text
stringlengths 2.25k
115k
| context
stringlengths 1.08k
113k
| question
stringclasses 41
values | answers
dict |
---|---|---|---|
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Warranty Duration" that should be reviewed by a lawyer. Details: What is the duration of any warranty against defects or errors in technology, products, or services provided under the contract?
Context: Exhibit 16.1
AUTOMOTIVE REFINISH DISTRIBUTOR AGREEMENT (P.R.China)
THIS AGREEMENT, made as of the 1st day of December, (the "Effective Date") by and between:
PPG Paints Trading (Shanghai) Co Ltd hereinafter referred to as ("PPG Shanghai")
Address : Suite 2512, 5th Floor No. 2 Xin Kang Building, 28 Jia Feng Road Wai Gao Qiao Free Trade Zone Shanghai, P. R. China
Tel. : (86-21) 6291 3500
Fax : (86-21) 6291 2100
Business liscence no. : 0537762
Legal representative : Viktoras R. Sekmakas and
NeoMedia Micro Paint Repair hereinafter referred to as ("DISTRIBUTOR")
Address : 2201 Second Street, Suite 600 Ft. Myers, Florida, 33901
Tel. : 239-337-3434
Fax : 239-337-3668
Business licence no. : 2648151
Legal representative : Charles T. Jensen
WITNESSETH:
WHEREAS:
A. PPG SHANGHAI desires DISTRIBUTOR to market and sell PPG's "Deltron" and "ACS" brand products, as hereinafter defined in Section 2 (the "Products"), to the repair chain shops in P.R.China as listed on Appendix 4 (the "Territory");
B. DISTRIBUTOR has the means to market Products in the Territory. As soon as Distributor's China subsidary, NeoMeida Micro Paint Repair China, a Wholley Foreign Owned Enterprise ("WFOE") registered under the Chinese laws and regulations, will be established, this title of Distributor will be automatically switched to the WFOE.
C. PPG SHANGHAI desires to appoint DISTRIBUTOR as a PPG SHANGHAI distributor in the Territory and DISTRIBUTOR desires to be such distributor; and
D. Accordingly, PPG SHANGHAI and DISTRIBUTOR have reached an agreement as hereinafter set forth.
In consideration of the mutual covenants and agreements herein contained, the parties hereto, intending to be legally bound hereby, covenant and agree as follows:
1. APPOINTMENT
1.1 PPG SHANGHAI does hereby appoint DISTRIBUTOR to distribute in the Territory the Products (as defined in paragraph 2, below) upon the terms and conditions hereinafter set forth. DISTRIBUTOR does hereby accept such appointment.
1.2 It is agreed that such appointment is nonexclusive and PPG SHANGHAI may, without obligation to pay DISTRIBUTOR any commission or other compensation, make direct sales of Products to other customers in the Territory and/or appoint additional distributors of Products in the Territory. During the term of this Agreement, DISTRIBUTOR shall have the exclusive right for selling the Products to Beijing Sino-US Jinche Yingang Auto Technological Services Limited (the "Auto Center"). PPG Shanghai or any of its direct or indirect affiliates shall not sell any of its products directly to the Auto Center or to any of the Auto Center's affiliates in China or throughout the world, unless PPG Shanghai obtains Distributor's written approval. It is understood and agreed that as used herein the term "PPG" shall mean PPG Industries Inc. and/or one or more affiliated companies of PPG Industries Inc. as the context may require.
1.3 Notwithstanding anything to the contrary in this Section 1, PPG SHANGHAI may also sell Products to any person or entity located outside the Territory without being obligated to consider whether such Products may be resold in the Territory. DISTRIBUTOR shall not be entitled to any commission or other compensation in such event.
1.4 Deleted.
1.5 DISTRIBUTOR warrants that it will not handle any counterfeit, passing-off products or products other than those purchased directly from PPG SHANGHAI.
1.6 DISTRIBUTOR warrants and represents that it is a corporation duly organized, validly existing, and in good standing under the applicable laws, that it has full legal right, power, and authority to enter into this Agreement and to consummate or cause to be consummated all of the transactions contemplated hereby, and that the execution, delivery, and/or performance of this Agreement do not or will not conflict with or result in a breach of any provision of any articles of incorporation or by-laws, or any written undertaking to which it is a party or by which it, or any of its assets, may be bound or affected, or result in a violation of any law, regulation, order, or award of any authority or body having jurisdiction over the assets and operations of it.
2. PRODUCTS
2.1 The Products and subject matter of this Agreement shall be the products listed below manufactured and sold by PPG SHANGHAI or affiliated companies of PPG SHANGHAI. Additional Products may be added to or deleted from the list at the sole discretion of PPG SHANGHAI:
(a) Global Deltron Refinish Products.
(b) ACS Products.
(c) Ancilliaries confirmed in writing for distribution by PPG SHANGHAI.
(d) Mixing equipment and related accessories as approved and supplied by PPG SHANGHAI.
(e) Any other products as PPG SHANGHAI may launch from time to time, at its absolute discretion.
2.2 Specific product codes for above category a, b, c, d, and e shall reference PPG SHANGHAI Price List in effect as of January 1, 2005 on Appendix 5.
3. REPRESENTATIONS AND WARRANTIES BY DISTRIBUTOR
DISTRIBUTOR represents and warrants to PPG SHANGHAI that(pound)(0)
(a) it is a business entity duly incorporated and registered and validly existing under the relevant PRC laws and regulations;
(b) it has been issued a valid business licence in its name by the relevant local branch of the State Administration of Industry and Commerce, and that business licence shall be valid within the duration of this Agreement;
(c) it is permitted to distribute chemical products pursuant to this Agreement under its approved business scope;
(d) it has a Dangerous Goods Business Permit Licence issued by the appropriate local government;
(e) it has the qualification of a general taxpayer and is able to issue value added tax invoices;
(f) it shall comply with all the relevant laws, regulations and permits, which have jurisdiction over its business, in relation to the sale of Products,
4. DISTRIBUTOR'S RESPONSIBILITY
4.1 DISTRIBUTOR shall promote the sale of the Products in the Territory. DISTRIBUTOR will conduct its operations in the Territory through offices or agencies to be maintained by DISTRIBUTOR at its sole cost and expense.
4.2 If DISTRIBUTOR sells or distributes the Products outside the Territory, whether directly or indirectly through DISTRIBUTOR's cooperation or in conjunction with other third parties, or to customers outside the Territory without the prior knowledge and consent of PPG SHANGHAI, PPG SHANGHAI shall have the right to terminate with immediate effect this Agreement and any existing incentive arrangements between PPG SHANGHAI and DISTRIBUTOR, whether entered into before or after the commencement of the Agreement.
4.3 DISTRIBUTOR agrees to satisfy the annual and quarterly sale targets for the Products set forth in Appendix 3 herein as mutually agreed to by the parties hereof.
4.4 DISTRIBUTOR and PPG Shanghai shall be responsible for providing technical support and after sale services to the Territory. PPG Shanghai's responsibility under this Section 4.4 is defined in Section 8.
5. PRICES AND TERMS
5.1 PPG SHANGHAI agrees that PPG SHANGHAI will sell and DISTRIBUTOR agrees to buy the Products at the prices agreed to by the parties from time to time and subject to the terms and conditions stated herein. The prices in effect as of the Effective Date of the Agreement are set forth on Appendix 5. The prices for the Products must be agreed upon by PPG SHANGHAI at the time of PPG SHANGHAI's written acceptance of an order hereunder. Unless otherwise agreed by PPG SHANGHAI in writing, DISTRIBUTOR shall prepay all the invoiced amount in the currency and manner as indicated by PPG Shanghai. DISTRIBUTOR shall be deemed to complete its payment obligation upon full payment of the invoiced sum, and such amount has been allocated into the account as directed by PPG SHANGHAI. PPG SHANGHAI shall only have the obligation to deliver the Products upon full and due payment.
5.2 PPG SHANGHAI reserves the right to adjust its selling prices based on local market situation.
5.3 PPG SHANGHAI shall bear the cost of transportation from overseas to its own warehouse, insurance and export / import duty for any Products to be sold to Distributor hereunder. DISTRIBUTOR shall pick up the ordered Products from PPG SHANGHAI by its own transport agency to its own places at its own expenses.
6. INTENT
It is the intent of this Agreement, and PPG SHANGHAI and DISTRIBUTOR agree, that:
(a) no consignment shipments shall be made to DISTRIBUTOR;
(b) DISTRIBUTOR is not authorized to sell the Products in any area outside the Territory or to establish or operate a "permanent establishment" in any country on behalf of PPG SHANGHAI;
(c) DISTRIBUTOR shall take no action which would cause PPG SHANGHAI to be classified or to be considered as doing business in any country under the laws of any country, or which would cause PPG SHANGHAI to become subject to the income tax, excess profits tax, corporation receipts tax, or any other tax of any country;
(d) DISTRIBUTOR has no authority to conclude contracts on behalf of or in the name of PPG SHANGHAI;
(e) DISTRIBUTOR shall hold PPG SHANGHAI harmless from any taxes or other liability of any type, kind or nature, assessed against PPG SHANGHAI because of DISTRIBUTOR taking any action prohibited by subparagraphs (b), (c) and (d) above;
(f) DISTRIBUTOR distributes the Products solely as an independent contractor and is not a franchisee, employee, partner or agent of PPG SHANGHAI and agrees not to represent the relationship as otherwise;
(g) No fee or other mandatory consideration has been paid by DISTRIBUTOR to PPG SHANGHAI for issuance of this Agreement.
8. PPG SHANGHAI'S RESPONSIBILITIES
(a) PPG SHANGHAI shall use reasonable commercial efforts to support DISTRIBUTOR in its sale and marketing. PPG SHANGHAI shall provide its assistance in sale by providing DISTRIBUTOR with its usual and newly developed sale materials, samples and sale items from time to time through its sale/technical representatives.
(b) Upon request by DISTRIBUTOR, PPG SHANGHAI shall provide DISTRIBUTOR with extra support by generally providing the relevant technique and other manner of consultation in relation to sale and use of Products.
(c) In pursuance to the reasonable request of DISTRIBUTOR, PPG SHANGHAI shall arrange training for DISTRIBUTOR in accordance with the product training generally provided by PPG SHANGHAI at its Training Centers or other pre-agreed venues.
(d) PPG SHANGHAI shall use reasonable commercial efforts to provide forthwith DISTRIBUTOR with the quantity of Products ordered by it and accepted by PPG SHANGHAI. The supplying responsibility of PPG SHANGHAI shall be subject to the stock of the ordered products at the time when DISTRIBUTOR's order is made with PPG SHANGHAI.
(e) PPG SHANGHAI shall provide DISTRIBUTOR Quarterly and Annual Rebate as listed in Appendix 3 if agreed targets are achieved on time.
9. DISTRIBUTOR'S RESPONSIBILITIES
DISTRIBUTOR agrees that DISTRIBUTOR shall, use all reasonable efforts , do the following:
(a) provide its customers with services regarding the Products, including the safety and toxicological aspects of Products handling and ensure that delivery to customers is made of technical information provided by PPG SHANGHAI regarding Products, including the safety precautions and toxicological aspects of Products handling;
(b) maintain an adequate supply of Products to expedite customer deliveries and give prompt and efficient service to its customers in the Territory;
(c) maintain knowledge of the market in the Territory and regularly communicate such knowledge to PPG SHANGHAI;
(d) be responsible that the labels for the Products meet all governmental and all applicable laws of the Territory regulatory requirements and comply with all applicable laws of the Territory;
(e) provide to its customers, Product technical support and training and ensure its customers maintain technical support and training to end-users.
(f) plan and develop promotional and advertising strategies to enhance PPG SHANGHAI's image and sales value in the region.
(g) Achieve agreed and signed sales target (Appendix 3).
10. PPG SHANGHAI TRADEMARKS
10.1 PPG SHANGHAI represents that it has rights and interests in the trademarks used on the Products, including, without limitation, the PPG logo listed on Appendix 2 hereto which shall herein be collectively referred to as the "PPG Trademarks." PPG SHANGHAI hereby grants to DISTRIBUTOR during the Term, subject to the terms and conditions hereinafter specified, a limited, nonexclusive, nonassignable and nontransferable right to use the PPG Trademarks in the Territory for or in connection with its advertisement, promotion, sale and distribution of Products. In connection with any use of the PPG Trademarks, DISTRIBUTOR shall prominently indicate that DISTRIBUTOR is an independent distributor for PPG SHANGHAI. DISTRIBUTOR's use shall be subject to PPG SHANGHAI's approval and shall be limited to labels and advertisements of the Products in the Territory and shall be at the expense of DISTRIBUTOR. DISTRIBUTOR agrees to submit proposed uses of the PPG Trademarks on labels to the Director of Automotive Refinish (Asia Pacific region), or such other person as PPG SHANGHAI may designate from time to time, for review and approval. DISTRIBUTOR agrees that if it uses the PPG Trademarks on its labels and in its advertisements, it shall only be in the form approved in writing by PPG SHANGHAI. PPG SHANGHAI agrees that it will not unreasonably withhold approval of any labels or advertising material submitted to it by DISTRIBUTOR for approval and use pursuant to the provisions hereof. DISTRIBUTOR will not seek to obtain any registration of any of the PPG Trademarks. Upon termination of this Agreement, DISTRIBUTOR shall forthwith cease all further use of the PPG Trademarks and shall destroy all unused labels and advertisements containing the PPG Trademarks. Thereafter, DISTRIBUTOR shall not use any PPG Trademarks or trade or corporate names similar thereto.
10.2 DISTRIBUTOR acknowledges PPG SHANGHAI's exclusive right and interests in relation to the PPG Trademarks and further acknowledges that all copyrights, patent, utility model rights and all other industrial property rights of whatever kind used in or in connection with the Products are the sole and exclusive property of PPG SHANGHAI or PPG and that DISTRIBUTOR will not, whether during the Term of this appointment or after its expiry or termination, knowingly do or cause to be done any act or thing directly or indirectly, contest or in any way impair or attempting to impair PPG SHANGHAI or PPG's rights, titles or interests in the PPG Trademarks.
10.3 DISTRIBUTOR shall not apply for registration of the PPG Trademarks in the People's Republic of China or in any other countries.
11. WARRANTY AND LIMITATION
11.1 PPG SHANGHAI warrants only its title to the Products and that the &bbsp; Products will be as set forth in the warranty statement, if any, on the Products' labeling or in the absence of any such warranty statement that the Products will conform to PPG SHANGHAI's standard warranty when they are taken from PPG SHANGHAI's warehouse by DISTRIUTOR or its transport agent. DISTRIBUTOR is not authorized to make warranties or representations on behalf of PPG SHANGHAI and shall make no such warranties or representations. THESE ARE THE ONLY REPRESENTATIONS OR WARRANTIES THAT PPG SHANGHAI MAKES, AND ALL OTHER EXPRESS OR IMPLIED WARRANTIES UNDER STATUTE OR ARISING OTHERWISE IN LAW FROM A COURSE OF DEALING OR USAGE OF TRADE, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTIBILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE, ARE DISCLAIMED BY PPG SHANGHAI. In the event that the Product fails to conform to the warranties herein given, DISTRIBUTOR's exclusive remedy and PPG SHANGHAI's sole responsibility is, at PPG SHANGHAI's option, limited to the replacement of such nonconforming Product at PPG SHANGHAI's expense or the refund of the purchase price attributable to a specific delivery as to which a claim is made. For the avoidance of doubt, PPG SHANGHAI hereby declares and represents that PPG SHANGHAI is not responsible for any damage to the Products after they have been taken away from PPG SHANGHAI's warehouse and caused by DISTRIBUTOR or its transport agent.
11.2 It is PPG SHANGHAI's responsibility to ensure that mis-delivery of Product is kept to the minimum. DISTRIBUTOR shall inspect the Products within 48 hours upon delivery. In case of discrepancy found in Products
delivered, DISTRIBUTOR shall report to PPG SHANGHAI in writing, detailing all the discrepancies within 48 hours after delivery. PPG SHANGHAI will not accept any claims for discrepancy in delivery beyond the 48 hours period. If Products are found damaged upon delivery, DISTRIBUTOR or its customers who directly receive the delivery shall report to PPG SHANGHAI in writing within 48 hours. The necessary and sufficient evidence (and photos) required for insurance claim must be submitted altogether. None of the damaged Products shall be disposed of until the claim is settled by the insurance company or PPG SHANGHAI.
11.3 DISTRIBUTOR assumes all responsibility, risk and liability arising from (i) the unloading, discharge, storage, handling and use of the Products, including use thereof alone or in combination with other substances; (ii) the improper functioning or failure of unloading, discharge, transportation or storage systems equipment used by DISTRIBUTOR, whether furnished or recommended by PPG SHANGHAI or not; and (iii) the failure to comply with laws, rules and regulations governing unloading, discharge, storage, handling and use of the Products.
12. FORCE MAJEURE
PPG SHANGHAI's failure or inability to make, or DISTRIBUTOR's failure or inability to take, any delivery or deliveries when due, or the failure or inability of either party to effect timely performance of any other obligation required of it hereunder, if caused by "force majeure" as hereinafter defined, shall not constitute a default hereunder or subject the party affected by force majeure to any liability to the other; provided, however, that the party so affected shall promptly notify the other of the existence thereof and of its expected duration and the estimated effect thereof upon its ability to perform its obligations hereunder. Such party shall promptly notify the other party when such force majeure circumstance has ceased to affect its ability to perform its obligations hereunder. The quantity to be delivered hereunder shall be reduced to the extent of the deliveries omitted for such cause or causes, unless both parties agree that the total quantity to be delivered hereunder shall remain unchanged. For so long as its ability to perform hereunder is affected by such force majeure circumstance, PPG SHANGHAI may, at its option, elect to allocate its total production of Product among its various requirements therefor (e.g., manufacturing and sales) in such manner as PPG SHANGHAI deems practicable and which, in the opinion of PPG SHANGHAI, is fair and reasonable. During the time that PPG SHANGHAI is unable to make deliveries or otherwise perform, it shall not be obligated to procure, or to use its best efforts to procure, any quantity of Product sold hereunder from any alternate producer or supplier. As used herein, the term "force majeure" shall mean and include any act of God, nature or the public enemy, accident, explosion, operation malfunction or interruption, fire, storm, earthquake, flood, drought, perils of the sea, strikes, lockouts, labor disputes, riots, sabotage, embargo, war (whether or not declared and whether or not the United States of America is a participant), federal, state or municipal legal restriction or limitation or compliance therewith, inability to obtain export licenses, failure or delay of transportation, shortage of, or inability to obtain, raw materials, supplies, equipment, fuel, power, labor, or other operational necessity, interruption, or curtailment of power supply, or any other circumstance of a similar or different nature beyond the reasonable control of the party affected thereby. In this connection, a party shall not be required to resolve labor disputes or disputes with suppliers of raw materials, supplies, equipment, fuel or power, except in accordance with such party's business judgment as to its best interest.
13. PRODUCT HANDLING
DISTRIBUTOR acknowledges that it has experience and expertise in handling and storing the Products, and that DISTRIBUTOR has the obligation to handle, store and distribute the Products safely and properly.
14. PRODUCT SAFETY
PPG SHANGHAI and DISTRIBUTOR recognize the importance of product safety considerations and the need to protect persons and property against unsafe conditions that could occur from the improper use, transportation, storage, handling, distribution or disposal of the Products sold hereunder. PPG SHANGHAI and DISTRIBUTOR will follow PPG's Responsible Care(R) Distributor Guidelines as set forth in the attached Appendix I (Responsible Care(R) is a registered trademark in the United States of the American Chemistry Council ). Accordingly, PPG SHANGHAI will furnish certain information to DISTRIBUTOR regarding product safety and handling aspects of the Products, and DISTRIBUTOR, in addition to its independent responsibility to obtain and implement a product safety program regarding the Products, will implement and conform to PPG SHANGHAI's product safety recommendations and Responsible Care(R) Distributor Guidelines, DISTRIBUTOR will also provide its customers, employees and other third parties foreseeably exposed to the Products with appropriate warnings, advice and other material regarding the Products, including all product safety and handling material provided by PPG SHANGHAI, and will ensure that the Products are used, stored, handled, distributed, transported and disposed of in a manner consistent with all of the above recommendations.
15. PRODUCT DISCONTINUANCE
DISTRIBUTOR acknowledges that it has express notice that PPG or PPG SHANGHAI may at any time discontinue the production and/or sale of any of the Products. If PPG or PPG SHANGHAI does discontinue the production and/or sale of any of the Products, this Agreement shall automatically terminate with respect to such discontinued Product, and DISTRIBUTOR shall not be entitled to claim or receive
from PPG or PPG SHANGHAI any compensation, reimbursement or damages of any nature as a result (direct or indirect) of PPG or PPG SHANGHAI's discontinuance of the production and/or sale of the affected Product.
16. LIMITATION OF DAMAGES
Notwithstanding the provisions of any law, rule, or regulation to the contrary, on the termination of this Agreement for any cause whatsoever, DISTRIBUTOR shall not be entitled to claim or receive from PPG SHANGHAI any compensation, reimbursement, or damages on account of any expenditure or commitment of any kind in connection with its business or on account of goodwill or on account of loss of prospective profits or otherwise. In no event shall PPG SHANGHAI be liable for consequential damages.
17. BUSINESS CONDUCT
17.1 In the performance of its responsibilities pursuant to this Agreement, DISTRIBUTOR agrees to make every effort to operate as a good, responsible and ethical corporate entity in the Territory and will comply with the laws of the Territory, the applicable laws of the United States of America and the countries of origin of the Products. DISTRIBUTOR further agrees that it will not, in connection with this Agreement or its performance hereunder, directly or indirectly offer, pay, promise to pay or authorize the payment of any money or thing of value to any employee of a customer or to any government official or to any person,
(a) to improperly or unlawfully influence any act or decision of such customer employee or governmental official, including a decision to fail to perform his/her official functions, or
(b) to induce such customer employee or government official to use his/her influence with the customer or the government (or instrumentality thereof), respectively, to affect or influence any act or decision of such customer or government (or instrumentality), in order to assist PPG SHANGHAI or DISTRIBUTOR in obtaining or retaining business or directing business to any other party. As used in this Section, the term "government official" means any officer or employee of any government or any department, agency, instrumentality or wholly-owned corporation thereof, or any person acting in an official capacity for or on behalf of any such government or department, agency, instrumentality or wholly-owned corporation thereof, or any candidate for political office.
17.2 DISTRIBUTOR agrees to notify PPG SHANGHAI immediately of any solicitation, demand or other request for anything of value, by or on behalf of any employee of a customer, government official or employee of any government which is directed to itself or to PPG SHANGHAI related to the sale and/or service of the Products.
17.3 DISTRIBUTOR agrees to require any sub-distributor or other person which it hires or engages to assist in the performance of this Agreement to comply with the provisions of this Section 17.
18. TERM OF AGREEMENT
18.1 The term of this Agreement (the "Term") shall commence on the date first above written and shall terminate on 31 December 2006, unless sooner terminated in accordance with the provisions hereof.
18.2 The parties hereof intend to form a long-term relationship. To this end, if both parties wish to renew this Agreement, the parties shall agree on such intention in writing at least thirty(30) days before the expiry of the current Term of the Agreement. The parties shall agree on the terms and conditions of the renewal, and enter into a new agreement within sixty(60) days from the expiry of this Agreement. During this sixty(60) days period, both parties shall continue to perform their respective obligation under the same terms and conditions of this Agreement.
18.3 In the event that there is no written notice issued by either party to show the intention to renew this Agreement in the said thirty(30) days before the expiry of the current Term of the Agreement, the Agreement shall terminate at the end of the said thirty(30) days. In the event that such a notice of intention to renew is issued, but the parties are not able to enter into a new agreement within that sixty(60) days from the expiry of this Agreement, this Agreement shall terminate at the end of the said sixty(60) days.
19. DEFAULT AND TERMINATION
19.1 If either party be in default with respect to any of the terms or conditions of this Agreement, including, without limitation, DISTRIBUTOR's failure to pay any invoice of PPG SHANGHAI in accordance with its terms, and if it fails to correct such default or failure within ten (10) business days following written notice thereof from the other, the party serving such notice may, without prejudice to any other right or remedy, defer further performance hereunder until such default be remedied or terminate this Agreement by written notice to the other, and the same shall terminate immediately upon the giving of such notice.
19.2 PPG SHANGHAI shall have the right to terminate this Agreement and/or suspend its performance hereunder immediately upon giving notice to DISTRIBUTOR, which termination shall be effective upon receipt of notice, if any one of the following occurs: (i) DISTRIBUTOR engages in fraudulent conduct in its dealings with PPG SHANGHAI or the Products; (ii) DISTRIBUTOR, or any principal owner of DISTRIBUTOR, is convicted of a crime which, in PPG SHANGHAI's reasonable judgment, may adversely affect the goodwill or interest of DISTRIBUTOR or of PPG SHANGHAI; (iii) DISTRIBUTOR becomes insolvent, assigns or attempts to assign its business assets for the benefit of creditors, institutes or has instituted against it proceedings in bankruptcy, or dissolves or liquidates the business of DISTRIBUTOR; or (iv) the business licence of DISTRIBUTOR is cancelled by the State Administration of Industry and Commerce.
20. DISPUTE RESOLUTION
20.1 All disputes, controversies and claims arising from or incidental to this Agreement shall be resolved by both parties through friendly consultation. If no resolution can be reached within thirty (30) days following the date on which one party informed the other party his intention to refer the disputes, controversies and claims for arbitration, such disputes, controversies and claims shall be referred to the China International Economic and Trade Arbitration Committee ("Arbitration Committee") for a final and binding arbitration in pursuance to the arbitration rules which is effective on the date hereof.
20.2 The venue of arbitration shall be in Shanghai or Beijing, China (to be decided by PPG SHANGHAI).
20.3 The arbitration shall be conducted in English and Chinese.
20.4 There shall be three arbitrators. Each of PPG SHANGHAI and DISTRIBUTOR shall select one; the chief arbitrator shall be selected by the first two arbitrators, provided that where the first two arbitrators are not able to agree on the appointment of the chief arbitrator within ten (10) days of the later of their appointments, the chief arbitrator shall be selected by the chairman of the Arbitration Committee.
20.5 The chief arbitrator shall not be a PRC national or a national of the United States.
20.6 The arbitration award shall be final and binding on both parties. Each party agree to be bound by the arbitration award. The arbitration fees and enforcement costs (including witness fees and reasonable legal fees) shall be borne by the losing party unless provided otherwise in the arbitration award.
20.7 During the occurrence of the dispute and the arbitration, other than the issues in dispute, each party shall continuously exercise its undisturbed rights and discharge its undisturbed obligations under this agreement.
21. GOVERNING LAW
The validity, construction, and performance of this Agreement shall be governed by and interpreted in accordance with the laws of the People's Republic of China.
22. LANGUAGE AND COUNTERPART
This Agreement shall be executed in two (2) counterparts of the Chinese language text.
23. ENTIRE AGREEMENT
This writing, including all documents attached to and/or referenced herein, constitutes the entire agreement between PPG SHANGHAI and DISTRIBUTOR regarding the subject matter hereof, terminating and superseding any prior agreements relating to the subject matter hereof, and there are no understandings, representations, or warranties of any kind except as expressly set forth herein. No modification, amendment or change in this Agreement or addition hereto shall be effective or binding on either of the parties hereto unless set forth in a writing which specifically references this Agreement and is executed by the respective duly authorized representatives of PPG SHANGHAI and DISTRIBUTOR and, if required, upon approval by competent governmental authorities, and no modifications shall be effected by any DISTRIBUTOR purchase order forms or other documents containing terms or conditions at variance with or in addition to those in this Agreement.
IN WITNESS WHEREOF, PPG SHANGHAI and DISTRIBUTOR have executed this Distributor Agreement effective the day, month, and year first above written.
Witness: PPG Paints Trading (Shanghai) Co., Ltd.
/s/ Ju dian By: /s/ Yuen Kit Yeg, Pauline ---------------------------- ------------------------------ Name: Yuen Kit Yeg, Pauline ---------------------------- Title: General Manager ---------------------------
Witness: [DISTRIBUTOR]
/s/ Paul Grzebielucha By /s/ Charles T. Jensen ---------------------------- ------------------------------- Name: Charles T. Jensen ---------------------------- Title: CEO --------------------------- [/INST] ```json
{<answer_start>
"answer": "If Products are found damaged upon delivery, DISTRIBUTOR or its customers who directly receive the delivery shall report to PPG SHANGHAI in writing within 48 hours."
<answer_end>
}
``` </s> | Exhibit 16.1
AUTOMOTIVE REFINISH DISTRIBUTOR AGREEMENT (P.R.China)
THIS AGREEMENT, made as of the 1st day of December, (the "Effective Date") by and between:
PPG Paints Trading (Shanghai) Co Ltd hereinafter referred to as ("PPG Shanghai")
Address : Suite 2512, 5th Floor No. 2 Xin Kang Building, 28 Jia Feng Road Wai Gao Qiao Free Trade Zone Shanghai, P. R. China
Tel. : (86-21) 6291 3500
Fax : (86-21) 6291 2100
Business liscence no. : 0537762
Legal representative : Viktoras R. Sekmakas and
NeoMedia Micro Paint Repair hereinafter referred to as ("DISTRIBUTOR")
Address : 2201 Second Street, Suite 600 Ft. Myers, Florida, 33901
Tel. : 239-337-3434
Fax : 239-337-3668
Business licence no. : 2648151
Legal representative : Charles T. Jensen
WITNESSETH:
WHEREAS:
A. PPG SHANGHAI desires DISTRIBUTOR to market and sell PPG's "Deltron" and "ACS" brand products, as hereinafter defined in Section 2 (the "Products"), to the repair chain shops in P.R.China as listed on Appendix 4 (the "Territory");
B. DISTRIBUTOR has the means to market Products in the Territory. As soon as Distributor's China subsidary, NeoMeida Micro Paint Repair China, a Wholley Foreign Owned Enterprise ("WFOE") registered under the Chinese laws and regulations, will be established, this title of Distributor will be automatically switched to the WFOE.
C. PPG SHANGHAI desires to appoint DISTRIBUTOR as a PPG SHANGHAI distributor in the Territory and DISTRIBUTOR desires to be such distributor; and
D. Accordingly, PPG SHANGHAI and DISTRIBUTOR have reached an agreement as hereinafter set forth.
In consideration of the mutual covenants and agreements herein contained, the parties hereto, intending to be legally bound hereby, covenant and agree as follows:
1. APPOINTMENT
1.1 PPG SHANGHAI does hereby appoint DISTRIBUTOR to distribute in the Territory the Products (as defined in paragraph 2, below) upon the terms and conditions hereinafter set forth. DISTRIBUTOR does hereby accept such appointment.
1.2 It is agreed that such appointment is nonexclusive and PPG SHANGHAI may, without obligation to pay DISTRIBUTOR any commission or other compensation, make direct sales of Products to other customers in the Territory and/or appoint additional distributors of Products in the Territory. During the term of this Agreement, DISTRIBUTOR shall have the exclusive right for selling the Products to Beijing Sino-US Jinche Yingang Auto Technological Services Limited (the "Auto Center"). PPG Shanghai or any of its direct or indirect affiliates shall not sell any of its products directly to the Auto Center or to any of the Auto Center's affiliates in China or throughout the world, unless PPG Shanghai obtains Distributor's written approval. It is understood and agreed that as used herein the term "PPG" shall mean PPG Industries Inc. and/or one or more affiliated companies of PPG Industries Inc. as the context may require.
1.3 Notwithstanding anything to the contrary in this Section 1, PPG SHANGHAI may also sell Products to any person or entity located outside the Territory without being obligated to consider whether such Products may be resold in the Territory. DISTRIBUTOR shall not be entitled to any commission or other compensation in such event.
1.4 Deleted.
1.5 DISTRIBUTOR warrants that it will not handle any counterfeit, passing-off products or products other than those purchased directly from PPG SHANGHAI.
1.6 DISTRIBUTOR warrants and represents that it is a corporation duly organized, validly existing, and in good standing under the applicable laws, that it has full legal right, power, and authority to enter into this Agreement and to consummate or cause to be consummated all of the transactions contemplated hereby, and that the execution, delivery, and/or performance of this Agreement do not or will not conflict with or result in a breach of any provision of any articles of incorporation or by-laws, or any written undertaking to which it is a party or by which it, or any of its assets, may be bound or affected, or result in a violation of any law, regulation, order, or award of any authority or body having jurisdiction over the assets and operations of it.
2. PRODUCTS
2.1 The Products and subject matter of this Agreement shall be the products listed below manufactured and sold by PPG SHANGHAI or affiliated companies of PPG SHANGHAI. Additional Products may be added to or deleted from the list at the sole discretion of PPG SHANGHAI:
(a) Global Deltron Refinish Products.
(b) ACS Products.
(c) Ancilliaries confirmed in writing for distribution by PPG SHANGHAI.
(d) Mixing equipment and related accessories as approved and supplied by PPG SHANGHAI.
(e) Any other products as PPG SHANGHAI may launch from time to time, at its absolute discretion.
2.2 Specific product codes for above category a, b, c, d, and e shall reference PPG SHANGHAI Price List in effect as of January 1, 2005 on Appendix 5.
3. REPRESENTATIONS AND WARRANTIES BY DISTRIBUTOR
DISTRIBUTOR represents and warrants to PPG SHANGHAI that(pound)(0)
(a) it is a business entity duly incorporated and registered and validly existing under the relevant PRC laws and regulations;
(b) it has been issued a valid business licence in its name by the relevant local branch of the State Administration of Industry and Commerce, and that business licence shall be valid within the duration of this Agreement;
(c) it is permitted to distribute chemical products pursuant to this Agreement under its approved business scope;
(d) it has a Dangerous Goods Business Permit Licence issued by the appropriate local government;
(e) it has the qualification of a general taxpayer and is able to issue value added tax invoices;
(f) it shall comply with all the relevant laws, regulations and permits, which have jurisdiction over its business, in relation to the sale of Products,
4. DISTRIBUTOR'S RESPONSIBILITY
4.1 DISTRIBUTOR shall promote the sale of the Products in the Territory. DISTRIBUTOR will conduct its operations in the Territory through offices or agencies to be maintained by DISTRIBUTOR at its sole cost and expense.
4.2 If DISTRIBUTOR sells or distributes the Products outside the Territory, whether directly or indirectly through DISTRIBUTOR's cooperation or in conjunction with other third parties, or to customers outside the Territory without the prior knowledge and consent of PPG SHANGHAI, PPG SHANGHAI shall have the right to terminate with immediate effect this Agreement and any existing incentive arrangements between PPG SHANGHAI and DISTRIBUTOR, whether entered into before or after the commencement of the Agreement.
4.3 DISTRIBUTOR agrees to satisfy the annual and quarterly sale targets for the Products set forth in Appendix 3 herein as mutually agreed to by the parties hereof.
4.4 DISTRIBUTOR and PPG Shanghai shall be responsible for providing technical support and after sale services to the Territory. PPG Shanghai's responsibility under this Section 4.4 is defined in Section 8.
5. PRICES AND TERMS
5.1 PPG SHANGHAI agrees that PPG SHANGHAI will sell and DISTRIBUTOR agrees to buy the Products at the prices agreed to by the parties from time to time and subject to the terms and conditions stated herein. The prices in effect as of the Effective Date of the Agreement are set forth on Appendix 5. The prices for the Products must be agreed upon by PPG SHANGHAI at the time of PPG SHANGHAI's written acceptance of an order hereunder. Unless otherwise agreed by PPG SHANGHAI in writing, DISTRIBUTOR shall prepay all the invoiced amount in the currency and manner as indicated by PPG Shanghai. DISTRIBUTOR shall be deemed to complete its payment obligation upon full payment of the invoiced sum, and such amount has been allocated into the account as directed by PPG SHANGHAI. PPG SHANGHAI shall only have the obligation to deliver the Products upon full and due payment.
5.2 PPG SHANGHAI reserves the right to adjust its selling prices based on local market situation.
5.3 PPG SHANGHAI shall bear the cost of transportation from overseas to its own warehouse, insurance and export / import duty for any Products to be sold to Distributor hereunder. DISTRIBUTOR shall pick up the ordered Products from PPG SHANGHAI by its own transport agency to its own places at its own expenses.
6. INTENT
It is the intent of this Agreement, and PPG SHANGHAI and DISTRIBUTOR agree, that:
(a) no consignment shipments shall be made to DISTRIBUTOR;
(b) DISTRIBUTOR is not authorized to sell the Products in any area outside the Territory or to establish or operate a "permanent establishment" in any country on behalf of PPG SHANGHAI;
(c) DISTRIBUTOR shall take no action which would cause PPG SHANGHAI to be classified or to be considered as doing business in any country under the laws of any country, or which would cause PPG SHANGHAI to become subject to the income tax, excess profits tax, corporation receipts tax, or any other tax of any country;
(d) DISTRIBUTOR has no authority to conclude contracts on behalf of or in the name of PPG SHANGHAI;
(e) DISTRIBUTOR shall hold PPG SHANGHAI harmless from any taxes or other liability of any type, kind or nature, assessed against PPG SHANGHAI because of DISTRIBUTOR taking any action prohibited by subparagraphs (b), (c) and (d) above;
(f) DISTRIBUTOR distributes the Products solely as an independent contractor and is not a franchisee, employee, partner or agent of PPG SHANGHAI and agrees not to represent the relationship as otherwise;
(g) No fee or other mandatory consideration has been paid by DISTRIBUTOR to PPG SHANGHAI for issuance of this Agreement.
8. PPG SHANGHAI'S RESPONSIBILITIES
(a) PPG SHANGHAI shall use reasonable commercial efforts to support DISTRIBUTOR in its sale and marketing. PPG SHANGHAI shall provide its assistance in sale by providing DISTRIBUTOR with its usual and newly developed sale materials, samples and sale items from time to time through its sale/technical representatives.
(b) Upon request by DISTRIBUTOR, PPG SHANGHAI shall provide DISTRIBUTOR with extra support by generally providing the relevant technique and other manner of consultation in relation to sale and use of Products.
(c) In pursuance to the reasonable request of DISTRIBUTOR, PPG SHANGHAI shall arrange training for DISTRIBUTOR in accordance with the product training generally provided by PPG SHANGHAI at its Training Centers or other pre-agreed venues.
(d) PPG SHANGHAI shall use reasonable commercial efforts to provide forthwith DISTRIBUTOR with the quantity of Products ordered by it and accepted by PPG SHANGHAI. The supplying responsibility of PPG SHANGHAI shall be subject to the stock of the ordered products at the time when DISTRIBUTOR's order is made with PPG SHANGHAI.
(e) PPG SHANGHAI shall provide DISTRIBUTOR Quarterly and Annual Rebate as listed in Appendix 3 if agreed targets are achieved on time.
9. DISTRIBUTOR'S RESPONSIBILITIES
DISTRIBUTOR agrees that DISTRIBUTOR shall, use all reasonable efforts , do the following:
(a) provide its customers with services regarding the Products, including the safety and toxicological aspects of Products handling and ensure that delivery to customers is made of technical information provided by PPG SHANGHAI regarding Products, including the safety precautions and toxicological aspects of Products handling;
(b) maintain an adequate supply of Products to expedite customer deliveries and give prompt and efficient service to its customers in the Territory;
(c) maintain knowledge of the market in the Territory and regularly communicate such knowledge to PPG SHANGHAI;
(d) be responsible that the labels for the Products meet all governmental and all applicable laws of the Territory regulatory requirements and comply with all applicable laws of the Territory;
(e) provide to its customers, Product technical support and training and ensure its customers maintain technical support and training to end-users.
(f) plan and develop promotional and advertising strategies to enhance PPG SHANGHAI's image and sales value in the region.
(g) Achieve agreed and signed sales target (Appendix 3).
10. PPG SHANGHAI TRADEMARKS
10.1 PPG SHANGHAI represents that it has rights and interests in the trademarks used on the Products, including, without limitation, the PPG logo listed on Appendix 2 hereto which shall herein be collectively referred to as the "PPG Trademarks." PPG SHANGHAI hereby grants to DISTRIBUTOR during the Term, subject to the terms and conditions hereinafter specified, a limited, nonexclusive, nonassignable and nontransferable right to use the PPG Trademarks in the Territory for or in connection with its advertisement, promotion, sale and distribution of Products. In connection with any use of the PPG Trademarks, DISTRIBUTOR shall prominently indicate that DISTRIBUTOR is an independent distributor for PPG SHANGHAI. DISTRIBUTOR's use shall be subject to PPG SHANGHAI's approval and shall be limited to labels and advertisements of the Products in the Territory and shall be at the expense of DISTRIBUTOR. DISTRIBUTOR agrees to submit proposed uses of the PPG Trademarks on labels to the Director of Automotive Refinish (Asia Pacific region), or such other person as PPG SHANGHAI may designate from time to time, for review and approval. DISTRIBUTOR agrees that if it uses the PPG Trademarks on its labels and in its advertisements, it shall only be in the form approved in writing by PPG SHANGHAI. PPG SHANGHAI agrees that it will not unreasonably withhold approval of any labels or advertising material submitted to it by DISTRIBUTOR for approval and use pursuant to the provisions hereof. DISTRIBUTOR will not seek to obtain any registration of any of the PPG Trademarks. Upon termination of this Agreement, DISTRIBUTOR shall forthwith cease all further use of the PPG Trademarks and shall destroy all unused labels and advertisements containing the PPG Trademarks. Thereafter, DISTRIBUTOR shall not use any PPG Trademarks or trade or corporate names similar thereto.
10.2 DISTRIBUTOR acknowledges PPG SHANGHAI's exclusive right and interests in relation to the PPG Trademarks and further acknowledges that all copyrights, patent, utility model rights and all other industrial property rights of whatever kind used in or in connection with the Products are the sole and exclusive property of PPG SHANGHAI or PPG and that DISTRIBUTOR will not, whether during the Term of this appointment or after its expiry or termination, knowingly do or cause to be done any act or thing directly or indirectly, contest or in any way impair or attempting to impair PPG SHANGHAI or PPG's rights, titles or interests in the PPG Trademarks.
10.3 DISTRIBUTOR shall not apply for registration of the PPG Trademarks in the People's Republic of China or in any other countries.
11. WARRANTY AND LIMITATION
11.1 PPG SHANGHAI warrants only its title to the Products and that the &bbsp; Products will be as set forth in the warranty statement, if any, on the Products' labeling or in the absence of any such warranty statement that the Products will conform to PPG SHANGHAI's standard warranty when they are taken from PPG SHANGHAI's warehouse by DISTRIUTOR or its transport agent. DISTRIBUTOR is not authorized to make warranties or representations on behalf of PPG SHANGHAI and shall make no such warranties or representations. THESE ARE THE ONLY REPRESENTATIONS OR WARRANTIES THAT PPG SHANGHAI MAKES, AND ALL OTHER EXPRESS OR IMPLIED WARRANTIES UNDER STATUTE OR ARISING OTHERWISE IN LAW FROM A COURSE OF DEALING OR USAGE OF TRADE, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTIBILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE, ARE DISCLAIMED BY PPG SHANGHAI. In the event that the Product fails to conform to the warranties herein given, DISTRIBUTOR's exclusive remedy and PPG SHANGHAI's sole responsibility is, at PPG SHANGHAI's option, limited to the replacement of such nonconforming Product at PPG SHANGHAI's expense or the refund of the purchase price attributable to a specific delivery as to which a claim is made. For the avoidance of doubt, PPG SHANGHAI hereby declares and represents that PPG SHANGHAI is not responsible for any damage to the Products after they have been taken away from PPG SHANGHAI's warehouse and caused by DISTRIBUTOR or its transport agent.
11.2 It is PPG SHANGHAI's responsibility to ensure that mis-delivery of Product is kept to the minimum. DISTRIBUTOR shall inspect the Products within 48 hours upon delivery. In case of discrepancy found in Products
delivered, DISTRIBUTOR shall report to PPG SHANGHAI in writing, detailing all the discrepancies within 48 hours after delivery. PPG SHANGHAI will not accept any claims for discrepancy in delivery beyond the 48 hours period. If Products are found damaged upon delivery, DISTRIBUTOR or its customers who directly receive the delivery shall report to PPG SHANGHAI in writing within 48 hours. The necessary and sufficient evidence (and photos) required for insurance claim must be submitted altogether. None of the damaged Products shall be disposed of until the claim is settled by the insurance company or PPG SHANGHAI.
11.3 DISTRIBUTOR assumes all responsibility, risk and liability arising from (i) the unloading, discharge, storage, handling and use of the Products, including use thereof alone or in combination with other substances; (ii) the improper functioning or failure of unloading, discharge, transportation or storage systems equipment used by DISTRIBUTOR, whether furnished or recommended by PPG SHANGHAI or not; and (iii) the failure to comply with laws, rules and regulations governing unloading, discharge, storage, handling and use of the Products.
12. FORCE MAJEURE
PPG SHANGHAI's failure or inability to make, or DISTRIBUTOR's failure or inability to take, any delivery or deliveries when due, or the failure or inability of either party to effect timely performance of any other obligation required of it hereunder, if caused by "force majeure" as hereinafter defined, shall not constitute a default hereunder or subject the party affected by force majeure to any liability to the other; provided, however, that the party so affected shall promptly notify the other of the existence thereof and of its expected duration and the estimated effect thereof upon its ability to perform its obligations hereunder. Such party shall promptly notify the other party when such force majeure circumstance has ceased to affect its ability to perform its obligations hereunder. The quantity to be delivered hereunder shall be reduced to the extent of the deliveries omitted for such cause or causes, unless both parties agree that the total quantity to be delivered hereunder shall remain unchanged. For so long as its ability to perform hereunder is affected by such force majeure circumstance, PPG SHANGHAI may, at its option, elect to allocate its total production of Product among its various requirements therefor (e.g., manufacturing and sales) in such manner as PPG SHANGHAI deems practicable and which, in the opinion of PPG SHANGHAI, is fair and reasonable. During the time that PPG SHANGHAI is unable to make deliveries or otherwise perform, it shall not be obligated to procure, or to use its best efforts to procure, any quantity of Product sold hereunder from any alternate producer or supplier. As used herein, the term "force majeure" shall mean and include any act of God, nature or the public enemy, accident, explosion, operation malfunction or interruption, fire, storm, earthquake, flood, drought, perils of the sea, strikes, lockouts, labor disputes, riots, sabotage, embargo, war (whether or not declared and whether or not the United States of America is a participant), federal, state or municipal legal restriction or limitation or compliance therewith, inability to obtain export licenses, failure or delay of transportation, shortage of, or inability to obtain, raw materials, supplies, equipment, fuel, power, labor, or other operational necessity, interruption, or curtailment of power supply, or any other circumstance of a similar or different nature beyond the reasonable control of the party affected thereby. In this connection, a party shall not be required to resolve labor disputes or disputes with suppliers of raw materials, supplies, equipment, fuel or power, except in accordance with such party's business judgment as to its best interest.
13. PRODUCT HANDLING
DISTRIBUTOR acknowledges that it has experience and expertise in handling and storing the Products, and that DISTRIBUTOR has the obligation to handle, store and distribute the Products safely and properly.
14. PRODUCT SAFETY
PPG SHANGHAI and DISTRIBUTOR recognize the importance of product safety considerations and the need to protect persons and property against unsafe conditions that could occur from the improper use, transportation, storage, handling, distribution or disposal of the Products sold hereunder. PPG SHANGHAI and DISTRIBUTOR will follow PPG's Responsible Care(R) Distributor Guidelines as set forth in the attached Appendix I (Responsible Care(R) is a registered trademark in the United States of the American Chemistry Council ). Accordingly, PPG SHANGHAI will furnish certain information to DISTRIBUTOR regarding product safety and handling aspects of the Products, and DISTRIBUTOR, in addition to its independent responsibility to obtain and implement a product safety program regarding the Products, will implement and conform to PPG SHANGHAI's product safety recommendations and Responsible Care(R) Distributor Guidelines, DISTRIBUTOR will also provide its customers, employees and other third parties foreseeably exposed to the Products with appropriate warnings, advice and other material regarding the Products, including all product safety and handling material provided by PPG SHANGHAI, and will ensure that the Products are used, stored, handled, distributed, transported and disposed of in a manner consistent with all of the above recommendations.
15. PRODUCT DISCONTINUANCE
DISTRIBUTOR acknowledges that it has express notice that PPG or PPG SHANGHAI may at any time discontinue the production and/or sale of any of the Products. If PPG or PPG SHANGHAI does discontinue the production and/or sale of any of the Products, this Agreement shall automatically terminate with respect to such discontinued Product, and DISTRIBUTOR shall not be entitled to claim or receive
from PPG or PPG SHANGHAI any compensation, reimbursement or damages of any nature as a result (direct or indirect) of PPG or PPG SHANGHAI's discontinuance of the production and/or sale of the affected Product.
16. LIMITATION OF DAMAGES
Notwithstanding the provisions of any law, rule, or regulation to the contrary, on the termination of this Agreement for any cause whatsoever, DISTRIBUTOR shall not be entitled to claim or receive from PPG SHANGHAI any compensation, reimbursement, or damages on account of any expenditure or commitment of any kind in connection with its business or on account of goodwill or on account of loss of prospective profits or otherwise. In no event shall PPG SHANGHAI be liable for consequential damages.
17. BUSINESS CONDUCT
17.1 In the performance of its responsibilities pursuant to this Agreement, DISTRIBUTOR agrees to make every effort to operate as a good, responsible and ethical corporate entity in the Territory and will comply with the laws of the Territory, the applicable laws of the United States of America and the countries of origin of the Products. DISTRIBUTOR further agrees that it will not, in connection with this Agreement or its performance hereunder, directly or indirectly offer, pay, promise to pay or authorize the payment of any money or thing of value to any employee of a customer or to any government official or to any person,
(a) to improperly or unlawfully influence any act or decision of such customer employee or governmental official, including a decision to fail to perform his/her official functions, or
(b) to induce such customer employee or government official to use his/her influence with the customer or the government (or instrumentality thereof), respectively, to affect or influence any act or decision of such customer or government (or instrumentality), in order to assist PPG SHANGHAI or DISTRIBUTOR in obtaining or retaining business or directing business to any other party. As used in this Section, the term "government official" means any officer or employee of any government or any department, agency, instrumentality or wholly-owned corporation thereof, or any person acting in an official capacity for or on behalf of any such government or department, agency, instrumentality or wholly-owned corporation thereof, or any candidate for political office.
17.2 DISTRIBUTOR agrees to notify PPG SHANGHAI immediately of any solicitation, demand or other request for anything of value, by or on behalf of any employee of a customer, government official or employee of any government which is directed to itself or to PPG SHANGHAI related to the sale and/or service of the Products.
17.3 DISTRIBUTOR agrees to require any sub-distributor or other person which it hires or engages to assist in the performance of this Agreement to comply with the provisions of this Section 17.
18. TERM OF AGREEMENT
18.1 The term of this Agreement (the "Term") shall commence on the date first above written and shall terminate on 31 December 2006, unless sooner terminated in accordance with the provisions hereof.
18.2 The parties hereof intend to form a long-term relationship. To this end, if both parties wish to renew this Agreement, the parties shall agree on such intention in writing at least thirty(30) days before the expiry of the current Term of the Agreement. The parties shall agree on the terms and conditions of the renewal, and enter into a new agreement within sixty(60) days from the expiry of this Agreement. During this sixty(60) days period, both parties shall continue to perform their respective obligation under the same terms and conditions of this Agreement.
18.3 In the event that there is no written notice issued by either party to show the intention to renew this Agreement in the said thirty(30) days before the expiry of the current Term of the Agreement, the Agreement shall terminate at the end of the said thirty(30) days. In the event that such a notice of intention to renew is issued, but the parties are not able to enter into a new agreement within that sixty(60) days from the expiry of this Agreement, this Agreement shall terminate at the end of the said sixty(60) days.
19. DEFAULT AND TERMINATION
19.1 If either party be in default with respect to any of the terms or conditions of this Agreement, including, without limitation, DISTRIBUTOR's failure to pay any invoice of PPG SHANGHAI in accordance with its terms, and if it fails to correct such default or failure within ten (10) business days following written notice thereof from the other, the party serving such notice may, without prejudice to any other right or remedy, defer further performance hereunder until such default be remedied or terminate this Agreement by written notice to the other, and the same shall terminate immediately upon the giving of such notice.
19.2 PPG SHANGHAI shall have the right to terminate this Agreement and/or suspend its performance hereunder immediately upon giving notice to DISTRIBUTOR, which termination shall be effective upon receipt of notice, if any one of the following occurs: (i) DISTRIBUTOR engages in fraudulent conduct in its dealings with PPG SHANGHAI or the Products; (ii) DISTRIBUTOR, or any principal owner of DISTRIBUTOR, is convicted of a crime which, in PPG SHANGHAI's reasonable judgment, may adversely affect the goodwill or interest of DISTRIBUTOR or of PPG SHANGHAI; (iii) DISTRIBUTOR becomes insolvent, assigns or attempts to assign its business assets for the benefit of creditors, institutes or has instituted against it proceedings in bankruptcy, or dissolves or liquidates the business of DISTRIBUTOR; or (iv) the business licence of DISTRIBUTOR is cancelled by the State Administration of Industry and Commerce.
20. DISPUTE RESOLUTION
20.1 All disputes, controversies and claims arising from or incidental to this Agreement shall be resolved by both parties through friendly consultation. If no resolution can be reached within thirty (30) days following the date on which one party informed the other party his intention to refer the disputes, controversies and claims for arbitration, such disputes, controversies and claims shall be referred to the China International Economic and Trade Arbitration Committee ("Arbitration Committee") for a final and binding arbitration in pursuance to the arbitration rules which is effective on the date hereof.
20.2 The venue of arbitration shall be in Shanghai or Beijing, China (to be decided by PPG SHANGHAI).
20.3 The arbitration shall be conducted in English and Chinese.
20.4 There shall be three arbitrators. Each of PPG SHANGHAI and DISTRIBUTOR shall select one; the chief arbitrator shall be selected by the first two arbitrators, provided that where the first two arbitrators are not able to agree on the appointment of the chief arbitrator within ten (10) days of the later of their appointments, the chief arbitrator shall be selected by the chairman of the Arbitration Committee.
20.5 The chief arbitrator shall not be a PRC national or a national of the United States.
20.6 The arbitration award shall be final and binding on both parties. Each party agree to be bound by the arbitration award. The arbitration fees and enforcement costs (including witness fees and reasonable legal fees) shall be borne by the losing party unless provided otherwise in the arbitration award.
20.7 During the occurrence of the dispute and the arbitration, other than the issues in dispute, each party shall continuously exercise its undisturbed rights and discharge its undisturbed obligations under this agreement.
21. GOVERNING LAW
The validity, construction, and performance of this Agreement shall be governed by and interpreted in accordance with the laws of the People's Republic of China.
22. LANGUAGE AND COUNTERPART
This Agreement shall be executed in two (2) counterparts of the Chinese language text.
23. ENTIRE AGREEMENT
This writing, including all documents attached to and/or referenced herein, constitutes the entire agreement between PPG SHANGHAI and DISTRIBUTOR regarding the subject matter hereof, terminating and superseding any prior agreements relating to the subject matter hereof, and there are no understandings, representations, or warranties of any kind except as expressly set forth herein. No modification, amendment or change in this Agreement or addition hereto shall be effective or binding on either of the parties hereto unless set forth in a writing which specifically references this Agreement and is executed by the respective duly authorized representatives of PPG SHANGHAI and DISTRIBUTOR and, if required, upon approval by competent governmental authorities, and no modifications shall be effected by any DISTRIBUTOR purchase order forms or other documents containing terms or conditions at variance with or in addition to those in this Agreement.
IN WITNESS WHEREOF, PPG SHANGHAI and DISTRIBUTOR have executed this Distributor Agreement effective the day, month, and year first above written.
Witness: PPG Paints Trading (Shanghai) Co., Ltd.
/s/ Ju dian By: /s/ Yuen Kit Yeg, Pauline ---------------------------- ------------------------------ Name: Yuen Kit Yeg, Pauline ---------------------------- Title: General Manager ---------------------------
Witness: [DISTRIBUTOR]
/s/ Paul Grzebielucha By /s/ Charles T. Jensen ---------------------------- ------------------------------- Name: Charles T. Jensen ---------------------------- Title: CEO --------------------------- | Highlight the parts (if any) of this contract related to "Warranty Duration" that should be reviewed by a lawyer. Details: What is the duration of any warranty against defects or errors in technology, products, or services provided under the contract? | {
"answer_start": [
19313
],
"text": [
"If Products are found damaged upon delivery, DISTRIBUTOR or its customers who directly receive the delivery shall report to PPG SHANGHAI in writing within 48 hours."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Termination For Convenience" that should be reviewed by a lawyer. Details: Can a party terminate this contract without cause (solely by giving a notice and allowing a waiting period to expire)?
Context: EXHIBIT 10.1
PROMOTION AGREEMENT
This Promotion Agreement ("Agreement") is entered into as of February 3, 2010 ("Effective Date") by and between MiddleBrook Pharmaceuticals, Inc. ("MBRK") , a Delaware corporation with offices at 7 Village Circle, Suite 100, Westlake, TX 76262 and DoctorDirectory.com, Inc. ("DD") , a South Carolina Corporation, with offices at One Page Avenue, Suite 280, Asheville, NC 28801.
WHEREAS DD provides advertising, promotion and marketing services to pharmaceutical companies that seek to market their products to physicians and other allied medical professionals including nurses, nurse practitioners, and physician assistants; and
WHEREAS MBRK markets prescription drug products, including its product known as MOXATAG® ("MOXATAG") to licensed physicians, nurses, nurse practitioners, and physician assistants in the United States ("US") whose clinical practice is consistent with MOXATAG's approved labeling; and
WHEREAS MBRK seeks to have MOXATAG promoted to as many licensed US physicians, nurse practitioners and physician assistants whose clinical practice is consistent with MOXATAG's approved labeling as is possible and practical.
THEREFORE, for good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, the Parties agree that DD will promote MOXATAG to certain US physicians and others as identified in this Agreement subject to the terms and conditions as set forth below:
Section 1 — Definitions
The terms as used in this Agreement will have the meanings as follows:
(a) "Actual DD Target Segment MOXATAG TRx" means the total actual number of MOXATAG prescriptions filled in the US during the applicable Promotional Measurement Period and written by DD Target Segment Prescribers as stipulated by the Prescriber Data. (b) "Actual DD Target Segment MOXATAG TRx Tablets" means the average number of tablets contained in all MOXATAG TRx during the applicable Promotional Measurement Period as stipulated by the Prescriber Data including the tablet quantities as reported by IMS NPA weekly EUTRx (tablets) data, multiplied by Actual DD Target Segment MOXATAG TRx. (c) "Change of Control" means the change of control of MBRK, as defined by any of the following events: A) any third party acquires directly or indirectly the beneficial ownership of any voting security of MBRK representing fifty percent (50%) of the total voting power of the then outstanding voting securities of MBRK; B) the consummation of a merger, consolidation, recapitalization, or reorganization of MBRK with or by a third party which
would result in fifty percent (50%) or more of the total voting power of MBRK stock being transferred to a third party; or C) the stockholders or equity holders of MBRK approve a plan of complete liquidation of MBRK or an agreement for the sale or disposition of all or substantially all the assets of MBRK.
(d) "Coupons" means those coupons or vouchers provided by MBRK and distributed through a MBRK designee and whose redemption is tracked by a MBRK designee, and redeemed by patients filling MOXATAG prescriptions written by DD Target Segment Prescribers. (e) "Cost of Coupon Redemption Amount" means the redemption amount and the costs associated with printing and processing those Coupons redeemed during the applicable Promotion Measurement period. (f) "Cost of Samples Amount" means the cost of manufacturing and delivering (including, without limitation, all applicable freight, packaging and shipping costs) and costs of any third party vendors used in connection with manufacturing and fulfillment of MOXATAG samples. (g) "Deposit" means that amount which MBRK shall deposit with DD upon the Promotion Commencement Date and as subject to the adjustment outlined in Section 5. (h) "DD Target Segment Prescribers" means the licensed prescribers as defined in EXHIBIT 1. (i) "Early Termination Fee" means that amount equal to the most recent month's Promotion Fee prior to termination, multiplied by the number of unexpired months remaining in the current year of the Agreement. (j) "End of Agreement Fee" means the fee, in addition to any other amounts due, payable to DD (when this Agreement is terminated as further described in Section 18(f)) that is equal to two (2) times the last month's Promotional Fee earned by DD during the last month of the Agreement. (k) "FDA" means the federal Food and Drug Administration. (l) "Gross Margin Per Tablet" means the Gross Margin calculated in accordance with GAAP and which excludes those non-recurring and unusual items that the Parties agree are not resulting from activities under this Agreement ("GM Adjustment Items") divided by the actual number of MOXATAG tablets (as report by IMS Health Rx data) during the applicable Promotional Period. By way of example, these GM Adjustment Items where appropriate may include inventory write-offs, changes to prior period reserve balances or foreign exchange gains or losses. MBRK agrees to provide a summary of any GM Adjustment Items to DD. The calculation of Gross Margin Per Tablet will be based on U.S. sales of MOXATAG only. For periods after September 30, 2010, if the Gross Margin per Tablet is less than $3.50, the Parties agree to re-evaluate the viability of the Agreement and if deemed necessary will use commercially reasonable efforts to re-negotiate an amendment to the Agreement.
(m) "Gross Margin Per TRx" means the Gross Margin per MOXATAG Rx as calculated in accordance with GAAP and which exclude GM Adjustment Items. The calculation of Gross Margin Per TRx will be based on U.S. sales of MOXATAG only. For the period from the Effective Date through September 30, 2010, the Gross Margin per TRx shall be $36.50. (n) "Intellectual Property Rights" means any and all patents, copyrights, trade secrets, trademarks, and any and all other intellectual property rights or interests. (o) "Medical Professionals" means licensed nurses, nurse practitioners, and physician assistants. (p) "MOXATAG" means the prescription drug known as MOXATAG® (amoxicillin extended-release) Tablets 775 mg, approved by the FDA, having NDC numbers 110442-142-03 and 110442-142-02 which is marketed in the US, including currently and subsequently approved formulations, strengths, concentrations and delivery mechanisms. (q) "MOXATAG Labeling" shall mean (a) the FDA-approved full prescribing information for MOXATAG, including any required patient information, and (b) all labels and other written, printed or graphic matter upon any container, wrapper or any package insert or outsert utilized with or for MOXATAG. (r) "Parties" means DD and MBRK collectively. (s) "Prescriber Data" means the prescriber data supplied by a nationally recognized prescription data provider where permitted under federal and state law, which is currently provided to MBRK by IMS Health. (t) "Promotion Commencement Date" means the first day of the month in which DD commences its promotion of MOXATAG under this Agreement. (u) "Promotion Fees" means the Promotion Fees payable to DD by MBRK for the promotion services provided under this Agreement as is calculated by and stipulated in Section 5, which represent fair market value for such services. (v) "Promotional Materials" shall mean all MBRK-approved and available sales representative training materials and all MBRK-approved and available written, printed, graphic, electronic, audio or video matter, including, but not limited to, journal advertisements, sales aids, formulary binders, reprints, direct mail, direct-to-consumer advertising, Internet postings, broadcast advertisements and sales reminder aids (for example, scratch pads, pens and other such items), in each case created by a party or on its behalf and used or intended for use by DD and MBRK in connection with any promotion of MOXATAG hereunder, or disease state or indication for which MOXATAG is approved for treatment but excluding MOXATAG Labeling. (w) "Promotional Measurement Period" means that month during which prescription activity for MOXATAG is measured. (x) "Territory" shall mean the US, including all US territories, possessions and protectorates. (y) "Up-Front Payment" means the one-time payment of $50,000 to be made by MBRK to DD upon execution of this Agreement.
Section 2 — Term
This Agreement shall commence as of the Effective Date and shall continue in full force and effect for an initial term of three (3) years from the Promotion Commencement Date, divided into three one-year periods. Unless terminated in accordance with the provisions of Section 18, this Agreement shall automatically renew for each subsequent one-year term.
Section 3 — Obligations of DD
3.1 DD will promote MOXATAG to DD Target Segment Prescribers using its full suite of promotion solutions where DD and MBRK deem appropriate, including but not limited to DD's a) eSampling Platform, b) eLearning / eDetailing, c) Educational Email, d) Direct-to-Physician Bulletin Services, e) Physician Portal Promotions, f) Patient Portal Promotions, g) Direct Mail Advertising, h) Coupon Promotions, i) Consumer Condition Content, j) Search Engine Marketing and k) Mini Web Site Promotions where appropriate and with prior written approval from MBRK. MBRK shall have final approval as to the promotion solutions utilized by DD in the promotion of MOXATAG and DD will not deploy any promotion solution without such approval from MBRK. Such promotion solutions are as listed in EXHIBIT 4. In the event that the Parties mutually agree on the provision of additional services beyond those listed in EXHIBIT 4, such additional promotional solutions shall be approved by MBRK and additional Appendices numbered sequentially (1, 2, 3, 4 etc.) setting forth in detail the additional services shall be duly signed by authorized representatives of the Parties and attached to EXHIBIT 4 and incorporated herein. The services contained in EXHIBIT 4 and any related modifications thereto represent those services that are reasonably necessary to accomplish the promotion of MOXATAG. No services shall be provided by DD, or paid for by MBRK, except as agreed to in writing by the Parties.
3.2. Notwithstanding any other provision of this Agreement, all Promotional Materials relating to MOXATAG that will be utilized by DD, as well as the use and placement of such Promotional Materials, are subject to written approval by MBRK prior to such use. DD agrees to provide draft and final versions of all Promotional Materials to MBRK for MBRK's review and approval prior to DD's use of such Promotional Materials, provided such materials are developed or modified by DD. MBRK has the authority to perform the final review of all Promotional Materials developed by DD. All Promotional Materials are subject to MBRK's legal, medical and regulatory review and approval process. DD agrees to make all the necessary changes and/or modifications requested by MBRK. DD shall not use Promotional Materials for any purpose outside of this Agreement without prior written authorization from MBRK.
3.3. Notwithstanding any other provision of this Agreement, all MOXATAG sample request forms (hereinafter "Sample Request Forms") utilized by DD to document a prescriber's request for MOXATAG samples are subject to written approval by MBRK. DD agrees to provide draft and final versions of all Sample Request Forms to MBRK for MBRK's review and approval prior to DD's use of such Sample Request Forms. MBRK has the authority to perform the final review of all Sample Request Forms developed by DD or used in conjunct. All Sample Request Forms are subject to MBRK's legal, medical and regulatory review and approval process. DD agrees to make all the necessary changes and/or modifications requested by MBRK. DD shall not use Sample Request Forms for any purpose outside of this Agreement without prior written authorization from MBRK.
3.4. Notwithstanding any other provision of this Agreement, DD shall not offer or provide any item to a DD Target Segment Prescriber, without prior written approval by MBRK. The provision of any items shall be subject to MBRK's legal, medical and regulatory review and approval process. In the event that MBRK authorizes the provision of items of nominal value to a DD Target Segment Prescriber, DD shall track and record the item provided, the associated value, the date of the transaction, and the recipient DD Target Segment Prescriber, including his or her credentials and the state in which he or she is licensed, where possible.
3.5 DD shall use commercially reasonable efforts to promote MOXATAG to DD Target Segment Prescribers and agrees to efficiently perform the services as described in EXHIBIT 4 in compliance with MBRK's policies and procedures, and all applicable federal and state laws and regulations, including, without limitation, federal and state anti-kickback statutes, regulations contained in 21 CFR (Code of Federal Regulations) as they pertain to promotional activity of an FDA-approved pharmaceutical product and the US Department of Health and Human Services Office of Inspector General's ("OIG") Compliance Program Guidance for Pharmaceutical Manufacturers (2003). DD agrees that it shall not directly or indirectly offer, pay or transfer anything of value, in cash or in-kind, to induce DD Target Segment Prescribers to purchase, order, or recommend MOXATAG, nor shall DD exert undue influence on the medical decision-making of DD Target Segment Prescribers.
3.6. Both Parties agree to assign sufficient resources and personnel to discharge their respective responsibilities under this Agreement in a timely manner and at all times operating using a professional standard of work as consistent with industry standards.
3.7. DD shall select and shall have full and complete control of and responsibility for all actions of its agents, affiliates, officers, directors, employees or subcontractors (hereinafter "Representatives") and none of DD's Representatives are, or shall be deemed to be, the Representatives of MBRK for any purpose whatsoever by virtue of this Agreement. MBRK has no duty, liability or responsibility of any kind, to or for the acts or omissions of DD or any of DD's Representatives. DD hereby acknowledges and agrees that DD shall cause each of DD's Representatives who participate in rendering the services to comply with the terms of this Agreement. DD hereby acknowledges and agrees that DD is responsible for the failure of any of DD's Representatives to comply with the terms of this Agreement.
3.8. DD shall be responsible for obtaining the necessary contracts and releases with or from all parties whose names, likenesses, testimonials, scripts, musical compositions or similar materials, assets or rights are used in MBRK's advertising, promotional, publicity or other materials prepared and produced by DD under this Agreement, except where MBRK undertakes to be responsible for obtaining the same. Notwithstanding the foregoing, without the prior written consent of MBRK, DD is not authorized hereunder or otherwise to enter into any contract or agreement in respect of the foregoing with a third party if such contract or agreement, directly or indirectly, imposes any obligations on MBRK.
3.9. All records maintained by DD pertaining to DD's services to MBRK pursuant to this Agreement shall be provided to MBRK within 48 hours of MBRK's request. DD shall also make its records and other documents relevant to MBRK and this Agreement available for audit or review by MBRK upon MBRK's request at a mutually agreed upon time. Upon termination or expiration of this Agreement, if specifically requested by MBRK, DD shall provide originals or copies of such records to MBRK.
Section 4 — Costs to Deliver DD Promotion
All costs incurred by DD to deploy its services to promote MOXATAG to DD Target Segment Prescribers will be the responsibility of DD, except as provided in Section 6.
Section 5 — Up-Front Payment, Deposit and Promotion Fees
5.1. MBRK will pay DD an Up-Front Payment of $50,000 upon execution of this Agreement.
5.2. Additionally, MBRK shall pay a Deposit to DD equal to $100,000 upon the Promotion Commencement Date. Each month the Parties will review the amount of the Deposit and where necessary MBRK will make an additional deposit payment to DD in order to maintain a total Deposit with DD of at least two (2) times the current month's Promotion Fees. For example, if in a month Promotion Fees are $105,000, then MBRK will increase the Deposit to two (2) times $105,000, equal to $210,000. The Parties agree to meet via conference call within five (5) business days of the end of each month to determine the necessary adjustment, if any, to the Deposit. If it is determined that the Deposit must be increased, within ten (10) business days of the date upon which the new Deposit is determined, MBRK shall send to DD the funds necessary to increase the Deposit. Notwithstanding the above, if during years 2 and 3 of this Agreement, in the event MBRK's then current annual form 10-K filed with the SEC does not contain an audit opinion that expresses doubt about MBRK's ability to continue as a going concern, then MBRK's requirement to maintain a Deposit is waived. In all cases the Deposit amount will be used to settle any outstanding amounts due to DD by MBRK at the end of the Agreement or at the time the Deposit requirement is waived.
5.3. Additionally, on or before the last day of each month, DD will invoice MBRK for the Promotion Fees due for the prior month. Such Promotion Fees shall be calculated by:
(a) the following formula for the period from the Effective Date through September 30, 2010:
For example: if during the month of March 2010 (a) (A) above was 2,000 TRx and (B) above was $36.50 then MBRK would be remit $36,500.00 to DD.
OR
(b) the following formula for the period from October 1, 2010 through termination of this Agreement:
(A) the Actual DD Target Segment MOXATAG TRx for the Promotional Measurement Period multiplied by: (B) the applicable Gross Margin Per TRx multiplied by: (C) 50%.
(A) the Actual DD Target Segment MOXATAG TRx Tablets for the Promotional Measurement Period multiplied by: (B) the applicable Gross Margin Per Tablet multiplied by: (C) 50%.
For example: if during the month of November 2010:
MBRK would remit $89,425.00 to DD:
These Promotion Fees represent fair market value payment for such services rendered.
The Parties recognize that Promotion Fees are to be settled on a monthly basis which requires the use of an estimated Gross Margin Per Tablet amount until the actual Gross Margin Per Tablet for an applicable quarter can be determined. Accordingly, to facilitate the calculation and settlement of monthly Promotion Fees for periods after September 2010, the Parties agree that the Gross Margin Per Tablet used to settle the monthly Promotion Fees will be that as calculated using the previous calendar quarter's Gross Margin Per Tablet data and current period's Actual DD Target Segment MOXATAG TRx. Such Promotion Fees for the three months in any calendar quarter will be subject to a true-up process which will occur by the 15th of the second month of the following quarter. By way of example, Promotion Fees for each of the months of April, May and June will be settled using the Gross Margin Per Tablet amount that has been calculated for the quarter ended March 31 and will be subject to a true-up process to occur by August 15 with any adjustment to such Promotion Fees being settled between the parties within 15 days thereafter.
5.4 In the event MBRK shall discontinue detailing prescribers in a territory that is not included in the then current DD Target Segment Prescribers set forth in EXHIBIT 1 to this Agreement or any amendments thereto ("New DD Target Segment Prescribers"), the Parties shall negotiate in good faith the Promotion Fee payable to DD should MBRK desire that DD add those New DD Target Segment Prescribers to the DD Target Segment Prescribers.
5.5. The Promotion Fees shall be paid to DD by MBRK fifteen (15) days after the receipt of an invoice from DD by MBRK.
5. 6. The basis for determining the Promotion Fees will be the Prescriber Data provided by MBRK to DD.
5.7. DD agrees to submit invoices to MBRK at the following address:
Attn: Accounts Payable MiddleBrook Pharmaceuticals, Inc. 7 Village Circle, Suite 100 Westlake, TX 76262
(A)= Actual DD Target Segment MOXATAG TRx (5,000) x an average tablet amount for the month of (9.8 tablets)= 49,000 (B)= 3.65 (C)= 50%
Section 6 — Obligations of MBRK
6.1. Subject to the terms of confidentiality set forth in Section 10, MBRK agrees to make available to DD to the best of its ability the items as stipulated in EXHIBIT 2. These items include the relevant portions of its marketing and communications plan, approved sales promotion materials in electronic format where available, sales and training aids relevant to MOXATAG and promotional items and packages for appropriate licensed physicians, nurses, nurse practitioners and physician assistants. Additionally, MBRK or its authorized designee shall be responsible for the provision of MOXATAG samples in response to a prescriber's request as documented on a Sample Request Form and MBRK or its authorized vendor shall be solely responsible for sample fulfillment in quantities agreed to by MBRK. At no time shall DD take physical possession of or title to MOXATAG samples.
6.2. Notwithstanding any other provision of this Agreement, MBRK shall have the sole right and authority and in its sole discretion shall take any actions that it deems appropriate with respect to MOXATAG as would normally be done in accordance with accepted business practices and federal and state legal requirements to maintain the authorization and/or ability to market MOXATAG in the US, including, without limitation, the following:
(a) manufacturing, storage, and distribution of MOXATAG trade and sample product; (b) the scope and strategies with respect to the marketing and promotion of MOXATAG, including, without limitation, any labeling or claims in connection therewith; (c) booking sales and distribution of MOXATAG hereunder and performance of related services; (d) handling all aspects of order processing, invoicing and collection, inventory and receivables; (e) providing customer support, including handling medical queries, and performing other functions consistent with consumer practice for prescription pharmaceuticals; (f) responding to product and medical complaints relating to MOXATAG; (g) handling all returns of MOXATAG trade and sample product; (h) handling all voluntary recalls and market withdrawals of MOXATAG. In such a situation, DD will make available to MBRK, upon request, all of DD's pertinent records on MOXATAG. Any and all reasonable and documented costs and expenses incurred by DD in the conduct of any such recall or market withdrawal of MOXATAG shall be reimbursed by MBRK, except to the extent such recall or market withdrawal was the direct result of the negligence or failure of DD to comply with its obligations under this Agreement; (i) communicating with any governmental agencies and satisfying their requirements regarding all regulatory approvals of MOXATAG; including the filing of marketing and promotion materials approved by MBRK under this Agreement with the FDA in compliance with all FDA pharmaceutical marketing regulations; (j) reporting adverse reaction reports to US regulatory authorities as required by applicable US law or regulation;
6.3 Notwithstanding any other provision herein to the contrary, MBRK shall have the sole right and responsibility for establishing and modifying the terms and conditions with respect to the sale of MOXATAG, including, without limitation, the price at which MOXATAG will be sold, any discounts attributable to payments on receivables and distribution of MOXATAG.
6.4. MBRK shall be responsible for the costs of obtaining, tracking, processing, formatting and reporting Prescriber Data.
6.5. The Cost of Samples Amount and the Cost of Coupon Redemption Amount shall be paid by MBRK.
Section 7 — Independent Contractor
In the performance of DD's obligations under this Agreement, DD shall at all times act as and be deemed an independent contractor. Nothing in this Agreement shall be construed to render DD or any of its employees, agents, or officers, an employee, joint venturer, agent, or partner of MBRK. As an independent contractor, DD fees and expenses are limited to those expressly stated in this Agreement. DD is not authorized to assume or create any obligations or responsibilities, express or implied, on behalf of or in the name of MBRK, except as specifically defined herein. It is understood that the employees, methods, facilities, and equipment of DD shall at all times be under DD's exclusive direction and control. DD shall not participate in MBRK's fringe benefit plans or any other compensation or benefit plans MBRK maintains for its own employees.
Section 8 — Representations and Warranties
8.1. MBRK represents and warrants that it has the rights and authorizations required by federal and state agencies, including but not limited to the FDA granting it the right to market MOXATAG in the US.
8.2. Each Party represents and warrants that it shall comply in all material respects with any and all applicable federal, state, and local laws and regulations and industry guidances and standards applicable to the conduct of business and the execution of any and all marketing and promotional services or activities pursuant to this Agreement, including but not limited to: the federal anti-kickback statute, 42 U.S.C. § 1320a-7b(b); federal Food, Drug and Cosmetic Act and relevant regulations; FDA promotional guidelines; FDA's Guidance on Industry-Supported Scientific and Educational Activities (1997); US Department of Health and Human Services OIG Compliance Program Guidance for Pharmaceutical Manufacturers (2003); the Pharmaceutical Research and Manufacturers of America ("PhRMA") Code on Interactions With Healthcare Professionals; and ethics opinions of the American Medical Association ("AMA").
(k) reporting significant losses and thefts of MOXATAG to the appropriate state and federal regulatory authorities, as required. In such a situation, DD will make available to MBRK, upon request, all of DD's pertinent records on MOXATAG. Any and all reasonable and documented costs and expenses incurred by DD in the conduct of such activities shall be reimbursed by MBRK, except to the extent such reporting obligations were the direct result of the negligence or failure of DD to comply with its obligations under this Agreement; and
(l) negotiating any and all agreements with managed care organizations, payers, wholesalers, group purchasing organizations, and the like, regarding MOXATAG.
8.3. Each Party represents and warrants that it shall comply with any and all applicable federal, state, and local laws and regulations related to the request and receipt of MOXATAG samples, including, but not limited to, the Prescription Drug Marketing Act of 1987 ("PDMA") of 1987, as amended, and the regulations promulgated thereunder.
8.4. Each Party represents and warrants that it shall comply with any and all applicable federal, state, and local laws and regulations including, but not limited to, health, safety and security rules and regulations and all privacy laws and regulations, including but not limited to applicable state privacy laws and regulations and the privacy requirements set forth in the Health Insurance Portability and Accountability Act (HIPAA).
8.5. DD represents and warrants that (i) it shall comply with all applicable MBRK policies and procedures, including MBRK policies governing interactions with physicians and other Medical Professionals; and (ii) it has the specific industry knowledge, experience and expertise to perform all of its obligations hereunder in good faith and to industry standards.
8.6. DD represents and warrants that neither DD nor, to DD's knowledge, any person DD employs in connection with the services to be performed under this Agreement (i) have been debarred, suspended, proposed for debarment, declared ineligible or voluntarily excluded from participation in this transaction by any federal or state law, regulation, or action including, but not limited to, 21 U.S.C. § 335(a) and (b); (ii) have been convicted of a criminal offense related to healthcare; and (iii) have been listed by a federal department or agency as debarred, excluded, or otherwise ineligible for participation in federal healthcare programs as set forth in 42 U.S.C. § 1320a-7, or any similar state law or regulation. DD shall notify MBRK in writing immediately if it or any person it employs in connection with this Agreement or any obligations performed hereunder, including any of its employees or other representatives or member of its senior management, is debarred, is in the process of being debarred, , or if any action, suit, claim, investigation, or legal or administrative proceeding is pending or is threatened, relating to the debarment or conviction of DD or any person it employs in connection with this Agreement or any obligations performed hereunder.
Section 9 — Indemnification
9.1. DD shall indemnify and hold MBRK and its Representatives harmless from and against any and all claims, losses, demands, causes of action, and any and all related costs and expenses including, but not limited to reasonable attorneys' fees, costs, and expenses, incurred by them in connection with any claim, suit or proceeding (hereinafter "Legal Claims"), arising out of or in connection with: (1) any negligent or willful act or omission or error of DD, or any of its Representatives, to the extent such Legal Claim does not arise from the negligent or willful act or omission of MBRK or any of its Representatives; (2) any violation by DD, or any of its Representatives of any law, statute, ordinance or regulation; (3) any breach by DD of any of its representations, warranties or obligations under this Agreement; or (4) statements or representations by DD, or its Representatives, that are contrary to the MOXATAG Labeling or the approved Promotional Materials and/or outside the FDA-approved indication(s) for MOXATAG.
9.2. DD warrants that any Promotional Materials developed by DD or its Representatives under this Agreement, do not infringe, misappropriate or otherwise violate any Intellectual Property Rights of any third party, and agrees to protect, indemnify and hold harmless MBRK and its Representatives against any and all claims, losses, demands, causes of action, and any and all related costs and expenses including, but not limited to reasonable attorneys' fees, costs, and expenses, incurred by them in connection with any assertion for such infringement, misappropriation or breach.
9.3. DD warrants that any promotional services rendered by DD or its Representatives under this Agreement, do not infringe, misappropriate or otherwise violate any Intellectual Property Rights of any third party, and agrees to protect, indemnify and hold harmless MBRK and its Representatives against any and all claims, losses, demands, causes of action, and any and all related costs and expenses including, but not limited to reasonable attorneys' fees, costs, and expenses, incurred by them in connection with any assertion for such infringement, misappropriation or breach.
9.4. MBRK warrants that MOXATAG does not infringe, misappropriate or otherwise violate any Intellectual Property Rights of any third party, and agrees to indemnify and hold harmless DD and its Representatives against any and all claims, losses, demands, causes of action, and any and all related costs and expenses including, but not limited to reasonable attorneys' fees, costs, and expenses, incurred by them in connection with any assertion for such infringement, misappropriation or breach.
9.5. MBRK shall indemnify and hold DD harmless from and against any damages, loss or expenses, including reasonable attorneys' fees, DD may sustain or incur as the result of any Legal Claims made, brought, or threatened against DD, arising out of: (1) any negligent or willful act or omission of MBRK, or any of its Representatives, to the extent that such Legal Claim does not arise from the negligent or willful act or omission of DD, or any of its Representatives; (2) any adverse events relating to the use of MBRK products; (3) assertions made in Promotional Materials, provided MBRK approved such Promotional Materials prior to implementation, including those that DD prepared for MBRK, and there are no deviations in such Promotional Material from the time MBRK provides DD with approval of such Promotional Material to the time that such Promotional Material is produced, printed and/or distributed by DD or on behalf of DD or MBRK; or (4) any breach by MBRK of any of its representations, warranties or obligations under this Agreement.
9.6. A party seeking indemnification hereunder (an "indemnified party") shall promptly notify the other party (the "indemnifying party") of any claim for which it intends to seek indemnification pursuant to this Section 9 (an "Indemnified Claim") , upon becoming aware thereof, shall permit the indemnifying party at the indemnifying party's cost to defend against such Indemnified Claim and to control the defense and disposition (including, without limitation, all decisions to litigate, settle subject to the settlement conditions set forth below, or appeal) of such Indemnified Claim and shall cooperate in the defense thereof. The indemnified party may, at its option and expense, have its own counsel participate in any such proceeding and shall cooperate with the indemnifying party and its insurer in the disposition of any such matter. Except with the prior consent of the indemnified party, which consent shall not be unreasonably withheld or delayed, the indemnifying party may not enter into any settlement of any Indemnified Claim unless such settlement includes an unqualified release of the indemnified party.
9.7. The provisions of this Section 9 shall survive the termination of this Agreement.
9.8. NOTWITHSTANDING THE FOREGOING, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY, UNDER ANY LEGAL OR EQUITABLE THEORY, FOR ANY INCIDENTAL, SPECIAL OR INDIRECT DAMAGES OF ANY KIND, SUFFERED BY OR OTHERWISE COMPENSABLE TO SUCH OTHER PARTY, ARISING OUT OF, UNDER OR RELATING TO THIS AGREEMENT, WHETHER OR NOT ADVISED OF THE POSSIBILITY OF SUCH.
Section 10 —Confidentiality
Both Parties agree to be bound by the Confidentiality Agreement executed by DD and MBRK on December 8, 2009, and which is incorporated by reference as part of this Agreement.
Section 11 — Intellectual Property
11.1. All materials (including Promotional Materials), documents, information, descriptions and suggestions of every kind supplied to DD by MBRK or any other affiliate of MBRK in connection with and/or pursuant to this Agreement or relationship established between DD and MBRK (including, without limitation, any such materials (including Promotional Materials), documents, information, descriptions and suggestions supplied to DD by MBRK prior to the execution of this Agreement) shall be the sole and exclusive property of MBRK and MBRK shall have the right to make whatever use it deems desirable of any such materials, documents, information, descriptions and suggestions. Upon termination or expiration of this Agreement, DD shall promptly return such items, including all copies thereof, to MBRK or dispose of such items as directed by MBRK.
11.2. DD agrees that any Intellectual Property Rights associated with Promotional Materials developed under this Agreement shall be the exclusive property of MBRK.
11.3. Prior to presentation to MBRK of any work or work product produced by DD pursuant to this Agreement, DD, at its own expense, shall insure that all such work or work product does not violate or infringe upon the Intellectual Property Rights of any third party.
11.4. All trademarks, service marks or logos developed under this Agreement shall be the exclusive property of MBRK.
11.5. DD will not have the right to use the name of MBRK, MOXATAG, or MBRK's trademarks, service marks, logos, or other similar marks in any manner except with the prior written approval of MBRK; provided that the foregoing shall not prohibit DD's use of MBRK's names or marks in connection with the performance of the services in a manner consistent with this Agreement. Nothing in this Agreement shall be construed to assign or license any rights to DD.
Section 12 — Assignment of Work Product
12.1. For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, DD hereby sells, assigns and transfers to MBRK and MBRK shall be the exclusive owner, assignee, and transferee of the entire right, title and interest, including all renewals for the entire world, in and to all work performed and work product developed or produced under this Agreement, including, but not limited to, materials (including Promotional Materials), writings, documents or other information conceived or reduced to practice or
authored by DD or any of DD Representative's, either solely or jointly with others, in connection with and/or pursuant to this Agreement or the relationship established between DD and MBRK or with information, materials (including Promotional Materials) or facilities of MBRK received or used by DD or DD's Representatives during the period in which DD is retained by MBRK.
12.2. In the event DD retains the service of a third party to perform any of DD's obligations hereunder DD shall, prior to commencement of any work by such third party, obtain the third party's written acknowledgement that all work done by such third party shall be deemed "work made for hire" and that the copyright in such material shall rest and remain with MBRK, or secure from such third party written assignment of all right, title and interest in and to the copyright in any material created by such third party.
Section 13 — Governing Law / Choice of Forum
The Parties agree that the venue for any action, injunctive application or dispute determinable by a court of law arising out of this Agreement and that this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of North Carolina, without giving effect to choice of law or arbitration provisions, and that the federal and state courts therein shall have jurisdiction over the subject matter and the Parties.
Section 14 — Survival of Certain Provisions
The terms, provisions, representations, and warranties contained in Sections 3.7, 3.9, 9, 10, 11, 12, and 13 of this Agreement by their terms are intended to survive the performance thereof by either party or both Parties hereunder shall so survive the completion of performance, expiration, termination or cancellation of this Agreement.
Section 15 — Entire Agreement / Amendments
This Agreement, together with any exhibits and attachments hereto and any orders issued hereunder, constitutes the entire agreement between the Parties hereto and shall supersede and take the place of any and all agreements, documents, minutes of meetings or letters concerning the subject matter hereof that may, prior to the Effective Date, be in existence. Furthermore, this Agreement shall supersede any and all pre-printed terms on any orders, invoices, and other related documents and any and all orders issued by DD. This Agreement may only be amended by a statement in writing to that effect signed by duly authorized representatives of MBRK and DD.
Section 16 — Severability
If any provision of this Agreement is found invalid or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall continue in full force and effect. The Parties shall negotiate in good faith to substitute a valid, legal, and enforceable provision that reflects the intent of such invalid or unenforceable provision.
Section 17 — Non Waiver
Either party's failure to enforce any of the terms or conditions herein or to exercise any right or privilege, or either party's waiver of any breach under this Agreement shall not be construed to be a waiver of any other terms, conditions, or privileges, whether of a similar or different type.
Section 18 — Termination and Fees
This Agreement may be terminated as follows:
(a) Either party hereto shall have the right to terminate this Agreement after thirty (30) days written notice to the other in the event the other is in breach of this Agreement unless the breaching party cures the breach before the expiration of such period of time. Each such notice shall set forth in reasonable detail the specifics of the breach.
(b) Either party shall have the right to terminate this Agreement effective upon written notice to the other party in the event the non-notifying party becomes insolvent or makes an assignment for the benefit of creditors, or in the event bankruptcy or insolvency proceedings are instituted against the non-notifying party or on the non-notifying party's behalf.
(c) Either party shall have the right to terminate this Agreement as per Section 19 below.
(d) MBRK may terminate this Agreement upon 60 days notice for a Change of Control subject to the Fees outlined in paragraph (f) of this Section 18.
(e) Upon the termination or expiration of this Agreement, all obligations and rights of both MBRK and DD hereunder shall terminate, except all obligations and rights (i) to make or receive payments becoming due prior to the date of termination or expiration, (ii) to pay or receive payments for any damages from any breach of the Agreement and (iii) otherwise provided in Section 14 of this Agreement. In addition to the foregoing, upon termination or expiration of this Agreement for any reason, each party shall continue to maintain accurate records necessary to demonstrate compliance with applicable laws, regulations and guidelines, including, without limitation, records relating to MOXATAG promotion to DD Target Segment Prescribers.
(f) Termination for Change of Control and Fees — If MBRK terminates this Agreement in the first year of the Agreement for any reason, then MBRK will pay DD a) an Early Termination Fee plus b) the End of Agreement Fee. If MBRK terminates the Agreement in years 2 or 3 prior to the period 60 days before the anniversary date, then MBRK will pay DD only the Early Termination Fee. If the Agreement is terminated in years 2 or 3 by MBRK providing notice to DD within 60 days of the then current anniversary date of its intent not to renew, then MBRK will pay DD the End of Agreement Fee but no Early Termination Fee.
Section 19 — Force Majeure
Each party shall be excused from liability for the failure or delay in performance of any obligation under this Agreement by reason of any extraordinary, unexpected and/or unavoidable event, such as acts of God, fire, flood, explosion, earthquake, or other natural forces, war, civil unrest, accident, destruction or other casualty, any lack or failure of transportation facilities, any lack or
failure of supply of raw materials, any strike or labor disturbance, or any other event similar to those enumerated above. Such excuse from liability shall be effective only to the extent and duration of the event(s) causing the failure or delay in performance and provided that the party has not caused such event(s) to occur. Notice by the failing party of such party's failure or delay in performance due to force majeure must be given to the other party within ten (10) calendar days after its occurrence. All delivery dates under this Agreement that have been affected by force majeure shall be tolled for the duration of such force majeure. In no event shall any party be required to prevent or settle any labor disturbance or dispute. Notwithstanding the foregoing and except as otherwise provided in Section 18 above with respect to MBRK's right to terminate this Agreement in the event that there is an inability to manufacture MOXATAG due to force majeure events, should the event(s) of force majeure suffered by a party extend beyond a ninety (90) day period, the other party may then terminate this Agreement by written notice to the non-performing party.
Section 20 — Notices
All notices or other communications, which are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by overnight courier with tracking capabilities, sent by first-class, registered or certified mail or sent by confirmed facsimile transmission.
If notices to DD, to:
Jay Grobowsky CEO DoctorDirectory.com, Inc. One Page Avenue, Suite 280 Asheville, NC 28801 Telephone: 888-796-4491 ext.101 Facsimile: 828-255-0442
If notices to MBRK, to:
John Thievon CEO MiddleBrook Pharmaceuticals, Inc. 7 Village Circle — Suite 100 Westlake, TX 76206 Telephone: 817-837-1200 Facsimile: 817-582-0410
With copy to:
Brad Cole General Counsel MiddleBrook Pharmaceuticals, Inc. 7 Village Circle — Suite 100 Westlake, TX 76206 Telephone: 817-837-1215 Facsimile: 817-582-0400
Section 21 — Disputes/Arbitration
21.1. In the event of any controversy or claim arising from or relating to any provision of this Agreement, or any term or condition hereof, or the performance by a party of its obligations hereunder, or its construction or its actual or alleged breach, the Parties will try to settle their differences amicably between themselves in negotiations between the Parties' respective Presidents or their executive level designees. If the dispute has not been resolved to the mutual satisfaction of the Parties within sixty (60) days after delivery of written notice of such dispute, either party may request binding arbitration.
21.2. Any dispute which is not resolved by executive level negotiations will be settled by final and binding arbitration before a single arbitrator in Asheville, NC and such arbitration will be conducted pursuant to then current rules of arbitration of commercial disputes of the American Arbitration Association. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The prevailing party shall be entitled to recover from the losing party reasonable attorney's fees, expenses and costs. In no event will the arbitrator have any right or power to award punitive or exemplary damages.
Section 22 — Assignment/Change of Control
This Agreement shall bind the Parties hereto and their successors and assigns, provided that neither party shall have the right to assign this Agreement or any part thereof to a third party without the prior written consent of the other party, however such consent will not be unreasonably withheld.
[Signature Page to Follow]
IN WITNESS WHEREOF, the Parties hereto, each by a duly authorized representative, have executed this Agreement as of the date first written above.
[Signature Page to Promotion Agreement]
DoctorDirectory.com, Inc. MiddleBrook Pharmaceuticals, Inc. By: /s/ Jay Grobowsky By: /s/ John Thievon
Name: Jay Grobowsky Name: John Thievon Title: CEO Title: President & CEO Date: February 3, 2010 Date: February 3, 2010
EXHIBIT 1
TO AGREEMENT BETWEEN DOCTORDIRECTORY.COM, INC. AND MBRK PHARMACEUTICALS, INC. DATED FEBRUARY 3, 2010
DD TARGET SEGMENT PRESCRIBERS
The Parties agree that the list of DD Target Segment Prescribers (hereinafter, "DD Target List") will be provided to MBRK by DD. MBRK shall have final approval of the DD Target List. MBRK receipt and approval of the DD Target List shall be documented in writing by the Parties. DD Target Segment Prescribers shall consist of only those licensed prescribers whose clinical practice is consistent with MOXATAG's approved labeling, uses, and indication.
It is anticipated that the DD Target List may exclude at MBRK's discretion, those prescribers that MBRK includes it its called upon healthcare practitioners, telemarketing program and as communicated to DD prior to the DD Target List being approved by MBRK. Any subsequent modifications to the DD Target List will be as approved in writing by the Parties.
EXHIBIT 2
TO AGREEMENT BETWEEN DOCTORDIRECTORY.COM, INC. AND MBRK PHARMACEUTICALS, INC. DATED FEBRUARY 3, 2010
MBRK DELIVERABLES
MBRK agrees to provide DD, to the best of its ability, with the following:
The Cost of Samples Amount and the Cost of Coupon Amount shall be at the expense of MBRK.
• Relevant portions of its MOXATAG marketing and communications plan, • MBRK-approved MOXATAG sales promotion materials in electronic format where available, • MOXATAG sales and training aids, including any eDetailing web site or relevant product materials, • All applicable MBRK policies and procedures that MBRK requires DD to comply with, including MBRK policies governing interactions with physicians and other Medical Professionals, • Analysis where available regarding promotion effectiveness of prior promotions, • Any available market research concerning MOXATAG, • Direct mail collateral pieces as shall be used from time to time by MBRK to promote MOXATAG to DD Target Segment Prescribers, • Timely review and approval of DD provided draft promotion material for use by DD, • The availability of MOXATAG Coupons and MOXATAG samples and the related fulfillment services as agreed to in advance by MBRK, • Monthly reporting, detailed by prescriber of redemption of MOXATAG Coupons, and • Monthly and quarterly attendance at status meetings, as appropriate, which may be via telephone, web based meeting/portal or face to face.
EXHIBIT 3
TO AGREEMENT BETWEEN DOCTORDIRECTORY.COM, INC. AND MBRK PHARMACEUTICALS, INC. DATED FEBRUARY 3, 2010
PRESCRIBER DATA
For purposes of this Agreement, Prescriber Data will be the prescription data for the activity within the U.S. for the USC Level 2 #15151 — Aminopenicillins category, in sufficient detail to identify periodic prescribing activity of MOXATAG. Such prescriber activity will be the basis for DD to calculate the Promotion Fees due as per Section 5 for the applicable Promotion Measurement Period.
EXHIBIT 4
TO AGREEMENT BETWEEN DOCTORDIRECTORY.COM, INC. AND MBRK PHARMACEUTICALS, INC. DATED FEBRUARY 3, 2010
PROMOTION SOLUTIONS
DD will provide promotional solutions to promote MOXATAG to DD Target Segment Prescribers as approved by MBRK. These services may include the following:
eSampling Platform — DD has created an eSampling platform that provides eligible prescribers with a virtual sample closet. Eligible prescribers will be determined through an analysis of prescribers selected from the DD Target Segment. Only those prescribers who possess a valid state license to prescribe MOXATAG and practice in a clinical area consistent with MOXATAG's approved labeling will be eligible to receive MOXATAG samples. This closet will provide a vehicle for these prescribers to order MOXATAG samples utilizing business rules created by MBRK. DD will promote the availability of samples to agreed upon prescribers and all fulfillment of samples will be conducted by MBRK's designated sample fulfillment provider in accordance with MBRK policies and procedures.
eLearning/eDetailing — DD may create an interactive learning platform that includes content of both an educational and promotional nature. All content would be consistent with MOXATAG's approved labeling and product positioning. The use of quizzes and interactive case presentations will be created to educate prescribers and promote interest in the eLearning platform. DD will link and/or incorporate a MOXATAG eDetail into the learning platform, if available. DD will attempt to use existing approved content for inclusion into the learning platform to expedite the MBRK approval process. All content will be as approved by MBRK.
Educational Email — DD's philosophy is to use science to support the promotion of MOXATAG. Therefore, the promotional program could include a series of educational messages that focus on clinical results and studies. These messages may be non-branded or partially branded depending on the nature of the content and shall be consistent with MOXATAG's approved labeling. New educational messages may be created and added as a result of ongoing understanding of prescribers' attitudes and perceptions. All content shall be approved by MBRK.
Direct-to-Physician Bulletin Services — Promotional emails may be used to communicate the primary, secondary and tertiary messages to the appropriate DD Target Segment Prescribers. The appropriate interval and frequency of messaging needed to ensure high response rates and interest level will be determined in consultation with MBRK.
Promotional emails generally include one or more "calls-to-action" such as online sample offers, clinical data reprint offers, and links to product website, eLearning Platform and/or a product eDetail, if available. Promotional emails shall comply with the CAN-SPAM Act of 2003 (15 U.S.C. 7701 et. seq.).
Physician Portal Promotions — DD may place MOXATAG-specific promotion in the DD Professional site within www.DoctorDirectory.com. Prescribers are required to logon or use an existing electronic communication to enter the site, which allows DD to target specific promotion to those prescribers whose practice area is consistent with MOXATAG's approved labeling. Promotion is in the form of rotating/flash tile ads and text links within the appropriate disease-state education and MOXATAG sample content areas. All Promotional Materials and their respective placement shall be approved by MBRK.
Patient Portal Promotions — Where appropriate, DD may place standard banner ads on the DD website www.DoctorDirectory.com that can be made visible to patients researching physicians. The site can accommodate static and flash banners and business rules developed in conjunction with MBRK guide the number of ads served based upon the number of banner ads within the Directory. In addition to the Directory's landing page, banners can be also served within the appropriate prescriber search and return pages. Such banner ads will be linked only to those prescribers whose practice area is consistent with MOXATAG's approved labeling. All banner ads and their respective placement shall be approved by MBRK.
Direct Mail Advertising — DD may use print mail to reach selected DD Target Segment Prescribers. Existing mail creative concepts may be used or if needed, DD may create new mail concepts in concert with and as approved by MBRK. At MiddleBrook's request, all direct mail advertising will include an opt-out option for recipient prescribers.
Coupon Promotions — DD may deploy a program to promote and distribute Coupons to appropriate targets as determined by both DD and the MBRK. Coupons can be made available via email promotion, print mail, site promotion, and within the online sample closet. All coupon promotion will be as approved by MBRK and shall not be valid for purchases that are reimbursed in whole or in part by Medicare, Medicaid, or similar federal and state programs), or for residents of Massachusetts if the purchase is reimbursed by a health care insurer.
Consumer Condition Content — DD may create pages of static disease and condition information consistent with MOXATAG's approved labeling that are appropriate for consumers. Pages may include PDF documents for printing of approved content such as "take along" pieces for patient office visits. All content will be as approved by MBRK.
Search Engine Marketing — DD may explore the use of specific search terms and phrases that can be used to promote the product website and/or eLearning platform. Search terms shall be consistent with MOXATAG's approved labeling. All search terms and "sponsored link" content will be as approved by MBRK.
Web Mini Site Promotion — DD may develop and deploy content rich "mini sites" that consist of static content but offer additional web properties in which to promote MOXATAG. Such mini sites may also be deployed as part of a search engine strategy as small content rich sites generally score well within search engine algorithms and place high within the natural return list. All content will be as approved by MBRK.
DD will not deploy any promotional service relating to MOXATAG without prior written approval from MBRK. All related Promotional Materials and associated content, as well as the use and placement of such Promotional Materials, are subject to MBRK's legal, medical and regulatory review and approval process. [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | EXHIBIT 10.1
PROMOTION AGREEMENT
This Promotion Agreement ("Agreement") is entered into as of February 3, 2010 ("Effective Date") by and between MiddleBrook Pharmaceuticals, Inc. ("MBRK") , a Delaware corporation with offices at 7 Village Circle, Suite 100, Westlake, TX 76262 and DoctorDirectory.com, Inc. ("DD") , a South Carolina Corporation, with offices at One Page Avenue, Suite 280, Asheville, NC 28801.
WHEREAS DD provides advertising, promotion and marketing services to pharmaceutical companies that seek to market their products to physicians and other allied medical professionals including nurses, nurse practitioners, and physician assistants; and
WHEREAS MBRK markets prescription drug products, including its product known as MOXATAG® ("MOXATAG") to licensed physicians, nurses, nurse practitioners, and physician assistants in the United States ("US") whose clinical practice is consistent with MOXATAG's approved labeling; and
WHEREAS MBRK seeks to have MOXATAG promoted to as many licensed US physicians, nurse practitioners and physician assistants whose clinical practice is consistent with MOXATAG's approved labeling as is possible and practical.
THEREFORE, for good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, the Parties agree that DD will promote MOXATAG to certain US physicians and others as identified in this Agreement subject to the terms and conditions as set forth below:
Section 1 — Definitions
The terms as used in this Agreement will have the meanings as follows:
(a) "Actual DD Target Segment MOXATAG TRx" means the total actual number of MOXATAG prescriptions filled in the US during the applicable Promotional Measurement Period and written by DD Target Segment Prescribers as stipulated by the Prescriber Data. (b) "Actual DD Target Segment MOXATAG TRx Tablets" means the average number of tablets contained in all MOXATAG TRx during the applicable Promotional Measurement Period as stipulated by the Prescriber Data including the tablet quantities as reported by IMS NPA weekly EUTRx (tablets) data, multiplied by Actual DD Target Segment MOXATAG TRx. (c) "Change of Control" means the change of control of MBRK, as defined by any of the following events: A) any third party acquires directly or indirectly the beneficial ownership of any voting security of MBRK representing fifty percent (50%) of the total voting power of the then outstanding voting securities of MBRK; B) the consummation of a merger, consolidation, recapitalization, or reorganization of MBRK with or by a third party which
would result in fifty percent (50%) or more of the total voting power of MBRK stock being transferred to a third party; or C) the stockholders or equity holders of MBRK approve a plan of complete liquidation of MBRK or an agreement for the sale or disposition of all or substantially all the assets of MBRK.
(d) "Coupons" means those coupons or vouchers provided by MBRK and distributed through a MBRK designee and whose redemption is tracked by a MBRK designee, and redeemed by patients filling MOXATAG prescriptions written by DD Target Segment Prescribers. (e) "Cost of Coupon Redemption Amount" means the redemption amount and the costs associated with printing and processing those Coupons redeemed during the applicable Promotion Measurement period. (f) "Cost of Samples Amount" means the cost of manufacturing and delivering (including, without limitation, all applicable freight, packaging and shipping costs) and costs of any third party vendors used in connection with manufacturing and fulfillment of MOXATAG samples. (g) "Deposit" means that amount which MBRK shall deposit with DD upon the Promotion Commencement Date and as subject to the adjustment outlined in Section 5. (h) "DD Target Segment Prescribers" means the licensed prescribers as defined in EXHIBIT 1. (i) "Early Termination Fee" means that amount equal to the most recent month's Promotion Fee prior to termination, multiplied by the number of unexpired months remaining in the current year of the Agreement. (j) "End of Agreement Fee" means the fee, in addition to any other amounts due, payable to DD (when this Agreement is terminated as further described in Section 18(f)) that is equal to two (2) times the last month's Promotional Fee earned by DD during the last month of the Agreement. (k) "FDA" means the federal Food and Drug Administration. (l) "Gross Margin Per Tablet" means the Gross Margin calculated in accordance with GAAP and which excludes those non-recurring and unusual items that the Parties agree are not resulting from activities under this Agreement ("GM Adjustment Items") divided by the actual number of MOXATAG tablets (as report by IMS Health Rx data) during the applicable Promotional Period. By way of example, these GM Adjustment Items where appropriate may include inventory write-offs, changes to prior period reserve balances or foreign exchange gains or losses. MBRK agrees to provide a summary of any GM Adjustment Items to DD. The calculation of Gross Margin Per Tablet will be based on U.S. sales of MOXATAG only. For periods after September 30, 2010, if the Gross Margin per Tablet is less than $3.50, the Parties agree to re-evaluate the viability of the Agreement and if deemed necessary will use commercially reasonable efforts to re-negotiate an amendment to the Agreement.
(m) "Gross Margin Per TRx" means the Gross Margin per MOXATAG Rx as calculated in accordance with GAAP and which exclude GM Adjustment Items. The calculation of Gross Margin Per TRx will be based on U.S. sales of MOXATAG only. For the period from the Effective Date through September 30, 2010, the Gross Margin per TRx shall be $36.50. (n) "Intellectual Property Rights" means any and all patents, copyrights, trade secrets, trademarks, and any and all other intellectual property rights or interests. (o) "Medical Professionals" means licensed nurses, nurse practitioners, and physician assistants. (p) "MOXATAG" means the prescription drug known as MOXATAG® (amoxicillin extended-release) Tablets 775 mg, approved by the FDA, having NDC numbers 110442-142-03 and 110442-142-02 which is marketed in the US, including currently and subsequently approved formulations, strengths, concentrations and delivery mechanisms. (q) "MOXATAG Labeling" shall mean (a) the FDA-approved full prescribing information for MOXATAG, including any required patient information, and (b) all labels and other written, printed or graphic matter upon any container, wrapper or any package insert or outsert utilized with or for MOXATAG. (r) "Parties" means DD and MBRK collectively. (s) "Prescriber Data" means the prescriber data supplied by a nationally recognized prescription data provider where permitted under federal and state law, which is currently provided to MBRK by IMS Health. (t) "Promotion Commencement Date" means the first day of the month in which DD commences its promotion of MOXATAG under this Agreement. (u) "Promotion Fees" means the Promotion Fees payable to DD by MBRK for the promotion services provided under this Agreement as is calculated by and stipulated in Section 5, which represent fair market value for such services. (v) "Promotional Materials" shall mean all MBRK-approved and available sales representative training materials and all MBRK-approved and available written, printed, graphic, electronic, audio or video matter, including, but not limited to, journal advertisements, sales aids, formulary binders, reprints, direct mail, direct-to-consumer advertising, Internet postings, broadcast advertisements and sales reminder aids (for example, scratch pads, pens and other such items), in each case created by a party or on its behalf and used or intended for use by DD and MBRK in connection with any promotion of MOXATAG hereunder, or disease state or indication for which MOXATAG is approved for treatment but excluding MOXATAG Labeling. (w) "Promotional Measurement Period" means that month during which prescription activity for MOXATAG is measured. (x) "Territory" shall mean the US, including all US territories, possessions and protectorates. (y) "Up-Front Payment" means the one-time payment of $50,000 to be made by MBRK to DD upon execution of this Agreement.
Section 2 — Term
This Agreement shall commence as of the Effective Date and shall continue in full force and effect for an initial term of three (3) years from the Promotion Commencement Date, divided into three one-year periods. Unless terminated in accordance with the provisions of Section 18, this Agreement shall automatically renew for each subsequent one-year term.
Section 3 — Obligations of DD
3.1 DD will promote MOXATAG to DD Target Segment Prescribers using its full suite of promotion solutions where DD and MBRK deem appropriate, including but not limited to DD's a) eSampling Platform, b) eLearning / eDetailing, c) Educational Email, d) Direct-to-Physician Bulletin Services, e) Physician Portal Promotions, f) Patient Portal Promotions, g) Direct Mail Advertising, h) Coupon Promotions, i) Consumer Condition Content, j) Search Engine Marketing and k) Mini Web Site Promotions where appropriate and with prior written approval from MBRK. MBRK shall have final approval as to the promotion solutions utilized by DD in the promotion of MOXATAG and DD will not deploy any promotion solution without such approval from MBRK. Such promotion solutions are as listed in EXHIBIT 4. In the event that the Parties mutually agree on the provision of additional services beyond those listed in EXHIBIT 4, such additional promotional solutions shall be approved by MBRK and additional Appendices numbered sequentially (1, 2, 3, 4 etc.) setting forth in detail the additional services shall be duly signed by authorized representatives of the Parties and attached to EXHIBIT 4 and incorporated herein. The services contained in EXHIBIT 4 and any related modifications thereto represent those services that are reasonably necessary to accomplish the promotion of MOXATAG. No services shall be provided by DD, or paid for by MBRK, except as agreed to in writing by the Parties.
3.2. Notwithstanding any other provision of this Agreement, all Promotional Materials relating to MOXATAG that will be utilized by DD, as well as the use and placement of such Promotional Materials, are subject to written approval by MBRK prior to such use. DD agrees to provide draft and final versions of all Promotional Materials to MBRK for MBRK's review and approval prior to DD's use of such Promotional Materials, provided such materials are developed or modified by DD. MBRK has the authority to perform the final review of all Promotional Materials developed by DD. All Promotional Materials are subject to MBRK's legal, medical and regulatory review and approval process. DD agrees to make all the necessary changes and/or modifications requested by MBRK. DD shall not use Promotional Materials for any purpose outside of this Agreement without prior written authorization from MBRK.
3.3. Notwithstanding any other provision of this Agreement, all MOXATAG sample request forms (hereinafter "Sample Request Forms") utilized by DD to document a prescriber's request for MOXATAG samples are subject to written approval by MBRK. DD agrees to provide draft and final versions of all Sample Request Forms to MBRK for MBRK's review and approval prior to DD's use of such Sample Request Forms. MBRK has the authority to perform the final review of all Sample Request Forms developed by DD or used in conjunct. All Sample Request Forms are subject to MBRK's legal, medical and regulatory review and approval process. DD agrees to make all the necessary changes and/or modifications requested by MBRK. DD shall not use Sample Request Forms for any purpose outside of this Agreement without prior written authorization from MBRK.
3.4. Notwithstanding any other provision of this Agreement, DD shall not offer or provide any item to a DD Target Segment Prescriber, without prior written approval by MBRK. The provision of any items shall be subject to MBRK's legal, medical and regulatory review and approval process. In the event that MBRK authorizes the provision of items of nominal value to a DD Target Segment Prescriber, DD shall track and record the item provided, the associated value, the date of the transaction, and the recipient DD Target Segment Prescriber, including his or her credentials and the state in which he or she is licensed, where possible.
3.5 DD shall use commercially reasonable efforts to promote MOXATAG to DD Target Segment Prescribers and agrees to efficiently perform the services as described in EXHIBIT 4 in compliance with MBRK's policies and procedures, and all applicable federal and state laws and regulations, including, without limitation, federal and state anti-kickback statutes, regulations contained in 21 CFR (Code of Federal Regulations) as they pertain to promotional activity of an FDA-approved pharmaceutical product and the US Department of Health and Human Services Office of Inspector General's ("OIG") Compliance Program Guidance for Pharmaceutical Manufacturers (2003). DD agrees that it shall not directly or indirectly offer, pay or transfer anything of value, in cash or in-kind, to induce DD Target Segment Prescribers to purchase, order, or recommend MOXATAG, nor shall DD exert undue influence on the medical decision-making of DD Target Segment Prescribers.
3.6. Both Parties agree to assign sufficient resources and personnel to discharge their respective responsibilities under this Agreement in a timely manner and at all times operating using a professional standard of work as consistent with industry standards.
3.7. DD shall select and shall have full and complete control of and responsibility for all actions of its agents, affiliates, officers, directors, employees or subcontractors (hereinafter "Representatives") and none of DD's Representatives are, or shall be deemed to be, the Representatives of MBRK for any purpose whatsoever by virtue of this Agreement. MBRK has no duty, liability or responsibility of any kind, to or for the acts or omissions of DD or any of DD's Representatives. DD hereby acknowledges and agrees that DD shall cause each of DD's Representatives who participate in rendering the services to comply with the terms of this Agreement. DD hereby acknowledges and agrees that DD is responsible for the failure of any of DD's Representatives to comply with the terms of this Agreement.
3.8. DD shall be responsible for obtaining the necessary contracts and releases with or from all parties whose names, likenesses, testimonials, scripts, musical compositions or similar materials, assets or rights are used in MBRK's advertising, promotional, publicity or other materials prepared and produced by DD under this Agreement, except where MBRK undertakes to be responsible for obtaining the same. Notwithstanding the foregoing, without the prior written consent of MBRK, DD is not authorized hereunder or otherwise to enter into any contract or agreement in respect of the foregoing with a third party if such contract or agreement, directly or indirectly, imposes any obligations on MBRK.
3.9. All records maintained by DD pertaining to DD's services to MBRK pursuant to this Agreement shall be provided to MBRK within 48 hours of MBRK's request. DD shall also make its records and other documents relevant to MBRK and this Agreement available for audit or review by MBRK upon MBRK's request at a mutually agreed upon time. Upon termination or expiration of this Agreement, if specifically requested by MBRK, DD shall provide originals or copies of such records to MBRK.
Section 4 — Costs to Deliver DD Promotion
All costs incurred by DD to deploy its services to promote MOXATAG to DD Target Segment Prescribers will be the responsibility of DD, except as provided in Section 6.
Section 5 — Up-Front Payment, Deposit and Promotion Fees
5.1. MBRK will pay DD an Up-Front Payment of $50,000 upon execution of this Agreement.
5.2. Additionally, MBRK shall pay a Deposit to DD equal to $100,000 upon the Promotion Commencement Date. Each month the Parties will review the amount of the Deposit and where necessary MBRK will make an additional deposit payment to DD in order to maintain a total Deposit with DD of at least two (2) times the current month's Promotion Fees. For example, if in a month Promotion Fees are $105,000, then MBRK will increase the Deposit to two (2) times $105,000, equal to $210,000. The Parties agree to meet via conference call within five (5) business days of the end of each month to determine the necessary adjustment, if any, to the Deposit. If it is determined that the Deposit must be increased, within ten (10) business days of the date upon which the new Deposit is determined, MBRK shall send to DD the funds necessary to increase the Deposit. Notwithstanding the above, if during years 2 and 3 of this Agreement, in the event MBRK's then current annual form 10-K filed with the SEC does not contain an audit opinion that expresses doubt about MBRK's ability to continue as a going concern, then MBRK's requirement to maintain a Deposit is waived. In all cases the Deposit amount will be used to settle any outstanding amounts due to DD by MBRK at the end of the Agreement or at the time the Deposit requirement is waived.
5.3. Additionally, on or before the last day of each month, DD will invoice MBRK for the Promotion Fees due for the prior month. Such Promotion Fees shall be calculated by:
(a) the following formula for the period from the Effective Date through September 30, 2010:
For example: if during the month of March 2010 (a) (A) above was 2,000 TRx and (B) above was $36.50 then MBRK would be remit $36,500.00 to DD.
OR
(b) the following formula for the period from October 1, 2010 through termination of this Agreement:
(A) the Actual DD Target Segment MOXATAG TRx for the Promotional Measurement Period multiplied by: (B) the applicable Gross Margin Per TRx multiplied by: (C) 50%.
(A) the Actual DD Target Segment MOXATAG TRx Tablets for the Promotional Measurement Period multiplied by: (B) the applicable Gross Margin Per Tablet multiplied by: (C) 50%.
For example: if during the month of November 2010:
MBRK would remit $89,425.00 to DD:
These Promotion Fees represent fair market value payment for such services rendered.
The Parties recognize that Promotion Fees are to be settled on a monthly basis which requires the use of an estimated Gross Margin Per Tablet amount until the actual Gross Margin Per Tablet for an applicable quarter can be determined. Accordingly, to facilitate the calculation and settlement of monthly Promotion Fees for periods after September 2010, the Parties agree that the Gross Margin Per Tablet used to settle the monthly Promotion Fees will be that as calculated using the previous calendar quarter's Gross Margin Per Tablet data and current period's Actual DD Target Segment MOXATAG TRx. Such Promotion Fees for the three months in any calendar quarter will be subject to a true-up process which will occur by the 15th of the second month of the following quarter. By way of example, Promotion Fees for each of the months of April, May and June will be settled using the Gross Margin Per Tablet amount that has been calculated for the quarter ended March 31 and will be subject to a true-up process to occur by August 15 with any adjustment to such Promotion Fees being settled between the parties within 15 days thereafter.
5.4 In the event MBRK shall discontinue detailing prescribers in a territory that is not included in the then current DD Target Segment Prescribers set forth in EXHIBIT 1 to this Agreement or any amendments thereto ("New DD Target Segment Prescribers"), the Parties shall negotiate in good faith the Promotion Fee payable to DD should MBRK desire that DD add those New DD Target Segment Prescribers to the DD Target Segment Prescribers.
5.5. The Promotion Fees shall be paid to DD by MBRK fifteen (15) days after the receipt of an invoice from DD by MBRK.
5. 6. The basis for determining the Promotion Fees will be the Prescriber Data provided by MBRK to DD.
5.7. DD agrees to submit invoices to MBRK at the following address:
Attn: Accounts Payable MiddleBrook Pharmaceuticals, Inc. 7 Village Circle, Suite 100 Westlake, TX 76262
(A)= Actual DD Target Segment MOXATAG TRx (5,000) x an average tablet amount for the month of (9.8 tablets)= 49,000 (B)= 3.65 (C)= 50%
Section 6 — Obligations of MBRK
6.1. Subject to the terms of confidentiality set forth in Section 10, MBRK agrees to make available to DD to the best of its ability the items as stipulated in EXHIBIT 2. These items include the relevant portions of its marketing and communications plan, approved sales promotion materials in electronic format where available, sales and training aids relevant to MOXATAG and promotional items and packages for appropriate licensed physicians, nurses, nurse practitioners and physician assistants. Additionally, MBRK or its authorized designee shall be responsible for the provision of MOXATAG samples in response to a prescriber's request as documented on a Sample Request Form and MBRK or its authorized vendor shall be solely responsible for sample fulfillment in quantities agreed to by MBRK. At no time shall DD take physical possession of or title to MOXATAG samples.
6.2. Notwithstanding any other provision of this Agreement, MBRK shall have the sole right and authority and in its sole discretion shall take any actions that it deems appropriate with respect to MOXATAG as would normally be done in accordance with accepted business practices and federal and state legal requirements to maintain the authorization and/or ability to market MOXATAG in the US, including, without limitation, the following:
(a) manufacturing, storage, and distribution of MOXATAG trade and sample product; (b) the scope and strategies with respect to the marketing and promotion of MOXATAG, including, without limitation, any labeling or claims in connection therewith; (c) booking sales and distribution of MOXATAG hereunder and performance of related services; (d) handling all aspects of order processing, invoicing and collection, inventory and receivables; (e) providing customer support, including handling medical queries, and performing other functions consistent with consumer practice for prescription pharmaceuticals; (f) responding to product and medical complaints relating to MOXATAG; (g) handling all returns of MOXATAG trade and sample product; (h) handling all voluntary recalls and market withdrawals of MOXATAG. In such a situation, DD will make available to MBRK, upon request, all of DD's pertinent records on MOXATAG. Any and all reasonable and documented costs and expenses incurred by DD in the conduct of any such recall or market withdrawal of MOXATAG shall be reimbursed by MBRK, except to the extent such recall or market withdrawal was the direct result of the negligence or failure of DD to comply with its obligations under this Agreement; (i) communicating with any governmental agencies and satisfying their requirements regarding all regulatory approvals of MOXATAG; including the filing of marketing and promotion materials approved by MBRK under this Agreement with the FDA in compliance with all FDA pharmaceutical marketing regulations; (j) reporting adverse reaction reports to US regulatory authorities as required by applicable US law or regulation;
6.3 Notwithstanding any other provision herein to the contrary, MBRK shall have the sole right and responsibility for establishing and modifying the terms and conditions with respect to the sale of MOXATAG, including, without limitation, the price at which MOXATAG will be sold, any discounts attributable to payments on receivables and distribution of MOXATAG.
6.4. MBRK shall be responsible for the costs of obtaining, tracking, processing, formatting and reporting Prescriber Data.
6.5. The Cost of Samples Amount and the Cost of Coupon Redemption Amount shall be paid by MBRK.
Section 7 — Independent Contractor
In the performance of DD's obligations under this Agreement, DD shall at all times act as and be deemed an independent contractor. Nothing in this Agreement shall be construed to render DD or any of its employees, agents, or officers, an employee, joint venturer, agent, or partner of MBRK. As an independent contractor, DD fees and expenses are limited to those expressly stated in this Agreement. DD is not authorized to assume or create any obligations or responsibilities, express or implied, on behalf of or in the name of MBRK, except as specifically defined herein. It is understood that the employees, methods, facilities, and equipment of DD shall at all times be under DD's exclusive direction and control. DD shall not participate in MBRK's fringe benefit plans or any other compensation or benefit plans MBRK maintains for its own employees.
Section 8 — Representations and Warranties
8.1. MBRK represents and warrants that it has the rights and authorizations required by federal and state agencies, including but not limited to the FDA granting it the right to market MOXATAG in the US.
8.2. Each Party represents and warrants that it shall comply in all material respects with any and all applicable federal, state, and local laws and regulations and industry guidances and standards applicable to the conduct of business and the execution of any and all marketing and promotional services or activities pursuant to this Agreement, including but not limited to: the federal anti-kickback statute, 42 U.S.C. § 1320a-7b(b); federal Food, Drug and Cosmetic Act and relevant regulations; FDA promotional guidelines; FDA's Guidance on Industry-Supported Scientific and Educational Activities (1997); US Department of Health and Human Services OIG Compliance Program Guidance for Pharmaceutical Manufacturers (2003); the Pharmaceutical Research and Manufacturers of America ("PhRMA") Code on Interactions With Healthcare Professionals; and ethics opinions of the American Medical Association ("AMA").
(k) reporting significant losses and thefts of MOXATAG to the appropriate state and federal regulatory authorities, as required. In such a situation, DD will make available to MBRK, upon request, all of DD's pertinent records on MOXATAG. Any and all reasonable and documented costs and expenses incurred by DD in the conduct of such activities shall be reimbursed by MBRK, except to the extent such reporting obligations were the direct result of the negligence or failure of DD to comply with its obligations under this Agreement; and
(l) negotiating any and all agreements with managed care organizations, payers, wholesalers, group purchasing organizations, and the like, regarding MOXATAG.
8.3. Each Party represents and warrants that it shall comply with any and all applicable federal, state, and local laws and regulations related to the request and receipt of MOXATAG samples, including, but not limited to, the Prescription Drug Marketing Act of 1987 ("PDMA") of 1987, as amended, and the regulations promulgated thereunder.
8.4. Each Party represents and warrants that it shall comply with any and all applicable federal, state, and local laws and regulations including, but not limited to, health, safety and security rules and regulations and all privacy laws and regulations, including but not limited to applicable state privacy laws and regulations and the privacy requirements set forth in the Health Insurance Portability and Accountability Act (HIPAA).
8.5. DD represents and warrants that (i) it shall comply with all applicable MBRK policies and procedures, including MBRK policies governing interactions with physicians and other Medical Professionals; and (ii) it has the specific industry knowledge, experience and expertise to perform all of its obligations hereunder in good faith and to industry standards.
8.6. DD represents and warrants that neither DD nor, to DD's knowledge, any person DD employs in connection with the services to be performed under this Agreement (i) have been debarred, suspended, proposed for debarment, declared ineligible or voluntarily excluded from participation in this transaction by any federal or state law, regulation, or action including, but not limited to, 21 U.S.C. § 335(a) and (b); (ii) have been convicted of a criminal offense related to healthcare; and (iii) have been listed by a federal department or agency as debarred, excluded, or otherwise ineligible for participation in federal healthcare programs as set forth in 42 U.S.C. § 1320a-7, or any similar state law or regulation. DD shall notify MBRK in writing immediately if it or any person it employs in connection with this Agreement or any obligations performed hereunder, including any of its employees or other representatives or member of its senior management, is debarred, is in the process of being debarred, , or if any action, suit, claim, investigation, or legal or administrative proceeding is pending or is threatened, relating to the debarment or conviction of DD or any person it employs in connection with this Agreement or any obligations performed hereunder.
Section 9 — Indemnification
9.1. DD shall indemnify and hold MBRK and its Representatives harmless from and against any and all claims, losses, demands, causes of action, and any and all related costs and expenses including, but not limited to reasonable attorneys' fees, costs, and expenses, incurred by them in connection with any claim, suit or proceeding (hereinafter "Legal Claims"), arising out of or in connection with: (1) any negligent or willful act or omission or error of DD, or any of its Representatives, to the extent such Legal Claim does not arise from the negligent or willful act or omission of MBRK or any of its Representatives; (2) any violation by DD, or any of its Representatives of any law, statute, ordinance or regulation; (3) any breach by DD of any of its representations, warranties or obligations under this Agreement; or (4) statements or representations by DD, or its Representatives, that are contrary to the MOXATAG Labeling or the approved Promotional Materials and/or outside the FDA-approved indication(s) for MOXATAG.
9.2. DD warrants that any Promotional Materials developed by DD or its Representatives under this Agreement, do not infringe, misappropriate or otherwise violate any Intellectual Property Rights of any third party, and agrees to protect, indemnify and hold harmless MBRK and its Representatives against any and all claims, losses, demands, causes of action, and any and all related costs and expenses including, but not limited to reasonable attorneys' fees, costs, and expenses, incurred by them in connection with any assertion for such infringement, misappropriation or breach.
9.3. DD warrants that any promotional services rendered by DD or its Representatives under this Agreement, do not infringe, misappropriate or otherwise violate any Intellectual Property Rights of any third party, and agrees to protect, indemnify and hold harmless MBRK and its Representatives against any and all claims, losses, demands, causes of action, and any and all related costs and expenses including, but not limited to reasonable attorneys' fees, costs, and expenses, incurred by them in connection with any assertion for such infringement, misappropriation or breach.
9.4. MBRK warrants that MOXATAG does not infringe, misappropriate or otherwise violate any Intellectual Property Rights of any third party, and agrees to indemnify and hold harmless DD and its Representatives against any and all claims, losses, demands, causes of action, and any and all related costs and expenses including, but not limited to reasonable attorneys' fees, costs, and expenses, incurred by them in connection with any assertion for such infringement, misappropriation or breach.
9.5. MBRK shall indemnify and hold DD harmless from and against any damages, loss or expenses, including reasonable attorneys' fees, DD may sustain or incur as the result of any Legal Claims made, brought, or threatened against DD, arising out of: (1) any negligent or willful act or omission of MBRK, or any of its Representatives, to the extent that such Legal Claim does not arise from the negligent or willful act or omission of DD, or any of its Representatives; (2) any adverse events relating to the use of MBRK products; (3) assertions made in Promotional Materials, provided MBRK approved such Promotional Materials prior to implementation, including those that DD prepared for MBRK, and there are no deviations in such Promotional Material from the time MBRK provides DD with approval of such Promotional Material to the time that such Promotional Material is produced, printed and/or distributed by DD or on behalf of DD or MBRK; or (4) any breach by MBRK of any of its representations, warranties or obligations under this Agreement.
9.6. A party seeking indemnification hereunder (an "indemnified party") shall promptly notify the other party (the "indemnifying party") of any claim for which it intends to seek indemnification pursuant to this Section 9 (an "Indemnified Claim") , upon becoming aware thereof, shall permit the indemnifying party at the indemnifying party's cost to defend against such Indemnified Claim and to control the defense and disposition (including, without limitation, all decisions to litigate, settle subject to the settlement conditions set forth below, or appeal) of such Indemnified Claim and shall cooperate in the defense thereof. The indemnified party may, at its option and expense, have its own counsel participate in any such proceeding and shall cooperate with the indemnifying party and its insurer in the disposition of any such matter. Except with the prior consent of the indemnified party, which consent shall not be unreasonably withheld or delayed, the indemnifying party may not enter into any settlement of any Indemnified Claim unless such settlement includes an unqualified release of the indemnified party.
9.7. The provisions of this Section 9 shall survive the termination of this Agreement.
9.8. NOTWITHSTANDING THE FOREGOING, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY, UNDER ANY LEGAL OR EQUITABLE THEORY, FOR ANY INCIDENTAL, SPECIAL OR INDIRECT DAMAGES OF ANY KIND, SUFFERED BY OR OTHERWISE COMPENSABLE TO SUCH OTHER PARTY, ARISING OUT OF, UNDER OR RELATING TO THIS AGREEMENT, WHETHER OR NOT ADVISED OF THE POSSIBILITY OF SUCH.
Section 10 —Confidentiality
Both Parties agree to be bound by the Confidentiality Agreement executed by DD and MBRK on December 8, 2009, and which is incorporated by reference as part of this Agreement.
Section 11 — Intellectual Property
11.1. All materials (including Promotional Materials), documents, information, descriptions and suggestions of every kind supplied to DD by MBRK or any other affiliate of MBRK in connection with and/or pursuant to this Agreement or relationship established between DD and MBRK (including, without limitation, any such materials (including Promotional Materials), documents, information, descriptions and suggestions supplied to DD by MBRK prior to the execution of this Agreement) shall be the sole and exclusive property of MBRK and MBRK shall have the right to make whatever use it deems desirable of any such materials, documents, information, descriptions and suggestions. Upon termination or expiration of this Agreement, DD shall promptly return such items, including all copies thereof, to MBRK or dispose of such items as directed by MBRK.
11.2. DD agrees that any Intellectual Property Rights associated with Promotional Materials developed under this Agreement shall be the exclusive property of MBRK.
11.3. Prior to presentation to MBRK of any work or work product produced by DD pursuant to this Agreement, DD, at its own expense, shall insure that all such work or work product does not violate or infringe upon the Intellectual Property Rights of any third party.
11.4. All trademarks, service marks or logos developed under this Agreement shall be the exclusive property of MBRK.
11.5. DD will not have the right to use the name of MBRK, MOXATAG, or MBRK's trademarks, service marks, logos, or other similar marks in any manner except with the prior written approval of MBRK; provided that the foregoing shall not prohibit DD's use of MBRK's names or marks in connection with the performance of the services in a manner consistent with this Agreement. Nothing in this Agreement shall be construed to assign or license any rights to DD.
Section 12 — Assignment of Work Product
12.1. For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, DD hereby sells, assigns and transfers to MBRK and MBRK shall be the exclusive owner, assignee, and transferee of the entire right, title and interest, including all renewals for the entire world, in and to all work performed and work product developed or produced under this Agreement, including, but not limited to, materials (including Promotional Materials), writings, documents or other information conceived or reduced to practice or
authored by DD or any of DD Representative's, either solely or jointly with others, in connection with and/or pursuant to this Agreement or the relationship established between DD and MBRK or with information, materials (including Promotional Materials) or facilities of MBRK received or used by DD or DD's Representatives during the period in which DD is retained by MBRK.
12.2. In the event DD retains the service of a third party to perform any of DD's obligations hereunder DD shall, prior to commencement of any work by such third party, obtain the third party's written acknowledgement that all work done by such third party shall be deemed "work made for hire" and that the copyright in such material shall rest and remain with MBRK, or secure from such third party written assignment of all right, title and interest in and to the copyright in any material created by such third party.
Section 13 — Governing Law / Choice of Forum
The Parties agree that the venue for any action, injunctive application or dispute determinable by a court of law arising out of this Agreement and that this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of North Carolina, without giving effect to choice of law or arbitration provisions, and that the federal and state courts therein shall have jurisdiction over the subject matter and the Parties.
Section 14 — Survival of Certain Provisions
The terms, provisions, representations, and warranties contained in Sections 3.7, 3.9, 9, 10, 11, 12, and 13 of this Agreement by their terms are intended to survive the performance thereof by either party or both Parties hereunder shall so survive the completion of performance, expiration, termination or cancellation of this Agreement.
Section 15 — Entire Agreement / Amendments
This Agreement, together with any exhibits and attachments hereto and any orders issued hereunder, constitutes the entire agreement between the Parties hereto and shall supersede and take the place of any and all agreements, documents, minutes of meetings or letters concerning the subject matter hereof that may, prior to the Effective Date, be in existence. Furthermore, this Agreement shall supersede any and all pre-printed terms on any orders, invoices, and other related documents and any and all orders issued by DD. This Agreement may only be amended by a statement in writing to that effect signed by duly authorized representatives of MBRK and DD.
Section 16 — Severability
If any provision of this Agreement is found invalid or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall continue in full force and effect. The Parties shall negotiate in good faith to substitute a valid, legal, and enforceable provision that reflects the intent of such invalid or unenforceable provision.
Section 17 — Non Waiver
Either party's failure to enforce any of the terms or conditions herein or to exercise any right or privilege, or either party's waiver of any breach under this Agreement shall not be construed to be a waiver of any other terms, conditions, or privileges, whether of a similar or different type.
Section 18 — Termination and Fees
This Agreement may be terminated as follows:
(a) Either party hereto shall have the right to terminate this Agreement after thirty (30) days written notice to the other in the event the other is in breach of this Agreement unless the breaching party cures the breach before the expiration of such period of time. Each such notice shall set forth in reasonable detail the specifics of the breach.
(b) Either party shall have the right to terminate this Agreement effective upon written notice to the other party in the event the non-notifying party becomes insolvent or makes an assignment for the benefit of creditors, or in the event bankruptcy or insolvency proceedings are instituted against the non-notifying party or on the non-notifying party's behalf.
(c) Either party shall have the right to terminate this Agreement as per Section 19 below.
(d) MBRK may terminate this Agreement upon 60 days notice for a Change of Control subject to the Fees outlined in paragraph (f) of this Section 18.
(e) Upon the termination or expiration of this Agreement, all obligations and rights of both MBRK and DD hereunder shall terminate, except all obligations and rights (i) to make or receive payments becoming due prior to the date of termination or expiration, (ii) to pay or receive payments for any damages from any breach of the Agreement and (iii) otherwise provided in Section 14 of this Agreement. In addition to the foregoing, upon termination or expiration of this Agreement for any reason, each party shall continue to maintain accurate records necessary to demonstrate compliance with applicable laws, regulations and guidelines, including, without limitation, records relating to MOXATAG promotion to DD Target Segment Prescribers.
(f) Termination for Change of Control and Fees — If MBRK terminates this Agreement in the first year of the Agreement for any reason, then MBRK will pay DD a) an Early Termination Fee plus b) the End of Agreement Fee. If MBRK terminates the Agreement in years 2 or 3 prior to the period 60 days before the anniversary date, then MBRK will pay DD only the Early Termination Fee. If the Agreement is terminated in years 2 or 3 by MBRK providing notice to DD within 60 days of the then current anniversary date of its intent not to renew, then MBRK will pay DD the End of Agreement Fee but no Early Termination Fee.
Section 19 — Force Majeure
Each party shall be excused from liability for the failure or delay in performance of any obligation under this Agreement by reason of any extraordinary, unexpected and/or unavoidable event, such as acts of God, fire, flood, explosion, earthquake, or other natural forces, war, civil unrest, accident, destruction or other casualty, any lack or failure of transportation facilities, any lack or
failure of supply of raw materials, any strike or labor disturbance, or any other event similar to those enumerated above. Such excuse from liability shall be effective only to the extent and duration of the event(s) causing the failure or delay in performance and provided that the party has not caused such event(s) to occur. Notice by the failing party of such party's failure or delay in performance due to force majeure must be given to the other party within ten (10) calendar days after its occurrence. All delivery dates under this Agreement that have been affected by force majeure shall be tolled for the duration of such force majeure. In no event shall any party be required to prevent or settle any labor disturbance or dispute. Notwithstanding the foregoing and except as otherwise provided in Section 18 above with respect to MBRK's right to terminate this Agreement in the event that there is an inability to manufacture MOXATAG due to force majeure events, should the event(s) of force majeure suffered by a party extend beyond a ninety (90) day period, the other party may then terminate this Agreement by written notice to the non-performing party.
Section 20 — Notices
All notices or other communications, which are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by overnight courier with tracking capabilities, sent by first-class, registered or certified mail or sent by confirmed facsimile transmission.
If notices to DD, to:
Jay Grobowsky CEO DoctorDirectory.com, Inc. One Page Avenue, Suite 280 Asheville, NC 28801 Telephone: 888-796-4491 ext.101 Facsimile: 828-255-0442
If notices to MBRK, to:
John Thievon CEO MiddleBrook Pharmaceuticals, Inc. 7 Village Circle — Suite 100 Westlake, TX 76206 Telephone: 817-837-1200 Facsimile: 817-582-0410
With copy to:
Brad Cole General Counsel MiddleBrook Pharmaceuticals, Inc. 7 Village Circle — Suite 100 Westlake, TX 76206 Telephone: 817-837-1215 Facsimile: 817-582-0400
Section 21 — Disputes/Arbitration
21.1. In the event of any controversy or claim arising from or relating to any provision of this Agreement, or any term or condition hereof, or the performance by a party of its obligations hereunder, or its construction or its actual or alleged breach, the Parties will try to settle their differences amicably between themselves in negotiations between the Parties' respective Presidents or their executive level designees. If the dispute has not been resolved to the mutual satisfaction of the Parties within sixty (60) days after delivery of written notice of such dispute, either party may request binding arbitration.
21.2. Any dispute which is not resolved by executive level negotiations will be settled by final and binding arbitration before a single arbitrator in Asheville, NC and such arbitration will be conducted pursuant to then current rules of arbitration of commercial disputes of the American Arbitration Association. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The prevailing party shall be entitled to recover from the losing party reasonable attorney's fees, expenses and costs. In no event will the arbitrator have any right or power to award punitive or exemplary damages.
Section 22 — Assignment/Change of Control
This Agreement shall bind the Parties hereto and their successors and assigns, provided that neither party shall have the right to assign this Agreement or any part thereof to a third party without the prior written consent of the other party, however such consent will not be unreasonably withheld.
[Signature Page to Follow]
IN WITNESS WHEREOF, the Parties hereto, each by a duly authorized representative, have executed this Agreement as of the date first written above.
[Signature Page to Promotion Agreement]
DoctorDirectory.com, Inc. MiddleBrook Pharmaceuticals, Inc. By: /s/ Jay Grobowsky By: /s/ John Thievon
Name: Jay Grobowsky Name: John Thievon Title: CEO Title: President & CEO Date: February 3, 2010 Date: February 3, 2010
EXHIBIT 1
TO AGREEMENT BETWEEN DOCTORDIRECTORY.COM, INC. AND MBRK PHARMACEUTICALS, INC. DATED FEBRUARY 3, 2010
DD TARGET SEGMENT PRESCRIBERS
The Parties agree that the list of DD Target Segment Prescribers (hereinafter, "DD Target List") will be provided to MBRK by DD. MBRK shall have final approval of the DD Target List. MBRK receipt and approval of the DD Target List shall be documented in writing by the Parties. DD Target Segment Prescribers shall consist of only those licensed prescribers whose clinical practice is consistent with MOXATAG's approved labeling, uses, and indication.
It is anticipated that the DD Target List may exclude at MBRK's discretion, those prescribers that MBRK includes it its called upon healthcare practitioners, telemarketing program and as communicated to DD prior to the DD Target List being approved by MBRK. Any subsequent modifications to the DD Target List will be as approved in writing by the Parties.
EXHIBIT 2
TO AGREEMENT BETWEEN DOCTORDIRECTORY.COM, INC. AND MBRK PHARMACEUTICALS, INC. DATED FEBRUARY 3, 2010
MBRK DELIVERABLES
MBRK agrees to provide DD, to the best of its ability, with the following:
The Cost of Samples Amount and the Cost of Coupon Amount shall be at the expense of MBRK.
• Relevant portions of its MOXATAG marketing and communications plan, • MBRK-approved MOXATAG sales promotion materials in electronic format where available, • MOXATAG sales and training aids, including any eDetailing web site or relevant product materials, • All applicable MBRK policies and procedures that MBRK requires DD to comply with, including MBRK policies governing interactions with physicians and other Medical Professionals, • Analysis where available regarding promotion effectiveness of prior promotions, • Any available market research concerning MOXATAG, • Direct mail collateral pieces as shall be used from time to time by MBRK to promote MOXATAG to DD Target Segment Prescribers, • Timely review and approval of DD provided draft promotion material for use by DD, • The availability of MOXATAG Coupons and MOXATAG samples and the related fulfillment services as agreed to in advance by MBRK, • Monthly reporting, detailed by prescriber of redemption of MOXATAG Coupons, and • Monthly and quarterly attendance at status meetings, as appropriate, which may be via telephone, web based meeting/portal or face to face.
EXHIBIT 3
TO AGREEMENT BETWEEN DOCTORDIRECTORY.COM, INC. AND MBRK PHARMACEUTICALS, INC. DATED FEBRUARY 3, 2010
PRESCRIBER DATA
For purposes of this Agreement, Prescriber Data will be the prescription data for the activity within the U.S. for the USC Level 2 #15151 — Aminopenicillins category, in sufficient detail to identify periodic prescribing activity of MOXATAG. Such prescriber activity will be the basis for DD to calculate the Promotion Fees due as per Section 5 for the applicable Promotion Measurement Period.
EXHIBIT 4
TO AGREEMENT BETWEEN DOCTORDIRECTORY.COM, INC. AND MBRK PHARMACEUTICALS, INC. DATED FEBRUARY 3, 2010
PROMOTION SOLUTIONS
DD will provide promotional solutions to promote MOXATAG to DD Target Segment Prescribers as approved by MBRK. These services may include the following:
eSampling Platform — DD has created an eSampling platform that provides eligible prescribers with a virtual sample closet. Eligible prescribers will be determined through an analysis of prescribers selected from the DD Target Segment. Only those prescribers who possess a valid state license to prescribe MOXATAG and practice in a clinical area consistent with MOXATAG's approved labeling will be eligible to receive MOXATAG samples. This closet will provide a vehicle for these prescribers to order MOXATAG samples utilizing business rules created by MBRK. DD will promote the availability of samples to agreed upon prescribers and all fulfillment of samples will be conducted by MBRK's designated sample fulfillment provider in accordance with MBRK policies and procedures.
eLearning/eDetailing — DD may create an interactive learning platform that includes content of both an educational and promotional nature. All content would be consistent with MOXATAG's approved labeling and product positioning. The use of quizzes and interactive case presentations will be created to educate prescribers and promote interest in the eLearning platform. DD will link and/or incorporate a MOXATAG eDetail into the learning platform, if available. DD will attempt to use existing approved content for inclusion into the learning platform to expedite the MBRK approval process. All content will be as approved by MBRK.
Educational Email — DD's philosophy is to use science to support the promotion of MOXATAG. Therefore, the promotional program could include a series of educational messages that focus on clinical results and studies. These messages may be non-branded or partially branded depending on the nature of the content and shall be consistent with MOXATAG's approved labeling. New educational messages may be created and added as a result of ongoing understanding of prescribers' attitudes and perceptions. All content shall be approved by MBRK.
Direct-to-Physician Bulletin Services — Promotional emails may be used to communicate the primary, secondary and tertiary messages to the appropriate DD Target Segment Prescribers. The appropriate interval and frequency of messaging needed to ensure high response rates and interest level will be determined in consultation with MBRK.
Promotional emails generally include one or more "calls-to-action" such as online sample offers, clinical data reprint offers, and links to product website, eLearning Platform and/or a product eDetail, if available. Promotional emails shall comply with the CAN-SPAM Act of 2003 (15 U.S.C. 7701 et. seq.).
Physician Portal Promotions — DD may place MOXATAG-specific promotion in the DD Professional site within www.DoctorDirectory.com. Prescribers are required to logon or use an existing electronic communication to enter the site, which allows DD to target specific promotion to those prescribers whose practice area is consistent with MOXATAG's approved labeling. Promotion is in the form of rotating/flash tile ads and text links within the appropriate disease-state education and MOXATAG sample content areas. All Promotional Materials and their respective placement shall be approved by MBRK.
Patient Portal Promotions — Where appropriate, DD may place standard banner ads on the DD website www.DoctorDirectory.com that can be made visible to patients researching physicians. The site can accommodate static and flash banners and business rules developed in conjunction with MBRK guide the number of ads served based upon the number of banner ads within the Directory. In addition to the Directory's landing page, banners can be also served within the appropriate prescriber search and return pages. Such banner ads will be linked only to those prescribers whose practice area is consistent with MOXATAG's approved labeling. All banner ads and their respective placement shall be approved by MBRK.
Direct Mail Advertising — DD may use print mail to reach selected DD Target Segment Prescribers. Existing mail creative concepts may be used or if needed, DD may create new mail concepts in concert with and as approved by MBRK. At MiddleBrook's request, all direct mail advertising will include an opt-out option for recipient prescribers.
Coupon Promotions — DD may deploy a program to promote and distribute Coupons to appropriate targets as determined by both DD and the MBRK. Coupons can be made available via email promotion, print mail, site promotion, and within the online sample closet. All coupon promotion will be as approved by MBRK and shall not be valid for purchases that are reimbursed in whole or in part by Medicare, Medicaid, or similar federal and state programs), or for residents of Massachusetts if the purchase is reimbursed by a health care insurer.
Consumer Condition Content — DD may create pages of static disease and condition information consistent with MOXATAG's approved labeling that are appropriate for consumers. Pages may include PDF documents for printing of approved content such as "take along" pieces for patient office visits. All content will be as approved by MBRK.
Search Engine Marketing — DD may explore the use of specific search terms and phrases that can be used to promote the product website and/or eLearning platform. Search terms shall be consistent with MOXATAG's approved labeling. All search terms and "sponsored link" content will be as approved by MBRK.
Web Mini Site Promotion — DD may develop and deploy content rich "mini sites" that consist of static content but offer additional web properties in which to promote MOXATAG. Such mini sites may also be deployed as part of a search engine strategy as small content rich sites generally score well within search engine algorithms and place high within the natural return list. All content will be as approved by MBRK.
DD will not deploy any promotional service relating to MOXATAG without prior written approval from MBRK. All related Promotional Materials and associated content, as well as the use and placement of such Promotional Materials, are subject to MBRK's legal, medical and regulatory review and approval process. | Highlight the parts (if any) of this contract related to "Termination For Convenience" that should be reviewed by a lawyer. Details: Can a party terminate this contract without cause (solely by giving a notice and allowing a waiting period to expire)? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Irrevocable Or Perpetual License" that should be reviewed by a lawyer. Details: Does the contract contain a license grant that is irrevocable or perpetual?
Context: AMENDMENT TO SERVICES AGREEMENT
This AMENDMENT TO SERVICES AGREEMENT, dated and effective as of March 30, 2009 (this "Amendment"), is made between FEDERATED INVESTMENT MANAGEMENT COMPANY, a Delaware statutory trust (the "Adviser"), and FEDERATED ADVISORY SERVICES COMPANY, a Delaware statutory trust ("FASC"). Capitalized terms used, but not defined, in this Amendment have the meanings given to such terms in the Services Agreement (as defined below).
RECITALS
WHEREAS, the Adviser and FASC have entered into that certain Services Agreement dated as of January 1, 2004 (as amended, the "Services Agreement"), pursuant to which FASC provides certain performance attribution, administration and risk management, equity trading and transaction settlement, fundamental analysis, and quantitative analysis services to Adviser in connection with Adviser providing investment advisory or sub-advisory services to investment companies registered under the Investment Company Act of 1940 ("1940 Act") and/or separate accounts not required to be so registered (collectively, "Accounts"); and
WHEREAS, the Adviser and FASC desire to amend the Services indicated in Exhibit A to the Services Agreement, solely with respect to Accounts that are not investment companies registered under the 1940 Act, to provide that, as part of the administration and risk management services provided by FASC, FASC may provide certain coordination of client portfolios and related fixed income trade execution implementation and administration services to Adviser when Adviser is acting as adviser or sub-adviser with respect to such Accounts.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:
1. Amendment to Exhibit A to Services Agreement. Solely with respect to Accounts that are not investment companies registered under the 1940 Act, the section of Exhibit A to the Services Agreement entitled "Administration and Risk Management" shall be, and hereby is, deleted in its entirety and replaced with the following:
"2. Administration and Risk Management. Employees of Federated Advisory Services Company provide support to portfolio managers and other employees of affiliated advisers. Such services may include development of risk management programs, production of portfolio and compliance reports for clients and/or fund Boards, coordination of client portfolios and related fixed income trade execution implementation and administration, completion of required broker and custody documentation, development and documentation of operational procedures, coordination of proxy voting activities, on-site support of hardware and software, etc."
2. Miscellaneous. This Amendment shall be effective as of the date first above written upon its execution and delivery by each of the parties hereto. The Services Agreement, as amended by this Amendment with respect to Accounts that are not investment companies registered under the 1940 Act, shall remain in full force and effect. The Services Agreement also shall remain in full force and effect without amendment with respect to Accounts that are investment companies under the 1940 Act. This Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania. This Amendment may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Amendment and all of which, when taken together, will be deemed to constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto, through their duly authorized officers, have executed this Amendment as of the date first above written.
FEDERATED INVESTMENT MANAGEMENT FEDERATED ADVISORY SERVICES COMPANY
COMPANY
By: /s/ John B. Fisher By: /s/ J. Christopher Donahue
Name: John B. Fisher Name: J. Christopher Donahue
Title: President Title: Chairman [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | AMENDMENT TO SERVICES AGREEMENT
This AMENDMENT TO SERVICES AGREEMENT, dated and effective as of March 30, 2009 (this "Amendment"), is made between FEDERATED INVESTMENT MANAGEMENT COMPANY, a Delaware statutory trust (the "Adviser"), and FEDERATED ADVISORY SERVICES COMPANY, a Delaware statutory trust ("FASC"). Capitalized terms used, but not defined, in this Amendment have the meanings given to such terms in the Services Agreement (as defined below).
RECITALS
WHEREAS, the Adviser and FASC have entered into that certain Services Agreement dated as of January 1, 2004 (as amended, the "Services Agreement"), pursuant to which FASC provides certain performance attribution, administration and risk management, equity trading and transaction settlement, fundamental analysis, and quantitative analysis services to Adviser in connection with Adviser providing investment advisory or sub-advisory services to investment companies registered under the Investment Company Act of 1940 ("1940 Act") and/or separate accounts not required to be so registered (collectively, "Accounts"); and
WHEREAS, the Adviser and FASC desire to amend the Services indicated in Exhibit A to the Services Agreement, solely with respect to Accounts that are not investment companies registered under the 1940 Act, to provide that, as part of the administration and risk management services provided by FASC, FASC may provide certain coordination of client portfolios and related fixed income trade execution implementation and administration services to Adviser when Adviser is acting as adviser or sub-adviser with respect to such Accounts.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:
1. Amendment to Exhibit A to Services Agreement. Solely with respect to Accounts that are not investment companies registered under the 1940 Act, the section of Exhibit A to the Services Agreement entitled "Administration and Risk Management" shall be, and hereby is, deleted in its entirety and replaced with the following:
"2. Administration and Risk Management. Employees of Federated Advisory Services Company provide support to portfolio managers and other employees of affiliated advisers. Such services may include development of risk management programs, production of portfolio and compliance reports for clients and/or fund Boards, coordination of client portfolios and related fixed income trade execution implementation and administration, completion of required broker and custody documentation, development and documentation of operational procedures, coordination of proxy voting activities, on-site support of hardware and software, etc."
2. Miscellaneous. This Amendment shall be effective as of the date first above written upon its execution and delivery by each of the parties hereto. The Services Agreement, as amended by this Amendment with respect to Accounts that are not investment companies registered under the 1940 Act, shall remain in full force and effect. The Services Agreement also shall remain in full force and effect without amendment with respect to Accounts that are investment companies under the 1940 Act. This Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania. This Amendment may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Amendment and all of which, when taken together, will be deemed to constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto, through their duly authorized officers, have executed this Amendment as of the date first above written.
FEDERATED INVESTMENT MANAGEMENT FEDERATED ADVISORY SERVICES COMPANY
COMPANY
By: /s/ John B. Fisher By: /s/ J. Christopher Donahue
Name: John B. Fisher Name: J. Christopher Donahue
Title: President Title: Chairman | Highlight the parts (if any) of this contract related to "Irrevocable Or Perpetual License" that should be reviewed by a lawyer. Details: Does the contract contain a license grant that is irrevocable or perpetual? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "No-Solicit Of Customers" that should be reviewed by a lawyer. Details: Is a party restricted from contracting or soliciting customers or partners of the counterparty, whether during the contract or after the contract ends (or both)?
Context: EXHIBIT 4.25 INFORMATION IN THIS EXHIBIT IDENTIFIED BY [ * * * ] IS CONFIDENTIAL AND HAS BEEN EXCLUDED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. SERVICES AGREEMENT This Services Agreement (this "Agreement") is entered into on October 1, 2019 and is made effective as of November 1, 2019 (the "Effective Date"), by and between [ * * * ] (the "Provider"), and TELCOSTAR PTE, LTD., a company organized and existing under the laws of Singapore and Ability Computer & Software Industries Ltd, a company organized and existing under the laws of the State of Israel (each and both of them "Recipient"). Each of the foregoing parties is referred to herein as a "Party" and together as the "Parties". RECITALS A. Recipient wishes to engage the Provider to provide certain services and resources (the "Services") and Provider desires to provide Recipient with the Services all in accordance with the terms and conditions set forth herein. AGREEMENT The Parties hereby agree as follows: 1. Services. 1.1 Provision of Services. (a) Provider agrees to provide the Services set forth on the Exhibit A attached hereto (as such Exhibit may be amended or supplemented pursuant to the terms of this Agreement, the "Exhibit") to Recipient for the respective periods and on the other terms and conditions set forth in this Agreement and in the Exhibit. Notwithstanding the contents of the Exhibit, Provider agrees to respond in good faith to any reasonable request by Recipient for access to any additional services and resources that are necessary for the operation of the Recipient and which are not currently contemplated in the Exhibit, at a price to be agreed upon after good faith negotiations between the Parties. Any such additional services and resources so provided by Provider shall constitute Services under this Agreement and be subject in all respect to the provisions of this Agreement as if fully set forth on the Exhibit as of the date hereof. (b) Recipient may freely assign its rights under this Agreement to receive the Services to any of its affiliates. 1.2 Standard of Service. (a) Provider represents, warrants and agrees that the Services shall be provided in good faith, in accordance with applicable law and in a manner generally consistent with the historical provision of the Services and with the same standard of care as historically provided. (b) Provider shall maintain complete and accurate records relating to the provision of the Services under this Agreement, in such form as Recipient shall approve.
(c) Provider shall use its best efforts to provide for employees or contractors to perform the Services, each of whose names, positions, and respective levels of experience and relevant licenses shall be set out in Exhibit A attached hereto (collectively, the "Provider Representatives"). Provider may not make any change in the Provider Representatives without the prior consent of the Recipient. Provider Representatives shall be dedicated to solely providing the Services to Recipient and shall not provide any such services or resources to Provider or any other customer of Provider. (d) Recipient acknowledges that this Agreement does not create a fiduciary relationship, partnership, joint venture or relationships of trust or agency between the Parties and that all Services are provided by Provider as an independent contractor. (e) Notwithstanding anything to the contrary in this Section 1.2: (a) in the event that Provider uses any subcontractors to perform any Services, Provider is not released from responsibility for its obligations under this Agreement; (b) Provider shall remain fully responsible, financially and otherwise, for the Services provided by each subcontractor to the same extent as if Provider had performed the Services itself (subject to the limitations set forth in this Agreement) and agrees to pay the fees and expenses of any such subcontractor; (c) Provider shall remain ultimately responsible for ensuring that the Services are provided and any such subcontractor performs any such obligations in accordance with the terms of this Agreement, and (d) the obligations with respect to the nature, quality and standards of care set forth in Section 1.2 are satisfied with respect to any Service provided by any subcontractor. (f) Provider shall at all times during the term of this Agreement maintain, or cause to be maintained, the computer software and computer hardware that is used in connection with the Services with substantially the same degree of care, skill and diligence with which Provider maintains, or causes to be maintained, as of the Effective Date, such computer software and computer hardware for itself, consistent with past practices, as of the Effective Date, including without limitation, with respect to type, quality and timeliness of such maintenance. 1.3 Additional Services. Nothing in this Agreement shall be construed to prevent the Recipient from itself performing or from acquiring services from other providers that are similar to or identical to the Services. 1.4 Intellectual Property. (a) Recipient shall own, and Provider hereby irrevocably assigns to the Recipient, all rights, title, and interest in any invention, technique, process, device, discovery, improvement, or know-how, whether patentable or not and all other proprietary rights, industrial rights and any other similar rights, in each case on a worldwide basis, and all copies and tangible embodiments thereof, or any part thereof, in whatever form or medium hereafter made or conceived solely or jointly by Provider while working for or on behalf of the Recipient, which relate to, is suggested by, or results from the Services. (b) At Recipient's request, Provider shall disclose any such invention, technique, process, device, discovery, improvement, or know-how promptly to Recipient. Provider shall, upon request of Recipient, promptly execute a specific assignment of title to Recipient, and do anything else reasonably necessary to enable Recipient to secure for itself, patent, trade secret, or any other proprietary rights.
2
(c) All writings or works of authorship, including, without limitation, program codes or documentation, produced or authored by Provider in the course of performing services for the Recipient, together with any associated copyrights, are works made for hire and the exclusive property of the Recipient. To the extent that any writings or works of authorship may not, by operation of law, be works made for hire, this Agreement shall constitute an irrevocable assignment by Provider to the Recipient of the ownership of and all rights of copyright in, such items, and the Recipient shall have the right to obtain and hold in its own name, rights of copyright, copyright registrations, and similar protections which may be available in the works. Provider shall give the Recipient or its designees all assistance reasonably required to perfect such rights. 2. Compensation. 2.1 Responsibility for Wages and Fees. For such time as any employees of Provider are providing the Services to Recipient under this Agreement, (a) such employees will remain employees of Provider and shall not be deemed to be employees of Recipient for any purpose, and (b) Provider shall be solely responsible for the payment and provision of all wages, bonuses and commissions, employee benefits, including severance and worker's compensation, and the withholding and payment of applicable taxes relating to such employment. 2.2 Terms of Payment and Related Matters. (a) As consideration for provision of the Services following the Effective Date, Recipient shall pay Provider an amount equal to Provider's actual cost of providing the Services plus a 10% service fee. In addition to such amount, in the event that Provider incurs reasonable and documented out-of-pocket expenses in the provision of any Service, including, without limitation, license fees and payments to third-party service providers or subcontractors (such included expenses, collectively, "Out-of-Pocket Costs"), Recipient shall reimburse Provider for all such Out-of-Pocket Costs. (b) (i) Provider shall provide Recipient with monthly invoices ("Invoices"), which shall set forth in reasonable detail, with such supporting documentation as Recipient may reasonably request with respect to Out-of-Pocket Costs, amounts payable under this Agreement, and (ii) payments pursuant to this Agreement shall be made within fifteen (15) days after the date of receipt of an Invoice by Recipient from Provider. (c) Provider shall allow the Recipient to use [ * * * ] at no cost, until December 31, 2021. 2.3 Invoice Disputes. In the event of an Invoice dispute, Recipient shall deliver a written statement to Provider prior to the date payment is due on the disputed Invoice listing all disputed items and providing a reasonably detailed description of each disputed item. Amounts not so disputed shall be deemed accepted and shall be paid, notwithstanding disputes on other items. The Parties shall seek to resolve all such disputes expeditiously and in good faith. Provider shall continue performing the Services in accordance with this Agreement pending resolution of any dispute.
3
2.4 No Right of Setoff. Each of the Parties hereby acknowledges that it shall have no right under this Agreement to offset any amounts owed (or to become due and owing) to the other Party, whether under this Agreement, the Purchase Agreement or otherwise, against any other amount owed (or to become due and owing) to it by the other Party. 3. Termination. 3.1 Termination of Agreement. This Agreement be deemed effective as of the Effective Date, Agreement and shall terminate on December 31, 2020, unless terminated earlier in accordance with Section 3.2. 3.2 Each of the Recipient and the Provider may, in their sole discretion, terminate this Agreement in whole or in part, at any time without cause, and without liability except, in the case of the Recipient, for required payment for services rendered and reimbursement for authorized expenses incurred, by providing at least 90 (ninety) days' prior written notice to the other party (such date, the "Services Termination Date"). 3.3 Breach. Any Party (the "Non-Breaching Party") may terminate this Agreement with respect to any Service, in whole but not in part, at any time upon prior written notice to the other Party (the "Breaching Party"), if the Breaching Party has failed (other than pursuant to Section 3.6) to perform any of its material obligations under this Agreement relating to such Service, and such failure shall have continued without cure for a period of 30 days after receipt by the Breaching Party of a written notice of such failure from the Non-Breaching Party seeking to terminate such service. For the avoidance of doubt, non-payment by Recipient for a Service provided by Provider in accordance with this Agreement and not the subject of a good-faith dispute shall be deemed a breach for purposes of this Section 3.3. 3.4 Insolvency. In the event that either Party hereto shall (a) file a petition in bankruptcy, (b) become or be declared insolvent, or become the subject of any proceedings (not dismissed within sixty (60) days) related to its liquidation, insolvency or the appointment of a receiver, (c) make an assignment on behalf of all or substantially all of its creditors, or (d) take any corporate action for its winding up or dissolution, then the other party shall have the right to terminate this Agreement by providing written notice in accordance with Section 6.6. 3.5 Effect of Termination. Upon termination of this Agreement in its entirety pursuant to Section 3.1, all obligations of the Parties hereto shall terminate, except for the provisions of Section 2.2, and the entirety of Sections 4, 5 and 6, which shall survive any termination or expiration of this Agreement. 3.6 Upon expiration or termination of this Agreement for any reason, Provider shall promptly: (a) Deliver to Recipient all documents, work product, and other materials, whether or not complete, prepared by or on behalf of Provider in the course of performing the Services for which Recipient has paid. (b) Return to Recipient all Recipient -owned property, equipment, or materials in its possession or control.
4
(c) Remove any Provider-owned property, equipment, or materials located at Recipient's locations. (d) Deliver to Recipient, all documents and tangible materials (and any copies) containing, reflecting, incorporating, or based on Recipient's Confidential Information. (e) On a pro rata basis, repay all fees and expenses paid in advance for any Services which have not been provided. (f) Permanently erase all of Recipient's Confidential Information from its computer systems. (g) Certify in writing to Recipient that it has complied with the requirements of this Section 3.6 3.7 Force Majeure. If Provider is prevented from or delayed in complying, either totally or in part, with any of the terms or provisions of this Agreement by reason of fire, flood, storm, strike, lockout or other labor trouble or shortage, delays by unaffiliated suppliers or carriers, shortages of fuel, power, raw materials or components, any law, order, proclamation, regulation, ordinance, demand, seizure or requirement of any governmental authority, riot, civil commotion, war, rebellion, acts of terrorism, nuclear accident or other causes beyond the reasonable control of Provider, or acts, omissions, or delays in acting by any governmental or military authority or Recipient (each, a "Force Majeure"), then upon written notice to Recipient, the Services affected by the Force Majeure (the "Affected Services") and/or other requirements of this Agreement will be suspended during the period of such Force Majeure and Provider will have no liability to Recipient or any other party in connection with such Affected Services. If the Force Majeure in question prevails for a continuous period in excess of three months after the date on which the Force Majeure begins, Provider shall be entitled to give notice to Recipient to terminate the Affected Services. The notice to terminate must specify the termination date, which must be not less than ten (10) days after the date on which the notice to terminate is given. Once a notice to terminate has been validly given, the Affected Services will terminate on the termination date set out in the notice. Neither Party shall have any liability to the other in respect of termination of the Affected Services due to Force Majeure, but rights and liabilities which have accrued prior to termination shall subsist.
5
4. Confidentiality. 4.1 Confidentiality. During the term of this Agreement and thereafter, the Parties hereto shall, and shall instruct their respective representatives to, maintain in confidence and not disclose the other Party's financial, technical, sales, marketing, development, personnel, and other information, records, or data, including, without limitation, customer lists, supplier lists, trade secrets, designs, product formulations, product specifications or any other proprietary or confidential information, however recorded or preserved, whether written or oral (any such information, "Confidential Information"). Each Party hereto shall use the same degree of care, but no less than reasonable care, to protect the other Party's Confidential Information as it uses to protect its own Confidential Information of like nature. Unless otherwise authorized in any other agreement between the Parties, any Party receiving any Confidential Information of the other Party (the "Receiving Party") may use Confidential Information only for the purposes of fulfilling its obligations under this Agreement (the "Permitted Purpose"). Any Receiving Party may disclose such Confidential Information only to its representatives who have a need to know such information for the Permitted Purpose and who have been advised of the terms of this Section 4.1 and the Receiving Party shall be liable for any breach of these confidentiality provisions by such Persons; provided, however, that any Receiving Party may disclose such Confidential Information to the extent such Confidential Information is required to be disclosed by law, in which case the Receiving Party shall promptly notify, to the extent possible, the disclosing party (the "Disclosing Party"), and take reasonable steps to assist in contesting such disclosure requirement or in protecting the Disclosing Party's rights prior to disclosure, and in which case the Receiving Party shall only disclose such Confidential Information that it is advised by its counsel in writing that it is legally bound to disclose. Notwithstanding the foregoing, "Confidential Information" shall not include any information that the Receiving Party can demonstrate: (a) was publicly known at the time of disclosure to it, or has become publicly known through no act of the Receiving Party or its representatives in breach of this Section 4.1, (b) was rightfully received from a third party without a duty of confidentiality, or (c) was developed by it independently without any reliance on the Confidential Information. 4.2 Return of Confidential Information. Upon demand by the Disclosing Party at any time, or upon expiration or termination of this Agreement with respect to any Service, the Receiving Party agrees promptly to return or destroy, at the Disclosing Party's option, all Confidential Information received in connection with this Agreement. If such Confidential Information is destroyed, an authorized officer of the Receiving Party shall certify to such destruction in writing. 5. Indemnification. 5.1 Indemnification. Provider shall indemnify, defend, and hold harmless Recipient and its officers, directors, employees, agents, affiliates, successors, and permitted assigns (collectively, "Indemnified Party") against any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs, or expenses of whatever kind, including attorneys' fees, fees and the costs of enforcing any right to indemnification under this Agreement, and the cost of pursuing any insurance providers, incurred by Indemnified Party or awarded against Indemnified Party (collectively, "Losses"), relating to/arising out of or resulting from any claim of a third party or Recipient arising out of or occurring in connection with Provider's negligence, willful misconduct, or breach of this Agreement. Provider shall not enter into any settlement without Recipient's or Indemnified Party's prior written consent. 6. Miscellaneous. 6.1 Entire Agreement. This Agreement, the Purchase Agreement and the documents referred to herein and therein constitute the entire agreement among the Parties and supersedes any prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof.
6
6.2 Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. Provider may not assign, delegate or otherwise transfer either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of Recipient. 6.3 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterparts may be delivered via facsimile and electronic mail (including portable document format (PDF) or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com). 6.4 Titles and Headings. Titles and section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 7. Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 7: If to Provider: [ * * * ] With a copy to: N/A If to Recipient: TELCOSTAR PTE. LTD 6 Eu Tong Sen Street Tel Aviv, Israel, 6770007 #10-15 The Central Singapore 059817 Email: avi@ability.co.il Attention: Avi Levin With a copy to: McDermott Will & Emery LLP 340 Madison Avenue New York, NY 10173-1922 Telephone: (212) 547-5541 Facsimile: (212) 547-5444 EMAIL: GEMMANUEL@MWE.COM Attention: Gary Emmanuel
7
Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth. 7.1 Further Assurances. The Parties agree (a) to furnish upon request to each other such further information, (b) to execute and deliver to each other such other documents, and (c) to do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement and the documents referred to in this Agreement. 7.2 Governing Law. This Agreement and any claim, controversy or dispute arising out of or related to this Agreement, any of the transactions contemplated hereby and/or the interpretation and enforcement of the rights and duties of the Parties, whether arising in contract, tort, equity or otherwise, shall be governed by and construed in accordance with the domestic laws of the State of Israel (including in respect of the statute of limitations or other limitations period applicable to any such claim, controversy or dispute), without giving effect to any choice or conflict of law provision or rule (whether of the State of Israel or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Israel. 7.3 Consent to Jurisdiction. The Parties hereby irrevocably submit any disputes under this Agreement to the exclusive jurisdiction of the courts located in Tel-Aviv, Israel, provided however, that Recipient shall be entitled to seek an injunction or other appropriate remedy against Provider in the country in which Provider has acted in breach of the terms hereof. 7.4 Specific Performance. The Parties hereby agree that, in the event of breach of this Agreement, damages would be difficult, if not impossible, to ascertain and that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, it is hereby agreed that the Parties shall be entitled to seek an injunction or other equitable relief in any court of competent jurisdiction to enjoin any such breach and enforce specifically the terms and provisions hereof, this being in addition to any other remedy or right to which they are entitled at law or in equity, without any necessity of proving damages or any requirement for the posting of a bond or other security. 7.5 Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by Recipient and the Provider. No waiver by any Party of any provision of this Agreement or any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be valid unless the same shall be in writing and signed by the Party making such waiver nor shall such waiver be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.
8
7.6 Severability. Any term or provision of this Agreement that is held invalid or unenforceable by a court of competent jurisdiction or other competent governmental authority in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. Upon such a determination, the Parties shall negotiate in good faith to replace invalid or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid or unenforceable provisions. 7.7 Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word "including" shall mean including without limitation. 7.8 Incorporation of Exhibits and Disclosure Schedule. The Exhibit identified in this Agreement is incorporated herein by reference and made a part hereof. 7.9 Amendment and Restatement. This Agreement amends and restates in full the Production Contract. [SIGNATURE PAGE FOLLOWS]
9
IN WITNESS WHEREOF, the Parties have executed this Services Agreement as of the date first written above. PROVIDER: RECIPIENT: [ * * * ] [ * * * ] By: By: Name: Name: Title: Title:
10
EXHIBIT A Services [ * * * ] 11 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | EXHIBIT 4.25 INFORMATION IN THIS EXHIBIT IDENTIFIED BY [ * * * ] IS CONFIDENTIAL AND HAS BEEN EXCLUDED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. SERVICES AGREEMENT This Services Agreement (this "Agreement") is entered into on October 1, 2019 and is made effective as of November 1, 2019 (the "Effective Date"), by and between [ * * * ] (the "Provider"), and TELCOSTAR PTE, LTD., a company organized and existing under the laws of Singapore and Ability Computer & Software Industries Ltd, a company organized and existing under the laws of the State of Israel (each and both of them "Recipient"). Each of the foregoing parties is referred to herein as a "Party" and together as the "Parties". RECITALS A. Recipient wishes to engage the Provider to provide certain services and resources (the "Services") and Provider desires to provide Recipient with the Services all in accordance with the terms and conditions set forth herein. AGREEMENT The Parties hereby agree as follows: 1. Services. 1.1 Provision of Services. (a) Provider agrees to provide the Services set forth on the Exhibit A attached hereto (as such Exhibit may be amended or supplemented pursuant to the terms of this Agreement, the "Exhibit") to Recipient for the respective periods and on the other terms and conditions set forth in this Agreement and in the Exhibit. Notwithstanding the contents of the Exhibit, Provider agrees to respond in good faith to any reasonable request by Recipient for access to any additional services and resources that are necessary for the operation of the Recipient and which are not currently contemplated in the Exhibit, at a price to be agreed upon after good faith negotiations between the Parties. Any such additional services and resources so provided by Provider shall constitute Services under this Agreement and be subject in all respect to the provisions of this Agreement as if fully set forth on the Exhibit as of the date hereof. (b) Recipient may freely assign its rights under this Agreement to receive the Services to any of its affiliates. 1.2 Standard of Service. (a) Provider represents, warrants and agrees that the Services shall be provided in good faith, in accordance with applicable law and in a manner generally consistent with the historical provision of the Services and with the same standard of care as historically provided. (b) Provider shall maintain complete and accurate records relating to the provision of the Services under this Agreement, in such form as Recipient shall approve.
(c) Provider shall use its best efforts to provide for employees or contractors to perform the Services, each of whose names, positions, and respective levels of experience and relevant licenses shall be set out in Exhibit A attached hereto (collectively, the "Provider Representatives"). Provider may not make any change in the Provider Representatives without the prior consent of the Recipient. Provider Representatives shall be dedicated to solely providing the Services to Recipient and shall not provide any such services or resources to Provider or any other customer of Provider. (d) Recipient acknowledges that this Agreement does not create a fiduciary relationship, partnership, joint venture or relationships of trust or agency between the Parties and that all Services are provided by Provider as an independent contractor. (e) Notwithstanding anything to the contrary in this Section 1.2: (a) in the event that Provider uses any subcontractors to perform any Services, Provider is not released from responsibility for its obligations under this Agreement; (b) Provider shall remain fully responsible, financially and otherwise, for the Services provided by each subcontractor to the same extent as if Provider had performed the Services itself (subject to the limitations set forth in this Agreement) and agrees to pay the fees and expenses of any such subcontractor; (c) Provider shall remain ultimately responsible for ensuring that the Services are provided and any such subcontractor performs any such obligations in accordance with the terms of this Agreement, and (d) the obligations with respect to the nature, quality and standards of care set forth in Section 1.2 are satisfied with respect to any Service provided by any subcontractor. (f) Provider shall at all times during the term of this Agreement maintain, or cause to be maintained, the computer software and computer hardware that is used in connection with the Services with substantially the same degree of care, skill and diligence with which Provider maintains, or causes to be maintained, as of the Effective Date, such computer software and computer hardware for itself, consistent with past practices, as of the Effective Date, including without limitation, with respect to type, quality and timeliness of such maintenance. 1.3 Additional Services. Nothing in this Agreement shall be construed to prevent the Recipient from itself performing or from acquiring services from other providers that are similar to or identical to the Services. 1.4 Intellectual Property. (a) Recipient shall own, and Provider hereby irrevocably assigns to the Recipient, all rights, title, and interest in any invention, technique, process, device, discovery, improvement, or know-how, whether patentable or not and all other proprietary rights, industrial rights and any other similar rights, in each case on a worldwide basis, and all copies and tangible embodiments thereof, or any part thereof, in whatever form or medium hereafter made or conceived solely or jointly by Provider while working for or on behalf of the Recipient, which relate to, is suggested by, or results from the Services. (b) At Recipient's request, Provider shall disclose any such invention, technique, process, device, discovery, improvement, or know-how promptly to Recipient. Provider shall, upon request of Recipient, promptly execute a specific assignment of title to Recipient, and do anything else reasonably necessary to enable Recipient to secure for itself, patent, trade secret, or any other proprietary rights.
2
(c) All writings or works of authorship, including, without limitation, program codes or documentation, produced or authored by Provider in the course of performing services for the Recipient, together with any associated copyrights, are works made for hire and the exclusive property of the Recipient. To the extent that any writings or works of authorship may not, by operation of law, be works made for hire, this Agreement shall constitute an irrevocable assignment by Provider to the Recipient of the ownership of and all rights of copyright in, such items, and the Recipient shall have the right to obtain and hold in its own name, rights of copyright, copyright registrations, and similar protections which may be available in the works. Provider shall give the Recipient or its designees all assistance reasonably required to perfect such rights. 2. Compensation. 2.1 Responsibility for Wages and Fees. For such time as any employees of Provider are providing the Services to Recipient under this Agreement, (a) such employees will remain employees of Provider and shall not be deemed to be employees of Recipient for any purpose, and (b) Provider shall be solely responsible for the payment and provision of all wages, bonuses and commissions, employee benefits, including severance and worker's compensation, and the withholding and payment of applicable taxes relating to such employment. 2.2 Terms of Payment and Related Matters. (a) As consideration for provision of the Services following the Effective Date, Recipient shall pay Provider an amount equal to Provider's actual cost of providing the Services plus a 10% service fee. In addition to such amount, in the event that Provider incurs reasonable and documented out-of-pocket expenses in the provision of any Service, including, without limitation, license fees and payments to third-party service providers or subcontractors (such included expenses, collectively, "Out-of-Pocket Costs"), Recipient shall reimburse Provider for all such Out-of-Pocket Costs. (b) (i) Provider shall provide Recipient with monthly invoices ("Invoices"), which shall set forth in reasonable detail, with such supporting documentation as Recipient may reasonably request with respect to Out-of-Pocket Costs, amounts payable under this Agreement, and (ii) payments pursuant to this Agreement shall be made within fifteen (15) days after the date of receipt of an Invoice by Recipient from Provider. (c) Provider shall allow the Recipient to use [ * * * ] at no cost, until December 31, 2021. 2.3 Invoice Disputes. In the event of an Invoice dispute, Recipient shall deliver a written statement to Provider prior to the date payment is due on the disputed Invoice listing all disputed items and providing a reasonably detailed description of each disputed item. Amounts not so disputed shall be deemed accepted and shall be paid, notwithstanding disputes on other items. The Parties shall seek to resolve all such disputes expeditiously and in good faith. Provider shall continue performing the Services in accordance with this Agreement pending resolution of any dispute.
3
2.4 No Right of Setoff. Each of the Parties hereby acknowledges that it shall have no right under this Agreement to offset any amounts owed (or to become due and owing) to the other Party, whether under this Agreement, the Purchase Agreement or otherwise, against any other amount owed (or to become due and owing) to it by the other Party. 3. Termination. 3.1 Termination of Agreement. This Agreement be deemed effective as of the Effective Date, Agreement and shall terminate on December 31, 2020, unless terminated earlier in accordance with Section 3.2. 3.2 Each of the Recipient and the Provider may, in their sole discretion, terminate this Agreement in whole or in part, at any time without cause, and without liability except, in the case of the Recipient, for required payment for services rendered and reimbursement for authorized expenses incurred, by providing at least 90 (ninety) days' prior written notice to the other party (such date, the "Services Termination Date"). 3.3 Breach. Any Party (the "Non-Breaching Party") may terminate this Agreement with respect to any Service, in whole but not in part, at any time upon prior written notice to the other Party (the "Breaching Party"), if the Breaching Party has failed (other than pursuant to Section 3.6) to perform any of its material obligations under this Agreement relating to such Service, and such failure shall have continued without cure for a period of 30 days after receipt by the Breaching Party of a written notice of such failure from the Non-Breaching Party seeking to terminate such service. For the avoidance of doubt, non-payment by Recipient for a Service provided by Provider in accordance with this Agreement and not the subject of a good-faith dispute shall be deemed a breach for purposes of this Section 3.3. 3.4 Insolvency. In the event that either Party hereto shall (a) file a petition in bankruptcy, (b) become or be declared insolvent, or become the subject of any proceedings (not dismissed within sixty (60) days) related to its liquidation, insolvency or the appointment of a receiver, (c) make an assignment on behalf of all or substantially all of its creditors, or (d) take any corporate action for its winding up or dissolution, then the other party shall have the right to terminate this Agreement by providing written notice in accordance with Section 6.6. 3.5 Effect of Termination. Upon termination of this Agreement in its entirety pursuant to Section 3.1, all obligations of the Parties hereto shall terminate, except for the provisions of Section 2.2, and the entirety of Sections 4, 5 and 6, which shall survive any termination or expiration of this Agreement. 3.6 Upon expiration or termination of this Agreement for any reason, Provider shall promptly: (a) Deliver to Recipient all documents, work product, and other materials, whether or not complete, prepared by or on behalf of Provider in the course of performing the Services for which Recipient has paid. (b) Return to Recipient all Recipient -owned property, equipment, or materials in its possession or control.
4
(c) Remove any Provider-owned property, equipment, or materials located at Recipient's locations. (d) Deliver to Recipient, all documents and tangible materials (and any copies) containing, reflecting, incorporating, or based on Recipient's Confidential Information. (e) On a pro rata basis, repay all fees and expenses paid in advance for any Services which have not been provided. (f) Permanently erase all of Recipient's Confidential Information from its computer systems. (g) Certify in writing to Recipient that it has complied with the requirements of this Section 3.6 3.7 Force Majeure. If Provider is prevented from or delayed in complying, either totally or in part, with any of the terms or provisions of this Agreement by reason of fire, flood, storm, strike, lockout or other labor trouble or shortage, delays by unaffiliated suppliers or carriers, shortages of fuel, power, raw materials or components, any law, order, proclamation, regulation, ordinance, demand, seizure or requirement of any governmental authority, riot, civil commotion, war, rebellion, acts of terrorism, nuclear accident or other causes beyond the reasonable control of Provider, or acts, omissions, or delays in acting by any governmental or military authority or Recipient (each, a "Force Majeure"), then upon written notice to Recipient, the Services affected by the Force Majeure (the "Affected Services") and/or other requirements of this Agreement will be suspended during the period of such Force Majeure and Provider will have no liability to Recipient or any other party in connection with such Affected Services. If the Force Majeure in question prevails for a continuous period in excess of three months after the date on which the Force Majeure begins, Provider shall be entitled to give notice to Recipient to terminate the Affected Services. The notice to terminate must specify the termination date, which must be not less than ten (10) days after the date on which the notice to terminate is given. Once a notice to terminate has been validly given, the Affected Services will terminate on the termination date set out in the notice. Neither Party shall have any liability to the other in respect of termination of the Affected Services due to Force Majeure, but rights and liabilities which have accrued prior to termination shall subsist.
5
4. Confidentiality. 4.1 Confidentiality. During the term of this Agreement and thereafter, the Parties hereto shall, and shall instruct their respective representatives to, maintain in confidence and not disclose the other Party's financial, technical, sales, marketing, development, personnel, and other information, records, or data, including, without limitation, customer lists, supplier lists, trade secrets, designs, product formulations, product specifications or any other proprietary or confidential information, however recorded or preserved, whether written or oral (any such information, "Confidential Information"). Each Party hereto shall use the same degree of care, but no less than reasonable care, to protect the other Party's Confidential Information as it uses to protect its own Confidential Information of like nature. Unless otherwise authorized in any other agreement between the Parties, any Party receiving any Confidential Information of the other Party (the "Receiving Party") may use Confidential Information only for the purposes of fulfilling its obligations under this Agreement (the "Permitted Purpose"). Any Receiving Party may disclose such Confidential Information only to its representatives who have a need to know such information for the Permitted Purpose and who have been advised of the terms of this Section 4.1 and the Receiving Party shall be liable for any breach of these confidentiality provisions by such Persons; provided, however, that any Receiving Party may disclose such Confidential Information to the extent such Confidential Information is required to be disclosed by law, in which case the Receiving Party shall promptly notify, to the extent possible, the disclosing party (the "Disclosing Party"), and take reasonable steps to assist in contesting such disclosure requirement or in protecting the Disclosing Party's rights prior to disclosure, and in which case the Receiving Party shall only disclose such Confidential Information that it is advised by its counsel in writing that it is legally bound to disclose. Notwithstanding the foregoing, "Confidential Information" shall not include any information that the Receiving Party can demonstrate: (a) was publicly known at the time of disclosure to it, or has become publicly known through no act of the Receiving Party or its representatives in breach of this Section 4.1, (b) was rightfully received from a third party without a duty of confidentiality, or (c) was developed by it independently without any reliance on the Confidential Information. 4.2 Return of Confidential Information. Upon demand by the Disclosing Party at any time, or upon expiration or termination of this Agreement with respect to any Service, the Receiving Party agrees promptly to return or destroy, at the Disclosing Party's option, all Confidential Information received in connection with this Agreement. If such Confidential Information is destroyed, an authorized officer of the Receiving Party shall certify to such destruction in writing. 5. Indemnification. 5.1 Indemnification. Provider shall indemnify, defend, and hold harmless Recipient and its officers, directors, employees, agents, affiliates, successors, and permitted assigns (collectively, "Indemnified Party") against any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs, or expenses of whatever kind, including attorneys' fees, fees and the costs of enforcing any right to indemnification under this Agreement, and the cost of pursuing any insurance providers, incurred by Indemnified Party or awarded against Indemnified Party (collectively, "Losses"), relating to/arising out of or resulting from any claim of a third party or Recipient arising out of or occurring in connection with Provider's negligence, willful misconduct, or breach of this Agreement. Provider shall not enter into any settlement without Recipient's or Indemnified Party's prior written consent. 6. Miscellaneous. 6.1 Entire Agreement. This Agreement, the Purchase Agreement and the documents referred to herein and therein constitute the entire agreement among the Parties and supersedes any prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof.
6
6.2 Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. Provider may not assign, delegate or otherwise transfer either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of Recipient. 6.3 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterparts may be delivered via facsimile and electronic mail (including portable document format (PDF) or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com). 6.4 Titles and Headings. Titles and section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 7. Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 7: If to Provider: [ * * * ] With a copy to: N/A If to Recipient: TELCOSTAR PTE. LTD 6 Eu Tong Sen Street Tel Aviv, Israel, 6770007 #10-15 The Central Singapore 059817 Email: avi@ability.co.il Attention: Avi Levin With a copy to: McDermott Will & Emery LLP 340 Madison Avenue New York, NY 10173-1922 Telephone: (212) 547-5541 Facsimile: (212) 547-5444 EMAIL: GEMMANUEL@MWE.COM Attention: Gary Emmanuel
7
Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth. 7.1 Further Assurances. The Parties agree (a) to furnish upon request to each other such further information, (b) to execute and deliver to each other such other documents, and (c) to do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement and the documents referred to in this Agreement. 7.2 Governing Law. This Agreement and any claim, controversy or dispute arising out of or related to this Agreement, any of the transactions contemplated hereby and/or the interpretation and enforcement of the rights and duties of the Parties, whether arising in contract, tort, equity or otherwise, shall be governed by and construed in accordance with the domestic laws of the State of Israel (including in respect of the statute of limitations or other limitations period applicable to any such claim, controversy or dispute), without giving effect to any choice or conflict of law provision or rule (whether of the State of Israel or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Israel. 7.3 Consent to Jurisdiction. The Parties hereby irrevocably submit any disputes under this Agreement to the exclusive jurisdiction of the courts located in Tel-Aviv, Israel, provided however, that Recipient shall be entitled to seek an injunction or other appropriate remedy against Provider in the country in which Provider has acted in breach of the terms hereof. 7.4 Specific Performance. The Parties hereby agree that, in the event of breach of this Agreement, damages would be difficult, if not impossible, to ascertain and that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, it is hereby agreed that the Parties shall be entitled to seek an injunction or other equitable relief in any court of competent jurisdiction to enjoin any such breach and enforce specifically the terms and provisions hereof, this being in addition to any other remedy or right to which they are entitled at law or in equity, without any necessity of proving damages or any requirement for the posting of a bond or other security. 7.5 Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by Recipient and the Provider. No waiver by any Party of any provision of this Agreement or any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be valid unless the same shall be in writing and signed by the Party making such waiver nor shall such waiver be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.
8
7.6 Severability. Any term or provision of this Agreement that is held invalid or unenforceable by a court of competent jurisdiction or other competent governmental authority in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. Upon such a determination, the Parties shall negotiate in good faith to replace invalid or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid or unenforceable provisions. 7.7 Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word "including" shall mean including without limitation. 7.8 Incorporation of Exhibits and Disclosure Schedule. The Exhibit identified in this Agreement is incorporated herein by reference and made a part hereof. 7.9 Amendment and Restatement. This Agreement amends and restates in full the Production Contract. [SIGNATURE PAGE FOLLOWS]
9
IN WITNESS WHEREOF, the Parties have executed this Services Agreement as of the date first written above. PROVIDER: RECIPIENT: [ * * * ] [ * * * ] By: By: Name: Name: Title: Title:
10
EXHIBIT A Services [ * * * ] 11 | Highlight the parts (if any) of this contract related to "No-Solicit Of Customers" that should be reviewed by a lawyer. Details: Is a party restricted from contracting or soliciting customers or partners of the counterparty, whether during the contract or after the contract ends (or both)? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Ip Ownership Assignment" that should be reviewed by a lawyer. Details: Does intellectual property created by one party become the property of the counterparty, either per the terms of the contract or upon the occurrence of certain events?
Context: Exhibit 10.1 CONSULTING AGREEMENT This CONSULTING AGREEMENT ("Agreement") effective as of this 1st day of March 2020 is hereby entered into between Gunston Consulting, LLC ("CONSULTANT"), a Virginia limited liability company, and Medalist Diversified REIT, Inc. ("REIT" or the "Company"), a Maryland corporation, collectively the "Parties." NOW THEREFORE, in consideration of the mutual promises and other good and valuable consideration, the Parties hereby agree as follows: 1. Consulting Services. REIT hereby retains CONSULTANT and CONSULTANT hereby accepts appointment to serve as an independent contractor to the Company. During the term of this Agreement, CONSULTANT shall consult with REIT and provide the services outlined in the attached Statement of Work in a timely and professional manner in accordance with industry standards. CONSULTANT further agrees that it will not assign the responsibilities set forth in the attached Statement of Work to any other CONSULTANT, subcontactor or other individual without the express written agreement of the Company's Chief Executive Officer. 2. No Control by the Company. The Parties agree that CONSULTANT shall use its own judgment as to the time, place, details, and means by which CONSULTANT will accomplish the results of CONSULTANT's services under this Agreement, that CONSULTANT is not required to work set hours of the day or week established by the Company or perform specific services in a sequence determined by the Company, and that nothing contained herein shall be construed to create the relationship of employer and employee between the Company or CONSULTANT; provided, however, that CONSULTANT is expected to provide the services contemplated by this Agreement in a timely and competent manner in order to meet the needs and expectations of the Company. 3. Independent Contractor. The Parties expressly intend and agree that CONSULTANT is acting as an independent contractor and not as an employee of REIT. Under no circumstances shall CONSULTANT look to REIT as its employer, or as a partner, agent, or principal. CONSULTANT has no right or authority to act as an agent of REIT or for or on behalf of the Company in any capacity whatsoever or to assume or create any obligation of any kind - express or implied - on behalf of REIT. 4. Compensation and Reimbursement. CONSULTANT shall be compensated and reimbursed for the services as set forth in the attached Statement of Work. Completeness of work product shall be determined by REIT in its sole discretion, and CONSULTANT agrees to make all revisions, additions, deletions or alterations as requested by the Company. No other fees and/or expenses will be paid to CONSULTANT, unless such fees and/or expenses have been approved in advance by the appropriate Company executive. CONSULTANT shall be solely responsible for any and all taxes, Social Security contributions or payments, disability insurance, unemployment taxes, and other payroll-type taxes applicable to such compensation.
1
5. Confidentiality. 5.1 Acknowledgment of Proprietary Interest. REIT now owns and will hereafter develop, compile, and own certain Proprietary Information, including proprietary techniques, trade secrets, and confidential information, which have great value in its business. As used herein, the term "Proprietary Information" includes any and all of REIT's confidential or proprietary information, including without limitation, the existence of, and the terms of, this Agreement, any and all confidential information of REIT encompassed in any and all reports, designs, devices, diagrams, software codes, test results, processes, research products and product development, technical memoranda and correspondence, work in progress, plans, proposals, marketing and sales information and data, financial projections, cost summaries, pricing formula, and all concepts or ideas, materials or information related to the business, products, or properties of REIT or REIT's tenants, suppliers, employees or contractors, which has not previously been released to the public at large by duly authorized representatives of REIT, whether or not such information would be enforceable as a trade secret or the copying of which would be enjoined or restrained by a court as constituting unfair competition, and any Work Product, as defined in Section 6 of this Agreement, developed or created by the CONSULTANT. CONSULTANT acknowledges and agrees that any and all Proprietary Information of REIT is the property of REIT. 5.2 Covenant Not to Divulge Proprietary Information. CONSULTANT acknowledges and agrees that REIT is entitled to prevent the disclosure of Proprietary Information of REIT. CONSULTANT agrees that at all times during or subsequent to the performance of the consulting services under this Agreement, CONSULTANT will keep confidential and will not divulge, communicate, or use Proprietary Information, except for CONSULTANT's own use during the Term of this Agreement to the extent necessary to perform the consulting services. CONSULTANT further agrees not to cause the transmission, removal or transport of tangible embodiments of, or electronic files containing, Proprietary Information from REIT's principal place of business, without prior approval of the Company. CONSULTANT shall disseminate Proprietary Information only to those employees of CONSULTANT with a special need to know such Proprietary Information. CONSULTANT warrants that such employees shall be informed of the proprietary nature of the Proprietary Information and shall be bound by this Agreement in the same manner that CONSULTANT is bound. 5.3 No Licenses. No rights or licenses in or to the Proprietary Information of REIT are granted to CONSULTANT by virtue of this Agreement. 6. Intellectual Property, Inventions and Patents. CONSULTANT acknowledges that CONSULTANT's rights in all discoveries, concepts, ideas, inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports, patent applications, copyrightable work and mask work (whether or not including any Proprietary Information) and all registrations or applications related thereto, all other proprietary information and all similar or related information (whether or not patentable) which relate to the Company's actual or anticipated business, research and development or existing or future products or services and which were or are conceived, developed, contributed to or made or reduced to practice by CONSULTANT (whether alone or jointly with others) while under contract with the Company, whether before or after the date of this Agreement ("Work Product"), belong to the Company. CONSULTANT shall promptly disclose such Work Product to the Chief Executive Officer of the Company and, at the Company's expense, perform all actions reasonably requested by the Chief Executive Officer of the Company (whether during or after the consultancy) to establish and confirm such ownership (including assignments, consents, powers of attorney and other instruments). CONSULTANT acknowledges that all copyrightable Work Product which is capable of being classified as "works made for hire" under the U.S. Copyright Act of 1976, as amended, shall be deemed "works made for hire" and that the Company shall be the author of, and own all rights therein. To the extent that any such copyrightable work is not a "work made for hire," CONSULTANT hereby assigns and agrees to assign to the Company all right, title and interest, including a copyright, in and to such copyrightable work. Furthermore, CONSULTANT agrees to sign any written instrument of transfer for any rights relating to the Work Product which may be required to effect or evidence the assignment of rights in the Work Product to the Company. The foregoing provisions of this Section 6 shall not apply to any invention that CONSULTANT developed entirely on CONSULTANT's own time without using the Company's equipment, supplies, facilities or trade secret information, except for those inventions that (i) relate to the Company's business or actual or demonstrably anticipated research or development, or (ii) result from any work performed by CONSULTANT for the Company.
2
7. Restrictive Covenants. 7.1 Solicitation of Employees. CONSULTANT agrees that during its consultancy for REIT and for a period of twelve (12) months immediately following the termination of its consultancy with the Company for any reason, whether with or without cause, it will not, for itself or any other person or entity: (a) solicit, induce, recruit or encourage any of the Company's employees, contractors, independent contractors or any person who provides services to the Company to terminate or reduce their employment or other relationship with the Company; (b) hire any individual who is (or was within the six (6) months immediately preceding such hiring, unless such employee was terminated from such employment by Company) an employee, exclusive contractor, or exclusive independent contractor of the Company; or (c) attempt to do any of the foregoing. 7.2 Solicitation of Customers. CONSULTANT agrees that during its consultancy for REIT and for a period of twelve (12) months immediately following the termination of its consultancy with the Company for any reason, whether with or without cause, it will not: (a) solicit, entice or induce any Customer for the purpose of providing, or provide, products or services that are competitive with the products or services provided by the Company, or (b) solicit, entice, or induce any Customer to terminate or reduce its business with (or refrain from increasing its business with) the Company. As used in this Section 7.2, "Customer" means any person or entity to which the Company provided products or services, including any tenants of the Company's properties, (or was invested in real estate owned by the Company), and with which CONSULTANT had contact on behalf of the Company, within the last twelve (12) months of its consultancy with the Company.
3
7.3 Noncompetition. CONSULTANT agrees that during its consultancy for REIT and for a period of twelve (12) months immediately following the termination of its consultancy with the Company for any reason, whether with or without cause, it will not: (a) have any ownership interest in, or participate in the financing, operation, management or control of, any Competitor; or (b) engage in or perform services for any Competitor, if such services either (1) are the same as or similar to (individually or in the aggregate) the services CONSULTANT performed for the Company during its consultancy with the Company, or (2) are performed with respect to products or services of the Competitor that are competitive with the products or services provided by the Company with which CONSULTANT was involved during its consultancy with the Company or about which it received Proprietary Information during its consultancy with the Company. As used in this section, "Competitor" means: (i) any private or publicly traded real estate investment trust, fund or other investment vehicle or program whose principal place of business is in Virginia or any other state in which the Company owns real estate and whose business strategy is based on investing in, acquiring or developing flex/industrial, retail, multifamily and limited service hotel real estate, whether directly or indirectly through joint ventures, or (ii) any entity whose principal place of business is in Virginia or any other state in which the Company owns real estate and that advises (including any external advisor) such investment vehicles or programs. It is agreed that ownership of no more than 1% of the outstanding voting stock of a publicly traded corporation will not constitute a violation of Section 7.3. 7.4 Non-Disparagement. CONSULTANT acknowledges that any disparaging comments by him against the Company are likely to substantially depreciate the business reputation of the Company. CONSULTANT agrees to act in good faith so as to not harm the business reputation of the Company in any way. CONSULTANT further agrees that it will not directly or indirectly defame, disparage, or publicly criticize the services, business, integrity, veracity or reputation of the Company or its owners, officers, directors, or employees in any forum or through any medium of communication. Nothing in this Agreement will preclude CONSULTANT from supplying truthful information to any governmental authority or in response to any lawful subpoena or other legal process. 8. Termination. This Agreement shall terminate immediately upon the occurrence of any of the following events: (a) upon the death or bankruptcy of CONSULTANT; or (b) upon the close of business on the date the Company gives CONSULTANT written notice of Termination for Cause (as defined below); (c) ninety (90) days following the date the Company gives CONSULTANT written notice of termination for any or no reason; or (d) CONSULTANT may terminate this Agreement by giving ninety (90) days' written notice to REIT.
4
For purposes of this Agreement, "Termination for Cause" shall mean termination of this Agreement by the Company as the result of: (i) any act of fraud, dishonesty or neglect of services by CONSULTANT in connection with the services to be provided under this Agreement or against any Company customer, vendor or affiliated company; or (ii) the breach or prospective breach of any provision of this Agreement by CONSULTANT. 8.1 Return of Materials at Termination. In the event of any termination of CONSULTANT's appointment, with or without cause, CONSULTANT shall promptly deliver to REIT any and all materials, property, documents, data, and all other information belonging to REIT or pertaining to Proprietary Information, whether prepared by REIT or CONSULTANT, in CONSULTANT's possession or control, and regardless of how stored or maintained, including all originals, copies, and compilations, and all information stored or maintained on computer, PDAs, electronic or other devices, tapes, discs, or any other form of technology. CONSULTANT shall not take any materials, property, documents, or other information, or any reproduction or excerpt thereof, belonging to REIT or pertaining to any Proprietary Information. 8.2 Obligations Surviving Termination. The obligations of Sections 3, 5, 6 and 7 shall survive any termination of this Agreement. 8.3 Change of Control. In the event of a 'Change of Control' of Company, then if CONSULTANT's services are terminated without cause at any time within a twelve (12) month period following such Change of Control, CONSULTANT shall receive a termination fee equal to twelve (12) months compensation hereunder at the then current monthly rate, including any stock compensation. A Change of Control shall be any purchase of equity in the Company by a party that results in the party acquiring (i) voting control of the Company or (ii) the authority to replace or appoint, a majority of the Board, or the CEO or COO or CFO of the Company. 9. General Provisions. 9.1 Entire Agreement. This Agreement constitutes the entire and exclusive agreement between the Parties with respect to the subject matter hereof and supersedes any prior or contemporaneous agreements, representations, and understandings of the Parties regarding their consulting relationship. 9.2 Severability. In the event that a court of competent jurisdiction determines that any portion of this Agreement is in violation of any law or public policy, only the portions of this Agreement that violate such law or public policy shall be stricken. All portions of this Agreement that do not violate any statute or public policy shall continue in full force and effect. Further, any court order striking any portion of this Agreement shall modify the stricken terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 9.3 Representations and Warranties. CONSULTANT represents and warrants to Company that (a) CONSULTANT has full power and authority to enter into this Agreement including all rights necessary to make the foregoing assignments to Company; that in performing under the Agreement; (b) CONSULTANT will not violate the terms of any agreement with any third party; and (c) the Services and any work product thereof are the original work of CONSULTANT, and to CONSULTANT's knowledge (i) do not and (ii) will not (unless noted to Company otherwise by CONSULTANT) infringe upon, violate or misappropriate any patent, copyright, trade secret, trademark, contract, or any other publicity right, privacy right, or proprietary right of any third party. For clarity, while CONSULTANT may create original ideas that are Work Product herein, CONSULTANT cannot, and does not warrant that those ideas can be exploited by Company with out infringing the rights of other parties.
5
9.4 Successors and Assigns. The rights and obligations of REIT under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of REIT. CONSULTANT shall not be entitled to assign any of CONSULTANT's rights or obligations under this Agreement. 9.5 Taxes, Fees and Benefits. Because this Agreement creates an independent contractor relationship, the parties understand that the Company has no obligation to withhold any state or federal income taxes, social security, or other taxes from payments to CONSULTANT, nor shall it make any workers' compensation or unemployment benefit payments, contributions or payroll tax payments on behalf of CONSULTANT. CONSULTANT agrees that it shall not be eligible for or entitled to participate in any PTO, benefit plans, retirement and insurance coverage provided by the Company or its subsidiary and affiliated entities to their respective employees. CONSULTANT also acknowledges and agrees that the Company will issue a Form 1099 for all compensation paid to CONSULTANT, and it is CONSULTANT's obligation to report and pay all federal, state and local income, payroll, self-employment and other taxes due for her on all compensation from the Company as may be required by law. CONSULTANT agrees to indemnify REIT for any claims, losses, costs, fees, liabilities, damages, or injuries suffered by REIT arising out of CONSULTANT's breach of this section. 9.6 Governing Law; Jurisdiction. This Agreement shall be interpreted, construed, governed, and enforced according to the laws of the Commonwealth of Virginia, without giving effect to its conflict of laws principles. The Parties hereby agree and consent that any and all causes of action arising under this Agreement shall only have jurisdiction and venue in the United States District Court for the Eastern District of Virginia and/or the Circuit Court for Chesterfield County. Each of the parties consents to the jurisdiction and venue of either court for the resolution of all causes of action arising under this Agreement upon proper service of process. 9.7 Indemnity. (a) Indemnity by the Company. The Company hereby agrees to indemnify and hold harmless Consultant against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation and legal counsel fees) to the extent not funded by applicable insurance, in addition to any liability the Company may otherwise have, arising out of, related to or based upon (i) any violation of law, rule or regulation by the Company or the Company's agents, employees, representatives or affiliates or (ii) any third party action or claim against the Company in which Consultant is alleged to be additionally liable. In this regard CONSULTANT shall be an additional insured under Company's applicable insurance coverages. Company shall provide CONSULTANT evidence of all such coverage.
6
(b) Indemnity by Consultant. Consultant hereby agrees to indemnify and hold harmless the Company and each person and affiliate associated with the Company against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation and legal counsel fees) to the extent not funded by applicable insurance, in addition to any liability the Consultant may otherwise have, arising out of, related to or based upon: (i) Any breach by Consultant of any representation, warranty or covenant contained in or made pursuant to this Agreement; or (ii) Any violation of law, rule or regulation by Consultant or Consultant's agents, employees, representatives or affiliates. (c) Actions Relating to Indemnity. If any action or claim shall be brought or asserted against a party entitled to indemnification under this Agreement (the "Indemnified Party") or any person controlling such party and in respect of which indemnity may be sought from the party obligated to indemnify the Indemnified Party pursuant to this Section 9.7 (the "Indemnifying Party"), the Indemnified Party shall promptly notify the Indemnifying Party in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of legal counsel and the payment of all expenses related to the claim against the Indemnified Party or such other controlling party. If the Indemnifying Party fails to assume the defense of such claims, the Indemnified Party or any such controlling party shall have the right to employ a single legal counsel, reasonably acceptable to the Indemnifying Party, in any such action and participate in the defense thereof and to be indemnified for the reasonable legal fees and expenses of the Indemnified Party's own legal counsel. (d) This Section shall survive any termination of this Agreement for a period of three (3) years from the date of termination of this Agreement. Notwithstanding anything herein to the contrary, no Indemnifying Party will be responsible for any indemnification obligation for the gross negligence or willful misconduct of the Indemnified Party. 9.8 Modification. This Agreement may not be amended except by an instrument in writing signed by or on behalf of all the Parties to this Agreement. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the effective date set forth above. Gunston Consulting, LLC REIT: By: /s/ Brent Winn By: /s/ Thomas E. Messier NAME: Brent Winn NAME: Thomas E. Messier Its: Authorized Signatory Title: Chief Executive Officer
7
STATEMENT OF WORK Nature of Services: CONSULTANT shall have the duties, authorities and responsibilities as are required by CONSULTANT's position commensurate with the duties, authorities and responsibilities of persons in similar capacities in similarly sized companies, and such other duties, authorities and responsibilities as may reasonably be assigned to CONSULTANT as the Chief Executive Officer or the Board of Directors of the REIT (the "Board of Directors" or the "Board") shall designate from time to time that are not inconsistent with CONSULTANT's position and that are consistent with the bylaws of the REIT and/or the limited partnership agreement of the REIT's operating partnership, Medalist Diversified Holdings, L.P., each as may be amended from time to time, including, but not limited to, managing the affairs of the Company. Term: twelve (12) months from the date of the Agreement which term shall automatically renew for an additional twelve (12) months on such date if the Agreement is not otherwise terminated according to Section 8 of the Agreement. Compensation: REIT agrees to pay CONSULTANT the following consulting fees, for services performed by CONSULTANT: 1. $200,000 annual fee payable in 12 equal monthly installments or 24 equal semi-monthly installments, at CONSULTANT's election. 2. Annual stock grants as awarded by the Compensation Committee of the Company's Board of Directors. 3. Except for limited authorized expenditures expressly agreed to and authorized by REIT, such as pre-approved, reasonable travel expenses, CONSULTANT shall be responsible for paying all expenses incurred by him/her in the performance of this Agreement. It is expressly understood that the Company will not wholly or partially reimburse non-authorized expenses. Moreover, invoices for approved expenses must be itemized and substantiated by appropriate receipts prior to payment.
8 [/INST] ```json
{<answer_start>
"answer": "To the extent that any such copyrightable work is not a "work made for hire," CONSULTANT hereby assigns and agrees to assign to the Company all right, title and interest, including a copyright, in and to such copyrightable work."
<answer_end>
}
``` </s> | Exhibit 10.1 CONSULTING AGREEMENT This CONSULTING AGREEMENT ("Agreement") effective as of this 1st day of March 2020 is hereby entered into between Gunston Consulting, LLC ("CONSULTANT"), a Virginia limited liability company, and Medalist Diversified REIT, Inc. ("REIT" or the "Company"), a Maryland corporation, collectively the "Parties." NOW THEREFORE, in consideration of the mutual promises and other good and valuable consideration, the Parties hereby agree as follows: 1. Consulting Services. REIT hereby retains CONSULTANT and CONSULTANT hereby accepts appointment to serve as an independent contractor to the Company. During the term of this Agreement, CONSULTANT shall consult with REIT and provide the services outlined in the attached Statement of Work in a timely and professional manner in accordance with industry standards. CONSULTANT further agrees that it will not assign the responsibilities set forth in the attached Statement of Work to any other CONSULTANT, subcontactor or other individual without the express written agreement of the Company's Chief Executive Officer. 2. No Control by the Company. The Parties agree that CONSULTANT shall use its own judgment as to the time, place, details, and means by which CONSULTANT will accomplish the results of CONSULTANT's services under this Agreement, that CONSULTANT is not required to work set hours of the day or week established by the Company or perform specific services in a sequence determined by the Company, and that nothing contained herein shall be construed to create the relationship of employer and employee between the Company or CONSULTANT; provided, however, that CONSULTANT is expected to provide the services contemplated by this Agreement in a timely and competent manner in order to meet the needs and expectations of the Company. 3. Independent Contractor. The Parties expressly intend and agree that CONSULTANT is acting as an independent contractor and not as an employee of REIT. Under no circumstances shall CONSULTANT look to REIT as its employer, or as a partner, agent, or principal. CONSULTANT has no right or authority to act as an agent of REIT or for or on behalf of the Company in any capacity whatsoever or to assume or create any obligation of any kind - express or implied - on behalf of REIT. 4. Compensation and Reimbursement. CONSULTANT shall be compensated and reimbursed for the services as set forth in the attached Statement of Work. Completeness of work product shall be determined by REIT in its sole discretion, and CONSULTANT agrees to make all revisions, additions, deletions or alterations as requested by the Company. No other fees and/or expenses will be paid to CONSULTANT, unless such fees and/or expenses have been approved in advance by the appropriate Company executive. CONSULTANT shall be solely responsible for any and all taxes, Social Security contributions or payments, disability insurance, unemployment taxes, and other payroll-type taxes applicable to such compensation.
1
5. Confidentiality. 5.1 Acknowledgment of Proprietary Interest. REIT now owns and will hereafter develop, compile, and own certain Proprietary Information, including proprietary techniques, trade secrets, and confidential information, which have great value in its business. As used herein, the term "Proprietary Information" includes any and all of REIT's confidential or proprietary information, including without limitation, the existence of, and the terms of, this Agreement, any and all confidential information of REIT encompassed in any and all reports, designs, devices, diagrams, software codes, test results, processes, research products and product development, technical memoranda and correspondence, work in progress, plans, proposals, marketing and sales information and data, financial projections, cost summaries, pricing formula, and all concepts or ideas, materials or information related to the business, products, or properties of REIT or REIT's tenants, suppliers, employees or contractors, which has not previously been released to the public at large by duly authorized representatives of REIT, whether or not such information would be enforceable as a trade secret or the copying of which would be enjoined or restrained by a court as constituting unfair competition, and any Work Product, as defined in Section 6 of this Agreement, developed or created by the CONSULTANT. CONSULTANT acknowledges and agrees that any and all Proprietary Information of REIT is the property of REIT. 5.2 Covenant Not to Divulge Proprietary Information. CONSULTANT acknowledges and agrees that REIT is entitled to prevent the disclosure of Proprietary Information of REIT. CONSULTANT agrees that at all times during or subsequent to the performance of the consulting services under this Agreement, CONSULTANT will keep confidential and will not divulge, communicate, or use Proprietary Information, except for CONSULTANT's own use during the Term of this Agreement to the extent necessary to perform the consulting services. CONSULTANT further agrees not to cause the transmission, removal or transport of tangible embodiments of, or electronic files containing, Proprietary Information from REIT's principal place of business, without prior approval of the Company. CONSULTANT shall disseminate Proprietary Information only to those employees of CONSULTANT with a special need to know such Proprietary Information. CONSULTANT warrants that such employees shall be informed of the proprietary nature of the Proprietary Information and shall be bound by this Agreement in the same manner that CONSULTANT is bound. 5.3 No Licenses. No rights or licenses in or to the Proprietary Information of REIT are granted to CONSULTANT by virtue of this Agreement. 6. Intellectual Property, Inventions and Patents. CONSULTANT acknowledges that CONSULTANT's rights in all discoveries, concepts, ideas, inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports, patent applications, copyrightable work and mask work (whether or not including any Proprietary Information) and all registrations or applications related thereto, all other proprietary information and all similar or related information (whether or not patentable) which relate to the Company's actual or anticipated business, research and development or existing or future products or services and which were or are conceived, developed, contributed to or made or reduced to practice by CONSULTANT (whether alone or jointly with others) while under contract with the Company, whether before or after the date of this Agreement ("Work Product"), belong to the Company. CONSULTANT shall promptly disclose such Work Product to the Chief Executive Officer of the Company and, at the Company's expense, perform all actions reasonably requested by the Chief Executive Officer of the Company (whether during or after the consultancy) to establish and confirm such ownership (including assignments, consents, powers of attorney and other instruments). CONSULTANT acknowledges that all copyrightable Work Product which is capable of being classified as "works made for hire" under the U.S. Copyright Act of 1976, as amended, shall be deemed "works made for hire" and that the Company shall be the author of, and own all rights therein. To the extent that any such copyrightable work is not a "work made for hire," CONSULTANT hereby assigns and agrees to assign to the Company all right, title and interest, including a copyright, in and to such copyrightable work. Furthermore, CONSULTANT agrees to sign any written instrument of transfer for any rights relating to the Work Product which may be required to effect or evidence the assignment of rights in the Work Product to the Company. The foregoing provisions of this Section 6 shall not apply to any invention that CONSULTANT developed entirely on CONSULTANT's own time without using the Company's equipment, supplies, facilities or trade secret information, except for those inventions that (i) relate to the Company's business or actual or demonstrably anticipated research or development, or (ii) result from any work performed by CONSULTANT for the Company.
2
7. Restrictive Covenants. 7.1 Solicitation of Employees. CONSULTANT agrees that during its consultancy for REIT and for a period of twelve (12) months immediately following the termination of its consultancy with the Company for any reason, whether with or without cause, it will not, for itself or any other person or entity: (a) solicit, induce, recruit or encourage any of the Company's employees, contractors, independent contractors or any person who provides services to the Company to terminate or reduce their employment or other relationship with the Company; (b) hire any individual who is (or was within the six (6) months immediately preceding such hiring, unless such employee was terminated from such employment by Company) an employee, exclusive contractor, or exclusive independent contractor of the Company; or (c) attempt to do any of the foregoing. 7.2 Solicitation of Customers. CONSULTANT agrees that during its consultancy for REIT and for a period of twelve (12) months immediately following the termination of its consultancy with the Company for any reason, whether with or without cause, it will not: (a) solicit, entice or induce any Customer for the purpose of providing, or provide, products or services that are competitive with the products or services provided by the Company, or (b) solicit, entice, or induce any Customer to terminate or reduce its business with (or refrain from increasing its business with) the Company. As used in this Section 7.2, "Customer" means any person or entity to which the Company provided products or services, including any tenants of the Company's properties, (or was invested in real estate owned by the Company), and with which CONSULTANT had contact on behalf of the Company, within the last twelve (12) months of its consultancy with the Company.
3
7.3 Noncompetition. CONSULTANT agrees that during its consultancy for REIT and for a period of twelve (12) months immediately following the termination of its consultancy with the Company for any reason, whether with or without cause, it will not: (a) have any ownership interest in, or participate in the financing, operation, management or control of, any Competitor; or (b) engage in or perform services for any Competitor, if such services either (1) are the same as or similar to (individually or in the aggregate) the services CONSULTANT performed for the Company during its consultancy with the Company, or (2) are performed with respect to products or services of the Competitor that are competitive with the products or services provided by the Company with which CONSULTANT was involved during its consultancy with the Company or about which it received Proprietary Information during its consultancy with the Company. As used in this section, "Competitor" means: (i) any private or publicly traded real estate investment trust, fund or other investment vehicle or program whose principal place of business is in Virginia or any other state in which the Company owns real estate and whose business strategy is based on investing in, acquiring or developing flex/industrial, retail, multifamily and limited service hotel real estate, whether directly or indirectly through joint ventures, or (ii) any entity whose principal place of business is in Virginia or any other state in which the Company owns real estate and that advises (including any external advisor) such investment vehicles or programs. It is agreed that ownership of no more than 1% of the outstanding voting stock of a publicly traded corporation will not constitute a violation of Section 7.3. 7.4 Non-Disparagement. CONSULTANT acknowledges that any disparaging comments by him against the Company are likely to substantially depreciate the business reputation of the Company. CONSULTANT agrees to act in good faith so as to not harm the business reputation of the Company in any way. CONSULTANT further agrees that it will not directly or indirectly defame, disparage, or publicly criticize the services, business, integrity, veracity or reputation of the Company or its owners, officers, directors, or employees in any forum or through any medium of communication. Nothing in this Agreement will preclude CONSULTANT from supplying truthful information to any governmental authority or in response to any lawful subpoena or other legal process. 8. Termination. This Agreement shall terminate immediately upon the occurrence of any of the following events: (a) upon the death or bankruptcy of CONSULTANT; or (b) upon the close of business on the date the Company gives CONSULTANT written notice of Termination for Cause (as defined below); (c) ninety (90) days following the date the Company gives CONSULTANT written notice of termination for any or no reason; or (d) CONSULTANT may terminate this Agreement by giving ninety (90) days' written notice to REIT.
4
For purposes of this Agreement, "Termination for Cause" shall mean termination of this Agreement by the Company as the result of: (i) any act of fraud, dishonesty or neglect of services by CONSULTANT in connection with the services to be provided under this Agreement or against any Company customer, vendor or affiliated company; or (ii) the breach or prospective breach of any provision of this Agreement by CONSULTANT. 8.1 Return of Materials at Termination. In the event of any termination of CONSULTANT's appointment, with or without cause, CONSULTANT shall promptly deliver to REIT any and all materials, property, documents, data, and all other information belonging to REIT or pertaining to Proprietary Information, whether prepared by REIT or CONSULTANT, in CONSULTANT's possession or control, and regardless of how stored or maintained, including all originals, copies, and compilations, and all information stored or maintained on computer, PDAs, electronic or other devices, tapes, discs, or any other form of technology. CONSULTANT shall not take any materials, property, documents, or other information, or any reproduction or excerpt thereof, belonging to REIT or pertaining to any Proprietary Information. 8.2 Obligations Surviving Termination. The obligations of Sections 3, 5, 6 and 7 shall survive any termination of this Agreement. 8.3 Change of Control. In the event of a 'Change of Control' of Company, then if CONSULTANT's services are terminated without cause at any time within a twelve (12) month period following such Change of Control, CONSULTANT shall receive a termination fee equal to twelve (12) months compensation hereunder at the then current monthly rate, including any stock compensation. A Change of Control shall be any purchase of equity in the Company by a party that results in the party acquiring (i) voting control of the Company or (ii) the authority to replace or appoint, a majority of the Board, or the CEO or COO or CFO of the Company. 9. General Provisions. 9.1 Entire Agreement. This Agreement constitutes the entire and exclusive agreement between the Parties with respect to the subject matter hereof and supersedes any prior or contemporaneous agreements, representations, and understandings of the Parties regarding their consulting relationship. 9.2 Severability. In the event that a court of competent jurisdiction determines that any portion of this Agreement is in violation of any law or public policy, only the portions of this Agreement that violate such law or public policy shall be stricken. All portions of this Agreement that do not violate any statute or public policy shall continue in full force and effect. Further, any court order striking any portion of this Agreement shall modify the stricken terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 9.3 Representations and Warranties. CONSULTANT represents and warrants to Company that (a) CONSULTANT has full power and authority to enter into this Agreement including all rights necessary to make the foregoing assignments to Company; that in performing under the Agreement; (b) CONSULTANT will not violate the terms of any agreement with any third party; and (c) the Services and any work product thereof are the original work of CONSULTANT, and to CONSULTANT's knowledge (i) do not and (ii) will not (unless noted to Company otherwise by CONSULTANT) infringe upon, violate or misappropriate any patent, copyright, trade secret, trademark, contract, or any other publicity right, privacy right, or proprietary right of any third party. For clarity, while CONSULTANT may create original ideas that are Work Product herein, CONSULTANT cannot, and does not warrant that those ideas can be exploited by Company with out infringing the rights of other parties.
5
9.4 Successors and Assigns. The rights and obligations of REIT under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of REIT. CONSULTANT shall not be entitled to assign any of CONSULTANT's rights or obligations under this Agreement. 9.5 Taxes, Fees and Benefits. Because this Agreement creates an independent contractor relationship, the parties understand that the Company has no obligation to withhold any state or federal income taxes, social security, or other taxes from payments to CONSULTANT, nor shall it make any workers' compensation or unemployment benefit payments, contributions or payroll tax payments on behalf of CONSULTANT. CONSULTANT agrees that it shall not be eligible for or entitled to participate in any PTO, benefit plans, retirement and insurance coverage provided by the Company or its subsidiary and affiliated entities to their respective employees. CONSULTANT also acknowledges and agrees that the Company will issue a Form 1099 for all compensation paid to CONSULTANT, and it is CONSULTANT's obligation to report and pay all federal, state and local income, payroll, self-employment and other taxes due for her on all compensation from the Company as may be required by law. CONSULTANT agrees to indemnify REIT for any claims, losses, costs, fees, liabilities, damages, or injuries suffered by REIT arising out of CONSULTANT's breach of this section. 9.6 Governing Law; Jurisdiction. This Agreement shall be interpreted, construed, governed, and enforced according to the laws of the Commonwealth of Virginia, without giving effect to its conflict of laws principles. The Parties hereby agree and consent that any and all causes of action arising under this Agreement shall only have jurisdiction and venue in the United States District Court for the Eastern District of Virginia and/or the Circuit Court for Chesterfield County. Each of the parties consents to the jurisdiction and venue of either court for the resolution of all causes of action arising under this Agreement upon proper service of process. 9.7 Indemnity. (a) Indemnity by the Company. The Company hereby agrees to indemnify and hold harmless Consultant against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation and legal counsel fees) to the extent not funded by applicable insurance, in addition to any liability the Company may otherwise have, arising out of, related to or based upon (i) any violation of law, rule or regulation by the Company or the Company's agents, employees, representatives or affiliates or (ii) any third party action or claim against the Company in which Consultant is alleged to be additionally liable. In this regard CONSULTANT shall be an additional insured under Company's applicable insurance coverages. Company shall provide CONSULTANT evidence of all such coverage.
6
(b) Indemnity by Consultant. Consultant hereby agrees to indemnify and hold harmless the Company and each person and affiliate associated with the Company against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation and legal counsel fees) to the extent not funded by applicable insurance, in addition to any liability the Consultant may otherwise have, arising out of, related to or based upon: (i) Any breach by Consultant of any representation, warranty or covenant contained in or made pursuant to this Agreement; or (ii) Any violation of law, rule or regulation by Consultant or Consultant's agents, employees, representatives or affiliates. (c) Actions Relating to Indemnity. If any action or claim shall be brought or asserted against a party entitled to indemnification under this Agreement (the "Indemnified Party") or any person controlling such party and in respect of which indemnity may be sought from the party obligated to indemnify the Indemnified Party pursuant to this Section 9.7 (the "Indemnifying Party"), the Indemnified Party shall promptly notify the Indemnifying Party in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of legal counsel and the payment of all expenses related to the claim against the Indemnified Party or such other controlling party. If the Indemnifying Party fails to assume the defense of such claims, the Indemnified Party or any such controlling party shall have the right to employ a single legal counsel, reasonably acceptable to the Indemnifying Party, in any such action and participate in the defense thereof and to be indemnified for the reasonable legal fees and expenses of the Indemnified Party's own legal counsel. (d) This Section shall survive any termination of this Agreement for a period of three (3) years from the date of termination of this Agreement. Notwithstanding anything herein to the contrary, no Indemnifying Party will be responsible for any indemnification obligation for the gross negligence or willful misconduct of the Indemnified Party. 9.8 Modification. This Agreement may not be amended except by an instrument in writing signed by or on behalf of all the Parties to this Agreement. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the effective date set forth above. Gunston Consulting, LLC REIT: By: /s/ Brent Winn By: /s/ Thomas E. Messier NAME: Brent Winn NAME: Thomas E. Messier Its: Authorized Signatory Title: Chief Executive Officer
7
STATEMENT OF WORK Nature of Services: CONSULTANT shall have the duties, authorities and responsibilities as are required by CONSULTANT's position commensurate with the duties, authorities and responsibilities of persons in similar capacities in similarly sized companies, and such other duties, authorities and responsibilities as may reasonably be assigned to CONSULTANT as the Chief Executive Officer or the Board of Directors of the REIT (the "Board of Directors" or the "Board") shall designate from time to time that are not inconsistent with CONSULTANT's position and that are consistent with the bylaws of the REIT and/or the limited partnership agreement of the REIT's operating partnership, Medalist Diversified Holdings, L.P., each as may be amended from time to time, including, but not limited to, managing the affairs of the Company. Term: twelve (12) months from the date of the Agreement which term shall automatically renew for an additional twelve (12) months on such date if the Agreement is not otherwise terminated according to Section 8 of the Agreement. Compensation: REIT agrees to pay CONSULTANT the following consulting fees, for services performed by CONSULTANT: 1. $200,000 annual fee payable in 12 equal monthly installments or 24 equal semi-monthly installments, at CONSULTANT's election. 2. Annual stock grants as awarded by the Compensation Committee of the Company's Board of Directors. 3. Except for limited authorized expenditures expressly agreed to and authorized by REIT, such as pre-approved, reasonable travel expenses, CONSULTANT shall be responsible for paying all expenses incurred by him/her in the performance of this Agreement. It is expressly understood that the Company will not wholly or partially reimburse non-authorized expenses. Moreover, invoices for approved expenses must be itemized and substantiated by appropriate receipts prior to payment.
8 | Highlight the parts (if any) of this contract related to "Ip Ownership Assignment" that should be reviewed by a lawyer. Details: Does intellectual property created by one party become the property of the counterparty, either per the terms of the contract or upon the occurrence of certain events? | {
"answer_start": [
7336
],
"text": [
"To the extent that any such copyrightable work is not a \"work made for hire,\" CONSULTANT hereby assigns and agrees to assign to the Company all right, title and interest, including a copyright, in and to such copyrightable work."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Governing Law" that should be reviewed by a lawyer. Details: Which state/country's law governs the interpretation of the contract?
Context: AMENDMENT NO. 2
Dated as of March 27, 2006
Reference is hereby made to that certain fully executed Wireless Content License Agreement Number 12965 dated as of December 16, 2004, as amended November 11, 2005, ("Agreement"), between Fox Mobile Entertainment, Inc. ("Fox"), as Administrator for Twentieth Century Fox Film Corporation ("Trademark Licensor") and Glu Mobile, Inc. f/k/a Sorrent, Inc. ("Licensee").
The parties agree to modify the Agreement as follows:
A. "ICE AGE 2" a/k/a "ICE AGE: THE MELTDOWN" AUDIO AND VIDEO WIRELESS PRODUCTS:
1. Grant of Rights: Fox grants to Licensee a limited, non-exclusive right and license to distribute the following Wireless Products in connection with the Property "ICE AGE: THE MELTDOWN" in the United States: (A) 2 Scrat voicetones; (B) 2 John Leguizamo voicetones; and (C) 3 premium videos. Fox also grants Licensee a limited, non-exclusive right and license to distribute the following Wireless Products in connection with the Property "ICE AGE 2" outside of the United States: (A) 4 Scrat voicetones; (B) 1 John Leguizamo voicetone; and (C) 3 premium videos. (collectively, "IA2 Audio and Video Wireless Products")
B. IA 2 AUDIO AND VIDEO WIRELESS PRODUCTS ROYALTY:
1. Royalty: In consideration of the rights granted to Licensee pursuant to this Amendment 2, Licensee shall pay to Fox, or such other party as Fox may designate in writing, a royalty in the following amount:
(a) From the first unit sold, Fox shall earn a royalty at the rate of ***** percent (*****%) of Licensee's Gross Receipts (as defined in the Agreement) from Licensee's sale and distribution of the IA2 Audio and Video Wireless Products. ("IA2 Audio and Video Royalty"). For the avoidance of doubt, Licensee may not recoup any portion of the Ice Age 2 Guarantee (as defined in Amendment 1) through its sale and distribution of the IA2 Audio and Video Wireless Products.
2. VGSL and other CSP Accounting: All VGSL and other CSP payments remitted directly to Fox pursuant to the VGSL Agreement and other CSP agreements with respect to the IA Audio and Video Wireless Products shall be treated in the same manner as set forth in Paragraphs 7(b)(ii) and 7(b)(iii) of the Agreement.
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
Source: GLU MOBILE INC, S-1/A, 3/19/2007
3. No Direct-to-Consumer Distribution Royalty: Licensee shall not be entitled to receive a share of any revenues and shall have no claim to any revenues earned and collected by Fox, or a third-party Fox designates, for the IA2 Audio and Video Wireless Products which Fox distributes through its and its assigns' direct-to-consumer distribution channels.
Except as herein expressly amended or by necessary implication modified by this Amendment, the Agreement in all other respects is hereby ratified and shall continue in full force and effect.
By signing in the places indicated below, the parties hereto accept and agree to all of the terms and conditions hereof.
Glu Mobile, Inc. f/k/a Sorrent, Inc. ("Licensee") Fox Mobile Entertainment, Inc. ("Fox") By: /s/ PAUL ZUZELO By: /s/ JAMIE SAMSON Jamie Samson Name: Paul Zuzelo Its: Senior Vice President Its: CAO Date: March 28, 2006 Date: 3/28/06
Source: GLU MOBILE INC, S-1/A, 3/19/2007 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | AMENDMENT NO. 2
Dated as of March 27, 2006
Reference is hereby made to that certain fully executed Wireless Content License Agreement Number 12965 dated as of December 16, 2004, as amended November 11, 2005, ("Agreement"), between Fox Mobile Entertainment, Inc. ("Fox"), as Administrator for Twentieth Century Fox Film Corporation ("Trademark Licensor") and Glu Mobile, Inc. f/k/a Sorrent, Inc. ("Licensee").
The parties agree to modify the Agreement as follows:
A. "ICE AGE 2" a/k/a "ICE AGE: THE MELTDOWN" AUDIO AND VIDEO WIRELESS PRODUCTS:
1. Grant of Rights: Fox grants to Licensee a limited, non-exclusive right and license to distribute the following Wireless Products in connection with the Property "ICE AGE: THE MELTDOWN" in the United States: (A) 2 Scrat voicetones; (B) 2 John Leguizamo voicetones; and (C) 3 premium videos. Fox also grants Licensee a limited, non-exclusive right and license to distribute the following Wireless Products in connection with the Property "ICE AGE 2" outside of the United States: (A) 4 Scrat voicetones; (B) 1 John Leguizamo voicetone; and (C) 3 premium videos. (collectively, "IA2 Audio and Video Wireless Products")
B. IA 2 AUDIO AND VIDEO WIRELESS PRODUCTS ROYALTY:
1. Royalty: In consideration of the rights granted to Licensee pursuant to this Amendment 2, Licensee shall pay to Fox, or such other party as Fox may designate in writing, a royalty in the following amount:
(a) From the first unit sold, Fox shall earn a royalty at the rate of ***** percent (*****%) of Licensee's Gross Receipts (as defined in the Agreement) from Licensee's sale and distribution of the IA2 Audio and Video Wireless Products. ("IA2 Audio and Video Royalty"). For the avoidance of doubt, Licensee may not recoup any portion of the Ice Age 2 Guarantee (as defined in Amendment 1) through its sale and distribution of the IA2 Audio and Video Wireless Products.
2. VGSL and other CSP Accounting: All VGSL and other CSP payments remitted directly to Fox pursuant to the VGSL Agreement and other CSP agreements with respect to the IA Audio and Video Wireless Products shall be treated in the same manner as set forth in Paragraphs 7(b)(ii) and 7(b)(iii) of the Agreement.
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
Source: GLU MOBILE INC, S-1/A, 3/19/2007
3. No Direct-to-Consumer Distribution Royalty: Licensee shall not be entitled to receive a share of any revenues and shall have no claim to any revenues earned and collected by Fox, or a third-party Fox designates, for the IA2 Audio and Video Wireless Products which Fox distributes through its and its assigns' direct-to-consumer distribution channels.
Except as herein expressly amended or by necessary implication modified by this Amendment, the Agreement in all other respects is hereby ratified and shall continue in full force and effect.
By signing in the places indicated below, the parties hereto accept and agree to all of the terms and conditions hereof.
Glu Mobile, Inc. f/k/a Sorrent, Inc. ("Licensee") Fox Mobile Entertainment, Inc. ("Fox") By: /s/ PAUL ZUZELO By: /s/ JAMIE SAMSON Jamie Samson Name: Paul Zuzelo Its: Senior Vice President Its: CAO Date: March 28, 2006 Date: 3/28/06
Source: GLU MOBILE INC, S-1/A, 3/19/2007 | Highlight the parts (if any) of this contract related to "Governing Law" that should be reviewed by a lawyer. Details: Which state/country's law governs the interpretation of the contract? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Post-Termination Services" that should be reviewed by a lawyer. Details: Is a party subject to obligations after the termination or expiration of a contract, including any post-termination transition, payment, transfer of IP, wind-down, last-buy, or similar commitments?
Context: EXHIBIT 10.3 SUPPLY AGREEMENT This Agreement ("the Agreement"), is made by and between EWSD 1, LLC, d/b/a/ SHI FARMS ("Shi Farms"), a Delaware limited liability company and Gridiron BioNutrients, Inc, a Nevada Corporation ("Gridiron") , each individually "a Party," and collectively, "the Parties." WHEREAS Shi Farms grows industrial hemp and wishes to sell hemp biomass ("Product"); and Gridiron wishes to purchase Product from Shi Farms; and Both Parties acknowledge that Shi Farms is the owner of the Product as defined below; and Shi Farms is willing to sell Product to Gridiron and Gridiron desires to acquire in accordance with the terms and conditions set forth below. NOW, THEREFORE for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. Products and Payments A. Product. Shi Farms agrees to sell Product and Gridiron agrees to purchase 30,000 lbs. of hemp biomass ("Biomass") from Shi Farms. Biomass must contain a minimum of six percent (6%) total Cannabidiol (CBD/and or CBDA) and all Biomass must have less than three percent (3%) total TCH content. The Biomass must contain no contaminates that are above acceptable industry standards for processing Biomass including but not limited to: Mold and Mildew; Non- Hemp Plant Material; Soil; Insects; Rodent Droppings; Wet or Rotting Material; Heavy Metals; Residual Pesticides or Herbicides; Bacteria. B. Pricing. Both Parties mutually agree that the Purchase Price of the Product is determined on a $5.00 per pound basis for a total cost of one hundred fifty thousand dollars ($150,000). C. Certificate of Analysis (COA). Both Parties agree that CBD potency numbers are determined by a third-party lab according to standard testing protocol which was provided by the seller. Buyer may take their own samples ("Product Samples") for testing as well. D. Payment. Both Parties agree that once the Parties have agreed to transaction which includes the purchase and sale of the Product that the Buyer will remit payment upon execution of this agreement. E. Quarantine. Once the payment has been received, Shi Farms will use its best efforts to quarantine product to ensure safe keeping of the Product until delivery date as agreed by the Parties. F. Delivery. Product Samples. The point of delivery of the Product Samples shall be a laboratory determined by Gridiron, if Gridiron determines that third party analysis of the Biomass is required for processing. Shi Farms shall be responsible to ship the Product Samples to the designated laboratory. Biomass. Shi Farms shall be responsible for delivery of the Biomass to the processor determined by Gridiron, in good form as described above "A. Product".
1
2. Term and Termination. A. Termination. Either Party may terminate this Agreement at any time prior to delivery of the Product. 3. Indemnification. Gridiron and affiliated parties shall indemnify and hold Shi Farms harmless from any claims, losses, actions, damages, liabilities, taxes , obligations, fines, proceedings, deficiencies and out of pocket costs and expenses (including but not limited to attorneys' fees and disbursements) without limitation resulting from or arising out of any inaccuracy or breach of any representation or warranty; any non-performance or any obligation incurred by Gridiron and its affiliated parties. If any claim or legal proceeding is filed by a third party, prompt notice is required by the one to the other. 4. Notices. All notices required or permitted under this Agreement must be in writing and delivered by email or personal delivery on the date sent; or if my facsimile on the date sent; or if by certified US mail on the third business day following such mailing; or if by overnight courier, on the next business day. Shi Farms:214 39t h Lane Pueblo, CO 81006 ATTN: Steven Turetsky Gridiron: 1119 West 1st Ave - Suite G Spokane, WA 99021 ATTN: Tim Orr 5. Entire Agreement. A. Amendment, Waiver, Assignment. This Agreement may not be waived, amended or assigned without an agreed written and signed document, signed by both Parties. B. Governing Law. This Agreement and any amendments thereto shall be construed according to the laws of the State of Colorado without regard to conflicts of law principles and any disputes hereunder shall be litigated in a state court in Colorado. C. Confidential Information. In the course of performing their respective obligations, each party will enter into possession of information of the other party which the Parties wish to protect and deem "Confidential Information." This will include all Intellectual Property, processes, pricing, and any information that is marked confidential. When the Agreement ends, each party shall return all copies of any such information to the other and take every reasonable measure to preclude its representatives from sharing or keeping such information. Failure to do so shall constitute a material breach of this Agreement with all rights and remedies available to the party whose material has been Disclosed. D. Counterparts and Severability. This document may be signed in counterparts which, when taken together, constitute the whole. Should any provision of this Agreement deemed unenforceable and thus stricken, the remainder of the Agreement remains in full force and effect upon both parties.
[Remainder of Page Intentionally Left Blank] 2
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date below. EWSD 1, LLC d/b/a Shi Farms Gridiron BioNutrients, Inc. BY: /s/ Thomas A. Gallo BY: /s/ Timothy S Orr Date: 1/26/2020 Date: 1/27/2020 Name: Thomas A. Gallo Name: Timothy Orr- President Title: Executive Director 3 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | EXHIBIT 10.3 SUPPLY AGREEMENT This Agreement ("the Agreement"), is made by and between EWSD 1, LLC, d/b/a/ SHI FARMS ("Shi Farms"), a Delaware limited liability company and Gridiron BioNutrients, Inc, a Nevada Corporation ("Gridiron") , each individually "a Party," and collectively, "the Parties." WHEREAS Shi Farms grows industrial hemp and wishes to sell hemp biomass ("Product"); and Gridiron wishes to purchase Product from Shi Farms; and Both Parties acknowledge that Shi Farms is the owner of the Product as defined below; and Shi Farms is willing to sell Product to Gridiron and Gridiron desires to acquire in accordance with the terms and conditions set forth below. NOW, THEREFORE for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. Products and Payments A. Product. Shi Farms agrees to sell Product and Gridiron agrees to purchase 30,000 lbs. of hemp biomass ("Biomass") from Shi Farms. Biomass must contain a minimum of six percent (6%) total Cannabidiol (CBD/and or CBDA) and all Biomass must have less than three percent (3%) total TCH content. The Biomass must contain no contaminates that are above acceptable industry standards for processing Biomass including but not limited to: Mold and Mildew; Non- Hemp Plant Material; Soil; Insects; Rodent Droppings; Wet or Rotting Material; Heavy Metals; Residual Pesticides or Herbicides; Bacteria. B. Pricing. Both Parties mutually agree that the Purchase Price of the Product is determined on a $5.00 per pound basis for a total cost of one hundred fifty thousand dollars ($150,000). C. Certificate of Analysis (COA). Both Parties agree that CBD potency numbers are determined by a third-party lab according to standard testing protocol which was provided by the seller. Buyer may take their own samples ("Product Samples") for testing as well. D. Payment. Both Parties agree that once the Parties have agreed to transaction which includes the purchase and sale of the Product that the Buyer will remit payment upon execution of this agreement. E. Quarantine. Once the payment has been received, Shi Farms will use its best efforts to quarantine product to ensure safe keeping of the Product until delivery date as agreed by the Parties. F. Delivery. Product Samples. The point of delivery of the Product Samples shall be a laboratory determined by Gridiron, if Gridiron determines that third party analysis of the Biomass is required for processing. Shi Farms shall be responsible to ship the Product Samples to the designated laboratory. Biomass. Shi Farms shall be responsible for delivery of the Biomass to the processor determined by Gridiron, in good form as described above "A. Product".
1
2. Term and Termination. A. Termination. Either Party may terminate this Agreement at any time prior to delivery of the Product. 3. Indemnification. Gridiron and affiliated parties shall indemnify and hold Shi Farms harmless from any claims, losses, actions, damages, liabilities, taxes , obligations, fines, proceedings, deficiencies and out of pocket costs and expenses (including but not limited to attorneys' fees and disbursements) without limitation resulting from or arising out of any inaccuracy or breach of any representation or warranty; any non-performance or any obligation incurred by Gridiron and its affiliated parties. If any claim or legal proceeding is filed by a third party, prompt notice is required by the one to the other. 4. Notices. All notices required or permitted under this Agreement must be in writing and delivered by email or personal delivery on the date sent; or if my facsimile on the date sent; or if by certified US mail on the third business day following such mailing; or if by overnight courier, on the next business day. Shi Farms:214 39t h Lane Pueblo, CO 81006 ATTN: Steven Turetsky Gridiron: 1119 West 1st Ave - Suite G Spokane, WA 99021 ATTN: Tim Orr 5. Entire Agreement. A. Amendment, Waiver, Assignment. This Agreement may not be waived, amended or assigned without an agreed written and signed document, signed by both Parties. B. Governing Law. This Agreement and any amendments thereto shall be construed according to the laws of the State of Colorado without regard to conflicts of law principles and any disputes hereunder shall be litigated in a state court in Colorado. C. Confidential Information. In the course of performing their respective obligations, each party will enter into possession of information of the other party which the Parties wish to protect and deem "Confidential Information." This will include all Intellectual Property, processes, pricing, and any information that is marked confidential. When the Agreement ends, each party shall return all copies of any such information to the other and take every reasonable measure to preclude its representatives from sharing or keeping such information. Failure to do so shall constitute a material breach of this Agreement with all rights and remedies available to the party whose material has been Disclosed. D. Counterparts and Severability. This document may be signed in counterparts which, when taken together, constitute the whole. Should any provision of this Agreement deemed unenforceable and thus stricken, the remainder of the Agreement remains in full force and effect upon both parties.
[Remainder of Page Intentionally Left Blank] 2
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date below. EWSD 1, LLC d/b/a Shi Farms Gridiron BioNutrients, Inc. BY: /s/ Thomas A. Gallo BY: /s/ Timothy S Orr Date: 1/26/2020 Date: 1/27/2020 Name: Thomas A. Gallo Name: Timothy Orr- President Title: Executive Director 3 | Highlight the parts (if any) of this contract related to "Post-Termination Services" that should be reviewed by a lawyer. Details: Is a party subject to obligations after the termination or expiration of a contract, including any post-termination transition, payment, transfer of IP, wind-down, last-buy, or similar commitments? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Price Restrictions" that should be reviewed by a lawyer. Details: Is there a restriction on the ability of a party to raise or reduce prices of technology, goods, or services provided?
Context: EXHIBIT 4.25 INFORMATION IN THIS EXHIBIT IDENTIFIED BY [ * * * ] IS CONFIDENTIAL AND HAS BEEN EXCLUDED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. SERVICES AGREEMENT This Services Agreement (this "Agreement") is entered into on October 1, 2019 and is made effective as of November 1, 2019 (the "Effective Date"), by and between [ * * * ] (the "Provider"), and TELCOSTAR PTE, LTD., a company organized and existing under the laws of Singapore and Ability Computer & Software Industries Ltd, a company organized and existing under the laws of the State of Israel (each and both of them "Recipient"). Each of the foregoing parties is referred to herein as a "Party" and together as the "Parties". RECITALS A. Recipient wishes to engage the Provider to provide certain services and resources (the "Services") and Provider desires to provide Recipient with the Services all in accordance with the terms and conditions set forth herein. AGREEMENT The Parties hereby agree as follows: 1. Services. 1.1 Provision of Services. (a) Provider agrees to provide the Services set forth on the Exhibit A attached hereto (as such Exhibit may be amended or supplemented pursuant to the terms of this Agreement, the "Exhibit") to Recipient for the respective periods and on the other terms and conditions set forth in this Agreement and in the Exhibit. Notwithstanding the contents of the Exhibit, Provider agrees to respond in good faith to any reasonable request by Recipient for access to any additional services and resources that are necessary for the operation of the Recipient and which are not currently contemplated in the Exhibit, at a price to be agreed upon after good faith negotiations between the Parties. Any such additional services and resources so provided by Provider shall constitute Services under this Agreement and be subject in all respect to the provisions of this Agreement as if fully set forth on the Exhibit as of the date hereof. (b) Recipient may freely assign its rights under this Agreement to receive the Services to any of its affiliates. 1.2 Standard of Service. (a) Provider represents, warrants and agrees that the Services shall be provided in good faith, in accordance with applicable law and in a manner generally consistent with the historical provision of the Services and with the same standard of care as historically provided. (b) Provider shall maintain complete and accurate records relating to the provision of the Services under this Agreement, in such form as Recipient shall approve.
(c) Provider shall use its best efforts to provide for employees or contractors to perform the Services, each of whose names, positions, and respective levels of experience and relevant licenses shall be set out in Exhibit A attached hereto (collectively, the "Provider Representatives"). Provider may not make any change in the Provider Representatives without the prior consent of the Recipient. Provider Representatives shall be dedicated to solely providing the Services to Recipient and shall not provide any such services or resources to Provider or any other customer of Provider. (d) Recipient acknowledges that this Agreement does not create a fiduciary relationship, partnership, joint venture or relationships of trust or agency between the Parties and that all Services are provided by Provider as an independent contractor. (e) Notwithstanding anything to the contrary in this Section 1.2: (a) in the event that Provider uses any subcontractors to perform any Services, Provider is not released from responsibility for its obligations under this Agreement; (b) Provider shall remain fully responsible, financially and otherwise, for the Services provided by each subcontractor to the same extent as if Provider had performed the Services itself (subject to the limitations set forth in this Agreement) and agrees to pay the fees and expenses of any such subcontractor; (c) Provider shall remain ultimately responsible for ensuring that the Services are provided and any such subcontractor performs any such obligations in accordance with the terms of this Agreement, and (d) the obligations with respect to the nature, quality and standards of care set forth in Section 1.2 are satisfied with respect to any Service provided by any subcontractor. (f) Provider shall at all times during the term of this Agreement maintain, or cause to be maintained, the computer software and computer hardware that is used in connection with the Services with substantially the same degree of care, skill and diligence with which Provider maintains, or causes to be maintained, as of the Effective Date, such computer software and computer hardware for itself, consistent with past practices, as of the Effective Date, including without limitation, with respect to type, quality and timeliness of such maintenance. 1.3 Additional Services. Nothing in this Agreement shall be construed to prevent the Recipient from itself performing or from acquiring services from other providers that are similar to or identical to the Services. 1.4 Intellectual Property. (a) Recipient shall own, and Provider hereby irrevocably assigns to the Recipient, all rights, title, and interest in any invention, technique, process, device, discovery, improvement, or know-how, whether patentable or not and all other proprietary rights, industrial rights and any other similar rights, in each case on a worldwide basis, and all copies and tangible embodiments thereof, or any part thereof, in whatever form or medium hereafter made or conceived solely or jointly by Provider while working for or on behalf of the Recipient, which relate to, is suggested by, or results from the Services. (b) At Recipient's request, Provider shall disclose any such invention, technique, process, device, discovery, improvement, or know-how promptly to Recipient. Provider shall, upon request of Recipient, promptly execute a specific assignment of title to Recipient, and do anything else reasonably necessary to enable Recipient to secure for itself, patent, trade secret, or any other proprietary rights.
2
(c) All writings or works of authorship, including, without limitation, program codes or documentation, produced or authored by Provider in the course of performing services for the Recipient, together with any associated copyrights, are works made for hire and the exclusive property of the Recipient. To the extent that any writings or works of authorship may not, by operation of law, be works made for hire, this Agreement shall constitute an irrevocable assignment by Provider to the Recipient of the ownership of and all rights of copyright in, such items, and the Recipient shall have the right to obtain and hold in its own name, rights of copyright, copyright registrations, and similar protections which may be available in the works. Provider shall give the Recipient or its designees all assistance reasonably required to perfect such rights. 2. Compensation. 2.1 Responsibility for Wages and Fees. For such time as any employees of Provider are providing the Services to Recipient under this Agreement, (a) such employees will remain employees of Provider and shall not be deemed to be employees of Recipient for any purpose, and (b) Provider shall be solely responsible for the payment and provision of all wages, bonuses and commissions, employee benefits, including severance and worker's compensation, and the withholding and payment of applicable taxes relating to such employment. 2.2 Terms of Payment and Related Matters. (a) As consideration for provision of the Services following the Effective Date, Recipient shall pay Provider an amount equal to Provider's actual cost of providing the Services plus a 10% service fee. In addition to such amount, in the event that Provider incurs reasonable and documented out-of-pocket expenses in the provision of any Service, including, without limitation, license fees and payments to third-party service providers or subcontractors (such included expenses, collectively, "Out-of-Pocket Costs"), Recipient shall reimburse Provider for all such Out-of-Pocket Costs. (b) (i) Provider shall provide Recipient with monthly invoices ("Invoices"), which shall set forth in reasonable detail, with such supporting documentation as Recipient may reasonably request with respect to Out-of-Pocket Costs, amounts payable under this Agreement, and (ii) payments pursuant to this Agreement shall be made within fifteen (15) days after the date of receipt of an Invoice by Recipient from Provider. (c) Provider shall allow the Recipient to use [ * * * ] at no cost, until December 31, 2021. 2.3 Invoice Disputes. In the event of an Invoice dispute, Recipient shall deliver a written statement to Provider prior to the date payment is due on the disputed Invoice listing all disputed items and providing a reasonably detailed description of each disputed item. Amounts not so disputed shall be deemed accepted and shall be paid, notwithstanding disputes on other items. The Parties shall seek to resolve all such disputes expeditiously and in good faith. Provider shall continue performing the Services in accordance with this Agreement pending resolution of any dispute.
3
2.4 No Right of Setoff. Each of the Parties hereby acknowledges that it shall have no right under this Agreement to offset any amounts owed (or to become due and owing) to the other Party, whether under this Agreement, the Purchase Agreement or otherwise, against any other amount owed (or to become due and owing) to it by the other Party. 3. Termination. 3.1 Termination of Agreement. This Agreement be deemed effective as of the Effective Date, Agreement and shall terminate on December 31, 2020, unless terminated earlier in accordance with Section 3.2. 3.2 Each of the Recipient and the Provider may, in their sole discretion, terminate this Agreement in whole or in part, at any time without cause, and without liability except, in the case of the Recipient, for required payment for services rendered and reimbursement for authorized expenses incurred, by providing at least 90 (ninety) days' prior written notice to the other party (such date, the "Services Termination Date"). 3.3 Breach. Any Party (the "Non-Breaching Party") may terminate this Agreement with respect to any Service, in whole but not in part, at any time upon prior written notice to the other Party (the "Breaching Party"), if the Breaching Party has failed (other than pursuant to Section 3.6) to perform any of its material obligations under this Agreement relating to such Service, and such failure shall have continued without cure for a period of 30 days after receipt by the Breaching Party of a written notice of such failure from the Non-Breaching Party seeking to terminate such service. For the avoidance of doubt, non-payment by Recipient for a Service provided by Provider in accordance with this Agreement and not the subject of a good-faith dispute shall be deemed a breach for purposes of this Section 3.3. 3.4 Insolvency. In the event that either Party hereto shall (a) file a petition in bankruptcy, (b) become or be declared insolvent, or become the subject of any proceedings (not dismissed within sixty (60) days) related to its liquidation, insolvency or the appointment of a receiver, (c) make an assignment on behalf of all or substantially all of its creditors, or (d) take any corporate action for its winding up or dissolution, then the other party shall have the right to terminate this Agreement by providing written notice in accordance with Section 6.6. 3.5 Effect of Termination. Upon termination of this Agreement in its entirety pursuant to Section 3.1, all obligations of the Parties hereto shall terminate, except for the provisions of Section 2.2, and the entirety of Sections 4, 5 and 6, which shall survive any termination or expiration of this Agreement. 3.6 Upon expiration or termination of this Agreement for any reason, Provider shall promptly: (a) Deliver to Recipient all documents, work product, and other materials, whether or not complete, prepared by or on behalf of Provider in the course of performing the Services for which Recipient has paid. (b) Return to Recipient all Recipient -owned property, equipment, or materials in its possession or control.
4
(c) Remove any Provider-owned property, equipment, or materials located at Recipient's locations. (d) Deliver to Recipient, all documents and tangible materials (and any copies) containing, reflecting, incorporating, or based on Recipient's Confidential Information. (e) On a pro rata basis, repay all fees and expenses paid in advance for any Services which have not been provided. (f) Permanently erase all of Recipient's Confidential Information from its computer systems. (g) Certify in writing to Recipient that it has complied with the requirements of this Section 3.6 3.7 Force Majeure. If Provider is prevented from or delayed in complying, either totally or in part, with any of the terms or provisions of this Agreement by reason of fire, flood, storm, strike, lockout or other labor trouble or shortage, delays by unaffiliated suppliers or carriers, shortages of fuel, power, raw materials or components, any law, order, proclamation, regulation, ordinance, demand, seizure or requirement of any governmental authority, riot, civil commotion, war, rebellion, acts of terrorism, nuclear accident or other causes beyond the reasonable control of Provider, or acts, omissions, or delays in acting by any governmental or military authority or Recipient (each, a "Force Majeure"), then upon written notice to Recipient, the Services affected by the Force Majeure (the "Affected Services") and/or other requirements of this Agreement will be suspended during the period of such Force Majeure and Provider will have no liability to Recipient or any other party in connection with such Affected Services. If the Force Majeure in question prevails for a continuous period in excess of three months after the date on which the Force Majeure begins, Provider shall be entitled to give notice to Recipient to terminate the Affected Services. The notice to terminate must specify the termination date, which must be not less than ten (10) days after the date on which the notice to terminate is given. Once a notice to terminate has been validly given, the Affected Services will terminate on the termination date set out in the notice. Neither Party shall have any liability to the other in respect of termination of the Affected Services due to Force Majeure, but rights and liabilities which have accrued prior to termination shall subsist.
5
4. Confidentiality. 4.1 Confidentiality. During the term of this Agreement and thereafter, the Parties hereto shall, and shall instruct their respective representatives to, maintain in confidence and not disclose the other Party's financial, technical, sales, marketing, development, personnel, and other information, records, or data, including, without limitation, customer lists, supplier lists, trade secrets, designs, product formulations, product specifications or any other proprietary or confidential information, however recorded or preserved, whether written or oral (any such information, "Confidential Information"). Each Party hereto shall use the same degree of care, but no less than reasonable care, to protect the other Party's Confidential Information as it uses to protect its own Confidential Information of like nature. Unless otherwise authorized in any other agreement between the Parties, any Party receiving any Confidential Information of the other Party (the "Receiving Party") may use Confidential Information only for the purposes of fulfilling its obligations under this Agreement (the "Permitted Purpose"). Any Receiving Party may disclose such Confidential Information only to its representatives who have a need to know such information for the Permitted Purpose and who have been advised of the terms of this Section 4.1 and the Receiving Party shall be liable for any breach of these confidentiality provisions by such Persons; provided, however, that any Receiving Party may disclose such Confidential Information to the extent such Confidential Information is required to be disclosed by law, in which case the Receiving Party shall promptly notify, to the extent possible, the disclosing party (the "Disclosing Party"), and take reasonable steps to assist in contesting such disclosure requirement or in protecting the Disclosing Party's rights prior to disclosure, and in which case the Receiving Party shall only disclose such Confidential Information that it is advised by its counsel in writing that it is legally bound to disclose. Notwithstanding the foregoing, "Confidential Information" shall not include any information that the Receiving Party can demonstrate: (a) was publicly known at the time of disclosure to it, or has become publicly known through no act of the Receiving Party or its representatives in breach of this Section 4.1, (b) was rightfully received from a third party without a duty of confidentiality, or (c) was developed by it independently without any reliance on the Confidential Information. 4.2 Return of Confidential Information. Upon demand by the Disclosing Party at any time, or upon expiration or termination of this Agreement with respect to any Service, the Receiving Party agrees promptly to return or destroy, at the Disclosing Party's option, all Confidential Information received in connection with this Agreement. If such Confidential Information is destroyed, an authorized officer of the Receiving Party shall certify to such destruction in writing. 5. Indemnification. 5.1 Indemnification. Provider shall indemnify, defend, and hold harmless Recipient and its officers, directors, employees, agents, affiliates, successors, and permitted assigns (collectively, "Indemnified Party") against any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs, or expenses of whatever kind, including attorneys' fees, fees and the costs of enforcing any right to indemnification under this Agreement, and the cost of pursuing any insurance providers, incurred by Indemnified Party or awarded against Indemnified Party (collectively, "Losses"), relating to/arising out of or resulting from any claim of a third party or Recipient arising out of or occurring in connection with Provider's negligence, willful misconduct, or breach of this Agreement. Provider shall not enter into any settlement without Recipient's or Indemnified Party's prior written consent. 6. Miscellaneous. 6.1 Entire Agreement. This Agreement, the Purchase Agreement and the documents referred to herein and therein constitute the entire agreement among the Parties and supersedes any prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof.
6
6.2 Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. Provider may not assign, delegate or otherwise transfer either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of Recipient. 6.3 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterparts may be delivered via facsimile and electronic mail (including portable document format (PDF) or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com). 6.4 Titles and Headings. Titles and section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 7. Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 7: If to Provider: [ * * * ] With a copy to: N/A If to Recipient: TELCOSTAR PTE. LTD 6 Eu Tong Sen Street Tel Aviv, Israel, 6770007 #10-15 The Central Singapore 059817 Email: avi@ability.co.il Attention: Avi Levin With a copy to: McDermott Will & Emery LLP 340 Madison Avenue New York, NY 10173-1922 Telephone: (212) 547-5541 Facsimile: (212) 547-5444 EMAIL: GEMMANUEL@MWE.COM Attention: Gary Emmanuel
7
Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth. 7.1 Further Assurances. The Parties agree (a) to furnish upon request to each other such further information, (b) to execute and deliver to each other such other documents, and (c) to do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement and the documents referred to in this Agreement. 7.2 Governing Law. This Agreement and any claim, controversy or dispute arising out of or related to this Agreement, any of the transactions contemplated hereby and/or the interpretation and enforcement of the rights and duties of the Parties, whether arising in contract, tort, equity or otherwise, shall be governed by and construed in accordance with the domestic laws of the State of Israel (including in respect of the statute of limitations or other limitations period applicable to any such claim, controversy or dispute), without giving effect to any choice or conflict of law provision or rule (whether of the State of Israel or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Israel. 7.3 Consent to Jurisdiction. The Parties hereby irrevocably submit any disputes under this Agreement to the exclusive jurisdiction of the courts located in Tel-Aviv, Israel, provided however, that Recipient shall be entitled to seek an injunction or other appropriate remedy against Provider in the country in which Provider has acted in breach of the terms hereof. 7.4 Specific Performance. The Parties hereby agree that, in the event of breach of this Agreement, damages would be difficult, if not impossible, to ascertain and that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, it is hereby agreed that the Parties shall be entitled to seek an injunction or other equitable relief in any court of competent jurisdiction to enjoin any such breach and enforce specifically the terms and provisions hereof, this being in addition to any other remedy or right to which they are entitled at law or in equity, without any necessity of proving damages or any requirement for the posting of a bond or other security. 7.5 Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by Recipient and the Provider. No waiver by any Party of any provision of this Agreement or any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be valid unless the same shall be in writing and signed by the Party making such waiver nor shall such waiver be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.
8
7.6 Severability. Any term or provision of this Agreement that is held invalid or unenforceable by a court of competent jurisdiction or other competent governmental authority in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. Upon such a determination, the Parties shall negotiate in good faith to replace invalid or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid or unenforceable provisions. 7.7 Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word "including" shall mean including without limitation. 7.8 Incorporation of Exhibits and Disclosure Schedule. The Exhibit identified in this Agreement is incorporated herein by reference and made a part hereof. 7.9 Amendment and Restatement. This Agreement amends and restates in full the Production Contract. [SIGNATURE PAGE FOLLOWS]
9
IN WITNESS WHEREOF, the Parties have executed this Services Agreement as of the date first written above. PROVIDER: RECIPIENT: [ * * * ] [ * * * ] By: By: Name: Name: Title: Title:
10
EXHIBIT A Services [ * * * ] 11 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | EXHIBIT 4.25 INFORMATION IN THIS EXHIBIT IDENTIFIED BY [ * * * ] IS CONFIDENTIAL AND HAS BEEN EXCLUDED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. SERVICES AGREEMENT This Services Agreement (this "Agreement") is entered into on October 1, 2019 and is made effective as of November 1, 2019 (the "Effective Date"), by and between [ * * * ] (the "Provider"), and TELCOSTAR PTE, LTD., a company organized and existing under the laws of Singapore and Ability Computer & Software Industries Ltd, a company organized and existing under the laws of the State of Israel (each and both of them "Recipient"). Each of the foregoing parties is referred to herein as a "Party" and together as the "Parties". RECITALS A. Recipient wishes to engage the Provider to provide certain services and resources (the "Services") and Provider desires to provide Recipient with the Services all in accordance with the terms and conditions set forth herein. AGREEMENT The Parties hereby agree as follows: 1. Services. 1.1 Provision of Services. (a) Provider agrees to provide the Services set forth on the Exhibit A attached hereto (as such Exhibit may be amended or supplemented pursuant to the terms of this Agreement, the "Exhibit") to Recipient for the respective periods and on the other terms and conditions set forth in this Agreement and in the Exhibit. Notwithstanding the contents of the Exhibit, Provider agrees to respond in good faith to any reasonable request by Recipient for access to any additional services and resources that are necessary for the operation of the Recipient and which are not currently contemplated in the Exhibit, at a price to be agreed upon after good faith negotiations between the Parties. Any such additional services and resources so provided by Provider shall constitute Services under this Agreement and be subject in all respect to the provisions of this Agreement as if fully set forth on the Exhibit as of the date hereof. (b) Recipient may freely assign its rights under this Agreement to receive the Services to any of its affiliates. 1.2 Standard of Service. (a) Provider represents, warrants and agrees that the Services shall be provided in good faith, in accordance with applicable law and in a manner generally consistent with the historical provision of the Services and with the same standard of care as historically provided. (b) Provider shall maintain complete and accurate records relating to the provision of the Services under this Agreement, in such form as Recipient shall approve.
(c) Provider shall use its best efforts to provide for employees or contractors to perform the Services, each of whose names, positions, and respective levels of experience and relevant licenses shall be set out in Exhibit A attached hereto (collectively, the "Provider Representatives"). Provider may not make any change in the Provider Representatives without the prior consent of the Recipient. Provider Representatives shall be dedicated to solely providing the Services to Recipient and shall not provide any such services or resources to Provider or any other customer of Provider. (d) Recipient acknowledges that this Agreement does not create a fiduciary relationship, partnership, joint venture or relationships of trust or agency between the Parties and that all Services are provided by Provider as an independent contractor. (e) Notwithstanding anything to the contrary in this Section 1.2: (a) in the event that Provider uses any subcontractors to perform any Services, Provider is not released from responsibility for its obligations under this Agreement; (b) Provider shall remain fully responsible, financially and otherwise, for the Services provided by each subcontractor to the same extent as if Provider had performed the Services itself (subject to the limitations set forth in this Agreement) and agrees to pay the fees and expenses of any such subcontractor; (c) Provider shall remain ultimately responsible for ensuring that the Services are provided and any such subcontractor performs any such obligations in accordance with the terms of this Agreement, and (d) the obligations with respect to the nature, quality and standards of care set forth in Section 1.2 are satisfied with respect to any Service provided by any subcontractor. (f) Provider shall at all times during the term of this Agreement maintain, or cause to be maintained, the computer software and computer hardware that is used in connection with the Services with substantially the same degree of care, skill and diligence with which Provider maintains, or causes to be maintained, as of the Effective Date, such computer software and computer hardware for itself, consistent with past practices, as of the Effective Date, including without limitation, with respect to type, quality and timeliness of such maintenance. 1.3 Additional Services. Nothing in this Agreement shall be construed to prevent the Recipient from itself performing or from acquiring services from other providers that are similar to or identical to the Services. 1.4 Intellectual Property. (a) Recipient shall own, and Provider hereby irrevocably assigns to the Recipient, all rights, title, and interest in any invention, technique, process, device, discovery, improvement, or know-how, whether patentable or not and all other proprietary rights, industrial rights and any other similar rights, in each case on a worldwide basis, and all copies and tangible embodiments thereof, or any part thereof, in whatever form or medium hereafter made or conceived solely or jointly by Provider while working for or on behalf of the Recipient, which relate to, is suggested by, or results from the Services. (b) At Recipient's request, Provider shall disclose any such invention, technique, process, device, discovery, improvement, or know-how promptly to Recipient. Provider shall, upon request of Recipient, promptly execute a specific assignment of title to Recipient, and do anything else reasonably necessary to enable Recipient to secure for itself, patent, trade secret, or any other proprietary rights.
2
(c) All writings or works of authorship, including, without limitation, program codes or documentation, produced or authored by Provider in the course of performing services for the Recipient, together with any associated copyrights, are works made for hire and the exclusive property of the Recipient. To the extent that any writings or works of authorship may not, by operation of law, be works made for hire, this Agreement shall constitute an irrevocable assignment by Provider to the Recipient of the ownership of and all rights of copyright in, such items, and the Recipient shall have the right to obtain and hold in its own name, rights of copyright, copyright registrations, and similar protections which may be available in the works. Provider shall give the Recipient or its designees all assistance reasonably required to perfect such rights. 2. Compensation. 2.1 Responsibility for Wages and Fees. For such time as any employees of Provider are providing the Services to Recipient under this Agreement, (a) such employees will remain employees of Provider and shall not be deemed to be employees of Recipient for any purpose, and (b) Provider shall be solely responsible for the payment and provision of all wages, bonuses and commissions, employee benefits, including severance and worker's compensation, and the withholding and payment of applicable taxes relating to such employment. 2.2 Terms of Payment and Related Matters. (a) As consideration for provision of the Services following the Effective Date, Recipient shall pay Provider an amount equal to Provider's actual cost of providing the Services plus a 10% service fee. In addition to such amount, in the event that Provider incurs reasonable and documented out-of-pocket expenses in the provision of any Service, including, without limitation, license fees and payments to third-party service providers or subcontractors (such included expenses, collectively, "Out-of-Pocket Costs"), Recipient shall reimburse Provider for all such Out-of-Pocket Costs. (b) (i) Provider shall provide Recipient with monthly invoices ("Invoices"), which shall set forth in reasonable detail, with such supporting documentation as Recipient may reasonably request with respect to Out-of-Pocket Costs, amounts payable under this Agreement, and (ii) payments pursuant to this Agreement shall be made within fifteen (15) days after the date of receipt of an Invoice by Recipient from Provider. (c) Provider shall allow the Recipient to use [ * * * ] at no cost, until December 31, 2021. 2.3 Invoice Disputes. In the event of an Invoice dispute, Recipient shall deliver a written statement to Provider prior to the date payment is due on the disputed Invoice listing all disputed items and providing a reasonably detailed description of each disputed item. Amounts not so disputed shall be deemed accepted and shall be paid, notwithstanding disputes on other items. The Parties shall seek to resolve all such disputes expeditiously and in good faith. Provider shall continue performing the Services in accordance with this Agreement pending resolution of any dispute.
3
2.4 No Right of Setoff. Each of the Parties hereby acknowledges that it shall have no right under this Agreement to offset any amounts owed (or to become due and owing) to the other Party, whether under this Agreement, the Purchase Agreement or otherwise, against any other amount owed (or to become due and owing) to it by the other Party. 3. Termination. 3.1 Termination of Agreement. This Agreement be deemed effective as of the Effective Date, Agreement and shall terminate on December 31, 2020, unless terminated earlier in accordance with Section 3.2. 3.2 Each of the Recipient and the Provider may, in their sole discretion, terminate this Agreement in whole or in part, at any time without cause, and without liability except, in the case of the Recipient, for required payment for services rendered and reimbursement for authorized expenses incurred, by providing at least 90 (ninety) days' prior written notice to the other party (such date, the "Services Termination Date"). 3.3 Breach. Any Party (the "Non-Breaching Party") may terminate this Agreement with respect to any Service, in whole but not in part, at any time upon prior written notice to the other Party (the "Breaching Party"), if the Breaching Party has failed (other than pursuant to Section 3.6) to perform any of its material obligations under this Agreement relating to such Service, and such failure shall have continued without cure for a period of 30 days after receipt by the Breaching Party of a written notice of such failure from the Non-Breaching Party seeking to terminate such service. For the avoidance of doubt, non-payment by Recipient for a Service provided by Provider in accordance with this Agreement and not the subject of a good-faith dispute shall be deemed a breach for purposes of this Section 3.3. 3.4 Insolvency. In the event that either Party hereto shall (a) file a petition in bankruptcy, (b) become or be declared insolvent, or become the subject of any proceedings (not dismissed within sixty (60) days) related to its liquidation, insolvency or the appointment of a receiver, (c) make an assignment on behalf of all or substantially all of its creditors, or (d) take any corporate action for its winding up or dissolution, then the other party shall have the right to terminate this Agreement by providing written notice in accordance with Section 6.6. 3.5 Effect of Termination. Upon termination of this Agreement in its entirety pursuant to Section 3.1, all obligations of the Parties hereto shall terminate, except for the provisions of Section 2.2, and the entirety of Sections 4, 5 and 6, which shall survive any termination or expiration of this Agreement. 3.6 Upon expiration or termination of this Agreement for any reason, Provider shall promptly: (a) Deliver to Recipient all documents, work product, and other materials, whether or not complete, prepared by or on behalf of Provider in the course of performing the Services for which Recipient has paid. (b) Return to Recipient all Recipient -owned property, equipment, or materials in its possession or control.
4
(c) Remove any Provider-owned property, equipment, or materials located at Recipient's locations. (d) Deliver to Recipient, all documents and tangible materials (and any copies) containing, reflecting, incorporating, or based on Recipient's Confidential Information. (e) On a pro rata basis, repay all fees and expenses paid in advance for any Services which have not been provided. (f) Permanently erase all of Recipient's Confidential Information from its computer systems. (g) Certify in writing to Recipient that it has complied with the requirements of this Section 3.6 3.7 Force Majeure. If Provider is prevented from or delayed in complying, either totally or in part, with any of the terms or provisions of this Agreement by reason of fire, flood, storm, strike, lockout or other labor trouble or shortage, delays by unaffiliated suppliers or carriers, shortages of fuel, power, raw materials or components, any law, order, proclamation, regulation, ordinance, demand, seizure or requirement of any governmental authority, riot, civil commotion, war, rebellion, acts of terrorism, nuclear accident or other causes beyond the reasonable control of Provider, or acts, omissions, or delays in acting by any governmental or military authority or Recipient (each, a "Force Majeure"), then upon written notice to Recipient, the Services affected by the Force Majeure (the "Affected Services") and/or other requirements of this Agreement will be suspended during the period of such Force Majeure and Provider will have no liability to Recipient or any other party in connection with such Affected Services. If the Force Majeure in question prevails for a continuous period in excess of three months after the date on which the Force Majeure begins, Provider shall be entitled to give notice to Recipient to terminate the Affected Services. The notice to terminate must specify the termination date, which must be not less than ten (10) days after the date on which the notice to terminate is given. Once a notice to terminate has been validly given, the Affected Services will terminate on the termination date set out in the notice. Neither Party shall have any liability to the other in respect of termination of the Affected Services due to Force Majeure, but rights and liabilities which have accrued prior to termination shall subsist.
5
4. Confidentiality. 4.1 Confidentiality. During the term of this Agreement and thereafter, the Parties hereto shall, and shall instruct their respective representatives to, maintain in confidence and not disclose the other Party's financial, technical, sales, marketing, development, personnel, and other information, records, or data, including, without limitation, customer lists, supplier lists, trade secrets, designs, product formulations, product specifications or any other proprietary or confidential information, however recorded or preserved, whether written or oral (any such information, "Confidential Information"). Each Party hereto shall use the same degree of care, but no less than reasonable care, to protect the other Party's Confidential Information as it uses to protect its own Confidential Information of like nature. Unless otherwise authorized in any other agreement between the Parties, any Party receiving any Confidential Information of the other Party (the "Receiving Party") may use Confidential Information only for the purposes of fulfilling its obligations under this Agreement (the "Permitted Purpose"). Any Receiving Party may disclose such Confidential Information only to its representatives who have a need to know such information for the Permitted Purpose and who have been advised of the terms of this Section 4.1 and the Receiving Party shall be liable for any breach of these confidentiality provisions by such Persons; provided, however, that any Receiving Party may disclose such Confidential Information to the extent such Confidential Information is required to be disclosed by law, in which case the Receiving Party shall promptly notify, to the extent possible, the disclosing party (the "Disclosing Party"), and take reasonable steps to assist in contesting such disclosure requirement or in protecting the Disclosing Party's rights prior to disclosure, and in which case the Receiving Party shall only disclose such Confidential Information that it is advised by its counsel in writing that it is legally bound to disclose. Notwithstanding the foregoing, "Confidential Information" shall not include any information that the Receiving Party can demonstrate: (a) was publicly known at the time of disclosure to it, or has become publicly known through no act of the Receiving Party or its representatives in breach of this Section 4.1, (b) was rightfully received from a third party without a duty of confidentiality, or (c) was developed by it independently without any reliance on the Confidential Information. 4.2 Return of Confidential Information. Upon demand by the Disclosing Party at any time, or upon expiration or termination of this Agreement with respect to any Service, the Receiving Party agrees promptly to return or destroy, at the Disclosing Party's option, all Confidential Information received in connection with this Agreement. If such Confidential Information is destroyed, an authorized officer of the Receiving Party shall certify to such destruction in writing. 5. Indemnification. 5.1 Indemnification. Provider shall indemnify, defend, and hold harmless Recipient and its officers, directors, employees, agents, affiliates, successors, and permitted assigns (collectively, "Indemnified Party") against any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs, or expenses of whatever kind, including attorneys' fees, fees and the costs of enforcing any right to indemnification under this Agreement, and the cost of pursuing any insurance providers, incurred by Indemnified Party or awarded against Indemnified Party (collectively, "Losses"), relating to/arising out of or resulting from any claim of a third party or Recipient arising out of or occurring in connection with Provider's negligence, willful misconduct, or breach of this Agreement. Provider shall not enter into any settlement without Recipient's or Indemnified Party's prior written consent. 6. Miscellaneous. 6.1 Entire Agreement. This Agreement, the Purchase Agreement and the documents referred to herein and therein constitute the entire agreement among the Parties and supersedes any prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof.
6
6.2 Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. Provider may not assign, delegate or otherwise transfer either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of Recipient. 6.3 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterparts may be delivered via facsimile and electronic mail (including portable document format (PDF) or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com). 6.4 Titles and Headings. Titles and section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 7. Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 7: If to Provider: [ * * * ] With a copy to: N/A If to Recipient: TELCOSTAR PTE. LTD 6 Eu Tong Sen Street Tel Aviv, Israel, 6770007 #10-15 The Central Singapore 059817 Email: avi@ability.co.il Attention: Avi Levin With a copy to: McDermott Will & Emery LLP 340 Madison Avenue New York, NY 10173-1922 Telephone: (212) 547-5541 Facsimile: (212) 547-5444 EMAIL: GEMMANUEL@MWE.COM Attention: Gary Emmanuel
7
Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth. 7.1 Further Assurances. The Parties agree (a) to furnish upon request to each other such further information, (b) to execute and deliver to each other such other documents, and (c) to do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement and the documents referred to in this Agreement. 7.2 Governing Law. This Agreement and any claim, controversy or dispute arising out of or related to this Agreement, any of the transactions contemplated hereby and/or the interpretation and enforcement of the rights and duties of the Parties, whether arising in contract, tort, equity or otherwise, shall be governed by and construed in accordance with the domestic laws of the State of Israel (including in respect of the statute of limitations or other limitations period applicable to any such claim, controversy or dispute), without giving effect to any choice or conflict of law provision or rule (whether of the State of Israel or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Israel. 7.3 Consent to Jurisdiction. The Parties hereby irrevocably submit any disputes under this Agreement to the exclusive jurisdiction of the courts located in Tel-Aviv, Israel, provided however, that Recipient shall be entitled to seek an injunction or other appropriate remedy against Provider in the country in which Provider has acted in breach of the terms hereof. 7.4 Specific Performance. The Parties hereby agree that, in the event of breach of this Agreement, damages would be difficult, if not impossible, to ascertain and that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, it is hereby agreed that the Parties shall be entitled to seek an injunction or other equitable relief in any court of competent jurisdiction to enjoin any such breach and enforce specifically the terms and provisions hereof, this being in addition to any other remedy or right to which they are entitled at law or in equity, without any necessity of proving damages or any requirement for the posting of a bond or other security. 7.5 Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by Recipient and the Provider. No waiver by any Party of any provision of this Agreement or any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be valid unless the same shall be in writing and signed by the Party making such waiver nor shall such waiver be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.
8
7.6 Severability. Any term or provision of this Agreement that is held invalid or unenforceable by a court of competent jurisdiction or other competent governmental authority in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. Upon such a determination, the Parties shall negotiate in good faith to replace invalid or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid or unenforceable provisions. 7.7 Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word "including" shall mean including without limitation. 7.8 Incorporation of Exhibits and Disclosure Schedule. The Exhibit identified in this Agreement is incorporated herein by reference and made a part hereof. 7.9 Amendment and Restatement. This Agreement amends and restates in full the Production Contract. [SIGNATURE PAGE FOLLOWS]
9
IN WITNESS WHEREOF, the Parties have executed this Services Agreement as of the date first written above. PROVIDER: RECIPIENT: [ * * * ] [ * * * ] By: By: Name: Name: Title: Title:
10
EXHIBIT A Services [ * * * ] 11 | Highlight the parts (if any) of this contract related to "Price Restrictions" that should be reviewed by a lawyer. Details: Is there a restriction on the ability of a party to raise or reduce prices of technology, goods, or services provided? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Audit Rights" that should be reviewed by a lawyer. Details: Does a party have the right to audit the books, records, or physical locations of the counterparty to ensure compliance with the contract?
Context: Exhibit 10.33 Last Updated: April 6, 2007 CHASE AFFILIATE AGREEMENT THIS AGREEMENT sets forth the terms and conditions agreed to between Chase Bank USA, N.A. (?Chase?) and you as an "Affiliate" in the Chase Affiliate Program (the "Affiliate Program"). Once accepted into the Affiliate Program, an Affiliate can establish links from the Affiliate's Website to [Chase.com]. Chase will pay Affiliate a fee for each approved credit card account that originates from a link in Affiliate's Website. THIS IS A LEGAL AND CONTRACTUALLY BINDING AGREEMENT BETWEEN AFFILIATE AND CHASE. TO APPLY TO THE AFFILIATE PROGRAM, YOU MUST COMPLETE AND SUBMIT THE AFFILIATE REGISTRATION FORM AND CLICK ON THE "AGREE" BUTTON BELOW TO INDICATE YOUR WILLINGNESS TO BE BOUND TO CHASE BY THIS AGREEMENT. THIS AGREEMENT WILL TAKE EFFECT IF AND WHEN CHASE REVIEWS AND ACCEPTS YOUR REGISTRATION FORM AND PROVIDES YOU NOTICE OF ACCEPTANCE. BY SUBMITTING YOUR REGISTRATION FORM, AFFILIATE CERTIFIES THAT YOU HAVE READ AND UNDERSTAND THE TERMS SET FORTH BELOW, AND THAT YOU ARE AUTHORIZED TO SUBMIT THIS REGISTRATION FORM BY THE NAMED AFFILIATE. In connection with your participation in the Affiliate Program, Affiliate and Chase agree as follows: 1. Enrollment in the Affiliate Program; Restricted Content To enroll in the Affiliate Program, you must submit a complete "Affiliate Registration Form" via the Chase Affiliate Website: For new affiliates: https://ssl.linksynergy.com/php-bin/reg/sregister.shtml?mid=2291 For existing affiliates: http://www.linkshare.com/joinprograms?oid=87909 Chase will evaluate your registration form and will notify you via e-mail of the acceptance or rejection of your registration form. Chase reserves, in its sole discretion, with or without reason, the right to accept or reject your registration into the Chase Affiliate Program, including but not limited to a determination that your site is unsuitable for or incompatible with the Affiliate Program based on the following criteria (collectively "Restricted Content"): • Incorporates images or content that is any way unlawful, offensive, profane, harmful, threatening, defamatory, obscene, harassing or racially, ethically or otherwise objectionable • Promote illegal activities, including gambling • Promotes or depicts sexually explicit, obscene or pornographic images • Promotes or depicts violence or hate speech • Promotes discrimination based on race, sex, religion, nationality, disability, sexual orientation or age
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
• Incorporates any materials which infringe or assist others to infringe on any copyright, trademark or other intellectual property rights • Contains or promotes politically sensitive or controversial issues Chase also reserves the right to terminate this Agreement in the event that any Restricted Content is incorporated on Affiliate's site after acceptance of your registration form and the commencement of the term of this Agreement. Chase may also terminate this Agreement if your site is deemed unsuitable based on the criteria below: • Manipulates key word searches on portals • Misrepresents itself as a Chase Website by altering the visual "look and feel" of or text from Chase's site, and/or engage in "framing" the Chase Website • Engages in domain squatting • Engages in spamming or unsolicited commercial e-mail • Engages in unauthorized telemarketing or remarketing of Chase Credit Card offers via telephone • Uses Chase products and services in the domain name, URL or URI, including, but not limited to, any combination of the following words: • JP • MORGAN • CHASE • MANHATTAN • AARP • AMAZON.COM • BALL STATE UNIVERSITY • BORDERS • BRITISH AIRWAYS • CASH PLUS • CHASE FREEDOM • CENTRAL MICHIGAN UNIVERSITY • CONTINENTAL • CORNELL UNIVERSITY • DISNEY • DUKE UNIVERSITY • FLEXIBLE REWARDS • FREE CASH • HARVARD COOP • HESS • HOME IMPROVEMENT • LEHIGH UNIVERSITY • LOUISIANA STATE UNIVERSITY • MARATHON • MARRIOTT • MIAMI UNIVERSITY • OHIO UNIVERSITY • OVERSTOCK • PERFECT CARD • PRIORITY CLUB / HOLIDAY INN • SONY • SOUTHERN ILLINOIS UNIVERSITY • SPEEDWAY SUPER AMERICA
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
• STARBUCKS • SUBARU • TEMPLE UNIVERSITY • TOYS "R" US • TRAVEL PLUS • TRUMP • ULTIMATE REWARDS • UNITED • UNIVERSAL • UNIVERSITY OF ARIZONA ATHLETICS • UNIVERSITY OF CHICAGO • UNIVERSITY OF FLORIDA • UNIVERSITY OF HOUSTON • UNIVERSITY OF IDAHO • UNIVERSITY OF KENTUCKY • UNIVERSITY OF MARYLAND • UNIVERSITY OF MEMPHIS • UNIVERSITY OF MINNESOTA ATHLETICS • UNIVERSITY OF NOTRE DAME • UNIVERSITY OF OKLAHOMA • UNIVERSITY OF OREGON • UNIVERSITY OF SOUTH CAROLINA • UNIVERSITY OF TENNESSEE • UNIVERSITY OF VIRGINIA • UTAH STATE UNIVERSITY • VALUE MILES • VIRGINIA TECH APPROVED ACCOUNT • VOLKSWAGEN • WESTERN ILLINOIS UNIVERSITY • YALE UNIVERSTIY • Uses a proxy server or redirector server to proxy Chase web pages or web sites through your website, URL or URI • Otherwise violates intellectual property rights, including, without limitation, "scraping" text or images from Chase's Website • Does not clearly state an online privacy policy to its visitors • Is based outside of the United States • Is otherwise considered offensive or inappropriate, at Chase's discretion 2. Affiliate Responsibilities: • Affiliate cannot use or implement creative that is not available through the LinkShare affiliate interface. • Affiliates may not harvest or collect personal information, or email addresses using the Chase brand without the written consent of Chase • If Affiliate manages a sub-affiliate network, upon Chase's request, Affiliate shall promptly provide Chase with a current, written list identifying the sub-affiliates or other third parties associated. • Chase reserves the right to review and approve all sub-affiliate partners. • Chase shall only use the list for the sole purpose of administering the program and monitoring proper usage, and will not poach or contact subaffiliates directly. • Affiliates will not use the following product keyword search terms. (See Appendix)
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
• If Affiliate manages a sub-affiliate network, the Affiliate may not pay sub-affiliates or other partners higher referral fees than the lowest tier of the public offer ($55.00). • Affiliate is prohibited from (a) installing spyware on another person's computer, (b) causing spyware to be installed on another person's computer, or (c) using a context based triggering mechanism to display an advertisement that partially or wholly covers or obscures paid advertising or other content on an Internet website in a way that interferes with a user's ability to view the Internet website. 3. Referral Fee For each Approved Account (as defined in section 4 below) received through Affiliate's site, Affiliate will earn a referral fee calculated in accordance with the schedule set forth below ("Commission") paid monthly. • Tiered or flat commission based on private offer terms in the network. Chase reserves the right to alter above referral fees from time to time upon written notice to Affiliate of such change. 4. Approved Account For purposes of determining Affiliate's Commission, an "Approved Account" means any Chase credit card application that is: (i) submitted by any user who clicks on an e-mail, banner or any other advertising material from Affiliate's Website; (ii) is approved by Chase; and (iii) is reported as approved by Chase to Affiliate. 5.Term of this Agreement The term of this Agreement will commence on the date that the Affiliate Registration Form is approved by Chase and will end when terminated by either party. Either Affiliate or Chase may terminate this Agreement at any time, with or without cause, by giving the other party written or e-mail notice of termination. At the time of termination, any links to Chase's Website must be removed immediately. Affiliate will continue to receive Commission payments for all Approved Accounts placed during the term of this Agreement. Notwithstanding the foregoing, Chase may terminate this Agreement if Affiliate does not comply with the terms and conditions herein. 6. Links Affiliate agrees to place Chase's links provided by Linkshare NetworkTM which manages the Affiliate Program ("Links") on its Affiliate's website. Affiliate is responsible for obtaining prior written approval from the Chase Affiliate manager or Linkshare Network to link any or all other sites owned or managed by the Affiliate, other than the site that was approved at the time of original registration. Affiliate may select or remove Links, at any time without prior approval from Chase. Affiliate is also responsible for removing and/or informing Chase of potential inactive or misdirected Links. Affiliate agrees to cooperate with Chase in establishing and maintaining Links.
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
7. Order Processing Chase will be solely responsible for processing each order placed by a customer from Affiliate's Links. Customers may only use the Chase on-line application process to apply for a Chase credit card. "Customers" are defined herein as individuals who apply for Chase credit cards through a link in Affiliate's Web site. Chase shall be responsible for administering application forms and related customer service. All of the rules, operating procedures and policies of Chase regarding customer orders and accounts will apply to orders received through the Links. Chase reserves the right to reject any credit card application in its sole discretion. 8. Tracking of Sales Chase will be solely responsible for tracking Approved Accounts made to customers who follow Affiliate's Links. Affiliate will be solely responsible for ensuring that the Links are formatted properly and maintained in a manner, which allows Chase to track such Approved Accounts. No Commission shall be paid if the Approved Account cannot be tracked by Chase's system or if the customer accesses the Chase site through means other than the Links. Chase will provide Affiliate with statements of Approved Account activity at the time Commissions are paid. 9. Terms and Conditions of Credit Cards Chase is solely responsible for determining the terms and conditions of the credit cards. The credit card offers may vary from time to time and are subject to change. Affiliate may not specify details regarding the Chase credit card on their Websites without the prior approval of Chase. 10. Chase Customers Customers who apply for Chase credit cards through the Chase Affiliate Program are customers of Chase. Affiliate has no authority to make or accept any offer on behalf of Chase. All Chase policies regarding customer orders, including availability, pricing and problem resolution, will apply to these customers. Affiliate has no authority to make, and Chase is not responsible for, any representations made by Affiliate that contradict these policies. 11. Product Descriptions Affiliate will only use credit card descriptions provided or approved in writing by Chase. 12. Copyrighted Material Affiliate is solely responsible for ensuring that its reviews and articles obey all applicable copyright and other laws. Generally, Affiliate must have express permission to use another party's copyrighted or other proprietary material. Chase is not responsible for Affiliate's improper use of another party's copyrighted or proprietary material.
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
13. Commercial Use This program is intended for commercial use only. Commissions are payable for Approved Accounts to third parties who access the Chase URL's (marketing pages) through the Links located on Affiliate's sponsoring Web site. Affiliates who use this program to apply for credit cards for their own use are NOT in violation of this Agreement. 14. Trademarks All Chase trademarks, trade names and service marks (collectively, the "Marks") are the exclusive property of Chase. Notwithstanding anything set forth in this Agreement, Chase reserves full ownership of the Marks and the Licensed Materials (as defined below). All use of the Marks by Affiliate is limited solely to the use contemplated by this Agreement. All use of Chase Marks by Affiliate is subject to the prior written approval of Chase. 15. Licenses and Use of the Chase Logos and Trademarks Chase grants Affiliate a non-exclusive, nontransferable, revocable right to (a) access the Chase site through the links solely in accordance with the terms of this Agreement and (b) solely in connection with such links, to use Chase's logos, trade names, trademarks, and similar identifying material relating to Chase (collectively, the "Licensed Materials"), for the sole purpose of booking Chase products. Prior to using any of the Licensed Materials, Affiliate will submit to Chase for approval a draft of all proposed material that incorporates the Licensed Materials, together with a brief statement setting forth the proposed use of such materials and any other background or supporting material reasonably requested by Chase to allow Chase to make an informed judgment. All such materials shall be submitted to Chase at least seven (7) days prior to the date of first intended use. Chase will notify Affiliate of its approval or disapproval of such materials within five (5) business days of its receipt of all information required to be submitted. The approval or disapproval of such materials will be in Chase's sole discretion. Any materials not receiving Chase's specific written preliminary approval will be deemed disapproved. Affiliate may not alter, modify, or change the Licensed Materials in any way. Affiliate is only entitled to use the licensed materials to the extent that it is a member in good standing of the Chase Affiliate Program. Affiliate agrees not to use the Licensed Materials in any manner that is disparaging or that otherwise portrays Chase in a negative light. Chase may revoke Affiliate's license at any time. 16. Service Interruption Certain technical difficulties may, from time to time, result in service interruptions. Affiliate agrees not to hold Chase responsible for the consequences of such interruptions. 17. Indemnification
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
Affiliate hereby agrees to indemnify, defend, and hold harmless Chase, its shareholders, officers, directors, employees, agents, affiliates and their respective directors, officers, employees and agents, successors and assigns, from and against any and all claims, demands, losses, liabilities, damages or expenses (including attorneys' fees and costs) of any nature whatsoever incurred or suffered by Chase (collectively the "losses"), in so far as such losses (or actions in respect thereof) arise out of, are related to, or are based on (i) the breach of any representation, warranty, or covenant made by Affiliate herein; or (ii) any claim related to Affiliate's site. 18. Confidentiality Except as otherwise provided in this Agreement or with the consent of the other party hereto, each of the parties hereto agrees that all information including, without limitation, the terms of this Agreement, business and financial information, customer and vendor lists, and pricing and sales information, concerning Chase, Customer or Affiliate shall remain strictly confidential and secret and shall not be utilized, directly or indirectly, by such party for its own business purposes or for any other purpose except and solely to the extent necessary to exercise rights and perform obligations under this Agreement. The foregoing restrictions will not apply to information to the extent it (i) was known to the receiving party at the time of disclosure; (ii) has become publicly known through no wrongful act of the receiving party; (iii) has been rightfully received from a third party under no obligation to the disclosing party; (iv) has been disclosed by court order or as otherwise required by law if the receiving party has given the disclosing party a reasonable opportunity to contest or limit the scope of such required disclosure. 19. Modification Chase reserves the right to change any and all of the terms and conditions in this Agreement, at any time and in its sole discretion, by posting a new agreement on its Website. Without limiting the generality of the foregoing, the amount of Commissions, the definition of Approved Accounts, and all other provisions of this Agreement are subject to change without notice other than posting such information on the Chase Website. IF ANY MODIFICATION IS UNACCEPTABLE TO AFFILIATE, THE ONLY RECOURSE IS TO TERMINATE THIS AGREEMENT. AFFILIATE'S CONTINUED PARTICIPATION IN THE AFFILIATE PROGRAM FOLLOWING CHASE'S POSTING OF A NEW AGREEMENT ON ITS WEB SITE WILL CONSTITUTE BINDING ACCEPTANCE OF THE CHANGE. 20. Warranty Disclaimer Chase makes no warranties, representations or conditions with regard to the Chase Affiliate Program or any services provided hereunder, whether express or implied, arising by law or otherwise, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT OR ANY IMPLIED WARRANTY ARISING OUT OF COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE.
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
21. Limitation of Damages Chase shall have no liability for any indirect, incidental, special or consequential damages or any loss of revenue or profits arising under or with respect to this Agreement or the Affiliate Program, regardless of whether Chase has been advised of the possibility of such damages. Further, Chase's aggregate liability arising under or with respect to this Agreement or the Affiliate Program shall in no event exceed the total Commissions paid or payable by Chase to Affiliate under this Agreement. 22. Independent Investigation AFFILIATE ACKNOWLEDGES THAT IT HAS READ THIS AGREEMENT, HAS HAD AN OPPORTUNITY TO CONSULT WITH ITS OWN LEGAL ADVISERS IF IT SO DESIRED, AND AGREES TO ALL ITS TERMS AND CONDITIONS. AFFILIATE AGREES THAT, IN INTERPRETING THIS AGREEMENT, NO WEIGHT SHALL BE PLACED UPON THE FACT THAT THIS AGREEMENT HAS BEEN DRAFTED BY CHASE, AND IT SHALL NOT ASSERT THAT THIS AGREEMENT IS UNENFORCEABLE OR INVALID ON THE GROUNDS THAT IT IS A CONTRACT OF ADHESION, THAT IT IS UNCONSCIONABLE, OR ANY SIMILAR THEORY. AFFILIATE UNDERSTANDS THAT CHASE MAY AT ANY TIME (DIRECTLY OR INDIRECTLY) SOLICIT CUSTOMER REFERRALS ON TERMS THAT MAY DIFFER FROM THOSE CONTAINED IN THIS AGREEMENT. 23. Governing Law This Agreement will be governed in all respects by the laws of the State of Delaware, including its conflict with law provisions. Accept. Appendix List of Restricted Trademark Terms Partner Restricted Trademark Terms Chase Brand Add Chase as a negative Keyword to your Search strategy. In addition, the following terms are prohibited: Chase, Chase bank, www.chase.com, www.creditcardsatchase.com, www.chasecreditcard.com, chase.com, creditcardsatchase.com, chasecreditcard.com, chase credit card, chase credit cards, Chase Freedom, Freedom Card AARP AARP.org, AARP.com, AARP membership, AARPmagazine.com, AARPhealthcare.com, AARP foundation, AARP passport, www.travelocity.com/AARP, AARP Bulletin, American Association of Retired Persons, AARP Insurance, AARP partner, AARP providers, AARP advocacy, Segunda Juventud, AARP Hot Deals Amazon Amazon, Amazon.com, www.amazon.com, Amazon Books, Amazon DVD, Amazon Movies, Amazon Music Borders Borders, Borders Stores, Borders Books, www.borders.com, www.bordersbooks.com Waldenbooks, Waldenbooks Stores, www.waldenbooks.com, www.waldenbooksstores.com
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
British Air British Airways, British Air, www.britishairways.com, www.ba.com, ba, Continental See Continental Tab Disney See "Disney" Tab Hess Hess, www.hess.com, Amerada Holiday Inn/Priority Club Holiday Inn, Holiday Inn Express, Priority Club, IHG, www.ichotelsgroup.com, InterContinental, InterContinental Hotels Group, Crowne Plaza, Hotel Indigo, Staybridge Suites, Candlewood Suites, Marathon Marathon, Marathon Oil, Marathon Petroleum Company, Speedway, Speedway SuperAmerica, SuperAmerica Marriott www.marriottrewards.com, www.marriott.com, Marriott, Marriott Rewards Overstock overstock.com, www.overstock.com, overstocked.com, overstock/com, overstock com, overstock com, overstockcom, overstock .com, overstock?com, overstock>com, overstock, overstocked.com, overstocks.com, over stock.com, overstock .com, overstockcom Sony Sony, www.sonystyle.com, ImageStation, My Sony, Vaio, EverQuest Speedway Speedway SuperAmerica, Speedway, SuperAmerica, Speedy Rewards, Marathon, Marathon Oil, Marathon Petroleum Company Starbucks Starbucks, Starbucks Coffee, Starbucks Foundation, Starbucks Coffee Company, Starbucks Corporation Subaru Subaru, My Subaru, Subaru World, Subaru of America Toys www.toysrus.com, Toysrus.com, Toys "R" Us, Toys "R" Us International, Kids"R"Us, Babies"R"Us, Babiesrus.com, Toyologist, Toysrus/Amazon, Babiesrus/Amazon, www.personalizedbyrus.com Trump Trump, www.trump.com, The Apprentice, Trumped, Trump University, Trump Taj Mahal, Trump Plaza, Trump Marina, Trump Indiana, Trump Club Privee, Trump National Golf Club, Trump Tower, Trump Park Avenue, Trump World Tower, Trump International Hotel & Tower, Trump Place, Trump Palace, Trump Parc & Trump Parc East, Trump Grande, Mar-a-Lago United See "United" Tab Universal Universal, Universal Studios, Universal Movies, Unviersal Entertainment, Universal Hollywood, www.universal.com, Universal movie tickets, universal movie ticket, universal theme parks, universal discount, universal discounts, universal ticket, universal tickets, universal vacation, universal vacations, universal travel, universal deals, universal offer, universal offers, universal park, universal parks, universal getaway, universal getaways, universal family getaway, universal family getaways, universal deal, universal deals Volkswagen Volkswagen, Volkswagen International, Volkswagen Group, Volkswagen AG, Audi Disney Restricted Key Words cheap disney vacation disney world vacations cheap disney vacations disneyland bargain child vacation disneyland bargains childrens vacations disneyland cheap discount disney travel disneyland discount discount disney vacation disneyland discounts discount disney vacations disneyland offer discount vacation disneyland offers discount vacations disneyland promotion
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
disney disneyland promotions disney bargain disneyland save disney bargains disneyland save disney cheap disneyland savings disney cruise disneyland savings disney cruise vacations disneyland travel disney deal disneyland trip disney discount disneyland trips disney family vacation disneyland vacation disney family vacations disneyland vacations disney florida vacation disneyworld bargain disney florida vacations disneyworld bargains disney golf vacations disneyworld cheap disney honeymoon disneyworld offer disney honeymoon vacation disneyworld offers disney honeymoons disneyworld promotions disney offer disneyworld save disney offers disneyworld savings disney package disneyworld vacation disney package vacations disneyworld vacations disney promotion family vacation disney promotions family vacations disney resort kid vacation disney resort vacation kids vacations disney resort vacations magic kingdom disney resorts orlando disney vacations disney savings orlando rentals disney travel orlando vacations disney travel package special disney travel disney vacation special vacation packages disney vacation club walt disney bargain disney vacations walt disney bargains disney vacations florida walt disney cheap disney vacations orlando walt disney deal disney world bargain walt disney deals disney world bargains walt disney offer disney world cheap walt disney offers disney world discount walt disney resort vacations disney world offer walt disney save disney world offers walt disney savings disney world package walt disney vacation disney world save walt disney vacations disney world savings walt disney world vacation disney world vacation walt disney world vacations United Restricted Key Words united airlines united air fare united united airlines reservations online united air united airline fare united.com United Escapes united airline international united flights www.united.com untied air united flight united first class unitedairlines.com United Vacation
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
UAL united travel united airlines.com united star alliance ual.com united airlines specials united air lines united discounts www.unitedairlines.com united trip united airlines schedule travel with united united airline travel united airlines discounts united reservation united airlines official website www.ual.com united business class united express united airlines airports united reservations united airlines star alliance www.united airlines.com united non-stop flights united fares united packages united airline flight international united travel united and airlines united airlines economy plus United Vacations united airports united airlines tickets united group travel united airlines flights United Escape united express airlines easy update united flights united air vacations unitedair united fare sale United airfare united last minute fares www.united airlines united efares untied airlines united getaways www.unitedairlines united low fares united airline.com united airlines bookings united air line cities united flies united airlines travel fly on united united airlines homepage united airlines group travel united airlines website united airlines travel certificates united destinations United Easy Update united airline flights united airlines business travel united airlines home page united special deals United airfares united business travel e-fares untiedair united airlines site united economy class united airlines fares united package deals www.unitedairline.com international united ticket united airlines home international united tickets united airlines vacations shop for united flights vacation travel United EasyUpdate united specials fly with united www.united airline.com united e fares unitied airlines united travel certificates united deals united air star alliance international united flight united fare search united airlines online United Escapes united e-fares international united flight united airlines cities united airlines online united air fare united e-fares united airlines reservations online united airlines cities united airline fare
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
Continental Restricted Key Words Continental airlines Continental air fare Continental Continental airlines reservations online continental.com Continental airline fare continental airline international Continental flights www.continental.com Continental air continental flight Continental first class continental air lines Continental Vacation continental airlines schedule Continental travel continental airline travel Continental airlines specials continental reservation Continental discounts continental reservations Continental trip continental fares travel with Continental continental airline flight Continental airlines discounts continental and airlines Continental airlines official website Continental Vacations Continental business class continental airlines tickets Continental airlines airports continental airlines flights Continental non stop flights continental flights continental airlines Continental packages continental air line International Continental travel continental airlines travel Continental airports continental airlines homepage Continental group travel continental airlines website Continental air vacations continental destinations Continental fare sale continental airlines vacations Continental last minute fares continental air fare Continental getaways continental airlines reservations online Continental low fares continental airline fare Continental airlines bookings international continental flight cities Continental flies continental airlines online fly on Continental continental airlines cities Continental airlines group travel Continental economy class Continental airlines travel certificates Continental package deals Continental airlines business travel international Continental ticket Continental special deals international Continental tickets Continental business travel shop for Continental flights fly with Continental
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 10.33 Last Updated: April 6, 2007 CHASE AFFILIATE AGREEMENT THIS AGREEMENT sets forth the terms and conditions agreed to between Chase Bank USA, N.A. (?Chase?) and you as an "Affiliate" in the Chase Affiliate Program (the "Affiliate Program"). Once accepted into the Affiliate Program, an Affiliate can establish links from the Affiliate's Website to [Chase.com]. Chase will pay Affiliate a fee for each approved credit card account that originates from a link in Affiliate's Website. THIS IS A LEGAL AND CONTRACTUALLY BINDING AGREEMENT BETWEEN AFFILIATE AND CHASE. TO APPLY TO THE AFFILIATE PROGRAM, YOU MUST COMPLETE AND SUBMIT THE AFFILIATE REGISTRATION FORM AND CLICK ON THE "AGREE" BUTTON BELOW TO INDICATE YOUR WILLINGNESS TO BE BOUND TO CHASE BY THIS AGREEMENT. THIS AGREEMENT WILL TAKE EFFECT IF AND WHEN CHASE REVIEWS AND ACCEPTS YOUR REGISTRATION FORM AND PROVIDES YOU NOTICE OF ACCEPTANCE. BY SUBMITTING YOUR REGISTRATION FORM, AFFILIATE CERTIFIES THAT YOU HAVE READ AND UNDERSTAND THE TERMS SET FORTH BELOW, AND THAT YOU ARE AUTHORIZED TO SUBMIT THIS REGISTRATION FORM BY THE NAMED AFFILIATE. In connection with your participation in the Affiliate Program, Affiliate and Chase agree as follows: 1. Enrollment in the Affiliate Program; Restricted Content To enroll in the Affiliate Program, you must submit a complete "Affiliate Registration Form" via the Chase Affiliate Website: For new affiliates: https://ssl.linksynergy.com/php-bin/reg/sregister.shtml?mid=2291 For existing affiliates: http://www.linkshare.com/joinprograms?oid=87909 Chase will evaluate your registration form and will notify you via e-mail of the acceptance or rejection of your registration form. Chase reserves, in its sole discretion, with or without reason, the right to accept or reject your registration into the Chase Affiliate Program, including but not limited to a determination that your site is unsuitable for or incompatible with the Affiliate Program based on the following criteria (collectively "Restricted Content"): • Incorporates images or content that is any way unlawful, offensive, profane, harmful, threatening, defamatory, obscene, harassing or racially, ethically or otherwise objectionable • Promote illegal activities, including gambling • Promotes or depicts sexually explicit, obscene or pornographic images • Promotes or depicts violence or hate speech • Promotes discrimination based on race, sex, religion, nationality, disability, sexual orientation or age
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
• Incorporates any materials which infringe or assist others to infringe on any copyright, trademark or other intellectual property rights • Contains or promotes politically sensitive or controversial issues Chase also reserves the right to terminate this Agreement in the event that any Restricted Content is incorporated on Affiliate's site after acceptance of your registration form and the commencement of the term of this Agreement. Chase may also terminate this Agreement if your site is deemed unsuitable based on the criteria below: • Manipulates key word searches on portals • Misrepresents itself as a Chase Website by altering the visual "look and feel" of or text from Chase's site, and/or engage in "framing" the Chase Website • Engages in domain squatting • Engages in spamming or unsolicited commercial e-mail • Engages in unauthorized telemarketing or remarketing of Chase Credit Card offers via telephone • Uses Chase products and services in the domain name, URL or URI, including, but not limited to, any combination of the following words: • JP • MORGAN • CHASE • MANHATTAN • AARP • AMAZON.COM • BALL STATE UNIVERSITY • BORDERS • BRITISH AIRWAYS • CASH PLUS • CHASE FREEDOM • CENTRAL MICHIGAN UNIVERSITY • CONTINENTAL • CORNELL UNIVERSITY • DISNEY • DUKE UNIVERSITY • FLEXIBLE REWARDS • FREE CASH • HARVARD COOP • HESS • HOME IMPROVEMENT • LEHIGH UNIVERSITY • LOUISIANA STATE UNIVERSITY • MARATHON • MARRIOTT • MIAMI UNIVERSITY • OHIO UNIVERSITY • OVERSTOCK • PERFECT CARD • PRIORITY CLUB / HOLIDAY INN • SONY • SOUTHERN ILLINOIS UNIVERSITY • SPEEDWAY SUPER AMERICA
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
• STARBUCKS • SUBARU • TEMPLE UNIVERSITY • TOYS "R" US • TRAVEL PLUS • TRUMP • ULTIMATE REWARDS • UNITED • UNIVERSAL • UNIVERSITY OF ARIZONA ATHLETICS • UNIVERSITY OF CHICAGO • UNIVERSITY OF FLORIDA • UNIVERSITY OF HOUSTON • UNIVERSITY OF IDAHO • UNIVERSITY OF KENTUCKY • UNIVERSITY OF MARYLAND • UNIVERSITY OF MEMPHIS • UNIVERSITY OF MINNESOTA ATHLETICS • UNIVERSITY OF NOTRE DAME • UNIVERSITY OF OKLAHOMA • UNIVERSITY OF OREGON • UNIVERSITY OF SOUTH CAROLINA • UNIVERSITY OF TENNESSEE • UNIVERSITY OF VIRGINIA • UTAH STATE UNIVERSITY • VALUE MILES • VIRGINIA TECH APPROVED ACCOUNT • VOLKSWAGEN • WESTERN ILLINOIS UNIVERSITY • YALE UNIVERSTIY • Uses a proxy server or redirector server to proxy Chase web pages or web sites through your website, URL or URI • Otherwise violates intellectual property rights, including, without limitation, "scraping" text or images from Chase's Website • Does not clearly state an online privacy policy to its visitors • Is based outside of the United States • Is otherwise considered offensive or inappropriate, at Chase's discretion 2. Affiliate Responsibilities: • Affiliate cannot use or implement creative that is not available through the LinkShare affiliate interface. • Affiliates may not harvest or collect personal information, or email addresses using the Chase brand without the written consent of Chase • If Affiliate manages a sub-affiliate network, upon Chase's request, Affiliate shall promptly provide Chase with a current, written list identifying the sub-affiliates or other third parties associated. • Chase reserves the right to review and approve all sub-affiliate partners. • Chase shall only use the list for the sole purpose of administering the program and monitoring proper usage, and will not poach or contact subaffiliates directly. • Affiliates will not use the following product keyword search terms. (See Appendix)
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
• If Affiliate manages a sub-affiliate network, the Affiliate may not pay sub-affiliates or other partners higher referral fees than the lowest tier of the public offer ($55.00). • Affiliate is prohibited from (a) installing spyware on another person's computer, (b) causing spyware to be installed on another person's computer, or (c) using a context based triggering mechanism to display an advertisement that partially or wholly covers or obscures paid advertising or other content on an Internet website in a way that interferes with a user's ability to view the Internet website. 3. Referral Fee For each Approved Account (as defined in section 4 below) received through Affiliate's site, Affiliate will earn a referral fee calculated in accordance with the schedule set forth below ("Commission") paid monthly. • Tiered or flat commission based on private offer terms in the network. Chase reserves the right to alter above referral fees from time to time upon written notice to Affiliate of such change. 4. Approved Account For purposes of determining Affiliate's Commission, an "Approved Account" means any Chase credit card application that is: (i) submitted by any user who clicks on an e-mail, banner or any other advertising material from Affiliate's Website; (ii) is approved by Chase; and (iii) is reported as approved by Chase to Affiliate. 5.Term of this Agreement The term of this Agreement will commence on the date that the Affiliate Registration Form is approved by Chase and will end when terminated by either party. Either Affiliate or Chase may terminate this Agreement at any time, with or without cause, by giving the other party written or e-mail notice of termination. At the time of termination, any links to Chase's Website must be removed immediately. Affiliate will continue to receive Commission payments for all Approved Accounts placed during the term of this Agreement. Notwithstanding the foregoing, Chase may terminate this Agreement if Affiliate does not comply with the terms and conditions herein. 6. Links Affiliate agrees to place Chase's links provided by Linkshare NetworkTM which manages the Affiliate Program ("Links") on its Affiliate's website. Affiliate is responsible for obtaining prior written approval from the Chase Affiliate manager or Linkshare Network to link any or all other sites owned or managed by the Affiliate, other than the site that was approved at the time of original registration. Affiliate may select or remove Links, at any time without prior approval from Chase. Affiliate is also responsible for removing and/or informing Chase of potential inactive or misdirected Links. Affiliate agrees to cooperate with Chase in establishing and maintaining Links.
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
7. Order Processing Chase will be solely responsible for processing each order placed by a customer from Affiliate's Links. Customers may only use the Chase on-line application process to apply for a Chase credit card. "Customers" are defined herein as individuals who apply for Chase credit cards through a link in Affiliate's Web site. Chase shall be responsible for administering application forms and related customer service. All of the rules, operating procedures and policies of Chase regarding customer orders and accounts will apply to orders received through the Links. Chase reserves the right to reject any credit card application in its sole discretion. 8. Tracking of Sales Chase will be solely responsible for tracking Approved Accounts made to customers who follow Affiliate's Links. Affiliate will be solely responsible for ensuring that the Links are formatted properly and maintained in a manner, which allows Chase to track such Approved Accounts. No Commission shall be paid if the Approved Account cannot be tracked by Chase's system or if the customer accesses the Chase site through means other than the Links. Chase will provide Affiliate with statements of Approved Account activity at the time Commissions are paid. 9. Terms and Conditions of Credit Cards Chase is solely responsible for determining the terms and conditions of the credit cards. The credit card offers may vary from time to time and are subject to change. Affiliate may not specify details regarding the Chase credit card on their Websites without the prior approval of Chase. 10. Chase Customers Customers who apply for Chase credit cards through the Chase Affiliate Program are customers of Chase. Affiliate has no authority to make or accept any offer on behalf of Chase. All Chase policies regarding customer orders, including availability, pricing and problem resolution, will apply to these customers. Affiliate has no authority to make, and Chase is not responsible for, any representations made by Affiliate that contradict these policies. 11. Product Descriptions Affiliate will only use credit card descriptions provided or approved in writing by Chase. 12. Copyrighted Material Affiliate is solely responsible for ensuring that its reviews and articles obey all applicable copyright and other laws. Generally, Affiliate must have express permission to use another party's copyrighted or other proprietary material. Chase is not responsible for Affiliate's improper use of another party's copyrighted or proprietary material.
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
13. Commercial Use This program is intended for commercial use only. Commissions are payable for Approved Accounts to third parties who access the Chase URL's (marketing pages) through the Links located on Affiliate's sponsoring Web site. Affiliates who use this program to apply for credit cards for their own use are NOT in violation of this Agreement. 14. Trademarks All Chase trademarks, trade names and service marks (collectively, the "Marks") are the exclusive property of Chase. Notwithstanding anything set forth in this Agreement, Chase reserves full ownership of the Marks and the Licensed Materials (as defined below). All use of the Marks by Affiliate is limited solely to the use contemplated by this Agreement. All use of Chase Marks by Affiliate is subject to the prior written approval of Chase. 15. Licenses and Use of the Chase Logos and Trademarks Chase grants Affiliate a non-exclusive, nontransferable, revocable right to (a) access the Chase site through the links solely in accordance with the terms of this Agreement and (b) solely in connection with such links, to use Chase's logos, trade names, trademarks, and similar identifying material relating to Chase (collectively, the "Licensed Materials"), for the sole purpose of booking Chase products. Prior to using any of the Licensed Materials, Affiliate will submit to Chase for approval a draft of all proposed material that incorporates the Licensed Materials, together with a brief statement setting forth the proposed use of such materials and any other background or supporting material reasonably requested by Chase to allow Chase to make an informed judgment. All such materials shall be submitted to Chase at least seven (7) days prior to the date of first intended use. Chase will notify Affiliate of its approval or disapproval of such materials within five (5) business days of its receipt of all information required to be submitted. The approval or disapproval of such materials will be in Chase's sole discretion. Any materials not receiving Chase's specific written preliminary approval will be deemed disapproved. Affiliate may not alter, modify, or change the Licensed Materials in any way. Affiliate is only entitled to use the licensed materials to the extent that it is a member in good standing of the Chase Affiliate Program. Affiliate agrees not to use the Licensed Materials in any manner that is disparaging or that otherwise portrays Chase in a negative light. Chase may revoke Affiliate's license at any time. 16. Service Interruption Certain technical difficulties may, from time to time, result in service interruptions. Affiliate agrees not to hold Chase responsible for the consequences of such interruptions. 17. Indemnification
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
Affiliate hereby agrees to indemnify, defend, and hold harmless Chase, its shareholders, officers, directors, employees, agents, affiliates and their respective directors, officers, employees and agents, successors and assigns, from and against any and all claims, demands, losses, liabilities, damages or expenses (including attorneys' fees and costs) of any nature whatsoever incurred or suffered by Chase (collectively the "losses"), in so far as such losses (or actions in respect thereof) arise out of, are related to, or are based on (i) the breach of any representation, warranty, or covenant made by Affiliate herein; or (ii) any claim related to Affiliate's site. 18. Confidentiality Except as otherwise provided in this Agreement or with the consent of the other party hereto, each of the parties hereto agrees that all information including, without limitation, the terms of this Agreement, business and financial information, customer and vendor lists, and pricing and sales information, concerning Chase, Customer or Affiliate shall remain strictly confidential and secret and shall not be utilized, directly or indirectly, by such party for its own business purposes or for any other purpose except and solely to the extent necessary to exercise rights and perform obligations under this Agreement. The foregoing restrictions will not apply to information to the extent it (i) was known to the receiving party at the time of disclosure; (ii) has become publicly known through no wrongful act of the receiving party; (iii) has been rightfully received from a third party under no obligation to the disclosing party; (iv) has been disclosed by court order or as otherwise required by law if the receiving party has given the disclosing party a reasonable opportunity to contest or limit the scope of such required disclosure. 19. Modification Chase reserves the right to change any and all of the terms and conditions in this Agreement, at any time and in its sole discretion, by posting a new agreement on its Website. Without limiting the generality of the foregoing, the amount of Commissions, the definition of Approved Accounts, and all other provisions of this Agreement are subject to change without notice other than posting such information on the Chase Website. IF ANY MODIFICATION IS UNACCEPTABLE TO AFFILIATE, THE ONLY RECOURSE IS TO TERMINATE THIS AGREEMENT. AFFILIATE'S CONTINUED PARTICIPATION IN THE AFFILIATE PROGRAM FOLLOWING CHASE'S POSTING OF A NEW AGREEMENT ON ITS WEB SITE WILL CONSTITUTE BINDING ACCEPTANCE OF THE CHANGE. 20. Warranty Disclaimer Chase makes no warranties, representations or conditions with regard to the Chase Affiliate Program or any services provided hereunder, whether express or implied, arising by law or otherwise, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT OR ANY IMPLIED WARRANTY ARISING OUT OF COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE.
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
21. Limitation of Damages Chase shall have no liability for any indirect, incidental, special or consequential damages or any loss of revenue or profits arising under or with respect to this Agreement or the Affiliate Program, regardless of whether Chase has been advised of the possibility of such damages. Further, Chase's aggregate liability arising under or with respect to this Agreement or the Affiliate Program shall in no event exceed the total Commissions paid or payable by Chase to Affiliate under this Agreement. 22. Independent Investigation AFFILIATE ACKNOWLEDGES THAT IT HAS READ THIS AGREEMENT, HAS HAD AN OPPORTUNITY TO CONSULT WITH ITS OWN LEGAL ADVISERS IF IT SO DESIRED, AND AGREES TO ALL ITS TERMS AND CONDITIONS. AFFILIATE AGREES THAT, IN INTERPRETING THIS AGREEMENT, NO WEIGHT SHALL BE PLACED UPON THE FACT THAT THIS AGREEMENT HAS BEEN DRAFTED BY CHASE, AND IT SHALL NOT ASSERT THAT THIS AGREEMENT IS UNENFORCEABLE OR INVALID ON THE GROUNDS THAT IT IS A CONTRACT OF ADHESION, THAT IT IS UNCONSCIONABLE, OR ANY SIMILAR THEORY. AFFILIATE UNDERSTANDS THAT CHASE MAY AT ANY TIME (DIRECTLY OR INDIRECTLY) SOLICIT CUSTOMER REFERRALS ON TERMS THAT MAY DIFFER FROM THOSE CONTAINED IN THIS AGREEMENT. 23. Governing Law This Agreement will be governed in all respects by the laws of the State of Delaware, including its conflict with law provisions. Accept. Appendix List of Restricted Trademark Terms Partner Restricted Trademark Terms Chase Brand Add Chase as a negative Keyword to your Search strategy. In addition, the following terms are prohibited: Chase, Chase bank, www.chase.com, www.creditcardsatchase.com, www.chasecreditcard.com, chase.com, creditcardsatchase.com, chasecreditcard.com, chase credit card, chase credit cards, Chase Freedom, Freedom Card AARP AARP.org, AARP.com, AARP membership, AARPmagazine.com, AARPhealthcare.com, AARP foundation, AARP passport, www.travelocity.com/AARP, AARP Bulletin, American Association of Retired Persons, AARP Insurance, AARP partner, AARP providers, AARP advocacy, Segunda Juventud, AARP Hot Deals Amazon Amazon, Amazon.com, www.amazon.com, Amazon Books, Amazon DVD, Amazon Movies, Amazon Music Borders Borders, Borders Stores, Borders Books, www.borders.com, www.bordersbooks.com Waldenbooks, Waldenbooks Stores, www.waldenbooks.com, www.waldenbooksstores.com
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
British Air British Airways, British Air, www.britishairways.com, www.ba.com, ba, Continental See Continental Tab Disney See "Disney" Tab Hess Hess, www.hess.com, Amerada Holiday Inn/Priority Club Holiday Inn, Holiday Inn Express, Priority Club, IHG, www.ichotelsgroup.com, InterContinental, InterContinental Hotels Group, Crowne Plaza, Hotel Indigo, Staybridge Suites, Candlewood Suites, Marathon Marathon, Marathon Oil, Marathon Petroleum Company, Speedway, Speedway SuperAmerica, SuperAmerica Marriott www.marriottrewards.com, www.marriott.com, Marriott, Marriott Rewards Overstock overstock.com, www.overstock.com, overstocked.com, overstock/com, overstock com, overstock com, overstockcom, overstock .com, overstock?com, overstock>com, overstock, overstocked.com, overstocks.com, over stock.com, overstock .com, overstockcom Sony Sony, www.sonystyle.com, ImageStation, My Sony, Vaio, EverQuest Speedway Speedway SuperAmerica, Speedway, SuperAmerica, Speedy Rewards, Marathon, Marathon Oil, Marathon Petroleum Company Starbucks Starbucks, Starbucks Coffee, Starbucks Foundation, Starbucks Coffee Company, Starbucks Corporation Subaru Subaru, My Subaru, Subaru World, Subaru of America Toys www.toysrus.com, Toysrus.com, Toys "R" Us, Toys "R" Us International, Kids"R"Us, Babies"R"Us, Babiesrus.com, Toyologist, Toysrus/Amazon, Babiesrus/Amazon, www.personalizedbyrus.com Trump Trump, www.trump.com, The Apprentice, Trumped, Trump University, Trump Taj Mahal, Trump Plaza, Trump Marina, Trump Indiana, Trump Club Privee, Trump National Golf Club, Trump Tower, Trump Park Avenue, Trump World Tower, Trump International Hotel & Tower, Trump Place, Trump Palace, Trump Parc & Trump Parc East, Trump Grande, Mar-a-Lago United See "United" Tab Universal Universal, Universal Studios, Universal Movies, Unviersal Entertainment, Universal Hollywood, www.universal.com, Universal movie tickets, universal movie ticket, universal theme parks, universal discount, universal discounts, universal ticket, universal tickets, universal vacation, universal vacations, universal travel, universal deals, universal offer, universal offers, universal park, universal parks, universal getaway, universal getaways, universal family getaway, universal family getaways, universal deal, universal deals Volkswagen Volkswagen, Volkswagen International, Volkswagen Group, Volkswagen AG, Audi Disney Restricted Key Words cheap disney vacation disney world vacations cheap disney vacations disneyland bargain child vacation disneyland bargains childrens vacations disneyland cheap discount disney travel disneyland discount discount disney vacation disneyland discounts discount disney vacations disneyland offer discount vacation disneyland offers discount vacations disneyland promotion
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
disney disneyland promotions disney bargain disneyland save disney bargains disneyland save disney cheap disneyland savings disney cruise disneyland savings disney cruise vacations disneyland travel disney deal disneyland trip disney discount disneyland trips disney family vacation disneyland vacation disney family vacations disneyland vacations disney florida vacation disneyworld bargain disney florida vacations disneyworld bargains disney golf vacations disneyworld cheap disney honeymoon disneyworld offer disney honeymoon vacation disneyworld offers disney honeymoons disneyworld promotions disney offer disneyworld save disney offers disneyworld savings disney package disneyworld vacation disney package vacations disneyworld vacations disney promotion family vacation disney promotions family vacations disney resort kid vacation disney resort vacation kids vacations disney resort vacations magic kingdom disney resorts orlando disney vacations disney savings orlando rentals disney travel orlando vacations disney travel package special disney travel disney vacation special vacation packages disney vacation club walt disney bargain disney vacations walt disney bargains disney vacations florida walt disney cheap disney vacations orlando walt disney deal disney world bargain walt disney deals disney world bargains walt disney offer disney world cheap walt disney offers disney world discount walt disney resort vacations disney world offer walt disney save disney world offers walt disney savings disney world package walt disney vacation disney world save walt disney vacations disney world savings walt disney world vacation disney world vacation walt disney world vacations United Restricted Key Words united airlines united air fare united united airlines reservations online united air united airline fare united.com United Escapes united airline international united flights www.united.com untied air united flight united first class unitedairlines.com United Vacation
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
UAL united travel united airlines.com united star alliance ual.com united airlines specials united air lines united discounts www.unitedairlines.com united trip united airlines schedule travel with united united airline travel united airlines discounts united reservation united airlines official website www.ual.com united business class united express united airlines airports united reservations united airlines star alliance www.united airlines.com united non-stop flights united fares united packages united airline flight international united travel united and airlines united airlines economy plus United Vacations united airports united airlines tickets united group travel united airlines flights United Escape united express airlines easy update united flights united air vacations unitedair united fare sale United airfare united last minute fares www.united airlines united efares untied airlines united getaways www.unitedairlines united low fares united airline.com united airlines bookings united air line cities united flies united airlines travel fly on united united airlines homepage united airlines group travel united airlines website united airlines travel certificates united destinations United Easy Update united airline flights united airlines business travel united airlines home page united special deals United airfares united business travel e-fares untiedair united airlines site united economy class united airlines fares united package deals www.unitedairline.com international united ticket united airlines home international united tickets united airlines vacations shop for united flights vacation travel United EasyUpdate united specials fly with united www.united airline.com united e fares unitied airlines united travel certificates united deals united air star alliance international united flight united fare search united airlines online United Escapes united e-fares international united flight united airlines cities united airlines online united air fare united e-fares united airlines reservations online united airlines cities united airline fare
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007
Continental Restricted Key Words Continental airlines Continental air fare Continental Continental airlines reservations online continental.com Continental airline fare continental airline international Continental flights www.continental.com Continental air continental flight Continental first class continental air lines Continental Vacation continental airlines schedule Continental travel continental airline travel Continental airlines specials continental reservation Continental discounts continental reservations Continental trip continental fares travel with Continental continental airline flight Continental airlines discounts continental and airlines Continental airlines official website Continental Vacations Continental business class continental airlines tickets Continental airlines airports continental airlines flights Continental non stop flights continental flights continental airlines Continental packages continental air line International Continental travel continental airlines travel Continental airports continental airlines homepage Continental group travel continental airlines website Continental air vacations continental destinations Continental fare sale continental airlines vacations Continental last minute fares continental air fare Continental getaways continental airlines reservations online Continental low fares continental airline fare Continental airlines bookings international continental flight cities Continental flies continental airlines online fly on Continental continental airlines cities Continental airlines group travel Continental economy class Continental airlines travel certificates Continental package deals Continental airlines business travel international Continental ticket Continental special deals international Continental tickets Continental business travel shop for Continental flights fly with Continental
Source: CREDITCARDS.COM, INC., S-1, 8/10/2007 | Highlight the parts (if any) of this contract related to "Audit Rights" that should be reviewed by a lawyer. Details: Does a party have the right to audit the books, records, or physical locations of the counterparty to ensure compliance with the contract? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Joint Ip Ownership" that should be reviewed by a lawyer. Details: Is there any clause providing for joint or shared ownership of intellectual property between the parties to the contract?
Context: Exhibit 1.2 SERVICES AGREEMENT This Services Agreement ("Services Agreement" or "Agreement") is entered into as of the date noted below (the "Effective Date") between StartEngine Crowdfunding, Inc., a Delaware corporation ("Company"), and Solutions Vending International, Inc a ___ DE corporation ("Customer" or "you"). 1. Services Company agrees to make available to Customer the ability to present information with respect to its securities offering (the "Offering") to Users, and to permit Users to create and manage online accounts, view information regarding the Customer, indicate interest in the Offering, and to subscribe to the Offering by signing a subscription agreement or similar instrument and transmitting payment instructions (together, the "Services"). A "User" means a natural person, corporation or other entity that has established an account on the Company's website. 2. Fees and expenses a) Generally In exchange for the Services, you shall pay the Company the then applicable fees and expenses set out below. The Company reserves the right to change the applicable charges and to institute new charges and fees at the end of the Initial Term (as defined below) or then current renewal term, upon 30 days prior notice to you. If you believe that the Company has billed you incorrectly, you must contact Company no later than 60 days after the closing date on the first billing statement in which the error or problem appeared, in order to receive an adjustment or credit. Inquiries should be directed to contact@startengine.com. b) Monthly Fees and Billing The Company will bill you monthly for the Services. You authorize the Company to instruct Prime Trust or any escrow agent used by Company to deduct such fees, debts and any other amounts liabilities incurred under this Service Agreement, prior to releasing any amounts due to you or to any other person (including another escrow agent) from escrow. Amounts which remain unpaid for 30 days are subject to a finance charge of 1.5% per month on any outstanding balance, or the maximum permitted by law, whichever is lower, plus all expenses of collection and may result in immediate termination of Service. You shall be responsible for all taxes associated with Services other than U.S. taxes based on the Company's net income. c) Transaction Fees Company's transaction fees depend on the method of payment (e.g. ACH-US or WIRE-US). ACH transaction: $1 Wire: $15 d) AML Fees AML fees are charged per User per initial transaction. AML: $2 AML UK: $5
e) Reimbursable expenses You shall reimburse the Company for the following expenses: (i) All credit card charges charged to the Company by its third-party credit card processor. (ii) All transaction fees charged to the Company or its affiliates by its third-party transaction processor. (iii) Escrow agent fees charged to the Company or its affiliates by third-party escrow agents. (iv) Return fees as set out in Section 4 (Returns, Reversals, Disputes and Reserves) below. Credit cards: average is 3.5% (varies because it is a combination of fixed and a percentage charged by the credit card vendor) 2. Customer Representations and Warranties Customer represents and warrants to the Company that then executed and delivered by Customer, this Service Agreement will constitute the legal, valid, and binding obligation of Customer, enforceable in accordance with its terms. 4. Returns and Reversals a) Returns and Reversals User transactions debited from bank accounts via ACH are subject to returns (e.g., non-sufficient funds) and reversals from chargebacks (e.g., unauthorized activity) per the Electronic Fund Transfer Act (15 U.S.C. 1693 et seq. as may be amended), Regulation E, and NACHA guidelines (collectively, such returns and reversals are "Reversals"). The Company will work to protect Customer and the receiving Users from unwarranted Reversals; however, Customer acknowledges and agrees that: i) Customer is liable for all User Activity and Reversals associated with User Activity; ii) If Company's agent receives a Reversal, the Company may in its sole discretion charge Customer the full amount of the Reversal ("Reversed Payment") plus an additional $7 reversal fee ("Reversal Fee" and collectively the "Reversal Liability"); iii) The Company has sole discretion to determine who is at fault and liable for the Reversed Payment and Reversal Fee; iv) Customer authorizes the Company to take any of the following actions (in any particular order): (i) collect the unpaid portion of the Reversal Liability from funds sent to your third party escrow account; (ii) debit your bank account in the amount of the unpaid portion of the Reversal Liability; (iv) engage in collection efforts to recover the unpaid portion of the Reversal Liability and/or (v) take legal action or any other action under this Service Agreement. 5. Term and Survival a) Subject to earlier termination as provided below, this Service Agreement is for the total duration of the Company's Offering (the "Initial Term") unless either party requests termination at least 30 days prior to the end of the then-current term.
b) Additionally, either party may terminate this Service Agreement in the event: i) The other party's material breach that remains not cured and continues for a period of (A) in the case of a failure involving the payment of any undisputed amount due hereunder, 15 days and (B) in the case of any other failure, 30 days after the non performing party receives notice from the terminating party specifying such failure; ii) Any statement, representation or warranty of the other party is untrue or misleading in any material respect or omits material information; iii) The other party (A) voluntarily or involuntarily is subject to bankruptcy proceedings, (B) applies for or consents to the appointment of a receiver, trustee, custodian, sequestrator, or similar official, (C) makes a general assignment to creditors, (D) commences winding down or liquidation of its business affairs, (E) otherwise takes corporate action for the purpose of effecting any of the foregoing, or (F) ceases operating in the normal course of business; iv) If any change to, enactment of, or change in interpretation or enforcement of any law occurs that would have a material adverse effect upon a party's ability to perform its obligations under this Service Agreement or a party's costs/revenues with respect to the services under this Service Agreement; v) Upon direction to a party from any regulatory authority or National Automated Clearing House Association to cease or materially limit the exercise or performance of such party's rights or obligations under this Service Agreement; vi) If there shall have occurred a material adverse change in the financial condition of the other party; or vii) Upon a force majeure event that materially prevents or impedes a party from performing its obligations hereunder for a period of more than 10 business days. StartEngine Crowdfunding, Inc. Customer: By: /s/ Dawn Dickson, By:Dawn Dickson, CEO and Founder Date: 08/19/2019 /s/ Howard Marks Howard Marks CEO [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 1.2 SERVICES AGREEMENT This Services Agreement ("Services Agreement" or "Agreement") is entered into as of the date noted below (the "Effective Date") between StartEngine Crowdfunding, Inc., a Delaware corporation ("Company"), and Solutions Vending International, Inc a ___ DE corporation ("Customer" or "you"). 1. Services Company agrees to make available to Customer the ability to present information with respect to its securities offering (the "Offering") to Users, and to permit Users to create and manage online accounts, view information regarding the Customer, indicate interest in the Offering, and to subscribe to the Offering by signing a subscription agreement or similar instrument and transmitting payment instructions (together, the "Services"). A "User" means a natural person, corporation or other entity that has established an account on the Company's website. 2. Fees and expenses a) Generally In exchange for the Services, you shall pay the Company the then applicable fees and expenses set out below. The Company reserves the right to change the applicable charges and to institute new charges and fees at the end of the Initial Term (as defined below) or then current renewal term, upon 30 days prior notice to you. If you believe that the Company has billed you incorrectly, you must contact Company no later than 60 days after the closing date on the first billing statement in which the error or problem appeared, in order to receive an adjustment or credit. Inquiries should be directed to contact@startengine.com. b) Monthly Fees and Billing The Company will bill you monthly for the Services. You authorize the Company to instruct Prime Trust or any escrow agent used by Company to deduct such fees, debts and any other amounts liabilities incurred under this Service Agreement, prior to releasing any amounts due to you or to any other person (including another escrow agent) from escrow. Amounts which remain unpaid for 30 days are subject to a finance charge of 1.5% per month on any outstanding balance, or the maximum permitted by law, whichever is lower, plus all expenses of collection and may result in immediate termination of Service. You shall be responsible for all taxes associated with Services other than U.S. taxes based on the Company's net income. c) Transaction Fees Company's transaction fees depend on the method of payment (e.g. ACH-US or WIRE-US). ACH transaction: $1 Wire: $15 d) AML Fees AML fees are charged per User per initial transaction. AML: $2 AML UK: $5
e) Reimbursable expenses You shall reimburse the Company for the following expenses: (i) All credit card charges charged to the Company by its third-party credit card processor. (ii) All transaction fees charged to the Company or its affiliates by its third-party transaction processor. (iii) Escrow agent fees charged to the Company or its affiliates by third-party escrow agents. (iv) Return fees as set out in Section 4 (Returns, Reversals, Disputes and Reserves) below. Credit cards: average is 3.5% (varies because it is a combination of fixed and a percentage charged by the credit card vendor) 2. Customer Representations and Warranties Customer represents and warrants to the Company that then executed and delivered by Customer, this Service Agreement will constitute the legal, valid, and binding obligation of Customer, enforceable in accordance with its terms. 4. Returns and Reversals a) Returns and Reversals User transactions debited from bank accounts via ACH are subject to returns (e.g., non-sufficient funds) and reversals from chargebacks (e.g., unauthorized activity) per the Electronic Fund Transfer Act (15 U.S.C. 1693 et seq. as may be amended), Regulation E, and NACHA guidelines (collectively, such returns and reversals are "Reversals"). The Company will work to protect Customer and the receiving Users from unwarranted Reversals; however, Customer acknowledges and agrees that: i) Customer is liable for all User Activity and Reversals associated with User Activity; ii) If Company's agent receives a Reversal, the Company may in its sole discretion charge Customer the full amount of the Reversal ("Reversed Payment") plus an additional $7 reversal fee ("Reversal Fee" and collectively the "Reversal Liability"); iii) The Company has sole discretion to determine who is at fault and liable for the Reversed Payment and Reversal Fee; iv) Customer authorizes the Company to take any of the following actions (in any particular order): (i) collect the unpaid portion of the Reversal Liability from funds sent to your third party escrow account; (ii) debit your bank account in the amount of the unpaid portion of the Reversal Liability; (iv) engage in collection efforts to recover the unpaid portion of the Reversal Liability and/or (v) take legal action or any other action under this Service Agreement. 5. Term and Survival a) Subject to earlier termination as provided below, this Service Agreement is for the total duration of the Company's Offering (the "Initial Term") unless either party requests termination at least 30 days prior to the end of the then-current term.
b) Additionally, either party may terminate this Service Agreement in the event: i) The other party's material breach that remains not cured and continues for a period of (A) in the case of a failure involving the payment of any undisputed amount due hereunder, 15 days and (B) in the case of any other failure, 30 days after the non performing party receives notice from the terminating party specifying such failure; ii) Any statement, representation or warranty of the other party is untrue or misleading in any material respect or omits material information; iii) The other party (A) voluntarily or involuntarily is subject to bankruptcy proceedings, (B) applies for or consents to the appointment of a receiver, trustee, custodian, sequestrator, or similar official, (C) makes a general assignment to creditors, (D) commences winding down or liquidation of its business affairs, (E) otherwise takes corporate action for the purpose of effecting any of the foregoing, or (F) ceases operating in the normal course of business; iv) If any change to, enactment of, or change in interpretation or enforcement of any law occurs that would have a material adverse effect upon a party's ability to perform its obligations under this Service Agreement or a party's costs/revenues with respect to the services under this Service Agreement; v) Upon direction to a party from any regulatory authority or National Automated Clearing House Association to cease or materially limit the exercise or performance of such party's rights or obligations under this Service Agreement; vi) If there shall have occurred a material adverse change in the financial condition of the other party; or vii) Upon a force majeure event that materially prevents or impedes a party from performing its obligations hereunder for a period of more than 10 business days. StartEngine Crowdfunding, Inc. Customer: By: /s/ Dawn Dickson, By:Dawn Dickson, CEO and Founder Date: 08/19/2019 /s/ Howard Marks Howard Marks CEO | Highlight the parts (if any) of this contract related to "Joint Ip Ownership" that should be reviewed by a lawyer. Details: Is there any clause providing for joint or shared ownership of intellectual property between the parties to the contract? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Rofr/Rofo/Rofn" that should be reviewed by a lawyer. Details: Is there a clause granting one party a right of first refusal, right of first offer or right of first negotiation to purchase, license, market, or distribute equity interest, technology, assets, products or services?
Context: Exhibit 10.6 EXECUTION COPY MEDIA LICENSE AGREEMENT THIS MEDIA LICENSE AGREEMENT (this "Agreement") is made and effective as of the date of the Closing (as defined in the Merger Agreement (as defined below)) (the "Effective Date"), between NATIONAL FOOTBALL MUSEUM, INC., an Ohio non-profit corporation, doing business as Pro Football Hall of Fame ("PFHOF"), HOF Village Media Group, LLC (the "Village Media Company"), a Delaware limited liability company that is a wholly-owned subsidiary of HOF Village, LLC, a Delaware limited liability company ("HOFV") and, solely for purposes of Section 4.5, HOFV; each a "Party" and collectively, the "Parties". RECITALS A. In connection with a Master Transaction Agreement dated December 11, 2018, as amended of even date herewith and as it may be amended or otherwise modified from time to time (the "Master Transaction Agreement"), by and among the Parties and certain other parties, as well as other agreements referenced in the Master Transaction Agreement relating to the development of the Hall of Fame Village Complex (the "Village"), the Parties have determined that it is appropriate and in the Parties' best interests to enter into a media license agreement for the exploitation of certain PFHOF assets by the Village Media Company and its Affiliates. B. The Parties further desire to provide for the sharing of media-related opportunities between the Village Media Company and Hall of Fame Media Group, LLC, an Ohio limited liability company and indirect wholly-owned subsidiary of PFHOF (the "HOF Media Company"). AGREEMENT NOW THEREFORE, based upon the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged (including but not limited to consideration outlined in the Master Transaction Agreement), and intending to be legally bound hereby, the Parties agree as follows: 1. DEFINITIONS 1.1 "Advisory Board" shall mean a board of advisors to the Village Media Company and the HOF Media Company made up of four (4) individuals - (i) the Chief Executive Officer of HOFV, (ii) the Chief Executive Officer of PFHOF, (iii) the Chief Executive Officer of the Village Media Company and (iv) the Executive Director of the HOF Media Company; provided, that if the Chief Executive Officer of the Village Media Company and the Executive Director of the HOF Media Company are the same individual (as is expected as of the Effective Date), then the fourth member of the Advisory Board shall be appointed by unanimous agreement of the foregoing individuals. The Advisory Board's function shall be to facilitate the consideration of opportunities presented to either or both of the Village Media Company and the HOF Media Company.
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
1.2 "Affiliate" with respect to the Village Media Company shall mean any of HOFV and any of the following entities so long as it is directly or indirectly controlled by, or is under common control, with HOFV: HOF Village Stadium, LLC; HOF Village Parking, LLC; HOF Village Land, LLC; HOF Village Youth Fields, LLC; HOF Village Hotel I, LLC; HOF Village Sports Business, LLC; Youth Sports Management, LLC; HOF Village Parking Management I, LLC; HOF Village Residences I, LLC; HOF Village Center for Excellence, LLC; HOF Village Center for Performance, LLC; HOF Experience, LLC; and JCIHOFV Financing, LLC. "Affiliate" with respect to PFHOF shall mean any entity that is directly or indirectly controlled by, or is under common control with, PFHOF. For purposes of this definition, "control" means an equity or income interest of fifty percent (50%) or more, or the possession of the power, directly or indirectly, to direct or cause the direction of the management and policies of the Affiliate, whether through the ownership of voting securities, by contract, or otherwise. 1.3 "Exploit" or "Exploitation" means to reproduce, distribute, digitally transmit, publish, publicly perform or otherwise display via any and all means of video or audio-visual media, or means of distribution except as set forth in this Agreement as to manner, frequency or duration of use including, but not limited to: film, television, streaming, short-form streaming, social media, SVOD, IVOD, pay per view, OTT, theatrical professional/non-professional productions, location based entertainment, music, publishing, holographic mediums, projection mapping, haptic mediums, as well as any marketing, advertising, and promotional activities thereof in any medium currently existing or hereinafter created. 1.4 "Merger Agreement" means that certain Agreement and Plan of Merger, dated September 16, 2019, by and among GPAQ Acquisition Holdings, Inc., a Delaware corporation, Gordon Pointe Acquisition Corp, a Delaware corporation, GPAQ Acquiror Merger Sub, Inc., a Delaware corporation, GPAQ Company Merger Sub, LLC, a Delaware limited liability company, HOFV, and HOF Village Newco, LLC, a Delaware limited liability company. 1.5 "Person" means an individual, corporation, partnership, association, limited liability company, joint venture, trust, estate, joint stock company or other similar organization, government or political subdivision thereof, or any other entity. 1.6 "PFHOF Works" shall mean the written, audio, visual, audiovisual, or choreographic works currently or hereafter owned by or freely sub-licensable by PFHOF.
2
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
2. GRANT OF RIGHTS 2.1 Subject to the terms of this Agreement (including, without limitation, Sections 2.3, 2.4, 2.6 and 5 below), PFHOF hereby grants to the Village Media Company a worldwide, non-exclusive, limited, non-sublicenseable and non-assignable (except to the extent set forth in this Agreement) right and license to (a) Exploit the PFHOF Works and (b) edit, supplement or otherwise adapt, incorporate or otherwise utilize, the PFHOF Works to create, produce and Exploit new, original work(s) (each such work in this clause (b), a "HOFV Work"). For the avoidance of doubt, after the termination or expiration of this Agreement, the Village Media Company and its permitted licensees shall continue to have the right to fully exploit, use, and Exploit the HOFV Works for the length of the term of the license granted by PFHOF in connection with such HOFV Work pursuant to Section 2.3; provided that the length of the term of such license shall be a minimum of five (5) years. Any HOFV Works created pursuant to this Agreement shall exclusively be owned by the Village Media Company; provided, however, that, (i) PFHOF shall own all right, title, interest, and copyright in and to the underlying PFHOF Work(s) as further set forth in Section 2.5 and (ii) the Village Media Company's ownership is subject in all events to any Rights Restrictions and the terms of the license (including the term of such license) granted by PFHOF in connection with such HOFV Work pursuant to Section 2.3. 2.2 In addition to any rights set forth herein, PFHOF shall have the right and license to Exploit HOFV Works, at no fee or charge to PFHOF or any of its Affiliates, for educational, not-for-profit purposes aligned with the mission of PFHOF which usage shall not diminish the value of the Village Media Company's or its Affiliates' Exploitation of such HOFV Work in accordance with the terms of this Agreement. HOFV must preapprove any of PFHOF's proposed plans to Exploit the HOFV Works, such approval not to be unreasonably withheld. 2.3 Notwithstanding anything to the contrary in this Agreement, PFHOF shall have the right to approve (in its sole and absolute discretion) any and all usage of, and Village Media Company's (and its Affiliates' and permitted licensees') plans to Exploit, the PFHOF Works (including any inclusion of any PFHOF Work in any HOFV Work and the term of such usage). Prior to any initial Exploitation of a PFHOF Work, the Village Media Company, at its own expense, must furnish to the Advisory Board and PFHOF a written notice ("Notice") which Notice will set forth the Village Media Company's proposal for Exploitation of a PFHOF Work (whether by itself or as incorporated into a HOFV Work), which proposal shall at a minimum specify the applicable PFHOF Work(s) to be Exploited by the Village Media Company, the nature and location of the proposed Exploitation and a pro forma specifying the economics and approximate time period related to such Exploitation. The Advisory Board shall, within fourteen (14) days of its receipt of the Notice, make a recommendation to PFHOF to either approve or reject such proposal as set forth in the Notice. PFHOF shall, within fourteen (14) days of its receipt of the recommendation of the Advisory Board, either approve or reject the proposal as set forth in the Notice. If PFHOF does not approve the proposal as set forth in the Notice within fourteen (14) days of PFHOF's receipt of the recommendation of the Advisory Board, such proposal shall be deemed rejected by PFHOF. In the event that a proposal is rejected (or deemed rejected) by PFHOF, PFHOF shall, upon request from the Village Media Company, provide a written explanation (with reasonable detail) outlining its reason for rejecting such proposal. Upon PFHOF's approval with respect to any such proposal, the Village Media Company (and its Affiliates and permitted licensees) may Exploit the applicable PFHOF Work(s) so long as such Exploitation is in conformance with the proposal as approved by PFHOF (including any proposed sublicenses in accordance with Section 2.4).
3
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
2.4 The Village Media Company shall have the right to sublicense (a) the production and creation of the HOFV Works and (b) Exploitation of the PFHOF Works hereunder to any of its Affiliates; provided, that, Village Media Company shall (x) cause such sublicenses to comply with all terms and conditions of this Agreement and (y) not be relieved of any of its obligations under this Agreement as a result of any such sublicense, and will be primarily responsible for any acts or omissions of such sublicensees. 2.5 Notwithstanding anything to the contrary contained in this Agreement, as between PFHOF (and its Affiliates), on the one hand, and the Village Media Company (and its Affiliates), on the other hand, PFHOF shall own and control all right, title, interest, and copyright in and to the PFHOF Works, including, without, limitation, any and all PFHOF Work(s) utilized by, or incorporated in, any HOFV Work and all of its constituent elements, which shall include, without limitation, all feeds recorded by or on behalf of PFHOF in connection with the production of such PFHOF Work, all event footage contained therein and all information and data concerning such PFHOF Work, and all derivatives of the foregoing (except for derivatives that constitute HOFV Works, which ownership shall be retained by the Village Media Company). The Village Media Company agrees, on behalf of itself and its Affiliates and their permitted sublicensees, that all uses by the Village Media Company or any of its Affiliates or their respective permitted sublicensees of the PFHOF Work shall inure to the benefit of PFHOF, and any right that may accrue to the Village Media Company, any of its Affiliates or any of their respective permitted sublicensees related thereto and any goodwill associated therewith are hereby granted and assigned to PFHOF or its designee. Notwithstanding the foregoing, to the extent any HOFV Work incorporates any HOFV trademarks, service marks, or trade dress ("HOFV Trademarks"), use of such HOFV Trademarks shall inure solely to HOFV's benefit. The Village Media Company shall not, and shall cause its Affiliates and their respective permitted sublicensees not to, whether during the Term or thereafter, challenge (a) the rights of PFHOF in and to any PFHOF Work, (b) the validity of any PFHOF Work, (c) PFHOF's right to grant rights or licenses relating to the PFHOF Works or (d) the validity, legality, or enforceability of this Agreement. 2.6 The Village Media Company acknowledges the existence of agreements in effect as of the Effective Date between PFHOF and certain licensees and/or licensors of PFHOF Works that may restrict or prohibit PFHOF from making certain PFHOF Works available for use or Exploitation under this Agreement, including, without limitation that certain agreement effective as of June 25, 2013 among NFL Enterprises LLC, PFHOF and PFHOF Enshrinees Events, Inc. d/b/a Pro Football Hall of Fame Enterprisers (the "NFLN Agreement") (any and all such restrictions and prohibitions, collectively, "Rights Restrictions") and that the Village Media Company's rights under this Agreement shall subject and subordinate to any such Rights Restrictions for so long as such Rights Restrictions are in effect. Without limiting the foregoing, in the event that the Village Media Company is prohibited from pursing and launching an opportunity to create and Exploit an HOFV Work or use or Exploit an existing PFHOF Work pursuant to Sections 2.7, 2.8 or 2.9 as a result of a Rights Restriction under the terms of the NFLN Agreement, then the Parties shall negotiate in good faith a reasonable decrease in the Annual Guarantee for the calendar year in which such opportunity is unavailable.
4
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
2.7 PFHOF agrees not to grant licenses to create new PFHOF Works, except with respect to the categories identified on Exhibit A, to any third party during the Term without first offering to the Village Media Company the right of first refusal to create such PFHOF Works on equal terms, subject to any Rights Restrictions. If PFHOF desires to offer a license to any third party or if it receives any bona fide offer from a third party that it is willing to accept, it shall promptly communicate such offer, including the specific terms and business plan relating to such offer, to the Village Media Company and provide the Village Media Company with at least fourteen (14) days to exercise its right of first refusal. If the Village Media Company elects to exercise its right of first refusal, the terms of the offer shall apply, the applicable license shall be subject to the terms and conditions of this Agreement and the Village Media Company shall pay to PFHOF a License Fee (as defined below) for such license in accordance with this Agreement. If the Village Media Company does not exercise its right of first refusal, PFHOF shall have the right to grant a license with respect to such third party on the same terms originally provided to the Village Media Company. 2.8 PFHOF agrees that during the Term, except with respect to the categories identified on Exhibit A, it will not create new PFHOF Works without first granting the Village Media Company a right of first offer to create such PFHOF Work, subject to any Rights Restrictions. If PFHOF desires to create new PFHOF Works, it shall present a proposed business plan in writing to the Village Media Company. The Village Media Company will have fourteen (14) days to review such business plan and elect to proceed under the business plan. If the Village Media Company elects proceed under the business plan, then creation of such PFHOF Work shall be subject to the terms and conditions of this Agreement and the Village Media Company shall pay to PFHOF a License Fee in accordance with this Agreement for the license to create the PFHOF Work. If the Village Media Company does not make such an election, then PFHOF shall have the right to create such PFHOF Work itself. 2.9 PFHOF agrees that during the Term, except with respect to the categories identified on Exhibit A, if PFHOF desires to either exploit itself or license a third party to exploit an existing PFHOF Work, it shall first give the Village Media Company a right of first offer to exclusively license such PFHOF Work, subject to any Rights Restrictions. In such a case, PFHOF shall promptly notify the Village Media Company and provide the Village Media Company with any bona fide third party offer to license such PFHOF Work that PFHOF is willing to accept, including any specific terms and proposed business plan relating to such offer. The Parties shall then negotiate in good faith an agreement to exclusively license the particular PFHOF Work. If the Parties reach an agreement within thirty (30) days, then the applicable license shall be subject to the terms and conditions of this Agreement and the Village Media Company shall pay to PFHOF a License Fee for such license in accordance with this Agreement. If the Parties cannot reach an agreement within thirty (30) days, then PFHOF shall have the right to exploit or license the PFHOF Work itself.
5
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
2.10 PFHOF represents and warrants to the Village Media Company that it is the exclusive owner of the PFHOF Works or has the right to grant the licenses and other rights granted to the Village Media Company hereunder, including the right to use the PFHOF Works as permitted herein and that, subject to any Rights Restriction in effect on the Effective Date, PFHOF has secured any necessary releases for any rights of publicity or privacy and can license such rights to the Village Media Company hereunder. 2.11 PFHOF agrees to indemnify, defend, and hold harmless the Village Media Company, its Affiliates, and their respective employees, officers, directors, agents, representatives, and successors and assigns from and against any and all claims, demands, liabilities, losses, suits, damages, costs (including, without limitation, costs of investigation), and expenses, including reasonable attorneys' fees, arising out of or relating to (a) the Village Media Company's authorized use of the PFHOF Works, as permitted by, and in accordance with, the terms of this Agreement, (b) any breach by PFHOF of any warranty, representation, obligation, or agreement made under this Agreement, or (c) PFHOF's use of the HOFV Works in breach of this Agreement, or any claim of infringement of any intellectual property right arising out of the misuse or misappropriation of the HOFV Works by PFHOF. 2.12 The Village Media Company represents and warrants to PFHOF that it is (a) a limited liability company organized and in good standing under the laws of the State of Delaware and (b) a wholly-owned subsidiary of HOFV. 2.13 The Village Media Company agrees to indemnify, defend, and hold harmless PFHOF, its Affiliates, and their respective employees, officers, directors, agents, representatives, and successors and assigns from and against any and all claims, demands, liabilities, losses, suits, damages, costs (including, without limitation, costs of investigation), and expenses, including reasonable attorneys' fees, arising out of or related to (a) the Village Media Company's use of the PFHOF Works in breach of this Agreement, or any claim of infringement of any intellectual property right arising out of the misuse or misappropriation of the PFHOF Works, (b) any breach by the Village Media Company (or its sublicensees, if applicable) of any warranty, representation, obligation, or agreement made under this Agreement, (c) the Exploitation of any of the rights granted pursuant to the terms of this Agreement by the Village Media Company, its Affiliates, licensees or sublicensees arising out of or relating to the Exploitation of any PFHOF Works or HOFV Works (unless such liability arises solely from use of the PFHOF Works by the Village Media Company in accordance with this Agreement), (d) PFHOF's authorized use of any HOFV Works as permitted by, and in accordance with, the terms of this Agreement, (e) any advertising, promotion or other similar materials that are inserted into any Exploitation of any PFHOF Work or any HOFV Work (but excluding advertising or promotional announcements supplied by or on behalf of PFHOF and excluding any claims arising solely from use of the PFHOF Works by the Village Media Company in accordance with this Agreement)) or (f) any failure of the Village Media Company to comply with applicable laws in connection with the rights and performance of its obligations under this Agreement.
6
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
2.14 Except for Section 3.5, nothing in this Agreement shall be construed as limiting in any way the Village Media Company's ability to seek and exploit separate rights from any third party. 3. OPERATION OF VILLAGE MEDIA COMPANY 3.1 The Chief Executive Officer of the Village Media Company (the "CEO") shall be the Manager of the Village Media Company. 3.2 The Executive Producer of the Village Media Company (the "EP") shall report to the CEO with input from the Chief Executive Officer of PFHOF. To the extent that the Village Media Company and PFHOF work collaboratively on media projects, the EP's services on such projects for the benefit of PFHOF shall be charged to PFHOF at cost without markup. Performance objectives for the EP shall be determined by the CEO with input from the Advisory Board. 3.3 In consultation with the CEO, the EP shall annually prepare a staffing plan for the Village Media Company's operations and present such plan to the Advisory Board for review. Staff employed by the Village Media Company may be used for projects solely for the benefit of PFHOF or for projects that are collaboratively undertaken by both the Village Media Company and PFHOF. The Advisory Board shall be informed to the extent Village Media Company staff are employed on projects solely for the benefit of PFHOF or on projects that are collaboratively undertaken by both the Village Media Company and PFHOF. In addition, (a) PFHOF shall bear its proportionate share of the cost of such Village Media Company staff (at cost without markup) that work on such collaborative projects and, to the extent such staff work 100% on a PFHOF project, PFHOF shall bear all of the cost of such staff for such project (at cost without markup) and (b) the Village Media Company shall bear its proportionate share of the cost of PFHOF staff (at cost without markup) that work on such collaborative projects and, to the extent such staff work 100% on a Village Media Company project, the Village Media Company bear all of the cost of such staff for such project (at cost without markup). The EP shall ensure that, to the extent that PFHOF and the Village Media Company share staff, that such sharing will not impact the ability of PFHOF or the Village Media Company to meet their respective budget, creative goals, or sales/marketing goals for any year.
7
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
3.4 The Advisory Board shall meet regularly to facilitate the Village Media Company's consideration of media-related opportunities contemplated hereunder and to review proposed projects, budgets, schedules, and creative concepts under consideration by the Village Media Company. 3.5 All communication with the National Football League (the "NFL"), its 32 Member Clubs, NFL Legends and Gold Jackets shall be made exclusively and directly through PFHOF. For the avoidance of doubt, PFHOF has the exclusive and sole relationship with the NFL, its 32 Member Clubs, NFL Legends and Gold Jackets for any and all PFHOF and HOFV activities; provided, however, that any communication relating to any investment by the NFL in any Village Media Company project, may be made directly through the President of PFHOF or the Chief Executive Officer of HOFV; and, provided further, that the Village Media Company shall have the right to present opportunities related to any of the above for approval by PFHOF. 4. TERM AND TERMINATION 4.1 Unless otherwise terminated as provided herein, the term of this Agreement shall commence on the Effective Date and shall terminate on December 31, 2034 (such period, including as may be extended in accordance with the subsequent sentence, the "Term"). Thereafter, the agreement shall automatically renew for successive five (5)-year terms, unless either Party gives written notice to the other Party of intent not to renew at least six (6) months prior to the expiration of the then-current Term. If either party elects not to renew the Agreement and the other party wishes to continue the Agreement, the Parties shall attempt in good faith to negotiate an amendment to the Agreement to renew the Term on such terms as may be negotiated by the Parties. Such good faith negotiation shall continue until both Parties agree to cease negotiations or until expiration of the Term. 4.2 After good faith consultation with the Advisory Board, either Party shall have the right to terminate this Agreement at any time for an uncured material breach by the other Party, including the non-payment of the Annual Guarantee, license fees and staffing fees, provided that the non-breaching Party provides prior written notice to the breaching Party, specifying the alleged material breach, and further provided that the breaching Party shall have thirty (30) days after receipt of such notice to cure the material breach, to the reasonable satisfaction of the non-breaching Party; provided, further, that if such breach (other than a breach for non-payment) cannot be cured during such 30-day period, but the allegedly breaching Party has commenced and is continuing good faith efforts to cure such breach within such 30-day period, then the cure period shall be extended until the allegedly breaching Party has stopped making good faith efforts to cure such breach, such extension not to exceed ninety (90) days. 4.3 Either Party may terminate this Agreement immediately upon giving notice if the other Party ceases to conduct its operations in the normal course of business, including the inability to meet its obligations as they mature, or if any proceeding under the bankruptcy or insolvency laws is brought by or against the other Party, or a receiver or custodian is appointed or applied for by the other Party, or an assignment for the benefit of creditors or a transfer of all or substantially all of its property is made by the other Party.
8
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
4.4 In addition to and without limiting any other provision of this Agreement, if a Change of Control occurs at any time during the Term, PFHOF shall have the right to terminate this Agreement immediately upon giving notice of such termination to the Village Media Company. For purposes of this Section 4.4, a "Change of Control" shall mean any transaction or series of related transactions that results in (including by way of merger or consolidation), or that is in connection with, the Village Media Company no longer being controlled (as defined in Section 1.2) by or under common control (as defined in Section 1.2) with HOFV. 4.5 In addition to and without limiting any other provision of this Agreement, in the event the Village Media Company or HOFV fails to pay the Annual Guarantee to PFHOF in accordance with Section 5.1 and such failure is not cured within thirty (30) days of notice thereof by PFHOF, then the rights of first offer granted to HOFV in Section 3.1 of the First Amended and Restated License Agreement, dated as of September 16, 2019 between PFHOF and HOFV (the "License Agreement") shall automatically and immediately terminate, regardless of whether PFHOF elects not to terminate this Agreement in accordance Section 4.2. 4.6 Notwithstanding anything to the contrary in this Agreement, this Agreement shall automatically and immediately terminate, without any further action or notice to any Party, upon termination of the License Agreement. 4.7 Upon the expiration or termination of this Agreement as provided in this Section 4, the rights and obligations of the Parties under this Agreement shall be terminated, except as provided herein. 5. FEES 5.1 Subject to Section 2.6, the Village Media Company shall, or shall cause HOFV to, pay to PFHOF a minimum guarantee of one million two hundred and fifty thousand dollars ($1,250,000) (the "Annual Guarantee") each year during the Term; provided that the Parties acknowledge and agree that after the first five (5) years of the Term, the Annual Guarantee shall increase by three percent (3%) on a year-over-year basis (e.g., the Annual Guarantee shall increase to $1,287,500 for year six (6) and to $1,326,125 for year seven (7)). The first Annual Guarantee payment shall be due and payable on the Effective Date and thereafter shall be payable to PFHOF on each twelve (12) month anniversary of the Closing Date during the Term.
9
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
5.2 In consideration of any license granted to the Village Media Company hereunder, the Village Media Company shall, or shall cause HOFV to, pay to PFHOF a license fee specific to the PFHOF Work(s) licensed by PFHOF hereunder ("License Fee") pursuant to the rate for the applicable project or opportunity as will be mutually agreed between the Parties for each opportunity; provided that License Fees shall be debited first from the Annual Guarantee, which shall satisfy such License Fees due and payable hereunder until the aggregate amount of the License Fees due and payable during such calendar year exceeds the Annual Guarantee for such calendar year. For clarity, if for any calendar year during the Term, the amount of License Fees for such calendar is (x) less than the amount of the Annual Guarantee, the Village Media Company shall still be required to pay the Annual Guarantee for such calendar year or (y) more than the Annual Guarantee, the Village Media Company shall be required to pay all License Fees in excess of the Annual Guarantee for such calendar year. The Parties acknowledge and agree that two hundred twenty five thousand dollars ($225,000) (the "Youth Sports License Fee") shall be credited against the Annual Guarantee on the Closing Date and each anniversary of the Closing Date during the Term for the license granted by PFHOF to Youth Sports Management, LLC ("Youth Sports") pursuant to that certain branding license agreement to be entered into on the Effective Date between PFHOF and Youth Sports for so long as such agreement remains in effect; provided that after the first five (5) years of the Term, the Youth Sports License Fee shall increase by three percent (3%) on a year-over year basis and thereafter, the aggregate amount of the Youth Sports License Fee, after giving effect to such increase each year, shall be the amount credited against the Annual Guarantee. 6. FORCE MAJEURE In the event either Party is unable to comply fully with its obligations (other than payment obligations) under this Agreement due to an event beyond the control of the Party whose performance is affected, including any legal prohibition, court order, degree, regulation or requirement of any governmental entity having jurisdiction, strikes, catastrophe, drought, shortage of water or other action of the elements, temporary or permanent shutdown due to regulatory or other governmental actions, or Acts of God or any other matters beyond its control, such Party shall while so affected be relieved to the extent thus prevented from performing its obligations hereunder and such non-performance shall not, in and of itself, be deemed to be a breach of this Agreement; provided that, in such event, the non-performing Party takes all commercially reasonable measures to remove the disability and resume full performance hereunder at the earliest possible date. 7. GENERAL PROVISIONS 7.1 Confidentiality (a) "Confidential Information" means all forms of confidential information, including technical information and business information, disclosed by one Party or its Affiliates (the "Disclosing Party") to the other Party or its Affiliates (the "Receiving Party") during the Term in connection with this Agreement, that is identified as confidential or is information that is of a nature that is customarily regarded as confidential, whether disclosed in electronic, tangible, oral or visual form; provided that oral or visual disclosures shall be deemed confidential only if they are confirmed as confidential in writing by the Disclosing Party prior to or at the time of disclosure or within thirty (30) days thereafter, or if the Receiving Party should reasonably know that such visual or oral disclosures are intended to be confidential. Confidential Information shall not include such information that: (i) as of the date of disclosure is known to the Receiving Party or its Affiliates, as shown by written documentation; (ii) was independently developed by the Receiving Party or its Affiliates without access to the Disclosing Party's Confidential Information; (iii) as of the date of disclosure is in, or subsequently enters, the public domain, through no fault of the Receiving Party; or (iv) as of the date of disclosure or thereafter is obtained from a third party free from any obligation of confidentiality to the Disclosing Party.
10
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
(b) Each Receiving Party agrees: (i) not to disclose, make public, or authorize any disclosure or publication of such Confidential Information of the Disclosing Party except as expressly permitted herein; (ii) to take reasonable measures to protect the confidentiality of the Disclosing Party's Confidential Information exercising the same degree of care to preserve and safeguard the Disclosing Party's Confidential Information as it uses to preserve and safeguard its own Confidential Information, but in no event less than a reasonable degree of care; (iii) to restrict access to such Confidential Information to only those officers, directors, or employees of the Receiving Party or its Affiliates or representatives who have a need to know such Confidential Information and who are bound by confidentiality obligations at least as restrictive as those contained in this Agreement; and (iv) not to remove any confidential or proprietary markings or designations placed by the Disclosing Party on such Confidential Information. The Receiving Party and its Affiliates shall not use the Disclosing Party's Confidential Information for any purpose except as permitted by this Agreement. (c) The confidentiality obligations contained herein shall not apply to the extent that the Receiving Party is required to disclose the information by law, order, or regulation of a governmental agency or a court of competent jurisdiction; provided that, in each such case, the Receiving Party shall give written notice thereof to the Disclosing Party and sufficient opportunity to prevent or limit any such disclosure or to request confidential treatment thereof; and provided further, that the Receiving Party shall give reasonable assistance to the Disclosing Party to preserve the information as confidential. (d) Upon termination of this Agreement, each Receiving Party shall return to the Disclosing Party (or at the Disclosing Party's direction, destroy) all Confidential Information of the Disclosing Party that is in the possession, custody, or control of the Receiving Party. The Village Media Company shall be permitted to retain copies of PFHOF's Confidential Information as necessary to allow the Village Media Company to exercise its post-termination rights with respect to such information.
11
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
(e) Each Party acknowledges that a breach or threatened breach of this Section 7.1 on its part shall result in irreparable and incalculable damages to the other Party. Therefore, in addition to any action by either Party for collection of damages resulting from the breach of this Agreement, such Party shall also be entitled to immediate injunctive relief, restraining the other Party from continued or threatened breach of this Agreement. Each Party further agrees that, upon a finding of a breach of the terms of this Agreement on its part, such Party shall pay to the other Party the costs and expenses, including attorneys' fees, which the other Party incurs in enforcing the terms of this Agreement. 7.2 Notices. Any notice required or permitted by this Agreement will be in writing and delivered as follows with notice deemed given as indicated: (i) by personal delivery when delivered personally; (ii) by overnight courier upon written verification of receipt; (iii) by telecopy or facsimile transmission upon acknowledgement of receipt of electronic transmission; or (iv) by certified or registered mail, return receipt requested, upon verification of receipt. Notice will be sent to the appropriate address set forth below or such other address as to which the Parties have been notified hereunder. 7.3 Compliance with Laws and Regulations. Each of the Village Media Company and PFHOF, as applicable, agrees to be in material compliance with all federal, state, and local laws, ordinances, and regulations applicable to its respective operations and to obtain and maintain all licenses and permits required by law necessary for each of their respective operations. 7.4 Governing Law and Arbitration. (a) This Agreement will be governed in all respects by the laws of the State of Ohio (without regard to conflicts of law provisions), as such laws are applied to agreements entered into and to be performed entirely within the State of Ohio between Ohio residents. (b) Any dispute between the Parties concerning the scope or interpretation of this Agreement shall be submitted to binding arbitration in accordance with the Rules of Commercial Arbitration of the American Arbitration Association in effect on the date that a dispute is submitted to arbitration (the "Rules"). The arbitration shall be held in Canton, Ohio, and shall be before a panel of three arbitrators, one chosen by each of the Parties and a third chosen by the two arbitrators so chosen by the Parties. Not less than fifteen (15) days prior to the arbitration, each Party shall submit to the other the documents and a list of witnesses it intends to interview or call in the arbitration. The arbitrators shall apply the substantive law of the State of Ohio with regard to any dispute that becomes the subject of arbitration, and the arbitrators will be so instructed. The arbitrators shall issue a written opinion stating the findings of fact and the conclusions of law upon which the decision is based. The decision of the arbitrators shall be final and binding.
12
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
(c) In any action, suit, proceeding, claim, or counterclaim brought to enforce this Agreement or any of its provisions, the Party that prevails in any such action, suit, proceeding, claim, or counterclaim (the "Prevailing Party") shall recover its costs, fees, and expenses, including, but not limited to, the reasonable costs, fees, and expenses of attorneys and outside experts (collectively, "Expenses"), from the other Party (the "Non-Prevailing Party"), and the court or arbitration panel shall be so instructed to determine which Party is the Prevailing Party, to grant the recovery of the Expenses incurred by the Prevailing Party, and to order the Non-Prevailing Party to pay the Expenses of the Prevailing Party. 7.5 Assignment. The Village Media Company shall not, directly or indirectly, assign, sublicense or otherwise transfer any of its rights or obligations hereunder without the prior written consent of PFHOF. The transfer of ownership of the Village Media Company pursuant to the Merger Agreement shall not require the consent of PFHOF. 7.6 Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be illegal, invalid, or unenforceable, the legality, validity, and enforceability of the remaining provisions of this Agreement will not be affected or impaired thereby. 7.7 Waiver. The waiver by either Party of a breach of any provision of this Agreement by the other Party will not operate or be construed as a waiver of any other or subsequent breach by such other Party. 7.8 Authority. Each Party warrants and represents that such Party's execution and delivery of this Agreement has been duly authorized by proper corporate or limited liability company action and that this Agreement is a binding obligation of such Party enforceable in accordance with its terms. 7.9 Independent Contracting Parties. The Parties are independent contracting parties and nothing in this Agreement shall make either Party the agent or legal representative of the other for any purpose whatsoever, nor does it grant either Party the authority to assume or create any obligation on behalf of or in the name of the other. Furthermore, the Parties shall remain separate and independent contracting parties and nothing in this Agreement shall make either Party subject to a joint venture agreement or other mutual arrangement between the Parties. 7.10 Entire Agreement. This Agreement constitutes the entire agreement between the Parties relating to this subject matter and supersedes all prior or contemporaneous oral or written agreements concerning such subject matter, including the Original License Agreement. This Agreement may be changed only by mutual agreement of the Parties in writing. 7.11 Merger Agreement. Notwithstanding anything to the contrary in this Agreement, in the event that the Closing (as such term is defined in the Merger Agreement) does not occur, this Agreement shall be terminated and the provisions herein shall have no force or effect. [signature page follows]
13
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
IN WITNESS WHEREOF, PFHOF, HOFV (solely for purposes of Section 4.5) and the Village Media Company have caused this Agreement to be executed by their respective, duly authorized representatives, effective as of the Effective Date. NATIONAL FOOTBALL MUSEUM, INC. By: C. David Baker President Date: Address: 2121 George Halas Drive NW Canton, Ohio 44708 HOF VILLAGE MEDIA GROUP, LLC By: Name: Title: Date: Address: 1826 Clearview Avenue NW Canton, Ohio 44708 [Media License Agreement]
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
For the purpose of acknowledging and agreeing to the terms set forth in Section 4.5: HOF VILLAGE, LLC By: Name: Title: Date: Address: 1826 Clearview Avenue NW Canton, Ohio 44708 [Media License Agreement]
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
Exhibit A Excluded Categories and Properties 1. Any PFHOF Works in, or Exploited in connection with, the following Categories: · Health Care · Museums · Education · Sports Betting 2. Any programming or content created or Exploited in support and furtherance of the PFHOF's mission. 3. The following television properties that are subject to perpetual rights and existing and future media deals (including any extensions, renewals or similar agreement in connection any existing agreement): Properties and rights subject to agreements with NFL Enterprises LLC ("NFLN") and ESPN, Inc. ("ESPN") through September 1st 2021 (and any extension, renewal or similar agreement relating thereto). · Enshrinement Ceremonies · Other Enshrinement Events reserved for NFLN o Gold Jacket Show one hour (2019 - 2 hours co-copyright NFLN PFHOF) o Five One Hour Gold Jacket Contender Shows from September to February around the Enshrinement Selection Process For the avoidance of doubt, nothing in this Agreement shall grant Village Media Company or its Affiliates the right or license to (i) any live (or near live) rights to Exploit any events or other content owned or controlled by PFHOF (e.g., Enshrinement Ceremonies), or (ii) any programming or content in connection with or related to any Enshrinement Ceremony or the Enshrinement selection process (e.g., selection meetings, voting, debates or discussions prior to or during any selection meeting, presenter speeches, discussions or events immediately after Enshrinement Ceremonies, etc.). 4. Any content or properties utilizing the following trademarks: · Knock on the Door (Trademarked sold to social media company) · Hometown Hall of Famer (Trademarked sold to sponsors)
Exhibit A-1
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
5. The following movies: · Jim and Jill Kelly Movie 6. The autobiographical or biographical works related to the following players with video rights: · Michael Strahan · John Madden · Troy Aikman 7. The following television show concepts: · Hall of Fame City · Documentary One Years One Hundred Yards of Character · Strong Youth Strong Communities · Centennial Spectacular · Centennial Gala 8. Any digital live streaming rights, including without limitation, of the following properties: · State of the Hall · Super Bowl Luncheon · Salute to Greatness · Inspiration Project · The Mission · Heart of the Hall of Famer 9. Any licenses or sponsorships of video games granted to EA Sports (or its successor) with respect to Madden NFL or any other EA Sports football game. Exhibit A-2
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 [/INST] ```json
{<answer_start>
"answer": "The Parties shall then negotiate in good faith an agreement to exclusively license the particular PFHOF Work. If the Parties reach an agreement within thirty (30) days, then the applicable license shall be subject to the terms and conditions of this Agreement and the Village Media Company shall pay to PFHOF a License Fee for such license in accordance with this Agreement. If the Parties cannot reach an agreement within thirty (30) days, then PFHOF shall have the right to exploit or license the PFHOF Work itself."
<answer_end>
}
``` </s> | Exhibit 10.6 EXECUTION COPY MEDIA LICENSE AGREEMENT THIS MEDIA LICENSE AGREEMENT (this "Agreement") is made and effective as of the date of the Closing (as defined in the Merger Agreement (as defined below)) (the "Effective Date"), between NATIONAL FOOTBALL MUSEUM, INC., an Ohio non-profit corporation, doing business as Pro Football Hall of Fame ("PFHOF"), HOF Village Media Group, LLC (the "Village Media Company"), a Delaware limited liability company that is a wholly-owned subsidiary of HOF Village, LLC, a Delaware limited liability company ("HOFV") and, solely for purposes of Section 4.5, HOFV; each a "Party" and collectively, the "Parties". RECITALS A. In connection with a Master Transaction Agreement dated December 11, 2018, as amended of even date herewith and as it may be amended or otherwise modified from time to time (the "Master Transaction Agreement"), by and among the Parties and certain other parties, as well as other agreements referenced in the Master Transaction Agreement relating to the development of the Hall of Fame Village Complex (the "Village"), the Parties have determined that it is appropriate and in the Parties' best interests to enter into a media license agreement for the exploitation of certain PFHOF assets by the Village Media Company and its Affiliates. B. The Parties further desire to provide for the sharing of media-related opportunities between the Village Media Company and Hall of Fame Media Group, LLC, an Ohio limited liability company and indirect wholly-owned subsidiary of PFHOF (the "HOF Media Company"). AGREEMENT NOW THEREFORE, based upon the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged (including but not limited to consideration outlined in the Master Transaction Agreement), and intending to be legally bound hereby, the Parties agree as follows: 1. DEFINITIONS 1.1 "Advisory Board" shall mean a board of advisors to the Village Media Company and the HOF Media Company made up of four (4) individuals - (i) the Chief Executive Officer of HOFV, (ii) the Chief Executive Officer of PFHOF, (iii) the Chief Executive Officer of the Village Media Company and (iv) the Executive Director of the HOF Media Company; provided, that if the Chief Executive Officer of the Village Media Company and the Executive Director of the HOF Media Company are the same individual (as is expected as of the Effective Date), then the fourth member of the Advisory Board shall be appointed by unanimous agreement of the foregoing individuals. The Advisory Board's function shall be to facilitate the consideration of opportunities presented to either or both of the Village Media Company and the HOF Media Company.
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
1.2 "Affiliate" with respect to the Village Media Company shall mean any of HOFV and any of the following entities so long as it is directly or indirectly controlled by, or is under common control, with HOFV: HOF Village Stadium, LLC; HOF Village Parking, LLC; HOF Village Land, LLC; HOF Village Youth Fields, LLC; HOF Village Hotel I, LLC; HOF Village Sports Business, LLC; Youth Sports Management, LLC; HOF Village Parking Management I, LLC; HOF Village Residences I, LLC; HOF Village Center for Excellence, LLC; HOF Village Center for Performance, LLC; HOF Experience, LLC; and JCIHOFV Financing, LLC. "Affiliate" with respect to PFHOF shall mean any entity that is directly or indirectly controlled by, or is under common control with, PFHOF. For purposes of this definition, "control" means an equity or income interest of fifty percent (50%) or more, or the possession of the power, directly or indirectly, to direct or cause the direction of the management and policies of the Affiliate, whether through the ownership of voting securities, by contract, or otherwise. 1.3 "Exploit" or "Exploitation" means to reproduce, distribute, digitally transmit, publish, publicly perform or otherwise display via any and all means of video or audio-visual media, or means of distribution except as set forth in this Agreement as to manner, frequency or duration of use including, but not limited to: film, television, streaming, short-form streaming, social media, SVOD, IVOD, pay per view, OTT, theatrical professional/non-professional productions, location based entertainment, music, publishing, holographic mediums, projection mapping, haptic mediums, as well as any marketing, advertising, and promotional activities thereof in any medium currently existing or hereinafter created. 1.4 "Merger Agreement" means that certain Agreement and Plan of Merger, dated September 16, 2019, by and among GPAQ Acquisition Holdings, Inc., a Delaware corporation, Gordon Pointe Acquisition Corp, a Delaware corporation, GPAQ Acquiror Merger Sub, Inc., a Delaware corporation, GPAQ Company Merger Sub, LLC, a Delaware limited liability company, HOFV, and HOF Village Newco, LLC, a Delaware limited liability company. 1.5 "Person" means an individual, corporation, partnership, association, limited liability company, joint venture, trust, estate, joint stock company or other similar organization, government or political subdivision thereof, or any other entity. 1.6 "PFHOF Works" shall mean the written, audio, visual, audiovisual, or choreographic works currently or hereafter owned by or freely sub-licensable by PFHOF.
2
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
2. GRANT OF RIGHTS 2.1 Subject to the terms of this Agreement (including, without limitation, Sections 2.3, 2.4, 2.6 and 5 below), PFHOF hereby grants to the Village Media Company a worldwide, non-exclusive, limited, non-sublicenseable and non-assignable (except to the extent set forth in this Agreement) right and license to (a) Exploit the PFHOF Works and (b) edit, supplement or otherwise adapt, incorporate or otherwise utilize, the PFHOF Works to create, produce and Exploit new, original work(s) (each such work in this clause (b), a "HOFV Work"). For the avoidance of doubt, after the termination or expiration of this Agreement, the Village Media Company and its permitted licensees shall continue to have the right to fully exploit, use, and Exploit the HOFV Works for the length of the term of the license granted by PFHOF in connection with such HOFV Work pursuant to Section 2.3; provided that the length of the term of such license shall be a minimum of five (5) years. Any HOFV Works created pursuant to this Agreement shall exclusively be owned by the Village Media Company; provided, however, that, (i) PFHOF shall own all right, title, interest, and copyright in and to the underlying PFHOF Work(s) as further set forth in Section 2.5 and (ii) the Village Media Company's ownership is subject in all events to any Rights Restrictions and the terms of the license (including the term of such license) granted by PFHOF in connection with such HOFV Work pursuant to Section 2.3. 2.2 In addition to any rights set forth herein, PFHOF shall have the right and license to Exploit HOFV Works, at no fee or charge to PFHOF or any of its Affiliates, for educational, not-for-profit purposes aligned with the mission of PFHOF which usage shall not diminish the value of the Village Media Company's or its Affiliates' Exploitation of such HOFV Work in accordance with the terms of this Agreement. HOFV must preapprove any of PFHOF's proposed plans to Exploit the HOFV Works, such approval not to be unreasonably withheld. 2.3 Notwithstanding anything to the contrary in this Agreement, PFHOF shall have the right to approve (in its sole and absolute discretion) any and all usage of, and Village Media Company's (and its Affiliates' and permitted licensees') plans to Exploit, the PFHOF Works (including any inclusion of any PFHOF Work in any HOFV Work and the term of such usage). Prior to any initial Exploitation of a PFHOF Work, the Village Media Company, at its own expense, must furnish to the Advisory Board and PFHOF a written notice ("Notice") which Notice will set forth the Village Media Company's proposal for Exploitation of a PFHOF Work (whether by itself or as incorporated into a HOFV Work), which proposal shall at a minimum specify the applicable PFHOF Work(s) to be Exploited by the Village Media Company, the nature and location of the proposed Exploitation and a pro forma specifying the economics and approximate time period related to such Exploitation. The Advisory Board shall, within fourteen (14) days of its receipt of the Notice, make a recommendation to PFHOF to either approve or reject such proposal as set forth in the Notice. PFHOF shall, within fourteen (14) days of its receipt of the recommendation of the Advisory Board, either approve or reject the proposal as set forth in the Notice. If PFHOF does not approve the proposal as set forth in the Notice within fourteen (14) days of PFHOF's receipt of the recommendation of the Advisory Board, such proposal shall be deemed rejected by PFHOF. In the event that a proposal is rejected (or deemed rejected) by PFHOF, PFHOF shall, upon request from the Village Media Company, provide a written explanation (with reasonable detail) outlining its reason for rejecting such proposal. Upon PFHOF's approval with respect to any such proposal, the Village Media Company (and its Affiliates and permitted licensees) may Exploit the applicable PFHOF Work(s) so long as such Exploitation is in conformance with the proposal as approved by PFHOF (including any proposed sublicenses in accordance with Section 2.4).
3
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
2.4 The Village Media Company shall have the right to sublicense (a) the production and creation of the HOFV Works and (b) Exploitation of the PFHOF Works hereunder to any of its Affiliates; provided, that, Village Media Company shall (x) cause such sublicenses to comply with all terms and conditions of this Agreement and (y) not be relieved of any of its obligations under this Agreement as a result of any such sublicense, and will be primarily responsible for any acts or omissions of such sublicensees. 2.5 Notwithstanding anything to the contrary contained in this Agreement, as between PFHOF (and its Affiliates), on the one hand, and the Village Media Company (and its Affiliates), on the other hand, PFHOF shall own and control all right, title, interest, and copyright in and to the PFHOF Works, including, without, limitation, any and all PFHOF Work(s) utilized by, or incorporated in, any HOFV Work and all of its constituent elements, which shall include, without limitation, all feeds recorded by or on behalf of PFHOF in connection with the production of such PFHOF Work, all event footage contained therein and all information and data concerning such PFHOF Work, and all derivatives of the foregoing (except for derivatives that constitute HOFV Works, which ownership shall be retained by the Village Media Company). The Village Media Company agrees, on behalf of itself and its Affiliates and their permitted sublicensees, that all uses by the Village Media Company or any of its Affiliates or their respective permitted sublicensees of the PFHOF Work shall inure to the benefit of PFHOF, and any right that may accrue to the Village Media Company, any of its Affiliates or any of their respective permitted sublicensees related thereto and any goodwill associated therewith are hereby granted and assigned to PFHOF or its designee. Notwithstanding the foregoing, to the extent any HOFV Work incorporates any HOFV trademarks, service marks, or trade dress ("HOFV Trademarks"), use of such HOFV Trademarks shall inure solely to HOFV's benefit. The Village Media Company shall not, and shall cause its Affiliates and their respective permitted sublicensees not to, whether during the Term or thereafter, challenge (a) the rights of PFHOF in and to any PFHOF Work, (b) the validity of any PFHOF Work, (c) PFHOF's right to grant rights or licenses relating to the PFHOF Works or (d) the validity, legality, or enforceability of this Agreement. 2.6 The Village Media Company acknowledges the existence of agreements in effect as of the Effective Date between PFHOF and certain licensees and/or licensors of PFHOF Works that may restrict or prohibit PFHOF from making certain PFHOF Works available for use or Exploitation under this Agreement, including, without limitation that certain agreement effective as of June 25, 2013 among NFL Enterprises LLC, PFHOF and PFHOF Enshrinees Events, Inc. d/b/a Pro Football Hall of Fame Enterprisers (the "NFLN Agreement") (any and all such restrictions and prohibitions, collectively, "Rights Restrictions") and that the Village Media Company's rights under this Agreement shall subject and subordinate to any such Rights Restrictions for so long as such Rights Restrictions are in effect. Without limiting the foregoing, in the event that the Village Media Company is prohibited from pursing and launching an opportunity to create and Exploit an HOFV Work or use or Exploit an existing PFHOF Work pursuant to Sections 2.7, 2.8 or 2.9 as a result of a Rights Restriction under the terms of the NFLN Agreement, then the Parties shall negotiate in good faith a reasonable decrease in the Annual Guarantee for the calendar year in which such opportunity is unavailable.
4
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
2.7 PFHOF agrees not to grant licenses to create new PFHOF Works, except with respect to the categories identified on Exhibit A, to any third party during the Term without first offering to the Village Media Company the right of first refusal to create such PFHOF Works on equal terms, subject to any Rights Restrictions. If PFHOF desires to offer a license to any third party or if it receives any bona fide offer from a third party that it is willing to accept, it shall promptly communicate such offer, including the specific terms and business plan relating to such offer, to the Village Media Company and provide the Village Media Company with at least fourteen (14) days to exercise its right of first refusal. If the Village Media Company elects to exercise its right of first refusal, the terms of the offer shall apply, the applicable license shall be subject to the terms and conditions of this Agreement and the Village Media Company shall pay to PFHOF a License Fee (as defined below) for such license in accordance with this Agreement. If the Village Media Company does not exercise its right of first refusal, PFHOF shall have the right to grant a license with respect to such third party on the same terms originally provided to the Village Media Company. 2.8 PFHOF agrees that during the Term, except with respect to the categories identified on Exhibit A, it will not create new PFHOF Works without first granting the Village Media Company a right of first offer to create such PFHOF Work, subject to any Rights Restrictions. If PFHOF desires to create new PFHOF Works, it shall present a proposed business plan in writing to the Village Media Company. The Village Media Company will have fourteen (14) days to review such business plan and elect to proceed under the business plan. If the Village Media Company elects proceed under the business plan, then creation of such PFHOF Work shall be subject to the terms and conditions of this Agreement and the Village Media Company shall pay to PFHOF a License Fee in accordance with this Agreement for the license to create the PFHOF Work. If the Village Media Company does not make such an election, then PFHOF shall have the right to create such PFHOF Work itself. 2.9 PFHOF agrees that during the Term, except with respect to the categories identified on Exhibit A, if PFHOF desires to either exploit itself or license a third party to exploit an existing PFHOF Work, it shall first give the Village Media Company a right of first offer to exclusively license such PFHOF Work, subject to any Rights Restrictions. In such a case, PFHOF shall promptly notify the Village Media Company and provide the Village Media Company with any bona fide third party offer to license such PFHOF Work that PFHOF is willing to accept, including any specific terms and proposed business plan relating to such offer. The Parties shall then negotiate in good faith an agreement to exclusively license the particular PFHOF Work. If the Parties reach an agreement within thirty (30) days, then the applicable license shall be subject to the terms and conditions of this Agreement and the Village Media Company shall pay to PFHOF a License Fee for such license in accordance with this Agreement. If the Parties cannot reach an agreement within thirty (30) days, then PFHOF shall have the right to exploit or license the PFHOF Work itself.
5
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
2.10 PFHOF represents and warrants to the Village Media Company that it is the exclusive owner of the PFHOF Works or has the right to grant the licenses and other rights granted to the Village Media Company hereunder, including the right to use the PFHOF Works as permitted herein and that, subject to any Rights Restriction in effect on the Effective Date, PFHOF has secured any necessary releases for any rights of publicity or privacy and can license such rights to the Village Media Company hereunder. 2.11 PFHOF agrees to indemnify, defend, and hold harmless the Village Media Company, its Affiliates, and their respective employees, officers, directors, agents, representatives, and successors and assigns from and against any and all claims, demands, liabilities, losses, suits, damages, costs (including, without limitation, costs of investigation), and expenses, including reasonable attorneys' fees, arising out of or relating to (a) the Village Media Company's authorized use of the PFHOF Works, as permitted by, and in accordance with, the terms of this Agreement, (b) any breach by PFHOF of any warranty, representation, obligation, or agreement made under this Agreement, or (c) PFHOF's use of the HOFV Works in breach of this Agreement, or any claim of infringement of any intellectual property right arising out of the misuse or misappropriation of the HOFV Works by PFHOF. 2.12 The Village Media Company represents and warrants to PFHOF that it is (a) a limited liability company organized and in good standing under the laws of the State of Delaware and (b) a wholly-owned subsidiary of HOFV. 2.13 The Village Media Company agrees to indemnify, defend, and hold harmless PFHOF, its Affiliates, and their respective employees, officers, directors, agents, representatives, and successors and assigns from and against any and all claims, demands, liabilities, losses, suits, damages, costs (including, without limitation, costs of investigation), and expenses, including reasonable attorneys' fees, arising out of or related to (a) the Village Media Company's use of the PFHOF Works in breach of this Agreement, or any claim of infringement of any intellectual property right arising out of the misuse or misappropriation of the PFHOF Works, (b) any breach by the Village Media Company (or its sublicensees, if applicable) of any warranty, representation, obligation, or agreement made under this Agreement, (c) the Exploitation of any of the rights granted pursuant to the terms of this Agreement by the Village Media Company, its Affiliates, licensees or sublicensees arising out of or relating to the Exploitation of any PFHOF Works or HOFV Works (unless such liability arises solely from use of the PFHOF Works by the Village Media Company in accordance with this Agreement), (d) PFHOF's authorized use of any HOFV Works as permitted by, and in accordance with, the terms of this Agreement, (e) any advertising, promotion or other similar materials that are inserted into any Exploitation of any PFHOF Work or any HOFV Work (but excluding advertising or promotional announcements supplied by or on behalf of PFHOF and excluding any claims arising solely from use of the PFHOF Works by the Village Media Company in accordance with this Agreement)) or (f) any failure of the Village Media Company to comply with applicable laws in connection with the rights and performance of its obligations under this Agreement.
6
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
2.14 Except for Section 3.5, nothing in this Agreement shall be construed as limiting in any way the Village Media Company's ability to seek and exploit separate rights from any third party. 3. OPERATION OF VILLAGE MEDIA COMPANY 3.1 The Chief Executive Officer of the Village Media Company (the "CEO") shall be the Manager of the Village Media Company. 3.2 The Executive Producer of the Village Media Company (the "EP") shall report to the CEO with input from the Chief Executive Officer of PFHOF. To the extent that the Village Media Company and PFHOF work collaboratively on media projects, the EP's services on such projects for the benefit of PFHOF shall be charged to PFHOF at cost without markup. Performance objectives for the EP shall be determined by the CEO with input from the Advisory Board. 3.3 In consultation with the CEO, the EP shall annually prepare a staffing plan for the Village Media Company's operations and present such plan to the Advisory Board for review. Staff employed by the Village Media Company may be used for projects solely for the benefit of PFHOF or for projects that are collaboratively undertaken by both the Village Media Company and PFHOF. The Advisory Board shall be informed to the extent Village Media Company staff are employed on projects solely for the benefit of PFHOF or on projects that are collaboratively undertaken by both the Village Media Company and PFHOF. In addition, (a) PFHOF shall bear its proportionate share of the cost of such Village Media Company staff (at cost without markup) that work on such collaborative projects and, to the extent such staff work 100% on a PFHOF project, PFHOF shall bear all of the cost of such staff for such project (at cost without markup) and (b) the Village Media Company shall bear its proportionate share of the cost of PFHOF staff (at cost without markup) that work on such collaborative projects and, to the extent such staff work 100% on a Village Media Company project, the Village Media Company bear all of the cost of such staff for such project (at cost without markup). The EP shall ensure that, to the extent that PFHOF and the Village Media Company share staff, that such sharing will not impact the ability of PFHOF or the Village Media Company to meet their respective budget, creative goals, or sales/marketing goals for any year.
7
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
3.4 The Advisory Board shall meet regularly to facilitate the Village Media Company's consideration of media-related opportunities contemplated hereunder and to review proposed projects, budgets, schedules, and creative concepts under consideration by the Village Media Company. 3.5 All communication with the National Football League (the "NFL"), its 32 Member Clubs, NFL Legends and Gold Jackets shall be made exclusively and directly through PFHOF. For the avoidance of doubt, PFHOF has the exclusive and sole relationship with the NFL, its 32 Member Clubs, NFL Legends and Gold Jackets for any and all PFHOF and HOFV activities; provided, however, that any communication relating to any investment by the NFL in any Village Media Company project, may be made directly through the President of PFHOF or the Chief Executive Officer of HOFV; and, provided further, that the Village Media Company shall have the right to present opportunities related to any of the above for approval by PFHOF. 4. TERM AND TERMINATION 4.1 Unless otherwise terminated as provided herein, the term of this Agreement shall commence on the Effective Date and shall terminate on December 31, 2034 (such period, including as may be extended in accordance with the subsequent sentence, the "Term"). Thereafter, the agreement shall automatically renew for successive five (5)-year terms, unless either Party gives written notice to the other Party of intent not to renew at least six (6) months prior to the expiration of the then-current Term. If either party elects not to renew the Agreement and the other party wishes to continue the Agreement, the Parties shall attempt in good faith to negotiate an amendment to the Agreement to renew the Term on such terms as may be negotiated by the Parties. Such good faith negotiation shall continue until both Parties agree to cease negotiations or until expiration of the Term. 4.2 After good faith consultation with the Advisory Board, either Party shall have the right to terminate this Agreement at any time for an uncured material breach by the other Party, including the non-payment of the Annual Guarantee, license fees and staffing fees, provided that the non-breaching Party provides prior written notice to the breaching Party, specifying the alleged material breach, and further provided that the breaching Party shall have thirty (30) days after receipt of such notice to cure the material breach, to the reasonable satisfaction of the non-breaching Party; provided, further, that if such breach (other than a breach for non-payment) cannot be cured during such 30-day period, but the allegedly breaching Party has commenced and is continuing good faith efforts to cure such breach within such 30-day period, then the cure period shall be extended until the allegedly breaching Party has stopped making good faith efforts to cure such breach, such extension not to exceed ninety (90) days. 4.3 Either Party may terminate this Agreement immediately upon giving notice if the other Party ceases to conduct its operations in the normal course of business, including the inability to meet its obligations as they mature, or if any proceeding under the bankruptcy or insolvency laws is brought by or against the other Party, or a receiver or custodian is appointed or applied for by the other Party, or an assignment for the benefit of creditors or a transfer of all or substantially all of its property is made by the other Party.
8
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
4.4 In addition to and without limiting any other provision of this Agreement, if a Change of Control occurs at any time during the Term, PFHOF shall have the right to terminate this Agreement immediately upon giving notice of such termination to the Village Media Company. For purposes of this Section 4.4, a "Change of Control" shall mean any transaction or series of related transactions that results in (including by way of merger or consolidation), or that is in connection with, the Village Media Company no longer being controlled (as defined in Section 1.2) by or under common control (as defined in Section 1.2) with HOFV. 4.5 In addition to and without limiting any other provision of this Agreement, in the event the Village Media Company or HOFV fails to pay the Annual Guarantee to PFHOF in accordance with Section 5.1 and such failure is not cured within thirty (30) days of notice thereof by PFHOF, then the rights of first offer granted to HOFV in Section 3.1 of the First Amended and Restated License Agreement, dated as of September 16, 2019 between PFHOF and HOFV (the "License Agreement") shall automatically and immediately terminate, regardless of whether PFHOF elects not to terminate this Agreement in accordance Section 4.2. 4.6 Notwithstanding anything to the contrary in this Agreement, this Agreement shall automatically and immediately terminate, without any further action or notice to any Party, upon termination of the License Agreement. 4.7 Upon the expiration or termination of this Agreement as provided in this Section 4, the rights and obligations of the Parties under this Agreement shall be terminated, except as provided herein. 5. FEES 5.1 Subject to Section 2.6, the Village Media Company shall, or shall cause HOFV to, pay to PFHOF a minimum guarantee of one million two hundred and fifty thousand dollars ($1,250,000) (the "Annual Guarantee") each year during the Term; provided that the Parties acknowledge and agree that after the first five (5) years of the Term, the Annual Guarantee shall increase by three percent (3%) on a year-over-year basis (e.g., the Annual Guarantee shall increase to $1,287,500 for year six (6) and to $1,326,125 for year seven (7)). The first Annual Guarantee payment shall be due and payable on the Effective Date and thereafter shall be payable to PFHOF on each twelve (12) month anniversary of the Closing Date during the Term.
9
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
5.2 In consideration of any license granted to the Village Media Company hereunder, the Village Media Company shall, or shall cause HOFV to, pay to PFHOF a license fee specific to the PFHOF Work(s) licensed by PFHOF hereunder ("License Fee") pursuant to the rate for the applicable project or opportunity as will be mutually agreed between the Parties for each opportunity; provided that License Fees shall be debited first from the Annual Guarantee, which shall satisfy such License Fees due and payable hereunder until the aggregate amount of the License Fees due and payable during such calendar year exceeds the Annual Guarantee for such calendar year. For clarity, if for any calendar year during the Term, the amount of License Fees for such calendar is (x) less than the amount of the Annual Guarantee, the Village Media Company shall still be required to pay the Annual Guarantee for such calendar year or (y) more than the Annual Guarantee, the Village Media Company shall be required to pay all License Fees in excess of the Annual Guarantee for such calendar year. The Parties acknowledge and agree that two hundred twenty five thousand dollars ($225,000) (the "Youth Sports License Fee") shall be credited against the Annual Guarantee on the Closing Date and each anniversary of the Closing Date during the Term for the license granted by PFHOF to Youth Sports Management, LLC ("Youth Sports") pursuant to that certain branding license agreement to be entered into on the Effective Date between PFHOF and Youth Sports for so long as such agreement remains in effect; provided that after the first five (5) years of the Term, the Youth Sports License Fee shall increase by three percent (3%) on a year-over year basis and thereafter, the aggregate amount of the Youth Sports License Fee, after giving effect to such increase each year, shall be the amount credited against the Annual Guarantee. 6. FORCE MAJEURE In the event either Party is unable to comply fully with its obligations (other than payment obligations) under this Agreement due to an event beyond the control of the Party whose performance is affected, including any legal prohibition, court order, degree, regulation or requirement of any governmental entity having jurisdiction, strikes, catastrophe, drought, shortage of water or other action of the elements, temporary or permanent shutdown due to regulatory or other governmental actions, or Acts of God or any other matters beyond its control, such Party shall while so affected be relieved to the extent thus prevented from performing its obligations hereunder and such non-performance shall not, in and of itself, be deemed to be a breach of this Agreement; provided that, in such event, the non-performing Party takes all commercially reasonable measures to remove the disability and resume full performance hereunder at the earliest possible date. 7. GENERAL PROVISIONS 7.1 Confidentiality (a) "Confidential Information" means all forms of confidential information, including technical information and business information, disclosed by one Party or its Affiliates (the "Disclosing Party") to the other Party or its Affiliates (the "Receiving Party") during the Term in connection with this Agreement, that is identified as confidential or is information that is of a nature that is customarily regarded as confidential, whether disclosed in electronic, tangible, oral or visual form; provided that oral or visual disclosures shall be deemed confidential only if they are confirmed as confidential in writing by the Disclosing Party prior to or at the time of disclosure or within thirty (30) days thereafter, or if the Receiving Party should reasonably know that such visual or oral disclosures are intended to be confidential. Confidential Information shall not include such information that: (i) as of the date of disclosure is known to the Receiving Party or its Affiliates, as shown by written documentation; (ii) was independently developed by the Receiving Party or its Affiliates without access to the Disclosing Party's Confidential Information; (iii) as of the date of disclosure is in, or subsequently enters, the public domain, through no fault of the Receiving Party; or (iv) as of the date of disclosure or thereafter is obtained from a third party free from any obligation of confidentiality to the Disclosing Party.
10
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
(b) Each Receiving Party agrees: (i) not to disclose, make public, or authorize any disclosure or publication of such Confidential Information of the Disclosing Party except as expressly permitted herein; (ii) to take reasonable measures to protect the confidentiality of the Disclosing Party's Confidential Information exercising the same degree of care to preserve and safeguard the Disclosing Party's Confidential Information as it uses to preserve and safeguard its own Confidential Information, but in no event less than a reasonable degree of care; (iii) to restrict access to such Confidential Information to only those officers, directors, or employees of the Receiving Party or its Affiliates or representatives who have a need to know such Confidential Information and who are bound by confidentiality obligations at least as restrictive as those contained in this Agreement; and (iv) not to remove any confidential or proprietary markings or designations placed by the Disclosing Party on such Confidential Information. The Receiving Party and its Affiliates shall not use the Disclosing Party's Confidential Information for any purpose except as permitted by this Agreement. (c) The confidentiality obligations contained herein shall not apply to the extent that the Receiving Party is required to disclose the information by law, order, or regulation of a governmental agency or a court of competent jurisdiction; provided that, in each such case, the Receiving Party shall give written notice thereof to the Disclosing Party and sufficient opportunity to prevent or limit any such disclosure or to request confidential treatment thereof; and provided further, that the Receiving Party shall give reasonable assistance to the Disclosing Party to preserve the information as confidential. (d) Upon termination of this Agreement, each Receiving Party shall return to the Disclosing Party (or at the Disclosing Party's direction, destroy) all Confidential Information of the Disclosing Party that is in the possession, custody, or control of the Receiving Party. The Village Media Company shall be permitted to retain copies of PFHOF's Confidential Information as necessary to allow the Village Media Company to exercise its post-termination rights with respect to such information.
11
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
(e) Each Party acknowledges that a breach or threatened breach of this Section 7.1 on its part shall result in irreparable and incalculable damages to the other Party. Therefore, in addition to any action by either Party for collection of damages resulting from the breach of this Agreement, such Party shall also be entitled to immediate injunctive relief, restraining the other Party from continued or threatened breach of this Agreement. Each Party further agrees that, upon a finding of a breach of the terms of this Agreement on its part, such Party shall pay to the other Party the costs and expenses, including attorneys' fees, which the other Party incurs in enforcing the terms of this Agreement. 7.2 Notices. Any notice required or permitted by this Agreement will be in writing and delivered as follows with notice deemed given as indicated: (i) by personal delivery when delivered personally; (ii) by overnight courier upon written verification of receipt; (iii) by telecopy or facsimile transmission upon acknowledgement of receipt of electronic transmission; or (iv) by certified or registered mail, return receipt requested, upon verification of receipt. Notice will be sent to the appropriate address set forth below or such other address as to which the Parties have been notified hereunder. 7.3 Compliance with Laws and Regulations. Each of the Village Media Company and PFHOF, as applicable, agrees to be in material compliance with all federal, state, and local laws, ordinances, and regulations applicable to its respective operations and to obtain and maintain all licenses and permits required by law necessary for each of their respective operations. 7.4 Governing Law and Arbitration. (a) This Agreement will be governed in all respects by the laws of the State of Ohio (without regard to conflicts of law provisions), as such laws are applied to agreements entered into and to be performed entirely within the State of Ohio between Ohio residents. (b) Any dispute between the Parties concerning the scope or interpretation of this Agreement shall be submitted to binding arbitration in accordance with the Rules of Commercial Arbitration of the American Arbitration Association in effect on the date that a dispute is submitted to arbitration (the "Rules"). The arbitration shall be held in Canton, Ohio, and shall be before a panel of three arbitrators, one chosen by each of the Parties and a third chosen by the two arbitrators so chosen by the Parties. Not less than fifteen (15) days prior to the arbitration, each Party shall submit to the other the documents and a list of witnesses it intends to interview or call in the arbitration. The arbitrators shall apply the substantive law of the State of Ohio with regard to any dispute that becomes the subject of arbitration, and the arbitrators will be so instructed. The arbitrators shall issue a written opinion stating the findings of fact and the conclusions of law upon which the decision is based. The decision of the arbitrators shall be final and binding.
12
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
(c) In any action, suit, proceeding, claim, or counterclaim brought to enforce this Agreement or any of its provisions, the Party that prevails in any such action, suit, proceeding, claim, or counterclaim (the "Prevailing Party") shall recover its costs, fees, and expenses, including, but not limited to, the reasonable costs, fees, and expenses of attorneys and outside experts (collectively, "Expenses"), from the other Party (the "Non-Prevailing Party"), and the court or arbitration panel shall be so instructed to determine which Party is the Prevailing Party, to grant the recovery of the Expenses incurred by the Prevailing Party, and to order the Non-Prevailing Party to pay the Expenses of the Prevailing Party. 7.5 Assignment. The Village Media Company shall not, directly or indirectly, assign, sublicense or otherwise transfer any of its rights or obligations hereunder without the prior written consent of PFHOF. The transfer of ownership of the Village Media Company pursuant to the Merger Agreement shall not require the consent of PFHOF. 7.6 Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be illegal, invalid, or unenforceable, the legality, validity, and enforceability of the remaining provisions of this Agreement will not be affected or impaired thereby. 7.7 Waiver. The waiver by either Party of a breach of any provision of this Agreement by the other Party will not operate or be construed as a waiver of any other or subsequent breach by such other Party. 7.8 Authority. Each Party warrants and represents that such Party's execution and delivery of this Agreement has been duly authorized by proper corporate or limited liability company action and that this Agreement is a binding obligation of such Party enforceable in accordance with its terms. 7.9 Independent Contracting Parties. The Parties are independent contracting parties and nothing in this Agreement shall make either Party the agent or legal representative of the other for any purpose whatsoever, nor does it grant either Party the authority to assume or create any obligation on behalf of or in the name of the other. Furthermore, the Parties shall remain separate and independent contracting parties and nothing in this Agreement shall make either Party subject to a joint venture agreement or other mutual arrangement between the Parties. 7.10 Entire Agreement. This Agreement constitutes the entire agreement between the Parties relating to this subject matter and supersedes all prior or contemporaneous oral or written agreements concerning such subject matter, including the Original License Agreement. This Agreement may be changed only by mutual agreement of the Parties in writing. 7.11 Merger Agreement. Notwithstanding anything to the contrary in this Agreement, in the event that the Closing (as such term is defined in the Merger Agreement) does not occur, this Agreement shall be terminated and the provisions herein shall have no force or effect. [signature page follows]
13
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
IN WITNESS WHEREOF, PFHOF, HOFV (solely for purposes of Section 4.5) and the Village Media Company have caused this Agreement to be executed by their respective, duly authorized representatives, effective as of the Effective Date. NATIONAL FOOTBALL MUSEUM, INC. By: C. David Baker President Date: Address: 2121 George Halas Drive NW Canton, Ohio 44708 HOF VILLAGE MEDIA GROUP, LLC By: Name: Title: Date: Address: 1826 Clearview Avenue NW Canton, Ohio 44708 [Media License Agreement]
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
For the purpose of acknowledging and agreeing to the terms set forth in Section 4.5: HOF VILLAGE, LLC By: Name: Title: Date: Address: 1826 Clearview Avenue NW Canton, Ohio 44708 [Media License Agreement]
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
Exhibit A Excluded Categories and Properties 1. Any PFHOF Works in, or Exploited in connection with, the following Categories: · Health Care · Museums · Education · Sports Betting 2. Any programming or content created or Exploited in support and furtherance of the PFHOF's mission. 3. The following television properties that are subject to perpetual rights and existing and future media deals (including any extensions, renewals or similar agreement in connection any existing agreement): Properties and rights subject to agreements with NFL Enterprises LLC ("NFLN") and ESPN, Inc. ("ESPN") through September 1st 2021 (and any extension, renewal or similar agreement relating thereto). · Enshrinement Ceremonies · Other Enshrinement Events reserved for NFLN o Gold Jacket Show one hour (2019 - 2 hours co-copyright NFLN PFHOF) o Five One Hour Gold Jacket Contender Shows from September to February around the Enshrinement Selection Process For the avoidance of doubt, nothing in this Agreement shall grant Village Media Company or its Affiliates the right or license to (i) any live (or near live) rights to Exploit any events or other content owned or controlled by PFHOF (e.g., Enshrinement Ceremonies), or (ii) any programming or content in connection with or related to any Enshrinement Ceremony or the Enshrinement selection process (e.g., selection meetings, voting, debates or discussions prior to or during any selection meeting, presenter speeches, discussions or events immediately after Enshrinement Ceremonies, etc.). 4. Any content or properties utilizing the following trademarks: · Knock on the Door (Trademarked sold to social media company) · Hometown Hall of Famer (Trademarked sold to sponsors)
Exhibit A-1
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020
5. The following movies: · Jim and Jill Kelly Movie 6. The autobiographical or biographical works related to the following players with video rights: · Michael Strahan · John Madden · Troy Aikman 7. The following television show concepts: · Hall of Fame City · Documentary One Years One Hundred Yards of Character · Strong Youth Strong Communities · Centennial Spectacular · Centennial Gala 8. Any digital live streaming rights, including without limitation, of the following properties: · State of the Hall · Super Bowl Luncheon · Salute to Greatness · Inspiration Project · The Mission · Heart of the Hall of Famer 9. Any licenses or sponsorships of video games granted to EA Sports (or its successor) with respect to Madden NFL or any other EA Sports football game. Exhibit A-2
Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 | Highlight the parts (if any) of this contract related to "Rofr/Rofo/Rofn" that should be reviewed by a lawyer. Details: Is there a clause granting one party a right of first refusal, right of first offer or right of first negotiation to purchase, license, market, or distribute equity interest, technology, assets, products or services? | {
"answer_start": [
16284
],
"text": [
"The Parties shall then negotiate in good faith an agreement to exclusively license the particular PFHOF Work. If the Parties reach an agreement within thirty (30) days, then the applicable license shall be subject to the terms and conditions of this Agreement and the Village Media Company shall pay to PFHOF a License Fee for such license in accordance with this Agreement. If the Parties cannot reach an agreement within thirty (30) days, then PFHOF shall have the right to exploit or license the PFHOF Work itself."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Affiliate License-Licensor" that should be reviewed by a lawyer. Details: Does the contract contain a license grant by affiliates of the licensor or that includes intellectual property of affiliates of the licensor?
Context: Exhibit 10.9
SUPPLY AGREEMENT
between
CREMER OLEO GmbH & Co KG, Glockengiesserwall 3, 20095 Hamburg,
Germany
— hereinafter referred to as Cremer —
and
Ultragenyx Pharmaceutical Inc, 60 Leveroni Court, Suite 200, Novato, California 94949, United States of America
— hereinafter referred to as Ultragenyx —
each party also referred to as a "Party" and jointly as the "Parties" -
Preamble
Whereas, Cremer is a producer of oleo chemical products;
Whereas, Ultragenyx is a biotechnology company committed to bringing life-enhancing therapeutics for patients with rare and ultra-rare genetic diseases, also known as orphan diseases, to market;
Whereas, the Parties desire that Cremer supplies to Ultragenyx the product Triheptanoin (hereinafter also referred to as the "Product") in bulk form pursuant to the terms and conditions of this Agreement;
Whereas, Ultragenyx intends to process the Product into a pharmaceutical product in the meaning of Sec. 2 German Pharmaceuticals Act (Arzneimittelgesetz—AMG) and to market the processed Product in the Field (as defined below) (hereinafter referred to as the "Purpose"); and
Whereas, Ultragenyx intends to obtain regulatory approval for the processed Product as a pharmaceutical product in the meaning of Sec. 2 AMG.
Now therefore, the Parties hereto agree as follows:
Article 1 Supply of Product
1) Subject to the terms and conditions set forth in this Agreement Cremer shall supply Ultragenyx with the Product free from defect and meeting the product specification attached to this Agreement as Annex A (the "Product Specifications").
2) Cremer shall supply Ultragenyx exclusively with the Product worldwide. The aforesaid exclusivity is limited to [***] (collectively, the "Field"). Cremer may supply the Product to other customers outside of the Field.
3) Ultragenyx shall purchase the Product exclusively from Cremer.
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
1
Article 2 Orders and Delivery
1) The Product will be ordered by Ultragenyx through purchase orders. Purchase orders shall be submitted in any written or electronic form or by facsimile, setting out the quantity of Product required and the date for delivery. Cremer shall give its order confirmation in writing stating the quantity and Price (as defined below). Cremer shall not be obliged to deliver the Product in the absence of a written order confirmation given to Ultragenyx.
2) Delivery of the Product in bulk form by Cremer shall be EXW (Incoterms 2010), unless otherwise agreed in writing by the Parties.
3) Within [***] days of execution of this Agreement, Cremer shall deliver to Ultragenyx the Master Batch Record for the Product for Ultragenyx to review.
4) All Product shall be delivered with the applicable certificate of analysis and batch records for the Product delivered and an invoice for the quantity of Product delivered.
5) If Ultragenyx obtains regulatory approval for the processed Product, the Parties shall enter into a separate commercial supply agreement for the Product that sets forth the forecasting and ordering mechanism for commercial supply of the Product, enablement of the manufacturing process in the event of a failure to supply, the term of such commercial supply agreement and other customary terms and conditions.
Article 3 Prices and payment
1) The prices payable by Ultragenyx to Cremer for the Product (the "Price") shall be agreed [***] every contract year; provided, that the Price may not increase more than the [***] for such period or [***]%, whichever is higher. At the date of signing the Parties agree on a Price of €[***] per kilogram for the Product.
2) If the parties cannot agree on a price for the Product by the beginning of a following contract year, Cremer may refuse to deliver the Product to Ultragenyx until the Parties agreed on a respective price.
3) Payments shall be made by Ultragenyx in Euro and within [***] days after receipt of a proper invoice.
4) Transfer of title with respect to any Product shall be subject to full payment and settlement of all claims Cremer may have against Ultragenyx in connection with the execution of this Agreement.
Article 4 Specification; Warranties; Cremer's Liability; Indemnification
1) The Parties assume that the Product constitutes an active pharmaceutical ingredient in the meaning of Sec. 4 para. 19 AMG. Ultragenyx shall process the Product into a pharmaceutical product in the meaning of Sec. 2 AMG and market the processed Product as a pharmaceutical product in the meaning of Sec 2 AMG and to perform clinical trials. Cremer does not participate in the processing, manufacturing and marketing of the respective pharmaceutical product or in the clinical trials.
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
2
2) Upon execution of this Agreement and any purchase order, Cremer shall provide Ultragenyx with following documentation regarding the Product: Certificate of Analysis and the applicants' part of the Drug Master File once compiled.
3) Cremer represents and warrants that all quantities of Product delivered under the Agreement were manufactured in accordance with GMP. The Product shall be free from defects if it is within the specifications according to Annex A.
4) Cremer represents and warrants that it has not received any written notice from a third party alleging that the manufacture, use or sale of the Product infringes intellectual property rights of a third party.
5) Ultragenyx will perform final release of the Product. Ultragenyx may rely on the documentation provided by Cremer and Ultragenyx will not need to independently test the Product unless Ultragenyx determines such independent testing is necessary. In the event that the Product fails to conform to the Product Specifications, and/or GMP, Ultragenyx may reject the Product by giving written notice to Cremer within [***] days after receipt of the Product and all documentation (except such [***] day period will not apply for any latent defect). Within [***] days following receipt of the rejected and returned Product from Ultragenyx, Cremer will, at Ultragenyx's choice, replace such quantity of Product with Product conforming to the Product Specifications, and GMP or refund Ultragenyx the Price paid for such Product.
6) Cremer does not warrant or represent that the Product is effective in a pharmaceutical way within the meaning of Sec. 4 para. 19 AMG. Cremer does not warrant or represent that the Product is safe in a pharmaceutical and pharmacological way. Cremer does not warrant or represent that the Product is suitable for the intended Purpose by Ultragenyx. Cremer is not a pharmaceutical manufacturer within the meaning of Sec. 4 para. 18 AMG. Cremer's liability in connection with the Purpose and the processing and marketing of a pharmaceutical product is excluded. No. 9 below applies.
7) Except for a claim arising out of Cremer's intentional misconduct or gross negligence under this Agreement, in the event of legal proceedings being instituted against Cremer by a third party arising out of Ultragenyx's development, processing and commercialization of the Product, Ultragenyx shall indemnify and keep indemnified Cremer in full against all damages, losses, injuries, costs and expenses in connection with such legal proceedings. Cremer will inform Ultragenyx about any legal proceedings being instituted against Cremer without delay. Ultragenyx shall control the respective legal proceedings but shall not settle any claim that admits fault on behalf of Cremer without Cremer's consent (not be unreasonably withheld).
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
3
8) In the event of legal proceedings being instituted against Ultragenyx by a third party arising out of Cremer's intentional misconduct or gross negligence under this Agreement, Cremer shall indemnify and keep indemnified Ultragenyx in full against all damages, losses, injuries, costs and expenses in connection with such legal proceedings. Ultragenyx will inform Cremer about any legal proceedings being instituted against Ultragenyx without delay. Cremer shall control the respective legal proceedings but shall not settle any claim without Ultragenyx's consent (not be unreasonably withheld).
9) Cremer's liability arising from this Agreement is limited to intentional misconduct or gross negligence. This limitation of liability does not apply to the injury of the life, body or health of a person, to claims according to the Product Liability Act (Produkthaftungsgesetz) or any other coercive legal liability claims.
10) NEITHER PARTY MAY CLAIM AND NEITHER PARTY IS LIABLE FOR CLAIMS FOR INDIRECT DAMAGES AND LOSSES, SUCH AS SPECIAL OR CONSEQUENTIAL LOSS OR DAMAGE, ANY LOSS OF ACTUAL OR ANTICIPATED PROFIT, OR REVENUE, ANTICIPATED SAVINGS OR BUSINESS OR DAMAGE TO GOODWILL OR BRAND EQUITY, ARE EXCLUDED.
Article 5 Term and Termination
1) This Agreement shall become effective on the date of its execution and shall remain in force for three years (the "Initial Term"). Thereafter, the Agreement shall be automatically renewed for additional two year periods (each a "Renewal Term", the Initial Term and all Renewal Terms, the "Term") unless either Party notifies the other Party of its intention not to renew in writing at least three calendar months before the expiration of the then current Term.
2) If a Party materially breaches an obligation under this Agreement and does not cure such breach within sixty (60) days of receiving notice of such breach from the non-breaching Party, the non-breaching Party may terminate this Agreement immediately upon written notice to the breaching Party.
3) Every termination has to be in writing.
Article 6 General Terms and Conditions
The application of General Terms and Conditions of any Party is excluded.
Article 7 Product Development
At the request and expense of Ultragenyx, Cremer shall perform development work for Ultragenyx to develop new formulations of the Product. All such work shall be performed pursuant to a statement of work (including a budget) to be agreed upon by the Parties and attached as an annex to this Agreement (each, a "Statement of Work"). In the event that in the course of performing a Statement of Work new Product knowhow and intellectual property rights may result, can be created or have been created the Parties will enter into a separate Agreement in order to define the rights and duties regarding the aforesaid know how and intellectual property rights.
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
4
Article 8 Invalidity
In the event that any individual clauses of these terms and conditions are, or shall become, invalid, this shall not affect the validity of the remaining clauses. An invalid condition shall be deemed to have been replaced by such provision which is legally valid and corresponds nearest to the economic purpose of the clause originally deemed invalid.
Article 9 Applicable Law; Modifications; Annexes; Miscellaneous
1) The laws of the Federal Republic of Germany shall apply to the Agreement and any legal relations thereof, especially any purchase order, between Cremer and Ultragenyx shall be governed by that law. The law of the United Nations Conventions of the formation of Agreements for the international sale of goods (CISG) is excluded. Exclusive place of Jurisdiction is Hamburg, Germany.
2) No addition or modification to this Agreement shall be valid unless made in writing and signed by the Parties.
3) The Annex attached to this Agreement form an integral part of the Agreement.
4) This Agreement, including the Annexes and any Statement of Work, constitutes the entire agreement between the Parties concerning the subject matter hereof and supersedes all written or oral prior agreements or understandings with respect thereto except the Confidentiality Agreement between the parties dated September 26t h, 2012. This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto, their successors and assigns.
5) All waivers must be in writing and signed by the Party to be charged. Any waiver or failure to enforce any provision of this Agreement on one occasion will not be deemed a waiver of any other provision or of such provision on any other occasion.
6) Each Party must deliver all notices, consents, and approvals required or permitted under this Agreement in writing to the other Party at the address specified above, by personal delivery, by certified or registered mail (postage prepaid and return receipt requested), by a nationally- recognized overnight carrier, or by facsimile transmission with electronic confirmation of transmission. Notice will be effective upon receipt or refusal of delivery. Each Party may change its address for receipt of notice by giving notice of such change to the other Party.
7) This Agreement may be executed in counterparts by original signature, facsimile or PDF files, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
5
Hamburg, November 19t h, 2012
/s/ Thomas Kassberg /s/ Dr. R. Stephan Ultragenyx Pharmaceutical Inc
CREMER OLEO GmbH & Co KG
CREMER OLEO GmbH & Co. KG Postfach 10 11 20, D-20007 Hamburg Tel: 040/320 11-0, Telefax 320 11-400
6
Annex A — Specification of the Product Trihepatanoin (Heptansäuretriglycerid)
No Test EP method Limits
1 [***] [***], [***] 2 [***] [***] [***] 3 [***] [***] [***] 4 [***] [***] [***] 5 [***] [***] [***] 6 [***] [***] [***] 7 [***] [***] [***] 8 [***] [***] [***] 9 [***] [***] [***] 10 [***] [***] [***] 11 [***] [***] [***] 12 [***] [***] 13 [***] [***] [***] 18 [***] [***] [***]
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
7 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 10.9
SUPPLY AGREEMENT
between
CREMER OLEO GmbH & Co KG, Glockengiesserwall 3, 20095 Hamburg,
Germany
— hereinafter referred to as Cremer —
and
Ultragenyx Pharmaceutical Inc, 60 Leveroni Court, Suite 200, Novato, California 94949, United States of America
— hereinafter referred to as Ultragenyx —
each party also referred to as a "Party" and jointly as the "Parties" -
Preamble
Whereas, Cremer is a producer of oleo chemical products;
Whereas, Ultragenyx is a biotechnology company committed to bringing life-enhancing therapeutics for patients with rare and ultra-rare genetic diseases, also known as orphan diseases, to market;
Whereas, the Parties desire that Cremer supplies to Ultragenyx the product Triheptanoin (hereinafter also referred to as the "Product") in bulk form pursuant to the terms and conditions of this Agreement;
Whereas, Ultragenyx intends to process the Product into a pharmaceutical product in the meaning of Sec. 2 German Pharmaceuticals Act (Arzneimittelgesetz—AMG) and to market the processed Product in the Field (as defined below) (hereinafter referred to as the "Purpose"); and
Whereas, Ultragenyx intends to obtain regulatory approval for the processed Product as a pharmaceutical product in the meaning of Sec. 2 AMG.
Now therefore, the Parties hereto agree as follows:
Article 1 Supply of Product
1) Subject to the terms and conditions set forth in this Agreement Cremer shall supply Ultragenyx with the Product free from defect and meeting the product specification attached to this Agreement as Annex A (the "Product Specifications").
2) Cremer shall supply Ultragenyx exclusively with the Product worldwide. The aforesaid exclusivity is limited to [***] (collectively, the "Field"). Cremer may supply the Product to other customers outside of the Field.
3) Ultragenyx shall purchase the Product exclusively from Cremer.
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
1
Article 2 Orders and Delivery
1) The Product will be ordered by Ultragenyx through purchase orders. Purchase orders shall be submitted in any written or electronic form or by facsimile, setting out the quantity of Product required and the date for delivery. Cremer shall give its order confirmation in writing stating the quantity and Price (as defined below). Cremer shall not be obliged to deliver the Product in the absence of a written order confirmation given to Ultragenyx.
2) Delivery of the Product in bulk form by Cremer shall be EXW (Incoterms 2010), unless otherwise agreed in writing by the Parties.
3) Within [***] days of execution of this Agreement, Cremer shall deliver to Ultragenyx the Master Batch Record for the Product for Ultragenyx to review.
4) All Product shall be delivered with the applicable certificate of analysis and batch records for the Product delivered and an invoice for the quantity of Product delivered.
5) If Ultragenyx obtains regulatory approval for the processed Product, the Parties shall enter into a separate commercial supply agreement for the Product that sets forth the forecasting and ordering mechanism for commercial supply of the Product, enablement of the manufacturing process in the event of a failure to supply, the term of such commercial supply agreement and other customary terms and conditions.
Article 3 Prices and payment
1) The prices payable by Ultragenyx to Cremer for the Product (the "Price") shall be agreed [***] every contract year; provided, that the Price may not increase more than the [***] for such period or [***]%, whichever is higher. At the date of signing the Parties agree on a Price of €[***] per kilogram for the Product.
2) If the parties cannot agree on a price for the Product by the beginning of a following contract year, Cremer may refuse to deliver the Product to Ultragenyx until the Parties agreed on a respective price.
3) Payments shall be made by Ultragenyx in Euro and within [***] days after receipt of a proper invoice.
4) Transfer of title with respect to any Product shall be subject to full payment and settlement of all claims Cremer may have against Ultragenyx in connection with the execution of this Agreement.
Article 4 Specification; Warranties; Cremer's Liability; Indemnification
1) The Parties assume that the Product constitutes an active pharmaceutical ingredient in the meaning of Sec. 4 para. 19 AMG. Ultragenyx shall process the Product into a pharmaceutical product in the meaning of Sec. 2 AMG and market the processed Product as a pharmaceutical product in the meaning of Sec 2 AMG and to perform clinical trials. Cremer does not participate in the processing, manufacturing and marketing of the respective pharmaceutical product or in the clinical trials.
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
2
2) Upon execution of this Agreement and any purchase order, Cremer shall provide Ultragenyx with following documentation regarding the Product: Certificate of Analysis and the applicants' part of the Drug Master File once compiled.
3) Cremer represents and warrants that all quantities of Product delivered under the Agreement were manufactured in accordance with GMP. The Product shall be free from defects if it is within the specifications according to Annex A.
4) Cremer represents and warrants that it has not received any written notice from a third party alleging that the manufacture, use or sale of the Product infringes intellectual property rights of a third party.
5) Ultragenyx will perform final release of the Product. Ultragenyx may rely on the documentation provided by Cremer and Ultragenyx will not need to independently test the Product unless Ultragenyx determines such independent testing is necessary. In the event that the Product fails to conform to the Product Specifications, and/or GMP, Ultragenyx may reject the Product by giving written notice to Cremer within [***] days after receipt of the Product and all documentation (except such [***] day period will not apply for any latent defect). Within [***] days following receipt of the rejected and returned Product from Ultragenyx, Cremer will, at Ultragenyx's choice, replace such quantity of Product with Product conforming to the Product Specifications, and GMP or refund Ultragenyx the Price paid for such Product.
6) Cremer does not warrant or represent that the Product is effective in a pharmaceutical way within the meaning of Sec. 4 para. 19 AMG. Cremer does not warrant or represent that the Product is safe in a pharmaceutical and pharmacological way. Cremer does not warrant or represent that the Product is suitable for the intended Purpose by Ultragenyx. Cremer is not a pharmaceutical manufacturer within the meaning of Sec. 4 para. 18 AMG. Cremer's liability in connection with the Purpose and the processing and marketing of a pharmaceutical product is excluded. No. 9 below applies.
7) Except for a claim arising out of Cremer's intentional misconduct or gross negligence under this Agreement, in the event of legal proceedings being instituted against Cremer by a third party arising out of Ultragenyx's development, processing and commercialization of the Product, Ultragenyx shall indemnify and keep indemnified Cremer in full against all damages, losses, injuries, costs and expenses in connection with such legal proceedings. Cremer will inform Ultragenyx about any legal proceedings being instituted against Cremer without delay. Ultragenyx shall control the respective legal proceedings but shall not settle any claim that admits fault on behalf of Cremer without Cremer's consent (not be unreasonably withheld).
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
3
8) In the event of legal proceedings being instituted against Ultragenyx by a third party arising out of Cremer's intentional misconduct or gross negligence under this Agreement, Cremer shall indemnify and keep indemnified Ultragenyx in full against all damages, losses, injuries, costs and expenses in connection with such legal proceedings. Ultragenyx will inform Cremer about any legal proceedings being instituted against Ultragenyx without delay. Cremer shall control the respective legal proceedings but shall not settle any claim without Ultragenyx's consent (not be unreasonably withheld).
9) Cremer's liability arising from this Agreement is limited to intentional misconduct or gross negligence. This limitation of liability does not apply to the injury of the life, body or health of a person, to claims according to the Product Liability Act (Produkthaftungsgesetz) or any other coercive legal liability claims.
10) NEITHER PARTY MAY CLAIM AND NEITHER PARTY IS LIABLE FOR CLAIMS FOR INDIRECT DAMAGES AND LOSSES, SUCH AS SPECIAL OR CONSEQUENTIAL LOSS OR DAMAGE, ANY LOSS OF ACTUAL OR ANTICIPATED PROFIT, OR REVENUE, ANTICIPATED SAVINGS OR BUSINESS OR DAMAGE TO GOODWILL OR BRAND EQUITY, ARE EXCLUDED.
Article 5 Term and Termination
1) This Agreement shall become effective on the date of its execution and shall remain in force for three years (the "Initial Term"). Thereafter, the Agreement shall be automatically renewed for additional two year periods (each a "Renewal Term", the Initial Term and all Renewal Terms, the "Term") unless either Party notifies the other Party of its intention not to renew in writing at least three calendar months before the expiration of the then current Term.
2) If a Party materially breaches an obligation under this Agreement and does not cure such breach within sixty (60) days of receiving notice of such breach from the non-breaching Party, the non-breaching Party may terminate this Agreement immediately upon written notice to the breaching Party.
3) Every termination has to be in writing.
Article 6 General Terms and Conditions
The application of General Terms and Conditions of any Party is excluded.
Article 7 Product Development
At the request and expense of Ultragenyx, Cremer shall perform development work for Ultragenyx to develop new formulations of the Product. All such work shall be performed pursuant to a statement of work (including a budget) to be agreed upon by the Parties and attached as an annex to this Agreement (each, a "Statement of Work"). In the event that in the course of performing a Statement of Work new Product knowhow and intellectual property rights may result, can be created or have been created the Parties will enter into a separate Agreement in order to define the rights and duties regarding the aforesaid know how and intellectual property rights.
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
4
Article 8 Invalidity
In the event that any individual clauses of these terms and conditions are, or shall become, invalid, this shall not affect the validity of the remaining clauses. An invalid condition shall be deemed to have been replaced by such provision which is legally valid and corresponds nearest to the economic purpose of the clause originally deemed invalid.
Article 9 Applicable Law; Modifications; Annexes; Miscellaneous
1) The laws of the Federal Republic of Germany shall apply to the Agreement and any legal relations thereof, especially any purchase order, between Cremer and Ultragenyx shall be governed by that law. The law of the United Nations Conventions of the formation of Agreements for the international sale of goods (CISG) is excluded. Exclusive place of Jurisdiction is Hamburg, Germany.
2) No addition or modification to this Agreement shall be valid unless made in writing and signed by the Parties.
3) The Annex attached to this Agreement form an integral part of the Agreement.
4) This Agreement, including the Annexes and any Statement of Work, constitutes the entire agreement between the Parties concerning the subject matter hereof and supersedes all written or oral prior agreements or understandings with respect thereto except the Confidentiality Agreement between the parties dated September 26t h, 2012. This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto, their successors and assigns.
5) All waivers must be in writing and signed by the Party to be charged. Any waiver or failure to enforce any provision of this Agreement on one occasion will not be deemed a waiver of any other provision or of such provision on any other occasion.
6) Each Party must deliver all notices, consents, and approvals required or permitted under this Agreement in writing to the other Party at the address specified above, by personal delivery, by certified or registered mail (postage prepaid and return receipt requested), by a nationally- recognized overnight carrier, or by facsimile transmission with electronic confirmation of transmission. Notice will be effective upon receipt or refusal of delivery. Each Party may change its address for receipt of notice by giving notice of such change to the other Party.
7) This Agreement may be executed in counterparts by original signature, facsimile or PDF files, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
5
Hamburg, November 19t h, 2012
/s/ Thomas Kassberg /s/ Dr. R. Stephan Ultragenyx Pharmaceutical Inc
CREMER OLEO GmbH & Co KG
CREMER OLEO GmbH & Co. KG Postfach 10 11 20, D-20007 Hamburg Tel: 040/320 11-0, Telefax 320 11-400
6
Annex A — Specification of the Product Trihepatanoin (Heptansäuretriglycerid)
No Test EP method Limits
1 [***] [***], [***] 2 [***] [***] [***] 3 [***] [***] [***] 4 [***] [***] [***] 5 [***] [***] [***] 6 [***] [***] [***] 7 [***] [***] [***] 8 [***] [***] [***] 9 [***] [***] [***] 10 [***] [***] [***] 11 [***] [***] [***] 12 [***] [***] 13 [***] [***] [***] 18 [***] [***] [***]
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
7 | Highlight the parts (if any) of this contract related to "Affiliate License-Licensor" that should be reviewed by a lawyer. Details: Does the contract contain a license grant by affiliates of the licensor or that includes intellectual property of affiliates of the licensor? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Ip Ownership Assignment" that should be reviewed by a lawyer. Details: Does intellectual property created by one party become the property of the counterparty, either per the terms of the contract or upon the occurrence of certain events?
Context: CONFIDENTIAL PORTIONS OMITTED
EXHIBIT 10.16
[LOGO OF TEAM SABCO APPEARS HERE]
SPONSORSHIP AGREEMENT
THIS SPONSORSHIP AGREEMENT (hereinafter the "Agreement) is made and entered into this 19th day of December 1997, by and between SABCO RACING, INC., a North Carolina corporation with a place of business in Iredell County, North Carolina (hereinafter Sabco), and Prolong Super Lubricants, Anaheim, Calif. (Hereinafter to be referred to as "Prolong");
WITNESSETH:
WHEREAS, Sabco is engaged in the business of operating NASCAR Winston Cup Series race cars and wishes to provide advertising space and advertising, promotional and marketing assistance to Prolong; and
WHEREAS, Prolong desires to become a major associate sponsor of all three Sabco entries during the 1998, 1999 and year-2000 NASCAR Winston Cup Series racing seasons. These entries shall mean the Sabco No. 40, all NASCAR Winston Cup Series races during this three-year period; the Sabco No. 42, all NASCAR Winston Cup Series races during this three-year period; and Sabco No. 46, all NASCAR Winston Cup Series races during this three-year period. Prolong shall use its sponsorship of the Sabco entries for advertising, promoting and marketing itself. WHEREAS, the parties desire to set forth in this Agreement their respective rights and obligations;
NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein, and for other good and valuable consideration, the parties hereto agree as follows:
1. Term. The term of this Agreement shall commence with the first race ----- of the 1998 Winston Cup season and shall continue until the final race of the year-2000 Winston Cup season.
2. Services to be provided by Sabco. Sabco shall perform the following --------------------------------- services for Prolong during the term hereof:
A. Drivers. The drivers for the 33 Winston Cup events to be held -------- during the 1998 season in which Prolong is an associate sponsor shall be Sterling Marlin (40), Joe Nemechek (42) and Wally Dallenbach Jr. (46), unless due to injury or for some unforeseeable reason, either is unable to drive, in which event Sabco shall choose a substitute driver to drive their respective Sabco/Prolong-sponsored entry. For the duration of this agreement, Sabco reserves the right to substitute or replace any of the aforementioned drivers listed without prior notice to Prolong or prior approval from Prolong.
B. Decal location. Sabco will designate Prolong as an associate sponsor --------------- on its No. 40, No. 42 and No. 46 Winston Cup race cars in the aforementioned 33 events. Sabco shall cause each car to be painted with paint schemes approved by each's primary sponsor and shall cause to display Prolong associate sponsor decal signage upon the middle side panel (between car number and rear tire; both sides of car) with dimensions of approximately 6
inches high by 16 inches long. In addition, Sabco shall provide, subject to Prolong's approval, drive, pit crew, team uniforms, team pit equipment, team race car transporter, show car and show car transporter bearing prominent Prolong associate sponsor identification as well as team pit equipment with size and placement commensurate with level of sponsorship
3. Driver Appearances. Sabco shall provide unto Prolong five aggregate ------------------ driver appearances (2) two-hours each at no fee. Prolong shall be responsible for all first class travel expenses relating to each driver appearance, i.e. hotel, airfare, meals, etc. Additional appearances by Sabco drivers shall be at the discounted rate of [ * ] ($[ * ]) Dollars per day per driver, [ * ].
Sabco shall further provide the services of each driver for one free day for commercial use (up to six hours each) for still photo shoot, TV and radio/commercial production. Prolong shall be responsible for all first class travel expenses relating to each driver appearance, i.e. hotel, airfare, meals, etc.
All Sabco drivers, while under contract with Team SABCO, shall allow their likeness, voice, picture and signature to be used for commercial purposes endorsing Prolong at no additional costs during the term of this agreement.
4. Compensation. Prolong agrees to pay unto Sabco the sum [ * ] [ * ] ------------ Dollars ($[ * ]) for services to be provided by Sabco over this three year period of 1998, 1999 and year-2000. This sponsorship fee of $ [ * ] shall be
paid to Sabco in the following installments: Year One (1998): $ [ * ] (four equal installments of $ [ * ] to be paid on 3/15/98, 6/15/98, 8/15/98 and 10/15/98); Year Two (1999): $ [ * ] (four equal installments of $ [ * ] to be paid on 3/15/99, 6/15/99, 8/15/99 and 10/15/99); Year Three (year-2000): $ [ * ] (four equal installments of $ [ * ] to be paid on 3/15/2000, 6/15/2000,8/15/2000 and 10/15/2000).
5. Show Car. Sabco agrees to provide at no expense to Prolong for its use -------- in promoting its sponsorship, five (5) free show car appearance days whereas Prolong can deem which of the Sabco show cars to use. This shall mean that Prolong may schedule any combination of Sabco's three show cars (based on availability) not to exceed a total of five show days (travel days are considered a "show date"). Sabco will provide transportation of show car and will provide an attendant to stay with the car during its display period. For any show car appearance requested by Prolong over and above the five (5) free appearances, Sabco will make available unto Prolong a show car at a discounted rate of [ * ] Dollars ($ [ * ]) per day. All travel days to and from the site of a show car appearance, as well as the actual day upon which show car is on display will be charged as a "show date". It is further understood that the parties will agree in advance upon a schedule of places and events for the show car to be displayed at such times as will not interfere with Sabco's racing schedule.
6. Media, Public Relations and Sponsor Communications. Sabco will use its -------------------------------------------------- best efforts to obtain favorable exposure for Prolong and will be available to assist Prolong with public relations activities to a reasonable extent. This shall include making members of Sabco available for media interviews, press conferences or other public relations activity, as reasonably requested by Prolong, at or near race sites on dates Sabco is at race sites pursuant to their obligations hereunder. Sabco shall provide at its expense a staff member to handle race team's media and public relations needs and shall cause Prolong to receive prominent mention and display within press kits featuring the Sabco No. 40, 42 and 46 race cars. In each of the 1998, 1999 and year-2000 races in which Prolong is designated as an associate sponsor, Sabco shall fax to Prolong officers on the Monday following the race, race results and a summary of the prior weekend activities.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
7. Exclusivity. During the term of this Agreement, Sabco will not ----------- represent or accept as a primary, secondary, or associate sponsor any other company reasonably deemed to be competitive with Prolong products.
8. Confidentiality. During and after the term of this Agreement, each --------------- party hereto, its employees and agents agree not to disclose any business results, trade practices or other business information of the other party, its employees or agents, which they may learn as a result of the performance of this Agreement.
9. Indemnification. --------------- A. Sabco shall indemnify, defend and hold harmless Prolong, its officers, directors, employees and representatives from and against any and all losses, claims, suits, damages, liabilities, costs and expenses, including attorney fees and count costs incurred by any of them arising out of:
(i) Any breach of any warrant made by Sabco herein;
(ii) Any acts done or words spoken
(iii) Any claims by any persons arising from acts or omissions of any nature by Sabco, its employees or agents, including but not limited to, claims arising during the court of competition or practice in the performance of this Agreement.
B. Prolong shall indemnify, defend and hold harmless Sabco, its officers, directors, employees and representatives, from and against any and all losses, claims, suits, damages, liabilities, costs and expenses, including attorney fees and court costs incurred by any of them, arising out of:
(i) The use of any logo, design or materials furnished to Sabco by Prolong hereunder;
(ii) Any breach of any warranty made by Prolong herein;
(iii) Any acts done or words spoken by Prolong, its officers, directors, agents, employees and representatives;
(iv) Any claims by any persons arising from acts of omissions of any nature by Prolong, its officers, directors, agents, employees or representatives, including, but not limited to, claims arising under any product liability theory with respect to Prolong's products.
10. Nature of Relationship. The parties expressly acknowledge and agree ---------------------- that Sabco is acting as an independent contractor. Each party is responsible for all taxes relating to its operation, including payroll taxes for its employees, and nothing in this Agreement is intended to create a relationship, express or
implied, of employer-employee between Sabco and Prolong. Except as expressly authorized herein, neither party may contract for or otherwise obligate the other party without the party's prior express written consent.
11. Insurance. Sabco shall provide at its expense and maintain throughout --------- the term of this Agreement and any option period spectator liability insurance in an amount not less than $1 million single limit coverage with respect to any liability relating to the activities of Sabco in the performance of this Agreement. Sabco shall, within 90 days of the execution of this Agreement, supply Prolong with a copy of such policy of insurance or a certificate thereof, and such policies shall be cancelable only upon 10 days written notice to Prolong.
12. Notices, Statements and Payments. All notices, statements and -------------------------------- payments required under this Agreement shall be sent to the parties at the following addresses:
SABCO RACING, INC. 114 Meadow Hill Circle Mooresville, North Carolina 28115 Attn: Felix Sabates
PROLONG SUPER LUBRICANTS 1210 North Barsten Way Anaheim, California 92806 Attn: Jerry Grant
All notices, statements and payments shall be deemed delivered when deposited in the United States mail postage prepaid, when hand delivered if delivered personally, when telecopied if the sender's telecopier confirms transmission (with respect to notices and statements) or when wire transferred in federal funds (with respect to payments).
13. Waivers. A waiver of any provision of this Agreement shall be -------- enforceable only if the waiver is in writing signed by the party against whom the waiver is sought to be enforced. A failure by a party at any time to exercise any rights hereunder shall not constitute a waiver of such rights at another time.
14. Entire Agreement. This Agreement contains the entire agreement and ---------------- understanding between the parties with respect to the subject matter hereof and supersedes all prior written or oral agreements between them with respect to the subject matter hereof.
15. Assignment. This Agreement may not be assigned by either party ---------- without the prior written consent of the other party.
16. Significance of Headings. Paragraph headings contained herein are ------------------------ solely for the purpose of aiding the speedy location of subject matter and are not in any sense to be given weight in the construction of this Agreement. Accordingly, in case of any question with respect to the construction of this Agreement, it is to be construed as though paragraph headings had been omitted.
17. Governing Law, Jurisdiction and Venue. This Agreement shall be ------------------------------------- governed by and construed in accordance with the substantive laws of the State of North Carolina. The parties hereto hereby submit to jurisdiction and venue in any state or federal court located in North Carolina as well as any other jurisdiction having venue and competent jurisdiction of any law suit arising out of or relating to this Agreement; provided, however, if any
proceedings are instituted in a jurisdiction other than North Carolina, any party may remove such proceeding to any State or Federal Court in North Carolina.
18. Further Execution; Cooperation. The parties agree to execute and ------------------------------ deliver such further agreements, instruments and other documents as the other party may reasonably deem necessary to effectuate the purposes and provisions of this Agreement. The parties further agree to cooperate with each other in any manner reasonably requested by the other party to effectuate the purposes and provisions of this Agreement.
19. Counterparts. This Agreement may be executed in counterparts and the ------------ signature page of any party, and photocopies and facsimiles thereof, may be appended to any counterpart and when so appended shall constitute an original signature.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly elected officers as of the day and year first above written.
SABCO RACING, INC. ATTEST: BY /s/ Armando Fitz -------------------------------- /s/ Jerry Grant Armando Fitz - Vice President Business Operations - -------------------------- Jerry Grant - Secretary
PROLONG SUPER LUBRICANTS ATTEST:
BY /s/ Elton Alderman /s/ ILLEGIBLE --------------------------------- - -------------------------- Elton Alderman - President Secretary [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | CONFIDENTIAL PORTIONS OMITTED
EXHIBIT 10.16
[LOGO OF TEAM SABCO APPEARS HERE]
SPONSORSHIP AGREEMENT
THIS SPONSORSHIP AGREEMENT (hereinafter the "Agreement) is made and entered into this 19th day of December 1997, by and between SABCO RACING, INC., a North Carolina corporation with a place of business in Iredell County, North Carolina (hereinafter Sabco), and Prolong Super Lubricants, Anaheim, Calif. (Hereinafter to be referred to as "Prolong");
WITNESSETH:
WHEREAS, Sabco is engaged in the business of operating NASCAR Winston Cup Series race cars and wishes to provide advertising space and advertising, promotional and marketing assistance to Prolong; and
WHEREAS, Prolong desires to become a major associate sponsor of all three Sabco entries during the 1998, 1999 and year-2000 NASCAR Winston Cup Series racing seasons. These entries shall mean the Sabco No. 40, all NASCAR Winston Cup Series races during this three-year period; the Sabco No. 42, all NASCAR Winston Cup Series races during this three-year period; and Sabco No. 46, all NASCAR Winston Cup Series races during this three-year period. Prolong shall use its sponsorship of the Sabco entries for advertising, promoting and marketing itself. WHEREAS, the parties desire to set forth in this Agreement their respective rights and obligations;
NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein, and for other good and valuable consideration, the parties hereto agree as follows:
1. Term. The term of this Agreement shall commence with the first race ----- of the 1998 Winston Cup season and shall continue until the final race of the year-2000 Winston Cup season.
2. Services to be provided by Sabco. Sabco shall perform the following --------------------------------- services for Prolong during the term hereof:
A. Drivers. The drivers for the 33 Winston Cup events to be held -------- during the 1998 season in which Prolong is an associate sponsor shall be Sterling Marlin (40), Joe Nemechek (42) and Wally Dallenbach Jr. (46), unless due to injury or for some unforeseeable reason, either is unable to drive, in which event Sabco shall choose a substitute driver to drive their respective Sabco/Prolong-sponsored entry. For the duration of this agreement, Sabco reserves the right to substitute or replace any of the aforementioned drivers listed without prior notice to Prolong or prior approval from Prolong.
B. Decal location. Sabco will designate Prolong as an associate sponsor --------------- on its No. 40, No. 42 and No. 46 Winston Cup race cars in the aforementioned 33 events. Sabco shall cause each car to be painted with paint schemes approved by each's primary sponsor and shall cause to display Prolong associate sponsor decal signage upon the middle side panel (between car number and rear tire; both sides of car) with dimensions of approximately 6
inches high by 16 inches long. In addition, Sabco shall provide, subject to Prolong's approval, drive, pit crew, team uniforms, team pit equipment, team race car transporter, show car and show car transporter bearing prominent Prolong associate sponsor identification as well as team pit equipment with size and placement commensurate with level of sponsorship
3. Driver Appearances. Sabco shall provide unto Prolong five aggregate ------------------ driver appearances (2) two-hours each at no fee. Prolong shall be responsible for all first class travel expenses relating to each driver appearance, i.e. hotel, airfare, meals, etc. Additional appearances by Sabco drivers shall be at the discounted rate of [ * ] ($[ * ]) Dollars per day per driver, [ * ].
Sabco shall further provide the services of each driver for one free day for commercial use (up to six hours each) for still photo shoot, TV and radio/commercial production. Prolong shall be responsible for all first class travel expenses relating to each driver appearance, i.e. hotel, airfare, meals, etc.
All Sabco drivers, while under contract with Team SABCO, shall allow their likeness, voice, picture and signature to be used for commercial purposes endorsing Prolong at no additional costs during the term of this agreement.
4. Compensation. Prolong agrees to pay unto Sabco the sum [ * ] [ * ] ------------ Dollars ($[ * ]) for services to be provided by Sabco over this three year period of 1998, 1999 and year-2000. This sponsorship fee of $ [ * ] shall be
paid to Sabco in the following installments: Year One (1998): $ [ * ] (four equal installments of $ [ * ] to be paid on 3/15/98, 6/15/98, 8/15/98 and 10/15/98); Year Two (1999): $ [ * ] (four equal installments of $ [ * ] to be paid on 3/15/99, 6/15/99, 8/15/99 and 10/15/99); Year Three (year-2000): $ [ * ] (four equal installments of $ [ * ] to be paid on 3/15/2000, 6/15/2000,8/15/2000 and 10/15/2000).
5. Show Car. Sabco agrees to provide at no expense to Prolong for its use -------- in promoting its sponsorship, five (5) free show car appearance days whereas Prolong can deem which of the Sabco show cars to use. This shall mean that Prolong may schedule any combination of Sabco's three show cars (based on availability) not to exceed a total of five show days (travel days are considered a "show date"). Sabco will provide transportation of show car and will provide an attendant to stay with the car during its display period. For any show car appearance requested by Prolong over and above the five (5) free appearances, Sabco will make available unto Prolong a show car at a discounted rate of [ * ] Dollars ($ [ * ]) per day. All travel days to and from the site of a show car appearance, as well as the actual day upon which show car is on display will be charged as a "show date". It is further understood that the parties will agree in advance upon a schedule of places and events for the show car to be displayed at such times as will not interfere with Sabco's racing schedule.
6. Media, Public Relations and Sponsor Communications. Sabco will use its -------------------------------------------------- best efforts to obtain favorable exposure for Prolong and will be available to assist Prolong with public relations activities to a reasonable extent. This shall include making members of Sabco available for media interviews, press conferences or other public relations activity, as reasonably requested by Prolong, at or near race sites on dates Sabco is at race sites pursuant to their obligations hereunder. Sabco shall provide at its expense a staff member to handle race team's media and public relations needs and shall cause Prolong to receive prominent mention and display within press kits featuring the Sabco No. 40, 42 and 46 race cars. In each of the 1998, 1999 and year-2000 races in which Prolong is designated as an associate sponsor, Sabco shall fax to Prolong officers on the Monday following the race, race results and a summary of the prior weekend activities.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
7. Exclusivity. During the term of this Agreement, Sabco will not ----------- represent or accept as a primary, secondary, or associate sponsor any other company reasonably deemed to be competitive with Prolong products.
8. Confidentiality. During and after the term of this Agreement, each --------------- party hereto, its employees and agents agree not to disclose any business results, trade practices or other business information of the other party, its employees or agents, which they may learn as a result of the performance of this Agreement.
9. Indemnification. --------------- A. Sabco shall indemnify, defend and hold harmless Prolong, its officers, directors, employees and representatives from and against any and all losses, claims, suits, damages, liabilities, costs and expenses, including attorney fees and count costs incurred by any of them arising out of:
(i) Any breach of any warrant made by Sabco herein;
(ii) Any acts done or words spoken
(iii) Any claims by any persons arising from acts or omissions of any nature by Sabco, its employees or agents, including but not limited to, claims arising during the court of competition or practice in the performance of this Agreement.
B. Prolong shall indemnify, defend and hold harmless Sabco, its officers, directors, employees and representatives, from and against any and all losses, claims, suits, damages, liabilities, costs and expenses, including attorney fees and court costs incurred by any of them, arising out of:
(i) The use of any logo, design or materials furnished to Sabco by Prolong hereunder;
(ii) Any breach of any warranty made by Prolong herein;
(iii) Any acts done or words spoken by Prolong, its officers, directors, agents, employees and representatives;
(iv) Any claims by any persons arising from acts of omissions of any nature by Prolong, its officers, directors, agents, employees or representatives, including, but not limited to, claims arising under any product liability theory with respect to Prolong's products.
10. Nature of Relationship. The parties expressly acknowledge and agree ---------------------- that Sabco is acting as an independent contractor. Each party is responsible for all taxes relating to its operation, including payroll taxes for its employees, and nothing in this Agreement is intended to create a relationship, express or
implied, of employer-employee between Sabco and Prolong. Except as expressly authorized herein, neither party may contract for or otherwise obligate the other party without the party's prior express written consent.
11. Insurance. Sabco shall provide at its expense and maintain throughout --------- the term of this Agreement and any option period spectator liability insurance in an amount not less than $1 million single limit coverage with respect to any liability relating to the activities of Sabco in the performance of this Agreement. Sabco shall, within 90 days of the execution of this Agreement, supply Prolong with a copy of such policy of insurance or a certificate thereof, and such policies shall be cancelable only upon 10 days written notice to Prolong.
12. Notices, Statements and Payments. All notices, statements and -------------------------------- payments required under this Agreement shall be sent to the parties at the following addresses:
SABCO RACING, INC. 114 Meadow Hill Circle Mooresville, North Carolina 28115 Attn: Felix Sabates
PROLONG SUPER LUBRICANTS 1210 North Barsten Way Anaheim, California 92806 Attn: Jerry Grant
All notices, statements and payments shall be deemed delivered when deposited in the United States mail postage prepaid, when hand delivered if delivered personally, when telecopied if the sender's telecopier confirms transmission (with respect to notices and statements) or when wire transferred in federal funds (with respect to payments).
13. Waivers. A waiver of any provision of this Agreement shall be -------- enforceable only if the waiver is in writing signed by the party against whom the waiver is sought to be enforced. A failure by a party at any time to exercise any rights hereunder shall not constitute a waiver of such rights at another time.
14. Entire Agreement. This Agreement contains the entire agreement and ---------------- understanding between the parties with respect to the subject matter hereof and supersedes all prior written or oral agreements between them with respect to the subject matter hereof.
15. Assignment. This Agreement may not be assigned by either party ---------- without the prior written consent of the other party.
16. Significance of Headings. Paragraph headings contained herein are ------------------------ solely for the purpose of aiding the speedy location of subject matter and are not in any sense to be given weight in the construction of this Agreement. Accordingly, in case of any question with respect to the construction of this Agreement, it is to be construed as though paragraph headings had been omitted.
17. Governing Law, Jurisdiction and Venue. This Agreement shall be ------------------------------------- governed by and construed in accordance with the substantive laws of the State of North Carolina. The parties hereto hereby submit to jurisdiction and venue in any state or federal court located in North Carolina as well as any other jurisdiction having venue and competent jurisdiction of any law suit arising out of or relating to this Agreement; provided, however, if any
proceedings are instituted in a jurisdiction other than North Carolina, any party may remove such proceeding to any State or Federal Court in North Carolina.
18. Further Execution; Cooperation. The parties agree to execute and ------------------------------ deliver such further agreements, instruments and other documents as the other party may reasonably deem necessary to effectuate the purposes and provisions of this Agreement. The parties further agree to cooperate with each other in any manner reasonably requested by the other party to effectuate the purposes and provisions of this Agreement.
19. Counterparts. This Agreement may be executed in counterparts and the ------------ signature page of any party, and photocopies and facsimiles thereof, may be appended to any counterpart and when so appended shall constitute an original signature.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly elected officers as of the day and year first above written.
SABCO RACING, INC. ATTEST: BY /s/ Armando Fitz -------------------------------- /s/ Jerry Grant Armando Fitz - Vice President Business Operations - -------------------------- Jerry Grant - Secretary
PROLONG SUPER LUBRICANTS ATTEST:
BY /s/ Elton Alderman /s/ ILLEGIBLE --------------------------------- - -------------------------- Elton Alderman - President Secretary | Highlight the parts (if any) of this contract related to "Ip Ownership Assignment" that should be reviewed by a lawyer. Details: Does intellectual property created by one party become the property of the counterparty, either per the terms of the contract or upon the occurrence of certain events? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Audit Rights" that should be reviewed by a lawyer. Details: Does a party have the right to audit the books, records, or physical locations of the counterparty to ensure compliance with the contract?
Context: Exhibit s.2
NUVEEN AMT-FREE MUNICIPAL CREDIT INCOME FUND (NVG)
AND
NUVEEN FUND ADVISORS, LLC
AND
[●]
REMARKETING AGREEMENT
Dated as of [●]
Series [●] MuniFund Preferred Shares
Variable Rate Remarketed Mode
(NVG - Series [●] MFP)
Table of Contents Page Section 1. Definitions 1 Section 2. Appointment and Obligations of the Remarketing Agent 3 Section 3. Representations, Warranties and Covenants of the Remarketing Agent and the Fund 6 Section 4. Fees and Expenses 7 Section 5. Resignation, Suspension and Removal of the Remarketing Agent 7 Section 6. Dealing in the VRRM-MFP Shares 7 Section 7. Information 8 Section 8. Conditions to Obligations of the Remarketing Agent 9 Section 9. Indemnification 9 Section 10. Termination of Remarketing Agreement 12 Section 11. Remarketing Agent's Performance; Duty of Care 13 Section 12. Amendment, Supplement or Modification of Agreements 13 Section 13. Books and Records 13 Section 14. Governing Law 13 Section 15. Waiver of Jury Trial 14 Section 16. Certain Provisions to Survive Termination of Agreement 14 Section 17. Successors and Assigns 14 Section 18. Headings 14 Section 19. Severability 14 Section 20. Counterparts 14 Section 21. Remarketing Agent Not Acting as Underwriter 15 Section 22. Amendment 15 i
Section 23. Benefits 15 Section 24. Notices and Wire Instructions 15 Section 25. Liability of Officers, Trustees and Shareholders 16 Section 26. Nonpetition Covenant 16
Exhibit A Form of Tender Notice (Optional Tenders)
Exhibit B Form of Remarketing Notice (Optional and Mandatory Tenders, Mode Transition)
Exhibit C Form of Failed Remarketing Notice (Optional and Mandatory Tenders, Mode Transition)
Exhibit D Form of Retention Notice (Mandatory Tenders) ii
REMARKETING AGREEMENT
This REMARKETING AGREEMENT, dated as of [●] (this "Agreement"), by and among Nuveen AMT-Free Municipal Credit Income Fund, a closed-end investment company organized as a Massachusetts business trust (the "Fund"), Nuveen Fund Advisors, LLC, a registered investment adviser and wholly-owned subsidiary of Nuveen Investments, Inc. (the "Investment Adviser"), and [●] (the "Remarketing Agent").
WITNESSETH:
WHEREAS, the Fund is issuing Series [●] MuniFund Preferred Shares, par value $.01 per share (the "MFP Shares"), with a liquidation preference of $[●] per share, pursuant to and with the preferences, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption assigned to them in the Fund's Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares effective [●], as amended, revised or supplemented from time to time (the "Statement"), as modified with respect to the Initial Mode by the Supplement to the Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares Initially Designating the Variable Rate Remarketed Mode for the Series [●] MuniFund Preferred Shares effective [●], as amended, revised or supplemented from time to time (the "Supplement"; references in this Agreement to the Supplement shall be deemed to include the Statement);
WHEREAS, the Fund has requested [●] to act as the Remarketing Agent under this Agreement while the MFP Shares are in the Variable Rate Remarketed Mode in accordance with the provisions of the Supplement (and the Board of Trustees of the Fund has adopted a resolution appointing [●] as the Remarketing Agent) to perform the duties set forth herein and to perform such other duties as are assigned to the Remarketing Agent herein and in the Supplement, all pursuant to the procedures set forth in the Supplement and this Agreement;
WHEREAS, the Remarketing Agent is willing to assume such duties on the terms and conditions expressly set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto agree as follows:
Section 1. Definitions. Capitalized terms used herein that are not otherwise defined shall have the meanings assigned to them in the Supplement.
"1933 Act" means the Securities Act of 1933, as amended.
"1933 Act Regulations" means the rules and regulations under the 1933 Act.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"1940 Act" means the Investment Company Act of 1940, as amended.
"1940 Act Documents" has the meaning set forth in Section 3(b) hereof. 1
"1940 Act Regulations" means the rules and regulations under the 1940 Act.
"Agreement" has the meaning set forth in the preamble.
"Calculation and Paying Agent" means The Bank of New York Mellon acting pursuant to the Tender and Paying Agent Agreement or any successor thereto.
"Commission" has the meaning set forth in Section 3(d) hereof.
"Fund" has the meaning set forth in the preamble.
"Indemnified Person" has the meaning set forth in Section 9(a) hereof.
"Indemnifying Person" has the meaning set forth in Section 9(c) hereof.
"Investment Adviser" has the meaning set forth in the preamble.
"Losses" has the meaning set forth in Section 9(b) hereof.
"MFP Shares" has the meaning set forth in the preamble.
"Mode" has the meaning set forth in the Statement.
"Prospectus" means the final prospectus, including the statement of additional information incorporated by reference therein, each dated [●], and the prospectus supplement, dated [●], relating to the initial offering of the VRRM-MFP Shares.
"Registration Statement" means the Fund's registration statement (No. 333-226136 and No. 811-09475), relating to the MFP Shares and other securities of the Fund, declared effective by order of the Commission on October [●], 2018, as it may be amended from time to time.
"Remarketing Agent" has the meaning set forth in the preamble.
"Remarketing Materials" has the meaning set forth in Section 7(b) hereof.
"Remarketing Memorandum" means the Prospectus or any other written communication describing the Fund and/or the terms of the VRRM-MFP Shares, which has been approved by the Fund in writing for use in connection with remarketing prior to its use, which approval shall not be unreasonably withheld or delayed.
"Representation Date" has the meaning set forth in Section 3(b) hereof.
"Statement" has the meaning set forth in the preamble.
"Supplement" has the meaning set forth in the preamble.
"Transition Remarketing" means a remarketing in connection with a Mode change pursuant to Article 3 of the Supplement. 2
"VRRM-MFP Shares" means the MFP Shares while in the Variable Rate Remarketed Mode pursuant to the Supplement.
Section 2. Appointment and Obligations of the Remarketing Agent.
(a) Appointment. The Fund hereby appoints [●], and [●] hereby accepts such appointment, as the exclusive Remarketing Agent of the VRRM-MFP Shares for the Variable Rate Remarketed Mode for the purpose of establishing on each Business Day the Dividend Rate in respect of the VRRM-MFP Shares and, in connection with a tender, remarketing such VRRM-MFP Shares on behalf of the Beneficial Owners or Holders thereof, as applicable, and calculating the Purchase Price therefor, among other things; and performing such other duties as are assigned to the Remarketing Agent in the Supplement, all pursuant to the procedures set forth in the Supplement and this Agreement.
(b) General Duties. The Remarketing Agent agrees with respect to the VRRM-MFP Shares to:
(i) use its best efforts to remarket Tendered VRRM-MFP Shares in connection with an optional tender or mandatory tender of VRRM-MFP Shares as provided in the Supplement, but shall in no way be liable if no purchasers are found, provided it has otherwise performed its obligations as set forth in this Agreement and the Supplement;
(ii) calculate the Purchase Price to be paid in connection with a remarketing of VRRM-MFP Shares.
(iii) establish the Dividend Rate as provided in the Supplement; provided, that the Dividend Rate may not exceed the Maximum Rate;
(iv) notify the Fund and the Calculation and Paying Agent of the Dividend Rate by Electronic Means and post the Dividend Rate on Bloomberg promptly on each date of determination of the Dividend Rate as provided in the Supplement; in the case of the notice to the Fund and the Calculation and Paying Agent with respect to the Step-Up Dividend Rate, such notice shall set forth in reasonable detail the basis for and calculation of the highest rate as determined by the Remarketing Agent;
(v) provide any other notices to be provided by the Remarketing Agent to the Fund, the Calculation and Paying Agent, Holders and Beneficial Owners as set forth in the Supplement;
(vi) make available to a Beneficial Owner, upon request by such Beneficial Owner in connection with a remarketing, a copy of the Contact Notification Form (as such term is defined in the Tender and Paying Agent Agreement);
(vii) make available to a Beneficial Owner or a former Beneficial Owner, upon request by such Beneficial Owner or former Beneficial Owner (as the case may be) in 3
connection with a remarketing, a copy of the Cancellation Form (as such term is defined in the Tender and Paying Agent Agreement); and
(viii) carry out such other duties as are assigned to the Remarketing Agent herein and in the Supplement, or as are reasonably requested by the Fund and agreed to by the Remarketing Agent, all in accordance with the provisions in this Agreement and the Supplement.
(c) Remarketing at Purchase Price; Principal to Principal Basis. It is further understood and agreed by and between the parties that, in connection with any attempted remarketing, all Tendered VRRM-MFP Shares shall be remarketed at the Purchase Price of such VRRM-MFP Shares. With respect to the Remarketing Agent's responsibilities, but without affecting the Calculation and Paying Agent's role as intermediary (if applicable), the Remarketing Agent hereby agrees that, if the Remarketing Agent obtains a bid at the Purchase Price for any VRRM-MFP Shares being remarketed, which, if accepted, would be binding on the bidder for the consummation of the sale of such VRRM-MFP Shares (an "actionable bid"), and the Remarketing Agent elects in its sole discretion to accept such actionable bid, the Remarketing Agent shall (i) purchase the Tendered VRRM-MFP Shares, as a principal and not as an agent, from the Beneficial Owner or Holder thereof on the Purchase Date at the Purchase Price, (ii) resell such VRRM-MFP Shares, as a principal and not as an agent, to the Person making such actionable bid at the Purchase Price, and (iii) record such purchase and resale on its books and records in accordance with this provision. Any such purchases by the Remarketing Agent from the Beneficial Owner or Holder shall be made with the Remarketing Agent's own funds.
(d) Optional Tender for Remarketing Notices. If, in connection with an optional tender for remarketing in accordance with Section 2.2(a) of the Supplement, a Beneficial Owner tendering VRRM-MFP Shares for remarketing delivers to the Remarketing Agent a Tender Notice in substantially the form of and containing the information set forth in Exhibit A hereto and the Remarketing Agent identifies a purchaser for the Tendered VRRM-MFP Shares during the related Remarketing Window, the Remarketing Agent shall deliver a Remarketing Notice in substantially the form of and containing the information set forth in Exhibit B hereto to the Beneficial Owner of the Tendered VRRM-MFP Shares, with a copy to the Fund and the Calculation and Paying Agent as provided in Section 2.2(a) of the Supplement. Upon the occurrence of a Failed Remarketing Event, the Remarketing Agent shall provide a Failed Remarketing Notice in substantially the form of and containing the information set forth in Exhibit C hereto to the Holders, the Fund and the Calculation and Paying Agent as provided in Section 2.2(b) of the Supplement.
(e) Mandatory Tender for Remarketing Notices. In connection with a mandatory tender for remarketing in accordance with Section 2.2(c) of the Supplement, the Remarketing Agent shall provide a Remarketing Notice in substantially the form of and containing the information set forth in Exhibit B hereto to the Holders, the Fund and the Calculation and Paying Agent as provided in Section 2.2(c) of the Supplement. Each Beneficial Owner wishing (and eligible) to retain its VRRM-MFP Shares shall provide a Retention Notice in substantially the form of and containing the information set forth in Exhibit D hereto to the Remarketing Agent 4
and the Calculation and Paying Agent as provided in Section 2.2(c) of the Supplement. Upon the occurrence of a Failed Remarketing Event, the Remarketing Agent shall provide a Failed Remarketing Notice in substantially the form of and containing the information set forth in Exhibit C hereto to the Holders, the Fund and the Calculation and Paying Agent as provided in Section 2.2(c) of the Supplement.
(f) Mode Change Notices. In connection with a mandatory tender for remarketing for a transition to a new Mode in accordance with Section 3.2 of the Supplement, the Remarketing Agent shall provide a Remarketing Notice in substantially the form of and containing the information set forth in Exhibit B hereto to the Holders, the Fund and the Calculation and Paying Agent as provided in Section 3.2(c) of the Supplement. Upon the occurrence of a Failed Remarketing Event, the Remarketing Agent shall provide a Failed Remarketing Notice in substantially the form of and containing the information set forth in Exhibit C hereto to the Holders, the Fund and the Calculation and Paying Agent as provided in Section 3.2(c) of the Supplement.
(g) Book-Entry Procedures. Except as otherwise expressly provided for herein, the purchase and delivery of Tendered VRRM-MFP Shares and the remarketing thereof, and payments with respect to the foregoing, will be accomplished in accordance with the applicable procedures of the Securities Depository.
(h) Return of Unsold VRRM-MFP Shares. Any VRRM-MFP Shares unsold in a remarketing will be returned to the relevant tendering Beneficial Owners or their Agent Members, or the relevant tendering Holders, as the case may be, by the Remarketing Agent; provided that such tender will continue until the earlier of the occurrence of a successful remarketing or the Failed Remarketing Mandatory Redemption Date.
(i) Timing Requirements. The Remarketing Agent agrees to the remarketing timing requirements applicable to it in the Supplement. The Remarketing Agent may, in its sole discretion, modify the settlement procedures set forth therein with respect to any Remarketing upon ten (10) days' prior written notice to the Fund and the Calculation and Paying Agent, provided any such modification does not adversely affect the Holders, the Beneficial Owners, the Calculation and Paying Agent or the Fund.
(j) Purchases by Remarketing Agent. If the Remarketing Agent in its sole discretion decides to purchase unsold VRRM- MFP Shares for its own account, on each Purchase Date, the Remarketing Agent will settle such purchase through delivery against payment of the Purchase Price for such VRRM-MFP Shares to be received by the Remarketing Agent by 11:00 a.m., New York City time, on such Purchase Date. The Remarketing Agent is not obligated to purchase any VRRM-MFP Shares that would otherwise remain unsold in a remarketing.
(k) Sales by Remarketing Agent for its Own Account. It is expressly understood and agreed by the parties hereto that VRRM-MFP Shares as to which the Remarketing Agent is the Beneficial Owner may be held by the Remarketing Agent for its own account or for the account of others, and may be sold in a remarketing or otherwise sold by the Remarketing Agent. The Remarketing Agent may sell VRRM-MFP Shares for its own account outside of a remarketing at a price other than the Purchase Price. 5
(l) Notice of Taxable Allocations. Whenever the Fund intends or expects to include any Taxable Allocation in any dividend on VRRM-MFP Shares, the Fund shall provide a Notice of Taxable Allocation in accordance with Section 2.7(a) of the Supplement. Whenever such advance notice is received from the Fund, the Calculation and Paying Agent will notify each Holder and the Remarketing Agent. The Remarketing Agent shall promptly notify each potential Beneficial Owner or its Agent Member after receipt of such advance notice by the Remarketing Agent.
Section 3. Representations, Warranties and Covenants of the Remarketing Agent and the Fund.
(a) The Remarketing Agent hereby represents, warrants and agrees that it has, and during the term of this Agreement shall maintain, all licenses, consents and other rights required for the use of any index or other data in connection with calculation of the Dividend Rate or dissemination thereof.
(b) The Fund represents and warrants to, and agrees with, the Remarketing Agent as as of each Purchase Date, Remarketing Date or New Mode Commencement Date, as applicable (each, a "Representation Date"), that (i) the Fund has made all the filings with the United States Securities and Exchange Commission (the "Commission") that are required to be made under the 1940 Act and the 1940 Act Regulations (collectively, the "1940 Act Documents"), (ii) each 1940 Act Document complies in all material respects with the requirements of the 1940 Act and the 1940 Act Regulations, and each 1940 Act Document did not at the time of filing with the Commission include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading and (iii) the applicable Remarketing Materials, as amended or supplemented, including by any subsequently filed 1940 Act Document on or prior to such Representation Date (or, if applicable, by any document filed pursuant to the 1933 Act and the 1933 Act Regulations), as provided by the Fund, will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the Fund makes no representations or warranties with respect to information provided by the Remarketing Agent specifically for use in the Remarketing Materials.
(c) The financial statements included or incorporated by reference in the 1940 Act Documents, together with the related notes and schedules, present fairly the financial position of the Fund as of the dates indicated and the results of operations, cash flows and changes in shareholders' equity of the Fund for the periods specified and have been prepared in compliance with the requirements of the 1940 Act and the 1940 Act Regulations and in conformity with U.S. generally accepted accounting principles applied on a consistent basis during the periods involved; the other financial and statistical data contained or incorporated by reference in the 1940 Act Documents are accurately and fairly presented and prepared on a basis consistent with the financial statements and books and records of the Fund.
(d) The Fund agrees (i) to deliver to the Remarketing Agent, within fifteen (15) calendar days following the last day of each calendar month beginning with [●], a report of 6
portfolio holdings of the Fund as of the close of business as of the last Business Day of such calendar month, listing portfolio holdings of the Fund by CUSIP and principal amount, and (ii) that, on or after such fifteenth calendar day (or earlier, with the Fund's prior approval) the Remarketing Agent may provide such report and/or the information therein to investors in the VRRM- MFP Shares, upon the investor's request.
Section 4. Fees and Expenses. For the performance of its services as Remarketing Agent hereunder, the Fund shall pay to the Remarketing Agent in arrears on the first day of each calendar month (or, if such day is not a Business Day, on the next succeeding Business Day) a monthly fee for each MFP Share Outstanding on the first calendar day of the preceding calendar month (or the date hereof in the case of the first such payment), in an amount, rounded upward to the nearest dollar, equal to (a) the product of (i) the rate of compensation as then in effect, as shall be agreed upon from time to time in writing by the Fund and the Remarketing Agent, times $[●] multiplied by (ii) the actual number of days from and including such first calendar day of the preceding calendar month (or the date hereof in the case of the first such payment) to and including the last calendar day of such preceding calendar month or, if applicable, the date of termination of this Agreement, if earlier, or the date of any prior redemption or liquidation for such share (as the case may be), divided by (b) 360. The obligation of the Fund to make the payments required by this Section shall survive the termination of this Agreement and remain in full force and effect until all such payments shall have been made in full.
Section 5. Resignation, Suspension and Removal of the Remarketing Agent.
(a) The Remarketing Agent may resign and be discharged from its duties and obligations hereunder with respect to the VRRM-MFP Shares by giving 90 days' prior written notice to the Fund and the Calculation and Paying Agent.
(b) The Fund may remove the Remarketing Agent with respect to the VRRM-MFP Shares by giving at least 60 days' prior written notice to the Remarketing Agent (and will provide prior notice also to the Calculation and Paying Agent, if any); provided, however, that no such removal shall become effective for an additional 30 days unless the Fund shall have appointed at least one nationally recognized securities dealer with expertise in remarketing variable rate securities as a successor Remarketing Agent for the VRRM-MFP Shares and the successor Remarketing Agent shall have entered into a remarketing agreement with the Fund, in form and substance satisfactory to the Fund, in which it shall have agreed to, among other duties, conduct remarketings in respect of VRRM-MFP Shares and determine the Dividend Rate on each Business Day for the VRRM-MFP Shares in accordance with the terms and conditions of the Supplement.
In each of the occurrences described in clause (a) or (b), the Fund shall use its best efforts to appoint a successor Remarketing Agent for such VRRM-MFP Shares and enter into a remarketing agreement with such Person as soon as reasonably practicable.
Section 6. Dealing in the VRRM-MFP Shares. The Remarketing Agent in its sole discretion may purchase for its own account VRRM-MFP Shares in a remarketing; however, subject to the last two sentences in Section 2(c) above, the Remarketing Agent shall not be obligated to purchase any VRRM-MFP Shares that would otherwise remain unsold in a 7
remarketing. None of the Fund, the Calculation and Paying Agent nor the Remarketing Agent (subject to the last sentence in Section 2(c) above) shall be obligated in any case to provide funds to make payment to a Beneficial Owner or its Agent Member or a Holder upon such Beneficial Owner's or Holder's tender of its VRRM-MFP Shares in a remarketing unless, in each case, such VRRM-MFP Shares were acquired for the account of the Fund, the Calculation and Paying Agent or the Remarketing Agent, as applicable. The Remarketing Agent may exercise any vote or join in any action which any Holder of VRRM-MFP Shares may be entitled to exercise or take pursuant to the Statement with like effect as if it did not act in any capacity hereunder. The Remarketing Agent, in its individual capacity, either as principal or agent, may also engage in or have an interest in any financial or other transaction with the Fund as freely as if it did not act in any capacity hereunder.
Section 7. Information.
(a) The Fund agrees to furnish to the Remarketing Agent: (i) copies of the Registration Statement, the Prospectus, the Statement, the Supplement and its bylaws and any amendment thereto and each report or other document mailed or made available to Holders (including annual reports to shareholders) or filed by the Fund with the Commission (including any documents incorporated therein by reference) as the Remarketing Agent may reasonably request from time to time; (ii) notice of the creation of any subsidiary by the Fund; (iii) notice of the purchase of VRRM-MFP Shares by a subsidiary or affiliate of the Fund as soon as the Fund shall become aware of such purchase; (iv) notice of any change (including being put on Credit Watch or Watchlist), suspension or termination in or of the ratings on the VRRM-MFP Shares by any NRSRO then rating the VRRM-MFP Shares or any change of an NRSRO rating the VRRM-MFP Shares as promptly as practicable upon the occurrence thereof or the occurrence of any of the events set forth in clause (b)(i) or (b)(ii) of Section 8 hereof (with the occurrence of any of the events described in clause (b)(ii) to be determined without regard to the opinion of the Remarketing Agent referred to therein); and (v) in connection with a remarketing, a Remarketing Memorandum, and such other remarketing information, as the Remarketing Agent may reasonably request from time to time, including but not limited to the financial condition of the Fund. The Fund agrees to provide the Remarketing Agent with as many copies of the foregoing materials and information as the Remarketing Agent may reasonably request for use in connection with a remarketing or Transition Remarketing, as the case may be, of VRRM-MFP Shares and consents to the use thereof for such purpose.
(b) If at any time during the term of this Agreement any event or condition known to the Fund relating to or affecting the Fund or the VRRM-MFP Shares shall occur which might affect the accuracy or completeness of any statement of a material fact contained in any of the reports, documents, materials and information referred to in clause (a)(v) above or any document incorporated therein by reference (collectively, the "Remarketing Materials") or any other materials or information made publicly available by the Fund, the Fund shall promptly notify the Remarketing Agent in writing of the circumstances and details of such event or condition and the Fund shall promptly prepare or cause to be prepared and delivered to the Remarketing Agent, at the Fund's expense, a supplement or amendment to the Remarketing Materials describing the circumstances and details of such event or condition. 8
Section 8. Conditions to Obligations of the Remarketing Agent. The obligations of the Remarketing Agent with respect to VRRM-MFP Shares under this Agreement have been undertaken in reliance on, and shall be subject to: (a) the due performance in all material respects by the Fund of its obligations and agreements as set forth in this Agreement (including Sections 3(c) and 7(b) hereof); and (b) the non-occurrence of any of the following events: (i) all of the VRRM-MFP Shares shall have been redeemed by the Fund; (ii) without the prior written consent of the Remarketing Agent, the Supplement, the Statement, the Declaration, the by-laws of the Fund, or the Tender and Paying Agent Agreement shall either not be in full force and effect or have been amended in any manner that in the reasonable opinion of the Remarketing Agent materially changes the nature of the VRRM- MFP Shares or the remarketing procedures; (iii) legislation, or a decision by a court of the United States shall be rendered, or a stop order, ruling, regulation or official statement by, or on behalf of, the Commission or other governmental agency having jurisdiction of the subject matter shall be made, to the effect that the offering or sale of the VRRM-MFP Shares is or would be in violation of any provision of the 1933 Act as then in effect, or the 1934 Act as then in effect, or with the purpose or effect of otherwise prohibiting the offering or sale of the VRRM-MFP Shares, as contemplated hereby, without registration under the 1933 Act; (iv) any legislation, resolution, ordinance, rule or regulation shall be enacted by, any governmental body, department or agency of the United States or the State of New York, or a decision by any court of competent jurisdiction within the United States or the State of New York shall be rendered, which, in the Remarketing Agent's reasonable opinion, materially adversely affects the marketability of the VRRM-MFP Shares; (v) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange, which, in the Remarketing Agent's reasonable opinion, would cause the performance of the Remarketing Agent's obligations hereunder to violate applicable law; (vi) any litigation shall be instituted and be outstanding, to restrain or enjoin the sale or remarketing of the VRRM-MFP Shares or in any way protesting or affecting any authority of the Fund with respect to the validity of the VRRM- MFP Shares or this Agreement, or the existence or powers of the Fund to perform its obligations hereunder; (vii) a general banking moratorium has been declared by federal or New York authorities having jurisdiction, a material disruption in commercial banking or securities settlement or clearance services or a force majeure event shall have occurred which in the reasonable opinion of the Remarketing Agent materially adversely affects the settlement or clearance of the VRRM-MFP Shares; or (viii) a material misstatement or omission in the Remarketing Materials has occurred, so that it is not advisable, in the reasonable judgment of the Remarketing Agent, to attempt to remarket the VRRM-MFP Shares, provided that the Remarketing Agent, upon identifying any such material misstatement or omission in the Remarketing Materials, shall promptly notify the Fund. In the event of the failure of any such conditions with respect to the VRMM-MFP Shares, the Remarketing Agent may terminate its obligations under this Agreement with respect to the VRMM-MFP Shares as provided in Section 10(b).
Section 9. Indemnification.
(a) The Fund and the Investment Adviser, jointly and severally, agree to indemnify and hold harmless the Remarketing Agent and its respective officers, directors, employees and control persons within the meaning of the 1934 Act (collectively, the "Indemnified Persons" 9
and individually, an "Indemnified Person") from and against any losses, claims, damages or liabilities to which any Indemnified Person may become subject insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in any of the Remarketing Materials or the omission or alleged omission to state therein a material fact necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading (except with respect to information provided by the Remarketing Agent specifically for use therein), or arise out of, or are based upon, any violation by the Fund or the Investment Adviser of, or any failure by the Fund or the Investment Adviser to perform, any of its obligations under, this Agreement. The Fund and the Investment Adviser agree to promptly reimburse each Indemnified Person for any legal or other expenses reasonably incurred by such Indemnified Person in investigating, defending or preparing to defend any such action or claim; provided, however, that neither the Fund nor the Investment Adviser shall be liable in any such case to the extent that any such loss, claim, damage or liability arises out of the use by the Remarketing Agent of any information that is not contained in the Remarketing Materials (in the form provided for use in connection with the remarketing). The indemnity agreement in this paragraph shall be in addition to any liability or obligation which the Fund or the Investment Adviser may otherwise have to any Indemnified Person and shall extend upon the same terms and conditions to each Person, if any, who controls any Indemnified Person within the meaning of the 1934 Act.
(b) The Fund agrees to indemnify and hold harmless the Indemnified Persons from and against every loss, liability or expense, including without limitation, damages, fines, suits, actions, demands, costs, out-of-pocket expenses, and reasonable legal fees and expenses (collectively, "Losses"), that may be imposed on, incurred by, or asserted against, any Indemnified Person for or in respect of its (1) execution and delivery of this Agreement, (2) compliance or attempted compliance with or reliance upon any instruction or other direction upon which the Remarketing Agent is authorized to rely pursuant to the terms of this Agreement and (3) performance under this Agreement, except to the extent that the Loss resulted from such Indemnified Person's gross negligence, willful misconduct, bad faith, violations of law or violations of the terms and conditions of this Agreement. For the avoidance of doubt, the Fund agrees to indemnify and hold harmless the Indemnified Persons from and against any and all Losses that may be imposed on, incurred by, or asserted against, any Indemnified Person for or in respect of the failure of the Remarketing Agent to deliver Remarketing Materials during the course of a remarketing, if such failure is due to the failure by the Fund to provide to the Remarketing Agent such Remarketing Materials for delivery (regardless of whether the Remarketing Agent has requested such Remarketing Materials), notwithstanding that such failure by the Remarketing Agent to deliver Remarketing Materials during the course of a Remarketing could be deemed a violation of law by an Indemnified Person. The indemnity agreement in this paragraph shall be in addition to any liability or obligation which the Fund may otherwise have to any Indemnified Person.
(c) Each Indemnified Person shall give notice as promptly as reasonably practicable to each of the Fund and the Investment Adviser (collectively, the "Indemnifying Persons" and individually, an "Indemnifying Person") of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify the Indemnifying Persons 10
shall not relieve any Indemnifying Person from any liability which it may have otherwise than on account of this indemnity agreement. No settlement or compromise of any such action shall be made without the consent of the Indemnifying Persons, which consent shall not be unreasonably withheld.
(d) In case any such action is brought against any Indemnified Person, and it notifies each Indemnifying Person from which it seeks indemnification of the commencement thereof, such Indemnifying Person (which may be the Fund and/or the Investment Adviser, in the case of notification of either) will be entitled to participate in, and, to the extent that it may wish, jointly with any other Indemnifying Person, similarly notified, to assume the defense thereof so long as its interests are not adverse to those of the Indemnified Person, with counsel reasonably satisfactory to such Indemnified Person, and after notice from each Indemnifying Person to such Indemnified Person of its election to assume the defense thereof, the Indemnifying Person will not be liable to such Indemnified Person under this Section 9 for any legal or other expenses subsequently incurred by such Indemnified Person in connection with the defense thereof other than reasonable costs of investigation. Upon assumption by any Indemnifying Person of the defense of any such action or proceeding, the Indemnified Person shall have the right to participate in such action or proceeding and to retain its own counsel but the Indemnifying Person shall not be liable for any legal expenses of other counsel subsequently incurred by such Indemnified Person in connection with the defense thereof unless (i) the Indemnifying Person has agreed to pay such fees and expenses, (ii) the Indemnifying Person shall have failed to employ counsel reasonably satisfactory to the Indemnified Person in a timely manner, or (iii) the Indemnified Person shall have been advised by counsel that there are actual or potential conflicting interests between the Indemnifying Persons and the Indemnified Person, including situations in which there are one or more legal defenses available to the Indemnified Person that are different from or additional to those available to each of the Fund and the Investment Adviser. If the Indemnifying Person elects not to assume the defense of any such suit, it will reimburse the Indemnified Persons for the reasonable fees and expenses of any counsel retained by them. In the event that the parties to any such action (including impleaded parties) include one or more Indemnifying Persons and one or more Indemnified Persons, and one or more Indemnified Persons shall have been advised by counsel reasonably satisfactory to each Indemnifying Person that there may be one or more legal defenses available to any of the Indemnified Persons, which are different from, additional to, or in conflict with those available to any of the Indemnifying Persons, the Indemnifying Persons will reimburse the Indemnified Persons for the reasonable fees and expenses of any counsel retained by the Indemnified Persons (it being understood that the Indemnifying Persons shall not, in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (plus local counsel) for all Indemnified Persons, which firm shall be designated by the Indemnified Persons, the Remarketing Agent or each Indemnifying Person, as the case may be). Each Indemnifying Person agrees promptly to notify each Indemnified Person of the commencement of any litigation or proceedings against it in connection with the remarketing of the VRRM-MFP Shares. No Indemnifying Person shall consent to the terms of any compromise or settlement of any action defended by any Indemnifying Person in accordance with the foregoing without the prior consent of the Indemnified Person. No Indemnifying Person shall be liable under this Section 9 for the amount of any compromise or settlement of any action 11
unless such compromise or settlement has been approved in writing by such Indemnifying Person, which approval shall not be unreasonably withheld.
(e) If the indemnification provided for in subparagraph (a) of this Section 9 is unavailable, because of limitations imposed by securities laws or for any other reason, to a party that would otherwise have been an Indemnified Person under subparagraph (a) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then the party that would have been an Indemnifying Person thereunder shall, in lieu of indemnifying such Indemnified Person, contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion so that the Remarketing Agent is responsible for that portion represented by the percentage that the Remarketing Agent's fee (calculated for a one year period) with respect to such remarketing bears to the aggregate liquidation preference of such VRRM-MFP Shares being remarketed but will not exceed the amount of such fee (calculated for a one year period) and each of the Fund and the Investment Adviser is responsible for the balance; provided, however, that no person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages or liabilities (or actions in respect thereon referred to above in this subparagraph (e)) shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified Person in connection with investigating or defending any such action or claims (which shall be limited as provided in this subparagraph (e) above if the Indemnifying Person has assumed the defense of any such action in accordance with the provisions thereof).
(f) The indemnity agreements contained in clauses (a), (b) and (c) of this Section 9 shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Remarketing Agent, and shall survive the termination or cancellation of this Agreement and the remarketing of any VRRM-MFP Shares hereunder.
Section 10. Termination of Remarketing Agreement. (a) This Agreement shall terminate as to the Remarketing Agent and its obligations hereunder with respect to VRRM-MFP Shares upon the earliest to occur of (a) the effective date of the resignation or removal of such Remarketing Agent pursuant to Section 5(a) and Section 5(b), respectively, (b) the completion of a successful Transition Remarketing on a New Mode Commencement Date in connection with transition to a new Mode, or (c) the date on which no VRRM-MFP Shares are Outstanding.
(b) In addition, the Remarketing Agent may terminate this Agreement and all of its obligations hereunder with respect to the VRRM-MFP Shares, by notifying the Fund and the Calculation and Paying Agent of its election to do so, if any of the conditions referred to or set forth in Section 8 hereof with respect to the VRRM-MFP Shares have not been met or satisfied in full and such failure shall have continued for a period of 30 days after the Remarketing Agent has given notice thereof to the Fund specifying the condition which has not been met and requiring it to be met; provided, however, that termination of this Agreement with respect to the VRRM-MFP Shares by the Remarketing Agent after giving the required notices with respect to the VRRM- MFP Shares shall be immediate in the event of the occurrence and continuation of 12
any event set forth in Section 8(b)(i), (ii), (iii) or (iv) hereof with respect to the VRRM-MFP Shares, or in the event the Remarketing Agent determines, in its sole discretion, that it shall not have received all of the information, whether or not specifically referenced herein, necessary to fulfill its obligations under this Agreement with respect to the VRRM-MFP Shares.
Section 11. Remarketing Agent's Performance; Duty of Care.
(a) The duties and obligations of the Remarketing Agent shall be determined solely by the express provisions of this Agreement and the Supplement. No implied covenants or obligations shall be read into this Agreement, or the Supplement. In the absence of bad faith on the part of the Remarketing Agent, the Remarketing Agent may conclusively rely upon any document furnished to it, which purports to conform to the requirements of this Agreement and the Statement, as to the truth of the statements expressed in any of such documents. The Remarketing Agent shall be protected in acting upon any document or communication reasonably believed by it to have been signed, presented or made by the proper party or parties. The Remarketing Agent shall incur no liability to the Fund, the Investment Adviser, the Calculation and Paying Agent or to any Beneficial Owner (or its Agent Member) or any Holder of the VRRM-MFP Shares in its individual capacity or as Remarketing Agent for any action or failure to act, in connection with its duties under this Agreement and the Supplement or otherwise, except as a result of bad faith, gross negligence or willful misconduct on its part.
(b) The Remarketing Agent shall not be responsible or liable for any failure or delay in the performance of its obligations under this Agreement arising out or caused by the failure of any other party (other than an affiliate of the Remarketing Agent) to provide any notice, statement or document required to be delivered pursuant to any Related Document in connection with performance by the Remarketing Agent of the relevant obligation.
Section 12. Amendment, Supplement or Modification of Agreements. Without the prior written consent of the Remarketing Agent, the Fund will not agree or consent to any amendment, supplement or modification of the Tender and Paying Agent Agreement, this Agreement or the Supplement, nor waive any provision thereof, if such amendment, supplement, modification or waiver would materially adversely affect the interests of the Remarketing Agent, in the Remarketing Agent's sole discretion; provided, that, for purposes of this Section 12, any changes or amendments to the rating agency criteria provided in the Supplement for the VRRM-MFP Shares shall not be deemed to materially adversely affect the interests of the Remarketing Agent.
Section 13. Books and Records. The Remarketing Agent shall keep such books and records with respect to the performance of its duties hereunder as shall be consistent with prudent industry practice and shall, to the extent permitted by law, make such books and records available for inspection by the Fund on reasonable notice during normal business hours. Any costs and expenses associated with such inspections shall be for the account of the party requesting such inspection.
Section 14. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of New York, except Section 25 below, which shall be construed in accordance with and governed by the laws of the Commonwealth of Massachusetts, 13
in each case without regard to conflict of laws principles that would require the application of the laws of another jurisdiction.
THE PARTIES HERETO HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY DISPUTE RELATED TO THIS AGREEMENT OR ANY MATTERS CONTEMPLATED HEREBY.
Section 15. Waiver of Jury Trial. The Fund, the Investment Adviser and the Remarketing Agent hereby waive trial by jury in any action, proceeding or counterclaim brought by any of the parties hereto against the other on any matters whatsoever arising out of or in any way connected with this Agreement.
Section 16. Certain Provisions to Survive Termination of Agreement. Regardless of any termination of this Agreement pursuant to Section 10 hereof, the obligations of the Fund and the Investment Adviser pursuant to Sections 3, 4 and 9 hereof and of the Remarketing Agent pursuant to Section 9 hereof shall remain operative and in full force and effect until fully satisfied.
Section 17. Successors and Assigns. The rights and obligations of the Fund and the Investment Adviser hereunder may not be assigned or delegated to any other person without the prior written consent of the Remarketing Agent. The rights and obligations of the Remarketing Agent hereunder may not be assigned or delegated to any other person without the prior written consent of the Fund. This Agreement shall inure to the benefit of and be binding upon the Fund, the Investment Adviser and the Remarketing Agent and their respective permitted successors and assigns, and, subject to Section 23, will not confer any benefit upon any other person, partnership, association or corporation other than persons, if any, controlling any Remarketing Agent within the meaning of Section 15 of the 1933 Act, or Section 20 of the 1934 Act, or any Indemnified Person to the extent provided in Section 9 hereof. As used in this Section 17, the terms "successors" and "assigns" shall not include any purchaser of VRRM-MFP Shares merely because of such purchase.
Section 18. Headings. The section headings herein are for convenience of reference only, and it is agreed that such section headings are not a part of this Agreement and will not be used in the interpretation of any provisions of this Agreement.
Section 19. Severability. If any provision of this Agreement shall be held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any or all jurisdiction or jurisdictions, because it conflicts with any provision of any constitution, statute, rule of public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question invalid, inoperative or unenforceable in any other case, circumstance or jurisdiction, or of rendering any other provision or provisions of this Agreement invalid, inoperative or unenforceable to any extent whatsoever.
Section 20. Counterparts. This Agreement may be executed in several counterparts, each of which shall be regarded as an original and all of which shall constitute one and the same document. 14
Section 21. Remarketing Agent Not Acting as Underwriter. It is understood and agreed by the parties hereto that the only obligations of the Remarketing Agent hereunder are as set forth in Sections 2, 3, 9 and 13 hereof. When engaged in remarketing any properly-Tendered VRRM-MFP Shares, the Remarketing Agent shall act only as agent for and on behalf of each owner of the VRRM-MFP Shares so tendered. The Remarketing Agent shall not act as an underwriter for the Tendered VRRM- MFP Shares and shall in no way be obligated to advance its own funds to purchase any Tendered VRRM-MFP Shares (except as provided in Section 2(c) or to the extent that in its individual capacity as purchaser of those VRRM-MFP Shares it may elect, in accordance with Section 6 hereof, to purchase, in its sole discretion) or to otherwise expend or risk its own funds or incur or become exposed to financial liability in the performance of its duties hereunder.
Section 22. Amendment. This Agreement may be amended by any instrument in writing signed by all of the parties hereto so long as this Agreement as amended is not inconsistent with the Supplement in effect as of the date of any such amendment. The parties acknowledge that amendments to this Agreement (including with respect to Section 2(c)) are subject to prior notice requirements as set forth in the Tender and Paying Agent Agreement.
Section 23. Benefits. Nothing herein, express of implied, shall give to any person, other than the Fund, the Remarketing Agent and their respective permitted successors and assigns, any benefit of any legal or equitable right, remedy or claim hereunder. Without limiting the generality of the foregoing, no Holder or Beneficial Owner (or their Agent Member) of VRRM-MFP Shares shall have or be deemed to have any right in respect of, or shall in any event be entitled to enforce or to seek recourse against any person in respect of, any provision of this Agreement, and any and all rights of holders of VRRM-MFP Shares or obligations of the Fund in respect thereof arise only under and as governed solely by the Declaration, the Supplement and by-laws of the Fund as they are in effect from time to time.
Section 24. Notices and Wire Instructions. Unless otherwise specified, any notices, requests, consents or other communications given or made hereunder or pursuant hereto shall be made in writing and shall be deemed to have been validly given or made upon receipt, if given by mail, or when delivered, if given by prepaid courier service, in each case addressed as follows: if to the Fund or the Investment Adviser, to either of them at 333 West Wacker Drive, Chicago, Illinois 60606, Attention: [●]; if to the Remarketing Agent, to [●], [●], Attention: [●], Telephone: [●], Fax: [●], Email: [●]; and if to the Calculation and Paying Agent, to [●], [●], Attention: [●], Telephone: [●], Fax: [●], Email: [●]; or to such other address as any of the foregoing persons shall specify to the parties hereto in writing.
The Purchase Price of remarketed VRRM-MFP Shares, if paid through the Calculation and Paying Agent, shall be paid by the Remarketing Agent in immediately available funds by wire transfer to the Calculation and Paying Agent in accordance with the following instructions:
[●] ABA# [●] 15
For Further Credit to Account # [●] Ref: [●] Attn: [●] Tel: [●]
The remarketing fee shall be paid by the Fund in immediately available funds by wire transfer to the Remarketing Agent in accordance with the following instructions:
[●] ABA# [●] For Further Credit to Account # [●] Ref: [●] Attn: [●] Tel: [●]
Email transmissions shall be deemed to have been validly given or made when sent to the following email addresses; if to the Fund or the Investment Adviser, to [●] and [●]; if to the Remarketing Agent, to [●]; or to such other address as any such parties shall specify to the other party in writing; and, if to the Calculation and Paying Agent, to [●].
Section 25. Liability of Officers, Trustees and Shareholders. A copy of the Declaration is on file with the Secretary of the Commonwealth of Massachusetts. This Agreement has been executed on behalf of the Fund by an officer of the Fund in such capacity and not individually and the obligations of the Fund under this Agreement are not binding upon such officer, any of the trustees or the shareholders individually but are binding only upon the assets and property of the Fund.
Section 26. Nonpetition Covenant. Notwithstanding any prior termination of this Agreement, [●], solely in its capacity as Remarketing Agent, hereby covenants and agrees that it shall not, prior to the date which is one year and one day after the redemption and the payment in full of the VRRM-MFP Shares and all accumulated dividends, petition or otherwise invoke the process of any court or government authority for the purpose of commencing a case against, the Fund under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Fund or any substantial part of the property of the Fund; provided, however, that nothing in this provision shall preclude, or be deemed to stop, the Remarketing Agent from taking any action prior to the expiration of the aforementioned one year and one day period in (x) any case or proceeding voluntarily filed or commenced by the Fund, (y) any involuntary insolvency proceeding filed or commenced against the Fund by a Person other than the Remarketing Agent, or (z) with respect to its rights or preferences as a Beneficial Owner or Holder of VRRM-MFP Shares.
[Signature Page Follows] 16
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by one of its duly authorized officers as of the date first above written. NUVEEN AMT-FREE MUNICIPAL CREDIT INCOME FUND
By Name: Title:
NUVEEN FUND ADVISORS, LLC
By Name: Title:
[NAME]
By Name: Title: Signature Page to Remarketing Agreement (NVG Series [●] MFP)
Exhibit A - Form of Tender Notice
NUVEEN AMT-FREE QUALITY MUNICIPAL INCOME FUND (NVG) (THE "FUND") SERIES [●] MUNIFUND PREFERRED SHARES IN THE VARIABLE RATE REMARKETED MODE ("VRRM-MFP SHARES")
TENDER NOTICE
Note: The substance of this notice must be given by the Beneficial Owner or its Agent Member to [●], as Remarketing Agent (the "Remarketing Agent"), appointed under the Remarketing Agreement, dated as of [●], between Nuveen AMT-Free Municipal Credit Income Fund, Nuveen Fund Advisors, LLC and the Remarketing Agent, in the manner provided in Schedule 1 hereto by Electronic Means prior to 5:00 p.m., New York City time, on any Business Day. Any Tender Notice delivered at or after 5:00 p.m., New York City time, shall be deemed to have been received by the Remarketing Agent on the next succeeding Business Day and the Purchase Date specified in this Tender Notice shall be postponed accordingly by one Business Day. The determination of the Remarketing Agent as to whether a Tender Notice has been properly delivered shall be conclusive and binding upon the Beneficial Owner and its Agent Member.
TO: [●], as Remarketing Agent
1. In accordance with the Fund's Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares effective [●] (the "Statement"), as modified with respect to the Variable Rate Remarketed Mode (the Initial Mode) by the Supplement to the Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares Initially Designating the Variable Rate Remarketed Mode for the Series [●] MuniFund Preferred Shares effective [●], as amended, revised or supplemented from time to time (the "Supplement"); the undersigned, [●], [Beneficial Owner] [Agent Member of the Beneficial Owner] of the following VRRM-MFP Shares:
VRRM-MFP Shares Series CUSIP Number
Number of VRRM-MFP Shares tendered for remarketing (the "Designated Amount")1 [●] [●]
hereby notifies you of the election by the Beneficial Owner of the referenced VRRM-MFP Shares to tender such VRRM-MFP Shares for remarketing of the Designated Amount on the seventh calendar day following the date on which this Tender Notice is delivered to the 1 VRRM-MFP Shares may be tendered only in whole shares.
Remarketing Agent, or if such seventh calendar day is not a Business Day, the next succeeding Business Day (the "Purchase Date").
The name and DTC Participant No. of the Agent Member tendering on behalf of the Beneficial Owner is:
Name of Agent Member:
DTC Participant No. of Agent Member:
Name of Beneficial Owner:
Beneficial Owner's account number:
The person to contact at the Beneficial Owner or its Agent Member and the related contact information are as follows:
Name:
Telephone No:
Email address:
The Beneficial Owner or its Agent Member acknowledges and agrees that the Person or Persons to whom or to whose order the Purchase Price of the tendered VRRM-MFP Shares is to be paid is/are the same as identified above.
2. The undersigned acknowledges the obligation of the tendering Beneficial Owner to deliver the VRRM-MFP Shares that are the subject of this Tender Notice on or before 11:00 a.m., New York City time on the Purchase Date, and, in accordance with such obligation, the undersigned hereby undertakes to deliver or to cause to be delivered the VRRM-MFP Shares being sold [directly] or [through an Agent Member] to the Remarketing Agent, through the "funds against delivery" procedures of the Securities Depository, no later than 11:00 a.m., New York City time, on the Purchase Date. The undersigned hereby also assigns and transfers and directs the Securities Depository or its nominee or the Remarketing Agent to transfer the tendered VRRM-MFP Shares to the purchaser in accordance with the procedures described in the Supplement, and otherwise according to the Securities Depository's procedures, in exchange for the payment of the Purchase Price thereof on the Purchase Date.
3. The undersigned confirms its agreement that it hereby transfers to the purchaser of the VRRM-MFP Shares tendered pursuant to this Tender Notice the right to receive from the Fund any dividends declared and unpaid for each day prior to the purchaser becoming the Beneficial Owner of the VRRM-MFP Shares in exchange for payment of the Purchase Price for such VRRM-MFP Share by the purchaser.
4. The undersigned hereby represents and warrants for the benefit of the Remarketing Agent, the Fund and the Calculation and Paying Agent, that the undersigned has full power and authority to tender, exchange, assign and transfer the VRRM-MFP Shares to be
tendered hereby, and that the transferee will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim, when the same are tendered.
5. The undersigned acknowledges that this Tender Notice is irrevocable and effective upon the receipt by the Remarketing Agent.
6. Terms used herein and not otherwise defined will have the meanings given to such terms in the Supplement. Dated: [Complete applicable signature block below.] Print name of Beneficial Owner
By: Name: Title: [OR] Print name of Agent Member
By: Name: Title:
SCHEDULE 1
TENDER NOTICE DELIVERY INFORMATION FOR THE REMARKETING AGENT
This Tender Notice must be delivered by the Beneficial Owner or its Agent Member to [●] (the "Remarketing Agent") by email transmission at the email address listed below or such other email address as the Remarketing Agent shall designate (or, if email transmission shall be unavailable, by facsimile transmission to the fax number listed below or such other fax number as the Remarketing Agent will designate) at or prior to 5:00 p.m., New York City time, on any Business Day. If this Tender Notice is delivered after 5:00 p.m., New York City time, it will be deemed to have been received by the Remarketing Agent on the next succeeding Business Day, and the Purchase Date will be postponed accordingly by one Business Day:
Attention: [●] [●]
Phone: [●]
Email: [●]
This Tender Notice will not be deemed to be delivered unless and until the Remarketing Agent actually receives it by the above-described means.
Exhibit B - Form of Remarketing Notice
TO [BENEFICAL OWNERS] [HOLDERS] OF SERIES [●] MUNIFUND PREFERRED SHARES IN THE VARIABLE RATE REMARKETED MODE ("VRRM-MFP SHARES") OF NUVEEN AMT-FREE MUNICIPAL CREDIT INCOME FUND (NVG) (THE "FUND")
REMARKETING NOTICE
[Date] Re: Nuveen AMT-Free Municipal Credit Income Fund Series [●] MuniFund Preferred Shares (the "VRRM-MFP Shares")
Pursuant to [Section 2(d)] [Section 2(e)] [Section 2(f)] of the Remarketing Agreement dated [●] (the "Remarketing Agreement"), by and among Nuveen AMT-Free Municipal Credit Income Fund, a closed-end investment company organized as a Massachusetts business trust, Nuveen Fund Advisors, LLC, a registered investment adviser and wholly-owned subsidiary of Nuveen Investments, Inc., and [●] (the "Remarketing Agent"), the undersigned Remarketing Agent hereby notifies you of the following information regarding the remarketing of the VRRM-MFP Shares as of the date hereof:
1. Information regarding the VRRM-MFP Shares is as follows:
VRRM-MFP Shares Series: A
CUSIP number:
2. Remarketing Results:
Populate fields in the applicable section; delete inapplicable sections.
[For Optional Tenders] (i) A purchaser or purchasers have been identified for the purchase of all of the Tendered VRRM-MFP Shares on the Purchase Date. (ii) Number of Tendered VRRM-MFP Shares sold, subject to settlement: . (iii) The Purchase Date will be: .
(iv) The Purchase Price per Tendered VRRM-MFP Share is: .
[For Mandatory Tenders] (i) A purchaser or purchasers have been identified for the purchase of all of the VRRM- MFP Shares on the Remarketing Date. (ii) Number of VRRM-MFP Shares sold, subject to settlement: . (iii) The Remarketing Date will be: . (iv) The Regular Dividend Rate to be applicable to the VRRM-MFP Shares on the Remarketing Date will be: . (v) All VRRM-MFP Shares will be subject to mandatory tender for purchase on the Remarketing Date at a Purchase Price per VRRM-MFP Share of: .
[For Transition to a New Mode] (i) A purchaser or purchasers have been identified for the purchase of all of the VRRM- MFP Shares on the New Mode Commencement Date. (ii) Number of VRRM-MFP Shares sold, subject to settlement: . (iii) The New Mode Commencement Date will be: . (iv) The Regular Dividend Rate to be applicable to the VRRM-MFP Shares on the New Mode Commencement Date will be: . (v) All VRRM-MFP Shares will be subject to mandatory tender for purchase on the New Mode Commencement Date at a Purchase Price per share of:
3. Capitalized terms used herein will have the meanings given to them in or by reference to the Remarketing Agreement.
[●] as Remarketing Agent
By: Name: Title: Cc: [●] Nuveen AMT-Free Municipal Credit Income Fund
Exhibit C - Form of Failed Remarketing Notice
TO HOLDERS OF SERIES [●] MUNIFUND PREFERRED SHARES IN THE VARIABLE RATE REMARKETED MODE ("VRRM-MFP SHARES") OF NUVEEN AMT-FREE MUNICIPAL CREDIT INCOME FUND (NVG) (THE "FUND")
CUSIP NO. [●]*
FAILED REMARKETING NOTICE
In accordance with the Fund's Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares effective [●] (the "Statement"), as modified with respect to the Variable Rate Remarketed Mode (the Initial Mode) by the Supplement to the Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares Initially Designating the Variable Rate Remarketed Mode for the Series [●] MuniFund Preferred Shares effective [●], as amended, revised or supplemented from time to time (the "Supplement"), the Fund hereby notifies Holders that:
Retain only the applicable section; delete inapplicable sections.
[For Optional Tender]
A Failed Remarketing Event has occurred with respect to Tendered VRRM-MFP Shares optionally tendered for remarketing. All Tendered VRRM-MFP Shares shall be retained by their respective Beneficial Owners.
[For Mandatory Tender]
A Failed Remarketing Event has occurred with respect to a mandatory tender of all Outstanding VRRM-MFP Shares for remarketing. All VRRM-MFP Shares shall be retained by their respective Holders.
[For Transition to New Mode]
A Failed Remarketing Event has occurred with respect to a mandatory tender of all Outstanding VRRM-MFP Shares for transition to a new Mode on the New Mode Commencement Date. All VRRM-MFP Shares shall be retained by their respective Holders. By not later than the Business Day immediately following the occurrence of the Failed Remarketing Event, the Fund will make an election, and provide a Failed Transition Election Notice in writing by Electronic Means to the Holders, the Remarketing Agent and the Calculation and Paying Agent, to either (i) cancel the * NOTE: None of the Fund, the Remarketing Agent or the Calculation and Paying Agent will be responsible for the selection or use of the CUSIP Numbers selected, nor is any representation made as to its correctness indicated in any notice or as printed on any VRRM-MFP Share certificate. It is included solely as a convenience to VRRM-MFP Shareholders.
attempted transition to a new Mode or (ii) continue to attempt to transition to a new Mode.
The Failed Remarketing Event [commences] [continues] a Failed Remarketing Period. During the Failed Remarketing Period, the Remarketing Agent will no longer determine the Regular Dividend Rate on a daily basis; dividends on all VRRM-MFP Shares will be payable at the Step-Up Dividend Rate (as determined by the Remarketing Agent commencing on the date of the Failed Remarketing Event); the right of Beneficial Owners to make optional tenders of their MuniFund Preferred Shares for remarketing is suspended; and all of the Outstanding VRRM-MFP Shares is subject to mandatory tender for remarketing. All Outstanding VRRM-MFP Shares are subject to mandatory redemption on [●] (the "Failed Remarketing Mandatory Redemption Date").
This notice will be conclusively presumed to have been duly given, whether or not the Holders or Beneficial Owners receive this notice.
Terms used herein and not otherwise defined will have the meanings given to such terms in the Supplement. Dated:
[NAME], as Remarketing Agent
By: Name: Title: Cc: [●] Nuveen AMT-Free Municipal Credit Income Fund
Exhibit D - Form of Retention Notice
NUVEEN AMT-FREE MUNICIPAL CREDIT INCOME FUND (NVG) (THE "FUND") SERIES [●] MUNIFUND PREFERRED SHARES IN THE VARIABLE RATE REMARKETED MODE ("VRRM-MFP SHARES") CUSIP No. [●]*
RETENTION NOTICE
TO: [●], as Remarketing Agent
Further to the Remarketing Notice dated [●] (the "Remarketing Notice") all VRRM-MFP Shares will be subject to mandatory tender for purchase at a price equal to [●] (the "Purchase Price") on [●] (the "Remarketing Date").
As set forth in the Fund's Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares effective [●] (the "Statement"), as modified with respect to the Variable Rate Remarketed Mode (the Initial Mode) by the Supplement to the Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares Initially Designating the Variable Rate Remarketed Mode for the Series [●] MuniFund Preferred Shares effective [●], as amended, revised or supplemented from time to time (the "Supplement"), any Beneficial Owner of a VRRM-MFP Share that is not a Tendered VRRM-MFP Share that was part of the Failed Remarketing Event to which the Remarketing Notice relates, as determined by the Remarketing Agent, may deliver written notice to the Remarketing Agent and the Calculation and Paying Agent by Electronic Means at least three Business Days prior to the Remarketing Date that it wishes to retain its VRRM-MFP Shares (each such Beneficial Owner, a "Retaining Beneficial Owner").
On the Remarketing Date, the VRRM-MFP Shares held by each Retaining Beneficial Owner will be subject to mandatory tender and repurchased by the Retaining Beneficial Owner at a price equal to the Purchase Price on the Remarketing Date.
For purposes of the foregoing, the undersigned Beneficial Owner of VRRM-MFP Shares hereby provides notice of its wish to retain VRRM-MFP Shares of which it is Beneficial Owner, in the following amount: [●]. The undersigned person electing to retain its VRRM-MFP Shares represents that it is the Beneficial Owner of the number of VRRM- MFP Shares set forth above, and such number constitutes all of the VRRM-MFP Shares owned by the undersigned.
Terms used herein and not otherwise defined will have the meanings given to such terms in the Supplement.
Dated: * NOTE: None of the Fund, the Remarketing Agent or the Calculation and Paying Agent will be responsible for the selection or use of the CUSIP Numbers selected, nor is any representation made as to its correctness indicated in any notice or as printed on any VRRM-MFP Share certificate. It is included solely as a convenience to VRRM-MFP Shareholders.
[Complete applicable signature block below.] Print name of Beneficial Owner
By: Name: Title: [OR] Print name of Agent Member
By: Name: Title:
Cc: [●] Nuveen AMT-Free Municipal Credit Income Fund [/INST] ```json
{<answer_start>
"answer": "The Remarketing Agent shall keep such books and records with respect to the performance of its duties hereunder as shall be consistent with prudent industry practice and shall, to the extent permitted by law, make such books and records available for inspection by the Fund on reasonable notice during normal business hours."
<answer_end>
}
``` </s> | Exhibit s.2
NUVEEN AMT-FREE MUNICIPAL CREDIT INCOME FUND (NVG)
AND
NUVEEN FUND ADVISORS, LLC
AND
[●]
REMARKETING AGREEMENT
Dated as of [●]
Series [●] MuniFund Preferred Shares
Variable Rate Remarketed Mode
(NVG - Series [●] MFP)
Table of Contents Page Section 1. Definitions 1 Section 2. Appointment and Obligations of the Remarketing Agent 3 Section 3. Representations, Warranties and Covenants of the Remarketing Agent and the Fund 6 Section 4. Fees and Expenses 7 Section 5. Resignation, Suspension and Removal of the Remarketing Agent 7 Section 6. Dealing in the VRRM-MFP Shares 7 Section 7. Information 8 Section 8. Conditions to Obligations of the Remarketing Agent 9 Section 9. Indemnification 9 Section 10. Termination of Remarketing Agreement 12 Section 11. Remarketing Agent's Performance; Duty of Care 13 Section 12. Amendment, Supplement or Modification of Agreements 13 Section 13. Books and Records 13 Section 14. Governing Law 13 Section 15. Waiver of Jury Trial 14 Section 16. Certain Provisions to Survive Termination of Agreement 14 Section 17. Successors and Assigns 14 Section 18. Headings 14 Section 19. Severability 14 Section 20. Counterparts 14 Section 21. Remarketing Agent Not Acting as Underwriter 15 Section 22. Amendment 15 i
Section 23. Benefits 15 Section 24. Notices and Wire Instructions 15 Section 25. Liability of Officers, Trustees and Shareholders 16 Section 26. Nonpetition Covenant 16
Exhibit A Form of Tender Notice (Optional Tenders)
Exhibit B Form of Remarketing Notice (Optional and Mandatory Tenders, Mode Transition)
Exhibit C Form of Failed Remarketing Notice (Optional and Mandatory Tenders, Mode Transition)
Exhibit D Form of Retention Notice (Mandatory Tenders) ii
REMARKETING AGREEMENT
This REMARKETING AGREEMENT, dated as of [●] (this "Agreement"), by and among Nuveen AMT-Free Municipal Credit Income Fund, a closed-end investment company organized as a Massachusetts business trust (the "Fund"), Nuveen Fund Advisors, LLC, a registered investment adviser and wholly-owned subsidiary of Nuveen Investments, Inc. (the "Investment Adviser"), and [●] (the "Remarketing Agent").
WITNESSETH:
WHEREAS, the Fund is issuing Series [●] MuniFund Preferred Shares, par value $.01 per share (the "MFP Shares"), with a liquidation preference of $[●] per share, pursuant to and with the preferences, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption assigned to them in the Fund's Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares effective [●], as amended, revised or supplemented from time to time (the "Statement"), as modified with respect to the Initial Mode by the Supplement to the Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares Initially Designating the Variable Rate Remarketed Mode for the Series [●] MuniFund Preferred Shares effective [●], as amended, revised or supplemented from time to time (the "Supplement"; references in this Agreement to the Supplement shall be deemed to include the Statement);
WHEREAS, the Fund has requested [●] to act as the Remarketing Agent under this Agreement while the MFP Shares are in the Variable Rate Remarketed Mode in accordance with the provisions of the Supplement (and the Board of Trustees of the Fund has adopted a resolution appointing [●] as the Remarketing Agent) to perform the duties set forth herein and to perform such other duties as are assigned to the Remarketing Agent herein and in the Supplement, all pursuant to the procedures set forth in the Supplement and this Agreement;
WHEREAS, the Remarketing Agent is willing to assume such duties on the terms and conditions expressly set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto agree as follows:
Section 1. Definitions. Capitalized terms used herein that are not otherwise defined shall have the meanings assigned to them in the Supplement.
"1933 Act" means the Securities Act of 1933, as amended.
"1933 Act Regulations" means the rules and regulations under the 1933 Act.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"1940 Act" means the Investment Company Act of 1940, as amended.
"1940 Act Documents" has the meaning set forth in Section 3(b) hereof. 1
"1940 Act Regulations" means the rules and regulations under the 1940 Act.
"Agreement" has the meaning set forth in the preamble.
"Calculation and Paying Agent" means The Bank of New York Mellon acting pursuant to the Tender and Paying Agent Agreement or any successor thereto.
"Commission" has the meaning set forth in Section 3(d) hereof.
"Fund" has the meaning set forth in the preamble.
"Indemnified Person" has the meaning set forth in Section 9(a) hereof.
"Indemnifying Person" has the meaning set forth in Section 9(c) hereof.
"Investment Adviser" has the meaning set forth in the preamble.
"Losses" has the meaning set forth in Section 9(b) hereof.
"MFP Shares" has the meaning set forth in the preamble.
"Mode" has the meaning set forth in the Statement.
"Prospectus" means the final prospectus, including the statement of additional information incorporated by reference therein, each dated [●], and the prospectus supplement, dated [●], relating to the initial offering of the VRRM-MFP Shares.
"Registration Statement" means the Fund's registration statement (No. 333-226136 and No. 811-09475), relating to the MFP Shares and other securities of the Fund, declared effective by order of the Commission on October [●], 2018, as it may be amended from time to time.
"Remarketing Agent" has the meaning set forth in the preamble.
"Remarketing Materials" has the meaning set forth in Section 7(b) hereof.
"Remarketing Memorandum" means the Prospectus or any other written communication describing the Fund and/or the terms of the VRRM-MFP Shares, which has been approved by the Fund in writing for use in connection with remarketing prior to its use, which approval shall not be unreasonably withheld or delayed.
"Representation Date" has the meaning set forth in Section 3(b) hereof.
"Statement" has the meaning set forth in the preamble.
"Supplement" has the meaning set forth in the preamble.
"Transition Remarketing" means a remarketing in connection with a Mode change pursuant to Article 3 of the Supplement. 2
"VRRM-MFP Shares" means the MFP Shares while in the Variable Rate Remarketed Mode pursuant to the Supplement.
Section 2. Appointment and Obligations of the Remarketing Agent.
(a) Appointment. The Fund hereby appoints [●], and [●] hereby accepts such appointment, as the exclusive Remarketing Agent of the VRRM-MFP Shares for the Variable Rate Remarketed Mode for the purpose of establishing on each Business Day the Dividend Rate in respect of the VRRM-MFP Shares and, in connection with a tender, remarketing such VRRM-MFP Shares on behalf of the Beneficial Owners or Holders thereof, as applicable, and calculating the Purchase Price therefor, among other things; and performing such other duties as are assigned to the Remarketing Agent in the Supplement, all pursuant to the procedures set forth in the Supplement and this Agreement.
(b) General Duties. The Remarketing Agent agrees with respect to the VRRM-MFP Shares to:
(i) use its best efforts to remarket Tendered VRRM-MFP Shares in connection with an optional tender or mandatory tender of VRRM-MFP Shares as provided in the Supplement, but shall in no way be liable if no purchasers are found, provided it has otherwise performed its obligations as set forth in this Agreement and the Supplement;
(ii) calculate the Purchase Price to be paid in connection with a remarketing of VRRM-MFP Shares.
(iii) establish the Dividend Rate as provided in the Supplement; provided, that the Dividend Rate may not exceed the Maximum Rate;
(iv) notify the Fund and the Calculation and Paying Agent of the Dividend Rate by Electronic Means and post the Dividend Rate on Bloomberg promptly on each date of determination of the Dividend Rate as provided in the Supplement; in the case of the notice to the Fund and the Calculation and Paying Agent with respect to the Step-Up Dividend Rate, such notice shall set forth in reasonable detail the basis for and calculation of the highest rate as determined by the Remarketing Agent;
(v) provide any other notices to be provided by the Remarketing Agent to the Fund, the Calculation and Paying Agent, Holders and Beneficial Owners as set forth in the Supplement;
(vi) make available to a Beneficial Owner, upon request by such Beneficial Owner in connection with a remarketing, a copy of the Contact Notification Form (as such term is defined in the Tender and Paying Agent Agreement);
(vii) make available to a Beneficial Owner or a former Beneficial Owner, upon request by such Beneficial Owner or former Beneficial Owner (as the case may be) in 3
connection with a remarketing, a copy of the Cancellation Form (as such term is defined in the Tender and Paying Agent Agreement); and
(viii) carry out such other duties as are assigned to the Remarketing Agent herein and in the Supplement, or as are reasonably requested by the Fund and agreed to by the Remarketing Agent, all in accordance with the provisions in this Agreement and the Supplement.
(c) Remarketing at Purchase Price; Principal to Principal Basis. It is further understood and agreed by and between the parties that, in connection with any attempted remarketing, all Tendered VRRM-MFP Shares shall be remarketed at the Purchase Price of such VRRM-MFP Shares. With respect to the Remarketing Agent's responsibilities, but without affecting the Calculation and Paying Agent's role as intermediary (if applicable), the Remarketing Agent hereby agrees that, if the Remarketing Agent obtains a bid at the Purchase Price for any VRRM-MFP Shares being remarketed, which, if accepted, would be binding on the bidder for the consummation of the sale of such VRRM-MFP Shares (an "actionable bid"), and the Remarketing Agent elects in its sole discretion to accept such actionable bid, the Remarketing Agent shall (i) purchase the Tendered VRRM-MFP Shares, as a principal and not as an agent, from the Beneficial Owner or Holder thereof on the Purchase Date at the Purchase Price, (ii) resell such VRRM-MFP Shares, as a principal and not as an agent, to the Person making such actionable bid at the Purchase Price, and (iii) record such purchase and resale on its books and records in accordance with this provision. Any such purchases by the Remarketing Agent from the Beneficial Owner or Holder shall be made with the Remarketing Agent's own funds.
(d) Optional Tender for Remarketing Notices. If, in connection with an optional tender for remarketing in accordance with Section 2.2(a) of the Supplement, a Beneficial Owner tendering VRRM-MFP Shares for remarketing delivers to the Remarketing Agent a Tender Notice in substantially the form of and containing the information set forth in Exhibit A hereto and the Remarketing Agent identifies a purchaser for the Tendered VRRM-MFP Shares during the related Remarketing Window, the Remarketing Agent shall deliver a Remarketing Notice in substantially the form of and containing the information set forth in Exhibit B hereto to the Beneficial Owner of the Tendered VRRM-MFP Shares, with a copy to the Fund and the Calculation and Paying Agent as provided in Section 2.2(a) of the Supplement. Upon the occurrence of a Failed Remarketing Event, the Remarketing Agent shall provide a Failed Remarketing Notice in substantially the form of and containing the information set forth in Exhibit C hereto to the Holders, the Fund and the Calculation and Paying Agent as provided in Section 2.2(b) of the Supplement.
(e) Mandatory Tender for Remarketing Notices. In connection with a mandatory tender for remarketing in accordance with Section 2.2(c) of the Supplement, the Remarketing Agent shall provide a Remarketing Notice in substantially the form of and containing the information set forth in Exhibit B hereto to the Holders, the Fund and the Calculation and Paying Agent as provided in Section 2.2(c) of the Supplement. Each Beneficial Owner wishing (and eligible) to retain its VRRM-MFP Shares shall provide a Retention Notice in substantially the form of and containing the information set forth in Exhibit D hereto to the Remarketing Agent 4
and the Calculation and Paying Agent as provided in Section 2.2(c) of the Supplement. Upon the occurrence of a Failed Remarketing Event, the Remarketing Agent shall provide a Failed Remarketing Notice in substantially the form of and containing the information set forth in Exhibit C hereto to the Holders, the Fund and the Calculation and Paying Agent as provided in Section 2.2(c) of the Supplement.
(f) Mode Change Notices. In connection with a mandatory tender for remarketing for a transition to a new Mode in accordance with Section 3.2 of the Supplement, the Remarketing Agent shall provide a Remarketing Notice in substantially the form of and containing the information set forth in Exhibit B hereto to the Holders, the Fund and the Calculation and Paying Agent as provided in Section 3.2(c) of the Supplement. Upon the occurrence of a Failed Remarketing Event, the Remarketing Agent shall provide a Failed Remarketing Notice in substantially the form of and containing the information set forth in Exhibit C hereto to the Holders, the Fund and the Calculation and Paying Agent as provided in Section 3.2(c) of the Supplement.
(g) Book-Entry Procedures. Except as otherwise expressly provided for herein, the purchase and delivery of Tendered VRRM-MFP Shares and the remarketing thereof, and payments with respect to the foregoing, will be accomplished in accordance with the applicable procedures of the Securities Depository.
(h) Return of Unsold VRRM-MFP Shares. Any VRRM-MFP Shares unsold in a remarketing will be returned to the relevant tendering Beneficial Owners or their Agent Members, or the relevant tendering Holders, as the case may be, by the Remarketing Agent; provided that such tender will continue until the earlier of the occurrence of a successful remarketing or the Failed Remarketing Mandatory Redemption Date.
(i) Timing Requirements. The Remarketing Agent agrees to the remarketing timing requirements applicable to it in the Supplement. The Remarketing Agent may, in its sole discretion, modify the settlement procedures set forth therein with respect to any Remarketing upon ten (10) days' prior written notice to the Fund and the Calculation and Paying Agent, provided any such modification does not adversely affect the Holders, the Beneficial Owners, the Calculation and Paying Agent or the Fund.
(j) Purchases by Remarketing Agent. If the Remarketing Agent in its sole discretion decides to purchase unsold VRRM- MFP Shares for its own account, on each Purchase Date, the Remarketing Agent will settle such purchase through delivery against payment of the Purchase Price for such VRRM-MFP Shares to be received by the Remarketing Agent by 11:00 a.m., New York City time, on such Purchase Date. The Remarketing Agent is not obligated to purchase any VRRM-MFP Shares that would otherwise remain unsold in a remarketing.
(k) Sales by Remarketing Agent for its Own Account. It is expressly understood and agreed by the parties hereto that VRRM-MFP Shares as to which the Remarketing Agent is the Beneficial Owner may be held by the Remarketing Agent for its own account or for the account of others, and may be sold in a remarketing or otherwise sold by the Remarketing Agent. The Remarketing Agent may sell VRRM-MFP Shares for its own account outside of a remarketing at a price other than the Purchase Price. 5
(l) Notice of Taxable Allocations. Whenever the Fund intends or expects to include any Taxable Allocation in any dividend on VRRM-MFP Shares, the Fund shall provide a Notice of Taxable Allocation in accordance with Section 2.7(a) of the Supplement. Whenever such advance notice is received from the Fund, the Calculation and Paying Agent will notify each Holder and the Remarketing Agent. The Remarketing Agent shall promptly notify each potential Beneficial Owner or its Agent Member after receipt of such advance notice by the Remarketing Agent.
Section 3. Representations, Warranties and Covenants of the Remarketing Agent and the Fund.
(a) The Remarketing Agent hereby represents, warrants and agrees that it has, and during the term of this Agreement shall maintain, all licenses, consents and other rights required for the use of any index or other data in connection with calculation of the Dividend Rate or dissemination thereof.
(b) The Fund represents and warrants to, and agrees with, the Remarketing Agent as as of each Purchase Date, Remarketing Date or New Mode Commencement Date, as applicable (each, a "Representation Date"), that (i) the Fund has made all the filings with the United States Securities and Exchange Commission (the "Commission") that are required to be made under the 1940 Act and the 1940 Act Regulations (collectively, the "1940 Act Documents"), (ii) each 1940 Act Document complies in all material respects with the requirements of the 1940 Act and the 1940 Act Regulations, and each 1940 Act Document did not at the time of filing with the Commission include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading and (iii) the applicable Remarketing Materials, as amended or supplemented, including by any subsequently filed 1940 Act Document on or prior to such Representation Date (or, if applicable, by any document filed pursuant to the 1933 Act and the 1933 Act Regulations), as provided by the Fund, will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the Fund makes no representations or warranties with respect to information provided by the Remarketing Agent specifically for use in the Remarketing Materials.
(c) The financial statements included or incorporated by reference in the 1940 Act Documents, together with the related notes and schedules, present fairly the financial position of the Fund as of the dates indicated and the results of operations, cash flows and changes in shareholders' equity of the Fund for the periods specified and have been prepared in compliance with the requirements of the 1940 Act and the 1940 Act Regulations and in conformity with U.S. generally accepted accounting principles applied on a consistent basis during the periods involved; the other financial and statistical data contained or incorporated by reference in the 1940 Act Documents are accurately and fairly presented and prepared on a basis consistent with the financial statements and books and records of the Fund.
(d) The Fund agrees (i) to deliver to the Remarketing Agent, within fifteen (15) calendar days following the last day of each calendar month beginning with [●], a report of 6
portfolio holdings of the Fund as of the close of business as of the last Business Day of such calendar month, listing portfolio holdings of the Fund by CUSIP and principal amount, and (ii) that, on or after such fifteenth calendar day (or earlier, with the Fund's prior approval) the Remarketing Agent may provide such report and/or the information therein to investors in the VRRM- MFP Shares, upon the investor's request.
Section 4. Fees and Expenses. For the performance of its services as Remarketing Agent hereunder, the Fund shall pay to the Remarketing Agent in arrears on the first day of each calendar month (or, if such day is not a Business Day, on the next succeeding Business Day) a monthly fee for each MFP Share Outstanding on the first calendar day of the preceding calendar month (or the date hereof in the case of the first such payment), in an amount, rounded upward to the nearest dollar, equal to (a) the product of (i) the rate of compensation as then in effect, as shall be agreed upon from time to time in writing by the Fund and the Remarketing Agent, times $[●] multiplied by (ii) the actual number of days from and including such first calendar day of the preceding calendar month (or the date hereof in the case of the first such payment) to and including the last calendar day of such preceding calendar month or, if applicable, the date of termination of this Agreement, if earlier, or the date of any prior redemption or liquidation for such share (as the case may be), divided by (b) 360. The obligation of the Fund to make the payments required by this Section shall survive the termination of this Agreement and remain in full force and effect until all such payments shall have been made in full.
Section 5. Resignation, Suspension and Removal of the Remarketing Agent.
(a) The Remarketing Agent may resign and be discharged from its duties and obligations hereunder with respect to the VRRM-MFP Shares by giving 90 days' prior written notice to the Fund and the Calculation and Paying Agent.
(b) The Fund may remove the Remarketing Agent with respect to the VRRM-MFP Shares by giving at least 60 days' prior written notice to the Remarketing Agent (and will provide prior notice also to the Calculation and Paying Agent, if any); provided, however, that no such removal shall become effective for an additional 30 days unless the Fund shall have appointed at least one nationally recognized securities dealer with expertise in remarketing variable rate securities as a successor Remarketing Agent for the VRRM-MFP Shares and the successor Remarketing Agent shall have entered into a remarketing agreement with the Fund, in form and substance satisfactory to the Fund, in which it shall have agreed to, among other duties, conduct remarketings in respect of VRRM-MFP Shares and determine the Dividend Rate on each Business Day for the VRRM-MFP Shares in accordance with the terms and conditions of the Supplement.
In each of the occurrences described in clause (a) or (b), the Fund shall use its best efforts to appoint a successor Remarketing Agent for such VRRM-MFP Shares and enter into a remarketing agreement with such Person as soon as reasonably practicable.
Section 6. Dealing in the VRRM-MFP Shares. The Remarketing Agent in its sole discretion may purchase for its own account VRRM-MFP Shares in a remarketing; however, subject to the last two sentences in Section 2(c) above, the Remarketing Agent shall not be obligated to purchase any VRRM-MFP Shares that would otherwise remain unsold in a 7
remarketing. None of the Fund, the Calculation and Paying Agent nor the Remarketing Agent (subject to the last sentence in Section 2(c) above) shall be obligated in any case to provide funds to make payment to a Beneficial Owner or its Agent Member or a Holder upon such Beneficial Owner's or Holder's tender of its VRRM-MFP Shares in a remarketing unless, in each case, such VRRM-MFP Shares were acquired for the account of the Fund, the Calculation and Paying Agent or the Remarketing Agent, as applicable. The Remarketing Agent may exercise any vote or join in any action which any Holder of VRRM-MFP Shares may be entitled to exercise or take pursuant to the Statement with like effect as if it did not act in any capacity hereunder. The Remarketing Agent, in its individual capacity, either as principal or agent, may also engage in or have an interest in any financial or other transaction with the Fund as freely as if it did not act in any capacity hereunder.
Section 7. Information.
(a) The Fund agrees to furnish to the Remarketing Agent: (i) copies of the Registration Statement, the Prospectus, the Statement, the Supplement and its bylaws and any amendment thereto and each report or other document mailed or made available to Holders (including annual reports to shareholders) or filed by the Fund with the Commission (including any documents incorporated therein by reference) as the Remarketing Agent may reasonably request from time to time; (ii) notice of the creation of any subsidiary by the Fund; (iii) notice of the purchase of VRRM-MFP Shares by a subsidiary or affiliate of the Fund as soon as the Fund shall become aware of such purchase; (iv) notice of any change (including being put on Credit Watch or Watchlist), suspension or termination in or of the ratings on the VRRM-MFP Shares by any NRSRO then rating the VRRM-MFP Shares or any change of an NRSRO rating the VRRM-MFP Shares as promptly as practicable upon the occurrence thereof or the occurrence of any of the events set forth in clause (b)(i) or (b)(ii) of Section 8 hereof (with the occurrence of any of the events described in clause (b)(ii) to be determined without regard to the opinion of the Remarketing Agent referred to therein); and (v) in connection with a remarketing, a Remarketing Memorandum, and such other remarketing information, as the Remarketing Agent may reasonably request from time to time, including but not limited to the financial condition of the Fund. The Fund agrees to provide the Remarketing Agent with as many copies of the foregoing materials and information as the Remarketing Agent may reasonably request for use in connection with a remarketing or Transition Remarketing, as the case may be, of VRRM-MFP Shares and consents to the use thereof for such purpose.
(b) If at any time during the term of this Agreement any event or condition known to the Fund relating to or affecting the Fund or the VRRM-MFP Shares shall occur which might affect the accuracy or completeness of any statement of a material fact contained in any of the reports, documents, materials and information referred to in clause (a)(v) above or any document incorporated therein by reference (collectively, the "Remarketing Materials") or any other materials or information made publicly available by the Fund, the Fund shall promptly notify the Remarketing Agent in writing of the circumstances and details of such event or condition and the Fund shall promptly prepare or cause to be prepared and delivered to the Remarketing Agent, at the Fund's expense, a supplement or amendment to the Remarketing Materials describing the circumstances and details of such event or condition. 8
Section 8. Conditions to Obligations of the Remarketing Agent. The obligations of the Remarketing Agent with respect to VRRM-MFP Shares under this Agreement have been undertaken in reliance on, and shall be subject to: (a) the due performance in all material respects by the Fund of its obligations and agreements as set forth in this Agreement (including Sections 3(c) and 7(b) hereof); and (b) the non-occurrence of any of the following events: (i) all of the VRRM-MFP Shares shall have been redeemed by the Fund; (ii) without the prior written consent of the Remarketing Agent, the Supplement, the Statement, the Declaration, the by-laws of the Fund, or the Tender and Paying Agent Agreement shall either not be in full force and effect or have been amended in any manner that in the reasonable opinion of the Remarketing Agent materially changes the nature of the VRRM- MFP Shares or the remarketing procedures; (iii) legislation, or a decision by a court of the United States shall be rendered, or a stop order, ruling, regulation or official statement by, or on behalf of, the Commission or other governmental agency having jurisdiction of the subject matter shall be made, to the effect that the offering or sale of the VRRM-MFP Shares is or would be in violation of any provision of the 1933 Act as then in effect, or the 1934 Act as then in effect, or with the purpose or effect of otherwise prohibiting the offering or sale of the VRRM-MFP Shares, as contemplated hereby, without registration under the 1933 Act; (iv) any legislation, resolution, ordinance, rule or regulation shall be enacted by, any governmental body, department or agency of the United States or the State of New York, or a decision by any court of competent jurisdiction within the United States or the State of New York shall be rendered, which, in the Remarketing Agent's reasonable opinion, materially adversely affects the marketability of the VRRM-MFP Shares; (v) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange, which, in the Remarketing Agent's reasonable opinion, would cause the performance of the Remarketing Agent's obligations hereunder to violate applicable law; (vi) any litigation shall be instituted and be outstanding, to restrain or enjoin the sale or remarketing of the VRRM-MFP Shares or in any way protesting or affecting any authority of the Fund with respect to the validity of the VRRM- MFP Shares or this Agreement, or the existence or powers of the Fund to perform its obligations hereunder; (vii) a general banking moratorium has been declared by federal or New York authorities having jurisdiction, a material disruption in commercial banking or securities settlement or clearance services or a force majeure event shall have occurred which in the reasonable opinion of the Remarketing Agent materially adversely affects the settlement or clearance of the VRRM-MFP Shares; or (viii) a material misstatement or omission in the Remarketing Materials has occurred, so that it is not advisable, in the reasonable judgment of the Remarketing Agent, to attempt to remarket the VRRM-MFP Shares, provided that the Remarketing Agent, upon identifying any such material misstatement or omission in the Remarketing Materials, shall promptly notify the Fund. In the event of the failure of any such conditions with respect to the VRMM-MFP Shares, the Remarketing Agent may terminate its obligations under this Agreement with respect to the VRMM-MFP Shares as provided in Section 10(b).
Section 9. Indemnification.
(a) The Fund and the Investment Adviser, jointly and severally, agree to indemnify and hold harmless the Remarketing Agent and its respective officers, directors, employees and control persons within the meaning of the 1934 Act (collectively, the "Indemnified Persons" 9
and individually, an "Indemnified Person") from and against any losses, claims, damages or liabilities to which any Indemnified Person may become subject insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in any of the Remarketing Materials or the omission or alleged omission to state therein a material fact necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading (except with respect to information provided by the Remarketing Agent specifically for use therein), or arise out of, or are based upon, any violation by the Fund or the Investment Adviser of, or any failure by the Fund or the Investment Adviser to perform, any of its obligations under, this Agreement. The Fund and the Investment Adviser agree to promptly reimburse each Indemnified Person for any legal or other expenses reasonably incurred by such Indemnified Person in investigating, defending or preparing to defend any such action or claim; provided, however, that neither the Fund nor the Investment Adviser shall be liable in any such case to the extent that any such loss, claim, damage or liability arises out of the use by the Remarketing Agent of any information that is not contained in the Remarketing Materials (in the form provided for use in connection with the remarketing). The indemnity agreement in this paragraph shall be in addition to any liability or obligation which the Fund or the Investment Adviser may otherwise have to any Indemnified Person and shall extend upon the same terms and conditions to each Person, if any, who controls any Indemnified Person within the meaning of the 1934 Act.
(b) The Fund agrees to indemnify and hold harmless the Indemnified Persons from and against every loss, liability or expense, including without limitation, damages, fines, suits, actions, demands, costs, out-of-pocket expenses, and reasonable legal fees and expenses (collectively, "Losses"), that may be imposed on, incurred by, or asserted against, any Indemnified Person for or in respect of its (1) execution and delivery of this Agreement, (2) compliance or attempted compliance with or reliance upon any instruction or other direction upon which the Remarketing Agent is authorized to rely pursuant to the terms of this Agreement and (3) performance under this Agreement, except to the extent that the Loss resulted from such Indemnified Person's gross negligence, willful misconduct, bad faith, violations of law or violations of the terms and conditions of this Agreement. For the avoidance of doubt, the Fund agrees to indemnify and hold harmless the Indemnified Persons from and against any and all Losses that may be imposed on, incurred by, or asserted against, any Indemnified Person for or in respect of the failure of the Remarketing Agent to deliver Remarketing Materials during the course of a remarketing, if such failure is due to the failure by the Fund to provide to the Remarketing Agent such Remarketing Materials for delivery (regardless of whether the Remarketing Agent has requested such Remarketing Materials), notwithstanding that such failure by the Remarketing Agent to deliver Remarketing Materials during the course of a Remarketing could be deemed a violation of law by an Indemnified Person. The indemnity agreement in this paragraph shall be in addition to any liability or obligation which the Fund may otherwise have to any Indemnified Person.
(c) Each Indemnified Person shall give notice as promptly as reasonably practicable to each of the Fund and the Investment Adviser (collectively, the "Indemnifying Persons" and individually, an "Indemnifying Person") of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify the Indemnifying Persons 10
shall not relieve any Indemnifying Person from any liability which it may have otherwise than on account of this indemnity agreement. No settlement or compromise of any such action shall be made without the consent of the Indemnifying Persons, which consent shall not be unreasonably withheld.
(d) In case any such action is brought against any Indemnified Person, and it notifies each Indemnifying Person from which it seeks indemnification of the commencement thereof, such Indemnifying Person (which may be the Fund and/or the Investment Adviser, in the case of notification of either) will be entitled to participate in, and, to the extent that it may wish, jointly with any other Indemnifying Person, similarly notified, to assume the defense thereof so long as its interests are not adverse to those of the Indemnified Person, with counsel reasonably satisfactory to such Indemnified Person, and after notice from each Indemnifying Person to such Indemnified Person of its election to assume the defense thereof, the Indemnifying Person will not be liable to such Indemnified Person under this Section 9 for any legal or other expenses subsequently incurred by such Indemnified Person in connection with the defense thereof other than reasonable costs of investigation. Upon assumption by any Indemnifying Person of the defense of any such action or proceeding, the Indemnified Person shall have the right to participate in such action or proceeding and to retain its own counsel but the Indemnifying Person shall not be liable for any legal expenses of other counsel subsequently incurred by such Indemnified Person in connection with the defense thereof unless (i) the Indemnifying Person has agreed to pay such fees and expenses, (ii) the Indemnifying Person shall have failed to employ counsel reasonably satisfactory to the Indemnified Person in a timely manner, or (iii) the Indemnified Person shall have been advised by counsel that there are actual or potential conflicting interests between the Indemnifying Persons and the Indemnified Person, including situations in which there are one or more legal defenses available to the Indemnified Person that are different from or additional to those available to each of the Fund and the Investment Adviser. If the Indemnifying Person elects not to assume the defense of any such suit, it will reimburse the Indemnified Persons for the reasonable fees and expenses of any counsel retained by them. In the event that the parties to any such action (including impleaded parties) include one or more Indemnifying Persons and one or more Indemnified Persons, and one or more Indemnified Persons shall have been advised by counsel reasonably satisfactory to each Indemnifying Person that there may be one or more legal defenses available to any of the Indemnified Persons, which are different from, additional to, or in conflict with those available to any of the Indemnifying Persons, the Indemnifying Persons will reimburse the Indemnified Persons for the reasonable fees and expenses of any counsel retained by the Indemnified Persons (it being understood that the Indemnifying Persons shall not, in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (plus local counsel) for all Indemnified Persons, which firm shall be designated by the Indemnified Persons, the Remarketing Agent or each Indemnifying Person, as the case may be). Each Indemnifying Person agrees promptly to notify each Indemnified Person of the commencement of any litigation or proceedings against it in connection with the remarketing of the VRRM-MFP Shares. No Indemnifying Person shall consent to the terms of any compromise or settlement of any action defended by any Indemnifying Person in accordance with the foregoing without the prior consent of the Indemnified Person. No Indemnifying Person shall be liable under this Section 9 for the amount of any compromise or settlement of any action 11
unless such compromise or settlement has been approved in writing by such Indemnifying Person, which approval shall not be unreasonably withheld.
(e) If the indemnification provided for in subparagraph (a) of this Section 9 is unavailable, because of limitations imposed by securities laws or for any other reason, to a party that would otherwise have been an Indemnified Person under subparagraph (a) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then the party that would have been an Indemnifying Person thereunder shall, in lieu of indemnifying such Indemnified Person, contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion so that the Remarketing Agent is responsible for that portion represented by the percentage that the Remarketing Agent's fee (calculated for a one year period) with respect to such remarketing bears to the aggregate liquidation preference of such VRRM-MFP Shares being remarketed but will not exceed the amount of such fee (calculated for a one year period) and each of the Fund and the Investment Adviser is responsible for the balance; provided, however, that no person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages or liabilities (or actions in respect thereon referred to above in this subparagraph (e)) shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified Person in connection with investigating or defending any such action or claims (which shall be limited as provided in this subparagraph (e) above if the Indemnifying Person has assumed the defense of any such action in accordance with the provisions thereof).
(f) The indemnity agreements contained in clauses (a), (b) and (c) of this Section 9 shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Remarketing Agent, and shall survive the termination or cancellation of this Agreement and the remarketing of any VRRM-MFP Shares hereunder.
Section 10. Termination of Remarketing Agreement. (a) This Agreement shall terminate as to the Remarketing Agent and its obligations hereunder with respect to VRRM-MFP Shares upon the earliest to occur of (a) the effective date of the resignation or removal of such Remarketing Agent pursuant to Section 5(a) and Section 5(b), respectively, (b) the completion of a successful Transition Remarketing on a New Mode Commencement Date in connection with transition to a new Mode, or (c) the date on which no VRRM-MFP Shares are Outstanding.
(b) In addition, the Remarketing Agent may terminate this Agreement and all of its obligations hereunder with respect to the VRRM-MFP Shares, by notifying the Fund and the Calculation and Paying Agent of its election to do so, if any of the conditions referred to or set forth in Section 8 hereof with respect to the VRRM-MFP Shares have not been met or satisfied in full and such failure shall have continued for a period of 30 days after the Remarketing Agent has given notice thereof to the Fund specifying the condition which has not been met and requiring it to be met; provided, however, that termination of this Agreement with respect to the VRRM-MFP Shares by the Remarketing Agent after giving the required notices with respect to the VRRM- MFP Shares shall be immediate in the event of the occurrence and continuation of 12
any event set forth in Section 8(b)(i), (ii), (iii) or (iv) hereof with respect to the VRRM-MFP Shares, or in the event the Remarketing Agent determines, in its sole discretion, that it shall not have received all of the information, whether or not specifically referenced herein, necessary to fulfill its obligations under this Agreement with respect to the VRRM-MFP Shares.
Section 11. Remarketing Agent's Performance; Duty of Care.
(a) The duties and obligations of the Remarketing Agent shall be determined solely by the express provisions of this Agreement and the Supplement. No implied covenants or obligations shall be read into this Agreement, or the Supplement. In the absence of bad faith on the part of the Remarketing Agent, the Remarketing Agent may conclusively rely upon any document furnished to it, which purports to conform to the requirements of this Agreement and the Statement, as to the truth of the statements expressed in any of such documents. The Remarketing Agent shall be protected in acting upon any document or communication reasonably believed by it to have been signed, presented or made by the proper party or parties. The Remarketing Agent shall incur no liability to the Fund, the Investment Adviser, the Calculation and Paying Agent or to any Beneficial Owner (or its Agent Member) or any Holder of the VRRM-MFP Shares in its individual capacity or as Remarketing Agent for any action or failure to act, in connection with its duties under this Agreement and the Supplement or otherwise, except as a result of bad faith, gross negligence or willful misconduct on its part.
(b) The Remarketing Agent shall not be responsible or liable for any failure or delay in the performance of its obligations under this Agreement arising out or caused by the failure of any other party (other than an affiliate of the Remarketing Agent) to provide any notice, statement or document required to be delivered pursuant to any Related Document in connection with performance by the Remarketing Agent of the relevant obligation.
Section 12. Amendment, Supplement or Modification of Agreements. Without the prior written consent of the Remarketing Agent, the Fund will not agree or consent to any amendment, supplement or modification of the Tender and Paying Agent Agreement, this Agreement or the Supplement, nor waive any provision thereof, if such amendment, supplement, modification or waiver would materially adversely affect the interests of the Remarketing Agent, in the Remarketing Agent's sole discretion; provided, that, for purposes of this Section 12, any changes or amendments to the rating agency criteria provided in the Supplement for the VRRM-MFP Shares shall not be deemed to materially adversely affect the interests of the Remarketing Agent.
Section 13. Books and Records. The Remarketing Agent shall keep such books and records with respect to the performance of its duties hereunder as shall be consistent with prudent industry practice and shall, to the extent permitted by law, make such books and records available for inspection by the Fund on reasonable notice during normal business hours. Any costs and expenses associated with such inspections shall be for the account of the party requesting such inspection.
Section 14. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of New York, except Section 25 below, which shall be construed in accordance with and governed by the laws of the Commonwealth of Massachusetts, 13
in each case without regard to conflict of laws principles that would require the application of the laws of another jurisdiction.
THE PARTIES HERETO HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY DISPUTE RELATED TO THIS AGREEMENT OR ANY MATTERS CONTEMPLATED HEREBY.
Section 15. Waiver of Jury Trial. The Fund, the Investment Adviser and the Remarketing Agent hereby waive trial by jury in any action, proceeding or counterclaim brought by any of the parties hereto against the other on any matters whatsoever arising out of or in any way connected with this Agreement.
Section 16. Certain Provisions to Survive Termination of Agreement. Regardless of any termination of this Agreement pursuant to Section 10 hereof, the obligations of the Fund and the Investment Adviser pursuant to Sections 3, 4 and 9 hereof and of the Remarketing Agent pursuant to Section 9 hereof shall remain operative and in full force and effect until fully satisfied.
Section 17. Successors and Assigns. The rights and obligations of the Fund and the Investment Adviser hereunder may not be assigned or delegated to any other person without the prior written consent of the Remarketing Agent. The rights and obligations of the Remarketing Agent hereunder may not be assigned or delegated to any other person without the prior written consent of the Fund. This Agreement shall inure to the benefit of and be binding upon the Fund, the Investment Adviser and the Remarketing Agent and their respective permitted successors and assigns, and, subject to Section 23, will not confer any benefit upon any other person, partnership, association or corporation other than persons, if any, controlling any Remarketing Agent within the meaning of Section 15 of the 1933 Act, or Section 20 of the 1934 Act, or any Indemnified Person to the extent provided in Section 9 hereof. As used in this Section 17, the terms "successors" and "assigns" shall not include any purchaser of VRRM-MFP Shares merely because of such purchase.
Section 18. Headings. The section headings herein are for convenience of reference only, and it is agreed that such section headings are not a part of this Agreement and will not be used in the interpretation of any provisions of this Agreement.
Section 19. Severability. If any provision of this Agreement shall be held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any or all jurisdiction or jurisdictions, because it conflicts with any provision of any constitution, statute, rule of public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question invalid, inoperative or unenforceable in any other case, circumstance or jurisdiction, or of rendering any other provision or provisions of this Agreement invalid, inoperative or unenforceable to any extent whatsoever.
Section 20. Counterparts. This Agreement may be executed in several counterparts, each of which shall be regarded as an original and all of which shall constitute one and the same document. 14
Section 21. Remarketing Agent Not Acting as Underwriter. It is understood and agreed by the parties hereto that the only obligations of the Remarketing Agent hereunder are as set forth in Sections 2, 3, 9 and 13 hereof. When engaged in remarketing any properly-Tendered VRRM-MFP Shares, the Remarketing Agent shall act only as agent for and on behalf of each owner of the VRRM-MFP Shares so tendered. The Remarketing Agent shall not act as an underwriter for the Tendered VRRM- MFP Shares and shall in no way be obligated to advance its own funds to purchase any Tendered VRRM-MFP Shares (except as provided in Section 2(c) or to the extent that in its individual capacity as purchaser of those VRRM-MFP Shares it may elect, in accordance with Section 6 hereof, to purchase, in its sole discretion) or to otherwise expend or risk its own funds or incur or become exposed to financial liability in the performance of its duties hereunder.
Section 22. Amendment. This Agreement may be amended by any instrument in writing signed by all of the parties hereto so long as this Agreement as amended is not inconsistent with the Supplement in effect as of the date of any such amendment. The parties acknowledge that amendments to this Agreement (including with respect to Section 2(c)) are subject to prior notice requirements as set forth in the Tender and Paying Agent Agreement.
Section 23. Benefits. Nothing herein, express of implied, shall give to any person, other than the Fund, the Remarketing Agent and their respective permitted successors and assigns, any benefit of any legal or equitable right, remedy or claim hereunder. Without limiting the generality of the foregoing, no Holder or Beneficial Owner (or their Agent Member) of VRRM-MFP Shares shall have or be deemed to have any right in respect of, or shall in any event be entitled to enforce or to seek recourse against any person in respect of, any provision of this Agreement, and any and all rights of holders of VRRM-MFP Shares or obligations of the Fund in respect thereof arise only under and as governed solely by the Declaration, the Supplement and by-laws of the Fund as they are in effect from time to time.
Section 24. Notices and Wire Instructions. Unless otherwise specified, any notices, requests, consents or other communications given or made hereunder or pursuant hereto shall be made in writing and shall be deemed to have been validly given or made upon receipt, if given by mail, or when delivered, if given by prepaid courier service, in each case addressed as follows: if to the Fund or the Investment Adviser, to either of them at 333 West Wacker Drive, Chicago, Illinois 60606, Attention: [●]; if to the Remarketing Agent, to [●], [●], Attention: [●], Telephone: [●], Fax: [●], Email: [●]; and if to the Calculation and Paying Agent, to [●], [●], Attention: [●], Telephone: [●], Fax: [●], Email: [●]; or to such other address as any of the foregoing persons shall specify to the parties hereto in writing.
The Purchase Price of remarketed VRRM-MFP Shares, if paid through the Calculation and Paying Agent, shall be paid by the Remarketing Agent in immediately available funds by wire transfer to the Calculation and Paying Agent in accordance with the following instructions:
[●] ABA# [●] 15
For Further Credit to Account # [●] Ref: [●] Attn: [●] Tel: [●]
The remarketing fee shall be paid by the Fund in immediately available funds by wire transfer to the Remarketing Agent in accordance with the following instructions:
[●] ABA# [●] For Further Credit to Account # [●] Ref: [●] Attn: [●] Tel: [●]
Email transmissions shall be deemed to have been validly given or made when sent to the following email addresses; if to the Fund or the Investment Adviser, to [●] and [●]; if to the Remarketing Agent, to [●]; or to such other address as any such parties shall specify to the other party in writing; and, if to the Calculation and Paying Agent, to [●].
Section 25. Liability of Officers, Trustees and Shareholders. A copy of the Declaration is on file with the Secretary of the Commonwealth of Massachusetts. This Agreement has been executed on behalf of the Fund by an officer of the Fund in such capacity and not individually and the obligations of the Fund under this Agreement are not binding upon such officer, any of the trustees or the shareholders individually but are binding only upon the assets and property of the Fund.
Section 26. Nonpetition Covenant. Notwithstanding any prior termination of this Agreement, [●], solely in its capacity as Remarketing Agent, hereby covenants and agrees that it shall not, prior to the date which is one year and one day after the redemption and the payment in full of the VRRM-MFP Shares and all accumulated dividends, petition or otherwise invoke the process of any court or government authority for the purpose of commencing a case against, the Fund under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Fund or any substantial part of the property of the Fund; provided, however, that nothing in this provision shall preclude, or be deemed to stop, the Remarketing Agent from taking any action prior to the expiration of the aforementioned one year and one day period in (x) any case or proceeding voluntarily filed or commenced by the Fund, (y) any involuntary insolvency proceeding filed or commenced against the Fund by a Person other than the Remarketing Agent, or (z) with respect to its rights or preferences as a Beneficial Owner or Holder of VRRM-MFP Shares.
[Signature Page Follows] 16
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by one of its duly authorized officers as of the date first above written. NUVEEN AMT-FREE MUNICIPAL CREDIT INCOME FUND
By Name: Title:
NUVEEN FUND ADVISORS, LLC
By Name: Title:
[NAME]
By Name: Title: Signature Page to Remarketing Agreement (NVG Series [●] MFP)
Exhibit A - Form of Tender Notice
NUVEEN AMT-FREE QUALITY MUNICIPAL INCOME FUND (NVG) (THE "FUND") SERIES [●] MUNIFUND PREFERRED SHARES IN THE VARIABLE RATE REMARKETED MODE ("VRRM-MFP SHARES")
TENDER NOTICE
Note: The substance of this notice must be given by the Beneficial Owner or its Agent Member to [●], as Remarketing Agent (the "Remarketing Agent"), appointed under the Remarketing Agreement, dated as of [●], between Nuveen AMT-Free Municipal Credit Income Fund, Nuveen Fund Advisors, LLC and the Remarketing Agent, in the manner provided in Schedule 1 hereto by Electronic Means prior to 5:00 p.m., New York City time, on any Business Day. Any Tender Notice delivered at or after 5:00 p.m., New York City time, shall be deemed to have been received by the Remarketing Agent on the next succeeding Business Day and the Purchase Date specified in this Tender Notice shall be postponed accordingly by one Business Day. The determination of the Remarketing Agent as to whether a Tender Notice has been properly delivered shall be conclusive and binding upon the Beneficial Owner and its Agent Member.
TO: [●], as Remarketing Agent
1. In accordance with the Fund's Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares effective [●] (the "Statement"), as modified with respect to the Variable Rate Remarketed Mode (the Initial Mode) by the Supplement to the Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares Initially Designating the Variable Rate Remarketed Mode for the Series [●] MuniFund Preferred Shares effective [●], as amended, revised or supplemented from time to time (the "Supplement"); the undersigned, [●], [Beneficial Owner] [Agent Member of the Beneficial Owner] of the following VRRM-MFP Shares:
VRRM-MFP Shares Series CUSIP Number
Number of VRRM-MFP Shares tendered for remarketing (the "Designated Amount")1 [●] [●]
hereby notifies you of the election by the Beneficial Owner of the referenced VRRM-MFP Shares to tender such VRRM-MFP Shares for remarketing of the Designated Amount on the seventh calendar day following the date on which this Tender Notice is delivered to the 1 VRRM-MFP Shares may be tendered only in whole shares.
Remarketing Agent, or if such seventh calendar day is not a Business Day, the next succeeding Business Day (the "Purchase Date").
The name and DTC Participant No. of the Agent Member tendering on behalf of the Beneficial Owner is:
Name of Agent Member:
DTC Participant No. of Agent Member:
Name of Beneficial Owner:
Beneficial Owner's account number:
The person to contact at the Beneficial Owner or its Agent Member and the related contact information are as follows:
Name:
Telephone No:
Email address:
The Beneficial Owner or its Agent Member acknowledges and agrees that the Person or Persons to whom or to whose order the Purchase Price of the tendered VRRM-MFP Shares is to be paid is/are the same as identified above.
2. The undersigned acknowledges the obligation of the tendering Beneficial Owner to deliver the VRRM-MFP Shares that are the subject of this Tender Notice on or before 11:00 a.m., New York City time on the Purchase Date, and, in accordance with such obligation, the undersigned hereby undertakes to deliver or to cause to be delivered the VRRM-MFP Shares being sold [directly] or [through an Agent Member] to the Remarketing Agent, through the "funds against delivery" procedures of the Securities Depository, no later than 11:00 a.m., New York City time, on the Purchase Date. The undersigned hereby also assigns and transfers and directs the Securities Depository or its nominee or the Remarketing Agent to transfer the tendered VRRM-MFP Shares to the purchaser in accordance with the procedures described in the Supplement, and otherwise according to the Securities Depository's procedures, in exchange for the payment of the Purchase Price thereof on the Purchase Date.
3. The undersigned confirms its agreement that it hereby transfers to the purchaser of the VRRM-MFP Shares tendered pursuant to this Tender Notice the right to receive from the Fund any dividends declared and unpaid for each day prior to the purchaser becoming the Beneficial Owner of the VRRM-MFP Shares in exchange for payment of the Purchase Price for such VRRM-MFP Share by the purchaser.
4. The undersigned hereby represents and warrants for the benefit of the Remarketing Agent, the Fund and the Calculation and Paying Agent, that the undersigned has full power and authority to tender, exchange, assign and transfer the VRRM-MFP Shares to be
tendered hereby, and that the transferee will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim, when the same are tendered.
5. The undersigned acknowledges that this Tender Notice is irrevocable and effective upon the receipt by the Remarketing Agent.
6. Terms used herein and not otherwise defined will have the meanings given to such terms in the Supplement. Dated: [Complete applicable signature block below.] Print name of Beneficial Owner
By: Name: Title: [OR] Print name of Agent Member
By: Name: Title:
SCHEDULE 1
TENDER NOTICE DELIVERY INFORMATION FOR THE REMARKETING AGENT
This Tender Notice must be delivered by the Beneficial Owner or its Agent Member to [●] (the "Remarketing Agent") by email transmission at the email address listed below or such other email address as the Remarketing Agent shall designate (or, if email transmission shall be unavailable, by facsimile transmission to the fax number listed below or such other fax number as the Remarketing Agent will designate) at or prior to 5:00 p.m., New York City time, on any Business Day. If this Tender Notice is delivered after 5:00 p.m., New York City time, it will be deemed to have been received by the Remarketing Agent on the next succeeding Business Day, and the Purchase Date will be postponed accordingly by one Business Day:
Attention: [●] [●]
Phone: [●]
Email: [●]
This Tender Notice will not be deemed to be delivered unless and until the Remarketing Agent actually receives it by the above-described means.
Exhibit B - Form of Remarketing Notice
TO [BENEFICAL OWNERS] [HOLDERS] OF SERIES [●] MUNIFUND PREFERRED SHARES IN THE VARIABLE RATE REMARKETED MODE ("VRRM-MFP SHARES") OF NUVEEN AMT-FREE MUNICIPAL CREDIT INCOME FUND (NVG) (THE "FUND")
REMARKETING NOTICE
[Date] Re: Nuveen AMT-Free Municipal Credit Income Fund Series [●] MuniFund Preferred Shares (the "VRRM-MFP Shares")
Pursuant to [Section 2(d)] [Section 2(e)] [Section 2(f)] of the Remarketing Agreement dated [●] (the "Remarketing Agreement"), by and among Nuveen AMT-Free Municipal Credit Income Fund, a closed-end investment company organized as a Massachusetts business trust, Nuveen Fund Advisors, LLC, a registered investment adviser and wholly-owned subsidiary of Nuveen Investments, Inc., and [●] (the "Remarketing Agent"), the undersigned Remarketing Agent hereby notifies you of the following information regarding the remarketing of the VRRM-MFP Shares as of the date hereof:
1. Information regarding the VRRM-MFP Shares is as follows:
VRRM-MFP Shares Series: A
CUSIP number:
2. Remarketing Results:
Populate fields in the applicable section; delete inapplicable sections.
[For Optional Tenders] (i) A purchaser or purchasers have been identified for the purchase of all of the Tendered VRRM-MFP Shares on the Purchase Date. (ii) Number of Tendered VRRM-MFP Shares sold, subject to settlement: . (iii) The Purchase Date will be: .
(iv) The Purchase Price per Tendered VRRM-MFP Share is: .
[For Mandatory Tenders] (i) A purchaser or purchasers have been identified for the purchase of all of the VRRM- MFP Shares on the Remarketing Date. (ii) Number of VRRM-MFP Shares sold, subject to settlement: . (iii) The Remarketing Date will be: . (iv) The Regular Dividend Rate to be applicable to the VRRM-MFP Shares on the Remarketing Date will be: . (v) All VRRM-MFP Shares will be subject to mandatory tender for purchase on the Remarketing Date at a Purchase Price per VRRM-MFP Share of: .
[For Transition to a New Mode] (i) A purchaser or purchasers have been identified for the purchase of all of the VRRM- MFP Shares on the New Mode Commencement Date. (ii) Number of VRRM-MFP Shares sold, subject to settlement: . (iii) The New Mode Commencement Date will be: . (iv) The Regular Dividend Rate to be applicable to the VRRM-MFP Shares on the New Mode Commencement Date will be: . (v) All VRRM-MFP Shares will be subject to mandatory tender for purchase on the New Mode Commencement Date at a Purchase Price per share of:
3. Capitalized terms used herein will have the meanings given to them in or by reference to the Remarketing Agreement.
[●] as Remarketing Agent
By: Name: Title: Cc: [●] Nuveen AMT-Free Municipal Credit Income Fund
Exhibit C - Form of Failed Remarketing Notice
TO HOLDERS OF SERIES [●] MUNIFUND PREFERRED SHARES IN THE VARIABLE RATE REMARKETED MODE ("VRRM-MFP SHARES") OF NUVEEN AMT-FREE MUNICIPAL CREDIT INCOME FUND (NVG) (THE "FUND")
CUSIP NO. [●]*
FAILED REMARKETING NOTICE
In accordance with the Fund's Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares effective [●] (the "Statement"), as modified with respect to the Variable Rate Remarketed Mode (the Initial Mode) by the Supplement to the Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares Initially Designating the Variable Rate Remarketed Mode for the Series [●] MuniFund Preferred Shares effective [●], as amended, revised or supplemented from time to time (the "Supplement"), the Fund hereby notifies Holders that:
Retain only the applicable section; delete inapplicable sections.
[For Optional Tender]
A Failed Remarketing Event has occurred with respect to Tendered VRRM-MFP Shares optionally tendered for remarketing. All Tendered VRRM-MFP Shares shall be retained by their respective Beneficial Owners.
[For Mandatory Tender]
A Failed Remarketing Event has occurred with respect to a mandatory tender of all Outstanding VRRM-MFP Shares for remarketing. All VRRM-MFP Shares shall be retained by their respective Holders.
[For Transition to New Mode]
A Failed Remarketing Event has occurred with respect to a mandatory tender of all Outstanding VRRM-MFP Shares for transition to a new Mode on the New Mode Commencement Date. All VRRM-MFP Shares shall be retained by their respective Holders. By not later than the Business Day immediately following the occurrence of the Failed Remarketing Event, the Fund will make an election, and provide a Failed Transition Election Notice in writing by Electronic Means to the Holders, the Remarketing Agent and the Calculation and Paying Agent, to either (i) cancel the * NOTE: None of the Fund, the Remarketing Agent or the Calculation and Paying Agent will be responsible for the selection or use of the CUSIP Numbers selected, nor is any representation made as to its correctness indicated in any notice or as printed on any VRRM-MFP Share certificate. It is included solely as a convenience to VRRM-MFP Shareholders.
attempted transition to a new Mode or (ii) continue to attempt to transition to a new Mode.
The Failed Remarketing Event [commences] [continues] a Failed Remarketing Period. During the Failed Remarketing Period, the Remarketing Agent will no longer determine the Regular Dividend Rate on a daily basis; dividends on all VRRM-MFP Shares will be payable at the Step-Up Dividend Rate (as determined by the Remarketing Agent commencing on the date of the Failed Remarketing Event); the right of Beneficial Owners to make optional tenders of their MuniFund Preferred Shares for remarketing is suspended; and all of the Outstanding VRRM-MFP Shares is subject to mandatory tender for remarketing. All Outstanding VRRM-MFP Shares are subject to mandatory redemption on [●] (the "Failed Remarketing Mandatory Redemption Date").
This notice will be conclusively presumed to have been duly given, whether or not the Holders or Beneficial Owners receive this notice.
Terms used herein and not otherwise defined will have the meanings given to such terms in the Supplement. Dated:
[NAME], as Remarketing Agent
By: Name: Title: Cc: [●] Nuveen AMT-Free Municipal Credit Income Fund
Exhibit D - Form of Retention Notice
NUVEEN AMT-FREE MUNICIPAL CREDIT INCOME FUND (NVG) (THE "FUND") SERIES [●] MUNIFUND PREFERRED SHARES IN THE VARIABLE RATE REMARKETED MODE ("VRRM-MFP SHARES") CUSIP No. [●]*
RETENTION NOTICE
TO: [●], as Remarketing Agent
Further to the Remarketing Notice dated [●] (the "Remarketing Notice") all VRRM-MFP Shares will be subject to mandatory tender for purchase at a price equal to [●] (the "Purchase Price") on [●] (the "Remarketing Date").
As set forth in the Fund's Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares effective [●] (the "Statement"), as modified with respect to the Variable Rate Remarketed Mode (the Initial Mode) by the Supplement to the Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares Initially Designating the Variable Rate Remarketed Mode for the Series [●] MuniFund Preferred Shares effective [●], as amended, revised or supplemented from time to time (the "Supplement"), any Beneficial Owner of a VRRM-MFP Share that is not a Tendered VRRM-MFP Share that was part of the Failed Remarketing Event to which the Remarketing Notice relates, as determined by the Remarketing Agent, may deliver written notice to the Remarketing Agent and the Calculation and Paying Agent by Electronic Means at least three Business Days prior to the Remarketing Date that it wishes to retain its VRRM-MFP Shares (each such Beneficial Owner, a "Retaining Beneficial Owner").
On the Remarketing Date, the VRRM-MFP Shares held by each Retaining Beneficial Owner will be subject to mandatory tender and repurchased by the Retaining Beneficial Owner at a price equal to the Purchase Price on the Remarketing Date.
For purposes of the foregoing, the undersigned Beneficial Owner of VRRM-MFP Shares hereby provides notice of its wish to retain VRRM-MFP Shares of which it is Beneficial Owner, in the following amount: [●]. The undersigned person electing to retain its VRRM-MFP Shares represents that it is the Beneficial Owner of the number of VRRM- MFP Shares set forth above, and such number constitutes all of the VRRM-MFP Shares owned by the undersigned.
Terms used herein and not otherwise defined will have the meanings given to such terms in the Supplement.
Dated: * NOTE: None of the Fund, the Remarketing Agent or the Calculation and Paying Agent will be responsible for the selection or use of the CUSIP Numbers selected, nor is any representation made as to its correctness indicated in any notice or as printed on any VRRM-MFP Share certificate. It is included solely as a convenience to VRRM-MFP Shareholders.
[Complete applicable signature block below.] Print name of Beneficial Owner
By: Name: Title: [OR] Print name of Agent Member
By: Name: Title:
Cc: [●] Nuveen AMT-Free Municipal Credit Income Fund | Highlight the parts (if any) of this contract related to "Audit Rights" that should be reviewed by a lawyer. Details: Does a party have the right to audit the books, records, or physical locations of the counterparty to ensure compliance with the contract? | {
"answer_start": [
45315
],
"text": [
"The Remarketing Agent shall keep such books and records with respect to the performance of its duties hereunder as shall be consistent with prudent industry practice and shall, to the extent permitted by law, make such books and records available for inspection by the Fund on reasonable notice during normal business hours."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Non-Disparagement" that should be reviewed by a lawyer. Details: Is there a requirement on a party not to disparage the counterparty?
Context: Confidential treatment has been requested with respect to portions of this agreement as indicated by "[***]" and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Amendment #3 to the Manufacturing Agreement This Amendment #3 to the Manufacturing Agreement (this "Amendment #3") is made effective as of December 21, 2017 ("Amendment Effective Date"), by and between ADMA BioManufacturing, LLC, a Delaware limited liability company, having a place of business at 5800 Park of Commerce Boulevard NW, Boca Raton, Florida 33487 USA ("ADMA") and Sanofi Pasteur S.A., a company existing and organized under the laws of France ("Sanofi Pasteur"), having its registered head office at 14, espace Henry Vallee, 69007, Lyon, France. WHEREAS, ADMA (as successor-in-interest to Biotest Pharmaceuticals Corporation ("BPC") and Sanofi Pasteur are parties to that certain Manufacturing Agreement, effective September 30, 2011, as previously amended (including by that certain Amendment #2 to the Manufacturing Agreement, effective as of August 1, 2016, by and between BPC and Sanofi Pasteur ("Amendment #2")) (the "Agreement") for the production of Rabies Fraction II Paste (the "Product," as further defined in the Agreement) for Sanofi Pasteur from human plasma containing rabies antibodies; WHEREAS, BPC and Sanofi Pasteur are Parties to that certain Plasma Supply Agreement, effective January 20, 2009, as amended (the "Plasma Supply Agreement"), for the production of human Rabies Hyperimmune Plasma ("Rabies Plasma") by BPC for Sanofi Pasteur to be used in the manufacturing of Rabies Immunoglobulin; WHEREAS, the Rabies Plasma manufactured by BPC under the Plasma Supply Agreement may be transferred to ADMA to be fractionated into Product under the Agreement; WHEREAS, ADMA and Sanofi Pasteur desire to further amend the Agreement in order to memorialize the amendment of certain provisions in the Agreement; NOW, THEREFORE, in consideration of the respective promises contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereto agree as follows: 1. All capitalized terms used and not defined in this Amendment shall have the meaning as set out in the Agreement. 2. The supply terms set forth in Section 1 of Amendment #2 (the "Prior Supply Terms") are hereby deleted in their entirety. In their place, the Parties agree to the following (and Section 2.1 of the Agreement is hereby amended as needed to implement the following): Sanofi Pasteur agrees to purchase and ADMA to manufacture [***] Batches of Product, which Batches will be produced over a period from Q3 2018 to Q3 2019. Attached hereto as Exhibit A is a detailed supply plan provided to ADMA by Sanofi Pasteur (the "Updated Supply Plan") that describes the agreed-upon timing for production of such Batches of Product, which supply plan is made an integral part hereof and shall be binding on the Parties. Prices for such [***] Batches of Product shall be in accordance with Section 3.2 of the Agreement (as amended in Amendment #2).
BPC Initials ___ Sanofi Pasteur Initials ___ 1
Confidential treatment has been requested with respect to portions of this agreement as indicated by "[***]" and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. The Parties agree to amend the Agreement to impose on ADMA an obligation to supply a minimum of [***] Batches of Product for that period stalling from Q4 2018 up to Q4 2019, as further specified in Exhibit A attached hereto. Should ADMA fail to supply a minimum of [***] Batches of Product (the "Minimum Volume") of Product during the time period as specified in this Amendment #3, ADMA agrees that Sanofi Pasteur shall be entitled to obtain from ADMA as liquidated damages, and not a penalty, amounting to $[***] ([***]) USD. ADMA accepts and declares that the amount of the liquidated damages is a fair and equitable compensation, and not a penalty, for such failure in reaching the volume commitment within the timelines agreed herein and in regard to the value and use of the Source Plasma. In addition to the Minimum Volume of Product to be manufactured by ADMA, should ADMA deliver the Minimum Volume of Product but fail to meet the Updated Supply Plan as provided in Exhibit A as attached hereto and made an integral part hereof, then it is agreed upon by the Parties that ADMA shall pay to Sanofi Pasteur an amount equal to $[***] ([***]) USD for each Batch of Product that is less than the agreed upon quantity in Exhibit A, as liquidated damages, and not as a penalty. The foregoing liquidated damages [***] respect to the [***] within the [***] agreed in this Amendment #3. [***] not be entitled to [***] by this Agreement as a result of [***], including without limitation [***]. Notwithstanding the foregoing, [***], sections 6.1 and 6.2 of the Agreement [***]. 3. Furthermore, should ADMA's compliance status under the FDA Warning Letter be escalated, and if such consequence limits ADMA's ability to supply the Batches of Product as specified in this Amendment #3 and the Updated Supply Plan or in case of failure by ADMA to supply any Batch of Product under this Amendment, Sanofi Pasteur shall be entitled to terminate immediately this Agreement upon written notice to ADMA and Sanofi Pasteur shall not be obligated to provide any additional payments (as outlined in Section 5 below and payments for any of the unproduced or delivered production batches) to ADMA from the date of such termination. In such a case, the remaining Source Plasma shall be immediately returned to Sanofi Pasteur, under ADMA's liability and expenses. Shipment of the Source Plasma to Sanofi Pasteur shall be made in compliance with the transportation conditions as provided in the Quality Agreement (as defined below), to be further amended by the Parties as contemplated in Section 9 below.
BPC Initials ___ Sanofi Pasteur Initials ___ 2
Confidential treatment has been requested with respect to portions of this agreement as indicated by "[***]" and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 4. In the event of a non-conformance in the Source Plasma at the time of delivery of the Source plasma at ADMA's place, or in the event of damaged Source Plasma, which non-conformance, damage or loss in the Source Plasma occurred prior to the transfer of risks in the Source Plasma to ADMA as per Section 7 below, it is agreed upon by the Parties that Sanofi Pasteur shall not be responsible, nor liable, to compensate or indemnify ADMA for the loss of business arising from the fact that, in such a case, the Source Plasma will no longer be manufactured by ADMA and consequently Sanofi Pasteur will not pay for the unproduced batch. 5. In consideration for certain quantities of Product that ADMA would have been contractually obligated to supply, and that Sanofi Pasteur would have been contractually obligated to purchase, under the Agreement, but that will now not be supplied and purchased as a result of the Parties' agreement in Section 2 above, Sanofi Pasteur agrees to pay ADMA an amount of seven million (7,000,000 USD) (the "Compensation Fee") in five installments and will be invoiced as follows: (a) [***] USD upon execution of this Amendment #3 (b) [***] USD on March 1, 2018 (c) [***] USD on June 1, 2018 (d) [***] USD on September 1, 2018 (e) [***] USD on December 1, 2018 Such payments shall be made in accordance with Section 3.4 of the Agreement; provided, however, that the initial payment described in Section 5(a) above shall be due no later than December 31,2017. Each invoice shall reference this Amendment 3 and shall be sent at the following address: Sanofi Pasteur SA DSFF Pole de Lyon - Carteret Tri C5-2-01 14 Espace Henry Vallee CS 90119 69361 LYON CEDEX 07 - FRANCE Upon payment of the Compensation Fee, ADMA shall be fully compensated for any kind of prejudice or damages ADMA may suffer arising from or related to the decrease in the quantities of Product Sanofi Pasteur committed to purchase initially from ADMA as per the Prior Supply Terms. ADMA declares that the Compensation Fee is fair and equitable. 6. Upon full payment of the Compensation Fee, each Party, with the intention of binding itself, its Affiliates, shareholders, successors and assigns, hereby releases, remises and forever discharges the other Party, and its Affiliates, employees, directors, shareholders, successors and assigns, from all actions, causes of action, suits, debts, dues, sums of money, accounts, covenants, contracts, controversies, agreements, promises, damages, claims and demands whatsoever, in law, contract or equity, arising directly out of, or relating to the Updated Supply Plan and/or the amount of the Compensation Fee Sanofi agrees to pay to ADMA.
BPC Initials ___ Sanofi Pasteur Initials ___ 3
Confidential treatment has been requested with respect to portions of this agreement as indicated by "[***]" and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 7. The Parties further agree to amend Section 6.5 of the Agreement as follows: (a) The liability cap set forth under section 6.5 is hereby amended to adapt to the provisions of this Amendment #3 and is therefore set at "[***]" instead of "[***]". (b) The last sentence of Section 6.5 of the Agreement is hereby deleted and replaced with the following: Unless Section 2.7 applies, and subject to any risk of loss assumed by BPC under the Plasma Agreement (as amended) or that certain [Termination, Settlement and Release Agreement] between BPC and Sanofi Pasteur, [of even date herewith], Sanofi Pasteur assumes all risk of loss for all Source Plasma (the "Sanofi Pasteur Property") while under storage conditions at BPC's warehouse except in case such loss occurs as a result of BPC negligence or willful misconduct, and Sanofi Pasteur hereby waives any and all rights of recovery against ADMA and its Affiliates, and against any of their respective directors, officers, employees, agents or representative, for any loss or damage to the Sanofi Pasteur Property while under storage conditions at BPC's warehouse. At such time that the Source Plasma is delivered to the ADMA loading dock located at 5800 Park of Commerce Blvd NW, Boca Raton, FL 33487, risk of loss for such delivered Source Plasma shall, as between Sanofi Pasteur and ADMA, transfer to ADMA. ADMA agrees to assume the risks of loss to the Sanofi Pasteur Property and shall reimburse Sanofi Pasteur, at the dollar value, the Source Plasma in case of damage or loss. In consideration of the foregoing, Section 6.5 is deleted in its entirety and replaced by the following: 6.5 Limitation of Liability: In no event shall either party be liable to the other party for incidental, indirect, special and consequential or punitive damages, including without limitation any claims for damages based upon lost profits or lost business opportunity. Except for the obligation of indemnity as set forth in Section 6.1 (c) with respect to claims by third parties for personal injury, illness or death (but not including property damage) resulting from the manufacture of the Product by BPC, aggregate damages for which ADMA shall be liable to Sanofi Pasteur hereunder, including without limitation costs of Source Plasma yield loss and/or rejected Batches, shall not exceed [***]. All claims by Sanofi Pasteur for breach or default under this Agreement shall be brought within [***] year after the cause of action comes into existence or otherwise shall be waived. This limitation of liability will not apply for damages that result from the gross negligence or the willful misconduct of a Party.
BPC Initials ___ Sanofi Pasteur Initials ___ 4
Confidential treatment has been requested with respect to portions of this agreement as indicated by "[***]" and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Furthermore, unless Section 2.7 applies, and subject to any risk of loss assumed by BPC under the Plasma Agreement (as amended) or that certain [Termination, Settlement and Release Agreement] between BPC and Sanofi Pasteur, [of even date herewith], Sanofi Pasteur assumes all risk of loss for all Source Plasma (the "Sanofi Pasteur Property") while under storage conditions at BPC's warehouse except in case such loss occurs as a result of BPC negligence or willful misconduct, and Sanofi Pasteur hereby waives any and all rights of recovery against ADMA and its Affiliates, and against any of their respective directors, officers, employees, agents or representative, for any loss or damage to the Sanofi Pasteur Property while under storage conditions at BPC's warehouse. At such time that the Source Plasma is delivered to the ADMA loading dock located at 5800 Park of Commerce Blvd NW, Boca Raton, FL 33487, risk of loss for such delivered Source Plasma shall, as between Sanofi Pasteur and ADMA, transfer to ADMA. ADMA agrees to assume the risks of loss to the Sanofi Pasteur Property and shall reimburse Sanofi Pasteur, at the dollar value, the Source Plasma in case of damage or loss. 8. The Parties further agree to amend that certain Quality and Technical Agreement between Sanofi Pasteur and ADMA (as successor to BPC) effective as of September 15, 2015 (the "Quality Agreement") to modify the address where the Source Plasma shall be stocked and the conditions associated therewith, as well as to ensure consistency with the other terms of this Amendment. The Parties shall use best efforts to complete such amendment to the Quality Agreement within 60 days after the Amendment Effective Date. 9. All other terms of the Agreement shall remain in full force and effect except to the extent superseded by the terms of this Amendment #3. IN WITNESS WHEREOF, the parties hereby have caused this Amendment #3 to the Agreement to be executed and the persons signing below warrant that they are duly authorized to sign for and on behalf of their respective Parties. Made in two original copies. Sanofi Pasteur, S.A. By:/s/ Vincent Hingot Name: Vincent Hingot Title: Senior Vice President Industrial Affairs Date: 22 Dec. 2017
ADMA BioManufacturing, LLC By: /s/ Adam Grossman Name: Adam Grossman Title: President & CEO Date: 12-21-2017
BPC Initials ___ Sanofi Pasteur Initials ___ 5
Confidential treatment has been requested with respect to portions of this agreement as indicated by "[***]" and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Exhibit A [***] ADMA Initials ___ Sanofi Pasteur Initials ___ A-1 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Confidential treatment has been requested with respect to portions of this agreement as indicated by "[***]" and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Amendment #3 to the Manufacturing Agreement This Amendment #3 to the Manufacturing Agreement (this "Amendment #3") is made effective as of December 21, 2017 ("Amendment Effective Date"), by and between ADMA BioManufacturing, LLC, a Delaware limited liability company, having a place of business at 5800 Park of Commerce Boulevard NW, Boca Raton, Florida 33487 USA ("ADMA") and Sanofi Pasteur S.A., a company existing and organized under the laws of France ("Sanofi Pasteur"), having its registered head office at 14, espace Henry Vallee, 69007, Lyon, France. WHEREAS, ADMA (as successor-in-interest to Biotest Pharmaceuticals Corporation ("BPC") and Sanofi Pasteur are parties to that certain Manufacturing Agreement, effective September 30, 2011, as previously amended (including by that certain Amendment #2 to the Manufacturing Agreement, effective as of August 1, 2016, by and between BPC and Sanofi Pasteur ("Amendment #2")) (the "Agreement") for the production of Rabies Fraction II Paste (the "Product," as further defined in the Agreement) for Sanofi Pasteur from human plasma containing rabies antibodies; WHEREAS, BPC and Sanofi Pasteur are Parties to that certain Plasma Supply Agreement, effective January 20, 2009, as amended (the "Plasma Supply Agreement"), for the production of human Rabies Hyperimmune Plasma ("Rabies Plasma") by BPC for Sanofi Pasteur to be used in the manufacturing of Rabies Immunoglobulin; WHEREAS, the Rabies Plasma manufactured by BPC under the Plasma Supply Agreement may be transferred to ADMA to be fractionated into Product under the Agreement; WHEREAS, ADMA and Sanofi Pasteur desire to further amend the Agreement in order to memorialize the amendment of certain provisions in the Agreement; NOW, THEREFORE, in consideration of the respective promises contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereto agree as follows: 1. All capitalized terms used and not defined in this Amendment shall have the meaning as set out in the Agreement. 2. The supply terms set forth in Section 1 of Amendment #2 (the "Prior Supply Terms") are hereby deleted in their entirety. In their place, the Parties agree to the following (and Section 2.1 of the Agreement is hereby amended as needed to implement the following): Sanofi Pasteur agrees to purchase and ADMA to manufacture [***] Batches of Product, which Batches will be produced over a period from Q3 2018 to Q3 2019. Attached hereto as Exhibit A is a detailed supply plan provided to ADMA by Sanofi Pasteur (the "Updated Supply Plan") that describes the agreed-upon timing for production of such Batches of Product, which supply plan is made an integral part hereof and shall be binding on the Parties. Prices for such [***] Batches of Product shall be in accordance with Section 3.2 of the Agreement (as amended in Amendment #2).
BPC Initials ___ Sanofi Pasteur Initials ___ 1
Confidential treatment has been requested with respect to portions of this agreement as indicated by "[***]" and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. The Parties agree to amend the Agreement to impose on ADMA an obligation to supply a minimum of [***] Batches of Product for that period stalling from Q4 2018 up to Q4 2019, as further specified in Exhibit A attached hereto. Should ADMA fail to supply a minimum of [***] Batches of Product (the "Minimum Volume") of Product during the time period as specified in this Amendment #3, ADMA agrees that Sanofi Pasteur shall be entitled to obtain from ADMA as liquidated damages, and not a penalty, amounting to $[***] ([***]) USD. ADMA accepts and declares that the amount of the liquidated damages is a fair and equitable compensation, and not a penalty, for such failure in reaching the volume commitment within the timelines agreed herein and in regard to the value and use of the Source Plasma. In addition to the Minimum Volume of Product to be manufactured by ADMA, should ADMA deliver the Minimum Volume of Product but fail to meet the Updated Supply Plan as provided in Exhibit A as attached hereto and made an integral part hereof, then it is agreed upon by the Parties that ADMA shall pay to Sanofi Pasteur an amount equal to $[***] ([***]) USD for each Batch of Product that is less than the agreed upon quantity in Exhibit A, as liquidated damages, and not as a penalty. The foregoing liquidated damages [***] respect to the [***] within the [***] agreed in this Amendment #3. [***] not be entitled to [***] by this Agreement as a result of [***], including without limitation [***]. Notwithstanding the foregoing, [***], sections 6.1 and 6.2 of the Agreement [***]. 3. Furthermore, should ADMA's compliance status under the FDA Warning Letter be escalated, and if such consequence limits ADMA's ability to supply the Batches of Product as specified in this Amendment #3 and the Updated Supply Plan or in case of failure by ADMA to supply any Batch of Product under this Amendment, Sanofi Pasteur shall be entitled to terminate immediately this Agreement upon written notice to ADMA and Sanofi Pasteur shall not be obligated to provide any additional payments (as outlined in Section 5 below and payments for any of the unproduced or delivered production batches) to ADMA from the date of such termination. In such a case, the remaining Source Plasma shall be immediately returned to Sanofi Pasteur, under ADMA's liability and expenses. Shipment of the Source Plasma to Sanofi Pasteur shall be made in compliance with the transportation conditions as provided in the Quality Agreement (as defined below), to be further amended by the Parties as contemplated in Section 9 below.
BPC Initials ___ Sanofi Pasteur Initials ___ 2
Confidential treatment has been requested with respect to portions of this agreement as indicated by "[***]" and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 4. In the event of a non-conformance in the Source Plasma at the time of delivery of the Source plasma at ADMA's place, or in the event of damaged Source Plasma, which non-conformance, damage or loss in the Source Plasma occurred prior to the transfer of risks in the Source Plasma to ADMA as per Section 7 below, it is agreed upon by the Parties that Sanofi Pasteur shall not be responsible, nor liable, to compensate or indemnify ADMA for the loss of business arising from the fact that, in such a case, the Source Plasma will no longer be manufactured by ADMA and consequently Sanofi Pasteur will not pay for the unproduced batch. 5. In consideration for certain quantities of Product that ADMA would have been contractually obligated to supply, and that Sanofi Pasteur would have been contractually obligated to purchase, under the Agreement, but that will now not be supplied and purchased as a result of the Parties' agreement in Section 2 above, Sanofi Pasteur agrees to pay ADMA an amount of seven million (7,000,000 USD) (the "Compensation Fee") in five installments and will be invoiced as follows: (a) [***] USD upon execution of this Amendment #3 (b) [***] USD on March 1, 2018 (c) [***] USD on June 1, 2018 (d) [***] USD on September 1, 2018 (e) [***] USD on December 1, 2018 Such payments shall be made in accordance with Section 3.4 of the Agreement; provided, however, that the initial payment described in Section 5(a) above shall be due no later than December 31,2017. Each invoice shall reference this Amendment 3 and shall be sent at the following address: Sanofi Pasteur SA DSFF Pole de Lyon - Carteret Tri C5-2-01 14 Espace Henry Vallee CS 90119 69361 LYON CEDEX 07 - FRANCE Upon payment of the Compensation Fee, ADMA shall be fully compensated for any kind of prejudice or damages ADMA may suffer arising from or related to the decrease in the quantities of Product Sanofi Pasteur committed to purchase initially from ADMA as per the Prior Supply Terms. ADMA declares that the Compensation Fee is fair and equitable. 6. Upon full payment of the Compensation Fee, each Party, with the intention of binding itself, its Affiliates, shareholders, successors and assigns, hereby releases, remises and forever discharges the other Party, and its Affiliates, employees, directors, shareholders, successors and assigns, from all actions, causes of action, suits, debts, dues, sums of money, accounts, covenants, contracts, controversies, agreements, promises, damages, claims and demands whatsoever, in law, contract or equity, arising directly out of, or relating to the Updated Supply Plan and/or the amount of the Compensation Fee Sanofi agrees to pay to ADMA.
BPC Initials ___ Sanofi Pasteur Initials ___ 3
Confidential treatment has been requested with respect to portions of this agreement as indicated by "[***]" and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 7. The Parties further agree to amend Section 6.5 of the Agreement as follows: (a) The liability cap set forth under section 6.5 is hereby amended to adapt to the provisions of this Amendment #3 and is therefore set at "[***]" instead of "[***]". (b) The last sentence of Section 6.5 of the Agreement is hereby deleted and replaced with the following: Unless Section 2.7 applies, and subject to any risk of loss assumed by BPC under the Plasma Agreement (as amended) or that certain [Termination, Settlement and Release Agreement] between BPC and Sanofi Pasteur, [of even date herewith], Sanofi Pasteur assumes all risk of loss for all Source Plasma (the "Sanofi Pasteur Property") while under storage conditions at BPC's warehouse except in case such loss occurs as a result of BPC negligence or willful misconduct, and Sanofi Pasteur hereby waives any and all rights of recovery against ADMA and its Affiliates, and against any of their respective directors, officers, employees, agents or representative, for any loss or damage to the Sanofi Pasteur Property while under storage conditions at BPC's warehouse. At such time that the Source Plasma is delivered to the ADMA loading dock located at 5800 Park of Commerce Blvd NW, Boca Raton, FL 33487, risk of loss for such delivered Source Plasma shall, as between Sanofi Pasteur and ADMA, transfer to ADMA. ADMA agrees to assume the risks of loss to the Sanofi Pasteur Property and shall reimburse Sanofi Pasteur, at the dollar value, the Source Plasma in case of damage or loss. In consideration of the foregoing, Section 6.5 is deleted in its entirety and replaced by the following: 6.5 Limitation of Liability: In no event shall either party be liable to the other party for incidental, indirect, special and consequential or punitive damages, including without limitation any claims for damages based upon lost profits or lost business opportunity. Except for the obligation of indemnity as set forth in Section 6.1 (c) with respect to claims by third parties for personal injury, illness or death (but not including property damage) resulting from the manufacture of the Product by BPC, aggregate damages for which ADMA shall be liable to Sanofi Pasteur hereunder, including without limitation costs of Source Plasma yield loss and/or rejected Batches, shall not exceed [***]. All claims by Sanofi Pasteur for breach or default under this Agreement shall be brought within [***] year after the cause of action comes into existence or otherwise shall be waived. This limitation of liability will not apply for damages that result from the gross negligence or the willful misconduct of a Party.
BPC Initials ___ Sanofi Pasteur Initials ___ 4
Confidential treatment has been requested with respect to portions of this agreement as indicated by "[***]" and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Furthermore, unless Section 2.7 applies, and subject to any risk of loss assumed by BPC under the Plasma Agreement (as amended) or that certain [Termination, Settlement and Release Agreement] between BPC and Sanofi Pasteur, [of even date herewith], Sanofi Pasteur assumes all risk of loss for all Source Plasma (the "Sanofi Pasteur Property") while under storage conditions at BPC's warehouse except in case such loss occurs as a result of BPC negligence or willful misconduct, and Sanofi Pasteur hereby waives any and all rights of recovery against ADMA and its Affiliates, and against any of their respective directors, officers, employees, agents or representative, for any loss or damage to the Sanofi Pasteur Property while under storage conditions at BPC's warehouse. At such time that the Source Plasma is delivered to the ADMA loading dock located at 5800 Park of Commerce Blvd NW, Boca Raton, FL 33487, risk of loss for such delivered Source Plasma shall, as between Sanofi Pasteur and ADMA, transfer to ADMA. ADMA agrees to assume the risks of loss to the Sanofi Pasteur Property and shall reimburse Sanofi Pasteur, at the dollar value, the Source Plasma in case of damage or loss. 8. The Parties further agree to amend that certain Quality and Technical Agreement between Sanofi Pasteur and ADMA (as successor to BPC) effective as of September 15, 2015 (the "Quality Agreement") to modify the address where the Source Plasma shall be stocked and the conditions associated therewith, as well as to ensure consistency with the other terms of this Amendment. The Parties shall use best efforts to complete such amendment to the Quality Agreement within 60 days after the Amendment Effective Date. 9. All other terms of the Agreement shall remain in full force and effect except to the extent superseded by the terms of this Amendment #3. IN WITNESS WHEREOF, the parties hereby have caused this Amendment #3 to the Agreement to be executed and the persons signing below warrant that they are duly authorized to sign for and on behalf of their respective Parties. Made in two original copies. Sanofi Pasteur, S.A. By:/s/ Vincent Hingot Name: Vincent Hingot Title: Senior Vice President Industrial Affairs Date: 22 Dec. 2017
ADMA BioManufacturing, LLC By: /s/ Adam Grossman Name: Adam Grossman Title: President & CEO Date: 12-21-2017
BPC Initials ___ Sanofi Pasteur Initials ___ 5
Confidential treatment has been requested with respect to portions of this agreement as indicated by "[***]" and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Exhibit A [***] ADMA Initials ___ Sanofi Pasteur Initials ___ A-1 | Highlight the parts (if any) of this contract related to "Non-Disparagement" that should be reviewed by a lawyer. Details: Is there a requirement on a party not to disparage the counterparty? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Change Of Control" that should be reviewed by a lawyer. Details: Does one party have the right to terminate or is consent or notice required of the counterparty if such party undergoes a change of control, such as a merger, stock sale, transfer of all or substantially all of its assets or business, or assignment by operation of law?
Context: CO-BRANDING AND ADVERTISING AGREEMENT
THIS CO-BRANDING AND ADVERTISING AGREEMENT (the "Agreement") is made as of June 21, 1999 (the "Effective Date") by and between I-ESCROW, INC., with its principal place of business at 1730 S. Amphlett Blvd., Suite 233, San Mateo, California 94402 ("i-Escrow"), and 2THEMART.COM, INC. having its principal place of business at 18301 Von Karman Avenue, 7th Floor, Irvine, California 92612 ("2TheMart").
1. DEFINITIONS.
(a) "CONTENT" means all content or information, in any medium, provided by a party to the other party for use in conjunction with the performance of its obligations hereunder, including without limitation any text, music, sound, photographs, video, graphics, data or software. Content provided by 2TheMart is referred to herein as "2TheMart Content" and Content provided by i-Escrow is referred to herein as "i-Escrow Content."
(b) "CO-BRANDED SITE" means the web-site accessible through Domain Name, for the Services implemented by i-Escrow. The homepage of this web-site will visibly display both 2TheMart Marks and i-Escrow Marks.
(c) "CUSTOMERS" means all users who access Co-Branded Site.
(d) "DOMAIN NAME" means www.iescrow.com/2TheMart.
(e) "ESCROW SERVICES" means services for auction sellers and high bidders whereby an agent holds a buyer's money in trust until the buyer approves the applicable item that was physically delivered, at which time the agent releases the buyer's money to seller, after subtracting the escrow fees.
(f) "INFORMATION TRANSFER MECHANISM" means the mechanism by which 2TheMart transfers to i-Escrow information to populate the applicable i-Escrow transaction and user registration forms.
(g) "LAUNCH DATE" means the first date on which the Co-Branded Site is pointed to in all references to i-Escrow from 2TheMart auction site, and the Information Transfer Mechanism is publicly deployed (post-beta).
(h) "MARKS" means all domain names, trademarks and logos designated by a party for the other party's use in conjunction with such other party's performance under this Agreement. Marks designated by 2TheMart for i-Escrow's use are referred to herein as "2TheMart Marks" and Marks designated by i-Escrow for 2TheMart' use are referred to herein as "i-Escrow Marks."
(i) "SERVICES" means i-Escrow's implementation and performance of the Escrow Services as of the Effective Date, as modified over time.
(j) "SHADOW SITE" means the site where Co-Branded Site is made available for 2TheMart's testing of the Information Transfer Mechanism prior to being made publicly available.
(k) "TRANSACTION" means a transaction utilizing the Services that actually closes and that was initiated by a Transaction Inquiry from a Customer.
(l) "TRANSACTION INQUIRY" means a Customer's submission of i-Escrow's standard New Transaction Inquiry form (or its successor) on or through the Co-Branded Pages. Currently this means entry of a description and price of merchandise by a user (buyer or seller) who agrees to abide by the terms and conditions of the Services, together with email address of the other party, regardless of whether or not any Transaction is completed.
Source: 2THEMART COM INC, 10-12G, 8/26/1999
2. DEVELOPMENT AND IMPLEMENTATION.
2.1 OVERVIEW. As set forth herein, 2TheMart will promote Services to its auction users (buyers and sellers), and i-Escrow shall develop Co-Branded Site, and develop the Information Transfer Mechanism working with 2TheMart to make Services available seamlessly to Customers. Unless otherwise specified, each party shall be responsible for all development, hosting and other costs associated with the pages resident on their servers and all emails to users they send.
2.2 INITIAL INFORMATION TRANSFER MECHANISM DEVELOPMENT. The parties shall negotiate in good faith to determine the initial operation of the Information Transfer Mechanism and to describe such operation and development fees, in a statement of work ("SOW"). Each party shall make available sufficient and qualified engineers to negotiate the SOW. No SOW shall be binding on the parties unless mutually approved by both parties. In the event that the parties are unable to agree to an SOW within 2 months following the Effective Date, either party may, in its sole discretion, terminate this Agreement by providing written notice.
Once approved, the parties shall use commercially reasonable efforts to diligently implement their respective obligations under the SOW. Upon completion of its duties under the SOW, a party shall notify the other party and provide the other party with the opportunity to test and evaluate its work. i-Escrow shall make available the Shadow Site for such testing in a timely manner. Each party shall reasonably cooperate with the other party in effectuating their respective duties under the SOW. The Information Transfer Mechanism shall not go live until its operation has been approved ("Approval Date") by both parties, such approval not to be unreasonably withheld.
2.3 LAUNCH TIMING. Each party shall use good faith and reasonable efforts to expeditiously develop the Co-Branded Pages and the Information Transfer Mechanism. In the event that, after using such efforts, the Launch Date has not occurred within 4 months following the Effective Date, either party may terminate this Agreement by providing written notice. If
only one party has used good faith and reasonable development efforts, only that party may exercise the foregoing right to terminate.
2.4 RESTRICTIONS ON COMMUNICATIONS. i-Escrow may place banner advertising on the Co-Branded Site upon prior written approval of 2TheMart, which shall be at the discretion of 2TheMart. All advertising revenue arising from the banner ads shall be solely i-Escrow's. i-Escrow shall not run banner advertisements on the Co-Branded Site for any of 2TheMart's competitors. 2TheMart shall provide in writing, a list of companies they would like to exclude, including every time they wish to change this list.
2.5 SERVICE PERFORMANCE OF INFORMATION TRANSFER MECHANISM. The parties each shall in good faith work to provide reasonable service levels with respect to the operation of the portions of the Information Transfer Mechanism in their control.
Source: 2THEMART COM INC, 10-12G, 8/26/1999
2.6 PROGRAM REVIEW MEETINGS. The parties shall meet, at least once per month either in person, or by telephone, to coordinate the implementation of this agreement over time.
3. PROMOTION.
After Launch Date, 2TheMart will widely promote the Services:
(a) To every seller and high bidder through means including, but not limited to, end of auction emails containing links, such that, it shall be possible for the buyer or seller to initiate a Transaction Inquiry with i-Escrow, without having to re-enter all their personal or transaction related information.
(b) By adding links to Co-Branded Site in FAQ section of 2TheMart auctions.
(c) By adding links to Co-Branded Site on the seller listing pages of 2TheMart auctions.
(d) By displaying a text or graphic link to a page containing information about Services on all auction item pages and bidding pages to educate bidders about i-Escrow. 2TheMart may use the "Escrow Services Description" attached in Exhibit A for creating such a page.
5. PAYMENT.
5.1 ADVERTISING FEES. After the Launch Date, i-Escrow shall pay 2TheMart advertising fees based on the number of Transaction Inquiries. This advertising fees shall consist of a per Transaction Inquiry amount calculated by multiplying 0.025% by the amount of the average Transaction from all Customers in the preceding quarter. The formula for arriving at the per Transaction Inquiry amount may be revised from time to time during the term of this Agreement to reflect present market conditions ("the Adjusted Rate"), but only by mutual
consent of the parties after good faith discussions. The Adjusted Rate shall be added as an addendum to this Agreement.
5.2 REPORTING. Within two (2) weeks following the end of each calendar quarter, i-Escrow shall provide to 2TheMart a report, describing for each quarter: the number of new registrations through the Co-Branded Pages; the number of Transaction Inquiries from Customers; the total number of Transactions from such inquiries; the total dollar value of the Transactions.
5.3 AUDIT RIGHTS. i-Escrow shall keep for one (1) year proper records and books of account relating to the computation of advertising payments owed to 2TheMart (including, as appropriate, the computation of the size of average Transaction). Once every twelve (12) months, 2TheMart through a CPA may inspect and audit such records to verify reports. Any such inspection will be conducted in a manner that does not unreasonably interfere with i-Escrow's business activities and with no less than fifteen (15) days notice. i-Escrow shall within two (2) weeks make any overdue payments disclosed by the audit. Such inspection shall be at 2TheMart's expense; however, if the audit reveals overdue payments in excess of ten percent (10%) of the payments owed to date, i-Escrow shall immediately pay all cost of such audit.
6. RIGHTS AND STANDARDS.
Source: 2THEMART COM INC, 10-12G, 8/26/1999
6.1 CONTENT. 2TheMart hereby grants to i-Escrow a worldwide, non-exclusive right to use, reproduce, distribute, publicly perform, publicly display and digitally perform the 2TheMart Content soley with respect to and in conjunction with the Co-Branded Site all with the prior written consent of 2TheMart, for the term of this Agreement. i-Escrow hereby grants to 2TheMart a worldwide, non-exclusive right to use, reproduce, distribute, publicly perform, publicly display and digitally perform the i-Escrow Content on or in conjunction with 2TheMart auctions.
6.2 CONTENT OWNERSHIP. Except as otherwise provided in this Agreement, as between 2TheMart and i-Escrow: (a) 2TheMart and its suppliers retain all rights, title and interest in and to all intellectual property rights embodied in or associated with the 2TheMart Content, and b) i-Escrow and its suppliers retain all rights, title and interest in and to all intellectual property rights embodied in or associated with the i-Escrow Content and Co-Branded Site. There are no implied licenses under this Agreement, and any rights not expressly granted are reserved. Neither party shall exceed the scope of the rights granted hereunder.
6.3 TRADEMARKS. Subject to the terms and conditions of this Agreement: (a) i-Escrow hereby grants to 2TheMart a non-exclusive, nontransferable right to use the i-Escrow Marks (including without limitation the Domain Name) in links to and advertisements and promotions for the Co-Branded Pages or the Services; and (b) 2TheMart hereby grants to i-Escrow a non-exclusive, nontransferable right to use 2TheMart Marks (including without limitation the Domain Name) on the Co-Branded Pages, and for the performance of Services.
6.4 TRADEMARK RESTRICTIONS. The Mark owner may terminate the foregoing rights if, in its reasonable discretion, the other party's use of the Marks tarnishes, blurs or dilutes the quality associated with the Marks or the associated goodwill and such problem is not cured within ten (10) days of notice of breach; alternatively, instead of terminating the right in total, the
owner may specify that certain pages of the other party's web-site may not contain the Marks. Title to and ownership of the owner's Marks shall remain with the owner. The receiving party shall use the Marks exactly in the form provided and in conformance with any trademark usage policies. The other party shall not take any action inconsistent with the owner's ownership of the Marks, and any benefits accruing from use of such Marks shall automatically vest in the owner. The other party shall not form any combination marks with the other party's Marks. Notwithstanding the foregoing, to the extent that the Domain Name is deemed a combination mark, neither party shall use the Domain Name for any purpose except as expressly provided herein or attempt to register the Domain Name, and the parties will jointly cooperate on any enforcement action of infringement of the Domain Name.
6.5 LIMITS ON SUBLICENSING. All rights (under any applicable intellectual property right) granted herein are not sublicenseable,
Source: 2THEMART COM INC, 10-12G, 8/26/1999
transferable or assignable. Notwithstanding the foregoing, either party may use a third party web host, but all actions or failures to act of the web host that would be a breach of this Agreement, were the actions or failures to act taken by the applicable party, shall be deemed a breach of this Agreement. In addition, 2TheMart may grant sublicenses to companies that 2TheMart has a business relationship with to the extent that 2TheMart Content is visible from such company's web-site through a link or other means.
6.6 CONTENT STANDARDS. 2TheMart shall not provide any 2TheMart Content, and i-Escrow shall not provide any i-Escrow Content, that: (a) infringes any third party's copyright, patent, trademark, trade secret or other proprietary rights or rights of publicity or privacy; (b) violates any law, statute, ordinance or regulation (including without limitation the laws and regulations governing export control, unfair competition, antidiscrimination or false advertising); (c) is defamatory, trade libelous, unlawfully threatening or unlawfully harassing; (d) is obscene, harmful to minors or child pornographic; (e) contains any viruses, Trojan horses, worms, time bombs, cancelbots or other computer programming routines that are intended to damage, detrimentally interfere with, surreptitiously intercept or expropriate any system, data or personal information; and (f) is materially false, misleading or inaccurate.
6.7 SERVICE STANDARDS. i-Escrow will comply with all laws and regulations and act as an Independent Escrow Agent as per the guidelines of California Escrow Law (California Financial Code Section17000 et seq., or its successor). Should any of the terms, conditions or provisions of this Agreement conflict with the California Escrow Law, its rules or regulations, which govern i-Escrow's business practices, the California Escrow Law shall prevail. Notwithstanding the foregoing, at any time that i-Escrow reasonably believes such a conflict exists, i-Escrow will give 2TheMart written notice of such conflict and the parties will use their best efforts to resolve such conflict.
7. DISCLAIMER OF WARRANTIES. EACH PARTY PROVIDES ALL MATERIALS AND SERVICES TO THE OTHER PARTY "AS IS." EACH PARTY DISCLAIMS ALL WARRANTIES AND CONDITIONS, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF TITLE, NON-
INFRINGEMENT, MERCHANTABILITY ANDFITNESS FOR A PARTICULAR PURPOSE. Each party acknowledges that it has not entered into this Agreement in reliance upon any warranty or representation except those specifically set forth herein.
8. TERM AND TERMINATION.
8.1 TERM. The term of this Agreement shall continue for one (1) year following the Launch Date, unless earlier terminated as provided herein. This Agreement may be renewed for any number of successive one (1) year terms by mutual written agreement of the parties prior to the conclusion of the term of this Agreement. A party wishing to renew this Agreement shall give the other party notice thereof no less than thirty (30) days before the expiration of the term then in effect. In the event that either party does not give such notice, the term of this Agreement shall be automatically renewed for another one (1) year.
Source: 2THEMART COM INC, 10-12G, 8/26/1999
8.2 TERMINATION FOR BREACH. In addition to other remedies that may be available to it, by providing written notice, a party may immediately terminate this Agreement: (a) if the other party materially breaches this Agreement and fails to cure that breach within sixty (60) days after receiving written notice of the breach, or (b) as provided in Sections 2.2 [INITIAL INFORMATION TRANSFER MECHANISM DEVELOPMENT], 2.4 [RESTRICTIONS ON COMMUNICATIONS], or 12.4.
8.3 TERMINATION FOR CHANGE IN COMPANY STRUCTURE. If a majority of the equity securities of either 2TheMart or i-Escrow, Inc. (except that i-Escrow may sell all or a majority of its equity securities or voting interests to i-Escrow.com, and i-Escrow.com may sell all or a majority of its equity securities or voting interests to i-Escrow's existing shareholders, without triggering the foregoing) are acquired by another company during the term of this Agreement either company may terminate this Agreement, without liability, by giving a thirty (30) days written notice to the other party.
8.4 TERMINATION FOR BANKRUPTCY. Either party may terminate or suspend this Agreement effective immediately and without liability upon written notice to the other party if any one of the following events occurs:
(a) the other party files a voluntary petition in bankruptcy or otherwise seeks protection under any law for the protection of debtors;
(b) a proceeding is instituted against the other party under any provision of any bankruptcy laws which is not dismissed within ninety (90) days;
(c) the other party is adjudged bankrupt;
(d) a court assumes jurisdiction of all or a substantial portion of the assets of the other party under a reorganization law;
(e) a trustee or receiver is appointed by a court for all or a substantial portion of the assets of the other party;
(f) the other party becomes insolvent, ceases or suspends all or substantially all of its business; or
(g) the other party makes an assignment of the majority of its assets for the benefit of its creditors.
8.5 EFFECTS OF TERMINATION. Upon expiration or termination of this Agreement for any reason: (a) all rights granted herein shall terminate, (b) i-Escrow shall pay all amounts owed to 2TheMart within six (6) weeks of termination, and (c) each party shall remove the other party's content and Marks from their servers. Notwithstanding the foregoing, unless this Agreement was terminated for a material breach, all provisions of this Agreement shall survive to the extent necessary for i-Escrow to complete any Customer transactions which are pending at the time of expiration or termination. Sections 1, 7, 8.5 [EFFECTS OF TERMINATION], 9, 10, 11 and 12 shall survive expiration or termination of this Agreement.
9. INDEMNITY. Each party (the "Indemnifying Party") shall indemnify the other party (the "Indemnified Party") against any and all claims, losses, costs and expenses, including reasonable attorneys' fees, which the Indemnified Party may incur as a result of claims in any form by third parties arising from the Indemnifying Party's acts, omissions or misrepresentations to the extent that the Indemnified Party is deemed a principal of the Indemnifying Party. In addition, 2TheMart shall indemnify i-Escrow against any and all claims, losses, costs and expenses, including reasonable attorneys' fees, which i-Escrow may incur as a result of claims in any form by third parties arising from 2TheMart Content. In addition, i-Escrow shall indemnify 2TheMart against any and all claims, losses, costs and expenses, including reasonable attorneys' fees, which 2TheMart may incur as a result of claims in any form by third parties arising from i-Escrow
Source: 2THEMART COM INC, 10-12G, 8/26/1999
Content and or the Services provided to Customers. The foregoing obligations are conditioned on the Indemnified Party: (i) giving the Indemnifying Party notice of the relevant claim, (ii) cooperating with the Indemnifying Party, at the Indemnifying Party's expense, in the defense of such claim, and (iii) giving the Indemnifying Party the right to control the defense and settlement of any such claim, except that the Indemnifying Party shall not enter into any settlement that affects the Indemnified Party's rights or interest without the Indemnified Party's prior written approval. The Indemnified Party shall have the right to participate in the defense at its expense.
10. LIMITATION ON LIABILITY. EXCEPT IN THE EVENT OF A BREACH OF SECTION 11, NEITHER PARTY SHALL BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS (HOWEVER ARISING, INCLUDING NEGLIGENCE) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, EVEN IF THE PARTIES ARE AWARE OF THE POSSIBILITY OF SUCH DAMAGES.
11. CONFIDENTIAL INFORMATION. A party's "Confidential Information" is defined as any confidential or proprietary information of a party which is disclosed to the other party in a writing marked confidential or, if disclosed orally, is identified as confidential at the time of disclosure and is subsequently reduced to a writing marked confidential and delivered to the
other party within ten (10) days of disclosure. Each party shall hold the other party's Confidential Information in confidence and shall not disclose such Confidential Information to third parties nor use the other party's Confidential Information for any purpose other than as required to perform under this Agreement. Such restrictions shall not apply to Confidential Information which (a) is already known by the recipient, (b) becomes, through no act or fault of the recipient, publicly known, (c) is received by recipient from a third party without a restriction on disclosure or use, or (d) is independently developed by recipient without reference to the Confidential Information. The restriction on disclosure shall not apply to Confidential Information which is required to be disclosed by a court or government agency. Upon expiration or termination of this Agreement, within fourteen (14) days of the other party's request, each party will return all Confidential Information and other deliverables to the requesting party.
12. GENERAL PROVISIONS.
12.1 GOVERNING LAW. This Agreement will be governed and construed in accordance with the laws of the State of California without giving effect to conflict of laws principles. Both parties submit to personal jurisdiction in California and further agree that any cause of action arising under this Agreement shall be brought in a court in Orange County, California.
12.2 SEVERABILITY; HEADINGS. If any provision herein is held to be invalid or unenforceable for any reason, the remaining provisions will continue in full force without being impaired or invalidated in any way. The parties agree to replace any invalid provision with a valid provision that most closely approximates the intent and economic effect of the invalid provision. Headings are for reference purposes only and in no way define, limit, construe or describe the scope or extent of such section.
12.3 PUBLICITY. Prior to the release of any press releases or other similar promotional materials related to this Agreement, the releasing party shall submit a written request for approval to the other party with a copy of the materials to be released, which
Source: 2THEMART COM INC, 10-12G, 8/26/1999
request shall be made no less than three (3) business days prior to the requested release date. A party shall not unreasonably withhold or delay the granting of its approval of such materials, and such approval shall be provided to the other party within one (1) business day of receipt
12.4 FORCE MAJEURE. Except as otherwise provided, if performance hereunder (other than payment) is prevented, restricted or interfered with by any act or condition whatsoever beyond the reasonable control of a party (a "force majeure event"), the party so affected, upon giving prompt notice to the other party, shall be excused from such performance to the extent of such prevention, restriction or interference. However, if a force majeure event interferes with the operation of this Agreement for sixty (60) days or more, either party can terminate this Agreement, without penalty. Notwithstanding the foregoing, the occurrence of any force majeure event shall not limit either party's obligations under Section 9 with respect to any third party claim as to which the other party seeks indemnification.
12.5 INDEPENDENT CONTRACTORS. The parties are independent contractors, and no agency, partnership, joint venture, employee- employer or franchisor-franchisee relationship is
intended or created by this Agreement. Neither party shall make any warranties or representations on behalf of the other party.
12.6 NOTICE. Any notices hereunder shall be given to the appropriate party at the address specified below or at such other address as the party shall specify in writing. Notice shall be deemed given: upon personal delivery; if sent by fax, upon confirmation of receipt; or if sent by a reputable overnight courier with tracking capabilities, one (1) day after the date of mailing: To i-Escrow: i-Escrow, Inc. 1730 South Amphlett Blvd., #215 San Mateo, CA 94402 Fax no. (650) 638-7890 Attention: President
With copy to: Fred M. Greguras, Esq. Legal Counsel of i-Escrow Fenwick & West LLP Two Palo Alto Square Palo Alto, CA 94306
To 2TheMart: Dominic J. Magliarditi President 18301 Von Karman Avenue, 7th Floor Irvine, CA 92612 Fax no. (949) 477-1221
11.7 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall be taken together and deemed to be one instrument.
12.8 GOOD FAITH. The parties agree to act in good faith with respect to each provision of this Agreement and any dispute that may arise related hereto.
12.9 ADDITIONAL DOCUMENTS/INFORMATION. The parties agree to sign and/or provide such additional documents and/or information as may reasonably be required to carry out the intent of this Agreement and to effectuate its purposes.
12.10 RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies provided herein will be cumulative and not exclusive of any other rights or remedies provided by law or otherwise.
12.11 NONWAIVER. No failure or forbearance by either party to exercise any right or insist upon or enforce performance of any obligation hereunder shall be deemed a waiver or relinquishment to any extent of that or any other right or obligation, in that or any other instance; rather, the
Source: 2THEMART COM INC, 10-12G, 8/26/1999
same shall be and shall remain in full force and effect. Any waiver of any right of a party or any obligation of the other party hereunder must be made in a writing signed by the arty waiving such right or obligation.
12.12 ENTIRE AGREEMENT. This Agreement contains the entire understanding of the parties hereto with respect to the transactions and matters contemplated hereby, supersedes all previous Agreements between i-Escrow and 2TheMart concerning the subject matter (except for the Confidential Agreement Dated January 4 1999, which shall survive this Agreement). No amendments or supplements to this Agreement will be effective for any purpose except by a written Agreement signed by the parties. No party hereto has relied on any statement, representation or promise of any party or with any other officer, agent, employee or attorney for the other party in executing this Agreement except as expressly stated herein.
2THEMART.COM, INC.: I-ESCROW, INC.:
By:/s/Dominic J. Magliarditi By:/s/Sanjay Bajaj Name: Dominic J. Magliarditi Name: Sanjay Bajaj Title: President Title: VP Business Development Date: 6/21/99 Date: 6/11/99
EXHIBIT A
ESCROW SERVICES DESCRIPTION
Successful completion of a transaction involves exchange of merchandise with payment. The buyer has to be satisfied he/she received what they thought they were getting and the seller has to be sure he/she gets paid. i-Escrow holds payment from the buyer in trust until the seller sends the merchandise to the buyer. Once the buyer accepts the merchandise, i-Escrow forwards the payment to the seller by writing a check. A typical escrow transaction: When an auction ends, your end of auction email contains links to i-Escrow. Once you have signed up with i-Escrow you go through the following steps to complete your transaction. 1. Start a transaction by entering the description and price of the merchandise along with email address of the other party. 2. The other party receives an email from i-Escrow requesting an acknowledgement of the terms of the transaction. 3. Once the transaction is acknowledged by the other party, the buyer pays i-Escrow the agreed upon price, by credit card or other means. 4. i-Escrow informs the seller that payment has been received, requesting them to ship the merchandise directly to the buyer. 5. The seller provides i-Escrow with the tracking number of the shipment. 6. The buyer receives and accepts the merchandise. 7. i-Escrow sends the check to the seller.
For more information about I-Escrow, visit their web-site at www.iescrow.com
Source: 2THEMART COM INC, 10-12G, 8/26/1999 [/INST] ```json
{<answer_start>
"answer": "If a majority of the equity securities of either 2TheMart or i-Escrow, Inc. (except that i-Escrow may sell all or a majority of its equity securities or voting interests to i-Escrow.com, and i-Escrow.com may sell all or a majority of its equity securities or voting interests to i-Escrow's existing shareholders, without triggering the foregoing) are acquired by another company during the term of this Agreement either company may terminate this Agreement, without liability, by giving a thirty (30) days written notice to the other party."
<answer_end>
}
``` </s> | CO-BRANDING AND ADVERTISING AGREEMENT
THIS CO-BRANDING AND ADVERTISING AGREEMENT (the "Agreement") is made as of June 21, 1999 (the "Effective Date") by and between I-ESCROW, INC., with its principal place of business at 1730 S. Amphlett Blvd., Suite 233, San Mateo, California 94402 ("i-Escrow"), and 2THEMART.COM, INC. having its principal place of business at 18301 Von Karman Avenue, 7th Floor, Irvine, California 92612 ("2TheMart").
1. DEFINITIONS.
(a) "CONTENT" means all content or information, in any medium, provided by a party to the other party for use in conjunction with the performance of its obligations hereunder, including without limitation any text, music, sound, photographs, video, graphics, data or software. Content provided by 2TheMart is referred to herein as "2TheMart Content" and Content provided by i-Escrow is referred to herein as "i-Escrow Content."
(b) "CO-BRANDED SITE" means the web-site accessible through Domain Name, for the Services implemented by i-Escrow. The homepage of this web-site will visibly display both 2TheMart Marks and i-Escrow Marks.
(c) "CUSTOMERS" means all users who access Co-Branded Site.
(d) "DOMAIN NAME" means www.iescrow.com/2TheMart.
(e) "ESCROW SERVICES" means services for auction sellers and high bidders whereby an agent holds a buyer's money in trust until the buyer approves the applicable item that was physically delivered, at which time the agent releases the buyer's money to seller, after subtracting the escrow fees.
(f) "INFORMATION TRANSFER MECHANISM" means the mechanism by which 2TheMart transfers to i-Escrow information to populate the applicable i-Escrow transaction and user registration forms.
(g) "LAUNCH DATE" means the first date on which the Co-Branded Site is pointed to in all references to i-Escrow from 2TheMart auction site, and the Information Transfer Mechanism is publicly deployed (post-beta).
(h) "MARKS" means all domain names, trademarks and logos designated by a party for the other party's use in conjunction with such other party's performance under this Agreement. Marks designated by 2TheMart for i-Escrow's use are referred to herein as "2TheMart Marks" and Marks designated by i-Escrow for 2TheMart' use are referred to herein as "i-Escrow Marks."
(i) "SERVICES" means i-Escrow's implementation and performance of the Escrow Services as of the Effective Date, as modified over time.
(j) "SHADOW SITE" means the site where Co-Branded Site is made available for 2TheMart's testing of the Information Transfer Mechanism prior to being made publicly available.
(k) "TRANSACTION" means a transaction utilizing the Services that actually closes and that was initiated by a Transaction Inquiry from a Customer.
(l) "TRANSACTION INQUIRY" means a Customer's submission of i-Escrow's standard New Transaction Inquiry form (or its successor) on or through the Co-Branded Pages. Currently this means entry of a description and price of merchandise by a user (buyer or seller) who agrees to abide by the terms and conditions of the Services, together with email address of the other party, regardless of whether or not any Transaction is completed.
Source: 2THEMART COM INC, 10-12G, 8/26/1999
2. DEVELOPMENT AND IMPLEMENTATION.
2.1 OVERVIEW. As set forth herein, 2TheMart will promote Services to its auction users (buyers and sellers), and i-Escrow shall develop Co-Branded Site, and develop the Information Transfer Mechanism working with 2TheMart to make Services available seamlessly to Customers. Unless otherwise specified, each party shall be responsible for all development, hosting and other costs associated with the pages resident on their servers and all emails to users they send.
2.2 INITIAL INFORMATION TRANSFER MECHANISM DEVELOPMENT. The parties shall negotiate in good faith to determine the initial operation of the Information Transfer Mechanism and to describe such operation and development fees, in a statement of work ("SOW"). Each party shall make available sufficient and qualified engineers to negotiate the SOW. No SOW shall be binding on the parties unless mutually approved by both parties. In the event that the parties are unable to agree to an SOW within 2 months following the Effective Date, either party may, in its sole discretion, terminate this Agreement by providing written notice.
Once approved, the parties shall use commercially reasonable efforts to diligently implement their respective obligations under the SOW. Upon completion of its duties under the SOW, a party shall notify the other party and provide the other party with the opportunity to test and evaluate its work. i-Escrow shall make available the Shadow Site for such testing in a timely manner. Each party shall reasonably cooperate with the other party in effectuating their respective duties under the SOW. The Information Transfer Mechanism shall not go live until its operation has been approved ("Approval Date") by both parties, such approval not to be unreasonably withheld.
2.3 LAUNCH TIMING. Each party shall use good faith and reasonable efforts to expeditiously develop the Co-Branded Pages and the Information Transfer Mechanism. In the event that, after using such efforts, the Launch Date has not occurred within 4 months following the Effective Date, either party may terminate this Agreement by providing written notice. If
only one party has used good faith and reasonable development efforts, only that party may exercise the foregoing right to terminate.
2.4 RESTRICTIONS ON COMMUNICATIONS. i-Escrow may place banner advertising on the Co-Branded Site upon prior written approval of 2TheMart, which shall be at the discretion of 2TheMart. All advertising revenue arising from the banner ads shall be solely i-Escrow's. i-Escrow shall not run banner advertisements on the Co-Branded Site for any of 2TheMart's competitors. 2TheMart shall provide in writing, a list of companies they would like to exclude, including every time they wish to change this list.
2.5 SERVICE PERFORMANCE OF INFORMATION TRANSFER MECHANISM. The parties each shall in good faith work to provide reasonable service levels with respect to the operation of the portions of the Information Transfer Mechanism in their control.
Source: 2THEMART COM INC, 10-12G, 8/26/1999
2.6 PROGRAM REVIEW MEETINGS. The parties shall meet, at least once per month either in person, or by telephone, to coordinate the implementation of this agreement over time.
3. PROMOTION.
After Launch Date, 2TheMart will widely promote the Services:
(a) To every seller and high bidder through means including, but not limited to, end of auction emails containing links, such that, it shall be possible for the buyer or seller to initiate a Transaction Inquiry with i-Escrow, without having to re-enter all their personal or transaction related information.
(b) By adding links to Co-Branded Site in FAQ section of 2TheMart auctions.
(c) By adding links to Co-Branded Site on the seller listing pages of 2TheMart auctions.
(d) By displaying a text or graphic link to a page containing information about Services on all auction item pages and bidding pages to educate bidders about i-Escrow. 2TheMart may use the "Escrow Services Description" attached in Exhibit A for creating such a page.
5. PAYMENT.
5.1 ADVERTISING FEES. After the Launch Date, i-Escrow shall pay 2TheMart advertising fees based on the number of Transaction Inquiries. This advertising fees shall consist of a per Transaction Inquiry amount calculated by multiplying 0.025% by the amount of the average Transaction from all Customers in the preceding quarter. The formula for arriving at the per Transaction Inquiry amount may be revised from time to time during the term of this Agreement to reflect present market conditions ("the Adjusted Rate"), but only by mutual
consent of the parties after good faith discussions. The Adjusted Rate shall be added as an addendum to this Agreement.
5.2 REPORTING. Within two (2) weeks following the end of each calendar quarter, i-Escrow shall provide to 2TheMart a report, describing for each quarter: the number of new registrations through the Co-Branded Pages; the number of Transaction Inquiries from Customers; the total number of Transactions from such inquiries; the total dollar value of the Transactions.
5.3 AUDIT RIGHTS. i-Escrow shall keep for one (1) year proper records and books of account relating to the computation of advertising payments owed to 2TheMart (including, as appropriate, the computation of the size of average Transaction). Once every twelve (12) months, 2TheMart through a CPA may inspect and audit such records to verify reports. Any such inspection will be conducted in a manner that does not unreasonably interfere with i-Escrow's business activities and with no less than fifteen (15) days notice. i-Escrow shall within two (2) weeks make any overdue payments disclosed by the audit. Such inspection shall be at 2TheMart's expense; however, if the audit reveals overdue payments in excess of ten percent (10%) of the payments owed to date, i-Escrow shall immediately pay all cost of such audit.
6. RIGHTS AND STANDARDS.
Source: 2THEMART COM INC, 10-12G, 8/26/1999
6.1 CONTENT. 2TheMart hereby grants to i-Escrow a worldwide, non-exclusive right to use, reproduce, distribute, publicly perform, publicly display and digitally perform the 2TheMart Content soley with respect to and in conjunction with the Co-Branded Site all with the prior written consent of 2TheMart, for the term of this Agreement. i-Escrow hereby grants to 2TheMart a worldwide, non-exclusive right to use, reproduce, distribute, publicly perform, publicly display and digitally perform the i-Escrow Content on or in conjunction with 2TheMart auctions.
6.2 CONTENT OWNERSHIP. Except as otherwise provided in this Agreement, as between 2TheMart and i-Escrow: (a) 2TheMart and its suppliers retain all rights, title and interest in and to all intellectual property rights embodied in or associated with the 2TheMart Content, and b) i-Escrow and its suppliers retain all rights, title and interest in and to all intellectual property rights embodied in or associated with the i-Escrow Content and Co-Branded Site. There are no implied licenses under this Agreement, and any rights not expressly granted are reserved. Neither party shall exceed the scope of the rights granted hereunder.
6.3 TRADEMARKS. Subject to the terms and conditions of this Agreement: (a) i-Escrow hereby grants to 2TheMart a non-exclusive, nontransferable right to use the i-Escrow Marks (including without limitation the Domain Name) in links to and advertisements and promotions for the Co-Branded Pages or the Services; and (b) 2TheMart hereby grants to i-Escrow a non-exclusive, nontransferable right to use 2TheMart Marks (including without limitation the Domain Name) on the Co-Branded Pages, and for the performance of Services.
6.4 TRADEMARK RESTRICTIONS. The Mark owner may terminate the foregoing rights if, in its reasonable discretion, the other party's use of the Marks tarnishes, blurs or dilutes the quality associated with the Marks or the associated goodwill and such problem is not cured within ten (10) days of notice of breach; alternatively, instead of terminating the right in total, the
owner may specify that certain pages of the other party's web-site may not contain the Marks. Title to and ownership of the owner's Marks shall remain with the owner. The receiving party shall use the Marks exactly in the form provided and in conformance with any trademark usage policies. The other party shall not take any action inconsistent with the owner's ownership of the Marks, and any benefits accruing from use of such Marks shall automatically vest in the owner. The other party shall not form any combination marks with the other party's Marks. Notwithstanding the foregoing, to the extent that the Domain Name is deemed a combination mark, neither party shall use the Domain Name for any purpose except as expressly provided herein or attempt to register the Domain Name, and the parties will jointly cooperate on any enforcement action of infringement of the Domain Name.
6.5 LIMITS ON SUBLICENSING. All rights (under any applicable intellectual property right) granted herein are not sublicenseable,
Source: 2THEMART COM INC, 10-12G, 8/26/1999
transferable or assignable. Notwithstanding the foregoing, either party may use a third party web host, but all actions or failures to act of the web host that would be a breach of this Agreement, were the actions or failures to act taken by the applicable party, shall be deemed a breach of this Agreement. In addition, 2TheMart may grant sublicenses to companies that 2TheMart has a business relationship with to the extent that 2TheMart Content is visible from such company's web-site through a link or other means.
6.6 CONTENT STANDARDS. 2TheMart shall not provide any 2TheMart Content, and i-Escrow shall not provide any i-Escrow Content, that: (a) infringes any third party's copyright, patent, trademark, trade secret or other proprietary rights or rights of publicity or privacy; (b) violates any law, statute, ordinance or regulation (including without limitation the laws and regulations governing export control, unfair competition, antidiscrimination or false advertising); (c) is defamatory, trade libelous, unlawfully threatening or unlawfully harassing; (d) is obscene, harmful to minors or child pornographic; (e) contains any viruses, Trojan horses, worms, time bombs, cancelbots or other computer programming routines that are intended to damage, detrimentally interfere with, surreptitiously intercept or expropriate any system, data or personal information; and (f) is materially false, misleading or inaccurate.
6.7 SERVICE STANDARDS. i-Escrow will comply with all laws and regulations and act as an Independent Escrow Agent as per the guidelines of California Escrow Law (California Financial Code Section17000 et seq., or its successor). Should any of the terms, conditions or provisions of this Agreement conflict with the California Escrow Law, its rules or regulations, which govern i-Escrow's business practices, the California Escrow Law shall prevail. Notwithstanding the foregoing, at any time that i-Escrow reasonably believes such a conflict exists, i-Escrow will give 2TheMart written notice of such conflict and the parties will use their best efforts to resolve such conflict.
7. DISCLAIMER OF WARRANTIES. EACH PARTY PROVIDES ALL MATERIALS AND SERVICES TO THE OTHER PARTY "AS IS." EACH PARTY DISCLAIMS ALL WARRANTIES AND CONDITIONS, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF TITLE, NON-
INFRINGEMENT, MERCHANTABILITY ANDFITNESS FOR A PARTICULAR PURPOSE. Each party acknowledges that it has not entered into this Agreement in reliance upon any warranty or representation except those specifically set forth herein.
8. TERM AND TERMINATION.
8.1 TERM. The term of this Agreement shall continue for one (1) year following the Launch Date, unless earlier terminated as provided herein. This Agreement may be renewed for any number of successive one (1) year terms by mutual written agreement of the parties prior to the conclusion of the term of this Agreement. A party wishing to renew this Agreement shall give the other party notice thereof no less than thirty (30) days before the expiration of the term then in effect. In the event that either party does not give such notice, the term of this Agreement shall be automatically renewed for another one (1) year.
Source: 2THEMART COM INC, 10-12G, 8/26/1999
8.2 TERMINATION FOR BREACH. In addition to other remedies that may be available to it, by providing written notice, a party may immediately terminate this Agreement: (a) if the other party materially breaches this Agreement and fails to cure that breach within sixty (60) days after receiving written notice of the breach, or (b) as provided in Sections 2.2 [INITIAL INFORMATION TRANSFER MECHANISM DEVELOPMENT], 2.4 [RESTRICTIONS ON COMMUNICATIONS], or 12.4.
8.3 TERMINATION FOR CHANGE IN COMPANY STRUCTURE. If a majority of the equity securities of either 2TheMart or i-Escrow, Inc. (except that i-Escrow may sell all or a majority of its equity securities or voting interests to i-Escrow.com, and i-Escrow.com may sell all or a majority of its equity securities or voting interests to i-Escrow's existing shareholders, without triggering the foregoing) are acquired by another company during the term of this Agreement either company may terminate this Agreement, without liability, by giving a thirty (30) days written notice to the other party.
8.4 TERMINATION FOR BANKRUPTCY. Either party may terminate or suspend this Agreement effective immediately and without liability upon written notice to the other party if any one of the following events occurs:
(a) the other party files a voluntary petition in bankruptcy or otherwise seeks protection under any law for the protection of debtors;
(b) a proceeding is instituted against the other party under any provision of any bankruptcy laws which is not dismissed within ninety (90) days;
(c) the other party is adjudged bankrupt;
(d) a court assumes jurisdiction of all or a substantial portion of the assets of the other party under a reorganization law;
(e) a trustee or receiver is appointed by a court for all or a substantial portion of the assets of the other party;
(f) the other party becomes insolvent, ceases or suspends all or substantially all of its business; or
(g) the other party makes an assignment of the majority of its assets for the benefit of its creditors.
8.5 EFFECTS OF TERMINATION. Upon expiration or termination of this Agreement for any reason: (a) all rights granted herein shall terminate, (b) i-Escrow shall pay all amounts owed to 2TheMart within six (6) weeks of termination, and (c) each party shall remove the other party's content and Marks from their servers. Notwithstanding the foregoing, unless this Agreement was terminated for a material breach, all provisions of this Agreement shall survive to the extent necessary for i-Escrow to complete any Customer transactions which are pending at the time of expiration or termination. Sections 1, 7, 8.5 [EFFECTS OF TERMINATION], 9, 10, 11 and 12 shall survive expiration or termination of this Agreement.
9. INDEMNITY. Each party (the "Indemnifying Party") shall indemnify the other party (the "Indemnified Party") against any and all claims, losses, costs and expenses, including reasonable attorneys' fees, which the Indemnified Party may incur as a result of claims in any form by third parties arising from the Indemnifying Party's acts, omissions or misrepresentations to the extent that the Indemnified Party is deemed a principal of the Indemnifying Party. In addition, 2TheMart shall indemnify i-Escrow against any and all claims, losses, costs and expenses, including reasonable attorneys' fees, which i-Escrow may incur as a result of claims in any form by third parties arising from 2TheMart Content. In addition, i-Escrow shall indemnify 2TheMart against any and all claims, losses, costs and expenses, including reasonable attorneys' fees, which 2TheMart may incur as a result of claims in any form by third parties arising from i-Escrow
Source: 2THEMART COM INC, 10-12G, 8/26/1999
Content and or the Services provided to Customers. The foregoing obligations are conditioned on the Indemnified Party: (i) giving the Indemnifying Party notice of the relevant claim, (ii) cooperating with the Indemnifying Party, at the Indemnifying Party's expense, in the defense of such claim, and (iii) giving the Indemnifying Party the right to control the defense and settlement of any such claim, except that the Indemnifying Party shall not enter into any settlement that affects the Indemnified Party's rights or interest without the Indemnified Party's prior written approval. The Indemnified Party shall have the right to participate in the defense at its expense.
10. LIMITATION ON LIABILITY. EXCEPT IN THE EVENT OF A BREACH OF SECTION 11, NEITHER PARTY SHALL BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS (HOWEVER ARISING, INCLUDING NEGLIGENCE) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, EVEN IF THE PARTIES ARE AWARE OF THE POSSIBILITY OF SUCH DAMAGES.
11. CONFIDENTIAL INFORMATION. A party's "Confidential Information" is defined as any confidential or proprietary information of a party which is disclosed to the other party in a writing marked confidential or, if disclosed orally, is identified as confidential at the time of disclosure and is subsequently reduced to a writing marked confidential and delivered to the
other party within ten (10) days of disclosure. Each party shall hold the other party's Confidential Information in confidence and shall not disclose such Confidential Information to third parties nor use the other party's Confidential Information for any purpose other than as required to perform under this Agreement. Such restrictions shall not apply to Confidential Information which (a) is already known by the recipient, (b) becomes, through no act or fault of the recipient, publicly known, (c) is received by recipient from a third party without a restriction on disclosure or use, or (d) is independently developed by recipient without reference to the Confidential Information. The restriction on disclosure shall not apply to Confidential Information which is required to be disclosed by a court or government agency. Upon expiration or termination of this Agreement, within fourteen (14) days of the other party's request, each party will return all Confidential Information and other deliverables to the requesting party.
12. GENERAL PROVISIONS.
12.1 GOVERNING LAW. This Agreement will be governed and construed in accordance with the laws of the State of California without giving effect to conflict of laws principles. Both parties submit to personal jurisdiction in California and further agree that any cause of action arising under this Agreement shall be brought in a court in Orange County, California.
12.2 SEVERABILITY; HEADINGS. If any provision herein is held to be invalid or unenforceable for any reason, the remaining provisions will continue in full force without being impaired or invalidated in any way. The parties agree to replace any invalid provision with a valid provision that most closely approximates the intent and economic effect of the invalid provision. Headings are for reference purposes only and in no way define, limit, construe or describe the scope or extent of such section.
12.3 PUBLICITY. Prior to the release of any press releases or other similar promotional materials related to this Agreement, the releasing party shall submit a written request for approval to the other party with a copy of the materials to be released, which
Source: 2THEMART COM INC, 10-12G, 8/26/1999
request shall be made no less than three (3) business days prior to the requested release date. A party shall not unreasonably withhold or delay the granting of its approval of such materials, and such approval shall be provided to the other party within one (1) business day of receipt
12.4 FORCE MAJEURE. Except as otherwise provided, if performance hereunder (other than payment) is prevented, restricted or interfered with by any act or condition whatsoever beyond the reasonable control of a party (a "force majeure event"), the party so affected, upon giving prompt notice to the other party, shall be excused from such performance to the extent of such prevention, restriction or interference. However, if a force majeure event interferes with the operation of this Agreement for sixty (60) days or more, either party can terminate this Agreement, without penalty. Notwithstanding the foregoing, the occurrence of any force majeure event shall not limit either party's obligations under Section 9 with respect to any third party claim as to which the other party seeks indemnification.
12.5 INDEPENDENT CONTRACTORS. The parties are independent contractors, and no agency, partnership, joint venture, employee- employer or franchisor-franchisee relationship is
intended or created by this Agreement. Neither party shall make any warranties or representations on behalf of the other party.
12.6 NOTICE. Any notices hereunder shall be given to the appropriate party at the address specified below or at such other address as the party shall specify in writing. Notice shall be deemed given: upon personal delivery; if sent by fax, upon confirmation of receipt; or if sent by a reputable overnight courier with tracking capabilities, one (1) day after the date of mailing: To i-Escrow: i-Escrow, Inc. 1730 South Amphlett Blvd., #215 San Mateo, CA 94402 Fax no. (650) 638-7890 Attention: President
With copy to: Fred M. Greguras, Esq. Legal Counsel of i-Escrow Fenwick & West LLP Two Palo Alto Square Palo Alto, CA 94306
To 2TheMart: Dominic J. Magliarditi President 18301 Von Karman Avenue, 7th Floor Irvine, CA 92612 Fax no. (949) 477-1221
11.7 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall be taken together and deemed to be one instrument.
12.8 GOOD FAITH. The parties agree to act in good faith with respect to each provision of this Agreement and any dispute that may arise related hereto.
12.9 ADDITIONAL DOCUMENTS/INFORMATION. The parties agree to sign and/or provide such additional documents and/or information as may reasonably be required to carry out the intent of this Agreement and to effectuate its purposes.
12.10 RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies provided herein will be cumulative and not exclusive of any other rights or remedies provided by law or otherwise.
12.11 NONWAIVER. No failure or forbearance by either party to exercise any right or insist upon or enforce performance of any obligation hereunder shall be deemed a waiver or relinquishment to any extent of that or any other right or obligation, in that or any other instance; rather, the
Source: 2THEMART COM INC, 10-12G, 8/26/1999
same shall be and shall remain in full force and effect. Any waiver of any right of a party or any obligation of the other party hereunder must be made in a writing signed by the arty waiving such right or obligation.
12.12 ENTIRE AGREEMENT. This Agreement contains the entire understanding of the parties hereto with respect to the transactions and matters contemplated hereby, supersedes all previous Agreements between i-Escrow and 2TheMart concerning the subject matter (except for the Confidential Agreement Dated January 4 1999, which shall survive this Agreement). No amendments or supplements to this Agreement will be effective for any purpose except by a written Agreement signed by the parties. No party hereto has relied on any statement, representation or promise of any party or with any other officer, agent, employee or attorney for the other party in executing this Agreement except as expressly stated herein.
2THEMART.COM, INC.: I-ESCROW, INC.:
By:/s/Dominic J. Magliarditi By:/s/Sanjay Bajaj Name: Dominic J. Magliarditi Name: Sanjay Bajaj Title: President Title: VP Business Development Date: 6/21/99 Date: 6/11/99
EXHIBIT A
ESCROW SERVICES DESCRIPTION
Successful completion of a transaction involves exchange of merchandise with payment. The buyer has to be satisfied he/she received what they thought they were getting and the seller has to be sure he/she gets paid. i-Escrow holds payment from the buyer in trust until the seller sends the merchandise to the buyer. Once the buyer accepts the merchandise, i-Escrow forwards the payment to the seller by writing a check. A typical escrow transaction: When an auction ends, your end of auction email contains links to i-Escrow. Once you have signed up with i-Escrow you go through the following steps to complete your transaction. 1. Start a transaction by entering the description and price of the merchandise along with email address of the other party. 2. The other party receives an email from i-Escrow requesting an acknowledgement of the terms of the transaction. 3. Once the transaction is acknowledged by the other party, the buyer pays i-Escrow the agreed upon price, by credit card or other means. 4. i-Escrow informs the seller that payment has been received, requesting them to ship the merchandise directly to the buyer. 5. The seller provides i-Escrow with the tracking number of the shipment. 6. The buyer receives and accepts the merchandise. 7. i-Escrow sends the check to the seller.
For more information about I-Escrow, visit their web-site at www.iescrow.com
Source: 2THEMART COM INC, 10-12G, 8/26/1999 | Highlight the parts (if any) of this contract related to "Change Of Control" that should be reviewed by a lawyer. Details: Does one party have the right to terminate or is consent or notice required of the counterparty if such party undergoes a change of control, such as a merger, stock sale, transfer of all or substantially all of its assets or business, or assignment by operation of law? | {
"answer_start": [
16231
],
"text": [
"If a majority of the equity securities of either 2TheMart or i-Escrow, Inc. (except that i-Escrow may sell all or a majority of its equity securities or voting interests to i-Escrow.com, and i-Escrow.com may sell all or a majority of its equity securities or voting interests to i-Escrow's existing shareholders, without triggering the foregoing) are acquired by another company during the term of this Agreement either company may terminate this Agreement, without liability, by giving a thirty (30) days written notice to the other party."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Non-Transferable License" that should be reviewed by a lawyer. Details: Does the contract limit the ability of a party to transfer the license being granted to a third party?
Context: Exhibit 1.2 SERVICES AGREEMENT This Services Agreement ("Services Agreement" or "Agreement") is entered into as of the date noted below (the "Effective Date") between StartEngine Crowdfunding, Inc., a Delaware corporation ("Company"), and Solutions Vending International, Inc a ___ DE corporation ("Customer" or "you"). 1. Services Company agrees to make available to Customer the ability to present information with respect to its securities offering (the "Offering") to Users, and to permit Users to create and manage online accounts, view information regarding the Customer, indicate interest in the Offering, and to subscribe to the Offering by signing a subscription agreement or similar instrument and transmitting payment instructions (together, the "Services"). A "User" means a natural person, corporation or other entity that has established an account on the Company's website. 2. Fees and expenses a) Generally In exchange for the Services, you shall pay the Company the then applicable fees and expenses set out below. The Company reserves the right to change the applicable charges and to institute new charges and fees at the end of the Initial Term (as defined below) or then current renewal term, upon 30 days prior notice to you. If you believe that the Company has billed you incorrectly, you must contact Company no later than 60 days after the closing date on the first billing statement in which the error or problem appeared, in order to receive an adjustment or credit. Inquiries should be directed to contact@startengine.com. b) Monthly Fees and Billing The Company will bill you monthly for the Services. You authorize the Company to instruct Prime Trust or any escrow agent used by Company to deduct such fees, debts and any other amounts liabilities incurred under this Service Agreement, prior to releasing any amounts due to you or to any other person (including another escrow agent) from escrow. Amounts which remain unpaid for 30 days are subject to a finance charge of 1.5% per month on any outstanding balance, or the maximum permitted by law, whichever is lower, plus all expenses of collection and may result in immediate termination of Service. You shall be responsible for all taxes associated with Services other than U.S. taxes based on the Company's net income. c) Transaction Fees Company's transaction fees depend on the method of payment (e.g. ACH-US or WIRE-US). ACH transaction: $1 Wire: $15 d) AML Fees AML fees are charged per User per initial transaction. AML: $2 AML UK: $5
e) Reimbursable expenses You shall reimburse the Company for the following expenses: (i) All credit card charges charged to the Company by its third-party credit card processor. (ii) All transaction fees charged to the Company or its affiliates by its third-party transaction processor. (iii) Escrow agent fees charged to the Company or its affiliates by third-party escrow agents. (iv) Return fees as set out in Section 4 (Returns, Reversals, Disputes and Reserves) below. Credit cards: average is 3.5% (varies because it is a combination of fixed and a percentage charged by the credit card vendor) 2. Customer Representations and Warranties Customer represents and warrants to the Company that then executed and delivered by Customer, this Service Agreement will constitute the legal, valid, and binding obligation of Customer, enforceable in accordance with its terms. 4. Returns and Reversals a) Returns and Reversals User transactions debited from bank accounts via ACH are subject to returns (e.g., non-sufficient funds) and reversals from chargebacks (e.g., unauthorized activity) per the Electronic Fund Transfer Act (15 U.S.C. 1693 et seq. as may be amended), Regulation E, and NACHA guidelines (collectively, such returns and reversals are "Reversals"). The Company will work to protect Customer and the receiving Users from unwarranted Reversals; however, Customer acknowledges and agrees that: i) Customer is liable for all User Activity and Reversals associated with User Activity; ii) If Company's agent receives a Reversal, the Company may in its sole discretion charge Customer the full amount of the Reversal ("Reversed Payment") plus an additional $7 reversal fee ("Reversal Fee" and collectively the "Reversal Liability"); iii) The Company has sole discretion to determine who is at fault and liable for the Reversed Payment and Reversal Fee; iv) Customer authorizes the Company to take any of the following actions (in any particular order): (i) collect the unpaid portion of the Reversal Liability from funds sent to your third party escrow account; (ii) debit your bank account in the amount of the unpaid portion of the Reversal Liability; (iv) engage in collection efforts to recover the unpaid portion of the Reversal Liability and/or (v) take legal action or any other action under this Service Agreement. 5. Term and Survival a) Subject to earlier termination as provided below, this Service Agreement is for the total duration of the Company's Offering (the "Initial Term") unless either party requests termination at least 30 days prior to the end of the then-current term.
b) Additionally, either party may terminate this Service Agreement in the event: i) The other party's material breach that remains not cured and continues for a period of (A) in the case of a failure involving the payment of any undisputed amount due hereunder, 15 days and (B) in the case of any other failure, 30 days after the non performing party receives notice from the terminating party specifying such failure; ii) Any statement, representation or warranty of the other party is untrue or misleading in any material respect or omits material information; iii) The other party (A) voluntarily or involuntarily is subject to bankruptcy proceedings, (B) applies for or consents to the appointment of a receiver, trustee, custodian, sequestrator, or similar official, (C) makes a general assignment to creditors, (D) commences winding down or liquidation of its business affairs, (E) otherwise takes corporate action for the purpose of effecting any of the foregoing, or (F) ceases operating in the normal course of business; iv) If any change to, enactment of, or change in interpretation or enforcement of any law occurs that would have a material adverse effect upon a party's ability to perform its obligations under this Service Agreement or a party's costs/revenues with respect to the services under this Service Agreement; v) Upon direction to a party from any regulatory authority or National Automated Clearing House Association to cease or materially limit the exercise or performance of such party's rights or obligations under this Service Agreement; vi) If there shall have occurred a material adverse change in the financial condition of the other party; or vii) Upon a force majeure event that materially prevents or impedes a party from performing its obligations hereunder for a period of more than 10 business days. StartEngine Crowdfunding, Inc. Customer: By: /s/ Dawn Dickson, By:Dawn Dickson, CEO and Founder Date: 08/19/2019 /s/ Howard Marks Howard Marks CEO [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 1.2 SERVICES AGREEMENT This Services Agreement ("Services Agreement" or "Agreement") is entered into as of the date noted below (the "Effective Date") between StartEngine Crowdfunding, Inc., a Delaware corporation ("Company"), and Solutions Vending International, Inc a ___ DE corporation ("Customer" or "you"). 1. Services Company agrees to make available to Customer the ability to present information with respect to its securities offering (the "Offering") to Users, and to permit Users to create and manage online accounts, view information regarding the Customer, indicate interest in the Offering, and to subscribe to the Offering by signing a subscription agreement or similar instrument and transmitting payment instructions (together, the "Services"). A "User" means a natural person, corporation or other entity that has established an account on the Company's website. 2. Fees and expenses a) Generally In exchange for the Services, you shall pay the Company the then applicable fees and expenses set out below. The Company reserves the right to change the applicable charges and to institute new charges and fees at the end of the Initial Term (as defined below) or then current renewal term, upon 30 days prior notice to you. If you believe that the Company has billed you incorrectly, you must contact Company no later than 60 days after the closing date on the first billing statement in which the error or problem appeared, in order to receive an adjustment or credit. Inquiries should be directed to contact@startengine.com. b) Monthly Fees and Billing The Company will bill you monthly for the Services. You authorize the Company to instruct Prime Trust or any escrow agent used by Company to deduct such fees, debts and any other amounts liabilities incurred under this Service Agreement, prior to releasing any amounts due to you or to any other person (including another escrow agent) from escrow. Amounts which remain unpaid for 30 days are subject to a finance charge of 1.5% per month on any outstanding balance, or the maximum permitted by law, whichever is lower, plus all expenses of collection and may result in immediate termination of Service. You shall be responsible for all taxes associated with Services other than U.S. taxes based on the Company's net income. c) Transaction Fees Company's transaction fees depend on the method of payment (e.g. ACH-US or WIRE-US). ACH transaction: $1 Wire: $15 d) AML Fees AML fees are charged per User per initial transaction. AML: $2 AML UK: $5
e) Reimbursable expenses You shall reimburse the Company for the following expenses: (i) All credit card charges charged to the Company by its third-party credit card processor. (ii) All transaction fees charged to the Company or its affiliates by its third-party transaction processor. (iii) Escrow agent fees charged to the Company or its affiliates by third-party escrow agents. (iv) Return fees as set out in Section 4 (Returns, Reversals, Disputes and Reserves) below. Credit cards: average is 3.5% (varies because it is a combination of fixed and a percentage charged by the credit card vendor) 2. Customer Representations and Warranties Customer represents and warrants to the Company that then executed and delivered by Customer, this Service Agreement will constitute the legal, valid, and binding obligation of Customer, enforceable in accordance with its terms. 4. Returns and Reversals a) Returns and Reversals User transactions debited from bank accounts via ACH are subject to returns (e.g., non-sufficient funds) and reversals from chargebacks (e.g., unauthorized activity) per the Electronic Fund Transfer Act (15 U.S.C. 1693 et seq. as may be amended), Regulation E, and NACHA guidelines (collectively, such returns and reversals are "Reversals"). The Company will work to protect Customer and the receiving Users from unwarranted Reversals; however, Customer acknowledges and agrees that: i) Customer is liable for all User Activity and Reversals associated with User Activity; ii) If Company's agent receives a Reversal, the Company may in its sole discretion charge Customer the full amount of the Reversal ("Reversed Payment") plus an additional $7 reversal fee ("Reversal Fee" and collectively the "Reversal Liability"); iii) The Company has sole discretion to determine who is at fault and liable for the Reversed Payment and Reversal Fee; iv) Customer authorizes the Company to take any of the following actions (in any particular order): (i) collect the unpaid portion of the Reversal Liability from funds sent to your third party escrow account; (ii) debit your bank account in the amount of the unpaid portion of the Reversal Liability; (iv) engage in collection efforts to recover the unpaid portion of the Reversal Liability and/or (v) take legal action or any other action under this Service Agreement. 5. Term and Survival a) Subject to earlier termination as provided below, this Service Agreement is for the total duration of the Company's Offering (the "Initial Term") unless either party requests termination at least 30 days prior to the end of the then-current term.
b) Additionally, either party may terminate this Service Agreement in the event: i) The other party's material breach that remains not cured and continues for a period of (A) in the case of a failure involving the payment of any undisputed amount due hereunder, 15 days and (B) in the case of any other failure, 30 days after the non performing party receives notice from the terminating party specifying such failure; ii) Any statement, representation or warranty of the other party is untrue or misleading in any material respect or omits material information; iii) The other party (A) voluntarily or involuntarily is subject to bankruptcy proceedings, (B) applies for or consents to the appointment of a receiver, trustee, custodian, sequestrator, or similar official, (C) makes a general assignment to creditors, (D) commences winding down or liquidation of its business affairs, (E) otherwise takes corporate action for the purpose of effecting any of the foregoing, or (F) ceases operating in the normal course of business; iv) If any change to, enactment of, or change in interpretation or enforcement of any law occurs that would have a material adverse effect upon a party's ability to perform its obligations under this Service Agreement or a party's costs/revenues with respect to the services under this Service Agreement; v) Upon direction to a party from any regulatory authority or National Automated Clearing House Association to cease or materially limit the exercise or performance of such party's rights or obligations under this Service Agreement; vi) If there shall have occurred a material adverse change in the financial condition of the other party; or vii) Upon a force majeure event that materially prevents or impedes a party from performing its obligations hereunder for a period of more than 10 business days. StartEngine Crowdfunding, Inc. Customer: By: /s/ Dawn Dickson, By:Dawn Dickson, CEO and Founder Date: 08/19/2019 /s/ Howard Marks Howard Marks CEO | Highlight the parts (if any) of this contract related to "Non-Transferable License" that should be reviewed by a lawyer. Details: Does the contract limit the ability of a party to transfer the license being granted to a third party? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Competitive Restriction Exception" that should be reviewed by a lawyer. Details: This category includes the exceptions or carveouts to Non-Compete, Exclusivity and No-Solicit of Customers above.
Context: Exhibit 10.38
EXHIBIT C
Software License Agreement [v.08.05.03]
PLEASE READ THIS SOFTWARE LICENSE AGREEMENT CAREFULLY BEFORE DOWNLOADING, INSTALLING OR USING CISCO OR CISCO- SUPPLIED SOFTWARE.
BY DOWNLOADING OR INSTALLING THE SOFTWARE, OR USING THE EQUIPMENT THAT CONTAINS THIS SOFTWARE, YOU ARE BINDING THE BUSINESS ENTITY THAT YOU REPRESENT ("CUSTOMER") TO THIS AGREEMENT. IF YOU DO NOT AGREE TO ALL OF THE TERMS OF THIS AGREEMENT, THEN (A) DO NOT DOWNLOAD, INSTALL OR USE THE SOFTWARE, AND (B) YOU MAY RETURN THE SOFTWARE FOR A FULL REFUND, OR, IF THE SOFTWARE IS SUPPLIED AS PART OF ANOTHER PRODUCT, YOU MAY RETURN THE ENTIRE PRODUCT FOR A FULL REFUND. YOUR RIGHT TO RETURN AND REFUND EXPIRES 30 DAYS AFTER PURCHASE FROM CISCO OR AN AUTHORIZED CISCO RESELLER, AND APPLIES ONLY IF CUSTOMER IS THE ORIGINAL END USER PURCHASER.
The following terms of this Software License Agreement ("Agreement') govern Customer's access and use of the Software, except to the extent (a) there is a separate signed agreement between Customer and Cisco governing Customer's use of the Software or (b) the Software includes a separate "click-accept" license agreement as part of the installation and/or download process. To the extent of a conflict between the provisions of the foregoing documents, the order of precedence shall be (1) the signed agreement, (2) the click-accept agreement, and (3) this Software License Agreement.
License. Subject to the terms and conditions of this Agreement, Cisco Systems, Inc. or its subsidiary licensing the Software instead of Cisco Systems, Inc. ("Cisco"), grants to Customer a nonexclusive and nontransferable license to use for Customer's internal business purposes the Software and the Documentation for which Customer has paid the required license fees. "Documentation" means written information (whether contained in user or technical manuals, training materials, specifications or otherwise) regarding the Software and made available by Cisco in any manner (including on CD-Rom, or on-line).
Customer's license to use the Software shall be limited to, and Customer shall not use the Software in excess of, a single hardware chassis or card or that number of agent(s), concurrent users, sessions, IP addresses, port(s), seat(s), server(s) or site(s), as set forth in the applicable Purchase Order which has been accepted by Cisco and for which Customer has paid to Cisco the required license fee.
Unless otherwise expressly provided in the Documentation, Customer shall use the Software solely as embedded in, for execution on, or (where the applicable documentation permits installation on non-Cisco equipment) for communication with Cisco equipment owned or leased by Customer. NOTE: For evaluation or beta copies for which Cisco does not charge a license fee, the above requirement to pay license fees does not apply.
General Limitations. Except as otherwise expressly provided under this Agreement, Customer shall have no right, and Customer specifically agrees not to:
(i) transfer, assign or sublicense its license rights to any other person or entity, or use the Software on unauthorized or secondhand Cisco equipment, and Customer acknowledges that any attempted transfer, assignment, sublicense or use shall be void;
(ii) make error corrections to or otherwise modify or adapt the Software or create derivative works based upon the Software, or permit third parties to do the same;
(iii) decompile, decrypt, reverse engineer, disassemble or otherwise reduce the Software to human- readable form; or
(iv) use or permit the Software to be used to perform services for third parties without the express written authorization of Cisco.
To the extent required by law, and at Customer's written request, Cisco shall provide Customer with the interface information needed to achieve interoperability between the Software and another independently created program, on payment of Cisco's
Source: SCANSOURCE, INC., 10-K, 8/22/2019
Exhibit 10.38
applicable fee, if any. Customer shall observe strict obligations of confidentiality with respect to such information.
Software, Upgrades and Additional Copies. For purposes of this Agreement, "Software" shall include (and the terms and conditions of this Agreement shall apply to) computer programs, including firmware, as provided to Customer by Cisco or an authorized Cisco reseller, and any upgrades, updates, bug fixes or modified versions thereto (collectively, "Upgrades") or backup copies of the Software licensed or provided to Customer by Cisco or an authorized Cisco reseller. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT: (1) CUSTOMER HAS NO LICENSE OR RIGHT TO USE ANY ADDITIONAL COPIES OR UPGRADES UNLESS CUSTOMER, AT THE TIME OF ACQUIRING SUCH COPY OR UPGRADE, ALREADY HOLDS A VALID LICENSE TO THE ORIGINAL SOFTWARE AND HAS PAID THE APPLICABLE FEE FOR THE UPGRADE; (2) USE OF UPGRADES IS LIMITED TO CISCO EQUIPMENT FOR WHICH CUSTOMER IS THE ORIGINAL END USER PURCHASER OR LESSEE OR WHO OTHERWISE HOLDS A VALID LICENSE TO USE THE SOFTWARE WHICH IS BEING UPGRADED; AND (3) THE MAKING AND USE OF ADDITIONAL COPIES IS LIMITED TO NECESSARY BACKUP PURPOSES ONLY.
Proprietary Notices. Customer agrees to maintain and reproduce all copyright and other proprietary notices on all copies, in any form, of the Software in the same form and manner that such copyright and other proprietary notices are included on the Software. Except as expressly authorized in this Agreement, Customer shall not make any copies or duplicates of any Software without the prior written permission of Cisco.
Protection of Information. Customer agrees that aspects of the Software and associated Documentation, including the specific design and structure of individual programs, are trade secrets and/or copyrighted materials of Cisco, its suppliers or licensors. Customer shall not disclose, provide, or otherwise make available such trade secrets or copyrighted material in any form to any third party without the prior written consent of Cisco. Customer shall implement reasonable security measures to protect such trade secrets and copyrighted materials. Title to Software and Documentation shall remain solely with Cisco, its suppliers or licensors.
Term and Termination. This Agreement and the license granted herein shall remain effective until terminated. Customer may terminate this Agreement and the license at any time by destroying all copies of Software including any Documentation. Customer's rights under this Agreement will terminate immediately without notice from Cisco if Customer fails to comply with any provision of this Agreement. Upon termination, Customer shall destroy all copies of Software and Documentation in its possession or control.
Customer Records. Customer grants to Cisco and its independent accountants the right to examine Customer's books, records and accounts during Customer's normal business hours to verify compliance with this Agreement. In the event such audit discloses non-compliance with this Agreement, Customer shall promptly pay to Cisco the appropriate license fees.
Export. Software, including technical data, may be subject to U.S. export control laws, including the U.S. Export Administration Act and its associated regulations, and may be subject to export or import regulations in other countries. Customer agrees to comply strictly with all such regulations and acknowledges that it has the responsibility to obtain licenses to export, re-export, or import Software.
Government End User Purchasers. The Software and Documentation qualify as "commercial items," as that term is defined at 48 C.F.R. 2.101, consisting of "commercial computer software" and "commercial computer software documentation" as such terms are used in 48 C.F.R. 12.212. Consistent with 48 C.F.R.12.212 and 48 C.F.R. 227.7202-1 through 227.7202-4, Customer will provide to Government end user, or, if this Agreement is direct Government end user will acquire, the Software and software documentation with only those rights set forth herein that apply to non- governmental customers. Use of this Software and Documentation constitutes agreement by the Government entity that the computer software and Documentation is commercial, and constitutes acceptance of the rights and restrictions herein.
Limited Warranty Cisco warrants that commencing from the date of shipment to Customer (but in case of resale by an authorized Cisco reseller, commencing not more than ninety (90) days after original shipment by Cisco), and continuing for a period of the longer of (a) ninety (90) days or (b) the software warranty period (if any) set forth in the warranty card accompanying the Product (if any): (a) the media on which the Software is furnished will be free of defects in materials and workmanship under normal use; and (b) the Software substantially conforms to its published specifications. The date of shipment of a Product by Cisco is set forth on the packaging material in which the Product is shipped. Except for the foregoing, the Software is provided AS IS. This limited warranty extends only to the Customer who is the original licensee. Customer's sole and exclusive remedy and the entire liability of Cisco and its suppliers and licensors under this limited warranty will be, at Cisco's option, repair, replacement,
Source: SCANSOURCE, INC., 10-K, 8/22/2019
Exhibit 10.38
or refund of the Software if reported (or, upon request, returned) to Cisco or the party supplying the Software to Customer, if different than Cisco. In no event does Cisco warrant that the Software is error free or that Customer will be able to operate the Software without problems or interruptions. In addition, due to the continual development of new techniques for intruding upon and attacking networks, Cisco does not warrant that the Software or any equipment, system or network on which the Software is used will be free of vulnerability to intrusion or attack.
Restrictions. This warranty does not apply if the Software, Product or any other equipment upon which the Software is authorized to be used (a) has been altered, except by Cisco, (b) has not been installed, operated, repaired, or maintained in accordance with instructions supplied by Cisco, (c) has been subjected to abnormal physical or electrical stress, misuse, negligence, or accident; or (d) is licensed, for beta, evaluation, testing or demonstration purposes for which Cisco does not charge a purchase price or license fee.
DISCLAIMER OF WARRANTY. EXCEPT AS SPECIFIED IN THIS WARRANTY, ALL EXPRESS OR IMPLIED CONDITIONS, REPRESENTATIONS, AND WARRANTIES INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OR CONDITION OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, SATISFACTORY QUALITY OR ARISING FROM A COURSE OF DEALING, LAW, USAGE, OR TRADE PRACTICE, ARE HEREBY EXCLUDED TO THE EXTENT ALLOWED BY APPLICABLE LAW AND ARE EXPRESSLY DISCLAIMED BY CISCO, ITS SUPPLIERS AND LICENSORS. TO THE EXTENT AN IMPLIED WARRANTY CANNOT BE EXCLUDED, SUCH WARRANTY IS LIMITED IN DURATION TO THE WARRANTY PERIOD. BECAUSE SOME STATES OR JURISDICTIONS DO NOT ALLOW LIMITATIONS ON HOW LONG AN IMPLIED WARRANTY LASTS, THE ABOVE LIMITATION MAY NOT APPLY. THIS WARRANTY GIVES CUSTOMER SPECIFIC LEGAL RIGHTS, AND CUSTOMER MAY ALSO HAVE OTHER RIGHTS WHICH VARY FROM JURISDICTION TO JURISDICTION. This disclaimer and exclusion shall apply even if the express warranty set forth above fails of its essential purpose.
General Terms Applicable to the Limited Warranty Statement and Software License
Disclaimer of Liabilities. IN NO EVENT WILL CISCO OR ITS SUPPLIERS BE LIABLE FOR ANY LOST REVENUE, PROFIT, OR LOST OR DAMAGED DATA, OR FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL, OR PUNITIVE DAMAGES HOWEVER CAUSED AND REGARDLESS OF THE THEORY OF LIABILITY OR WHETHER ARISING OUT OF THE USE OF OR INABILITY TO USE SOFTWARE OR OTHERWISE AND EVEN IF CISCO OR ITS SUPPLIERS OR LICENSORS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. In no event shall Cisco's or its suppliers' or licensors' liability to Customer, whether in contract, tort (including negligence), or otherwise, exceed the price paid by Customer for the Software that gave rise to the claim or if the Software is part of another Product, the price paid for such other Product. The foregoing limitations shall apply even if the above stated warranty fails of its essential purpose. BECAUSE SOME STATES OR JURISDICTIONS DO NOT ALLOW LIMITATION OR EXCLUSION OF CONSEQUENTIAL OR INCIDENTAL DAMAGES, THE ABOVE LIMITATION MAY NOT APPLY TO YOU.
The Warranty and the Software License shall be governed by and construed in accordance with the laws of the State of California, without reference to principles of conflict of laws. The United Nations Convention on the International Sale of Goods shall not apply. If any portion hereof is found to be void or unenforceable, the remaining provisions of the Agreement shall remain in full force and effect. Except as expressly provided herein, this Agreement constitutes the entire agreement between the parties with respect to the license of the Software and supersedes any conflicting or additional terms contained in any purchase order or elsewhere all of which terms are excluded.
Source: SCANSOURCE, INC., 10-K, 8/22/2019 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 10.38
EXHIBIT C
Software License Agreement [v.08.05.03]
PLEASE READ THIS SOFTWARE LICENSE AGREEMENT CAREFULLY BEFORE DOWNLOADING, INSTALLING OR USING CISCO OR CISCO- SUPPLIED SOFTWARE.
BY DOWNLOADING OR INSTALLING THE SOFTWARE, OR USING THE EQUIPMENT THAT CONTAINS THIS SOFTWARE, YOU ARE BINDING THE BUSINESS ENTITY THAT YOU REPRESENT ("CUSTOMER") TO THIS AGREEMENT. IF YOU DO NOT AGREE TO ALL OF THE TERMS OF THIS AGREEMENT, THEN (A) DO NOT DOWNLOAD, INSTALL OR USE THE SOFTWARE, AND (B) YOU MAY RETURN THE SOFTWARE FOR A FULL REFUND, OR, IF THE SOFTWARE IS SUPPLIED AS PART OF ANOTHER PRODUCT, YOU MAY RETURN THE ENTIRE PRODUCT FOR A FULL REFUND. YOUR RIGHT TO RETURN AND REFUND EXPIRES 30 DAYS AFTER PURCHASE FROM CISCO OR AN AUTHORIZED CISCO RESELLER, AND APPLIES ONLY IF CUSTOMER IS THE ORIGINAL END USER PURCHASER.
The following terms of this Software License Agreement ("Agreement') govern Customer's access and use of the Software, except to the extent (a) there is a separate signed agreement between Customer and Cisco governing Customer's use of the Software or (b) the Software includes a separate "click-accept" license agreement as part of the installation and/or download process. To the extent of a conflict between the provisions of the foregoing documents, the order of precedence shall be (1) the signed agreement, (2) the click-accept agreement, and (3) this Software License Agreement.
License. Subject to the terms and conditions of this Agreement, Cisco Systems, Inc. or its subsidiary licensing the Software instead of Cisco Systems, Inc. ("Cisco"), grants to Customer a nonexclusive and nontransferable license to use for Customer's internal business purposes the Software and the Documentation for which Customer has paid the required license fees. "Documentation" means written information (whether contained in user or technical manuals, training materials, specifications or otherwise) regarding the Software and made available by Cisco in any manner (including on CD-Rom, or on-line).
Customer's license to use the Software shall be limited to, and Customer shall not use the Software in excess of, a single hardware chassis or card or that number of agent(s), concurrent users, sessions, IP addresses, port(s), seat(s), server(s) or site(s), as set forth in the applicable Purchase Order which has been accepted by Cisco and for which Customer has paid to Cisco the required license fee.
Unless otherwise expressly provided in the Documentation, Customer shall use the Software solely as embedded in, for execution on, or (where the applicable documentation permits installation on non-Cisco equipment) for communication with Cisco equipment owned or leased by Customer. NOTE: For evaluation or beta copies for which Cisco does not charge a license fee, the above requirement to pay license fees does not apply.
General Limitations. Except as otherwise expressly provided under this Agreement, Customer shall have no right, and Customer specifically agrees not to:
(i) transfer, assign or sublicense its license rights to any other person or entity, or use the Software on unauthorized or secondhand Cisco equipment, and Customer acknowledges that any attempted transfer, assignment, sublicense or use shall be void;
(ii) make error corrections to or otherwise modify or adapt the Software or create derivative works based upon the Software, or permit third parties to do the same;
(iii) decompile, decrypt, reverse engineer, disassemble or otherwise reduce the Software to human- readable form; or
(iv) use or permit the Software to be used to perform services for third parties without the express written authorization of Cisco.
To the extent required by law, and at Customer's written request, Cisco shall provide Customer with the interface information needed to achieve interoperability between the Software and another independently created program, on payment of Cisco's
Source: SCANSOURCE, INC., 10-K, 8/22/2019
Exhibit 10.38
applicable fee, if any. Customer shall observe strict obligations of confidentiality with respect to such information.
Software, Upgrades and Additional Copies. For purposes of this Agreement, "Software" shall include (and the terms and conditions of this Agreement shall apply to) computer programs, including firmware, as provided to Customer by Cisco or an authorized Cisco reseller, and any upgrades, updates, bug fixes or modified versions thereto (collectively, "Upgrades") or backup copies of the Software licensed or provided to Customer by Cisco or an authorized Cisco reseller. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT: (1) CUSTOMER HAS NO LICENSE OR RIGHT TO USE ANY ADDITIONAL COPIES OR UPGRADES UNLESS CUSTOMER, AT THE TIME OF ACQUIRING SUCH COPY OR UPGRADE, ALREADY HOLDS A VALID LICENSE TO THE ORIGINAL SOFTWARE AND HAS PAID THE APPLICABLE FEE FOR THE UPGRADE; (2) USE OF UPGRADES IS LIMITED TO CISCO EQUIPMENT FOR WHICH CUSTOMER IS THE ORIGINAL END USER PURCHASER OR LESSEE OR WHO OTHERWISE HOLDS A VALID LICENSE TO USE THE SOFTWARE WHICH IS BEING UPGRADED; AND (3) THE MAKING AND USE OF ADDITIONAL COPIES IS LIMITED TO NECESSARY BACKUP PURPOSES ONLY.
Proprietary Notices. Customer agrees to maintain and reproduce all copyright and other proprietary notices on all copies, in any form, of the Software in the same form and manner that such copyright and other proprietary notices are included on the Software. Except as expressly authorized in this Agreement, Customer shall not make any copies or duplicates of any Software without the prior written permission of Cisco.
Protection of Information. Customer agrees that aspects of the Software and associated Documentation, including the specific design and structure of individual programs, are trade secrets and/or copyrighted materials of Cisco, its suppliers or licensors. Customer shall not disclose, provide, or otherwise make available such trade secrets or copyrighted material in any form to any third party without the prior written consent of Cisco. Customer shall implement reasonable security measures to protect such trade secrets and copyrighted materials. Title to Software and Documentation shall remain solely with Cisco, its suppliers or licensors.
Term and Termination. This Agreement and the license granted herein shall remain effective until terminated. Customer may terminate this Agreement and the license at any time by destroying all copies of Software including any Documentation. Customer's rights under this Agreement will terminate immediately without notice from Cisco if Customer fails to comply with any provision of this Agreement. Upon termination, Customer shall destroy all copies of Software and Documentation in its possession or control.
Customer Records. Customer grants to Cisco and its independent accountants the right to examine Customer's books, records and accounts during Customer's normal business hours to verify compliance with this Agreement. In the event such audit discloses non-compliance with this Agreement, Customer shall promptly pay to Cisco the appropriate license fees.
Export. Software, including technical data, may be subject to U.S. export control laws, including the U.S. Export Administration Act and its associated regulations, and may be subject to export or import regulations in other countries. Customer agrees to comply strictly with all such regulations and acknowledges that it has the responsibility to obtain licenses to export, re-export, or import Software.
Government End User Purchasers. The Software and Documentation qualify as "commercial items," as that term is defined at 48 C.F.R. 2.101, consisting of "commercial computer software" and "commercial computer software documentation" as such terms are used in 48 C.F.R. 12.212. Consistent with 48 C.F.R.12.212 and 48 C.F.R. 227.7202-1 through 227.7202-4, Customer will provide to Government end user, or, if this Agreement is direct Government end user will acquire, the Software and software documentation with only those rights set forth herein that apply to non- governmental customers. Use of this Software and Documentation constitutes agreement by the Government entity that the computer software and Documentation is commercial, and constitutes acceptance of the rights and restrictions herein.
Limited Warranty Cisco warrants that commencing from the date of shipment to Customer (but in case of resale by an authorized Cisco reseller, commencing not more than ninety (90) days after original shipment by Cisco), and continuing for a period of the longer of (a) ninety (90) days or (b) the software warranty period (if any) set forth in the warranty card accompanying the Product (if any): (a) the media on which the Software is furnished will be free of defects in materials and workmanship under normal use; and (b) the Software substantially conforms to its published specifications. The date of shipment of a Product by Cisco is set forth on the packaging material in which the Product is shipped. Except for the foregoing, the Software is provided AS IS. This limited warranty extends only to the Customer who is the original licensee. Customer's sole and exclusive remedy and the entire liability of Cisco and its suppliers and licensors under this limited warranty will be, at Cisco's option, repair, replacement,
Source: SCANSOURCE, INC., 10-K, 8/22/2019
Exhibit 10.38
or refund of the Software if reported (or, upon request, returned) to Cisco or the party supplying the Software to Customer, if different than Cisco. In no event does Cisco warrant that the Software is error free or that Customer will be able to operate the Software without problems or interruptions. In addition, due to the continual development of new techniques for intruding upon and attacking networks, Cisco does not warrant that the Software or any equipment, system or network on which the Software is used will be free of vulnerability to intrusion or attack.
Restrictions. This warranty does not apply if the Software, Product or any other equipment upon which the Software is authorized to be used (a) has been altered, except by Cisco, (b) has not been installed, operated, repaired, or maintained in accordance with instructions supplied by Cisco, (c) has been subjected to abnormal physical or electrical stress, misuse, negligence, or accident; or (d) is licensed, for beta, evaluation, testing or demonstration purposes for which Cisco does not charge a purchase price or license fee.
DISCLAIMER OF WARRANTY. EXCEPT AS SPECIFIED IN THIS WARRANTY, ALL EXPRESS OR IMPLIED CONDITIONS, REPRESENTATIONS, AND WARRANTIES INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OR CONDITION OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, SATISFACTORY QUALITY OR ARISING FROM A COURSE OF DEALING, LAW, USAGE, OR TRADE PRACTICE, ARE HEREBY EXCLUDED TO THE EXTENT ALLOWED BY APPLICABLE LAW AND ARE EXPRESSLY DISCLAIMED BY CISCO, ITS SUPPLIERS AND LICENSORS. TO THE EXTENT AN IMPLIED WARRANTY CANNOT BE EXCLUDED, SUCH WARRANTY IS LIMITED IN DURATION TO THE WARRANTY PERIOD. BECAUSE SOME STATES OR JURISDICTIONS DO NOT ALLOW LIMITATIONS ON HOW LONG AN IMPLIED WARRANTY LASTS, THE ABOVE LIMITATION MAY NOT APPLY. THIS WARRANTY GIVES CUSTOMER SPECIFIC LEGAL RIGHTS, AND CUSTOMER MAY ALSO HAVE OTHER RIGHTS WHICH VARY FROM JURISDICTION TO JURISDICTION. This disclaimer and exclusion shall apply even if the express warranty set forth above fails of its essential purpose.
General Terms Applicable to the Limited Warranty Statement and Software License
Disclaimer of Liabilities. IN NO EVENT WILL CISCO OR ITS SUPPLIERS BE LIABLE FOR ANY LOST REVENUE, PROFIT, OR LOST OR DAMAGED DATA, OR FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL, OR PUNITIVE DAMAGES HOWEVER CAUSED AND REGARDLESS OF THE THEORY OF LIABILITY OR WHETHER ARISING OUT OF THE USE OF OR INABILITY TO USE SOFTWARE OR OTHERWISE AND EVEN IF CISCO OR ITS SUPPLIERS OR LICENSORS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. In no event shall Cisco's or its suppliers' or licensors' liability to Customer, whether in contract, tort (including negligence), or otherwise, exceed the price paid by Customer for the Software that gave rise to the claim or if the Software is part of another Product, the price paid for such other Product. The foregoing limitations shall apply even if the above stated warranty fails of its essential purpose. BECAUSE SOME STATES OR JURISDICTIONS DO NOT ALLOW LIMITATION OR EXCLUSION OF CONSEQUENTIAL OR INCIDENTAL DAMAGES, THE ABOVE LIMITATION MAY NOT APPLY TO YOU.
The Warranty and the Software License shall be governed by and construed in accordance with the laws of the State of California, without reference to principles of conflict of laws. The United Nations Convention on the International Sale of Goods shall not apply. If any portion hereof is found to be void or unenforceable, the remaining provisions of the Agreement shall remain in full force and effect. Except as expressly provided herein, this Agreement constitutes the entire agreement between the parties with respect to the license of the Software and supersedes any conflicting or additional terms contained in any purchase order or elsewhere all of which terms are excluded.
Source: SCANSOURCE, INC., 10-K, 8/22/2019 | Highlight the parts (if any) of this contract related to "Competitive Restriction Exception" that should be reviewed by a lawyer. Details: This category includes the exceptions or carveouts to Non-Compete, Exclusivity and No-Solicit of Customers above. | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Joint Ip Ownership" that should be reviewed by a lawyer. Details: Is there any clause providing for joint or shared ownership of intellectual property between the parties to the contract?
Context: SCHEDULE B
Customization Schedule
This Customization Schedule is attached to the Software License, Customization and Maintenance Agreement (the "Agreement") executed by and between Bank of America, N.A. ("Bank of America") and <<enter Company Name>> ("Supplier"). The Customizations identified hereunder shall be subject to the terms and conditions of that Software License, Customization and Maintenance Agreement referenced above.
Bank of America wishes to obtain the Customizations herein defined, and Supplier wishes to delivery those Customizations, on the terms and conditions of the Agreement and this Customization Schedule.
1. The Customizations shall fulfill or exceed all of the functional, performance and other specifications described in the Program Materials and the documents prepared either by Bank of America or Supplier pursuant to this Agreement. as indicated below.
No later than <<enter Customization Documents Delivery Date>>, Supplier shall deliver to Bank of America the documents described below for this Customization. The detailed specifications so delivered shall be incorporated herein when approved by Bank of America.
System Solution
Functional Specifications
System Design Specifications
Test Specifications
Supplier acknowledges receipt of the following documents from Bank of America:
Detailed Requirements
2. Bank of America Customizations:
3. Supplier Customizations:
Proprietary to Bank of America B-1 vTIP2010
Source: CARDLYTICS, INC., S-1, 1/12/2018
4. Fees for Customizations:
[SPECIFY TIME AND MATERIALS RATES ([Indicate any "not to exceed" limit on T&M Customization costs) OR FIXED PRICE]
If the proposed price Is Increased by Supplier upon delivery to Bank of America of detailed specifications or at any other time hereafter, Bank of America may terminate this Schedule and shall receive a refund of all amounts previously paid hereunder.
5. Unless otherwise specified herein, the environment for this Customization Is the same as described on Product License Schedule A to this Agreement.
6 The Delivery and Installation Schedule for this Customization is:
Delivery Date:
Installation Date:
[Insert any other Schedule Information pertaining to the Delivery or Installation of the Product]
7. [Add any special items. e.g., special payment Schedule, for this Schedule.]
8. Project Personnel:
Bank of America Project Administrator: Supplier Project Administrator:
Bank of America Project Manager: Supplier Project Manager:
THE FOREGOING IS UNDERSTOOD AND AGREED TO BY:
<<enter Company Name>> ("Supplier") Bank of America, N.A. ("Bank of America") By: By:
Name: Name: Title: Title: Date: Date: Proprietary to Bank of America B-2 vTIP2010
Source: CARDLYTICS, INC., S-1, 1/12/2018 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | SCHEDULE B
Customization Schedule
This Customization Schedule is attached to the Software License, Customization and Maintenance Agreement (the "Agreement") executed by and between Bank of America, N.A. ("Bank of America") and <<enter Company Name>> ("Supplier"). The Customizations identified hereunder shall be subject to the terms and conditions of that Software License, Customization and Maintenance Agreement referenced above.
Bank of America wishes to obtain the Customizations herein defined, and Supplier wishes to delivery those Customizations, on the terms and conditions of the Agreement and this Customization Schedule.
1. The Customizations shall fulfill or exceed all of the functional, performance and other specifications described in the Program Materials and the documents prepared either by Bank of America or Supplier pursuant to this Agreement. as indicated below.
No later than <<enter Customization Documents Delivery Date>>, Supplier shall deliver to Bank of America the documents described below for this Customization. The detailed specifications so delivered shall be incorporated herein when approved by Bank of America.
System Solution
Functional Specifications
System Design Specifications
Test Specifications
Supplier acknowledges receipt of the following documents from Bank of America:
Detailed Requirements
2. Bank of America Customizations:
3. Supplier Customizations:
Proprietary to Bank of America B-1 vTIP2010
Source: CARDLYTICS, INC., S-1, 1/12/2018
4. Fees for Customizations:
[SPECIFY TIME AND MATERIALS RATES ([Indicate any "not to exceed" limit on T&M Customization costs) OR FIXED PRICE]
If the proposed price Is Increased by Supplier upon delivery to Bank of America of detailed specifications or at any other time hereafter, Bank of America may terminate this Schedule and shall receive a refund of all amounts previously paid hereunder.
5. Unless otherwise specified herein, the environment for this Customization Is the same as described on Product License Schedule A to this Agreement.
6 The Delivery and Installation Schedule for this Customization is:
Delivery Date:
Installation Date:
[Insert any other Schedule Information pertaining to the Delivery or Installation of the Product]
7. [Add any special items. e.g., special payment Schedule, for this Schedule.]
8. Project Personnel:
Bank of America Project Administrator: Supplier Project Administrator:
Bank of America Project Manager: Supplier Project Manager:
THE FOREGOING IS UNDERSTOOD AND AGREED TO BY:
<<enter Company Name>> ("Supplier") Bank of America, N.A. ("Bank of America") By: By:
Name: Name: Title: Title: Date: Date: Proprietary to Bank of America B-2 vTIP2010
Source: CARDLYTICS, INC., S-1, 1/12/2018 | Highlight the parts (if any) of this contract related to "Joint Ip Ownership" that should be reviewed by a lawyer. Details: Is there any clause providing for joint or shared ownership of intellectual property between the parties to the contract? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Unlimited/All-You-Can-Eat-License" that should be reviewed by a lawyer. Details: Is there a clause granting one party an “enterprise,” “all you can eat” or unlimited usage license?
Context: DISTRIBUTION AND SERVICES AGREEMENT January 18, 2020 This is to confirm that, in consideration of the agreements hereinafter contained, the undersigned, the Integrity Short Term Government Fund, (the "Fund"), an open-end, diversified, management investment company organized as a series of The Integrity Funds, a Delaware statutory trust, has agreed that Integrity Funds Distributor, LLC, ("Integrity"), shall be, for the period of this distribution agreement (the "Agreement"), the principal underwriter of shares issued by the Fund, including such classes of shares as may now or hereafter be authorized (the "Shares"). SECTION 1. SERVICES AS UNDERWRITER Section 1.1 Integrity will act as principal underwriter for the distribution of the Shares covered by the registration statement, prospectus, and statement of additional information then in effect of the Fund (the "Registration Statement") under the Securities Act of 1933, as amended (the "1933 Act"), and the Investment Company Act of 1940, as amended (the "1940 Act"). Section 1.2 Integrity agrees to use its best efforts to solicit orders for the sale of the Shares at the public offering price, as determined in accordance with the Registration Statement, and will undertake such advertising and promotion as it believes is reasonable in connection with such solicitation. Integrity shall order Shares from the Fund only to the extent that it shall have received purchase orders therefore. Section 1.3 All activities by Integrity as underwriter of the Shares shall comply with all applicable laws, rules, and regulations, including, without limitation, all rules and regulations made or adopted by the Securities and Exchange Commission (the "SEC") or by any securities association registered under the Securities Exchange Act of 1934 and the Fund's Registration Statement. Section 1.4 Integrity will provide one or more persons during normal business hours to respond to telephone questions concerning the Fund. Section 1.5 Integrity acknowledges that, whenever in the judgment of the Fund's officers such action is warranted for any reason, including, without limitation, market, economic, or political conditions, those officers may decline to accept any orders for, or make any sales of, the Shares until such time as those officers deem it advisable to accept such orders and to make such sales. Section 1.6 Integrity shall be deemed to be an independent contractor and, except as specifically provided or authorized herein, shall have no authority to act for or represent the Fund. Integrity will act only on its own behalf as principal should it choose to enter into selling agreements with selected dealers or others. Integrity may allow commissions or concessions to dealers in such amounts as Integrity shall determine from time to time, as set forth in the Fund's Registration Statement. Except as may otherwise be determined by Integrity and the Fund from time to time, such commissions or concessions shall be uniform to all dealers. Shares sold to dealers shall be for resale by such dealers only at the public offering price(s) set forth in the Fund's then current Registration Statement. The price the Fund shall receive for all Shares purchased from the Fund shall be the net asset value used in determining the public offering price applicable to the sale of such Shares.
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
Section 1.7 In consideration of the services rendered pursuant to this Agreement, Integrity shall receive the excess, if any, of the sales price, as set forth in the Fund's Registration Statement, over the net asset value of Shares sold by Integrity, as underwriter. The Fund shall also pay Integrity any distribution and/or service fees applicable to the Shares as authorized by the Shareholder Services Plan (the "Plan") adopted by the Fund under Rule 12b-1 of the Investment Company Act of 1940 and set forth in the Fund's Registration Statement. Such fees shall be payable in the manner and terms set forth in the Plan. Section 1.8 Integrity will bear all expenses in connection with the performance of its services and the incurring of distribution expenses under this Agreement. For purposes of this Agreement, "distribution expenses" of Integrity shall mean all expenses borne by Integrity or by any other person with which Integrity has an agreement approved by the Fund, which expenses represent payment for activities primarily intended to result in the sale of Shares, including, but not limited to, the following: (a) payments made to, and expenses of, persons who provide support services in connection with the distribution of Shares, including, but not limited to, office space and equipment, telephone facilities, answering routine inquiries regarding the Fund, processing shareholder transactions, and providing any other shareholder services; (b) costs relating to the formulation and implementation of marketing and promotional activities, including, but not limited to, direct mail promotions and television, radio, newspaper, magazine, and other mass media advertising; (c) costs of printing and distributing prospectuses and reports of the Fund to prospective shareholders of the Fund; (d) costs involved in preparing, printing, and distributing sales literature pertaining to the Fund; (e) costs involved in obtaining whatever information, analyses, and reports with respect to marketing and promotional activities that the Fund may, from time to time, deem advisable; and 2
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
(f) sales commissions and other fees paid, together with related financing costs to brokers, dealers or other selling entities with a dealer agreement in effect for the sale of Fund Shares. Distribution expenses, however, shall not include any expenditures in connection with services which Integrity, any of its affiliates, or any other person has agreed to bear without reimbursement. Section 1.9 Integrity shall prepare and deliver reports to the Treasurer of the Fund and to the Investment Adviser on a regular, at least quarterly, basis, showing the distribution expenses incurred pursuant to this Agreement and the Plan and the purposes therefore, as well as any supplemental reports as the Trustees, from time to time, may reasonably request. SECTION 2. DUTIES OF THE FUND Section 2.1 The Fund agrees at its own expense to execute any and all documents, to furnish any and all information, and to take any other actions that may be reasonably necessary in connection with the qualification of the Shares for sale in those states that Integrity may designate. Section 2.2 The Fund shall furnish from time to time, for use in connection with the sale of the Shares, such information reports with respect to the Fund and its Shares as Integrity may reasonably request, all of which shall be signed by one or more of the Fund's duly authorized officers; and the Fund warrants that the statements contained in any such reports, when so signed by one or more of the Fund's officers, shall be true and correct. The Fund shall also furnish Integrity upon request with: (a) annual audits of the Fund's books and accounts made by independent public accountants regularly retained by the Fund, (b) semi-annual unaudited financial statements pertaining to the Fund, (c) quarterly earnings statements prepared by the Fund, (d) a monthly itemized list of the securities in the portfolio of the Fund, (e) monthly balance sheets as soon as practicable after the end of each month, and (f) from time to time such additional information regarding the Fund's financial condition as Integrity may reasonably request. Section 2.3 The Fund shall pay to Integrity, as set forth in the Registration Statement, any distribution and service fee authorized by the Plan. SECTION 3. REPRESENTATIONS AND WARRANTIES Section 3.1 The Fund represents to Integrity that all registration statements, prospectuses, and statements of additional information filed by the Fund with the SEC under the 1933 Act and the 1940 Act with respect to the Shares of the Fund have been carefully prepared in conformity with the requirements of the 1933 Act, the 1940 Act, and the rules and regulations of the SEC thereunder. As used in this Agreement, the terms "registration statement," "prospectus," and "statement of additional information" shall mean any registration statement, prospectus, and statement of additional information filed by the Fund with the SEC and any amendments and supplements thereto which at any time shall have been filed with the SEC. The Fund represents and warrants to Integrity that any registration statement, prospectus, and statement of additional information, when such registration statement becomes effective, will include all statements required to be contained therein in conformity with the 1933 Act, the 1940 Act, and the rules and regulations of the SEC; that all statements of fact contained in any registration statement, prospectus, or statement of additional information will be true and correct when such registration statement becomes effective; and that neither any registration statement nor any prospectus or statement of additional information when such registration statement becomes effective will include an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading to a purchaser of Shares. Integrity may, but shall not be obligated to, propose from time to time such amendment or amendments to any registration statement and such supplement or supplements to any prospectus or statement of additional information as, in the light of future developments, may, in the opinion of Integrity's counsel, be necessary or advisable. If the Fund shall not propose such amendment or amendments and/or supplement or supplements within fifteen days after receipt by the Fund of a written request from Integrity to do so, Integrity may, at its option, terminate this Agreement. The Fund shall not file any amendment to any registration statement or supplement to any prospectus or statement of additional information without giving Integrity reasonable notice thereof in advance; provided, however, that nothing contained in this Agreement shall in any way limit the Fund's right to file at any time such amendments to any registration statement and/or supplements to any prospectus or statement of additional information, of whatever character, as the Fund may deem advisable, such right being in all respects absolute and unconditional. 3
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
SECTION 4. INDEMNIFICATION Section 4.1 The Fund authorizes Integrity and any dealers with whom Integrity has entered into dealer agreements to use any prospectus or statement of additional information furnished by the Fund from time to time in connection with the sale of Shares. The Fund agrees to indemnify, defend, and hold Integrity, its several officers and governors, and any person who controls Integrity within the meaning of Section 15 of the 1933 Act, free and harmless from and against any and all claims, demands, liabilities, and expenses (including the cost of investigating or defending such claims, demands, or liabilities and any counsel fees incurred in connection therewith) which Integrity, its officers and governors, or any such controlling person may incur under the 1933 Act, the 1940 Act, or common law or otherwise, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any registration statement, any prospectus, or any statement of additional information, or arising out of or based upon any omission or alleged omission to state a material fact required to be stated in any registration statement, any prospectus, or any statement of additional information, or necessary to make the statements in any of them not misleading; provided, however, that the Fund's agreement to indemnify Integrity, its officers or governors, and any such controlling person shall not be deemed to cover any claims, demands, liabilities, or expenses arising out of or based upon any statements or representations made by Integrity or its representatives or agents other than such statements and representations as are contained in any registration statement, prospectus, or statement of additional information and in such financial and other statements as are furnished to Integrity pursuant to paragraph 2.2 hereof; and further provided that the Fund's agreement to indemnify Integrity and the Fund's representations and warranties hereinbefore set forth in paragraph 3 shall not be deemed to cover any liability to the Fund or its shareholders to which Integrity would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of its duties, or by reason of Integrity's reckless disregard of its obligations and duties under this Agreement. The Fund's agreement to indemnify Integrity, its officers and governors, and any such controlling person, as aforesaid, is expressly conditioned upon the Fund's being notified of any action brought against Integrity, its officers or governors, or any such controlling person, such notification to be given by letter or by telegram addressed to the Fund at its principal office in Minot, North Dakota, and sent to the Fund by the person against whom such action is brought, within ten days after the summons or other first legal process shall have been served. The failure so to notify the Fund of any such action shall not relieve the Fund from any liability that the Fund may have to the person against whom such action is brought by reason of any such untrue statement or omission or alleged omission otherwise than on account of the Fund's indemnity agreement contained in this paragraph 4.1. The Fund's indemnification agreement contained in this paragraph 4.1 and the Fund's representations and warranties in this Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of Integrity, its officers and governors, or any controlling person, and shall survive the delivery of any Shares. This agreement of indemnity will inure exclusively to Integrity's benefit, to the benefit of its several officers and governors, and their respective estates, and to the benefit of the controlling persons and their successors. The Fund agrees to notify Integrity promptly of the commencement of any litigation or proceedings against the Fund or any of its officers or trustees in connection with the issuance and sale of any Shares. 4
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
Section 4.2 Integrity agrees to indemnify, defend, and hold the Fund, its several officers and trustees, and any person who controls the Fund within the meaning of Section 15 of the 1933 Act, free and harmless from and against any and all claims, demands, liabilities, and expenses (including the costs of investigating or defending such claims, demands, or liabilities and any counsel fees incurred in connection therewith) that the Fund, its officers or trustees, or any such controlling person may incur under the 1933 Act, the 1940 Act, or common law or otherwise, but only to the extent that such liability or expense incurred by the Fund, its officers or trustees, or such controlling person resulting from such claims or demands shall arise out of or be based upon (a) any unauthorized sales literature, advertisements, information, statements, or representations or (b) any untrue or alleged untrue statement of a material fact contained in information furnished in writing by Integrity to the Fund and used in the answers to any of the items of the registration statement or in the corresponding statements made in the prospectus or statement of additional information, or shall arise out of or be based upon any omission or alleged omission to state a material fact in connection with such information furnished in writing by Integrity to the Fund and required to be stated in such answers or necessary to make such information not misleading. Integrity's agreement to indemnify the Fund, its officers and trustees, and any such controlling person, as aforesaid, is expressly conditioned upon Integrity's being notified of any action brought against the Fund, its officers or trustees, or any such controlling person, such notification to be given by letter or telegram addressed to Integrity at its principal office in Minot, North Dakota, and sent to Integrity by the person against whom such action is brought, within ten days after the summons or other first legal process shall have been served. The failure so to notify Integrity of any such action shall not relieve Integrity from any liability that Integrity may have to the Fund, its officers or trustees, or to such controlling person by reason of any such untrue or alleged untrue statement or omission or alleged omission otherwise than on account of Integrity's indemnity agreement contained in this paragraph 4.2. Integrity agrees to notify the Fund promptly of the commencement of any litigation or proceedings against Integrity or any of its officers or governors in connection with the issuance and sale of any Shares. 5
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
Section 4.3 In case any action shall be brought against any indemnified party under paragraph 4.1 or 4.2, and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it shall wish to do so, to assume the defense thereof with counsel satisfactory to such indemnified party. If the indemnifying party opts to assume the defense of such action, the indemnifying party will not be liable to the indemnified party for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than (a) reasonable costs of investigation or the furnishing of documents or witnesses and (b) all reasonable fees and expenses of separate counsel to such indemnified party if (i) the indemnifying party and the indemnified party shall have agreed to the retention of such counsel or (ii) the indemnified party shall have concluded reasonably that representation of the indemnifying party and the indemnified party by the same counsel would be inappropriate due to actual or potential differing interests between them in the conduct of the defense of such action. SECTION 5. EFFECTIVENESS OF REGISTRATION Section 5.1 None of the Shares shall be offered by either Integrity or the Fund under any of the provisions of this Agreement and no orders for the purchase or sale of the Shares hereunder shall be accepted by the Fund if and so long as the effectiveness of the registration statement then in effect or any necessary amendments thereto shall be suspended under any of the provisions of the 1933 Act or if and so long as a current prospectus as required by Section 5(b)(2) of the 1933 Act is not on file with the SEC; provided, however, that nothing contained in this paragraph 5 shall in any way restrict or have an application to or bearing upon the Fund's obligation to repurchase Shares from any shareholder in accordance with the provisions of the Fund's prospectus, statement of additional information, or declaration of trust. SECTION 6. NOTICE TO INTEGRITY Section 6.1 The Fund agrees to advise Integrity immediately in writing: 6
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
(a) of any request by the SEC for amendments to the registration statement, prospectus, or statement of additional information then in effect or for additional information; (b) in the event of the issuance by the SEC of any stop order suspending the effectiveness of the registration statement, prospectus, or statement of additional information then in effect or the initiation of any proceeding for that purpose; (c) of the happening of any event that makes untrue any statement of a material fact made in the registration statement, prospectus, or statement of additional information then in effect or that requires the making of a change in such registration statement, prospectus, or statement of additional information in order to make the statement therein not misleading; and (d) of all actions of the SEC with respect to any amendment to any registration statement, prospectus, or statement of additional information which may from time to time be filed with the SEC. SECTION 7. TERM OF AGREEMENT Section 7.1 This Agreement shall continue until January 18, 2022, and thereafter shall continue automatically for successive annual periods ending on January 18th of each year, provided such continuance is specifically approved at least annually by (a) the Fund's Board of Trustees and (b) a vote of a majority (as defined in the 1940 Act) of the Fund's Trustees who are not interested persons (as defined in the 1940 Act) of the Fund and who have no direct or indirect financial interest in the operation of the Plan, in this Agreement, or any agreement related to the Plan (the "Qualified Trustees"), by vote cast in person at a meeting called for the purpose of voting on such approval. This Agreement is terminable with respect to the Fund, without penalty, (a) on 60 days' written notice, by vote of a majority of the Qualified Trustees or by vote of a majority (as defined in the 1940 Act) of the outstanding voting securities of the Fund or (b) on 90 days' written notice by Integrity. This Agreement will also terminate automatically in the event of its assignment (as defined in the 1940 Act). SECTION 8. MISCELLANEOUS Section 8.1 The Fund recognizes that governors, officers, and employees of Integrity may from time to time serve as directors, officers, and employees of corporations and business trusts (including other investment companies) and that Integrity or its affiliates may enter into distribution or other agreements with such other corporations and trusts. Section 8.2 It is expressly agreed that the obligations of the Fund hereunder shall not be binding upon any of the trustees, shareholders, nominees, officers, agents, or employees of the Fund, personally, but bind only the property of the Fund. The execution and delivery of this Agreement have been authorized by the Trustees and signed by an authorized officer of the Fund, acting as such, and neither such authorization by such Trustees nor such execution and delivery by such officer shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the property of the Fund. 7
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
Section 8.3 This Agreement shall be construed in accordance with the laws of the State of Kansas. Section 8.4 This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original; but such counterparts shall, together, constitute only one instrument. Section 8.5 This Agreement may not be amended or modified in any manner except by both parties with the same formality as this Agreement and as may be permitted or required by the 1940 Act. Section 8.6 The captions of this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. In Witness Whereof, the parties hereto have caused this Agreement to be executed as of the date first set forth herein. Integrity Short Term Government Fund By: /s/ Shannon D. Radke Shannon D. Radke - President Accepted: Integrity Funds Distributor, LLC By: /s/ Shannon D. Radke Shannon D. Radke - President Dated: January 18, 2020 8
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | DISTRIBUTION AND SERVICES AGREEMENT January 18, 2020 This is to confirm that, in consideration of the agreements hereinafter contained, the undersigned, the Integrity Short Term Government Fund, (the "Fund"), an open-end, diversified, management investment company organized as a series of The Integrity Funds, a Delaware statutory trust, has agreed that Integrity Funds Distributor, LLC, ("Integrity"), shall be, for the period of this distribution agreement (the "Agreement"), the principal underwriter of shares issued by the Fund, including such classes of shares as may now or hereafter be authorized (the "Shares"). SECTION 1. SERVICES AS UNDERWRITER Section 1.1 Integrity will act as principal underwriter for the distribution of the Shares covered by the registration statement, prospectus, and statement of additional information then in effect of the Fund (the "Registration Statement") under the Securities Act of 1933, as amended (the "1933 Act"), and the Investment Company Act of 1940, as amended (the "1940 Act"). Section 1.2 Integrity agrees to use its best efforts to solicit orders for the sale of the Shares at the public offering price, as determined in accordance with the Registration Statement, and will undertake such advertising and promotion as it believes is reasonable in connection with such solicitation. Integrity shall order Shares from the Fund only to the extent that it shall have received purchase orders therefore. Section 1.3 All activities by Integrity as underwriter of the Shares shall comply with all applicable laws, rules, and regulations, including, without limitation, all rules and regulations made or adopted by the Securities and Exchange Commission (the "SEC") or by any securities association registered under the Securities Exchange Act of 1934 and the Fund's Registration Statement. Section 1.4 Integrity will provide one or more persons during normal business hours to respond to telephone questions concerning the Fund. Section 1.5 Integrity acknowledges that, whenever in the judgment of the Fund's officers such action is warranted for any reason, including, without limitation, market, economic, or political conditions, those officers may decline to accept any orders for, or make any sales of, the Shares until such time as those officers deem it advisable to accept such orders and to make such sales. Section 1.6 Integrity shall be deemed to be an independent contractor and, except as specifically provided or authorized herein, shall have no authority to act for or represent the Fund. Integrity will act only on its own behalf as principal should it choose to enter into selling agreements with selected dealers or others. Integrity may allow commissions or concessions to dealers in such amounts as Integrity shall determine from time to time, as set forth in the Fund's Registration Statement. Except as may otherwise be determined by Integrity and the Fund from time to time, such commissions or concessions shall be uniform to all dealers. Shares sold to dealers shall be for resale by such dealers only at the public offering price(s) set forth in the Fund's then current Registration Statement. The price the Fund shall receive for all Shares purchased from the Fund shall be the net asset value used in determining the public offering price applicable to the sale of such Shares.
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
Section 1.7 In consideration of the services rendered pursuant to this Agreement, Integrity shall receive the excess, if any, of the sales price, as set forth in the Fund's Registration Statement, over the net asset value of Shares sold by Integrity, as underwriter. The Fund shall also pay Integrity any distribution and/or service fees applicable to the Shares as authorized by the Shareholder Services Plan (the "Plan") adopted by the Fund under Rule 12b-1 of the Investment Company Act of 1940 and set forth in the Fund's Registration Statement. Such fees shall be payable in the manner and terms set forth in the Plan. Section 1.8 Integrity will bear all expenses in connection with the performance of its services and the incurring of distribution expenses under this Agreement. For purposes of this Agreement, "distribution expenses" of Integrity shall mean all expenses borne by Integrity or by any other person with which Integrity has an agreement approved by the Fund, which expenses represent payment for activities primarily intended to result in the sale of Shares, including, but not limited to, the following: (a) payments made to, and expenses of, persons who provide support services in connection with the distribution of Shares, including, but not limited to, office space and equipment, telephone facilities, answering routine inquiries regarding the Fund, processing shareholder transactions, and providing any other shareholder services; (b) costs relating to the formulation and implementation of marketing and promotional activities, including, but not limited to, direct mail promotions and television, radio, newspaper, magazine, and other mass media advertising; (c) costs of printing and distributing prospectuses and reports of the Fund to prospective shareholders of the Fund; (d) costs involved in preparing, printing, and distributing sales literature pertaining to the Fund; (e) costs involved in obtaining whatever information, analyses, and reports with respect to marketing and promotional activities that the Fund may, from time to time, deem advisable; and 2
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
(f) sales commissions and other fees paid, together with related financing costs to brokers, dealers or other selling entities with a dealer agreement in effect for the sale of Fund Shares. Distribution expenses, however, shall not include any expenditures in connection with services which Integrity, any of its affiliates, or any other person has agreed to bear without reimbursement. Section 1.9 Integrity shall prepare and deliver reports to the Treasurer of the Fund and to the Investment Adviser on a regular, at least quarterly, basis, showing the distribution expenses incurred pursuant to this Agreement and the Plan and the purposes therefore, as well as any supplemental reports as the Trustees, from time to time, may reasonably request. SECTION 2. DUTIES OF THE FUND Section 2.1 The Fund agrees at its own expense to execute any and all documents, to furnish any and all information, and to take any other actions that may be reasonably necessary in connection with the qualification of the Shares for sale in those states that Integrity may designate. Section 2.2 The Fund shall furnish from time to time, for use in connection with the sale of the Shares, such information reports with respect to the Fund and its Shares as Integrity may reasonably request, all of which shall be signed by one or more of the Fund's duly authorized officers; and the Fund warrants that the statements contained in any such reports, when so signed by one or more of the Fund's officers, shall be true and correct. The Fund shall also furnish Integrity upon request with: (a) annual audits of the Fund's books and accounts made by independent public accountants regularly retained by the Fund, (b) semi-annual unaudited financial statements pertaining to the Fund, (c) quarterly earnings statements prepared by the Fund, (d) a monthly itemized list of the securities in the portfolio of the Fund, (e) monthly balance sheets as soon as practicable after the end of each month, and (f) from time to time such additional information regarding the Fund's financial condition as Integrity may reasonably request. Section 2.3 The Fund shall pay to Integrity, as set forth in the Registration Statement, any distribution and service fee authorized by the Plan. SECTION 3. REPRESENTATIONS AND WARRANTIES Section 3.1 The Fund represents to Integrity that all registration statements, prospectuses, and statements of additional information filed by the Fund with the SEC under the 1933 Act and the 1940 Act with respect to the Shares of the Fund have been carefully prepared in conformity with the requirements of the 1933 Act, the 1940 Act, and the rules and regulations of the SEC thereunder. As used in this Agreement, the terms "registration statement," "prospectus," and "statement of additional information" shall mean any registration statement, prospectus, and statement of additional information filed by the Fund with the SEC and any amendments and supplements thereto which at any time shall have been filed with the SEC. The Fund represents and warrants to Integrity that any registration statement, prospectus, and statement of additional information, when such registration statement becomes effective, will include all statements required to be contained therein in conformity with the 1933 Act, the 1940 Act, and the rules and regulations of the SEC; that all statements of fact contained in any registration statement, prospectus, or statement of additional information will be true and correct when such registration statement becomes effective; and that neither any registration statement nor any prospectus or statement of additional information when such registration statement becomes effective will include an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading to a purchaser of Shares. Integrity may, but shall not be obligated to, propose from time to time such amendment or amendments to any registration statement and such supplement or supplements to any prospectus or statement of additional information as, in the light of future developments, may, in the opinion of Integrity's counsel, be necessary or advisable. If the Fund shall not propose such amendment or amendments and/or supplement or supplements within fifteen days after receipt by the Fund of a written request from Integrity to do so, Integrity may, at its option, terminate this Agreement. The Fund shall not file any amendment to any registration statement or supplement to any prospectus or statement of additional information without giving Integrity reasonable notice thereof in advance; provided, however, that nothing contained in this Agreement shall in any way limit the Fund's right to file at any time such amendments to any registration statement and/or supplements to any prospectus or statement of additional information, of whatever character, as the Fund may deem advisable, such right being in all respects absolute and unconditional. 3
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
SECTION 4. INDEMNIFICATION Section 4.1 The Fund authorizes Integrity and any dealers with whom Integrity has entered into dealer agreements to use any prospectus or statement of additional information furnished by the Fund from time to time in connection with the sale of Shares. The Fund agrees to indemnify, defend, and hold Integrity, its several officers and governors, and any person who controls Integrity within the meaning of Section 15 of the 1933 Act, free and harmless from and against any and all claims, demands, liabilities, and expenses (including the cost of investigating or defending such claims, demands, or liabilities and any counsel fees incurred in connection therewith) which Integrity, its officers and governors, or any such controlling person may incur under the 1933 Act, the 1940 Act, or common law or otherwise, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any registration statement, any prospectus, or any statement of additional information, or arising out of or based upon any omission or alleged omission to state a material fact required to be stated in any registration statement, any prospectus, or any statement of additional information, or necessary to make the statements in any of them not misleading; provided, however, that the Fund's agreement to indemnify Integrity, its officers or governors, and any such controlling person shall not be deemed to cover any claims, demands, liabilities, or expenses arising out of or based upon any statements or representations made by Integrity or its representatives or agents other than such statements and representations as are contained in any registration statement, prospectus, or statement of additional information and in such financial and other statements as are furnished to Integrity pursuant to paragraph 2.2 hereof; and further provided that the Fund's agreement to indemnify Integrity and the Fund's representations and warranties hereinbefore set forth in paragraph 3 shall not be deemed to cover any liability to the Fund or its shareholders to which Integrity would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of its duties, or by reason of Integrity's reckless disregard of its obligations and duties under this Agreement. The Fund's agreement to indemnify Integrity, its officers and governors, and any such controlling person, as aforesaid, is expressly conditioned upon the Fund's being notified of any action brought against Integrity, its officers or governors, or any such controlling person, such notification to be given by letter or by telegram addressed to the Fund at its principal office in Minot, North Dakota, and sent to the Fund by the person against whom such action is brought, within ten days after the summons or other first legal process shall have been served. The failure so to notify the Fund of any such action shall not relieve the Fund from any liability that the Fund may have to the person against whom such action is brought by reason of any such untrue statement or omission or alleged omission otherwise than on account of the Fund's indemnity agreement contained in this paragraph 4.1. The Fund's indemnification agreement contained in this paragraph 4.1 and the Fund's representations and warranties in this Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of Integrity, its officers and governors, or any controlling person, and shall survive the delivery of any Shares. This agreement of indemnity will inure exclusively to Integrity's benefit, to the benefit of its several officers and governors, and their respective estates, and to the benefit of the controlling persons and their successors. The Fund agrees to notify Integrity promptly of the commencement of any litigation or proceedings against the Fund or any of its officers or trustees in connection with the issuance and sale of any Shares. 4
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
Section 4.2 Integrity agrees to indemnify, defend, and hold the Fund, its several officers and trustees, and any person who controls the Fund within the meaning of Section 15 of the 1933 Act, free and harmless from and against any and all claims, demands, liabilities, and expenses (including the costs of investigating or defending such claims, demands, or liabilities and any counsel fees incurred in connection therewith) that the Fund, its officers or trustees, or any such controlling person may incur under the 1933 Act, the 1940 Act, or common law or otherwise, but only to the extent that such liability or expense incurred by the Fund, its officers or trustees, or such controlling person resulting from such claims or demands shall arise out of or be based upon (a) any unauthorized sales literature, advertisements, information, statements, or representations or (b) any untrue or alleged untrue statement of a material fact contained in information furnished in writing by Integrity to the Fund and used in the answers to any of the items of the registration statement or in the corresponding statements made in the prospectus or statement of additional information, or shall arise out of or be based upon any omission or alleged omission to state a material fact in connection with such information furnished in writing by Integrity to the Fund and required to be stated in such answers or necessary to make such information not misleading. Integrity's agreement to indemnify the Fund, its officers and trustees, and any such controlling person, as aforesaid, is expressly conditioned upon Integrity's being notified of any action brought against the Fund, its officers or trustees, or any such controlling person, such notification to be given by letter or telegram addressed to Integrity at its principal office in Minot, North Dakota, and sent to Integrity by the person against whom such action is brought, within ten days after the summons or other first legal process shall have been served. The failure so to notify Integrity of any such action shall not relieve Integrity from any liability that Integrity may have to the Fund, its officers or trustees, or to such controlling person by reason of any such untrue or alleged untrue statement or omission or alleged omission otherwise than on account of Integrity's indemnity agreement contained in this paragraph 4.2. Integrity agrees to notify the Fund promptly of the commencement of any litigation or proceedings against Integrity or any of its officers or governors in connection with the issuance and sale of any Shares. 5
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
Section 4.3 In case any action shall be brought against any indemnified party under paragraph 4.1 or 4.2, and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it shall wish to do so, to assume the defense thereof with counsel satisfactory to such indemnified party. If the indemnifying party opts to assume the defense of such action, the indemnifying party will not be liable to the indemnified party for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than (a) reasonable costs of investigation or the furnishing of documents or witnesses and (b) all reasonable fees and expenses of separate counsel to such indemnified party if (i) the indemnifying party and the indemnified party shall have agreed to the retention of such counsel or (ii) the indemnified party shall have concluded reasonably that representation of the indemnifying party and the indemnified party by the same counsel would be inappropriate due to actual or potential differing interests between them in the conduct of the defense of such action. SECTION 5. EFFECTIVENESS OF REGISTRATION Section 5.1 None of the Shares shall be offered by either Integrity or the Fund under any of the provisions of this Agreement and no orders for the purchase or sale of the Shares hereunder shall be accepted by the Fund if and so long as the effectiveness of the registration statement then in effect or any necessary amendments thereto shall be suspended under any of the provisions of the 1933 Act or if and so long as a current prospectus as required by Section 5(b)(2) of the 1933 Act is not on file with the SEC; provided, however, that nothing contained in this paragraph 5 shall in any way restrict or have an application to or bearing upon the Fund's obligation to repurchase Shares from any shareholder in accordance with the provisions of the Fund's prospectus, statement of additional information, or declaration of trust. SECTION 6. NOTICE TO INTEGRITY Section 6.1 The Fund agrees to advise Integrity immediately in writing: 6
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
(a) of any request by the SEC for amendments to the registration statement, prospectus, or statement of additional information then in effect or for additional information; (b) in the event of the issuance by the SEC of any stop order suspending the effectiveness of the registration statement, prospectus, or statement of additional information then in effect or the initiation of any proceeding for that purpose; (c) of the happening of any event that makes untrue any statement of a material fact made in the registration statement, prospectus, or statement of additional information then in effect or that requires the making of a change in such registration statement, prospectus, or statement of additional information in order to make the statement therein not misleading; and (d) of all actions of the SEC with respect to any amendment to any registration statement, prospectus, or statement of additional information which may from time to time be filed with the SEC. SECTION 7. TERM OF AGREEMENT Section 7.1 This Agreement shall continue until January 18, 2022, and thereafter shall continue automatically for successive annual periods ending on January 18th of each year, provided such continuance is specifically approved at least annually by (a) the Fund's Board of Trustees and (b) a vote of a majority (as defined in the 1940 Act) of the Fund's Trustees who are not interested persons (as defined in the 1940 Act) of the Fund and who have no direct or indirect financial interest in the operation of the Plan, in this Agreement, or any agreement related to the Plan (the "Qualified Trustees"), by vote cast in person at a meeting called for the purpose of voting on such approval. This Agreement is terminable with respect to the Fund, without penalty, (a) on 60 days' written notice, by vote of a majority of the Qualified Trustees or by vote of a majority (as defined in the 1940 Act) of the outstanding voting securities of the Fund or (b) on 90 days' written notice by Integrity. This Agreement will also terminate automatically in the event of its assignment (as defined in the 1940 Act). SECTION 8. MISCELLANEOUS Section 8.1 The Fund recognizes that governors, officers, and employees of Integrity may from time to time serve as directors, officers, and employees of corporations and business trusts (including other investment companies) and that Integrity or its affiliates may enter into distribution or other agreements with such other corporations and trusts. Section 8.2 It is expressly agreed that the obligations of the Fund hereunder shall not be binding upon any of the trustees, shareholders, nominees, officers, agents, or employees of the Fund, personally, but bind only the property of the Fund. The execution and delivery of this Agreement have been authorized by the Trustees and signed by an authorized officer of the Fund, acting as such, and neither such authorization by such Trustees nor such execution and delivery by such officer shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the property of the Fund. 7
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
Section 8.3 This Agreement shall be construed in accordance with the laws of the State of Kansas. Section 8.4 This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original; but such counterparts shall, together, constitute only one instrument. Section 8.5 This Agreement may not be amended or modified in any manner except by both parties with the same formality as this Agreement and as may be permitted or required by the 1940 Act. Section 8.6 The captions of this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. In Witness Whereof, the parties hereto have caused this Agreement to be executed as of the date first set forth herein. Integrity Short Term Government Fund By: /s/ Shannon D. Radke Shannon D. Radke - President Accepted: Integrity Funds Distributor, LLC By: /s/ Shannon D. Radke Shannon D. Radke - President Dated: January 18, 2020 8
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020 | Highlight the parts (if any) of this contract related to "Unlimited/All-You-Can-Eat-License" that should be reviewed by a lawyer. Details: Is there a clause granting one party an “enterprise,” “all you can eat” or unlimited usage license? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Source Code Escrow" that should be reviewed by a lawyer. Details: Is one party required to deposit its source code into escrow with a third party, which can be released to the counterparty upon the occurrence of certain events (bankruptcy, insolvency, etc.)?
Context: Exhibit 10.24 [***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. EXECUTION VERSION STRATEGIC ALLIANCE AGREEMENT
THIS STRATEGIC ALLIANCE AGREEMENT ("Agreement") is made and entered into as of November 6, 2016 (the "Effective Date") by and between Dialog Semiconductor (UK) Ltd., a corporation organized under the laws of England and Wales, having its principal office at 100 Longwater Avenue, Green Park, Reading, RG2 6GP, United Kingdom ("DIALOG") and Energous Corporation, a Delaware corporation, having its principal office at 3590 North First Street, Suite 210, San Jose, CA 95134 ("ENERGOUS"). WHEREAS DIALOG is a supplier of mixed-signal semiconductor products; WHEREAS ENERGOUS is a supplier of uncoupled wirefree charging systems, including antennas, semiconductors, firmware, software, algorithms, and sensors; WHEREAS concurrently with their execution of this Agreement, DIALOG and ENERGOUS are entering into a separate Securities Purchase Agreement, pursuant to which DIALOG will make an investment in ENERGOUS, and ENERGOUS will issue to DIALOG shares of its common stock and a warrant to purchase its common stock on the terms set forth therein. WHEREAS DIALOG and ENERGOUS desire to enter into a strategic relationship to distribute to the marketplace certain ENERGOUS products and technology and to potentially collaborate on further initiatives pursuant to the terms and conditions of this Agreement. NOW, THEREFORE, in consideration for the premises and mutual covenants contained herein, DIALOG and ENERGOUS hereby agree as follows: 1. DEFINITIONS. All capitalized terms used in this Agreement will have the meaning set out below, or if not defined below, the meaning as defined elsewhere in the Agreement. 1.1 "Affiliate" means any person or entity that controls, is controlled by or is under common control with the specified person or entity, but only so long as such control exists. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through ownership of voting securities, by contract or otherwise. 1.2 "Approved Production Specifications" means those materials, processes and workmanship specifications of Manufacturing Subcontractors as approved by ENERGOUS for the manufacture and production of the Products. 1.3 "Change of Control" means any transaction or series of transactions that results in (i) the consolidation or merger of the specified party ("Target") into or with any other corporation or corporations, (ii) the sale, conveyance or disposition of all or substantially all of the assets of the Target, (iii) the transfer of more than fifty percent (50%) of the voting power of the Target to any entity or entities not controlled by the Target, or (iv) any similar form of acquisition or any liquidation, dissolution or winding up of the Target or other transaction that results in the discontinuance of the Target's business; provided, however, that Change of Control will not include any transaction or series of transactions entered into primarily for equity financing purposes (including, without limitation, any private equity investment or any public offering of securities).
1.4 "Deposit Materials" means all chip level design databases, circuit schematics, test and characterization programs and associated documentation reasonably required to have Products manufactured, or to allow design bugs or Epidemic Defects to be fixed in the Product. 1.5 "Design-In Phase" means the phase in the sales cycle with a prospective customer for a Product that follows the customer's decision to move forward with the potential Product, during which chip samples are delivered to customer and the parties work together to design the evaluation board for in-system evaluation. 1.6 "Documentation" means all information that is necessary or useful to support DIALOG's authorized manufacture, testing, sale and support of the Products, including but not limited to Product Specifications, data sheets, application notes, application board gerber files/BOM, sales and marketing collateral, Product errata, test reports, characterization reports, software (e.g., firmware, GUI), test plans and yield data in connection with the manufacture and sale of Products, Approved Production Specifications, test and characterization programs and associated documentation reasonably required to have Products manufactured, assembled and tested, designs of all Tooling and all other items reasonably required for the manufacture of the Products. 1.7 "Epidemic Defects" means material defects of any Product resulting from a common root cause solely attributable to the Product Specifications or Approved Production Specifications and which results in returns (in accordance with the returns procedure mutually agreed between the parties in the Commercialization Plan) of more than [***] percent ([***]%) of the quantity of such Product manufactured in any [***] day period. Any number of material defects affecting any number of Products which result from a single common root cause or combination of causes and result in returns of more than [***] ([***]%) of such Products manufactured in any [***] day period will be treated as the occurrence of a single Epidemic Defect for purposes of this Agreement. 1.8 "Insolvency Event" means (a) without a successor, the specified party fails to function as a going concern or to operate in the ordinary course, or (b) other than in the case when the specified party is a debtor-in-possession and continuing to fulfill all its obligations under this Agreement, a receiver or trustee in bankruptcy is appointed for such party or its property, or such party makes a general assignment for the benefit of its creditors, or such party commences, or has commenced against it, proceedings under any bankruptcy, insolvency or debtor's relief law, in each case which proceedings are not dismissed within ninety (90) days. 1.9 "Intellectual Property Rights" means any and all Patent Rights, copyright rights, Marks rights (including all associated goodwill), mask work rights, trade secret rights and all other intellectual and industrial property rights of any sort throughout the world (including any application therefor). * Confidential Treatment Requested
Page 2
1.10 "Invention" means any idea, concept, discovery, invention, development, technology, work of authorship, trade secret, software, firmware, library, component, tool, mask work, process, method, technique, know-how, show-how, data, plan, formula, device, apparatus, specification, design, documentation or other material or information, tangible or intangible, whether or not it may be patented, copyrighted or otherwise protected (including all versions, modifications, enhancements and derivative works thereof). 1.11 "Manufacturing Subcontractors" means (a) [***] and/or its Affiliate that is the wafer foundry for the Products ("[***]"), (b) [***] and/or its Affiliate that is responsible for the assembly, packaging and testing of the Products, and (c) and other third party contractors DIALOG or ENERGOUS use, or may from time to time use, for the manufacturing, assembly, testing, or packaging of the Licensed Products or Licensed Product components. 1.12 "Marks" means trademarks, service marks, trade dress and trade names. 1.13 "Mask Set" means the mask set for fabrication of wafers at a foundry supplier. 1.14 "Mass Production Qualified Product" means a fully qualified Product which has completed 500 hour high temperature over lifetime (HTOL) testing and has been shipped in excess of [***] units for purposes of incorporation in customer products. 1.15 MCM means a multichip module, being a single package that includes multiple integrated circuit dies, including a Product die. 1.16 "Net Sales" means the invoiced amounts for the Sale of Products less: (a) amounts credited for return of any such Products; (b) amounts separately stated with respect to shipment of such Products for insurance, handling, duty, freight, and taxes; and (c) any discounts, credits or rebates in the relevant royalty or service fee period. 1.17 "New Product" means a product developed by or on behalf of ENERGOUS after the Effective Date that is not a Product Update; provided, however, that "New Products" exclude any product developed by a successor or acquirer of ENERGOUS. 1.18 "Patent" means any United States or foreign patent or patent application, including any provisional application, continuation, continuation-in-part, divisional, registration, confirmation, revalidation, reissue, PCT application, patent term extension, supplementary protection certificate, and utility model, as well as all foreign counterparts of any of the foregoing, and related extensions or restorations of terms thereof. 1.19 "Patent Rights" means rights under any Patent. 1.20 "Person" a human being or group of human beings, a company, corporation, a partnership or other legal entity (artificial or juristic person) recognized by law as having rights and duties. * Confidential Treatment Requested
Page 3
1.21 "Products" means the ENERGOUS products set forth in Exhibit A, as such Exhibit may be amended from time to time by mutual agreement between the parties, that have been released by ENERGOUS to production, including all Product Updates, which will be deemed to have been added to Exhibit A automatically, without any further action required by the parties, immediately following the release to production date. 1.22 "Product Die" means the silicon die incorporated within Products. 1.23 "Product IP" means (a) all Intellectual Property Rights in and to the Products, including all Product Updates, (b) any other Inventions and work products created or developed in connection with research and development or manufacturing efforts relating to the Products, including all Intellectual Property Rights therein and (c) all Intellectual Property Rights in and to the Mask Sets and Tooling, in each of the foregoing cases, that are owned or controlled by ENERGOUS, its Affiliates or any successor or assign. 1.24 "Product Specifications" means ENERGOUS' written technical specifications for the Products as referenced in datasheets and related documentation such as errata sheets. All Product Specifications are subject to change with at least one (1) months prior written notice to DIALOG, provided that with respect to any warranty for Products covered by this Agreement, the Product Specification in effect at the time of shipment of the relevant Product will apply for warranty purposes notwithstanding any subsequent change to the Product Specifications as provided herein. 1.25 "Product Updates" means any updates, improvements and other modifications to the Products made by or for ENERGOUS, including, without limitation: (a) any updates or modifications to the software (DSP code, firmware, GUI (graphical user interface) code); (b) modifications of silicon, including, without limitation; such modifications made solely for cost reduction purposes, and including only metal layer as well as all layer mask changes; (c) modifications which increase the distance over which wireless power is transmitted or received, subject to the limitations set out in Exhibit A; (d) modifications which increase the amount of power which is transmitted or received; (e) modifications to improve functionality or efficiency or add or improve features; and (f) modifications required to attain regulatory approvals, including, but not limited to, FCC approval; provided, however, that "Product Updates" will only include any of the foregoing developed by an acquirer or successor of ENERGOUS for a period of [***] after a Change of Control of ENERGOUS, and provided further that any Products incorporating Product Updates will be subject to separate terms and conditions to be agreed in good faith by the Parties, which terms and conditions will be no less favourable to DIALOG than those with respect to the Product to which the Product Update corresponds. 1.26 "Sale," "Sell" or "Sold" mean the sale, transfer, exchange or other disposition of Products, by DIALOG or any of its Affiliates to any customer or other third party, directly or indirectly through one or more tiers of distribution, for consideration that is recognized as revenue by DIALOG or its Affiliates according to applicable generally accepted accounting principles. 1.27 "Semiconductor Supplier" means any Person, other than DIALOG or its Affiliates, which primarily, or in its ordinary course of business, sells or distributes integrated circuits in packaged, die, multichip module or similar form. * Confidential Treatment Requested
Page 4
1.28 "Term" means the Initial Term and any and all Renewal Term(s) as set forth in Section 15.1 hereof. 1.29 "Third Party IP" means Intellectual Property Rights licensed from a third party relating to the Products. 1.30 "Tooling" means the physical Mask Sets, packaging fixtures, test fixtures, test programs, processes, software source code and any other physical tooling or program source code required for the manufacture, packaging, assembly and testing of the Products. 1.31 "Uncoupled Power Transfer Technology" means a family of wire-free technology defined by the AirFuel Alliance that provides power to devices at a distance, and that currently includes (i) RF, (ii) ultrasonic transduction, and (iii) Laser power beaming. Notwithstanding the foregoing, the meaning of Uncoupled Power Transfer Technology excludes technology which functions primarily for data transmission or direct- current-to-direct-current (DC-to-DC) power conversion. 2. LICENSE. 2.1 License Grant. Subject to the restrictions set out in Section 2.2, ENERGOUS hereby grants to DIALOG a non-exclusive (subject to Section 2.5), irrevocable, worldwide, sub-licensable (solely in accordance with Section 2.4), royalty-bearing license during the Term under all Product IP to: (a) repackage or have repackaged the Product Die into various package formats or layouts, and to integrate the Product Die into MCMs, which may incorporate DIALOG or third party intellectual property (such repackaged Product Die, MCMs and Products, are individually and/or collectively referred to as the "Licensed Products"); (b) have the Licensed Products manufactured, tested and packaged by Manufacturing Subcontractors; (c) Sell, offer for Sale, import, export and support the Licensed Products, including without limitation, providing system design, troubleshooting and failure analysis support for DIALOG's customers and their customers; (d) use and modify the Tooling and Documentation for the purposes of paragraphs (a) to (d) of this Section 2.1. 2.2 Excluded Applications. Until the earlier of (i) termination of ENERGOUS' exclusivity obligations to the Key Customer set forth in Exhibit F (the "Key Customer") existing as of the Effective Date with respect to the following applications, or (ii) [***] that incorporates ENERGOUS wireless charging technology, or (iii) [***] and subject to the exceptions set out in Section 2.3, DIALOG will not be permitted to Sell Licensed Products for use in the following applications (the "Excluded Applications"): (a) [***]; * Confidential Treatment Requested
Page 5
(b) [***]; (c) [***]; (d) [***]; and (e) [***] designed for use with any of the applications in paragraphs (a) to (d) of this Section 2.2. For the avoidance of doubt, DIALOG will be permitted to Sell Licensed Products for use in any or all of the Excluded Applications (A) at any time on or after [***] or, if earlier, (B) [***] that incorporates ENERGOUS wireless charging technology, or (C) upon the termination of ENERGOUS' exclusivity obligations to the Key Customer existing as of the Effective Date with respect to the above applications. 2.3 Exceptions to Excluded Applications. The following applications are exceptions to and excluded from the Excluded Applications (the "Permitted Applications"): (a) [***]; (b) [***]; (c) [***]; (d) [***]; (e) [***]; (f) [***]; (g) [***]; (h) [***]; (i) [***]; and (j) [***]. The fact that a [***] has [***] does not automatically preclude such device from falling under paragraphs (b), (c) and (d) of this Section 2.3 2.4 Sublicenses. DIALOG may sublicense the foregoing license rights to any of its Affiliates. DIALOG will be responsible for the observance and performance by all such Affiliates of all of DIALOG's obligations pursuant to this Agreement. DIALOG may sublicense the foregoing license rights to Manufacturing Subcontractors solely to the extent necessary and appropriate for them to manufacture, assemble, test and provide support for the Products. DIALOG may not sublicense the foregoing license rights to any other third party without ENERGOUS' prior written consent. * Confidential Treatment Requested
Page 6
2.5 Exclusivity. (a) Subject to paragraph (b) of this Section 2.5, ENERGOUS will not, and will not enable any Semiconductor Supplier, to manufacture, have manufactured, offer for sale, sell, import or export the Products or Product Die in commercial volumes, except a Semiconductor Supplier to the Key Customer for use in the Excluded Applications. (b) ENERGOUS will use its diligent, good faith efforts to promote DIALOG as the preferred supplier of Products and Product Die. However, ENERGOUS is allowed to engage with a Semiconductor Supplier to supply comparable products or product die to a customer if either (i) the customer which has not been engaged with DIALOG with respect to such product or product die notifies ENERGOUS or DIALOG in writing by an authorized officer of the customer that it does not want to use DIALOG or a DIALOG Affiliate as a supplier of such product or product die; or (ii) if DIALOG has been engaged with the customer, the customer notifies ENERGOUS or DIALOG in writing prior to commencement of the Design-In Phase that it does not want to use DIALOG or a DIALOG Affiliate as a supplier of such product or product die. For clarity, ENERGOUS shall not intentionally supply Products, Product Die or comparable products or product die to customers directly or through distribution channels. 2.6 Branding. (a) Products Sold by DIALOG or its Affiliates may be branded as DIALOG products. All sales and marketing collateral, software tools and material for promotional activities relating to the Products will utilize ENERGOUS branding in a prominent basis as an equivalent partner with respect to such Products. (b) To the extent the parties engage in any co-branding activities, then, subject to the terms and conditions of this Agreement and during the Term, each party (in such capacity, "Licensor") hereby grants to the other party (in such capacity, "Licensee") a non-exclusive, non- transferable, worldwide right and license (without the right to sublicense), under Licensor's Intellectual Property Rights in Licensor's Marks, to use those Marks of Licensor set forth in Exhibit D solely in connection with the marketing, sale and distribution of such co-branded Products in accordance with this Agreement. (c) Use of Licensor's Marks will be subject to the following terms and conditions: (i) all goodwill generated by use of Licensor's Marks by Licensee will inure to the benefit of Licensor; (ii) Licensee will use Licensor's Marks only in such forms and with such graphics as authorized by Licensor; and (iii) Licensee will identify Licensor's Marks as being owned by Licensor and will (A) cause the symbol "®" to appear adjacent to and slightly above any registered Licensor Mark, or (B) alternatively, for any Licensor Marks that are not registered, the symbol "TM" or "SM", as applicable. 2.7 No Other Rights. Except for the rights and licenses expressly granted in this Agreement, no other right is granted, no other use is permitted and all other rights are expressly reserved.
Page 7
3. SOURCING. 3.1 Product Manufacture. Concurrent with or before execution of this Agreement, and substantially in the form attached as Exhibit C, ENERGOUS will provide written authorization to its Manufacturing Subcontractors to confirm DIALOG's and, if applicable, DIALOG's Affiliates' rights to procure the Licensed Products and related services directly from such Manufacturing Subcontractors utilizing ENERGOUS' Tooling and any associated manufacturing resources. DIALOG and its sublicensed Affiliates may directly contract with the Manufacturing Subcontractors for the manufacture and supply of Licensed Products under terms and conditions that DIALOG or such Affiliates may directly negotiate with such third parties. 3.2 Additional Manufacturing Subcontractors. DIALOG at its sole discretion may qualify and establish an alternative source to some or all of ENERGOUS' Manufacturing Subcontractors for the manufacturing of the Licensed Products and ENERGOUS will provide its written authorization thereof if requested by DIALOG. 3.3 Tooling. Subject to ENERGOUS' rights in the Product IP and any Third Party IP (including, without limitation, that of any Manufacturing Subcontractors), each party will own all right, title and interest in the physical Tooling procured or generated by that party for the manufacturing, testing and packaging of the Licensed Products. For the avoidance of doubt, as between the parties, ENERGOUS will also continue to own all right, title and interest in and to the firmware, DSP code and GUI software embedded in the Products, including all Intellectual Property Rights embodied therein. Upon the termination of DIALOG's right to manufacture the Licensed Products following any expiration or termination of the Agreement or any Wind Down Period or Continuing Obligation period, as applicable, then all right, title and interest in the Tooling will automatically transfer to ENERGOUS subject to any Third Party IP, and DIALOG will, at ENERGOUS' option, either sell any Tooling in its possession to ENERGOUS at cost or destroy the Tooling and certify in writing as to same. 4. PRODUCT COMMERCIALIZATION. 4.1 Commercialization Plan. (a) Exhibit E hereto sets out the plan for the commercialization of the Licensed Products (the "Commercialization Plan"). The Commercialization Plan sets forth the parties' respective rights and obligations with respect to commercial and technical activities to be performed to maximize potential Sales of Licensed Products. The Commercialization Plan will be reviewed and (if necessary) updated by the parties on a quarterly basis during the Term. (b) Each party will appoint (and notify the other party of the name of) a member of their management team who will serve as that party's primary contact for all matters related to this Agreement (each, a "Liaison"), including resolution of issues that may arise under this Agreement. Each party may replace its Liaison at any time by notice in writing to the other party. (c) The Commercialization Plan includes a go-to-market plan. ENERGOUS will provide commercially reasonable sales training, material and support to DIALOG's global application, sales and marketing teams and customers, including the support set out in Section 4.3.
Page 8
(d) ENERGOUS will also support DIALOG with an operations and quality plan, which will set forth information relating to quality matters, including, but not limited to, testing, yield management, RMA process, failure analysis/corrective action procedure, ECN/PCN process and detailed agreement on mutual rights and responsibilities with respect to any quality issues or warranty claims (hereinafter "Quality Plan"). Both parties will work in good faith to finalize and implement the Quality Plan within 90 days after the Effective Date of this Agreement. DIALOG will be responsible for its own frontline quality function and corrective actions, with technical input from ENERGOUS as required. (e) The parties may promote the relationship with marketing initiatives and also agree to engage in joint marketing communication activities related to the relationship described in this Agreement or to the promotion of the Licensed Products, as set forth in the Commercialization Plan or otherwise mutually agreed between the parties from time to time. 4.2 Commercialization Meetings. The parties will meet regularly, but at least once each month during the Term, either in person or by telephone, video or internet conference call, to share technical and commercial information as reasonably required to facilitate the parties' exercise of their respective rights and performance of their respective obligations under this Agreement. The information shared by the parties will include, but is not limited to (a) market and competitive dynamic updates, (b) activities and progress updates at DIALOG's customers, (c) technical review and feedback from customers, (d) non-binding 12 month rolling Sales and Royalty and Service Fee forecasts for the Licensed Products, (e) initiatives to boost sales potential for the Licensed Products. Customer information shared will be within the limits allowed by any non-disclosure agreements DIALOG may have entered into with such customers. 4.3 Technical Support. ENERGOUS will support DIALOG's or its Affiliates' engineers and, in some cases and at DIALOG's request, the customer directly in providing standard design-in support (including antenna design support) for customers' products. If the customer requires unique or custom engineering services (i.e., support and services not limited to those with general application to Product customers), then ENERGOUS will contract directly with such customer for the provision of such services. ENERGOUS will provide DIALOG with any and all information that is necessary or useful to support its authorized manufacture, testing, marketing, Sale, troubleshooting, compatibility analysis, performance tuning, failure analysis, and other support of the Licensed Products, including the Documentation and any updates thereto or revisions thereof which are reasonably necessary or appropriate to provide technical support for the Products to DIALOG customers. ENERGOUS receives the Service Fee for providing the support described in this Section 4.3 to DIALOG and its customers during the Term. In the event the Technical Support provided by ENERGOUS falls below a mutually-agreed upon service level that is common to the semiconductor industry or reasonably requested by DIALOG's customers, and after failure by ENERGOUS to address such deficiency within a twenty (20) day notice period, DIALOG may suspend the payment of Service Fees until such service level is provided. Furthermore, in the event ENERGOUS fails to meet its obligations as set forth in the Quality Plan, and after failure by ENERGOUS to address such deficiency within a thirty (30) day notice period, DIALOG may suspend the payment of Service Fees until such obligations are met.
Page 9
5. PRODUCT DEVELOPMENT AND PRODUCT UPDATES. ENERGOUS will have control and authority over the design and development of the Products, including without limitation, developing and implementing all Product Updates. ENERGOUS reserves the right to implement Product Updates at any time in its sole discretion. The parties will consult each other on the perceived product needs of the market and DIALOG's customers and how best to respond to such needs. DIALOG may suggest Product Updates to ENERGOUS provided, but all the development of Product Updates will be at ENERGOUS' sole discretion. ENERGOUS will share its relevant product roadmaps from time to time to maximize collaboration opportunities. 6. INTELLECTUAL PROPERTY OWNERSHIP. 6.1 Product IP. ENERGOUS retains right, title and interest in and to the Product IP, ENERGOUS' Marks and ENERGOUS' Confidential Information, including all Intellectual Property Rights embodied therein. No transfer or grant is made hereunder by ENERGOUS of any of these rights or any of its other rights, whether by implication, estoppel or otherwise, other than the limited rights and licenses expressly granted by ENERGOUS in this Agreement, and all such other rights are hereby reserved. 6.2 DIALOG Intellectual Property. DIALOG retains rights, title and interest in and to DIALOG's Marks and DIALOG's Confidential Information, including all Intellectual Property Rights embodied therein. No transfer or grant is made hereunder by DIALOG of any of these rights or any of its other rights, whether by implication, estoppel or otherwise, other than the limited rights and licenses expressly granted by DIALOG in this Agreement and all such other rights are hereby reserved. 7. PRODUCT SALES. 7.1 Sales. Subject to the terms and conditions of this Agreement, and except as set forth in the Commercialization Plan or otherwise agreed in writing between the parties, DIALOG will market and Sell the Licensed Products as authorized under this Agreement. DIALOG will independently manage and process its own forecasting, operations and order management. 7.2 Discontinuation of Sale of Products. If DIALOG decides to discontinue Sales of any Product, it will notify ENERGOUS at least [***] prior to such discontinuance, and following such notification, the exclusivity rights, if any, associated with that Product will cease; provided, however, this provision will not apply in the event that DIALOG continues Sales of Product Updates, repackaged Product Dies or MCMs. 7.3 Supply of Products to ENERGOUS. DIALOG will provide 1000 samples of each Product free of charge to ENERGOUS for the purposes of evaluation and demonstration. For additional volumes required by ENERGOUS, DIALOG will sell to ENERGOUS on a reasonable cost plus basis for the purposes of evaluation and demonstration. These samples are provided as is, are not intended for resale by ENERGOUS, and no indemnification or other warranties from DIALOG will apply. * Confidential Treatment Requested
Page 10
8. OTHER PRODUCTS. 8.1 New Products. In the event that ENERGOUS develops New Product, ENERGOUS will provide DIALOG with written notice describing the New Product before marketing, selling or distributing the New Product with or to any third party. Upon receipt of such notice, DIALOG will have [***] to notify ENERGOUS in writing that it desires to add such New Product as Product under this Agreement. If DIALOG provides such a notice, for a period of [***] following ENERGOUS' receipt of such notice, ENERGOUS and DIALOG will negotiate in good faith the terms pursuant to which such New Product will be added as a Product to this Agreement. ENERGOUS may not negotiate with any third party the rights to market, sell or distribute any New Product until the earliest to occur of the following (a) DIALOG does not provide ENERGOUS with notice that it desires to add such New Product to this Agreement within the above-described [***] period, (b) ENERGOUS and DIALOG do not reach mutually agreeable terms for adding such New Product to this Agreement during the [***] negotiation period or (c) DIALOG provides ENERGOUS with written notice that it does not wish to negotiate with respect to such New Product. For clarity, after any of the events described in the foregoing subsections (a), (b) or (c) occurs, the New Product will not be covered under this Agreement, and ENERGOUS will be free to manufacture, market, sell, distribute and otherwise exploit such New Product as it deems fit in its sole discretion, including in collaboration with or through one or more third parties. 8.2 No Competing Products. (a) Until expiration or earlier termination of the Agreement, DIALOG agrees that it and its Affiliates will not, without ENERGOUS' written approval, intentionally sell, distribute or work with any third party to develop products incorporating any Uncoupled Power Transfer Technology other than Licensed Products; provided, however, that DIALOG shall not be under any such restrictions in relation to services or products it provides to the Key Customer in the event the Key Customer terminates its agreement with ENERGOUS. (b) In the event that ENERGOUS does not receive Federal Communications Commission approval of any Licensed Product for power transmission [***] by the [***], (i) ENERGOUS may provide written notice to DIALOG which references this Section 8.2(b) and indicates ENERGOUS' intention to enable one or more Semiconductor Suppliers to supply Products for [***]; and (ii) DIALOG may provide written notice to ENERGOUS which references this Section 8.2(b) and indicates DIALOG's intention to sell, distribute or work with one or more third parties to develop products incorporating Uncoupled Power Transfer Technology for [***]. [***] following the date such notice is given pursuant to Section 20.1, the restrictions in Section 8.2(a) shall no longer apply to DIALOG for Uncoupled Power Transfer Technology in [***] and the restrictions relating to enabling a Semiconductor Supplier in Section 2.5(a) shall no longer apply to ENERGOUS for Products or Product Die in [***]. (c) In the event that ENERGOUS does not receive Federal Communications Commission approval of any Licensed Product for power transmission in [***] by the [***], (i) ENERGOUS may provide written notice to DIALOG which references this Section 8.2(c) and indicates ENERGOUS' intention to enable one or more Semiconductor Suppliers to supply Products for [***]; and (ii) DIALOG may provide written notice to ENERGOUS which references this Section 8.2(c) and indicates DIALOG's intention to sell, distribute or work with one or more third parties to develop products incorporating Uncoupled Power Transfer Technology for [***]. [***] following the date such notice is given pursuant to Section 20.1, the restrictions in Section 8.2(a) shall no longer apply to DIALOG for Uncoupled Power Transfer Technology in [***] and the restrictions relating to enabling a Semiconductor Supplier in Section 2.5(a) shall no longer apply to ENERGOUS for Products or Product Die in [***]. * Confidential Treatment Requested
Page 11
9. ROYALTIES AND SERVICE FEES. 9.1 Royalties. DIALOG will pay ENERGOUS the Royalties set forth in Exhibit B. For clarity, DIALOG will be responsible for paying to ENERGOUS any Royalties payable hereunder as a result of its Affiliates' Licensed Product Sales. 9.2 Service Fee. Subject to Section 4.3, DIALOG will pay ENERGOUS the Service Fees set forth in Exhibit B. For clarity, subject to Section 4.3, DIALOG will be responsible for paying to ENERGOUS any Service Fees payable hereunder for services provided by ENERGOUS hereunder to DIALOG's Affiliates or any of DIALOG's or its Affiliates' customers. 9.3 Payment. Payments of Royalties and Service Fees will be due on a calendar quarterly basis, within [***] days after the end of the calendar quarter in which the applicable Licensed Products were Sold or services were rendered. From the date a payment is due, unless otherwise agreed, any late payment will accrue a late payment fee of [***] per month, or the highest interest rate permitted by law, whichever is less. 9.4 Reports. Each payment made hereunder will be accompanied by a report detailing (a) the total number of units, on a product-by- product basis, of the Licensed Products Sold during the previous calendar quarter, (b) DIALOG's and its Affiliates' Net Sales attributable to such Licensed Product units during such calendar quarter, and (c) reasonable details regarding the calculation of the quarterly Royalty payment and Service Fee. Such information will be maintained in strict confidence by ENERGOUS under Section 10 of this Agreement. 9.5 Books. With respect to its exercise of the rights and licenses granted in, and payment obligations under, this Agreement, DIALOG and its Affiliates will keep accurate books and other records, including but not limited to supporting documentation for the Royalties and Service Fees paid hereunder (the "Records"). These Records will be maintained for a period of at least three (3) years from the date of the related payment ("Record Retention Period"), notwithstanding any termination of expiration of this Agreement. 9.6 Audit Rights. During the Record Retention Period, ENERGOUS may appoint a mutually agreed independent, internationally recognized third-party certified auditor who will have the right to inspect and copy the Records upon reasonable prior notice, and DIALOG will (and will cause its Affiliates to) allow necessary access including, as applicable, to its premises where such Records are located. ENERGOUS may exercise such right to this independent-third party audit no more than one time per calendar year and each such audit will be conducted during normal business hours. Such audit may also not interfere with DIALOG's or its Affliates' quarterly closing of its books. In the event that such audit reveals an underpayment of Royalties or Service Fees owed by DIALOG, DIALOG will promptly pay ENERGOUS the amount of the underpayment. If such underpayment is in excess of [***] of the Royalties or Service Fee due for the period audited, DIALOG will also reimburse ENERGOUS for its reasonable, out-of-pocket cost of such audit. In the event that such audit reveals an overpayment of Royalties or Service Fees owed by DIALOG, ENERGOUS will promptly pay DIALOG the amount of the overpayment. * Confidential Treatment Requested
Page 12
9.7 Taxes. Each party will be responsible to collect, bear and pay any and all taxes levied or based upon the party's sale of the Products, Product Die or Licensed Products, including, all sales, use, value added, withholding or similar taxes. In the event that the government of a country imposes any income taxes on payments made by a party to the other hereunder and requires a party to withhold such tax from such payments, such party may deduct such tax from such payments. Each party will be responsible for its own banking costs relating to the receipt of payments of Royalties and Service Fees and any other monies payable to it in connection with this Agreement. 9.8 Payment Currency. All payments due under this Agreement will be payable in U.S. Dollars. With respect to Net Sales invoiced in a currency other than U.S. Dollars, the Net Sales will be expressed in the domestic currency of the entity making the Sale, together with the U.S. Dollar equivalent, calculated using the conversion rate existing in the United States (as reported in the Wall Street Journal) on the last working day of each month of the calendar quarter in which the Net Sales were made. Such payments will be without deduction of exchange, collection or other charges. 10. CONFIDENTIALITY. 10.1 Scope. The term "Confidential Information" means all financial, business and technical information disclosed by or on behalf of a party in relation to this Agreement (whether tangible or intangible, and including all copies, analyses and derivatives thereof), that is marked or otherwise identified as proprietary or confidential at the time of disclosure, or which by its nature would be understood by a reasonable person to be proprietary or confidential, including all copies, abstracts, summaries, analyses and derivatives thereof. Confidential Information does not include information the receiving party can demonstrate (a) was rightfully furnished to it without restriction by a third party without breach of any obligation to the disclosing party, (b) is generally available to the public without breach of this Agreement, (c) was available to or already in the possession or control of the receiving party on a non-confidential basis before receipt from the disclosing party or (d) is independently developed by it or its employees without reliance on such information. Information associated with DIALOG's quarterly Royalty or Service Fee disclosures is Confidential Information of DIALOG. 10.2 Non-Disclosure. The receiving party agrees (a) not to copy or use the disclosing party's Confidential Information except and only for the purposes contemplated by this Agreement, (b) to maintain it as confidential, and exercise reasonable precautions to prevent unauthorized access, use and disclosure, (c) not to disclose it to any third party other than the receiving party's employees and contractors who have a need to know for the permitted purpose and who are bound by obligations that are at least as protective as the restrictions in this Agreement and (d) not to export or re-export in violation of U.S. or other export control laws or regulations any such Confidential Information or product thereof. Each party will bear the responsibility for any breach of this Section 10 by its and its Affiliates' employees and contractors. Upon any termination of this Agreement or, in the event of any Wind Down Period or Continuing Obligation period, upon the expiration of such period, and within fifteen (15) days after request by the disclosing party, each receiving party will return the Confidential Information of the other or destroy such Confidential Information and all copies of it and all information, records and materials developed therefrom, except that the recipient may retain one copy for archival purposes to ensure compliance with the provisions of this Agreement, and nothing contained herein will require the erasure, deletion, alteration or destruction of any Confidential Information required to be retained for legal or regulatory purposes or stored on back-up tapes or other back-up media or archiving systems made in the ordinary course of business, subject in each case to the confidentiality obligations set forth herein. Each party may only disclose the general nature, but not the specific terms, of this Agreement without the prior consent of the other party; provided, however, either party may provide a copy of this Agreement or otherwise disclose its terms on a confidential basis in connection with any legal or regulatory requirement, financing transaction or due diligence inquiry. For clarity, in the event that use, disclosure or retention of any Confidential Information is required in order for DIALOG to exercise the license granted in Section 2, this Section 10 will not be deemed to prevent such use, disclosure or retention.
Page 13
10.3 Required Disclosure. Nothing herein will prevent a receiving party from disclosing all or part of the other's Confidential Information as necessary pursuant to court order, the lawful requirement of a governmental agency or when disclosure is required by operation of law (including disclosures pursuant to applicable securities laws or regulations thereunder); provided, that prior to any such disclosure, the receiving party will use reasonable efforts to (a) promptly notify the disclosing party in writing of such requirement to disclose, and (b) cooperate fully with the disclosing party in protecting against or minimizing any such disclosure or obtaining a protective order. 11. REPRESENTATIONS AND WARRANTIES; DISCLAIMERS. 11.1 Mutual Representations and Warranties. ENERGOUS and DIALOG hereby each represent and warrant to the other that as of the Effective Date: (a) it is a duly and validly organized and existing corporation in good standing under the laws of the state or country of its incorporation, as applicable, and that it is legally qualified to do business in each jurisdiction in which this Agreement may be performed and the performance of its activities hereunder requires such qualification; (b) the performance of this Agreement and the consummation of the transactions contemplated herein will not result in any breach or violation of any terms or provisions of, or constitute a default under, its certificate of incorporation or by-laws or other organizational documents, or any material agreement or instrument to which it is a party, by which it is bound, or to which any of its property is subject; (c) all requisite corporate action has been taken for the due authorization, execution, delivery and performance of this Agreement by it, and this Agreement constitutes a legally binding obligation, enforceable against such party in accordance with its terms, except insofar as enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally; and
Page 14
(d) it is not a party to any litigation relating to, or that could reasonably be expected to affect, its ability to perform its obligations under this Agreement. 11.2 Product Warranty. (a) ENERGOUS warrants that (i) when manufactured in accordance with the Approved Production Specifications, and as implemented in a suitable circuit application in accordance with the Product Specifications, the Products and Product Die will conform to the Product Specifications and will be free from defects that could have been avoided in their design; (ii) the Products, any constituent parts or functionality thereof, the Documentation and the Deposit Materials do not infringe any third party's Intellectual Property Rights; (iii) it did not misappropriate any third party's trade secrets in the development of the Products, any constituent parts or functionality thereof, the Documentation or the Deposit Materials; and (iv) when delivered (including any software updates if any), no Product will contain any viruses, "Trojan horses" or other harmful code. The above warranties are valid for a period of [***] from the date of shipment of any Licensed Product to any customer. (b) The warranty contained in Section 11.2(a) does not apply to the extent any Product is operated in a manner other than that specified by the Product Specifications, is treated with abuse, negligence or other improper treatment (including, without limitation, use outside the device maximum ratings, package MSL (moisture sensitivity level) guidelines or environmental limits as may be set forth in the Product Specifications), or is defective as a result of any materials or workmanship of the Manufacturing Subcontractors or failure of the Manufacturing Subcontractors to manufacture the Product according to Approved Production Specifications. As such, any warranty claims due to defects in build, materials or workmanship will be directed to the Manufacturing Subcontractors as part of that contract between DIALOG or, if applicable, its Affiliate and such parties. (c) With the exception of the warranties in Section 11.2(a)(ii) (third party IP infringement) and Section 11.2(a)(iii) (misappropriation of third party trade secrets) related to any Product Die, the warranties in this Section 11.2 do not apply to MCMs or repackaged Product Die developed by or for DIALOG or its Affiliates. (d) In the event any warranty claim is due to or arises from an Epidemic Defect, ENERGOUS will be responsible for all costs and expenses directly incurred by DIALOG or its Affiliates or their respective customers as a result of reasonable inspection, servicing, repairs, replacements, recall notices, recalls and responses with respect thereto, provided that ENERGOUS' aggregate liability to DIALOG and its Affiliates and their respective customers under this paragraph (d) will not exceed [***] per occurrence of an Epidemic Defect. Each party will immediately notify the other upon becoming aware of the circumstance that could reasonably be construed to be an indication of an Epidemic Defect, and, in any event, will notify the other party immediately upon becoming aware of the existence of an Epidemic Defect. ENERGOUS and DIALOG will expeditiously work together in good faith to determine a technical resolution of the Epidemic Failure. ENERGOUS agrees to make all commercially reasonable efforts to promptly diagnose the Epidemic Failure's root cause, provide DIALOG a report detailing the results of ENERGOUS' investigation and plan an effective workaround and a permanent solution. ENERGOUS will consult with DIALOG on any proposed workarounds and other solutions. * Confidential Treatment Requested
Page 15
11.3 Infringement of Intellectual Property Rights. If any of the Products, Product Die, Documentation or Deposit Materials is, or in ENERGOUS' or DIALOG's opinion is likely to become, the subject of an Intellectual Property Rights infringement claim, and as a result DIALOG or any of its Affiliates or their respective customers are enjoined, or in ENERGOUS' or DIALOG's opinion are likely to be enjoined, from using the Products, Product Die, Documentation or Deposit Materials, ENERGOUS will use its best efforts to: (a) procure for DIALOG and its Affiliates and their respective customers the right to continue to use the Products, Product Die, Documentation or Deposit Materials, as applicable; or, but only in the event that, despite ENERGOUS' best efforts to do so, ENERGOUS is unable to so procure such right, (b) replace or modify the Products, Product Die, Documentation or Deposit Materials, as applicable, to make them non-infringing, provided that the replaced or modified Products, Product Die, Documentation and Deposit Materials remain substantially similar in performance to the infringing Products, Product Die, Documentation and Deposit Materials. If none of the foregoing alternatives is available within a commercially reasonable time period, DIALOG may terminate this Agreement with immediate effect, provided that it will give ENERGOUS prompt prior written notice thereof. Nothing in this Section 11.3 is intended to limit DIALOG's rights to indemnification under Section 12 in connection with any such infringement claim. 11.4 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 11, THE PRODUCTS, THE PRODUCT IP, TOOLING, DOCUMENTATION, DEPOSIT MATERIALS, CONFIDENTIAL INFORMATION AND ALL LICENSES, SERVICES AND OTHER ITEMS PROVIDED BY A PARTY TO THE OTHER PARTY HEREUNDER ARE PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND. EXCEPT FOR THOSE WARRANTIES EXPRESSLY PROVIDED HEREIN, EACH PARTY SPECIFICALLY DISCLAIMS ALL WARRANTIES, WHETHER ORAL OR WRITTEN, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND ALL WARRANTIES ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE IN TRADE. 12. INDEMNIFICATION. 12.1 Indemnification by Energous. Subject to Section 12.2, ENERGOUS agrees to indemnify, hold harmless and, in the case of any third party claims, defend DIALOG and its Affiliates and each of their respective directors, officers, employees, contractors, agents, distributors and customers (collectively, "DIALOG Indemnitees") from and against and in respect of any and all alleged or actual demands, claims, actions, causes of action, suits or proceedings, assessments, awarded damages (including punitive damages), liabilities, interest and penalties, costs and expenses (including, without limitation, court costs and reasonable legal fees and disbursements in connection therewith) (each, a "Claim") to the extent resulting from, arising out of, relating to, or imposed upon or incurred by any DIALOG Indemnitees by reason of (a) death or bodily injury caused by or resulting from use of the Products, (b) any breach of any representation or warranty made by ENERGOUS hereunder or to any third party in relation to the Products or Product Die, (c) the infringement or misappropriation of any third party Intellectual Property Rights in relation to the Products or Product Die, (d) the infringement or misappropriation of any third party Intellectual Property Rights as a result of DIALOG's or its Affiliates' exercise of rights in accordance with the terms of this Agreement, including, but not limited to, the Manufacturing Subcontractors' manufacture of the Products on their behalf, provided that the Products are manufactured in strict compliance with the Product Specifications and Approved Production Specifications and only to the extent such Claims arise due to compliance with the Product Specifications and/or the Approved Production Specifications or use of the Tooling provided by ENERGOUS hereunder, (e) the infringement by DIALOG of any third party Marks rights as a result of its authorized use of the ENERGOUS Marks, (f) any failure by ENERGOUS to comply with applicable laws, regulations and standards, or (g) ENERGOUS' negligence, intentional misconduct or fraud.
Page 16
12.2 Exclusion. Notwithstanding the provisions of Section 12.1, ENERGOUS will not be liable to the extent any Claim results from (a) modification of the Products by DIALOG, its Affiliates and/or any third party (including the Manufacturing Subcontractors), or combination of the Products with other products, offered by DIALOG, its Affiliates and/or any third party, (b) acts or omissions of any Manufacturing Subcontractor (except to the extent such Claims are due to the infringement or misappropriation of third party Intellectual Property Rights arising from such Manufacturing Subcontractor's manufacturing of the Products on behalf of DIALOG in strict compliance with the Product Specifications, Approved Production Specifications and Tooling provided by ENERGOUS), (c) failure of any DIALOG Indemnitee to comply with applicable laws, regulations and standards, or (d) negligence, intentional misconduct or fraud of any DIALOG Indemnitee. For clarification, if any of the foregoing is not the cause, in whole or in part of the Claim, ENERGOUS is not relieved of its obligations under Section 12.1. 12.3 Conditions. DIALOG must notify ENERGOUS within thirty (30) business days after receipt of actual notice of any Claim by a third party for which it seeks indemnification; provided, however, any failure or delay in notice will not relieve ENERGOUS of its obligations hereunder except to the extent that ENERGOUS is actually prejudiced by such failure to notify. ENERGOUS will have control and authority with respect to the defense, litigation, compromise or settlement of such third party Claim (except to the extent that any settlement involves any commitments, responsibilities or obligations on the part of DIALOG, in which case such settlement will require the prior written consent of DIALOG, which consent will not be unreasonably delayed, conditioned or withheld). DIALOG will cooperate and provide assistance and information as may reasonably be required by ENERGOUS (but at ENERGOUS' expense) in connection therewith. DIALOG reserves the right to participate at its own cost in any third party proceedings with counsel of its own choosing. In the event that ENERGOUS does not respond to any third party Claim or does not sufficiently defend such third party Claim, DIALOG, acting reasonably, may step in and take over the defense of such Claim. Costs incurred in the settlement of any Claim, including, but not limited to, reasonable legal expenses, may be off set against future Royalties and Service Fees payable.
Page 17
12.4 Insurance. Each party will maintain, during the Term and for three (3) years thereafter, such comprehensive general liability insurance (including without limitation, products liability) as will adequately protect it against its potential liabilities under this Agreement, in amounts customary in the semiconductor industry for similar services and products. Each party will, at the other party's request, provide to the other party a certificate of insurance evidencing the foregoing insurance coverage. 13. LIMITATION OF LIABILITY. 13.1 EXCEPT IN THE CASE OF (a) ANY BREACH OF SECTION 10 (CONFIDENTIALITY), (b) THE PARTIES' OBLIGATIONS UNDER SECTION 12 (INDEMNIFICATION), (c) A PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (d) LIABILITY ARISING FROM EPIDEMIC DEFECTS (WHICH WILL BE SUBJECT TO THE LIMITATION SET FORTH IN SECTION 11.2(d)), IN NO EVENT WILL EITHER PARTY BE LIABLE UNDER THIS AGREEMENT, REGARDLESS OF THE FORM OF ANY CLAIM OR ACTION (WHETHER IN CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE), FOR ANY (i) INDIRECT, PUNITIVE, INCIDENTAL, RELIANCE, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF BUSINESS, REVENUES, PROFITS OR GOODWILL, OR (ii) AGGREGATE DAMAGES IN EXCESS OF [***]. IN ADDITION, ENERGOUS' LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER SECTION 12.1(b) SHALL IN NO EVENT EXCEED [***]. THESE LIMITATIONS ARE INDEPENDENT FROM ALL OTHER PROVISIONS OF THIS AGREEMENT AND WILL APPLY NOTWITHSTANDING THE FAILURE OF ANY REMEDY PROVIDED HEREIN. 14. COMPLIANCE WITH LAWS. Each party will comply with all law and regulations applicable such party's performance under this Agreement, including but not limited to U.S. Export Administration laws and regulations and any other export, import and re-export control laws applicable to such party. The parties will refrain from exporting or re-exporting the Products or Product IP or any technical data or other materials received from each other, or the direct product of any of these, to any country, individual or organization proscribed by the United States government, unless properly authorized by the appropriate agencies of the United States government. Each party will provide all information under its control which is necessary or useful for the other party to ship or receive the Products, including, but not limited to, U.S. Export Control Classification Numbers (ECCNs), U.S. Customs Certificates of Delivery, Certificates of Origin and U.S. Federal Communications Commission identifier, if applicable. Each party agrees that it will not act in any fashion or take any action in violation of any applicable anti-bribery or anti-corruption legislation in any jurisdiction in which it does business, which prohibits the offering, giving or promising to offer or give, directly or indirectly, money or anything of value to any official of a government, political party or instrumentality to assist it in obtaining or retaining business, including the U.S. Foreign Corrupt Practices Act or any comparable legislation in another country. * Confidential Treatment Requested
Page 18
15. TERM AND TERMINATION. 15.1 Term. This Agreement is effective on the Effective Date. Unless earlier terminated as provided herein, this Agreement continues in effect for an initial term of seven (7) years ("Initial Term") and will automatically renew for one or more annual periods after the Initial Term (each a "Renewal Term") unless either party gives notice of non-renewal at least one hundred eighty (180) days prior to the beginning of any Renewal Term. 15.2 Termination. (a) Mutual Termination Rights. Either party may, in addition to any other remedies available to it under this Agreement or at law or in equity, terminate this Agreement (or, in the event this Agreement has been previously terminated, the Wind Down Period, if any) immediately upon the issuance of written notice to the other party in the event that (i) the other party materially breaches a material provision of this Agreement, and fails to cure such breach within thirty (30) days, or (ii) the other party undergoes an Insolvency Event. (b) Termination By ENERGOUS. (i) If ENERGOUS is acquired by a third party, ENERGOUS' acquirer will have the right, for a period of [***] following closing of such acquisition, to terminate this Agreement upon written notice to DIALOG. (ii) ENERGOUS will have the right to terminate this Agreement immediately upon the issuance of written notice to DIALOG (A) if DIALOG undergoes a Change of Control involving a competitor of ENERGOUS (as reasonably determined by ENERGOUS), or (B) if DIALOG or any of its Affiliates acquires, whether directly or indirectly through a sale of assets or a Change of Control transaction or otherwise, any competitor of ENERGOUS. DIALOG will provide ENERGOUS with notice of any such Change of Control or acquisition within [***] after the closing thereof and ENERGOUS' right to terminate the Agreement will expire [***] after receipt of such notice. (iii) ENERGOUS may, at any time after the third anniversary of the Effective Date, terminate this Agreement with or without cause upon not less than one hundred and eighty (180) days prior written notice to DIALOG. (iv) ENERGOUS will have the right to terminate this Agreement, upon not less than [***] prior written notice to DIALOG, in the event that, following termination by the [***] of its agreement with ENERGOUS, DIALOG participates in or indicates its intention to participate in the development, design or manufacture of products incorporating Uncoupled Power Transfer Technology not provided by ENERGOUS to [***]. (c) Termination by DIALOG. (i) If DIALOG is acquired by a third party, DIALOG's acquirer will have the right, for a period of [***] following closing of such acquisition, to terminate this Agreement upon written notice to ENERGOUS. * Confidential Treatment Requested
Page 19
(ii) DIALOG may terminate this Agreement, immediately upon issuance of written notice to ENERGOUS in the event that: (A) DIALOG or its Affiliates fail to achieve a design-win pipeline with an annual projected sales value to DIALOG of at least [***] in the [***] after the availability of a Mass Production Qualified Product; or (B) the aggregate annual Net Sales of Products are below [***] by the [***] of the availability of a Mass Production Qualified Product, or below [***] by the [***] of the availability of a Mass Production Qualified Product, or below [***] by each [***] of the availability of a Mass Production Qualified Product during the remainder of the Term. (iii) DIALOG will have the right to terminate this Agreement immediately upon the issuance of written notice to ENERGOUS (A) if ENERGOUS undergoes a Change of Control involving a competitor of DIALOG, or (B) if ENERGOUS acquires, whether directly through a sale of assets or through a Change of Control transaction, any competitor of DIALOG (as reasonably determined by DIALOG). ENERGOUS will provide DIALOG with notice of any such Change of Control or acquisition within [***] after the closing thereof and DIALOG's right to terminate the Agreement will expire [***] after receipt of such notice. 15.3 Effect of Termination. Upon any termination or expiration of this Agreement, all rights, licenses (including any sublicenses granted by DIALOG) and obligations hereunder will cease, except that the provisions of Sections 6 (Intellectual Property Ownership), 9 (Royalties and Service Fees), 10 (Confidentiality), 11 (Representations and Warranties; Disclaimers), 12 (Indemnification), 13 (Limitation of Liability), 15.3 (Effect of Termination), 15.4 (Wind Down Period), 16 (Escrow), 18 (Non-Solicitation), 19 (Choice of Law and Dispute Resolution) and any provisions to give effect thereto, will survive such termination or expiration and remain in full force and effect in accordance with their terms. 15.4 Wind Down Period. (a) Notwithstanding any statement in Section 15.3 to the contrary, upon any termination or expiration of this Agreement and until the later to occur of (i) [***] from the Effective Date or (ii) [***] following the effective date of termination or expiration of this Agreement (the "Wind Down Period"), the parties' respective rights and obligations under Sections 2 (License), 3 (Sourcing), 7 (Product Sales), 9 (Royalties and Service Fees), 11 (Representations and Warranties; Disclaimers), 12 (Indemnification), 13 (Limitation of Liability), 14 (Compliance with Laws), 15.2 (Termination), 16 (Escrow) and all Exhibits hereto which are associated with any of the foregoing listed sections will remain in full force and effect as to (A) any Products or repackaged Product Die with respect to which DIALOG or any of its Affiliates has secured a design win at a customer prior to or within one (1) month after the start of the Wind Down Period, or (B) the sale of any MCMs which have been released for production at a foundry, provided, however, that DIALOG's license rights under Section 2.1 (including any sublicenses granted by DIALOG pursuant to Section 2.4) will be non-exclusive during the Wind Down Period. (b) If, at the time of notice of any termination of this Agreement, DIALOG or any of its Affiliates has a written supply contract with a customer that extends beyond the end of the Wind Down Period (a "Continuing Obligation"), DIALOG and/or its Affiliates may continue to Sell Licensed Products to such customer through the term of the Wind Down Period and for the remainder of the term of such Continuing Obligation, provided that in no event may DIALOG or its Affiliates Sell Licensed Products to such customer pursuant to this Section 15.4(b) for a period longer than [***] after the effective date of termination of this Agreement. In such event, the provisions of this Agreement that survive during the Wind Down Period will continue to survive for the remainder of the period of time that DIALOG is authorized to Sell Licensed Products to any customer in accordance with the foregoing sentence. The rights granted under this Section 15.4(b) will be conditioned upon DIALOG providing ENERGOUS a complete or redacted copy of the applicable supply contract demonstrating the existence of the Continuing Obligation as of the date of notice of termination or, if DIALOG or its Affiliate is prohibited from providing a copy of the contract by the confidentiality obligations set forth therein, a written certification from an officer of DIALOG attesting to the existence of the Continuing Obligation. * Confidential Treatment Requested
Page 20
16. ESCROW. 16.1 Escrow. ENERGOUS will at its expense, at DIALOG's written request during the Term and any Wind Down Period, enter into a three- party escrow deposit arrangement, in accordance with this Section 16, with a recognized escrow agent (the "Escrow Agent") of mutual agreement. ENERGOUS will keep the Deposit Materials in escrow and ensure on a quarterly basis that all the information relating to the Deposit Materials in escrow is current, including deposit of any Product Updates. 16.2 Release of Deposit Materials. In the event of any Insolvency Event and where the design files need to be accessed by DIALOG to fix an Epidemic Defect or other Product design or production issue impacting yield or quality ("Release Condition"), the Escrow Agent will, in accordance with the terms of the escrow agreement between the parties and the Escrow Agent (the "Escrow Agreement"), release the Deposit Materials to DIALOG. 16.3 License. ENERGOUS hereby grants DIALOG a non-exclusive, non-transferable (except as set forth in Section 2) license under the Product IP to use any of the Deposit Materials released from escrow for the purpose of fixing an Epidemic Defect or other Product design or production issue impacting yield or quality during the Term and, if applicable, any Wind Down Period or Continuing Obligation period, including, but not limited to, authorizing any third party subcontractor to manufacture and supply Products, provided, however, that DIALOG continues to make all Royalty payment owed to ENERGOUS (or the then-current owner of the Product IP) as provided in this Agreement. No Service Fees will be payable under this license. DIALOG agrees not to exercise such license until occurrence of a Release Condition, subject to the other restrictions set forth in this Section 16. Such license may be exercised by DIALOG only during the Term and any Wind Down Period or Continuing Obligation period and is subject to DIALOG's continued compliance with all of the other applicable terms and conditions of this Agreement during any such applicable period. All Deposit Materials will be deemed ENERGOUS' Confidential Information hereunder. DIALOG's license to possess and use the Deposit Materials does not include any right to disclose, market, sublicense or distribute the Deposit Materials to any third party other than its Affiliates and Manufacturing Subcontractors. 16.4 Rights in Bankruptcy. The licenses granted pursuant to this Agreement are license to rights in "intellectual property" (as that term is defined in Section 101 of the United States Bankruptcy Code) and governed by 11 USC Section 365(n). Accordingly, if a trustee in bankruptcy rejects the Escrow Agreement and/or this Agreement as executory contracts, then Company may elect to retain its rights under this Agreement in accordance with and subject to the provisions of 11 USC Section 365(n).
Page 21
17. PUBLICITY. 17.1 Publicity. Within 30 days of the Effective Date each party will issue a mutually agreed joint press release regarding the strategic cooperation for the supply of Products and the strategic cooperation between the parties. 18. NON-SOLICITATION. 18.1 Non-Solicitation. During the Term and for a [***], neither party will without the written consent of the other party (which may be granted or denied in its sole discretion) (a) directly or indirectly recruit or solicit for employment or for the provision of services any employee of the other party, (b) otherwise solicit, induce or influence any employee to leave their employment with the other party, or (c) attempt to do any of the foregoing; provided, however, that the foregoing will not apply to (y) any employee of the other party that responds to a public advertisement of employment opportunities or (z) any employee that was terminated without cause by the other party. ENERGOUS and DIALOG acknowledge and agree that the covenants in this Section 18 are reasonable and necessary to protect each of their trade secrets, Confidential Information and stable workforces. 19. CHOICE OF LAW AND DISPUTE RESOLUTION. 19.1 Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of California, exclusive of conflict of laws principles. 19.2 Dispute Resolution; Jurisdiction. Any dispute or claim arising out of or relating to this Agreement (including any matters regarding its existence, scope, validity, breach or termination, or any non-contractual obligations arising out of or related to it) that is not able to be resolved through negotiations will be submitted to arbitration in San Francisco, California, administered by the International Chamber of Commerce under its Rules of Arbitration. There will be one arbitrator. The language of the arbitration will be English. The award will be in writing, state the reasons for the award and be final and binding. Judgment on the award may be enforced in any court of competent jurisdiction. Except as may be required by law, the parties will preserve the confidentiality of all aspects of the arbitration. The arbitration will be the sole and exclusive forum for final resolution of any such dispute or claim, provided, however, that, because each party will have access to and become acquainted with Confidential Information of the other party, the unauthorized use or disclosure of which may cause irreparable harm and significant injury which may be difficult to ascertain and which may not be compensable by damages alone, the parties agree that the damaged party will have the right to seek an injunction, specific performance or other equitable relief without prejudice to any other rights and remedies that it may have for such unauthorized use or disclosure. Each party irrevocably waives all rights to a jury trial in any judicial proceeding permitted hereunder. For the avoidance of doubt, the validity, construction, and enforceability of this Agreement and the resolution of disputes arising out of and relating to this Agreement, will be governed solely by this Section 19. * Confidential Treatment Requested
Page 22
20. MISCELLANEOUS PROVISIONS. 20.1 Notices. All notices required or permitted under this Agreement will be in writing, reference this Agreement and be deemed given: (a) when delivered personally; or (b) when sent by electronic mail with electronic confirmation of receipt, provided that such notice is immediately confirmed as provided in (c) or (d) below; or (c) seven (7) days after having been sent by registered or certified mail,; or (d) two (2) days after deposit with a commercial courier service, with written verification of receipt. All communications will be sent to the addresses set forth below. Either party may change its address by giving notice pursuant to, and specifically referring to, this Section 20. If to ENERGOUS: Energous Corporation 3590 North First Street Suite 210 San Jose, California 95134 U.S.A. Attn: Brian Sereda, CFO
If to DIALOG: Dialog Semiconductor (UK) Ltd 100 Longwater Avenue Green Park Reading, RG2 6GP United Kingdom Attn: Legal Department 20.2 Relationship of Parties. ENERGOUS and DIALOG are independent business entities. Neither party nor its employees, consultants, contractors or agents are agents, employees, partners or joint venturers of the other party, nor do they have any authority to bind the other party by contract or otherwise to any obligation. The parties will not represent to the contrary, either expressly, implicitly, by appearance or otherwise. 20.3 Force Majeure. Except for obligations to pay amounts due under this Agreement, neither party will be liable for any failure or delay in its performance under this Agreement due to causes which are beyond its reasonable control, including, but not limited to, acts of God, acts of civil or military authority, fires, epidemics, floods, earthquakes, riots, wars, sabotage, labor shortages or disputes, and governmental actions; provided, however, that the affected party: (a) gives the other party written notice of such cause promptly, and in any event within fifteen (15) days of discovery thereof; and (b) uses its reasonable efforts to correct such failure or delay in its performance as soon as possible. The affected party's time for performance or cure under this Section 20.3 will be extended for a period equal to the duration of the cause. 20.4 Severability. If any provision of this Agreement is held to be invalid or unenforceable in any jurisdiction in which this Agreement is being performed, then: (a) such provision will be deleted from this Agreement in that jurisdiction to the extent of such invalidity or unenforceability without invalidating the remaining provisions of this Agreement, and any such unenforceability in that jurisdiction will not make that provision unenforceable in any other jurisdiction; and (b) the parties will agree on an alternative provision that best accomplishes the objectives of such provision, to the extent legally permissible in such jurisdiction.
Page 23
20.5 No Waiver. No waiver or consent in connection with or relating to this Agreement will bind either party unless in writing and signed by the party against which enforcement is sought. Waiver by either party of any default will not be deemed a waiver by such party of the same or any other default that may thereafter occur. 20.6 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be an original, but taken together constituting one and the same instrument. Execution of a facsimile copy (including PDF) will have the same force and effect as execution of an original, and a facsimile/electronic signature will be deemed an original and valid signature. 20.7 Headings and References. The headings and captions used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 20.8 Construction. The parties and their respective counsel have negotiated this Agreement. This Agreement will be fairly interpreted in accordance with its terms and without any strict construction in favor of or against either party. 20.9 Complete Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes and replaces all prior or contemporaneous understandings or agreements, written or oral, regarding such subject matter. No amendment to or modification of this Agreement will be binding unless in writing and signed by a duly authorized representative of both parties. 20.10 Assignment. This Agreement may not be assigned by either party without the express written consent of the other party, which approval will not be unreasonably withheld or delayed, except that either party may (without consent but with notice to the other party) assign this Agreement in its entirety to any successor in the event of a Change of Control of such party. 20.11 Notice of Merger or Acquisition. Until the date that this Agreement terminates or is terminated in accordance with Section 15 hereof, ENERGOUS agrees that, [***]. * Confidential Treatment Requested
Page 24
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date. ENERGOUS CORPORATION DIALOG SEMICONDUCTOR (UK) LTD By: /s/ Stephen R. Rizzore By: /s Mark Tyndall Name: Stephen R. Rizzore Name: Mark Tyndall Title: President and Chief Executive Officer Title: SVP Corporate Development and Strategy
Page 25
EXHIBIT A PRODUCTS Any ENERGOUS integrated circuit (IC) designed to receive power wirelessly and any ENERGOUS IC used in a wireless transmitter, including, but not limited to, the following Products (and any related Product Updates): [***] * Confidential Treatment Requested
Page 26
EXHIBIT B ROYALTIES AND SERVICE FEES Royalties and Service Fees payable by DIALOG and/or its Affiliates to ENERGOUS hereunder will be calculated on a Product by Product basis as defined herein. Margin Split: Combined Royalties and Service Fees shall equal [***]. Dialog will retain the remaining [***]. [***]. [***]. Notwithstanding any provision of the Agreement, no Royalties or Service Fees will be payable to ENERGOUS hereunder in connection with any Sale to any customer of prototype or sample Licensed Products [***]. * Confidential Treatment Requested
Page 27
EXHIBIT C Example of Letter of Authorization: Mask Set(s) Authorization for Third Party's Product(s) To whom it may concern Pursuant to a STRATEGIC ALLIANCE Agreement between Dialog Semiconductor (UK) Ltd and Energous Corporation dated November 6, 2016 (to which [Manufacturing Subcontractor] is not a party), we, Energous Corporation (Energous), hereby agree and authorize [Manufacturing Subcontractor], under the terms of this Letter of Authorization, to use the Mask Set(s) specified below for manufacturing products for the supply to the Third Party specified in paragraph 2 below only: 1. Mask Set(s) details: Mask Set(s) Product Type: Foundry Code: 2. Third Party details: Third Party's Name: Dialog Semiconductor [purchasing entity to be determined] Third Party's Address: Contact name of Third Party: 3. Volume of products The number of products to be manufactured with the Mask Set(s) will be unlimited, unless otherwise instructed by us below: Authorized Amount: [UNLIMITED] 4. Duration of Authorization The duration of this Letter of Authorization will be unlimited, unless otherwise instructed by us below: Duration of Authorization: [UNLIMITED] 5. Confidential Information Other than wafers for products specified under paragraph 1 above (which contain Energous designs), [Manufacturing Subcontractor] will not disclose to the Third Party any information which is proprietary or confidential to Energous.
Page 28
6. Reporting Upon Energous' request (but not more frequently than once per calendar year), [Manufacturing Subcontractor] will provide Energous with the accumulated wafer volumes ordered (and shipped) to the Third Party under this Letter of Authorization. By signing this Letter of Authorization, the Third Party authorizes [Manufacturing Subcontractor] to report to Energous accordingly. 8. Governing Law This Letter of Authorization will be governed by and construed in accordance with the laws of California, excluding its conflict of laws provisions, and be subject to the non-exclusive jurisdiction of the California courts. Very truly yours, Energous Incorporated Name: Title: Date: Agreed by Dialog Semiconductor (UK) Ltd Name: Title: Date: This Letter of Authorization is subject to the approval of the Manufacturing Subcontractors.
Page 29
EXHIBIT D LICENSED MARKS DIALOG LICENSED MARKS: Dialog Dialog Semiconductor ENERGOUS LICENSED MARKS: Energous WattUp Unleash your power Pending: [***] * Confidential Treatment Requested
Page 30
EXHIBIT E Commercialization plan Objective The Commercialization Plan sets forth the parties' respective rights and obligations with respect to commercial and technical activities to be performed to maximize potential Sales of Licensed Products. [***] Review O The Commercialization Plan will be reviewed and (if necessary) updated by the parties on a quarterly basis throughout the Term of the agreement. * Confidential Treatment Requested
Page 31
EXHIBIT F CUSTOMER: [***] * Confidential Treatment Requested
Page 32 [/INST] ```json
{<answer_start>
"answer": "DIALOG agrees not to exercise such license until occurrence of a Release Condition, subject to the other restrictions set forth in this Section 16."
<answer_end>
}
``` </s> | Exhibit 10.24 [***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. EXECUTION VERSION STRATEGIC ALLIANCE AGREEMENT
THIS STRATEGIC ALLIANCE AGREEMENT ("Agreement") is made and entered into as of November 6, 2016 (the "Effective Date") by and between Dialog Semiconductor (UK) Ltd., a corporation organized under the laws of England and Wales, having its principal office at 100 Longwater Avenue, Green Park, Reading, RG2 6GP, United Kingdom ("DIALOG") and Energous Corporation, a Delaware corporation, having its principal office at 3590 North First Street, Suite 210, San Jose, CA 95134 ("ENERGOUS"). WHEREAS DIALOG is a supplier of mixed-signal semiconductor products; WHEREAS ENERGOUS is a supplier of uncoupled wirefree charging systems, including antennas, semiconductors, firmware, software, algorithms, and sensors; WHEREAS concurrently with their execution of this Agreement, DIALOG and ENERGOUS are entering into a separate Securities Purchase Agreement, pursuant to which DIALOG will make an investment in ENERGOUS, and ENERGOUS will issue to DIALOG shares of its common stock and a warrant to purchase its common stock on the terms set forth therein. WHEREAS DIALOG and ENERGOUS desire to enter into a strategic relationship to distribute to the marketplace certain ENERGOUS products and technology and to potentially collaborate on further initiatives pursuant to the terms and conditions of this Agreement. NOW, THEREFORE, in consideration for the premises and mutual covenants contained herein, DIALOG and ENERGOUS hereby agree as follows: 1. DEFINITIONS. All capitalized terms used in this Agreement will have the meaning set out below, or if not defined below, the meaning as defined elsewhere in the Agreement. 1.1 "Affiliate" means any person or entity that controls, is controlled by or is under common control with the specified person or entity, but only so long as such control exists. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through ownership of voting securities, by contract or otherwise. 1.2 "Approved Production Specifications" means those materials, processes and workmanship specifications of Manufacturing Subcontractors as approved by ENERGOUS for the manufacture and production of the Products. 1.3 "Change of Control" means any transaction or series of transactions that results in (i) the consolidation or merger of the specified party ("Target") into or with any other corporation or corporations, (ii) the sale, conveyance or disposition of all or substantially all of the assets of the Target, (iii) the transfer of more than fifty percent (50%) of the voting power of the Target to any entity or entities not controlled by the Target, or (iv) any similar form of acquisition or any liquidation, dissolution or winding up of the Target or other transaction that results in the discontinuance of the Target's business; provided, however, that Change of Control will not include any transaction or series of transactions entered into primarily for equity financing purposes (including, without limitation, any private equity investment or any public offering of securities).
1.4 "Deposit Materials" means all chip level design databases, circuit schematics, test and characterization programs and associated documentation reasonably required to have Products manufactured, or to allow design bugs or Epidemic Defects to be fixed in the Product. 1.5 "Design-In Phase" means the phase in the sales cycle with a prospective customer for a Product that follows the customer's decision to move forward with the potential Product, during which chip samples are delivered to customer and the parties work together to design the evaluation board for in-system evaluation. 1.6 "Documentation" means all information that is necessary or useful to support DIALOG's authorized manufacture, testing, sale and support of the Products, including but not limited to Product Specifications, data sheets, application notes, application board gerber files/BOM, sales and marketing collateral, Product errata, test reports, characterization reports, software (e.g., firmware, GUI), test plans and yield data in connection with the manufacture and sale of Products, Approved Production Specifications, test and characterization programs and associated documentation reasonably required to have Products manufactured, assembled and tested, designs of all Tooling and all other items reasonably required for the manufacture of the Products. 1.7 "Epidemic Defects" means material defects of any Product resulting from a common root cause solely attributable to the Product Specifications or Approved Production Specifications and which results in returns (in accordance with the returns procedure mutually agreed between the parties in the Commercialization Plan) of more than [***] percent ([***]%) of the quantity of such Product manufactured in any [***] day period. Any number of material defects affecting any number of Products which result from a single common root cause or combination of causes and result in returns of more than [***] ([***]%) of such Products manufactured in any [***] day period will be treated as the occurrence of a single Epidemic Defect for purposes of this Agreement. 1.8 "Insolvency Event" means (a) without a successor, the specified party fails to function as a going concern or to operate in the ordinary course, or (b) other than in the case when the specified party is a debtor-in-possession and continuing to fulfill all its obligations under this Agreement, a receiver or trustee in bankruptcy is appointed for such party or its property, or such party makes a general assignment for the benefit of its creditors, or such party commences, or has commenced against it, proceedings under any bankruptcy, insolvency or debtor's relief law, in each case which proceedings are not dismissed within ninety (90) days. 1.9 "Intellectual Property Rights" means any and all Patent Rights, copyright rights, Marks rights (including all associated goodwill), mask work rights, trade secret rights and all other intellectual and industrial property rights of any sort throughout the world (including any application therefor). * Confidential Treatment Requested
Page 2
1.10 "Invention" means any idea, concept, discovery, invention, development, technology, work of authorship, trade secret, software, firmware, library, component, tool, mask work, process, method, technique, know-how, show-how, data, plan, formula, device, apparatus, specification, design, documentation or other material or information, tangible or intangible, whether or not it may be patented, copyrighted or otherwise protected (including all versions, modifications, enhancements and derivative works thereof). 1.11 "Manufacturing Subcontractors" means (a) [***] and/or its Affiliate that is the wafer foundry for the Products ("[***]"), (b) [***] and/or its Affiliate that is responsible for the assembly, packaging and testing of the Products, and (c) and other third party contractors DIALOG or ENERGOUS use, or may from time to time use, for the manufacturing, assembly, testing, or packaging of the Licensed Products or Licensed Product components. 1.12 "Marks" means trademarks, service marks, trade dress and trade names. 1.13 "Mask Set" means the mask set for fabrication of wafers at a foundry supplier. 1.14 "Mass Production Qualified Product" means a fully qualified Product which has completed 500 hour high temperature over lifetime (HTOL) testing and has been shipped in excess of [***] units for purposes of incorporation in customer products. 1.15 MCM means a multichip module, being a single package that includes multiple integrated circuit dies, including a Product die. 1.16 "Net Sales" means the invoiced amounts for the Sale of Products less: (a) amounts credited for return of any such Products; (b) amounts separately stated with respect to shipment of such Products for insurance, handling, duty, freight, and taxes; and (c) any discounts, credits or rebates in the relevant royalty or service fee period. 1.17 "New Product" means a product developed by or on behalf of ENERGOUS after the Effective Date that is not a Product Update; provided, however, that "New Products" exclude any product developed by a successor or acquirer of ENERGOUS. 1.18 "Patent" means any United States or foreign patent or patent application, including any provisional application, continuation, continuation-in-part, divisional, registration, confirmation, revalidation, reissue, PCT application, patent term extension, supplementary protection certificate, and utility model, as well as all foreign counterparts of any of the foregoing, and related extensions or restorations of terms thereof. 1.19 "Patent Rights" means rights under any Patent. 1.20 "Person" a human being or group of human beings, a company, corporation, a partnership or other legal entity (artificial or juristic person) recognized by law as having rights and duties. * Confidential Treatment Requested
Page 3
1.21 "Products" means the ENERGOUS products set forth in Exhibit A, as such Exhibit may be amended from time to time by mutual agreement between the parties, that have been released by ENERGOUS to production, including all Product Updates, which will be deemed to have been added to Exhibit A automatically, without any further action required by the parties, immediately following the release to production date. 1.22 "Product Die" means the silicon die incorporated within Products. 1.23 "Product IP" means (a) all Intellectual Property Rights in and to the Products, including all Product Updates, (b) any other Inventions and work products created or developed in connection with research and development or manufacturing efforts relating to the Products, including all Intellectual Property Rights therein and (c) all Intellectual Property Rights in and to the Mask Sets and Tooling, in each of the foregoing cases, that are owned or controlled by ENERGOUS, its Affiliates or any successor or assign. 1.24 "Product Specifications" means ENERGOUS' written technical specifications for the Products as referenced in datasheets and related documentation such as errata sheets. All Product Specifications are subject to change with at least one (1) months prior written notice to DIALOG, provided that with respect to any warranty for Products covered by this Agreement, the Product Specification in effect at the time of shipment of the relevant Product will apply for warranty purposes notwithstanding any subsequent change to the Product Specifications as provided herein. 1.25 "Product Updates" means any updates, improvements and other modifications to the Products made by or for ENERGOUS, including, without limitation: (a) any updates or modifications to the software (DSP code, firmware, GUI (graphical user interface) code); (b) modifications of silicon, including, without limitation; such modifications made solely for cost reduction purposes, and including only metal layer as well as all layer mask changes; (c) modifications which increase the distance over which wireless power is transmitted or received, subject to the limitations set out in Exhibit A; (d) modifications which increase the amount of power which is transmitted or received; (e) modifications to improve functionality or efficiency or add or improve features; and (f) modifications required to attain regulatory approvals, including, but not limited to, FCC approval; provided, however, that "Product Updates" will only include any of the foregoing developed by an acquirer or successor of ENERGOUS for a period of [***] after a Change of Control of ENERGOUS, and provided further that any Products incorporating Product Updates will be subject to separate terms and conditions to be agreed in good faith by the Parties, which terms and conditions will be no less favourable to DIALOG than those with respect to the Product to which the Product Update corresponds. 1.26 "Sale," "Sell" or "Sold" mean the sale, transfer, exchange or other disposition of Products, by DIALOG or any of its Affiliates to any customer or other third party, directly or indirectly through one or more tiers of distribution, for consideration that is recognized as revenue by DIALOG or its Affiliates according to applicable generally accepted accounting principles. 1.27 "Semiconductor Supplier" means any Person, other than DIALOG or its Affiliates, which primarily, or in its ordinary course of business, sells or distributes integrated circuits in packaged, die, multichip module or similar form. * Confidential Treatment Requested
Page 4
1.28 "Term" means the Initial Term and any and all Renewal Term(s) as set forth in Section 15.1 hereof. 1.29 "Third Party IP" means Intellectual Property Rights licensed from a third party relating to the Products. 1.30 "Tooling" means the physical Mask Sets, packaging fixtures, test fixtures, test programs, processes, software source code and any other physical tooling or program source code required for the manufacture, packaging, assembly and testing of the Products. 1.31 "Uncoupled Power Transfer Technology" means a family of wire-free technology defined by the AirFuel Alliance that provides power to devices at a distance, and that currently includes (i) RF, (ii) ultrasonic transduction, and (iii) Laser power beaming. Notwithstanding the foregoing, the meaning of Uncoupled Power Transfer Technology excludes technology which functions primarily for data transmission or direct- current-to-direct-current (DC-to-DC) power conversion. 2. LICENSE. 2.1 License Grant. Subject to the restrictions set out in Section 2.2, ENERGOUS hereby grants to DIALOG a non-exclusive (subject to Section 2.5), irrevocable, worldwide, sub-licensable (solely in accordance with Section 2.4), royalty-bearing license during the Term under all Product IP to: (a) repackage or have repackaged the Product Die into various package formats or layouts, and to integrate the Product Die into MCMs, which may incorporate DIALOG or third party intellectual property (such repackaged Product Die, MCMs and Products, are individually and/or collectively referred to as the "Licensed Products"); (b) have the Licensed Products manufactured, tested and packaged by Manufacturing Subcontractors; (c) Sell, offer for Sale, import, export and support the Licensed Products, including without limitation, providing system design, troubleshooting and failure analysis support for DIALOG's customers and their customers; (d) use and modify the Tooling and Documentation for the purposes of paragraphs (a) to (d) of this Section 2.1. 2.2 Excluded Applications. Until the earlier of (i) termination of ENERGOUS' exclusivity obligations to the Key Customer set forth in Exhibit F (the "Key Customer") existing as of the Effective Date with respect to the following applications, or (ii) [***] that incorporates ENERGOUS wireless charging technology, or (iii) [***] and subject to the exceptions set out in Section 2.3, DIALOG will not be permitted to Sell Licensed Products for use in the following applications (the "Excluded Applications"): (a) [***]; * Confidential Treatment Requested
Page 5
(b) [***]; (c) [***]; (d) [***]; and (e) [***] designed for use with any of the applications in paragraphs (a) to (d) of this Section 2.2. For the avoidance of doubt, DIALOG will be permitted to Sell Licensed Products for use in any or all of the Excluded Applications (A) at any time on or after [***] or, if earlier, (B) [***] that incorporates ENERGOUS wireless charging technology, or (C) upon the termination of ENERGOUS' exclusivity obligations to the Key Customer existing as of the Effective Date with respect to the above applications. 2.3 Exceptions to Excluded Applications. The following applications are exceptions to and excluded from the Excluded Applications (the "Permitted Applications"): (a) [***]; (b) [***]; (c) [***]; (d) [***]; (e) [***]; (f) [***]; (g) [***]; (h) [***]; (i) [***]; and (j) [***]. The fact that a [***] has [***] does not automatically preclude such device from falling under paragraphs (b), (c) and (d) of this Section 2.3 2.4 Sublicenses. DIALOG may sublicense the foregoing license rights to any of its Affiliates. DIALOG will be responsible for the observance and performance by all such Affiliates of all of DIALOG's obligations pursuant to this Agreement. DIALOG may sublicense the foregoing license rights to Manufacturing Subcontractors solely to the extent necessary and appropriate for them to manufacture, assemble, test and provide support for the Products. DIALOG may not sublicense the foregoing license rights to any other third party without ENERGOUS' prior written consent. * Confidential Treatment Requested
Page 6
2.5 Exclusivity. (a) Subject to paragraph (b) of this Section 2.5, ENERGOUS will not, and will not enable any Semiconductor Supplier, to manufacture, have manufactured, offer for sale, sell, import or export the Products or Product Die in commercial volumes, except a Semiconductor Supplier to the Key Customer for use in the Excluded Applications. (b) ENERGOUS will use its diligent, good faith efforts to promote DIALOG as the preferred supplier of Products and Product Die. However, ENERGOUS is allowed to engage with a Semiconductor Supplier to supply comparable products or product die to a customer if either (i) the customer which has not been engaged with DIALOG with respect to such product or product die notifies ENERGOUS or DIALOG in writing by an authorized officer of the customer that it does not want to use DIALOG or a DIALOG Affiliate as a supplier of such product or product die; or (ii) if DIALOG has been engaged with the customer, the customer notifies ENERGOUS or DIALOG in writing prior to commencement of the Design-In Phase that it does not want to use DIALOG or a DIALOG Affiliate as a supplier of such product or product die. For clarity, ENERGOUS shall not intentionally supply Products, Product Die or comparable products or product die to customers directly or through distribution channels. 2.6 Branding. (a) Products Sold by DIALOG or its Affiliates may be branded as DIALOG products. All sales and marketing collateral, software tools and material for promotional activities relating to the Products will utilize ENERGOUS branding in a prominent basis as an equivalent partner with respect to such Products. (b) To the extent the parties engage in any co-branding activities, then, subject to the terms and conditions of this Agreement and during the Term, each party (in such capacity, "Licensor") hereby grants to the other party (in such capacity, "Licensee") a non-exclusive, non- transferable, worldwide right and license (without the right to sublicense), under Licensor's Intellectual Property Rights in Licensor's Marks, to use those Marks of Licensor set forth in Exhibit D solely in connection with the marketing, sale and distribution of such co-branded Products in accordance with this Agreement. (c) Use of Licensor's Marks will be subject to the following terms and conditions: (i) all goodwill generated by use of Licensor's Marks by Licensee will inure to the benefit of Licensor; (ii) Licensee will use Licensor's Marks only in such forms and with such graphics as authorized by Licensor; and (iii) Licensee will identify Licensor's Marks as being owned by Licensor and will (A) cause the symbol "®" to appear adjacent to and slightly above any registered Licensor Mark, or (B) alternatively, for any Licensor Marks that are not registered, the symbol "TM" or "SM", as applicable. 2.7 No Other Rights. Except for the rights and licenses expressly granted in this Agreement, no other right is granted, no other use is permitted and all other rights are expressly reserved.
Page 7
3. SOURCING. 3.1 Product Manufacture. Concurrent with or before execution of this Agreement, and substantially in the form attached as Exhibit C, ENERGOUS will provide written authorization to its Manufacturing Subcontractors to confirm DIALOG's and, if applicable, DIALOG's Affiliates' rights to procure the Licensed Products and related services directly from such Manufacturing Subcontractors utilizing ENERGOUS' Tooling and any associated manufacturing resources. DIALOG and its sublicensed Affiliates may directly contract with the Manufacturing Subcontractors for the manufacture and supply of Licensed Products under terms and conditions that DIALOG or such Affiliates may directly negotiate with such third parties. 3.2 Additional Manufacturing Subcontractors. DIALOG at its sole discretion may qualify and establish an alternative source to some or all of ENERGOUS' Manufacturing Subcontractors for the manufacturing of the Licensed Products and ENERGOUS will provide its written authorization thereof if requested by DIALOG. 3.3 Tooling. Subject to ENERGOUS' rights in the Product IP and any Third Party IP (including, without limitation, that of any Manufacturing Subcontractors), each party will own all right, title and interest in the physical Tooling procured or generated by that party for the manufacturing, testing and packaging of the Licensed Products. For the avoidance of doubt, as between the parties, ENERGOUS will also continue to own all right, title and interest in and to the firmware, DSP code and GUI software embedded in the Products, including all Intellectual Property Rights embodied therein. Upon the termination of DIALOG's right to manufacture the Licensed Products following any expiration or termination of the Agreement or any Wind Down Period or Continuing Obligation period, as applicable, then all right, title and interest in the Tooling will automatically transfer to ENERGOUS subject to any Third Party IP, and DIALOG will, at ENERGOUS' option, either sell any Tooling in its possession to ENERGOUS at cost or destroy the Tooling and certify in writing as to same. 4. PRODUCT COMMERCIALIZATION. 4.1 Commercialization Plan. (a) Exhibit E hereto sets out the plan for the commercialization of the Licensed Products (the "Commercialization Plan"). The Commercialization Plan sets forth the parties' respective rights and obligations with respect to commercial and technical activities to be performed to maximize potential Sales of Licensed Products. The Commercialization Plan will be reviewed and (if necessary) updated by the parties on a quarterly basis during the Term. (b) Each party will appoint (and notify the other party of the name of) a member of their management team who will serve as that party's primary contact for all matters related to this Agreement (each, a "Liaison"), including resolution of issues that may arise under this Agreement. Each party may replace its Liaison at any time by notice in writing to the other party. (c) The Commercialization Plan includes a go-to-market plan. ENERGOUS will provide commercially reasonable sales training, material and support to DIALOG's global application, sales and marketing teams and customers, including the support set out in Section 4.3.
Page 8
(d) ENERGOUS will also support DIALOG with an operations and quality plan, which will set forth information relating to quality matters, including, but not limited to, testing, yield management, RMA process, failure analysis/corrective action procedure, ECN/PCN process and detailed agreement on mutual rights and responsibilities with respect to any quality issues or warranty claims (hereinafter "Quality Plan"). Both parties will work in good faith to finalize and implement the Quality Plan within 90 days after the Effective Date of this Agreement. DIALOG will be responsible for its own frontline quality function and corrective actions, with technical input from ENERGOUS as required. (e) The parties may promote the relationship with marketing initiatives and also agree to engage in joint marketing communication activities related to the relationship described in this Agreement or to the promotion of the Licensed Products, as set forth in the Commercialization Plan or otherwise mutually agreed between the parties from time to time. 4.2 Commercialization Meetings. The parties will meet regularly, but at least once each month during the Term, either in person or by telephone, video or internet conference call, to share technical and commercial information as reasonably required to facilitate the parties' exercise of their respective rights and performance of their respective obligations under this Agreement. The information shared by the parties will include, but is not limited to (a) market and competitive dynamic updates, (b) activities and progress updates at DIALOG's customers, (c) technical review and feedback from customers, (d) non-binding 12 month rolling Sales and Royalty and Service Fee forecasts for the Licensed Products, (e) initiatives to boost sales potential for the Licensed Products. Customer information shared will be within the limits allowed by any non-disclosure agreements DIALOG may have entered into with such customers. 4.3 Technical Support. ENERGOUS will support DIALOG's or its Affiliates' engineers and, in some cases and at DIALOG's request, the customer directly in providing standard design-in support (including antenna design support) for customers' products. If the customer requires unique or custom engineering services (i.e., support and services not limited to those with general application to Product customers), then ENERGOUS will contract directly with such customer for the provision of such services. ENERGOUS will provide DIALOG with any and all information that is necessary or useful to support its authorized manufacture, testing, marketing, Sale, troubleshooting, compatibility analysis, performance tuning, failure analysis, and other support of the Licensed Products, including the Documentation and any updates thereto or revisions thereof which are reasonably necessary or appropriate to provide technical support for the Products to DIALOG customers. ENERGOUS receives the Service Fee for providing the support described in this Section 4.3 to DIALOG and its customers during the Term. In the event the Technical Support provided by ENERGOUS falls below a mutually-agreed upon service level that is common to the semiconductor industry or reasonably requested by DIALOG's customers, and after failure by ENERGOUS to address such deficiency within a twenty (20) day notice period, DIALOG may suspend the payment of Service Fees until such service level is provided. Furthermore, in the event ENERGOUS fails to meet its obligations as set forth in the Quality Plan, and after failure by ENERGOUS to address such deficiency within a thirty (30) day notice period, DIALOG may suspend the payment of Service Fees until such obligations are met.
Page 9
5. PRODUCT DEVELOPMENT AND PRODUCT UPDATES. ENERGOUS will have control and authority over the design and development of the Products, including without limitation, developing and implementing all Product Updates. ENERGOUS reserves the right to implement Product Updates at any time in its sole discretion. The parties will consult each other on the perceived product needs of the market and DIALOG's customers and how best to respond to such needs. DIALOG may suggest Product Updates to ENERGOUS provided, but all the development of Product Updates will be at ENERGOUS' sole discretion. ENERGOUS will share its relevant product roadmaps from time to time to maximize collaboration opportunities. 6. INTELLECTUAL PROPERTY OWNERSHIP. 6.1 Product IP. ENERGOUS retains right, title and interest in and to the Product IP, ENERGOUS' Marks and ENERGOUS' Confidential Information, including all Intellectual Property Rights embodied therein. No transfer or grant is made hereunder by ENERGOUS of any of these rights or any of its other rights, whether by implication, estoppel or otherwise, other than the limited rights and licenses expressly granted by ENERGOUS in this Agreement, and all such other rights are hereby reserved. 6.2 DIALOG Intellectual Property. DIALOG retains rights, title and interest in and to DIALOG's Marks and DIALOG's Confidential Information, including all Intellectual Property Rights embodied therein. No transfer or grant is made hereunder by DIALOG of any of these rights or any of its other rights, whether by implication, estoppel or otherwise, other than the limited rights and licenses expressly granted by DIALOG in this Agreement and all such other rights are hereby reserved. 7. PRODUCT SALES. 7.1 Sales. Subject to the terms and conditions of this Agreement, and except as set forth in the Commercialization Plan or otherwise agreed in writing between the parties, DIALOG will market and Sell the Licensed Products as authorized under this Agreement. DIALOG will independently manage and process its own forecasting, operations and order management. 7.2 Discontinuation of Sale of Products. If DIALOG decides to discontinue Sales of any Product, it will notify ENERGOUS at least [***] prior to such discontinuance, and following such notification, the exclusivity rights, if any, associated with that Product will cease; provided, however, this provision will not apply in the event that DIALOG continues Sales of Product Updates, repackaged Product Dies or MCMs. 7.3 Supply of Products to ENERGOUS. DIALOG will provide 1000 samples of each Product free of charge to ENERGOUS for the purposes of evaluation and demonstration. For additional volumes required by ENERGOUS, DIALOG will sell to ENERGOUS on a reasonable cost plus basis for the purposes of evaluation and demonstration. These samples are provided as is, are not intended for resale by ENERGOUS, and no indemnification or other warranties from DIALOG will apply. * Confidential Treatment Requested
Page 10
8. OTHER PRODUCTS. 8.1 New Products. In the event that ENERGOUS develops New Product, ENERGOUS will provide DIALOG with written notice describing the New Product before marketing, selling or distributing the New Product with or to any third party. Upon receipt of such notice, DIALOG will have [***] to notify ENERGOUS in writing that it desires to add such New Product as Product under this Agreement. If DIALOG provides such a notice, for a period of [***] following ENERGOUS' receipt of such notice, ENERGOUS and DIALOG will negotiate in good faith the terms pursuant to which such New Product will be added as a Product to this Agreement. ENERGOUS may not negotiate with any third party the rights to market, sell or distribute any New Product until the earliest to occur of the following (a) DIALOG does not provide ENERGOUS with notice that it desires to add such New Product to this Agreement within the above-described [***] period, (b) ENERGOUS and DIALOG do not reach mutually agreeable terms for adding such New Product to this Agreement during the [***] negotiation period or (c) DIALOG provides ENERGOUS with written notice that it does not wish to negotiate with respect to such New Product. For clarity, after any of the events described in the foregoing subsections (a), (b) or (c) occurs, the New Product will not be covered under this Agreement, and ENERGOUS will be free to manufacture, market, sell, distribute and otherwise exploit such New Product as it deems fit in its sole discretion, including in collaboration with or through one or more third parties. 8.2 No Competing Products. (a) Until expiration or earlier termination of the Agreement, DIALOG agrees that it and its Affiliates will not, without ENERGOUS' written approval, intentionally sell, distribute or work with any third party to develop products incorporating any Uncoupled Power Transfer Technology other than Licensed Products; provided, however, that DIALOG shall not be under any such restrictions in relation to services or products it provides to the Key Customer in the event the Key Customer terminates its agreement with ENERGOUS. (b) In the event that ENERGOUS does not receive Federal Communications Commission approval of any Licensed Product for power transmission [***] by the [***], (i) ENERGOUS may provide written notice to DIALOG which references this Section 8.2(b) and indicates ENERGOUS' intention to enable one or more Semiconductor Suppliers to supply Products for [***]; and (ii) DIALOG may provide written notice to ENERGOUS which references this Section 8.2(b) and indicates DIALOG's intention to sell, distribute or work with one or more third parties to develop products incorporating Uncoupled Power Transfer Technology for [***]. [***] following the date such notice is given pursuant to Section 20.1, the restrictions in Section 8.2(a) shall no longer apply to DIALOG for Uncoupled Power Transfer Technology in [***] and the restrictions relating to enabling a Semiconductor Supplier in Section 2.5(a) shall no longer apply to ENERGOUS for Products or Product Die in [***]. (c) In the event that ENERGOUS does not receive Federal Communications Commission approval of any Licensed Product for power transmission in [***] by the [***], (i) ENERGOUS may provide written notice to DIALOG which references this Section 8.2(c) and indicates ENERGOUS' intention to enable one or more Semiconductor Suppliers to supply Products for [***]; and (ii) DIALOG may provide written notice to ENERGOUS which references this Section 8.2(c) and indicates DIALOG's intention to sell, distribute or work with one or more third parties to develop products incorporating Uncoupled Power Transfer Technology for [***]. [***] following the date such notice is given pursuant to Section 20.1, the restrictions in Section 8.2(a) shall no longer apply to DIALOG for Uncoupled Power Transfer Technology in [***] and the restrictions relating to enabling a Semiconductor Supplier in Section 2.5(a) shall no longer apply to ENERGOUS for Products or Product Die in [***]. * Confidential Treatment Requested
Page 11
9. ROYALTIES AND SERVICE FEES. 9.1 Royalties. DIALOG will pay ENERGOUS the Royalties set forth in Exhibit B. For clarity, DIALOG will be responsible for paying to ENERGOUS any Royalties payable hereunder as a result of its Affiliates' Licensed Product Sales. 9.2 Service Fee. Subject to Section 4.3, DIALOG will pay ENERGOUS the Service Fees set forth in Exhibit B. For clarity, subject to Section 4.3, DIALOG will be responsible for paying to ENERGOUS any Service Fees payable hereunder for services provided by ENERGOUS hereunder to DIALOG's Affiliates or any of DIALOG's or its Affiliates' customers. 9.3 Payment. Payments of Royalties and Service Fees will be due on a calendar quarterly basis, within [***] days after the end of the calendar quarter in which the applicable Licensed Products were Sold or services were rendered. From the date a payment is due, unless otherwise agreed, any late payment will accrue a late payment fee of [***] per month, or the highest interest rate permitted by law, whichever is less. 9.4 Reports. Each payment made hereunder will be accompanied by a report detailing (a) the total number of units, on a product-by- product basis, of the Licensed Products Sold during the previous calendar quarter, (b) DIALOG's and its Affiliates' Net Sales attributable to such Licensed Product units during such calendar quarter, and (c) reasonable details regarding the calculation of the quarterly Royalty payment and Service Fee. Such information will be maintained in strict confidence by ENERGOUS under Section 10 of this Agreement. 9.5 Books. With respect to its exercise of the rights and licenses granted in, and payment obligations under, this Agreement, DIALOG and its Affiliates will keep accurate books and other records, including but not limited to supporting documentation for the Royalties and Service Fees paid hereunder (the "Records"). These Records will be maintained for a period of at least three (3) years from the date of the related payment ("Record Retention Period"), notwithstanding any termination of expiration of this Agreement. 9.6 Audit Rights. During the Record Retention Period, ENERGOUS may appoint a mutually agreed independent, internationally recognized third-party certified auditor who will have the right to inspect and copy the Records upon reasonable prior notice, and DIALOG will (and will cause its Affiliates to) allow necessary access including, as applicable, to its premises where such Records are located. ENERGOUS may exercise such right to this independent-third party audit no more than one time per calendar year and each such audit will be conducted during normal business hours. Such audit may also not interfere with DIALOG's or its Affliates' quarterly closing of its books. In the event that such audit reveals an underpayment of Royalties or Service Fees owed by DIALOG, DIALOG will promptly pay ENERGOUS the amount of the underpayment. If such underpayment is in excess of [***] of the Royalties or Service Fee due for the period audited, DIALOG will also reimburse ENERGOUS for its reasonable, out-of-pocket cost of such audit. In the event that such audit reveals an overpayment of Royalties or Service Fees owed by DIALOG, ENERGOUS will promptly pay DIALOG the amount of the overpayment. * Confidential Treatment Requested
Page 12
9.7 Taxes. Each party will be responsible to collect, bear and pay any and all taxes levied or based upon the party's sale of the Products, Product Die or Licensed Products, including, all sales, use, value added, withholding or similar taxes. In the event that the government of a country imposes any income taxes on payments made by a party to the other hereunder and requires a party to withhold such tax from such payments, such party may deduct such tax from such payments. Each party will be responsible for its own banking costs relating to the receipt of payments of Royalties and Service Fees and any other monies payable to it in connection with this Agreement. 9.8 Payment Currency. All payments due under this Agreement will be payable in U.S. Dollars. With respect to Net Sales invoiced in a currency other than U.S. Dollars, the Net Sales will be expressed in the domestic currency of the entity making the Sale, together with the U.S. Dollar equivalent, calculated using the conversion rate existing in the United States (as reported in the Wall Street Journal) on the last working day of each month of the calendar quarter in which the Net Sales were made. Such payments will be without deduction of exchange, collection or other charges. 10. CONFIDENTIALITY. 10.1 Scope. The term "Confidential Information" means all financial, business and technical information disclosed by or on behalf of a party in relation to this Agreement (whether tangible or intangible, and including all copies, analyses and derivatives thereof), that is marked or otherwise identified as proprietary or confidential at the time of disclosure, or which by its nature would be understood by a reasonable person to be proprietary or confidential, including all copies, abstracts, summaries, analyses and derivatives thereof. Confidential Information does not include information the receiving party can demonstrate (a) was rightfully furnished to it without restriction by a third party without breach of any obligation to the disclosing party, (b) is generally available to the public without breach of this Agreement, (c) was available to or already in the possession or control of the receiving party on a non-confidential basis before receipt from the disclosing party or (d) is independently developed by it or its employees without reliance on such information. Information associated with DIALOG's quarterly Royalty or Service Fee disclosures is Confidential Information of DIALOG. 10.2 Non-Disclosure. The receiving party agrees (a) not to copy or use the disclosing party's Confidential Information except and only for the purposes contemplated by this Agreement, (b) to maintain it as confidential, and exercise reasonable precautions to prevent unauthorized access, use and disclosure, (c) not to disclose it to any third party other than the receiving party's employees and contractors who have a need to know for the permitted purpose and who are bound by obligations that are at least as protective as the restrictions in this Agreement and (d) not to export or re-export in violation of U.S. or other export control laws or regulations any such Confidential Information or product thereof. Each party will bear the responsibility for any breach of this Section 10 by its and its Affiliates' employees and contractors. Upon any termination of this Agreement or, in the event of any Wind Down Period or Continuing Obligation period, upon the expiration of such period, and within fifteen (15) days after request by the disclosing party, each receiving party will return the Confidential Information of the other or destroy such Confidential Information and all copies of it and all information, records and materials developed therefrom, except that the recipient may retain one copy for archival purposes to ensure compliance with the provisions of this Agreement, and nothing contained herein will require the erasure, deletion, alteration or destruction of any Confidential Information required to be retained for legal or regulatory purposes or stored on back-up tapes or other back-up media or archiving systems made in the ordinary course of business, subject in each case to the confidentiality obligations set forth herein. Each party may only disclose the general nature, but not the specific terms, of this Agreement without the prior consent of the other party; provided, however, either party may provide a copy of this Agreement or otherwise disclose its terms on a confidential basis in connection with any legal or regulatory requirement, financing transaction or due diligence inquiry. For clarity, in the event that use, disclosure or retention of any Confidential Information is required in order for DIALOG to exercise the license granted in Section 2, this Section 10 will not be deemed to prevent such use, disclosure or retention.
Page 13
10.3 Required Disclosure. Nothing herein will prevent a receiving party from disclosing all or part of the other's Confidential Information as necessary pursuant to court order, the lawful requirement of a governmental agency or when disclosure is required by operation of law (including disclosures pursuant to applicable securities laws or regulations thereunder); provided, that prior to any such disclosure, the receiving party will use reasonable efforts to (a) promptly notify the disclosing party in writing of such requirement to disclose, and (b) cooperate fully with the disclosing party in protecting against or minimizing any such disclosure or obtaining a protective order. 11. REPRESENTATIONS AND WARRANTIES; DISCLAIMERS. 11.1 Mutual Representations and Warranties. ENERGOUS and DIALOG hereby each represent and warrant to the other that as of the Effective Date: (a) it is a duly and validly organized and existing corporation in good standing under the laws of the state or country of its incorporation, as applicable, and that it is legally qualified to do business in each jurisdiction in which this Agreement may be performed and the performance of its activities hereunder requires such qualification; (b) the performance of this Agreement and the consummation of the transactions contemplated herein will not result in any breach or violation of any terms or provisions of, or constitute a default under, its certificate of incorporation or by-laws or other organizational documents, or any material agreement or instrument to which it is a party, by which it is bound, or to which any of its property is subject; (c) all requisite corporate action has been taken for the due authorization, execution, delivery and performance of this Agreement by it, and this Agreement constitutes a legally binding obligation, enforceable against such party in accordance with its terms, except insofar as enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally; and
Page 14
(d) it is not a party to any litigation relating to, or that could reasonably be expected to affect, its ability to perform its obligations under this Agreement. 11.2 Product Warranty. (a) ENERGOUS warrants that (i) when manufactured in accordance with the Approved Production Specifications, and as implemented in a suitable circuit application in accordance with the Product Specifications, the Products and Product Die will conform to the Product Specifications and will be free from defects that could have been avoided in their design; (ii) the Products, any constituent parts or functionality thereof, the Documentation and the Deposit Materials do not infringe any third party's Intellectual Property Rights; (iii) it did not misappropriate any third party's trade secrets in the development of the Products, any constituent parts or functionality thereof, the Documentation or the Deposit Materials; and (iv) when delivered (including any software updates if any), no Product will contain any viruses, "Trojan horses" or other harmful code. The above warranties are valid for a period of [***] from the date of shipment of any Licensed Product to any customer. (b) The warranty contained in Section 11.2(a) does not apply to the extent any Product is operated in a manner other than that specified by the Product Specifications, is treated with abuse, negligence or other improper treatment (including, without limitation, use outside the device maximum ratings, package MSL (moisture sensitivity level) guidelines or environmental limits as may be set forth in the Product Specifications), or is defective as a result of any materials or workmanship of the Manufacturing Subcontractors or failure of the Manufacturing Subcontractors to manufacture the Product according to Approved Production Specifications. As such, any warranty claims due to defects in build, materials or workmanship will be directed to the Manufacturing Subcontractors as part of that contract between DIALOG or, if applicable, its Affiliate and such parties. (c) With the exception of the warranties in Section 11.2(a)(ii) (third party IP infringement) and Section 11.2(a)(iii) (misappropriation of third party trade secrets) related to any Product Die, the warranties in this Section 11.2 do not apply to MCMs or repackaged Product Die developed by or for DIALOG or its Affiliates. (d) In the event any warranty claim is due to or arises from an Epidemic Defect, ENERGOUS will be responsible for all costs and expenses directly incurred by DIALOG or its Affiliates or their respective customers as a result of reasonable inspection, servicing, repairs, replacements, recall notices, recalls and responses with respect thereto, provided that ENERGOUS' aggregate liability to DIALOG and its Affiliates and their respective customers under this paragraph (d) will not exceed [***] per occurrence of an Epidemic Defect. Each party will immediately notify the other upon becoming aware of the circumstance that could reasonably be construed to be an indication of an Epidemic Defect, and, in any event, will notify the other party immediately upon becoming aware of the existence of an Epidemic Defect. ENERGOUS and DIALOG will expeditiously work together in good faith to determine a technical resolution of the Epidemic Failure. ENERGOUS agrees to make all commercially reasonable efforts to promptly diagnose the Epidemic Failure's root cause, provide DIALOG a report detailing the results of ENERGOUS' investigation and plan an effective workaround and a permanent solution. ENERGOUS will consult with DIALOG on any proposed workarounds and other solutions. * Confidential Treatment Requested
Page 15
11.3 Infringement of Intellectual Property Rights. If any of the Products, Product Die, Documentation or Deposit Materials is, or in ENERGOUS' or DIALOG's opinion is likely to become, the subject of an Intellectual Property Rights infringement claim, and as a result DIALOG or any of its Affiliates or their respective customers are enjoined, or in ENERGOUS' or DIALOG's opinion are likely to be enjoined, from using the Products, Product Die, Documentation or Deposit Materials, ENERGOUS will use its best efforts to: (a) procure for DIALOG and its Affiliates and their respective customers the right to continue to use the Products, Product Die, Documentation or Deposit Materials, as applicable; or, but only in the event that, despite ENERGOUS' best efforts to do so, ENERGOUS is unable to so procure such right, (b) replace or modify the Products, Product Die, Documentation or Deposit Materials, as applicable, to make them non-infringing, provided that the replaced or modified Products, Product Die, Documentation and Deposit Materials remain substantially similar in performance to the infringing Products, Product Die, Documentation and Deposit Materials. If none of the foregoing alternatives is available within a commercially reasonable time period, DIALOG may terminate this Agreement with immediate effect, provided that it will give ENERGOUS prompt prior written notice thereof. Nothing in this Section 11.3 is intended to limit DIALOG's rights to indemnification under Section 12 in connection with any such infringement claim. 11.4 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 11, THE PRODUCTS, THE PRODUCT IP, TOOLING, DOCUMENTATION, DEPOSIT MATERIALS, CONFIDENTIAL INFORMATION AND ALL LICENSES, SERVICES AND OTHER ITEMS PROVIDED BY A PARTY TO THE OTHER PARTY HEREUNDER ARE PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND. EXCEPT FOR THOSE WARRANTIES EXPRESSLY PROVIDED HEREIN, EACH PARTY SPECIFICALLY DISCLAIMS ALL WARRANTIES, WHETHER ORAL OR WRITTEN, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND ALL WARRANTIES ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE IN TRADE. 12. INDEMNIFICATION. 12.1 Indemnification by Energous. Subject to Section 12.2, ENERGOUS agrees to indemnify, hold harmless and, in the case of any third party claims, defend DIALOG and its Affiliates and each of their respective directors, officers, employees, contractors, agents, distributors and customers (collectively, "DIALOG Indemnitees") from and against and in respect of any and all alleged or actual demands, claims, actions, causes of action, suits or proceedings, assessments, awarded damages (including punitive damages), liabilities, interest and penalties, costs and expenses (including, without limitation, court costs and reasonable legal fees and disbursements in connection therewith) (each, a "Claim") to the extent resulting from, arising out of, relating to, or imposed upon or incurred by any DIALOG Indemnitees by reason of (a) death or bodily injury caused by or resulting from use of the Products, (b) any breach of any representation or warranty made by ENERGOUS hereunder or to any third party in relation to the Products or Product Die, (c) the infringement or misappropriation of any third party Intellectual Property Rights in relation to the Products or Product Die, (d) the infringement or misappropriation of any third party Intellectual Property Rights as a result of DIALOG's or its Affiliates' exercise of rights in accordance with the terms of this Agreement, including, but not limited to, the Manufacturing Subcontractors' manufacture of the Products on their behalf, provided that the Products are manufactured in strict compliance with the Product Specifications and Approved Production Specifications and only to the extent such Claims arise due to compliance with the Product Specifications and/or the Approved Production Specifications or use of the Tooling provided by ENERGOUS hereunder, (e) the infringement by DIALOG of any third party Marks rights as a result of its authorized use of the ENERGOUS Marks, (f) any failure by ENERGOUS to comply with applicable laws, regulations and standards, or (g) ENERGOUS' negligence, intentional misconduct or fraud.
Page 16
12.2 Exclusion. Notwithstanding the provisions of Section 12.1, ENERGOUS will not be liable to the extent any Claim results from (a) modification of the Products by DIALOG, its Affiliates and/or any third party (including the Manufacturing Subcontractors), or combination of the Products with other products, offered by DIALOG, its Affiliates and/or any third party, (b) acts or omissions of any Manufacturing Subcontractor (except to the extent such Claims are due to the infringement or misappropriation of third party Intellectual Property Rights arising from such Manufacturing Subcontractor's manufacturing of the Products on behalf of DIALOG in strict compliance with the Product Specifications, Approved Production Specifications and Tooling provided by ENERGOUS), (c) failure of any DIALOG Indemnitee to comply with applicable laws, regulations and standards, or (d) negligence, intentional misconduct or fraud of any DIALOG Indemnitee. For clarification, if any of the foregoing is not the cause, in whole or in part of the Claim, ENERGOUS is not relieved of its obligations under Section 12.1. 12.3 Conditions. DIALOG must notify ENERGOUS within thirty (30) business days after receipt of actual notice of any Claim by a third party for which it seeks indemnification; provided, however, any failure or delay in notice will not relieve ENERGOUS of its obligations hereunder except to the extent that ENERGOUS is actually prejudiced by such failure to notify. ENERGOUS will have control and authority with respect to the defense, litigation, compromise or settlement of such third party Claim (except to the extent that any settlement involves any commitments, responsibilities or obligations on the part of DIALOG, in which case such settlement will require the prior written consent of DIALOG, which consent will not be unreasonably delayed, conditioned or withheld). DIALOG will cooperate and provide assistance and information as may reasonably be required by ENERGOUS (but at ENERGOUS' expense) in connection therewith. DIALOG reserves the right to participate at its own cost in any third party proceedings with counsel of its own choosing. In the event that ENERGOUS does not respond to any third party Claim or does not sufficiently defend such third party Claim, DIALOG, acting reasonably, may step in and take over the defense of such Claim. Costs incurred in the settlement of any Claim, including, but not limited to, reasonable legal expenses, may be off set against future Royalties and Service Fees payable.
Page 17
12.4 Insurance. Each party will maintain, during the Term and for three (3) years thereafter, such comprehensive general liability insurance (including without limitation, products liability) as will adequately protect it against its potential liabilities under this Agreement, in amounts customary in the semiconductor industry for similar services and products. Each party will, at the other party's request, provide to the other party a certificate of insurance evidencing the foregoing insurance coverage. 13. LIMITATION OF LIABILITY. 13.1 EXCEPT IN THE CASE OF (a) ANY BREACH OF SECTION 10 (CONFIDENTIALITY), (b) THE PARTIES' OBLIGATIONS UNDER SECTION 12 (INDEMNIFICATION), (c) A PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (d) LIABILITY ARISING FROM EPIDEMIC DEFECTS (WHICH WILL BE SUBJECT TO THE LIMITATION SET FORTH IN SECTION 11.2(d)), IN NO EVENT WILL EITHER PARTY BE LIABLE UNDER THIS AGREEMENT, REGARDLESS OF THE FORM OF ANY CLAIM OR ACTION (WHETHER IN CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE), FOR ANY (i) INDIRECT, PUNITIVE, INCIDENTAL, RELIANCE, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF BUSINESS, REVENUES, PROFITS OR GOODWILL, OR (ii) AGGREGATE DAMAGES IN EXCESS OF [***]. IN ADDITION, ENERGOUS' LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER SECTION 12.1(b) SHALL IN NO EVENT EXCEED [***]. THESE LIMITATIONS ARE INDEPENDENT FROM ALL OTHER PROVISIONS OF THIS AGREEMENT AND WILL APPLY NOTWITHSTANDING THE FAILURE OF ANY REMEDY PROVIDED HEREIN. 14. COMPLIANCE WITH LAWS. Each party will comply with all law and regulations applicable such party's performance under this Agreement, including but not limited to U.S. Export Administration laws and regulations and any other export, import and re-export control laws applicable to such party. The parties will refrain from exporting or re-exporting the Products or Product IP or any technical data or other materials received from each other, or the direct product of any of these, to any country, individual or organization proscribed by the United States government, unless properly authorized by the appropriate agencies of the United States government. Each party will provide all information under its control which is necessary or useful for the other party to ship or receive the Products, including, but not limited to, U.S. Export Control Classification Numbers (ECCNs), U.S. Customs Certificates of Delivery, Certificates of Origin and U.S. Federal Communications Commission identifier, if applicable. Each party agrees that it will not act in any fashion or take any action in violation of any applicable anti-bribery or anti-corruption legislation in any jurisdiction in which it does business, which prohibits the offering, giving or promising to offer or give, directly or indirectly, money or anything of value to any official of a government, political party or instrumentality to assist it in obtaining or retaining business, including the U.S. Foreign Corrupt Practices Act or any comparable legislation in another country. * Confidential Treatment Requested
Page 18
15. TERM AND TERMINATION. 15.1 Term. This Agreement is effective on the Effective Date. Unless earlier terminated as provided herein, this Agreement continues in effect for an initial term of seven (7) years ("Initial Term") and will automatically renew for one or more annual periods after the Initial Term (each a "Renewal Term") unless either party gives notice of non-renewal at least one hundred eighty (180) days prior to the beginning of any Renewal Term. 15.2 Termination. (a) Mutual Termination Rights. Either party may, in addition to any other remedies available to it under this Agreement or at law or in equity, terminate this Agreement (or, in the event this Agreement has been previously terminated, the Wind Down Period, if any) immediately upon the issuance of written notice to the other party in the event that (i) the other party materially breaches a material provision of this Agreement, and fails to cure such breach within thirty (30) days, or (ii) the other party undergoes an Insolvency Event. (b) Termination By ENERGOUS. (i) If ENERGOUS is acquired by a third party, ENERGOUS' acquirer will have the right, for a period of [***] following closing of such acquisition, to terminate this Agreement upon written notice to DIALOG. (ii) ENERGOUS will have the right to terminate this Agreement immediately upon the issuance of written notice to DIALOG (A) if DIALOG undergoes a Change of Control involving a competitor of ENERGOUS (as reasonably determined by ENERGOUS), or (B) if DIALOG or any of its Affiliates acquires, whether directly or indirectly through a sale of assets or a Change of Control transaction or otherwise, any competitor of ENERGOUS. DIALOG will provide ENERGOUS with notice of any such Change of Control or acquisition within [***] after the closing thereof and ENERGOUS' right to terminate the Agreement will expire [***] after receipt of such notice. (iii) ENERGOUS may, at any time after the third anniversary of the Effective Date, terminate this Agreement with or without cause upon not less than one hundred and eighty (180) days prior written notice to DIALOG. (iv) ENERGOUS will have the right to terminate this Agreement, upon not less than [***] prior written notice to DIALOG, in the event that, following termination by the [***] of its agreement with ENERGOUS, DIALOG participates in or indicates its intention to participate in the development, design or manufacture of products incorporating Uncoupled Power Transfer Technology not provided by ENERGOUS to [***]. (c) Termination by DIALOG. (i) If DIALOG is acquired by a third party, DIALOG's acquirer will have the right, for a period of [***] following closing of such acquisition, to terminate this Agreement upon written notice to ENERGOUS. * Confidential Treatment Requested
Page 19
(ii) DIALOG may terminate this Agreement, immediately upon issuance of written notice to ENERGOUS in the event that: (A) DIALOG or its Affiliates fail to achieve a design-win pipeline with an annual projected sales value to DIALOG of at least [***] in the [***] after the availability of a Mass Production Qualified Product; or (B) the aggregate annual Net Sales of Products are below [***] by the [***] of the availability of a Mass Production Qualified Product, or below [***] by the [***] of the availability of a Mass Production Qualified Product, or below [***] by each [***] of the availability of a Mass Production Qualified Product during the remainder of the Term. (iii) DIALOG will have the right to terminate this Agreement immediately upon the issuance of written notice to ENERGOUS (A) if ENERGOUS undergoes a Change of Control involving a competitor of DIALOG, or (B) if ENERGOUS acquires, whether directly through a sale of assets or through a Change of Control transaction, any competitor of DIALOG (as reasonably determined by DIALOG). ENERGOUS will provide DIALOG with notice of any such Change of Control or acquisition within [***] after the closing thereof and DIALOG's right to terminate the Agreement will expire [***] after receipt of such notice. 15.3 Effect of Termination. Upon any termination or expiration of this Agreement, all rights, licenses (including any sublicenses granted by DIALOG) and obligations hereunder will cease, except that the provisions of Sections 6 (Intellectual Property Ownership), 9 (Royalties and Service Fees), 10 (Confidentiality), 11 (Representations and Warranties; Disclaimers), 12 (Indemnification), 13 (Limitation of Liability), 15.3 (Effect of Termination), 15.4 (Wind Down Period), 16 (Escrow), 18 (Non-Solicitation), 19 (Choice of Law and Dispute Resolution) and any provisions to give effect thereto, will survive such termination or expiration and remain in full force and effect in accordance with their terms. 15.4 Wind Down Period. (a) Notwithstanding any statement in Section 15.3 to the contrary, upon any termination or expiration of this Agreement and until the later to occur of (i) [***] from the Effective Date or (ii) [***] following the effective date of termination or expiration of this Agreement (the "Wind Down Period"), the parties' respective rights and obligations under Sections 2 (License), 3 (Sourcing), 7 (Product Sales), 9 (Royalties and Service Fees), 11 (Representations and Warranties; Disclaimers), 12 (Indemnification), 13 (Limitation of Liability), 14 (Compliance with Laws), 15.2 (Termination), 16 (Escrow) and all Exhibits hereto which are associated with any of the foregoing listed sections will remain in full force and effect as to (A) any Products or repackaged Product Die with respect to which DIALOG or any of its Affiliates has secured a design win at a customer prior to or within one (1) month after the start of the Wind Down Period, or (B) the sale of any MCMs which have been released for production at a foundry, provided, however, that DIALOG's license rights under Section 2.1 (including any sublicenses granted by DIALOG pursuant to Section 2.4) will be non-exclusive during the Wind Down Period. (b) If, at the time of notice of any termination of this Agreement, DIALOG or any of its Affiliates has a written supply contract with a customer that extends beyond the end of the Wind Down Period (a "Continuing Obligation"), DIALOG and/or its Affiliates may continue to Sell Licensed Products to such customer through the term of the Wind Down Period and for the remainder of the term of such Continuing Obligation, provided that in no event may DIALOG or its Affiliates Sell Licensed Products to such customer pursuant to this Section 15.4(b) for a period longer than [***] after the effective date of termination of this Agreement. In such event, the provisions of this Agreement that survive during the Wind Down Period will continue to survive for the remainder of the period of time that DIALOG is authorized to Sell Licensed Products to any customer in accordance with the foregoing sentence. The rights granted under this Section 15.4(b) will be conditioned upon DIALOG providing ENERGOUS a complete or redacted copy of the applicable supply contract demonstrating the existence of the Continuing Obligation as of the date of notice of termination or, if DIALOG or its Affiliate is prohibited from providing a copy of the contract by the confidentiality obligations set forth therein, a written certification from an officer of DIALOG attesting to the existence of the Continuing Obligation. * Confidential Treatment Requested
Page 20
16. ESCROW. 16.1 Escrow. ENERGOUS will at its expense, at DIALOG's written request during the Term and any Wind Down Period, enter into a three- party escrow deposit arrangement, in accordance with this Section 16, with a recognized escrow agent (the "Escrow Agent") of mutual agreement. ENERGOUS will keep the Deposit Materials in escrow and ensure on a quarterly basis that all the information relating to the Deposit Materials in escrow is current, including deposit of any Product Updates. 16.2 Release of Deposit Materials. In the event of any Insolvency Event and where the design files need to be accessed by DIALOG to fix an Epidemic Defect or other Product design or production issue impacting yield or quality ("Release Condition"), the Escrow Agent will, in accordance with the terms of the escrow agreement between the parties and the Escrow Agent (the "Escrow Agreement"), release the Deposit Materials to DIALOG. 16.3 License. ENERGOUS hereby grants DIALOG a non-exclusive, non-transferable (except as set forth in Section 2) license under the Product IP to use any of the Deposit Materials released from escrow for the purpose of fixing an Epidemic Defect or other Product design or production issue impacting yield or quality during the Term and, if applicable, any Wind Down Period or Continuing Obligation period, including, but not limited to, authorizing any third party subcontractor to manufacture and supply Products, provided, however, that DIALOG continues to make all Royalty payment owed to ENERGOUS (or the then-current owner of the Product IP) as provided in this Agreement. No Service Fees will be payable under this license. DIALOG agrees not to exercise such license until occurrence of a Release Condition, subject to the other restrictions set forth in this Section 16. Such license may be exercised by DIALOG only during the Term and any Wind Down Period or Continuing Obligation period and is subject to DIALOG's continued compliance with all of the other applicable terms and conditions of this Agreement during any such applicable period. All Deposit Materials will be deemed ENERGOUS' Confidential Information hereunder. DIALOG's license to possess and use the Deposit Materials does not include any right to disclose, market, sublicense or distribute the Deposit Materials to any third party other than its Affiliates and Manufacturing Subcontractors. 16.4 Rights in Bankruptcy. The licenses granted pursuant to this Agreement are license to rights in "intellectual property" (as that term is defined in Section 101 of the United States Bankruptcy Code) and governed by 11 USC Section 365(n). Accordingly, if a trustee in bankruptcy rejects the Escrow Agreement and/or this Agreement as executory contracts, then Company may elect to retain its rights under this Agreement in accordance with and subject to the provisions of 11 USC Section 365(n).
Page 21
17. PUBLICITY. 17.1 Publicity. Within 30 days of the Effective Date each party will issue a mutually agreed joint press release regarding the strategic cooperation for the supply of Products and the strategic cooperation between the parties. 18. NON-SOLICITATION. 18.1 Non-Solicitation. During the Term and for a [***], neither party will without the written consent of the other party (which may be granted or denied in its sole discretion) (a) directly or indirectly recruit or solicit for employment or for the provision of services any employee of the other party, (b) otherwise solicit, induce or influence any employee to leave their employment with the other party, or (c) attempt to do any of the foregoing; provided, however, that the foregoing will not apply to (y) any employee of the other party that responds to a public advertisement of employment opportunities or (z) any employee that was terminated without cause by the other party. ENERGOUS and DIALOG acknowledge and agree that the covenants in this Section 18 are reasonable and necessary to protect each of their trade secrets, Confidential Information and stable workforces. 19. CHOICE OF LAW AND DISPUTE RESOLUTION. 19.1 Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of California, exclusive of conflict of laws principles. 19.2 Dispute Resolution; Jurisdiction. Any dispute or claim arising out of or relating to this Agreement (including any matters regarding its existence, scope, validity, breach or termination, or any non-contractual obligations arising out of or related to it) that is not able to be resolved through negotiations will be submitted to arbitration in San Francisco, California, administered by the International Chamber of Commerce under its Rules of Arbitration. There will be one arbitrator. The language of the arbitration will be English. The award will be in writing, state the reasons for the award and be final and binding. Judgment on the award may be enforced in any court of competent jurisdiction. Except as may be required by law, the parties will preserve the confidentiality of all aspects of the arbitration. The arbitration will be the sole and exclusive forum for final resolution of any such dispute or claim, provided, however, that, because each party will have access to and become acquainted with Confidential Information of the other party, the unauthorized use or disclosure of which may cause irreparable harm and significant injury which may be difficult to ascertain and which may not be compensable by damages alone, the parties agree that the damaged party will have the right to seek an injunction, specific performance or other equitable relief without prejudice to any other rights and remedies that it may have for such unauthorized use or disclosure. Each party irrevocably waives all rights to a jury trial in any judicial proceeding permitted hereunder. For the avoidance of doubt, the validity, construction, and enforceability of this Agreement and the resolution of disputes arising out of and relating to this Agreement, will be governed solely by this Section 19. * Confidential Treatment Requested
Page 22
20. MISCELLANEOUS PROVISIONS. 20.1 Notices. All notices required or permitted under this Agreement will be in writing, reference this Agreement and be deemed given: (a) when delivered personally; or (b) when sent by electronic mail with electronic confirmation of receipt, provided that such notice is immediately confirmed as provided in (c) or (d) below; or (c) seven (7) days after having been sent by registered or certified mail,; or (d) two (2) days after deposit with a commercial courier service, with written verification of receipt. All communications will be sent to the addresses set forth below. Either party may change its address by giving notice pursuant to, and specifically referring to, this Section 20. If to ENERGOUS: Energous Corporation 3590 North First Street Suite 210 San Jose, California 95134 U.S.A. Attn: Brian Sereda, CFO
If to DIALOG: Dialog Semiconductor (UK) Ltd 100 Longwater Avenue Green Park Reading, RG2 6GP United Kingdom Attn: Legal Department 20.2 Relationship of Parties. ENERGOUS and DIALOG are independent business entities. Neither party nor its employees, consultants, contractors or agents are agents, employees, partners or joint venturers of the other party, nor do they have any authority to bind the other party by contract or otherwise to any obligation. The parties will not represent to the contrary, either expressly, implicitly, by appearance or otherwise. 20.3 Force Majeure. Except for obligations to pay amounts due under this Agreement, neither party will be liable for any failure or delay in its performance under this Agreement due to causes which are beyond its reasonable control, including, but not limited to, acts of God, acts of civil or military authority, fires, epidemics, floods, earthquakes, riots, wars, sabotage, labor shortages or disputes, and governmental actions; provided, however, that the affected party: (a) gives the other party written notice of such cause promptly, and in any event within fifteen (15) days of discovery thereof; and (b) uses its reasonable efforts to correct such failure or delay in its performance as soon as possible. The affected party's time for performance or cure under this Section 20.3 will be extended for a period equal to the duration of the cause. 20.4 Severability. If any provision of this Agreement is held to be invalid or unenforceable in any jurisdiction in which this Agreement is being performed, then: (a) such provision will be deleted from this Agreement in that jurisdiction to the extent of such invalidity or unenforceability without invalidating the remaining provisions of this Agreement, and any such unenforceability in that jurisdiction will not make that provision unenforceable in any other jurisdiction; and (b) the parties will agree on an alternative provision that best accomplishes the objectives of such provision, to the extent legally permissible in such jurisdiction.
Page 23
20.5 No Waiver. No waiver or consent in connection with or relating to this Agreement will bind either party unless in writing and signed by the party against which enforcement is sought. Waiver by either party of any default will not be deemed a waiver by such party of the same or any other default that may thereafter occur. 20.6 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be an original, but taken together constituting one and the same instrument. Execution of a facsimile copy (including PDF) will have the same force and effect as execution of an original, and a facsimile/electronic signature will be deemed an original and valid signature. 20.7 Headings and References. The headings and captions used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 20.8 Construction. The parties and their respective counsel have negotiated this Agreement. This Agreement will be fairly interpreted in accordance with its terms and without any strict construction in favor of or against either party. 20.9 Complete Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes and replaces all prior or contemporaneous understandings or agreements, written or oral, regarding such subject matter. No amendment to or modification of this Agreement will be binding unless in writing and signed by a duly authorized representative of both parties. 20.10 Assignment. This Agreement may not be assigned by either party without the express written consent of the other party, which approval will not be unreasonably withheld or delayed, except that either party may (without consent but with notice to the other party) assign this Agreement in its entirety to any successor in the event of a Change of Control of such party. 20.11 Notice of Merger or Acquisition. Until the date that this Agreement terminates or is terminated in accordance with Section 15 hereof, ENERGOUS agrees that, [***]. * Confidential Treatment Requested
Page 24
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date. ENERGOUS CORPORATION DIALOG SEMICONDUCTOR (UK) LTD By: /s/ Stephen R. Rizzore By: /s Mark Tyndall Name: Stephen R. Rizzore Name: Mark Tyndall Title: President and Chief Executive Officer Title: SVP Corporate Development and Strategy
Page 25
EXHIBIT A PRODUCTS Any ENERGOUS integrated circuit (IC) designed to receive power wirelessly and any ENERGOUS IC used in a wireless transmitter, including, but not limited to, the following Products (and any related Product Updates): [***] * Confidential Treatment Requested
Page 26
EXHIBIT B ROYALTIES AND SERVICE FEES Royalties and Service Fees payable by DIALOG and/or its Affiliates to ENERGOUS hereunder will be calculated on a Product by Product basis as defined herein. Margin Split: Combined Royalties and Service Fees shall equal [***]. Dialog will retain the remaining [***]. [***]. [***]. Notwithstanding any provision of the Agreement, no Royalties or Service Fees will be payable to ENERGOUS hereunder in connection with any Sale to any customer of prototype or sample Licensed Products [***]. * Confidential Treatment Requested
Page 27
EXHIBIT C Example of Letter of Authorization: Mask Set(s) Authorization for Third Party's Product(s) To whom it may concern Pursuant to a STRATEGIC ALLIANCE Agreement between Dialog Semiconductor (UK) Ltd and Energous Corporation dated November 6, 2016 (to which [Manufacturing Subcontractor] is not a party), we, Energous Corporation (Energous), hereby agree and authorize [Manufacturing Subcontractor], under the terms of this Letter of Authorization, to use the Mask Set(s) specified below for manufacturing products for the supply to the Third Party specified in paragraph 2 below only: 1. Mask Set(s) details: Mask Set(s) Product Type: Foundry Code: 2. Third Party details: Third Party's Name: Dialog Semiconductor [purchasing entity to be determined] Third Party's Address: Contact name of Third Party: 3. Volume of products The number of products to be manufactured with the Mask Set(s) will be unlimited, unless otherwise instructed by us below: Authorized Amount: [UNLIMITED] 4. Duration of Authorization The duration of this Letter of Authorization will be unlimited, unless otherwise instructed by us below: Duration of Authorization: [UNLIMITED] 5. Confidential Information Other than wafers for products specified under paragraph 1 above (which contain Energous designs), [Manufacturing Subcontractor] will not disclose to the Third Party any information which is proprietary or confidential to Energous.
Page 28
6. Reporting Upon Energous' request (but not more frequently than once per calendar year), [Manufacturing Subcontractor] will provide Energous with the accumulated wafer volumes ordered (and shipped) to the Third Party under this Letter of Authorization. By signing this Letter of Authorization, the Third Party authorizes [Manufacturing Subcontractor] to report to Energous accordingly. 8. Governing Law This Letter of Authorization will be governed by and construed in accordance with the laws of California, excluding its conflict of laws provisions, and be subject to the non-exclusive jurisdiction of the California courts. Very truly yours, Energous Incorporated Name: Title: Date: Agreed by Dialog Semiconductor (UK) Ltd Name: Title: Date: This Letter of Authorization is subject to the approval of the Manufacturing Subcontractors.
Page 29
EXHIBIT D LICENSED MARKS DIALOG LICENSED MARKS: Dialog Dialog Semiconductor ENERGOUS LICENSED MARKS: Energous WattUp Unleash your power Pending: [***] * Confidential Treatment Requested
Page 30
EXHIBIT E Commercialization plan Objective The Commercialization Plan sets forth the parties' respective rights and obligations with respect to commercial and technical activities to be performed to maximize potential Sales of Licensed Products. [***] Review O The Commercialization Plan will be reviewed and (if necessary) updated by the parties on a quarterly basis throughout the Term of the agreement. * Confidential Treatment Requested
Page 31
EXHIBIT F CUSTOMER: [***] * Confidential Treatment Requested
Page 32 | Highlight the parts (if any) of this contract related to "Source Code Escrow" that should be reviewed by a lawyer. Details: Is one party required to deposit its source code into escrow with a third party, which can be released to the counterparty upon the occurrence of certain events (bankruptcy, insolvency, etc.)? | {
"answer_start": [
67837
],
"text": [
"DIALOG agrees not to exercise such license until occurrence of a Release Condition, subject to the other restrictions set forth in this Section 16."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Exclusivity" that should be reviewed by a lawyer. Details: Is there an exclusive dealing commitment with the counterparty? This includes a commitment to procure all “requirements” from one party of certain technology, goods, or services or a prohibition on licensing or selling technology, goods or services to third parties, or a prohibition on collaborating or working with other parties), whether during the contract or after the contract ends (or both).
Context: Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
Exhibit 10.75
COLLABORATION & ENDORSEMENT AGREEMENT
THIS COLLABORATION & ENDORSEMENT AGREEMENT (the "Agreement") is dated as of this 15th day of June, 2015 ("Effective Date"), between The Naked Brands Group, Inc., a Delaware corporation ("Naked"), and Wade Enterprises, LLC ("Wade Enterprises"), an Alaska limited liability company f/s/o Dwyane Wade ("Athlete" and together with Wade Enterprises, collectively "Wade"). Wade Enterprises, Athlete and together with Naked, are each referred to herein as a "Party" and collectively, the "Parties".
AGREEMENT
1. Engagement. Naked hereby engages Wade for collaboration in business development for, and his endorsement as set forth herein of, the following items, which shall be known herein as "Innerwear": Briefs, trunks, boxer briefs and boxers, non-athletic undershirts (i.e., t-shirts intended to be worn as innerwear and not intended specifically for athletic purposes), non-athletic lounge apparel (bottoms and tops), sleepwear (including pajama bottoms and tops), and robes (as may be expanded to include other mutually agreed upon innerwear and lounge apparel) which may now or hereafter during the Term be manufactured, distributed, marketed and/or sold by Naked (collectively, the "Naked Products"), and Wade hereby accepts such engagement. The Parties agree that the territory of such engagement shall be worldwide (the "Territory").
2. Term of Agreement. The initial term of this Agreement shall be for a period of four (4) years, commencing on the Effective Date, which term may be extended for up to three (3) years by written agreement of both Parties prior to the expiration date of the initial term or any extension thereof (collectively, the "Term"). Each twelve-month period beginning on the Effective Date shall be known as a "Contract Year." In the event that either Wade or Naked wishes to extend the Term of the Agreement as contemplated above, it shall provide the other Party with written notice at least ninety (90) days prior to the expiration of the Term. The other Party will then have a period of fourteen (14) days from the date of the notice to indicate whether it also desires to extend the Term, on the terms and conditions set forth herein and if no such indication is made, the other Party will be deemed to have declined the offer to extend. Notwithstanding the foregoing, Wade agrees that for a period of ninety (90) days prior to the expiration of the Term (unless the Agreement is terminated by Wade as permitted hereunder), Naked shall have the exclusive right to negotiate for continued endorsement by Athlete of the Naked Products. For a period of six (6) months at the end of the Term (the "Sell-off Period"); provided that the Agreement was not terminated by Wade as permitted herein, Naked will have the right to continue to sell the Wade Products (defined below) for which orders have already been placed at the end of the Term on the terms and conditions herein.
3. Use of Wade Image.
During the Term and subject to the limitations set forth in this Agreement, Naked shall have an exclusive right and license in the Territory to use Athlete's name, nickname, initials, autograph, image, likeness, photographs, biographical details, facsimile signature, voice, videos, electronic media depictions, any words, symbols or other depictions, as well as any other identifying attributes that would identify Athlete to the public, including any trade mark(s), copyrights which Wade has, as set forth on Schedule A attached hereto, and all multimedia assets that Wade owns or has right to use (collectively, the "Wade Image") solely for the advertising, endorsement, promotion, or sale of the Naked Products (including the Wade Products) in the Territory as follows:
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
(1) On Naked's website(s) ("Website");
(2) In social media channels, including, but not limited to Facebook, Instagram, Twitter, YouTube, Google+, Tumblr and other mutually agreeable channels, with reasonable frequency, to promote Naked Products and Wade Products;
(3) In marketing and media opportunities in connection with the Wade Services (as defined below); and
(4) For use on the packaging of the Naked Products and Wade Products and on Wade Products themselves.
All uses of Wade Image in connection with this Agreement shall be subject to the prior written approval of Wade, which Wade shall not unreasonably withhold. Naked agrees to submit to Wade or its authorized agent a copy of all new promotional and/or advertising material using Wade Image at least ten (10) days prior to the release to the general public. Wade and its authorized agent agree that they shall not unreasonably withhold such approval. In the absence of disapproval within three (3) business days of Wade's or authorized agent's receipt of a request for approval, said advertising or promotional material shall be deemed approved. Any such usage featuring Athlete shall be and remain the property of Naked except as otherwise set forth herein; however, Naked shall have the right to such use only during the Term. Wade may use said materials in whole or in part for Wade's personal portfolio, website or otherwise. Such usage may not be sold or transferred. For the avoidance of doubt, that certain logo designed by Athlete prior to the date hereof (the "Logo") shall remain the sole property of Wade and Naked shall have license during the Term to use the Logo for the advertising, endorsement, promotion, or sale of the Naked Products (including the Wade Products) in the Territory in accordance with the terms and conditions of the Agreement. During the Sell-off Period, Naked shall have the license to use the Logo solely on packaging and presentation of Wade Products already offered for sale at retail outlets or on-line in accordance with the terms and conditions of the Agreement.
Wade will allow Naked to use any quotes that are attributed to Wade to promote the Naked Products and Wade Products in any advertising campaign. Wade will allow Naked to use any such attributed quotes that Naked requires to promote the Naked Products and Wade Products, subject to Wade's right to approve such quotes in writing, which approval shall not be unreasonably withheld.
The Parties acknowledge and agree that Athlete's accomplishments and recognition as an outstanding basketball player, individual and fashion icon, as well as his character, fame, likeness, image and reputation are the essence of this Agreement.
Wade hereby warrants that he is not a party to any agreement, contract or understanding which would prevent, limit or hider his performance of any of the obligations under this Agreement, provided that Naked acknowledges that it is aware of Athlete's obligations under his existing endorsement agreement with Li Ning for athletic shoes and athletic apparel and nothing herein shall obligate Athlete to endorse any athletic apparel other than Li Ning's.
2
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
4. Exclusivity. Wade agrees that during the Term of this Agreement, he will not represent or perform as a representative, spokesperson or provide Wade Services for, nor furnish services or materials, or allow the use of the Wade Image to be used for the advertising, endorsement, promotion, or sale of Innerwear in the Territory. Furthermore, Wade will not engage in any business or other transaction or have any financial or personal interest in any entity whose primary or core business is selling or manufacturing Innerwear during the Term. Endorsement of any Innerwear other than the Naked Products or Wade Products without the express written consent of Naked will constitute a material breach of this Agreement.
5. Wade Services. During the Term and subject to the limitations set forth in this Agreement, Wade agrees to provide Naked with the following services (collectively, the "Wade Services"):
A. During the first Contract Year, Wade will be available for (i) one production day for the purpose of creating marketing assets for Naked Products for unlimited use in advertisements and the media and (ii) one production day for creating marketing assets for Wade Products and Naked Products for unlimited use in advertisements and the media, each as permitted herein. Wade shall be available to render services at such production day for a maximum of three (3) consecutive hours, not including scheduled breaks, during each such production day period; provided that, in the event an additional production day is reasonably required for the creation of marketing assets related to the Wade Product packaging, Athlete will be available to render services for up to an additional three (3) hours in either the first Contract Year or the second Contract Year but not both. The scheduling and content of said production days shall be mutually determined by Wade and Naked, subject to Wade's professional availability;
B. Beginning in the second Contract Year, Wade will be available for a maximum of one (1) production day for creating marketing assets for Wade Products and Naked Products for unlimited use in advertisements and the media, for a maximum of three (3) consecutive hours, not including scheduled breaks, during such production day period. The scheduling and content of said production days shall be mutually determined by Wade and Naked, subject to Wade's professional availability;
C. During each Contract Year, Wade will be available for two (2) personal appearances (each, a "Personal Appearance") on behalf of Naked and the Naked Products and Wade Products in the media, including publicity shoots, interviews, print, television, radio and social media channels, each appearance for a maximum of sixty (60) consecutive minutes to be scheduled at a time mutually agreeable to Naked and Wade;
Wade has rights to websites or other social media channels promoting himself or any other promotional activity that is independent of this Agreement ("Independent Promotions"), including Wade's Facebook, Instagram, Twitter and Google+ channels and Wade's YouTube channel. Wade agrees, to generously and positively promote Naked Products and Wade Products in any such Independent Promotions on a mutually agreed upon basis with reasonable frequency and in a manner consistent with drawing attention to the Wade/Naked relationship and promoting the Naked Products and Wade Products. Naked, in its sole and absolute discretion, may preview all references and other such materials referring to Naked in the Independent Promotions prior to the public dissemination of such Independent Promotions. Wade agrees to immediately remove all such materials in his Independent Promotions that Naked, in its sole and absolute discretion requests be removed. Naked has the right to request such removals at any time, even if Naked previously approved the Independent Promotions, and Naked agrees that all social media promotions it requests of Athlete shall comply with all applicable rules and regulations. Naked may also provide material regarding the Naked Products and Wade Products to Wade, and Wade agrees to include such materials in his Independent Promotions; and
3
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
E. Wade is currently engaged in partnerships whereby its partners are selling and distributing other Athlete endorsed products. Wade will use reasonable efforts to facilitate an introduction to Naked to existing sales and distributions channels and accounts.
F. Naked may reasonably request an additional production session(s), or a media tour or personal appearance(s), subject to mutual agreement by the Parties.
At all Personal Appearances, Wade will be available to sign a reasonable number of photographs, autographs, and any other items requested by and provided by Naked at its sole cost and expense, which Naked will have the right to distribute as giveaways but never for sale. If requested, Wade will pass out a reasonable number of samples of the Wade Product. Wade will also permit himself to be reasonably photographed at the Personal Appearances with customers and fans.
6. Commercial Materials. The results of the production days listed in subsections A and B in Section 5 may be used solely for the promotion of the Naked Products (including the Wade Products) and are hereinafter referred to individually and collectively as the "Commercial Materials." Wade shall have the right of prior written approval with respect to his photographs, likeness and statements. During the Term, Naked shall have the right in the Territory to the unlimited broadcast use and re-use of the Commercial Materials in the Territory. During the Term, Naked shall have the right in the Territory to use the Wade Image in the Commercial Materials, for publication and display, as Naked shall in its sole discretion determine, in print magazines, including but not limited to, point-of-sale material, product packaging, Naked's Annual Report, other shareholder communications, internal sales and marketing pieces, as well as the right to use the same at meetings held or attended by Naked or for trade purposes. Naked shall have the right at any time during the term of this Agreement to make any revision or versions of all or any part of the Commercial Materials to conform to the requirements of individual markets as Naked may desire, subject to Wade's reasonable approval as aforesaid. Naked may also propose to use the Commercial Materials as part of cooperative advertising and retail tie in promotions subject to Wade's prior written approval which shall not be unreasonably withheld, provided that withholding approval because a potential tie in conflicts with one of Athlete's existing sponsors shall not be deemed unreasonable. Notwithstanding the foregoing, in no case shall the Commercial Materials feature any commercial tie in or other use that could be perceived as an endorsement by Athlete of any products or services other than the Naked Products. Naked shall comply with all applicable rules and regulations (including the NBA's) in its use of the Commercial Materials hereunder.
7. Design of Wade Products.
Naked and Wade (either Athlete or a team and/or agent and/or designer designated by Athlete, referred to as the "Wade Team") agree to collaborate on the design and manufacture of a new line of Innerwear under the brand "Wade By Naked" or such other brand name as the Parties agree (collectively, the "Wade Products"). Athlete will have the title of "Creative Director" for the Wade Products, which title shall be featured on the Commercial Materials. During the Term and subject to the limitations set forth in this Agreement, the Wade Team and Naked agree that the process for approving designs for Wade Products will be as follows:
4
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
(1) Naked will develop detailed designs for each Wade Product, which shall include rough drawings, to be provided to Wade for review and comment;
(2) The Wade Team will provide Naked with comments on such designs within ten (10) days after they are provided to the Wade Team;
(3) Upon receipt of the Wade Team's comments, Naked will review such comments and work diligently to incorporate them into the design within commercial reason and thereafter, develop and create a prototype for such Wade Product for the Wade Team's approval;
(4) Within ten (10) days after the Wade Team's receipt of the prototype either in hand or via a photograph by email, the Wade Team shall review the prototype and provide any additional comments; and
(5) Upon the Wade Team's written approval of a prototype, such Wade Product will be considered approved for production (the "Production Approval").
(6) In addition to the foregoing Wade Products, Naked shall have the right to produce and distribute, on a non-exclusive basis, printed or branded tee-shirts subject to Wade's existing endorsement agreements.
The Wade Team and Naked will collaborate to establish a mutually acceptable marketing campaign for Wade Products, and will schedule regular phone calls, video conferences, and/or other meetings to timely complete development of Wade Products.
8. Royalties. As consideration for Wade's services under this Agreement, Naked will pay Wade royalties as follows:
A. Royalties. Naked will report, and Wade will be paid, royalty payments at [***]
5
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
B. Payment Terms. Wade Product Royalties described above in Section 8A will be paid on a quarterly basis on the first day of each of the months of July, October, January, and April and shall be accompanied by backup documentation reasonably satisfactory to Wade.
C. [***]
D. Withholding Taxes. Wade will be solely responsible for withholding and paying any and all federal, state and local taxes, including but not limited to payroll, unemployment, social security and income taxes and any other payments which may be owed by Wade as a result of or in connection with payments made by Naked for Wade Services rendered under this Agreement. Wade acknowledges that he is not qualified for and will not receive any Naked employment benefits or other incidents of employment as a result of the Agreement.
E. Equity Ownership. Wade is hereby granted a warrant (the "Grant Warrant") exercisable for a period of seven (7) years from the date of issuance for the number of shares of Common Stock equal to [***] shares of Common Stock (the "Wade Grant"), subject to the following terms:
(1) Exercise Price. The Grant Warrant will have an exercise price equal to the then-fair market value per share of Common Stock as quoted on the OTCQB as of the Effective Date (the "FMV Exercise Price"). The form of the Grant Warrant shall be agreed to by the Parties.
(2) Vesting Schedule. The Grant Warrant will become exercisable for: (a) fifty percent (50%) of the Wade Grant on the one year anniversary of the Effective Date (the "First Installment"); (b) twenty-five percent (25%) of the Wade Grant on the second anniversary of the Effective Date (the "Second Installment"); and (c) the remaining twenty-five percent (25%) of the Wade Grant will vest on the third anniversary of the Effective Date (the "Third Installment" and together with the First Installment and the Second Installment, the "Installments" and each an "Installment"); provided however, that in the event of a change of control of Naked, the entire unvested portion of the Grant Warrant will immediately vest. For purposes hereof, a "change of control" shall mean the sale of at least fifty percent (50%) of the assets of Naked, a merger or consolidation of Naked with, by or into another entity, or a change in the ownership of more than fifty percent (50%) of the voting capital stock of Naked in one or more related transactions.
6
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
(3) Exercise Upon Termination of the Agreement. In the event that the Agreement is terminated in accordance with Section 12A, than the [***] term of the Grant Warrant [***] shall expire ninety (90) days thereafter. [***]
(6) Designee of Wade Grant. Pursuant to the request of Wade, Naked shall issue [***] to Wade's exclusive representative, CAA Sports LLC. This grant shall be issued pursuant to the same terms and conditions as the Wade Grant, with the exception of the terms of [***].
(7) [***]
7
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
(8) Grant Documents. All warrants referenced herein shall be issued pursuant to separate, mutually negotiated grant documents, which shall contain all the terms referenced herein and shall be negotiated and executed promptly after the execution of the Agreement.
9. Board Membership.
A. Advisory Board. Upon entering into this Agreement, Athlete will join the Advisory Board of Naked ("Advisory Board"). As a member of the Advisory Board, Athlete agrees to the following:
(1) Athlete will participate in at least one (1) scheduled Advisory Board meeting by phone or in-person, provided that such meeting is held in Miami on a date acceptable to Wade.
(2) Athlete will provide Naked with access to Wade's contacts and Wade's expertise and breadth of experience as it pertains to the business of Naked;
(3) Wade will provide any reasonable additional assistance as may be mutually agreed upon by Naked and Wade from time to time; and
(4) Wade grants Naked the right to publicly identify Wade as a member of the Advisory Board, Creative Director, Stockholder, and Partner of Naked, and in the event that Wade joins the Board, as Director, and may include his name and biography in materials published by Naked, including any prospectus or offering materials or to publish any other information regarding Wade in any documents required to be filed pursuant to applicable laws and regulations.
B. Board of Directors. Further, Athlete will have the option in his sole discretion of becoming a member of the Board of Directors of Naked (the "Board") (for a period of eighteen (18) months commencing on the Effective Date and provided that the Agreement has not been terminated). If Athlete elects to become a member of the Board, he must satisfy the following requirements on an annual basis:
(1) Wade will participate in at least four (4) scheduled board meetings, two (2) of which Wade must attend in-person, provided that at least one meeting is held in Miami, FL or, if no such meeting is held in Miami, FL then one (1) meeting if all meetings are held in New York, NY or another location. Subject to legal compliance requirements, Wade may designate an individual acceptable to Naked serve as his representative to the meetings of the Board;
(2) Wade will attend, subject to his availability in his sole discretion, fundraising events and meetings with potential investors, placement agents and representatives of the same at the request of Naked to be scheduled at the convenience of each of Naked and Wade;
If, while serving on the Board Wade does not satisfy any of the above-listed requirements on more than one (1) occasion, the other members of the Board may remove Wade from the Board upon written notice to Wade.
8
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
10. Wade Obligations. During the Term of this Agreement, Athlete agrees to comply with the following obligations:
A. Comply with all rules and regulations of the National Basketball Association and its governing bodies rules and regulations;
B. Not do anything which damages Wade's name, reputation, or image in the eyes of a reasonable observer;
C. Exercise reasonable constraints to avoid taking any actions which damages Naked, its name, reputation, image, the Naked Products and Wade Products;
D. When promoting the Naked Products or Wade Products, mention when appropriate the name of Naked and/or the Naked Products and Wade Products in interviews with the press, social media channels and broadcast media;
E. Wear the Naked Products and/or Wade Products when appropriate and refrain from wearing any other Innerwear products that would be visible to the public.
11. Non-compete; Confidentiality. Wade represents and warrants that during the Term and in the Territory, neither Wade nor any of his agents, representatives or employees will solicit, initiate, or encourage any proposal for an endorsement by Wade of any Innerwear to commence during the Term, or participate in any discussions or negotiations for the same. Wade will execute a non-disclosure and confidentiality agreement in a form mutually acceptable to each of Wade and Naked.
12. Termination.
A. Naked shall have the right to terminate this Agreement upon ten (10) days prior written notice to Wade in the event Wade fails to perform the Wade Services or breaches any other covenant or agreement set forth herein (including the essence of this Agreement), and fails to cure same (if curable) within seven (7) days of receipt of written notice. Such termination shall relieve Naked of its obligation to provide any further consideration pursuant to this Agreement provided that Wade shall retain all warrants he has received hereunder that have vested as of the date of such termination. In the event of such termination as a result of a material breach of this Agreement by Wade (i) Wade's contractual liabilities and obligations until the date of termination still exist notwithstanding such termination, (ii) Naked shall be under no obligation to sell any Wade Products but shall nevertheless owe the Royalty on any Wade Products sold; and (iii) notwithstanding anything to the contrary herein, Wade shall forfeit all warrants he has received hereunder. Naked shall not have waived any of its rights at law or in equity by exercising any provision of this section.
B. Wade shall have the right to terminate this Agreement upon ten (10) days prior written notice to Naked in the event of the occurrence of any of the following: (i) Naked is adjudicated as insolvent or declares bankruptcy; or (ii) Naked fails to provide consideration due pursuant to this Agreement, within ten (10) days following the date such consideration is due hereunder (or, if Wade elects to receive stock in lieu of the cash consideration, if Naked fails to instruct its transfer agent to issue the appropriate amount of Common Stock to Wade within ten (10) days following the date such consideration is due in the event such consideration is payable in Common Stock); provided that Naked is notified in writing of such non-payment by Wade and such payment by Naked is not made within three (3) days following such notification; or (iii) Naked breaches any covenant or agreement set forth herein and fails to cure same (if curable) within seven (7) days of receipt of written notice. Furthermore, Naked agrees that such termination shall not relieve it of its obligation to provide consideration as contemplated hereunder. Wade shall not have waived any of his rights at law or in equity by exercising any provision of this section.
9
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
C. The Agreement shall be deemed terminated if neither Naked nor Wade elect to extend the Agreement as set forth in Section 2 hereof.
D. Naked's rights to the use of Wade Image shall end immediately should this Agreement be terminated pursuant to Section 12(A) or Section 12(B) above.
13. Notices. All notices provided for herein shall be given in writing by hand delivery, courier service, or by certified mail return receipt requested to the addresses of the Parties set forth as follows (unless change of address by notice to the other Party is given as provided in this Section 13):
If to Wade: If to Naked: CAA Sports LLC Naked Brand Group, Inc. 405 Lexington Avenue, 19th Floor 10th Floor - 95 Madison Avenue New York, NY 10174 New York, NY 10016 Attn: Lloyd Frischer Attn: Joel Primus With a copy to: With a copy to: Andrew B. Latack, Esq. Duane Morris LLP at the same address 1540 Broadway, 14th Floor New York, NY 10036 Attn: Nanette C. Heide, Esq.
14. Intellectual Property.
All rights to the use of the names, trademarks, service marks, symbols, logos, domain names, trade secrets, confidential know-how, patents, copyrights, any pending applications with respect to any of the foregoing, and any other intellectual property and related proprietary rights, interests and protections ("Intellectual Property Rights") in connection with Wade Products will be jointly owned by Wade and Naked. Wade will retain all ownership of the Intellectual Property Rights in connection with Wade Image including, for the avoidance of doubt, the Logo. For the avoidance of doubt, no rights are being granted hereunder to any intellectual property belonging to the NBA or its member clubs (including but not limited to the Miami Heat).
Subject to Section 14A, Naked will retain all ownership of the Intellectual Property Rights in connection with the Naked Products, the Naked brand and any and all related brands. All advertising material produced hereunder will be and remain the absolute property of Naked. Wade acknowledges that he does not now have and in the future will assert no right, title or interest of any kind or nature whatsoever therein, or in or to any component part or tape, dub or copy or element or character or characterization thereof.
10
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
15. Representations and Warranties of Naked and Wade.
A. Wade relies upon Naked's skill and judgment and also upon the following representations of Naked which shall be in effect throughout the term of this Agreement:
(1) Naked's products will be merchantable and fit for the purpose for which they are intended, and
(2) Naked's products will conform at all times to all applicable federal, state and local laws, rules, regulations, ordinances, and other enactments and industry standards, including, but not limited to, those relating to product safety.
B. Wade Enterprises and Athlete hereby jointly and severally represent to Naked the following:
(1) Authorization. Wade Enterprises is an entity duly organized and validly existing in good standing under the laws of its jurisdiction of organization. Wade Enterprises and Athlete each have the requisite power and authority to enter into, execute and deliver the Agreement to which it is a party and to perform all of the obligations to be performed by each of them hereunder. The Agreement and the obligations and transactions contemplated hereby have been, duly authorized, executed and delivered by each of them, and the Agreement constitutes each of their valid and binding obligation, enforceable against such Party in accordance with its terms.
(2) No Conflicts. Neither the execution and delivery of this Agreement nor the performance or consummation of the transactions contemplated hereby or thereby by either Wade Enterprises or Athlete will conflict with, result in the breach of, constitute a default under or accelerate the performance required by the terms of: (i) any law, rule or regulation of any government or governmental or regulatory agency; (ii) any judgment, order, writ, decree, permit or license of any court or governmental or regulatory agency to which such Party may be subject; (iii) any contract, agreement, commitment or instrument to which Wade Enterprises or Athlete is a party; or (iv) Wade Enterprises' constituent documents or other governing instruments (or constitute an event which, with the passage of time or action by a third party, would result in any of the foregoing). The execution and delivery of this Agreement by Wade Enterprises and Athlete and the performance and consummation of the transactions contemplated hereby do not require any registration, filing, qualification, consent or approval under any material law, rule, regulation, judgment, order, writ, decree, permit or license to which such Party is subject.
16. Indemnity.
Naked shall be solely responsible for all liability arising out of production, distribution and sale of its product. Naked hereby agrees to indemnify, defend and hold harmless Wade Enterprises, Athlete, his agents, representatives and employees (referred to collectively as "Wade Indemnities") from and against any and all claims, actions, causes or action, damages, injuries, expenses, liabilities (joint and several), penalties fines, attorneys' fees, court costs, and any other expenses incurred by Wade Indemnities arising out of (1) breach by Naked of any of the terms, representations or warranties made by Naked in this Agreement; or (2) Naked product liability or trademark patent or other proprietary right infringement; or (3) errors, omissions, fraudulent or negligent acts by Naked, its employees, agents or subcontractors in connection with (i) any advertising featuring Athlete; (ii) the performance of Naked's duties and obligations under this Agreement; (iii) the production, distribution, promotion, marketing and sales of products including related product packaging; and/or (iv) the operation and management of its production and distribution facilities, however caused. Naked shall not be obligated to indemnify Wade with respect to damages which are the result of the gross negligence or willful misconduct of Wade.
11
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
Athlete and Wade Enterprises, jointly and severally, hereby agree to indemnify, defend and hold harmless Naked, its shareholders, directors, officers, employees, agents, and affiliates (referred to collectively as "Naked Indemnities") from and against any and all claims, actions, causes or action, damages, injuries, expenses, liabilities (joint and several), penalties fines, attorneys' fees, court costs, and any other expenses incurred by Naked Indemnities arising out of or are in any way connected directly or indirectly with any and all claims, suits, actions, costs, and other expenses, fines, judgments, investigations, proceedings, demands, liabilities, and obligations of any nature whatsoever, with respect to Wade Enterprises' or Athlete's breach of its respective representations and warranties, uncured breach of this Agreement or Athlete's gross negligence or willful misconduct.
17. Relationship of Parties. Nothing contained in this Agreement shall be deemed or construed to place the Parties in the relationship of partners, joint venturers, principal-agents, or employer-employee, it being understood that the Parties are and will remain independent contractors in all respects and neither Party shall have any right to obligate or bind the other in any manner whatsoever.
18. Assignment. Neither this Agreement nor any of the rights or obligations contained herein may be assigned or transferred by either Party without the prior written consent of the other Party.
19. Expenses. Each Party will bear its own expenses with respect to the execution of this Agreement and the transactions contemplated thereunder, including but not limited to legal fees.
20. Authority to Contract. Each of the Parties represents and warrants that it has full right and power to enter into this Agreement, to perform all obligations to be performed by it hereunder, and to grant all rights hereunder granted without violating the legal or equitable rights of any other person or entity, and that the execution and performance of this Agreement will not conflict with or result in a breach of or default under any of the terms or conditions of any agreement to which either Party has agreed, or is a Party, or may be bound.
21. Construction of Agreement. Each Party acknowledges that it has participated in the negotiation of this Agreement and that no provision of this Agreement shall be construed against or be interpreted to the disadvantage of any Party by any court or other governmental or judicial authority by reason of such Party having or deemed to have structured, dictated or drafted such provision.
12
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
22. Merger; Modification. This Agreement constitutes the entire agreement with respect to the subject matter contained herein and supersedes all previous communications and agreements between the Parties pertaining to the subject matter hereof, whether written or oral. The terms of this Agreement may not be modified, waived, amended, discharged, terminated, or supplemented, or otherwise changed, except by a written document executed by each Party.
23. No Waiver. A waiver by either Party of any of the terms or conditions of this Agreement in any instance shall not be deemed or construed to be a waiver of such term or condition for the future, or of any subsequent breach thereof, or any other term or condition of this Agreement. All remedies, rights, undertakings, obligations, and agreements contained in this Agreement shall be cumulative and none of them shall be in limitation of any other remedy, right, undertaking, obligation or agreement of either Party.
24. Severability. If any provision of this Agreement, as applied to either Party or to any circumstance, shall be adjudged by a court of competent jurisdiction to be void or unenforceable, whether at law or in equity, then such determination shall in no way affect any other provision of this Agreement, or the validity or enforceability of this Agreement.
25. Choice of Law. This Agreement, all amendments hereto, and any and all issues or controversies arising here from or related hereto, shall be governed by and construed exclusively in accordance with the laws of the State of New York.
26. Arbitration of Disputes. The parties agree to use commercially reasonable efforts to settle amicably any controversy, or claim arising out of the Agreement or any breach thereof through a dispute resolution process involving Wade and members from the senior management of Naked. If the parties do not otherwise agree, either party may present any unresolved dispute for arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the "Rules") then in effect. Such arbitration will be held in New York, NY. The arbitration will be by a single arbitrator chosen by the parties, provided that if the parties fail to agree and to appoint a single arbitrator within twenty (20) business days from the date that one of the parties has made a demand for arbitration, then the arbitrator will be chosen in accordance with the Rules. The decision of the arbitrator will be final and binding on the parties and any award of the arbitrator may be entered in any court of competent jurisdiction.
27. Attorneys' Fees. If any action is necessary to enforce the provisions of this Agreement, including any claims or demands, or to interpret this Agreement, the prevailing Party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which it may otherwise be entitled.
28. Captions; Structure. Section headings used in this Agreement are for convenience of reference only and shall not in any way affect the interpretation of any section of this Agreement or of the Agreement itself.
29. Time is of the Essence. Time is of the essence with respect to the performance of the duties and obligations hereunder.
30. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall be construed as a single instrument. This Agreement may be executed by facsimile or other electronic transmissions, and signatures on any facsimile or electronic transmission copy hereof shall be deemed authorized original signatures.
13
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
31. No Third Party Beneficiaries. This Agreement is not for the benefit of any third party and shall be deemed not to give any right or remedy to such third party, whether referred to herein or not.
32. Recitals. The recitals contained in this Agreement are true and correct and are incorporated herein by reference.
[SIGNATURE PAGE TO FOLLOW]
14
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and date first above written.
WITNESS: Naked Brand Group, Inc. ("Naked") By: By: /s/ Carole Hochman Date: Title: WITNESS: Wade Enterprises, LLC ("Wade") By: By: /s/ Dwyane Wade Date:
15
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
Inducement Letter and Guarantee
In order to induce Naked to enter into this Agreement with Wade Enterprises, LLC, I agree to the execution and delivery of this Agreement by Wade Enterprises, LLC, and agree to render all the services herein provided to be rendered by me, to grant all the rights granted herein, and to be bound by and duly perform and observe each and all of the terms and conditions of this Agreement regarding performance or compliance on my part, and I hereby join in all warranties, representations, agreements and indemnities made by Wade Enterprises, LLC, and further confirm the rights granted to Naked under the Agreement. All notices to Wade Enterprises, LLC shall be deemed notices to me with the same effect as if given to me. I certify that my services are rendered as an employee of Wade Enterprises, LLC, and, unless substituted for Wade Enterprises, LLC by law, I agree to look solely to Wade Enterprises, LLC for payment of compensation for my services and the discharge all other obligations of an employer, subject to the terms of the Agreement.
By: /s/ Dwyane Wade Name: Dwyane Wade Date: NAKED BRAND GROUP, INC. By: /s/ Carole Hochman Name: Date:
16
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
SCHEDULE A
WADE TRADEMARKS AND COPYRIGHTS
Wade's Asterisk Logo
17
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
18
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
SCHEDULE B
[***]
19
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 [/INST] ```json
{<answer_start>
"answer": "During the Term and subject to the limitations set forth in this Agreement, Naked shall have an exclusive right and license in the Territory to use Athlete's name, nickname, initials, autograph, image, likeness, photographs, biographical details, facsimile signature, voice, videos, electronic media depictions, any words, symbols or other depictions, as well as any other identifying attributes that would identify Athlete to the public, including any trade mark(s), copyrights which Wade has, as set forth on Schedule A attached hereto, and all multimedia assets that Wade owns or has right to use (collectively, the "Wade Image") solely for the advertising, endorsement, promotion, or sale of the Naked Products (including the Wade Products) in the Territory as follows:"
<answer_end>
}
``` </s> | Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
Exhibit 10.75
COLLABORATION & ENDORSEMENT AGREEMENT
THIS COLLABORATION & ENDORSEMENT AGREEMENT (the "Agreement") is dated as of this 15th day of June, 2015 ("Effective Date"), between The Naked Brands Group, Inc., a Delaware corporation ("Naked"), and Wade Enterprises, LLC ("Wade Enterprises"), an Alaska limited liability company f/s/o Dwyane Wade ("Athlete" and together with Wade Enterprises, collectively "Wade"). Wade Enterprises, Athlete and together with Naked, are each referred to herein as a "Party" and collectively, the "Parties".
AGREEMENT
1. Engagement. Naked hereby engages Wade for collaboration in business development for, and his endorsement as set forth herein of, the following items, which shall be known herein as "Innerwear": Briefs, trunks, boxer briefs and boxers, non-athletic undershirts (i.e., t-shirts intended to be worn as innerwear and not intended specifically for athletic purposes), non-athletic lounge apparel (bottoms and tops), sleepwear (including pajama bottoms and tops), and robes (as may be expanded to include other mutually agreed upon innerwear and lounge apparel) which may now or hereafter during the Term be manufactured, distributed, marketed and/or sold by Naked (collectively, the "Naked Products"), and Wade hereby accepts such engagement. The Parties agree that the territory of such engagement shall be worldwide (the "Territory").
2. Term of Agreement. The initial term of this Agreement shall be for a period of four (4) years, commencing on the Effective Date, which term may be extended for up to three (3) years by written agreement of both Parties prior to the expiration date of the initial term or any extension thereof (collectively, the "Term"). Each twelve-month period beginning on the Effective Date shall be known as a "Contract Year." In the event that either Wade or Naked wishes to extend the Term of the Agreement as contemplated above, it shall provide the other Party with written notice at least ninety (90) days prior to the expiration of the Term. The other Party will then have a period of fourteen (14) days from the date of the notice to indicate whether it also desires to extend the Term, on the terms and conditions set forth herein and if no such indication is made, the other Party will be deemed to have declined the offer to extend. Notwithstanding the foregoing, Wade agrees that for a period of ninety (90) days prior to the expiration of the Term (unless the Agreement is terminated by Wade as permitted hereunder), Naked shall have the exclusive right to negotiate for continued endorsement by Athlete of the Naked Products. For a period of six (6) months at the end of the Term (the "Sell-off Period"); provided that the Agreement was not terminated by Wade as permitted herein, Naked will have the right to continue to sell the Wade Products (defined below) for which orders have already been placed at the end of the Term on the terms and conditions herein.
3. Use of Wade Image.
During the Term and subject to the limitations set forth in this Agreement, Naked shall have an exclusive right and license in the Territory to use Athlete's name, nickname, initials, autograph, image, likeness, photographs, biographical details, facsimile signature, voice, videos, electronic media depictions, any words, symbols or other depictions, as well as any other identifying attributes that would identify Athlete to the public, including any trade mark(s), copyrights which Wade has, as set forth on Schedule A attached hereto, and all multimedia assets that Wade owns or has right to use (collectively, the "Wade Image") solely for the advertising, endorsement, promotion, or sale of the Naked Products (including the Wade Products) in the Territory as follows:
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
(1) On Naked's website(s) ("Website");
(2) In social media channels, including, but not limited to Facebook, Instagram, Twitter, YouTube, Google+, Tumblr and other mutually agreeable channels, with reasonable frequency, to promote Naked Products and Wade Products;
(3) In marketing and media opportunities in connection with the Wade Services (as defined below); and
(4) For use on the packaging of the Naked Products and Wade Products and on Wade Products themselves.
All uses of Wade Image in connection with this Agreement shall be subject to the prior written approval of Wade, which Wade shall not unreasonably withhold. Naked agrees to submit to Wade or its authorized agent a copy of all new promotional and/or advertising material using Wade Image at least ten (10) days prior to the release to the general public. Wade and its authorized agent agree that they shall not unreasonably withhold such approval. In the absence of disapproval within three (3) business days of Wade's or authorized agent's receipt of a request for approval, said advertising or promotional material shall be deemed approved. Any such usage featuring Athlete shall be and remain the property of Naked except as otherwise set forth herein; however, Naked shall have the right to such use only during the Term. Wade may use said materials in whole or in part for Wade's personal portfolio, website or otherwise. Such usage may not be sold or transferred. For the avoidance of doubt, that certain logo designed by Athlete prior to the date hereof (the "Logo") shall remain the sole property of Wade and Naked shall have license during the Term to use the Logo for the advertising, endorsement, promotion, or sale of the Naked Products (including the Wade Products) in the Territory in accordance with the terms and conditions of the Agreement. During the Sell-off Period, Naked shall have the license to use the Logo solely on packaging and presentation of Wade Products already offered for sale at retail outlets or on-line in accordance with the terms and conditions of the Agreement.
Wade will allow Naked to use any quotes that are attributed to Wade to promote the Naked Products and Wade Products in any advertising campaign. Wade will allow Naked to use any such attributed quotes that Naked requires to promote the Naked Products and Wade Products, subject to Wade's right to approve such quotes in writing, which approval shall not be unreasonably withheld.
The Parties acknowledge and agree that Athlete's accomplishments and recognition as an outstanding basketball player, individual and fashion icon, as well as his character, fame, likeness, image and reputation are the essence of this Agreement.
Wade hereby warrants that he is not a party to any agreement, contract or understanding which would prevent, limit or hider his performance of any of the obligations under this Agreement, provided that Naked acknowledges that it is aware of Athlete's obligations under his existing endorsement agreement with Li Ning for athletic shoes and athletic apparel and nothing herein shall obligate Athlete to endorse any athletic apparel other than Li Ning's.
2
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
4. Exclusivity. Wade agrees that during the Term of this Agreement, he will not represent or perform as a representative, spokesperson or provide Wade Services for, nor furnish services or materials, or allow the use of the Wade Image to be used for the advertising, endorsement, promotion, or sale of Innerwear in the Territory. Furthermore, Wade will not engage in any business or other transaction or have any financial or personal interest in any entity whose primary or core business is selling or manufacturing Innerwear during the Term. Endorsement of any Innerwear other than the Naked Products or Wade Products without the express written consent of Naked will constitute a material breach of this Agreement.
5. Wade Services. During the Term and subject to the limitations set forth in this Agreement, Wade agrees to provide Naked with the following services (collectively, the "Wade Services"):
A. During the first Contract Year, Wade will be available for (i) one production day for the purpose of creating marketing assets for Naked Products for unlimited use in advertisements and the media and (ii) one production day for creating marketing assets for Wade Products and Naked Products for unlimited use in advertisements and the media, each as permitted herein. Wade shall be available to render services at such production day for a maximum of three (3) consecutive hours, not including scheduled breaks, during each such production day period; provided that, in the event an additional production day is reasonably required for the creation of marketing assets related to the Wade Product packaging, Athlete will be available to render services for up to an additional three (3) hours in either the first Contract Year or the second Contract Year but not both. The scheduling and content of said production days shall be mutually determined by Wade and Naked, subject to Wade's professional availability;
B. Beginning in the second Contract Year, Wade will be available for a maximum of one (1) production day for creating marketing assets for Wade Products and Naked Products for unlimited use in advertisements and the media, for a maximum of three (3) consecutive hours, not including scheduled breaks, during such production day period. The scheduling and content of said production days shall be mutually determined by Wade and Naked, subject to Wade's professional availability;
C. During each Contract Year, Wade will be available for two (2) personal appearances (each, a "Personal Appearance") on behalf of Naked and the Naked Products and Wade Products in the media, including publicity shoots, interviews, print, television, radio and social media channels, each appearance for a maximum of sixty (60) consecutive minutes to be scheduled at a time mutually agreeable to Naked and Wade;
Wade has rights to websites or other social media channels promoting himself or any other promotional activity that is independent of this Agreement ("Independent Promotions"), including Wade's Facebook, Instagram, Twitter and Google+ channels and Wade's YouTube channel. Wade agrees, to generously and positively promote Naked Products and Wade Products in any such Independent Promotions on a mutually agreed upon basis with reasonable frequency and in a manner consistent with drawing attention to the Wade/Naked relationship and promoting the Naked Products and Wade Products. Naked, in its sole and absolute discretion, may preview all references and other such materials referring to Naked in the Independent Promotions prior to the public dissemination of such Independent Promotions. Wade agrees to immediately remove all such materials in his Independent Promotions that Naked, in its sole and absolute discretion requests be removed. Naked has the right to request such removals at any time, even if Naked previously approved the Independent Promotions, and Naked agrees that all social media promotions it requests of Athlete shall comply with all applicable rules and regulations. Naked may also provide material regarding the Naked Products and Wade Products to Wade, and Wade agrees to include such materials in his Independent Promotions; and
3
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
E. Wade is currently engaged in partnerships whereby its partners are selling and distributing other Athlete endorsed products. Wade will use reasonable efforts to facilitate an introduction to Naked to existing sales and distributions channels and accounts.
F. Naked may reasonably request an additional production session(s), or a media tour or personal appearance(s), subject to mutual agreement by the Parties.
At all Personal Appearances, Wade will be available to sign a reasonable number of photographs, autographs, and any other items requested by and provided by Naked at its sole cost and expense, which Naked will have the right to distribute as giveaways but never for sale. If requested, Wade will pass out a reasonable number of samples of the Wade Product. Wade will also permit himself to be reasonably photographed at the Personal Appearances with customers and fans.
6. Commercial Materials. The results of the production days listed in subsections A and B in Section 5 may be used solely for the promotion of the Naked Products (including the Wade Products) and are hereinafter referred to individually and collectively as the "Commercial Materials." Wade shall have the right of prior written approval with respect to his photographs, likeness and statements. During the Term, Naked shall have the right in the Territory to the unlimited broadcast use and re-use of the Commercial Materials in the Territory. During the Term, Naked shall have the right in the Territory to use the Wade Image in the Commercial Materials, for publication and display, as Naked shall in its sole discretion determine, in print magazines, including but not limited to, point-of-sale material, product packaging, Naked's Annual Report, other shareholder communications, internal sales and marketing pieces, as well as the right to use the same at meetings held or attended by Naked or for trade purposes. Naked shall have the right at any time during the term of this Agreement to make any revision or versions of all or any part of the Commercial Materials to conform to the requirements of individual markets as Naked may desire, subject to Wade's reasonable approval as aforesaid. Naked may also propose to use the Commercial Materials as part of cooperative advertising and retail tie in promotions subject to Wade's prior written approval which shall not be unreasonably withheld, provided that withholding approval because a potential tie in conflicts with one of Athlete's existing sponsors shall not be deemed unreasonable. Notwithstanding the foregoing, in no case shall the Commercial Materials feature any commercial tie in or other use that could be perceived as an endorsement by Athlete of any products or services other than the Naked Products. Naked shall comply with all applicable rules and regulations (including the NBA's) in its use of the Commercial Materials hereunder.
7. Design of Wade Products.
Naked and Wade (either Athlete or a team and/or agent and/or designer designated by Athlete, referred to as the "Wade Team") agree to collaborate on the design and manufacture of a new line of Innerwear under the brand "Wade By Naked" or such other brand name as the Parties agree (collectively, the "Wade Products"). Athlete will have the title of "Creative Director" for the Wade Products, which title shall be featured on the Commercial Materials. During the Term and subject to the limitations set forth in this Agreement, the Wade Team and Naked agree that the process for approving designs for Wade Products will be as follows:
4
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
(1) Naked will develop detailed designs for each Wade Product, which shall include rough drawings, to be provided to Wade for review and comment;
(2) The Wade Team will provide Naked with comments on such designs within ten (10) days after they are provided to the Wade Team;
(3) Upon receipt of the Wade Team's comments, Naked will review such comments and work diligently to incorporate them into the design within commercial reason and thereafter, develop and create a prototype for such Wade Product for the Wade Team's approval;
(4) Within ten (10) days after the Wade Team's receipt of the prototype either in hand or via a photograph by email, the Wade Team shall review the prototype and provide any additional comments; and
(5) Upon the Wade Team's written approval of a prototype, such Wade Product will be considered approved for production (the "Production Approval").
(6) In addition to the foregoing Wade Products, Naked shall have the right to produce and distribute, on a non-exclusive basis, printed or branded tee-shirts subject to Wade's existing endorsement agreements.
The Wade Team and Naked will collaborate to establish a mutually acceptable marketing campaign for Wade Products, and will schedule regular phone calls, video conferences, and/or other meetings to timely complete development of Wade Products.
8. Royalties. As consideration for Wade's services under this Agreement, Naked will pay Wade royalties as follows:
A. Royalties. Naked will report, and Wade will be paid, royalty payments at [***]
5
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
B. Payment Terms. Wade Product Royalties described above in Section 8A will be paid on a quarterly basis on the first day of each of the months of July, October, January, and April and shall be accompanied by backup documentation reasonably satisfactory to Wade.
C. [***]
D. Withholding Taxes. Wade will be solely responsible for withholding and paying any and all federal, state and local taxes, including but not limited to payroll, unemployment, social security and income taxes and any other payments which may be owed by Wade as a result of or in connection with payments made by Naked for Wade Services rendered under this Agreement. Wade acknowledges that he is not qualified for and will not receive any Naked employment benefits or other incidents of employment as a result of the Agreement.
E. Equity Ownership. Wade is hereby granted a warrant (the "Grant Warrant") exercisable for a period of seven (7) years from the date of issuance for the number of shares of Common Stock equal to [***] shares of Common Stock (the "Wade Grant"), subject to the following terms:
(1) Exercise Price. The Grant Warrant will have an exercise price equal to the then-fair market value per share of Common Stock as quoted on the OTCQB as of the Effective Date (the "FMV Exercise Price"). The form of the Grant Warrant shall be agreed to by the Parties.
(2) Vesting Schedule. The Grant Warrant will become exercisable for: (a) fifty percent (50%) of the Wade Grant on the one year anniversary of the Effective Date (the "First Installment"); (b) twenty-five percent (25%) of the Wade Grant on the second anniversary of the Effective Date (the "Second Installment"); and (c) the remaining twenty-five percent (25%) of the Wade Grant will vest on the third anniversary of the Effective Date (the "Third Installment" and together with the First Installment and the Second Installment, the "Installments" and each an "Installment"); provided however, that in the event of a change of control of Naked, the entire unvested portion of the Grant Warrant will immediately vest. For purposes hereof, a "change of control" shall mean the sale of at least fifty percent (50%) of the assets of Naked, a merger or consolidation of Naked with, by or into another entity, or a change in the ownership of more than fifty percent (50%) of the voting capital stock of Naked in one or more related transactions.
6
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
(3) Exercise Upon Termination of the Agreement. In the event that the Agreement is terminated in accordance with Section 12A, than the [***] term of the Grant Warrant [***] shall expire ninety (90) days thereafter. [***]
(6) Designee of Wade Grant. Pursuant to the request of Wade, Naked shall issue [***] to Wade's exclusive representative, CAA Sports LLC. This grant shall be issued pursuant to the same terms and conditions as the Wade Grant, with the exception of the terms of [***].
(7) [***]
7
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
(8) Grant Documents. All warrants referenced herein shall be issued pursuant to separate, mutually negotiated grant documents, which shall contain all the terms referenced herein and shall be negotiated and executed promptly after the execution of the Agreement.
9. Board Membership.
A. Advisory Board. Upon entering into this Agreement, Athlete will join the Advisory Board of Naked ("Advisory Board"). As a member of the Advisory Board, Athlete agrees to the following:
(1) Athlete will participate in at least one (1) scheduled Advisory Board meeting by phone or in-person, provided that such meeting is held in Miami on a date acceptable to Wade.
(2) Athlete will provide Naked with access to Wade's contacts and Wade's expertise and breadth of experience as it pertains to the business of Naked;
(3) Wade will provide any reasonable additional assistance as may be mutually agreed upon by Naked and Wade from time to time; and
(4) Wade grants Naked the right to publicly identify Wade as a member of the Advisory Board, Creative Director, Stockholder, and Partner of Naked, and in the event that Wade joins the Board, as Director, and may include his name and biography in materials published by Naked, including any prospectus or offering materials or to publish any other information regarding Wade in any documents required to be filed pursuant to applicable laws and regulations.
B. Board of Directors. Further, Athlete will have the option in his sole discretion of becoming a member of the Board of Directors of Naked (the "Board") (for a period of eighteen (18) months commencing on the Effective Date and provided that the Agreement has not been terminated). If Athlete elects to become a member of the Board, he must satisfy the following requirements on an annual basis:
(1) Wade will participate in at least four (4) scheduled board meetings, two (2) of which Wade must attend in-person, provided that at least one meeting is held in Miami, FL or, if no such meeting is held in Miami, FL then one (1) meeting if all meetings are held in New York, NY or another location. Subject to legal compliance requirements, Wade may designate an individual acceptable to Naked serve as his representative to the meetings of the Board;
(2) Wade will attend, subject to his availability in his sole discretion, fundraising events and meetings with potential investors, placement agents and representatives of the same at the request of Naked to be scheduled at the convenience of each of Naked and Wade;
If, while serving on the Board Wade does not satisfy any of the above-listed requirements on more than one (1) occasion, the other members of the Board may remove Wade from the Board upon written notice to Wade.
8
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
10. Wade Obligations. During the Term of this Agreement, Athlete agrees to comply with the following obligations:
A. Comply with all rules and regulations of the National Basketball Association and its governing bodies rules and regulations;
B. Not do anything which damages Wade's name, reputation, or image in the eyes of a reasonable observer;
C. Exercise reasonable constraints to avoid taking any actions which damages Naked, its name, reputation, image, the Naked Products and Wade Products;
D. When promoting the Naked Products or Wade Products, mention when appropriate the name of Naked and/or the Naked Products and Wade Products in interviews with the press, social media channels and broadcast media;
E. Wear the Naked Products and/or Wade Products when appropriate and refrain from wearing any other Innerwear products that would be visible to the public.
11. Non-compete; Confidentiality. Wade represents and warrants that during the Term and in the Territory, neither Wade nor any of his agents, representatives or employees will solicit, initiate, or encourage any proposal for an endorsement by Wade of any Innerwear to commence during the Term, or participate in any discussions or negotiations for the same. Wade will execute a non-disclosure and confidentiality agreement in a form mutually acceptable to each of Wade and Naked.
12. Termination.
A. Naked shall have the right to terminate this Agreement upon ten (10) days prior written notice to Wade in the event Wade fails to perform the Wade Services or breaches any other covenant or agreement set forth herein (including the essence of this Agreement), and fails to cure same (if curable) within seven (7) days of receipt of written notice. Such termination shall relieve Naked of its obligation to provide any further consideration pursuant to this Agreement provided that Wade shall retain all warrants he has received hereunder that have vested as of the date of such termination. In the event of such termination as a result of a material breach of this Agreement by Wade (i) Wade's contractual liabilities and obligations until the date of termination still exist notwithstanding such termination, (ii) Naked shall be under no obligation to sell any Wade Products but shall nevertheless owe the Royalty on any Wade Products sold; and (iii) notwithstanding anything to the contrary herein, Wade shall forfeit all warrants he has received hereunder. Naked shall not have waived any of its rights at law or in equity by exercising any provision of this section.
B. Wade shall have the right to terminate this Agreement upon ten (10) days prior written notice to Naked in the event of the occurrence of any of the following: (i) Naked is adjudicated as insolvent or declares bankruptcy; or (ii) Naked fails to provide consideration due pursuant to this Agreement, within ten (10) days following the date such consideration is due hereunder (or, if Wade elects to receive stock in lieu of the cash consideration, if Naked fails to instruct its transfer agent to issue the appropriate amount of Common Stock to Wade within ten (10) days following the date such consideration is due in the event such consideration is payable in Common Stock); provided that Naked is notified in writing of such non-payment by Wade and such payment by Naked is not made within three (3) days following such notification; or (iii) Naked breaches any covenant or agreement set forth herein and fails to cure same (if curable) within seven (7) days of receipt of written notice. Furthermore, Naked agrees that such termination shall not relieve it of its obligation to provide consideration as contemplated hereunder. Wade shall not have waived any of his rights at law or in equity by exercising any provision of this section.
9
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
C. The Agreement shall be deemed terminated if neither Naked nor Wade elect to extend the Agreement as set forth in Section 2 hereof.
D. Naked's rights to the use of Wade Image shall end immediately should this Agreement be terminated pursuant to Section 12(A) or Section 12(B) above.
13. Notices. All notices provided for herein shall be given in writing by hand delivery, courier service, or by certified mail return receipt requested to the addresses of the Parties set forth as follows (unless change of address by notice to the other Party is given as provided in this Section 13):
If to Wade: If to Naked: CAA Sports LLC Naked Brand Group, Inc. 405 Lexington Avenue, 19th Floor 10th Floor - 95 Madison Avenue New York, NY 10174 New York, NY 10016 Attn: Lloyd Frischer Attn: Joel Primus With a copy to: With a copy to: Andrew B. Latack, Esq. Duane Morris LLP at the same address 1540 Broadway, 14th Floor New York, NY 10036 Attn: Nanette C. Heide, Esq.
14. Intellectual Property.
All rights to the use of the names, trademarks, service marks, symbols, logos, domain names, trade secrets, confidential know-how, patents, copyrights, any pending applications with respect to any of the foregoing, and any other intellectual property and related proprietary rights, interests and protections ("Intellectual Property Rights") in connection with Wade Products will be jointly owned by Wade and Naked. Wade will retain all ownership of the Intellectual Property Rights in connection with Wade Image including, for the avoidance of doubt, the Logo. For the avoidance of doubt, no rights are being granted hereunder to any intellectual property belonging to the NBA or its member clubs (including but not limited to the Miami Heat).
Subject to Section 14A, Naked will retain all ownership of the Intellectual Property Rights in connection with the Naked Products, the Naked brand and any and all related brands. All advertising material produced hereunder will be and remain the absolute property of Naked. Wade acknowledges that he does not now have and in the future will assert no right, title or interest of any kind or nature whatsoever therein, or in or to any component part or tape, dub or copy or element or character or characterization thereof.
10
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
15. Representations and Warranties of Naked and Wade.
A. Wade relies upon Naked's skill and judgment and also upon the following representations of Naked which shall be in effect throughout the term of this Agreement:
(1) Naked's products will be merchantable and fit for the purpose for which they are intended, and
(2) Naked's products will conform at all times to all applicable federal, state and local laws, rules, regulations, ordinances, and other enactments and industry standards, including, but not limited to, those relating to product safety.
B. Wade Enterprises and Athlete hereby jointly and severally represent to Naked the following:
(1) Authorization. Wade Enterprises is an entity duly organized and validly existing in good standing under the laws of its jurisdiction of organization. Wade Enterprises and Athlete each have the requisite power and authority to enter into, execute and deliver the Agreement to which it is a party and to perform all of the obligations to be performed by each of them hereunder. The Agreement and the obligations and transactions contemplated hereby have been, duly authorized, executed and delivered by each of them, and the Agreement constitutes each of their valid and binding obligation, enforceable against such Party in accordance with its terms.
(2) No Conflicts. Neither the execution and delivery of this Agreement nor the performance or consummation of the transactions contemplated hereby or thereby by either Wade Enterprises or Athlete will conflict with, result in the breach of, constitute a default under or accelerate the performance required by the terms of: (i) any law, rule or regulation of any government or governmental or regulatory agency; (ii) any judgment, order, writ, decree, permit or license of any court or governmental or regulatory agency to which such Party may be subject; (iii) any contract, agreement, commitment or instrument to which Wade Enterprises or Athlete is a party; or (iv) Wade Enterprises' constituent documents or other governing instruments (or constitute an event which, with the passage of time or action by a third party, would result in any of the foregoing). The execution and delivery of this Agreement by Wade Enterprises and Athlete and the performance and consummation of the transactions contemplated hereby do not require any registration, filing, qualification, consent or approval under any material law, rule, regulation, judgment, order, writ, decree, permit or license to which such Party is subject.
16. Indemnity.
Naked shall be solely responsible for all liability arising out of production, distribution and sale of its product. Naked hereby agrees to indemnify, defend and hold harmless Wade Enterprises, Athlete, his agents, representatives and employees (referred to collectively as "Wade Indemnities") from and against any and all claims, actions, causes or action, damages, injuries, expenses, liabilities (joint and several), penalties fines, attorneys' fees, court costs, and any other expenses incurred by Wade Indemnities arising out of (1) breach by Naked of any of the terms, representations or warranties made by Naked in this Agreement; or (2) Naked product liability or trademark patent or other proprietary right infringement; or (3) errors, omissions, fraudulent or negligent acts by Naked, its employees, agents or subcontractors in connection with (i) any advertising featuring Athlete; (ii) the performance of Naked's duties and obligations under this Agreement; (iii) the production, distribution, promotion, marketing and sales of products including related product packaging; and/or (iv) the operation and management of its production and distribution facilities, however caused. Naked shall not be obligated to indemnify Wade with respect to damages which are the result of the gross negligence or willful misconduct of Wade.
11
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
Athlete and Wade Enterprises, jointly and severally, hereby agree to indemnify, defend and hold harmless Naked, its shareholders, directors, officers, employees, agents, and affiliates (referred to collectively as "Naked Indemnities") from and against any and all claims, actions, causes or action, damages, injuries, expenses, liabilities (joint and several), penalties fines, attorneys' fees, court costs, and any other expenses incurred by Naked Indemnities arising out of or are in any way connected directly or indirectly with any and all claims, suits, actions, costs, and other expenses, fines, judgments, investigations, proceedings, demands, liabilities, and obligations of any nature whatsoever, with respect to Wade Enterprises' or Athlete's breach of its respective representations and warranties, uncured breach of this Agreement or Athlete's gross negligence or willful misconduct.
17. Relationship of Parties. Nothing contained in this Agreement shall be deemed or construed to place the Parties in the relationship of partners, joint venturers, principal-agents, or employer-employee, it being understood that the Parties are and will remain independent contractors in all respects and neither Party shall have any right to obligate or bind the other in any manner whatsoever.
18. Assignment. Neither this Agreement nor any of the rights or obligations contained herein may be assigned or transferred by either Party without the prior written consent of the other Party.
19. Expenses. Each Party will bear its own expenses with respect to the execution of this Agreement and the transactions contemplated thereunder, including but not limited to legal fees.
20. Authority to Contract. Each of the Parties represents and warrants that it has full right and power to enter into this Agreement, to perform all obligations to be performed by it hereunder, and to grant all rights hereunder granted without violating the legal or equitable rights of any other person or entity, and that the execution and performance of this Agreement will not conflict with or result in a breach of or default under any of the terms or conditions of any agreement to which either Party has agreed, or is a Party, or may be bound.
21. Construction of Agreement. Each Party acknowledges that it has participated in the negotiation of this Agreement and that no provision of this Agreement shall be construed against or be interpreted to the disadvantage of any Party by any court or other governmental or judicial authority by reason of such Party having or deemed to have structured, dictated or drafted such provision.
12
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
22. Merger; Modification. This Agreement constitutes the entire agreement with respect to the subject matter contained herein and supersedes all previous communications and agreements between the Parties pertaining to the subject matter hereof, whether written or oral. The terms of this Agreement may not be modified, waived, amended, discharged, terminated, or supplemented, or otherwise changed, except by a written document executed by each Party.
23. No Waiver. A waiver by either Party of any of the terms or conditions of this Agreement in any instance shall not be deemed or construed to be a waiver of such term or condition for the future, or of any subsequent breach thereof, or any other term or condition of this Agreement. All remedies, rights, undertakings, obligations, and agreements contained in this Agreement shall be cumulative and none of them shall be in limitation of any other remedy, right, undertaking, obligation or agreement of either Party.
24. Severability. If any provision of this Agreement, as applied to either Party or to any circumstance, shall be adjudged by a court of competent jurisdiction to be void or unenforceable, whether at law or in equity, then such determination shall in no way affect any other provision of this Agreement, or the validity or enforceability of this Agreement.
25. Choice of Law. This Agreement, all amendments hereto, and any and all issues or controversies arising here from or related hereto, shall be governed by and construed exclusively in accordance with the laws of the State of New York.
26. Arbitration of Disputes. The parties agree to use commercially reasonable efforts to settle amicably any controversy, or claim arising out of the Agreement or any breach thereof through a dispute resolution process involving Wade and members from the senior management of Naked. If the parties do not otherwise agree, either party may present any unresolved dispute for arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the "Rules") then in effect. Such arbitration will be held in New York, NY. The arbitration will be by a single arbitrator chosen by the parties, provided that if the parties fail to agree and to appoint a single arbitrator within twenty (20) business days from the date that one of the parties has made a demand for arbitration, then the arbitrator will be chosen in accordance with the Rules. The decision of the arbitrator will be final and binding on the parties and any award of the arbitrator may be entered in any court of competent jurisdiction.
27. Attorneys' Fees. If any action is necessary to enforce the provisions of this Agreement, including any claims or demands, or to interpret this Agreement, the prevailing Party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which it may otherwise be entitled.
28. Captions; Structure. Section headings used in this Agreement are for convenience of reference only and shall not in any way affect the interpretation of any section of this Agreement or of the Agreement itself.
29. Time is of the Essence. Time is of the essence with respect to the performance of the duties and obligations hereunder.
30. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall be construed as a single instrument. This Agreement may be executed by facsimile or other electronic transmissions, and signatures on any facsimile or electronic transmission copy hereof shall be deemed authorized original signatures.
13
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
31. No Third Party Beneficiaries. This Agreement is not for the benefit of any third party and shall be deemed not to give any right or remedy to such third party, whether referred to herein or not.
32. Recitals. The recitals contained in this Agreement are true and correct and are incorporated herein by reference.
[SIGNATURE PAGE TO FOLLOW]
14
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and date first above written.
WITNESS: Naked Brand Group, Inc. ("Naked") By: By: /s/ Carole Hochman Date: Title: WITNESS: Wade Enterprises, LLC ("Wade") By: By: /s/ Dwyane Wade Date:
15
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
Inducement Letter and Guarantee
In order to induce Naked to enter into this Agreement with Wade Enterprises, LLC, I agree to the execution and delivery of this Agreement by Wade Enterprises, LLC, and agree to render all the services herein provided to be rendered by me, to grant all the rights granted herein, and to be bound by and duly perform and observe each and all of the terms and conditions of this Agreement regarding performance or compliance on my part, and I hereby join in all warranties, representations, agreements and indemnities made by Wade Enterprises, LLC, and further confirm the rights granted to Naked under the Agreement. All notices to Wade Enterprises, LLC shall be deemed notices to me with the same effect as if given to me. I certify that my services are rendered as an employee of Wade Enterprises, LLC, and, unless substituted for Wade Enterprises, LLC by law, I agree to look solely to Wade Enterprises, LLC for payment of compensation for my services and the discharge all other obligations of an employer, subject to the terms of the Agreement.
By: /s/ Dwyane Wade Name: Dwyane Wade Date: NAKED BRAND GROUP, INC. By: /s/ Carole Hochman Name: Date:
16
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
SCHEDULE A
WADE TRADEMARKS AND COPYRIGHTS
Wade's Asterisk Logo
17
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
18
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
SCHEDULE B
[***]
19
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 | Highlight the parts (if any) of this contract related to "Exclusivity" that should be reviewed by a lawyer. Details: Is there an exclusive dealing commitment with the counterparty? This includes a commitment to procure all “requirements” from one party of certain technology, goods, or services or a prohibition on licensing or selling technology, goods or services to third parties, or a prohibition on collaborating or working with other parties), whether during the contract or after the contract ends (or both). | {
"answer_start": [
3353
],
"text": [
"During the Term and subject to the limitations set forth in this Agreement, Naked shall have an exclusive right and license in the Territory to use Athlete's name, nickname, initials, autograph, image, likeness, photographs, biographical details, facsimile signature, voice, videos, electronic media depictions, any words, symbols or other depictions, as well as any other identifying attributes that would identify Athlete to the public, including any trade mark(s), copyrights which Wade has, as set forth on Schedule A attached hereto, and all multimedia assets that Wade owns or has right to use (collectively, the \"Wade Image\") solely for the advertising, endorsement, promotion, or sale of the Naked Products (including the Wade Products) in the Territory as follows:"
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Unlimited/All-You-Can-Eat-License" that should be reviewed by a lawyer. Details: Is there a clause granting one party an “enterprise,” “all you can eat” or unlimited usage license?
Context: Exhibit 10.2
STRICTLY PRIVATE AND CONFIDENTIAL
1 April, 2020
THERAVANCE BIOPHARMA UK LIMITED and BRETT HAUMANN
SERVICE AGREEMENT
THIS AGREEMENT is entered into between the parties on 1 April, 2020.
PARTIES (1) Theravance Biopharma UK Limited is a company registered in the United Kingdom and whose registered office is at 12 New Fetter Lane, London, United Kingdom, EC4A 1JP (the "Employer"); and (2) Brett Haumann of [address removed] (the "Executive").
AGREED TERMS 1. Definitions 1.1 The following terms shall have the following meanings unless the context requires otherwise: "Capacity" means as agent, consultant, director, employee, owner, partner, shareholder or otherwise;
"Commencement Date" means 1 April 2020;
"Confidential Information" means trade secrets, knowhow and information (whether or not recorded in documentary form, or stored on any magnetic or optical disk or memory) relating to the business, products, affairs and finances of any Group Company or any of their suppliers, customers, agents, shareholders or management, including (but not limited to): (a) business, financial or strategic information or plans; (b) technical data and know-how; (c) litigation, potential litigation or legal advice; (d) employment terms or pay of the Executive or others; (e) commercial terms with business partners; (f) products or services in the course of development; (g) processes or know-how; (h) details of any joint ventures, which (in each case) the Executive creates, develops, learns, receives or obtains in connection with the Executive's employment before or after the date of this agreement, whether or not such information is marked confidential;
"Copies" means copies or records of any Confidential Information in whatever form (including, without limitation, in written, oral, visual or electronic form or on any magnetic or optical disk or memory and wherever located) including, without limitation, extracts, analysis, studies, plans, compilations or any other way of representing or recording and recalling information which contains, reflects or is derived or generated from Confidential Information;
"Garden Leave" means any period during which the Company has exercised its rights under clause 19; "Group Company" means the Company and any group undertaking (as such term is defined in section 1161(5) of the Companies Act 2006) of the Company in any jurisdiction from time to time; "Intellectual Property Rights" means patents, rights to Inventions, copyright and related rights, trademarks, trade names and domain names, rights in get-up, rights in goodwill or to sue for passing off, unfair competition rights, rights in designs, rights in computer software, database rights, topography rights, rights in confidential information (including know-how and trade secrets) and any other intellectual property rights, in each case
2
whether registered or unregistered and including all applications (or rights to apply) for, and renewals or extensions of, such rights and all similar or equivalent rights or forms of protection which subsist or will subsist now or in the future in any part of the world; "Invention" means any invention, idea, discovery, development, improvement or innovation, whether patentable or capable of registration, and whether or not recorded in any medium; "Permitted Investment" has the meaning given to it in clause 14.2; and "Termination" means the termination of the Executive's employment under this Agreement however caused, whether lawful or not, and "Termination Date" means the date of Termination. 1.2 In this Agreement, unless the context otherwise requires: 1.2.1 words in the singular include the plural and in the plural include the singular; 1.2.2 any phrase introduced by the terms "including", "include", "in particular" or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms; 1.2.3 the headings are inserted for convenience only and shall not affect its construction; 1.2.4 reference to a particular law is a reference to it as it is in force for the time being taking account of any amendment, extension or re-enactment and includes any subordinate legislation for the time being in force made under it; 1.2.5 reference to any regulator or other body includes a reference to any successor. 2. Term of Employment 2.1 The Executive's employment with the Company will commence on the Commencement Date and shall continue, subject to the remaining terms of this Agreement, until terminated by either party giving the other the following minimum advance written notice: 2.1.1 6 weeks' notice;
2.1.2 such other longer period as required by law.
2.2 The Executive's period of continuous employment for the purposes of the Employment Rights Act 1996 commenced on 29 October 2013. 3. Pre-Conditions and Warranties The Executive's employment under this Agreement is conditional upon the Executive having produced to the Company for inspection original documents proving the Executive's right to work lawfully in the United Kingdom.
3
4. Duties 4.1 The Executive shall serve as Chief Medical Officer and Senior Vice President, Development (reporting to Rick Winningham) or in such other role as the Company may determine. 4.2 During the employment the Executive shall: 4.2.1 devote the whole of their working time, attention and abilities to the business of the Company and any other Group Company for which the Executive is required to work from time to time; 4.2.2 promptly make such reports to the Company in connection with the Executive's duties or other such matters at such times as are reasonably required; 4.2.3 faithfully and diligently exercise such powers and perform such duties for each Group Company as may from time to time be assigned by the Company; 4.2.4 comply with all reasonable and lawful directions given by the Company; 4.2.5 report their own wrongdoing and any wrongdoing or proposed or potential wrongdoing of any other employee, officer or consultant of any Group Company to the Company immediately on becoming aware of it; 4.2.6 use their utmost endeavours to promote, protect, develop and extend the business of the Company; 4.2.7 comply with their common law, statutory, regulatory and fiduciary duties as well as any policies put in place by the Company from time to time; 4.2.8 exercise the Executive's powers jointly with such other person that the Company may appoint; and 4.2.9 at all times conduct the business of each Group Company for which the Executive is responsible in a lawful and ethical manner. 5. Place of Work 5.1 The normal place of work of the Executive is at the Executive's home (or such other location as agreed between the Company and the Executive from time to time). 5.2 The Executive agrees to travel on any business of any Group Company (both within the United Kingdom and abroad) as may be required for the proper performance of the Executive's duties. 5.3 The Executive shall not be required to work outside the United Kingdom for any continuous period of more than one month. If the Executive is required to do so, their terms of employment during this time will be communicated with them separately.
4
6. Hours of Work 6.1 The Executive shall work such hours as are required for the proper and efficient performance of their duties including the Company's normal business hours which are 9am until 5:30pm from Monday to Friday. 6.2 The Executive agrees that the limit on weekly working time contained in Regulation 4 of The Working Time Regulations 1998 does not apply because Regulation 20 applies to the Executive. 7. Salary 7.1 The Executive shall be paid a basic salary of £448,903 per annum subject to deductions required by law. The Executive's salary shall accrue from day to day, shall be payable in equal monthly instalments in arrears on or about the last day of each month. 7.2 The salary paid to the Executive will be reviewed on or around 1 April 2021. The Company is under no obligation to award an increase following a salary review. 7.3 The Company may deduct from the salary or any other sums payable to the Executive any money owed to any Group Company by the Executive. The Executive will reimburse the Company upon demand for the personal use of any Company credit card, any other unauthorised transactions entered into by the Executive or any overpayments made to the Executive. 8. Expenses The Company shall reimburse any reasonable travel expenses wholly, exclusively and necessarily incurred by the Executive in the proper performance of the Executive's duties under this Agreement subject always to the rules and policies of the Company from time to time and subject to the Executive providing receipts or other evidence of payment as the Company may require. 9. Annual Bonus 9.1 The Executive shall be entitled to participate in an annual bonus plan on such terms and with such individual, team or corporate targets as the Company may communicate from time to time which shall provide the Executive with an opportunity to be considered each year for a bonus equivalent to up to 50% of the Executive's basic salary. The Company shall be entitled to determine whether such targets have been met and where such targets have been met in full or part shall have a discretion to determine whether to make payments and, if so, in what amount and when. 9.2 The Company may suspend, alter or discontinue any bonus payment(s) or any bonus plan and its eligibility requirements at any time (whether generally or in relation to the Executive only) at its absolute discretion. If the Executive receives any bonus payment the Company is not obliged to make any further bonus payments and any bonus payment will not become part of the Executive's contractual remuneration or fixed salary. In order to be eligible to receive a bonus payment, the Executive must be in the Company's employment and not under notice, given or received on the date that the bonus is paid. Bonus entitlement does not accrue in the course of a year, and the Executive is not entitled to
5
payment of a bonus, or any pro rata portion of it, if the Executive leaves employment prior to the date that the bonus is paid. 9.3 The Executive shall not be eligible to be considered for any bonus nor shall any bonus be paid if the Executive is subject to any disciplinary action or investigation at the date any bonus is being considered and/or at the bonus payment date (as applicable) although the Company may reconsider the matter upon the conclusion of the disciplinary action or investigation in question. 10. Pensions 10.1 The Company intends to comply with the employer pension duties in respect of the Executive in accordance with Part 1 of the Pensions Act 2008. 10.2 The Executive's participation in the Company's pension arrangements is subject to the rules of the relevant scheme and the statutory requirement as each are varied from time to time. In particular the Company reserves the right to change the scheme provider, the funds available, the charging structure and the default fund from time to time. 11. Benefits During the course of employment the Executive may participate in benefit plans operated by the Company. The Executive's participation in any such benefit plans are subject to the terms and conditions of any such plan. The Company reserves the right to discontinue, vary or amend each benefit plan (including the level of cover) at any time on reasonable notice to the Executive. 12. Holidays 12.1 The Executive shall be entitled to 28 days' paid holiday in each holiday year (which includes public holidays) to be taken at times convenient to the Company and authorised in advance. 12.2 The Company's holiday year runs from 1 January to 31 December. If the Executive's employment commences or terminates part way through a holiday year, the Executive's entitlement during that holiday year shall be calculated on a pro rata basis rounded up to the nearest whole day. 12.3 The Executive shall have no entitlement to any payment in lieu of accrued but untaken holiday except on Termination. The amount of such payment in lieu shall be 1/260 of the Executive's salary for each untaken day of entitlement. 12.4 If on Termination the Executive has taken in excess of their accrued holiday entitlement, the Company shall be entitled to recover from the Executive by way of deduction from any payments due to the Executive or otherwise, one day's pay for each excess day calculated at 1/260 of the Executive's salary. 12.5 If either party has served notice to terminate the employment, the Company may require the Executive to take any accrued but unused holiday entitlement during the notice period. Any accrued but unused holiday entitlement shall be deemed to be taken during any period of Garden Leave.
6
th
th
13. Sickness 13.1 The Company may in its absolute discretion pay the Executive an amount equal to the Executive's normal basic pay ("Company Sick Pay") for the first 3 months of sickness absence in any rolling 12-month period, subject to such conditions as the Company may specify. Company Sick Pay will include any entitlement to statutory sick pay or any benefits provided by virtue of any permanent health insurance scheme. Company Sick Pay is also subject to the Executive's compliance with this Agreement and will not be paid in respect of any period of illness that commences during the first 6 months of the Executive's employment or whilst the Company is addressing performance or disciplinary issues. 13.2 The Executive must comply with the Company's sickness absence notification procedures. Any period of absence of up to five days may be self-certified and any period of absence of more than five days must be supported by doctor's certificate. 13.3 The Executive consents to undergo a medical examination by a doctor nominated by the Company at the Company's request and expense. The Executive agrees that any report produced in connection with any such examination may be disclosed to the Company and the Company may discuss the contents of any such report with the relevant doctor. 13.4 The rights of the Company to terminate the Executive's employment under the terms of this Agreement apply even when such termination would or might cause the Executive to forfeit any entitlement to sick pay, permanent health insurance or other benefits. 14. Outside Activities and Interests 14.1 The Executive shall not during the employment except as a representative of the Company or with the Company's prior written consent (whether directly or indirectly, paid or unpaid) be employed, engaged, concerned or interested in any other actual or prospective business, organisation, occupation or profession. 14.2 Nothing in this Agreement shall prevent the Executive from holding an investment by way of shares or other securities to in any entity listed or dealt on a recognised stock exchange (a "Permitted Investment") provided always that during the term of the employment the Permitted Investment shall not constitute more than 3% of the issued share capital of the entity concerned . 15. Confidential Information 15.1 Without prejudice to the Executive's common law and fiduciary duties, the Executive shall not during employment or at any time after Termination and whether for their own benefit or for the benefit of any third party: 15.1.1 use any Confidential Information; or 15.1.2 disclose any Confidential Information to any person, company or other organisation whatsoever, except in the proper course of their duties, as required by law or as authorised by the Company in writing.
7
15.2 The Executive shall be responsible for protecting the confidentiality of the Confidential Information and shall use best endeavours to prevent the misuse of Confidential Information by others. 15.3 All Confidential Information and Copies shall be the property of the Company and the Executive shall not make any Copies save in the proper course of their employment. 15.4 Save as authorised by the Company, the Executive shall not make or publish any comment regarding to the business or affairs of any Group Company or any Group Companies' current or former employees or directors to the media (including on social media). 16. Intellectual Property 16.1 The Executive shall disclose to the Company details of all Inventions and of all works embodying Intellectual Property Rights made solely or jointly with others at any time during the term of the employment which relate to, or are capable of being used in, the business of any Group Company whether or not in the course of their ordinary duties and whether or not made in working time (together, the "Company IP"). The Executive acknowledges that all Intellectual Property Rights subsisting (or which may in the future subsist) in such Company IP shall automatically, on creation, vest in the Company absolutely. To the extent that the Company IP does not vest automatically in the Company the Executive hereby assigns all right, title and interest in the Company IP to the Company with full title guarantee by way of a present assignment of all future rights and shall otherwise hold them on trust for the Company. The Executive agrees promptly to execute all documents and to do all acts as may, in the opinion of the Company, be necessary or desirable to give the Company full benefit of this clause. 16.2 The Executive irrevocably waives all "moral rights" under the Copyright, Designs and Patents Act 1988 (and, to the fullest extent permitted by law, all similar rights in other jurisdictions) which the Executive has or will have in any Company IP. 16.3 By way of security for the Executive's obligations under this Agreement, the Executive irrevocably appoints the Company to be the Executive's attorney to execute any instrument or to do anything and generally to use the Executive's name for the purpose of giving the Company or i ts nominee the benefit of this clause. The Executive acknowledges in favour of a third party that a certificate in writing signed by the Company that any instrument or act falls within the authority conferred by this clause shall be conclusive evidence that such is the case. 16.4 The Executive agrees that the Executive's work for the Company will be the Executive's own original work and the Executive will not violate the intellectual property rights of third parties. The Company does not want and does not need any confidential information relating to any former employer of the Executive and the Executive agrees to not to copy, use or disclose such information. 17. Payment in Lieu of Notice 17.1 The Company may, in its sole and absolute discretion, terminate the Executive's employment under this Agreement at any time and with immediate effect by notifying the Executive that the Company is exercising its right under this clause 17 and that it will make a payment in l ieu of not ice ("PILON") to the Executive. The Executive's employment will terminate immediately and any PILON due to the Executive in accordance with the
8
provisions of this clause 17 will be paid within 28 days. The PILON will be equal to the basic salary (as at the Termination Date) which the Executive would have been entitled to receive under this Agreement during the notice period referred to at clause 2 (or, if notice has already been given, during the remainder of the notice period) less deductions required by law. 17.2 The Executive shall have no right to receive a PILON unless the Company has exercised its discretion in clause 17.1. 17.3 Notwithstanding clause 17.1, the Executive shall not be entitled to any PILON if the Company would otherwise have been entitled to terminate the Executive's employment under this Agreement without notice in accordance with clause 18. In that case the Company shall also be entitled to recover from the Executive any PILON already made. 18. Termination Without Notice 18.1 The Company may terminate the Executive's employment under this Agreement with immediate effect without notice and with no liability to make any further payment to the Executive (other than in respect of amounts accrued at the Termination Date) if in the reasonable opinion of the Company the Executive: 18.1.1 is guilty of gross misconduct; or 18.1.2 commits any serious or repeated breach or non-observance of any of the provisions of this Agreement or refuses to comply with any reasonable and lawful directions of the Company; or 18.1.3 commits any serious or repeated breach of the Company's policies or procedures; or 18.1.4 is grossly negligent or grossly incompetent in the performance of their duties; 18.1.5 is declared bankrupt or makes any arrangement with or for the benefit of their creditors or has a county court administration order made under the County Court Act 1984; or 18.1.6 is convicted of any criminal offence (other than an offence under any road traffic legislation in the United Kingdom or elsewhere for which a fine or non-custodial penalty is imposed); or 18.1.7 is no longer eligible to work in the United Kingdom; or 18.1.8 is guilty of any fraud or dishonesty or acts in any manner which brings or is likely to bring the Executive or any Group Company into disrepute or is materially adverse to the interests of any Group Company; or 18.1.9 makes any statement or other form of communication that disparages or undermines the goodwill or reputation of any Group Company. 18.2 The rights of the Company under clause 18.1 are without prejudice to any other rights that it might have at law to terminate the Executive's employment or to accept any breach of
9
this Agreement by the Executive as having brought the Agreement to an end. Any delay by the Company in exercising it rights to terminate shall not constitute a waiver thereof. 18.3 The Company may suspend the Executive from any or all of the Executive's duties during any period in which the Company is investigating any disciplinary matter involving the Executive or while any disciplinary procedure or regulatory investigation is outstanding. Any such suspension shall not constitute disciplinary action. During any period of suspension, the Company may impose the same conditions that apply to Garden Leave. 19. Garden Leave 19.1 Following service of notice to terminate the employment by either party, or if the Executive purports to terminate the employment in breach of contract, the Company may by written notice place the Executive on Garden Leave for the whole or part of the remainder of the employment. 19.2 During any period of Garden Leave: 19.2.1 the Company shall be under no obligation to provide any work to the Executive and may revoke any powers the Executive holds on behalf of any Group Company; 19.2.2 the Executive shall continue to receive their basic salary but shall not be entitled to receive any bonus or other incentives in respect of the period of Garden Leave; 19.2.3 the Company may require the Executive to carry out alternative duties or to only perform such specific duties as are expressly assigned to the Executive, at such location (including the home of the Executive) as the Company may reasonably decide; 19.2.4 the Company may appoint another person to carry out the Executive's normal duties; 19.2.5 the Executive shall remain an employee of the Company and bound by the terms of this Agreement; 19.2.6 the Executive shall be contactable during each working day (except during any periods taken as holiday in the usual way); 19.2.7 the Company may exclude the Executive from any premises of any Group Company, require the Executive to return any Group Company property and remove the Executive's access from some or all of its information systems; and 19.2.8 the Company may require the Executive not to contact or deal with (or attempt to contact or deal with) any officer, employee, consultant, client or other business contact of any Group Company as it may reasonably determine. 20. Obligations Upon Termination 20.1 On Termination or, if earlier, at the start of a period of Garden Leave following the service of notice or purported Termination by the Executive, the Executive shall:
10
20.1.1 immediately deliver to the Company all documents, books, materials, records, correspondence, papers, Copies, Confidential Information and other business information (on whatever media and wherever located) relating to the business or affairs of any Group Company or its business contacts, any keys and any other property of any Group Company, which is in the Executive's possession or control; 20.1.2 irretrievably delete any information relating to the business of any Group Company stored on any magnetic or optical disk or memory (including on any personal computer, personal device, personal email account or web account), and all matter derived from such sources which is in their possession or under their control outside the premises of the Company; 20.1.3 provide such handover of their duties as the Company shall consider appropriate; and 20.1.4 provide a signed statement confirming full compliance with the obligations under clauses 20.1.1 and 20.1.2 together with such reasonable evidence of compliance as the Company may request. 21. Post Termination Restrictions During the term of employment and for one (1) year thereafter, the Executive will not directly or indirectly, either themselves or through others, encourage or solicit any employee of the Company to leave the Company for any reason. This obligation shall not affect any responsibility the Executive has as an employee of the Company with respect to the bona fide hiring and firing of Company personnel. 22. Statutory Particulars 22.1 The Executive is subject to the Company's disciplinary and grievance procedures, copies of which are available upon request (although the Company reserves the right to deviate from these procedures in light of the Executive's seniority). These procedures do not form part of the Executive's contract of employment. 22.2 If the Executive wishes to raise a grievance or appeal a disciplinary decision the matter should be raised in writing with Rick Winningham. 22.3 There is no collective agreement which affects the Executive's employment or this Agreement. 23. Workplace Privacy 23.1 The Executive's attention is drawn to the Company's Privacy Notice which is available upon request. 23.2 The Executive consents to the Company monitoring their communication and electronic equipment including, without limitation, the Company's telephone, chat and e-mail systems, information stored on the Company's computer equipment (including all electronically stored information that is the property of the Company), recordings from the Company's closed circuit television cameras and any other computer equipment or other device used by the Executive in the performance of their duties.
11
24. General 24.1 The Executive will, at the request of the Company at any time after the Termination Date, co-operate and provide assistance to any Group Company in any internal investigation, administrative, regulatory, quasi-judicial proceedings or any threatened or actual litigation concerning any Group Company where the Executive is aware of any facts or other matters which the Company reasonably considers is relevant to such process or legal proceedings (including, but not limited to, giving statements/affidavits, meeting with their legal and other professional advisers, attending any legal hearing and giving evidence) on the understanding that the Company will pay any reasonable expenses for which receipts and other supporting documents are provided to the reasonable satisfaction of the Company and provided any expense is authorised in advance by the Company). 24.2 If the Executive's employment is terminated at any time by reason of any reconstruction or amalgamation of any Group Company, whether by winding up or otherwise, and the Executive is offered employment with any concern or undertaking involved in or resulting from the reconstruction or amalgamation on terms which (considered in their entirety) are no less favourable to any material extent than the terms of this Agreement, the Executive acknowledges and agrees that there shall be no claim against the Company or any undertaking arising out of or connected with such termination. 24.3 This clause applies if the Executive subscribes for or is awarded shares in the Company or any Group Company or participates in any share option, restricted share, restricted share unit, long term incentive, carried interest, co-invest or any other form of profit sharing, incentive, bonus or equity plan or arrangement (each, an "Incentive") or may do so. Upon Termination, the Executive's rights (if any) in respect of each Incentive shall be solely determined by the articles of association, rules or other documents governing each Incentive which are in force on the Termination Date and the Executive hereby irrevocably waives all claims or rights of action in respect of the loss of any rights or benefits under or in respect of any Incentive granted or not yet granted to the Executive (including any loss relating to the lapse of, or their ineligibility to exercise, any share options, the value of any shares, the operation of any compulsory transfer provisions or the operation of any vesting criteria)
24.4 A notice given to a party under this Agreement shall be in writing in the English language and signed by or on behalf of the party giving it. It shall be delivered by hand or sent to the party at the address given for that party in this Agreement, in the case of the Executive to their personal email address or as otherwise notified in writing to the other party. A notice given by email shall be deemed to take effect one hour after it is sent, a notice sent by first class post shall be deemed to take effect on the next working day and notice sent by courier upon delivery at the address in question. A notice required to be given to the Company under this Agreement shall not be validly given if sent by email. 24.5 This Agreement and any document referred to in it constitutes the entire agreement between the parties and supersedes and extinguishes all previous discussions, correspondence, negotiations, drafts, agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter.
24.6 The Executive agrees that in entering into this Agreement the Executive does not rely on and shall have no remedies in respect of, any statement, representation, assurance or warranty (whether made innocently or negligently) that is not expressly set out in this
12
Agreement. The Executive waives any claim for innocent or negligent misrepresentation or negligent misstatement including in respect of any statement set out in this Agreement. 24.7 No variation or agreed termination of this Agreement shall be effective unless it is in writing and signed by the parties (or their authorised representatives). If the Executive commences employment or continues in employment without executing a copy of this Agreement and fails to object within one month of the Commencement Date then the Executive will be deemed to have agreed to its terms. 24.8 The Executive shall not be contractually entitled to receive any benefit from the Company which is not expressly provided for by this Agreement. 24.9 This Agreement may be executed in any number of counterparts, each of which, when executed and delivered, shall be an original, and all the counterparts together shall constitute one and the same agreement. 24.10 The Contracts (Rights of Third Parties) Act 1999 shall only apply to this Agreement in relation to any Group Company. No person other than the parties to this Agreement and any Group Company shall have any rights under it and it will not be enforceable by any person other than those parties. 24.11 This Agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England. 24.12 Each party irrevocably agrees that the courts of England shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims).
13
Signed by Rick E Winningham for and on behalf of Theravance Biopharma UK Limited
/s/ Rick E Winningham
Signature Signed as a deed by Brett Haumann in the presence of: /s/ Brett Haumann Signature
/s/ Connor Haumann Witness's Signature Name of witness Connor Haumann Address of witness [address removed] Occupation of witness Student
14 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 10.2
STRICTLY PRIVATE AND CONFIDENTIAL
1 April, 2020
THERAVANCE BIOPHARMA UK LIMITED and BRETT HAUMANN
SERVICE AGREEMENT
THIS AGREEMENT is entered into between the parties on 1 April, 2020.
PARTIES (1) Theravance Biopharma UK Limited is a company registered in the United Kingdom and whose registered office is at 12 New Fetter Lane, London, United Kingdom, EC4A 1JP (the "Employer"); and (2) Brett Haumann of [address removed] (the "Executive").
AGREED TERMS 1. Definitions 1.1 The following terms shall have the following meanings unless the context requires otherwise: "Capacity" means as agent, consultant, director, employee, owner, partner, shareholder or otherwise;
"Commencement Date" means 1 April 2020;
"Confidential Information" means trade secrets, knowhow and information (whether or not recorded in documentary form, or stored on any magnetic or optical disk or memory) relating to the business, products, affairs and finances of any Group Company or any of their suppliers, customers, agents, shareholders or management, including (but not limited to): (a) business, financial or strategic information or plans; (b) technical data and know-how; (c) litigation, potential litigation or legal advice; (d) employment terms or pay of the Executive or others; (e) commercial terms with business partners; (f) products or services in the course of development; (g) processes or know-how; (h) details of any joint ventures, which (in each case) the Executive creates, develops, learns, receives or obtains in connection with the Executive's employment before or after the date of this agreement, whether or not such information is marked confidential;
"Copies" means copies or records of any Confidential Information in whatever form (including, without limitation, in written, oral, visual or electronic form or on any magnetic or optical disk or memory and wherever located) including, without limitation, extracts, analysis, studies, plans, compilations or any other way of representing or recording and recalling information which contains, reflects or is derived or generated from Confidential Information;
"Garden Leave" means any period during which the Company has exercised its rights under clause 19; "Group Company" means the Company and any group undertaking (as such term is defined in section 1161(5) of the Companies Act 2006) of the Company in any jurisdiction from time to time; "Intellectual Property Rights" means patents, rights to Inventions, copyright and related rights, trademarks, trade names and domain names, rights in get-up, rights in goodwill or to sue for passing off, unfair competition rights, rights in designs, rights in computer software, database rights, topography rights, rights in confidential information (including know-how and trade secrets) and any other intellectual property rights, in each case
2
whether registered or unregistered and including all applications (or rights to apply) for, and renewals or extensions of, such rights and all similar or equivalent rights or forms of protection which subsist or will subsist now or in the future in any part of the world; "Invention" means any invention, idea, discovery, development, improvement or innovation, whether patentable or capable of registration, and whether or not recorded in any medium; "Permitted Investment" has the meaning given to it in clause 14.2; and "Termination" means the termination of the Executive's employment under this Agreement however caused, whether lawful or not, and "Termination Date" means the date of Termination. 1.2 In this Agreement, unless the context otherwise requires: 1.2.1 words in the singular include the plural and in the plural include the singular; 1.2.2 any phrase introduced by the terms "including", "include", "in particular" or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms; 1.2.3 the headings are inserted for convenience only and shall not affect its construction; 1.2.4 reference to a particular law is a reference to it as it is in force for the time being taking account of any amendment, extension or re-enactment and includes any subordinate legislation for the time being in force made under it; 1.2.5 reference to any regulator or other body includes a reference to any successor. 2. Term of Employment 2.1 The Executive's employment with the Company will commence on the Commencement Date and shall continue, subject to the remaining terms of this Agreement, until terminated by either party giving the other the following minimum advance written notice: 2.1.1 6 weeks' notice;
2.1.2 such other longer period as required by law.
2.2 The Executive's period of continuous employment for the purposes of the Employment Rights Act 1996 commenced on 29 October 2013. 3. Pre-Conditions and Warranties The Executive's employment under this Agreement is conditional upon the Executive having produced to the Company for inspection original documents proving the Executive's right to work lawfully in the United Kingdom.
3
4. Duties 4.1 The Executive shall serve as Chief Medical Officer and Senior Vice President, Development (reporting to Rick Winningham) or in such other role as the Company may determine. 4.2 During the employment the Executive shall: 4.2.1 devote the whole of their working time, attention and abilities to the business of the Company and any other Group Company for which the Executive is required to work from time to time; 4.2.2 promptly make such reports to the Company in connection with the Executive's duties or other such matters at such times as are reasonably required; 4.2.3 faithfully and diligently exercise such powers and perform such duties for each Group Company as may from time to time be assigned by the Company; 4.2.4 comply with all reasonable and lawful directions given by the Company; 4.2.5 report their own wrongdoing and any wrongdoing or proposed or potential wrongdoing of any other employee, officer or consultant of any Group Company to the Company immediately on becoming aware of it; 4.2.6 use their utmost endeavours to promote, protect, develop and extend the business of the Company; 4.2.7 comply with their common law, statutory, regulatory and fiduciary duties as well as any policies put in place by the Company from time to time; 4.2.8 exercise the Executive's powers jointly with such other person that the Company may appoint; and 4.2.9 at all times conduct the business of each Group Company for which the Executive is responsible in a lawful and ethical manner. 5. Place of Work 5.1 The normal place of work of the Executive is at the Executive's home (or such other location as agreed between the Company and the Executive from time to time). 5.2 The Executive agrees to travel on any business of any Group Company (both within the United Kingdom and abroad) as may be required for the proper performance of the Executive's duties. 5.3 The Executive shall not be required to work outside the United Kingdom for any continuous period of more than one month. If the Executive is required to do so, their terms of employment during this time will be communicated with them separately.
4
6. Hours of Work 6.1 The Executive shall work such hours as are required for the proper and efficient performance of their duties including the Company's normal business hours which are 9am until 5:30pm from Monday to Friday. 6.2 The Executive agrees that the limit on weekly working time contained in Regulation 4 of The Working Time Regulations 1998 does not apply because Regulation 20 applies to the Executive. 7. Salary 7.1 The Executive shall be paid a basic salary of £448,903 per annum subject to deductions required by law. The Executive's salary shall accrue from day to day, shall be payable in equal monthly instalments in arrears on or about the last day of each month. 7.2 The salary paid to the Executive will be reviewed on or around 1 April 2021. The Company is under no obligation to award an increase following a salary review. 7.3 The Company may deduct from the salary or any other sums payable to the Executive any money owed to any Group Company by the Executive. The Executive will reimburse the Company upon demand for the personal use of any Company credit card, any other unauthorised transactions entered into by the Executive or any overpayments made to the Executive. 8. Expenses The Company shall reimburse any reasonable travel expenses wholly, exclusively and necessarily incurred by the Executive in the proper performance of the Executive's duties under this Agreement subject always to the rules and policies of the Company from time to time and subject to the Executive providing receipts or other evidence of payment as the Company may require. 9. Annual Bonus 9.1 The Executive shall be entitled to participate in an annual bonus plan on such terms and with such individual, team or corporate targets as the Company may communicate from time to time which shall provide the Executive with an opportunity to be considered each year for a bonus equivalent to up to 50% of the Executive's basic salary. The Company shall be entitled to determine whether such targets have been met and where such targets have been met in full or part shall have a discretion to determine whether to make payments and, if so, in what amount and when. 9.2 The Company may suspend, alter or discontinue any bonus payment(s) or any bonus plan and its eligibility requirements at any time (whether generally or in relation to the Executive only) at its absolute discretion. If the Executive receives any bonus payment the Company is not obliged to make any further bonus payments and any bonus payment will not become part of the Executive's contractual remuneration or fixed salary. In order to be eligible to receive a bonus payment, the Executive must be in the Company's employment and not under notice, given or received on the date that the bonus is paid. Bonus entitlement does not accrue in the course of a year, and the Executive is not entitled to
5
payment of a bonus, or any pro rata portion of it, if the Executive leaves employment prior to the date that the bonus is paid. 9.3 The Executive shall not be eligible to be considered for any bonus nor shall any bonus be paid if the Executive is subject to any disciplinary action or investigation at the date any bonus is being considered and/or at the bonus payment date (as applicable) although the Company may reconsider the matter upon the conclusion of the disciplinary action or investigation in question. 10. Pensions 10.1 The Company intends to comply with the employer pension duties in respect of the Executive in accordance with Part 1 of the Pensions Act 2008. 10.2 The Executive's participation in the Company's pension arrangements is subject to the rules of the relevant scheme and the statutory requirement as each are varied from time to time. In particular the Company reserves the right to change the scheme provider, the funds available, the charging structure and the default fund from time to time. 11. Benefits During the course of employment the Executive may participate in benefit plans operated by the Company. The Executive's participation in any such benefit plans are subject to the terms and conditions of any such plan. The Company reserves the right to discontinue, vary or amend each benefit plan (including the level of cover) at any time on reasonable notice to the Executive. 12. Holidays 12.1 The Executive shall be entitled to 28 days' paid holiday in each holiday year (which includes public holidays) to be taken at times convenient to the Company and authorised in advance. 12.2 The Company's holiday year runs from 1 January to 31 December. If the Executive's employment commences or terminates part way through a holiday year, the Executive's entitlement during that holiday year shall be calculated on a pro rata basis rounded up to the nearest whole day. 12.3 The Executive shall have no entitlement to any payment in lieu of accrued but untaken holiday except on Termination. The amount of such payment in lieu shall be 1/260 of the Executive's salary for each untaken day of entitlement. 12.4 If on Termination the Executive has taken in excess of their accrued holiday entitlement, the Company shall be entitled to recover from the Executive by way of deduction from any payments due to the Executive or otherwise, one day's pay for each excess day calculated at 1/260 of the Executive's salary. 12.5 If either party has served notice to terminate the employment, the Company may require the Executive to take any accrued but unused holiday entitlement during the notice period. Any accrued but unused holiday entitlement shall be deemed to be taken during any period of Garden Leave.
6
th
th
13. Sickness 13.1 The Company may in its absolute discretion pay the Executive an amount equal to the Executive's normal basic pay ("Company Sick Pay") for the first 3 months of sickness absence in any rolling 12-month period, subject to such conditions as the Company may specify. Company Sick Pay will include any entitlement to statutory sick pay or any benefits provided by virtue of any permanent health insurance scheme. Company Sick Pay is also subject to the Executive's compliance with this Agreement and will not be paid in respect of any period of illness that commences during the first 6 months of the Executive's employment or whilst the Company is addressing performance or disciplinary issues. 13.2 The Executive must comply with the Company's sickness absence notification procedures. Any period of absence of up to five days may be self-certified and any period of absence of more than five days must be supported by doctor's certificate. 13.3 The Executive consents to undergo a medical examination by a doctor nominated by the Company at the Company's request and expense. The Executive agrees that any report produced in connection with any such examination may be disclosed to the Company and the Company may discuss the contents of any such report with the relevant doctor. 13.4 The rights of the Company to terminate the Executive's employment under the terms of this Agreement apply even when such termination would or might cause the Executive to forfeit any entitlement to sick pay, permanent health insurance or other benefits. 14. Outside Activities and Interests 14.1 The Executive shall not during the employment except as a representative of the Company or with the Company's prior written consent (whether directly or indirectly, paid or unpaid) be employed, engaged, concerned or interested in any other actual or prospective business, organisation, occupation or profession. 14.2 Nothing in this Agreement shall prevent the Executive from holding an investment by way of shares or other securities to in any entity listed or dealt on a recognised stock exchange (a "Permitted Investment") provided always that during the term of the employment the Permitted Investment shall not constitute more than 3% of the issued share capital of the entity concerned . 15. Confidential Information 15.1 Without prejudice to the Executive's common law and fiduciary duties, the Executive shall not during employment or at any time after Termination and whether for their own benefit or for the benefit of any third party: 15.1.1 use any Confidential Information; or 15.1.2 disclose any Confidential Information to any person, company or other organisation whatsoever, except in the proper course of their duties, as required by law or as authorised by the Company in writing.
7
15.2 The Executive shall be responsible for protecting the confidentiality of the Confidential Information and shall use best endeavours to prevent the misuse of Confidential Information by others. 15.3 All Confidential Information and Copies shall be the property of the Company and the Executive shall not make any Copies save in the proper course of their employment. 15.4 Save as authorised by the Company, the Executive shall not make or publish any comment regarding to the business or affairs of any Group Company or any Group Companies' current or former employees or directors to the media (including on social media). 16. Intellectual Property 16.1 The Executive shall disclose to the Company details of all Inventions and of all works embodying Intellectual Property Rights made solely or jointly with others at any time during the term of the employment which relate to, or are capable of being used in, the business of any Group Company whether or not in the course of their ordinary duties and whether or not made in working time (together, the "Company IP"). The Executive acknowledges that all Intellectual Property Rights subsisting (or which may in the future subsist) in such Company IP shall automatically, on creation, vest in the Company absolutely. To the extent that the Company IP does not vest automatically in the Company the Executive hereby assigns all right, title and interest in the Company IP to the Company with full title guarantee by way of a present assignment of all future rights and shall otherwise hold them on trust for the Company. The Executive agrees promptly to execute all documents and to do all acts as may, in the opinion of the Company, be necessary or desirable to give the Company full benefit of this clause. 16.2 The Executive irrevocably waives all "moral rights" under the Copyright, Designs and Patents Act 1988 (and, to the fullest extent permitted by law, all similar rights in other jurisdictions) which the Executive has or will have in any Company IP. 16.3 By way of security for the Executive's obligations under this Agreement, the Executive irrevocably appoints the Company to be the Executive's attorney to execute any instrument or to do anything and generally to use the Executive's name for the purpose of giving the Company or i ts nominee the benefit of this clause. The Executive acknowledges in favour of a third party that a certificate in writing signed by the Company that any instrument or act falls within the authority conferred by this clause shall be conclusive evidence that such is the case. 16.4 The Executive agrees that the Executive's work for the Company will be the Executive's own original work and the Executive will not violate the intellectual property rights of third parties. The Company does not want and does not need any confidential information relating to any former employer of the Executive and the Executive agrees to not to copy, use or disclose such information. 17. Payment in Lieu of Notice 17.1 The Company may, in its sole and absolute discretion, terminate the Executive's employment under this Agreement at any time and with immediate effect by notifying the Executive that the Company is exercising its right under this clause 17 and that it will make a payment in l ieu of not ice ("PILON") to the Executive. The Executive's employment will terminate immediately and any PILON due to the Executive in accordance with the
8
provisions of this clause 17 will be paid within 28 days. The PILON will be equal to the basic salary (as at the Termination Date) which the Executive would have been entitled to receive under this Agreement during the notice period referred to at clause 2 (or, if notice has already been given, during the remainder of the notice period) less deductions required by law. 17.2 The Executive shall have no right to receive a PILON unless the Company has exercised its discretion in clause 17.1. 17.3 Notwithstanding clause 17.1, the Executive shall not be entitled to any PILON if the Company would otherwise have been entitled to terminate the Executive's employment under this Agreement without notice in accordance with clause 18. In that case the Company shall also be entitled to recover from the Executive any PILON already made. 18. Termination Without Notice 18.1 The Company may terminate the Executive's employment under this Agreement with immediate effect without notice and with no liability to make any further payment to the Executive (other than in respect of amounts accrued at the Termination Date) if in the reasonable opinion of the Company the Executive: 18.1.1 is guilty of gross misconduct; or 18.1.2 commits any serious or repeated breach or non-observance of any of the provisions of this Agreement or refuses to comply with any reasonable and lawful directions of the Company; or 18.1.3 commits any serious or repeated breach of the Company's policies or procedures; or 18.1.4 is grossly negligent or grossly incompetent in the performance of their duties; 18.1.5 is declared bankrupt or makes any arrangement with or for the benefit of their creditors or has a county court administration order made under the County Court Act 1984; or 18.1.6 is convicted of any criminal offence (other than an offence under any road traffic legislation in the United Kingdom or elsewhere for which a fine or non-custodial penalty is imposed); or 18.1.7 is no longer eligible to work in the United Kingdom; or 18.1.8 is guilty of any fraud or dishonesty or acts in any manner which brings or is likely to bring the Executive or any Group Company into disrepute or is materially adverse to the interests of any Group Company; or 18.1.9 makes any statement or other form of communication that disparages or undermines the goodwill or reputation of any Group Company. 18.2 The rights of the Company under clause 18.1 are without prejudice to any other rights that it might have at law to terminate the Executive's employment or to accept any breach of
9
this Agreement by the Executive as having brought the Agreement to an end. Any delay by the Company in exercising it rights to terminate shall not constitute a waiver thereof. 18.3 The Company may suspend the Executive from any or all of the Executive's duties during any period in which the Company is investigating any disciplinary matter involving the Executive or while any disciplinary procedure or regulatory investigation is outstanding. Any such suspension shall not constitute disciplinary action. During any period of suspension, the Company may impose the same conditions that apply to Garden Leave. 19. Garden Leave 19.1 Following service of notice to terminate the employment by either party, or if the Executive purports to terminate the employment in breach of contract, the Company may by written notice place the Executive on Garden Leave for the whole or part of the remainder of the employment. 19.2 During any period of Garden Leave: 19.2.1 the Company shall be under no obligation to provide any work to the Executive and may revoke any powers the Executive holds on behalf of any Group Company; 19.2.2 the Executive shall continue to receive their basic salary but shall not be entitled to receive any bonus or other incentives in respect of the period of Garden Leave; 19.2.3 the Company may require the Executive to carry out alternative duties or to only perform such specific duties as are expressly assigned to the Executive, at such location (including the home of the Executive) as the Company may reasonably decide; 19.2.4 the Company may appoint another person to carry out the Executive's normal duties; 19.2.5 the Executive shall remain an employee of the Company and bound by the terms of this Agreement; 19.2.6 the Executive shall be contactable during each working day (except during any periods taken as holiday in the usual way); 19.2.7 the Company may exclude the Executive from any premises of any Group Company, require the Executive to return any Group Company property and remove the Executive's access from some or all of its information systems; and 19.2.8 the Company may require the Executive not to contact or deal with (or attempt to contact or deal with) any officer, employee, consultant, client or other business contact of any Group Company as it may reasonably determine. 20. Obligations Upon Termination 20.1 On Termination or, if earlier, at the start of a period of Garden Leave following the service of notice or purported Termination by the Executive, the Executive shall:
10
20.1.1 immediately deliver to the Company all documents, books, materials, records, correspondence, papers, Copies, Confidential Information and other business information (on whatever media and wherever located) relating to the business or affairs of any Group Company or its business contacts, any keys and any other property of any Group Company, which is in the Executive's possession or control; 20.1.2 irretrievably delete any information relating to the business of any Group Company stored on any magnetic or optical disk or memory (including on any personal computer, personal device, personal email account or web account), and all matter derived from such sources which is in their possession or under their control outside the premises of the Company; 20.1.3 provide such handover of their duties as the Company shall consider appropriate; and 20.1.4 provide a signed statement confirming full compliance with the obligations under clauses 20.1.1 and 20.1.2 together with such reasonable evidence of compliance as the Company may request. 21. Post Termination Restrictions During the term of employment and for one (1) year thereafter, the Executive will not directly or indirectly, either themselves or through others, encourage or solicit any employee of the Company to leave the Company for any reason. This obligation shall not affect any responsibility the Executive has as an employee of the Company with respect to the bona fide hiring and firing of Company personnel. 22. Statutory Particulars 22.1 The Executive is subject to the Company's disciplinary and grievance procedures, copies of which are available upon request (although the Company reserves the right to deviate from these procedures in light of the Executive's seniority). These procedures do not form part of the Executive's contract of employment. 22.2 If the Executive wishes to raise a grievance or appeal a disciplinary decision the matter should be raised in writing with Rick Winningham. 22.3 There is no collective agreement which affects the Executive's employment or this Agreement. 23. Workplace Privacy 23.1 The Executive's attention is drawn to the Company's Privacy Notice which is available upon request. 23.2 The Executive consents to the Company monitoring their communication and electronic equipment including, without limitation, the Company's telephone, chat and e-mail systems, information stored on the Company's computer equipment (including all electronically stored information that is the property of the Company), recordings from the Company's closed circuit television cameras and any other computer equipment or other device used by the Executive in the performance of their duties.
11
24. General 24.1 The Executive will, at the request of the Company at any time after the Termination Date, co-operate and provide assistance to any Group Company in any internal investigation, administrative, regulatory, quasi-judicial proceedings or any threatened or actual litigation concerning any Group Company where the Executive is aware of any facts or other matters which the Company reasonably considers is relevant to such process or legal proceedings (including, but not limited to, giving statements/affidavits, meeting with their legal and other professional advisers, attending any legal hearing and giving evidence) on the understanding that the Company will pay any reasonable expenses for which receipts and other supporting documents are provided to the reasonable satisfaction of the Company and provided any expense is authorised in advance by the Company). 24.2 If the Executive's employment is terminated at any time by reason of any reconstruction or amalgamation of any Group Company, whether by winding up or otherwise, and the Executive is offered employment with any concern or undertaking involved in or resulting from the reconstruction or amalgamation on terms which (considered in their entirety) are no less favourable to any material extent than the terms of this Agreement, the Executive acknowledges and agrees that there shall be no claim against the Company or any undertaking arising out of or connected with such termination. 24.3 This clause applies if the Executive subscribes for or is awarded shares in the Company or any Group Company or participates in any share option, restricted share, restricted share unit, long term incentive, carried interest, co-invest or any other form of profit sharing, incentive, bonus or equity plan or arrangement (each, an "Incentive") or may do so. Upon Termination, the Executive's rights (if any) in respect of each Incentive shall be solely determined by the articles of association, rules or other documents governing each Incentive which are in force on the Termination Date and the Executive hereby irrevocably waives all claims or rights of action in respect of the loss of any rights or benefits under or in respect of any Incentive granted or not yet granted to the Executive (including any loss relating to the lapse of, or their ineligibility to exercise, any share options, the value of any shares, the operation of any compulsory transfer provisions or the operation of any vesting criteria)
24.4 A notice given to a party under this Agreement shall be in writing in the English language and signed by or on behalf of the party giving it. It shall be delivered by hand or sent to the party at the address given for that party in this Agreement, in the case of the Executive to their personal email address or as otherwise notified in writing to the other party. A notice given by email shall be deemed to take effect one hour after it is sent, a notice sent by first class post shall be deemed to take effect on the next working day and notice sent by courier upon delivery at the address in question. A notice required to be given to the Company under this Agreement shall not be validly given if sent by email. 24.5 This Agreement and any document referred to in it constitutes the entire agreement between the parties and supersedes and extinguishes all previous discussions, correspondence, negotiations, drafts, agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter.
24.6 The Executive agrees that in entering into this Agreement the Executive does not rely on and shall have no remedies in respect of, any statement, representation, assurance or warranty (whether made innocently or negligently) that is not expressly set out in this
12
Agreement. The Executive waives any claim for innocent or negligent misrepresentation or negligent misstatement including in respect of any statement set out in this Agreement. 24.7 No variation or agreed termination of this Agreement shall be effective unless it is in writing and signed by the parties (or their authorised representatives). If the Executive commences employment or continues in employment without executing a copy of this Agreement and fails to object within one month of the Commencement Date then the Executive will be deemed to have agreed to its terms. 24.8 The Executive shall not be contractually entitled to receive any benefit from the Company which is not expressly provided for by this Agreement. 24.9 This Agreement may be executed in any number of counterparts, each of which, when executed and delivered, shall be an original, and all the counterparts together shall constitute one and the same agreement. 24.10 The Contracts (Rights of Third Parties) Act 1999 shall only apply to this Agreement in relation to any Group Company. No person other than the parties to this Agreement and any Group Company shall have any rights under it and it will not be enforceable by any person other than those parties. 24.11 This Agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England. 24.12 Each party irrevocably agrees that the courts of England shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims).
13
Signed by Rick E Winningham for and on behalf of Theravance Biopharma UK Limited
/s/ Rick E Winningham
Signature Signed as a deed by Brett Haumann in the presence of: /s/ Brett Haumann Signature
/s/ Connor Haumann Witness's Signature Name of witness Connor Haumann Address of witness [address removed] Occupation of witness Student
14 | Highlight the parts (if any) of this contract related to "Unlimited/All-You-Can-Eat-License" that should be reviewed by a lawyer. Details: Is there a clause granting one party an “enterprise,” “all you can eat” or unlimited usage license? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Parties" that should be reviewed by a lawyer. Details: The two or more parties who signed the contract
Context: [Confidential Treatment Requested]
Exhibit 10.11
CO-BRANDING AGREEMENT
This Co-Branding Agreement (this "Agreement") dated March 3, 2000 (the "Effective Date") is entered into between VerticalNet, Inc., a Pennsylvania corporation having a principal place of business at 700 Dresher Road, Suite 100, Horsham, Pennsylvania, 19044 ("VerticalNet"), and Impresse Corporation, a California Corporation, having a principal place of business at 1309 South Mary Avenue, Sunnyvale, California, 94087 ("Impresse").
BACKGROUND
WHEREAS, VerticalNet owns and operates a series of Online Communities (defined below) that are accessible via the World Wide Web, each of which is designed to be an online gathering place for businesses of a certain type or within a certain industry; and
WHEREAS, Impresse desires to provide its commercial printing services (the "Impresse Services") to Users (defined below) of VerticalNet Sites (defined below); and
WHEREAS, Impresse and VerticalNet desire to create Co-Branded Site (defined below) where users will be able to register to review and utilize the Impresse Services and to promote such Co-Branded Site on VerticalNet Sites.
NOW, THEREFORE, in consideration of the mutual covenants herein, and intending to be legally bound hereby, VerticalNet and Impresse agree as follows:
1. DEFINITIONS
1.1. AFFILIATE shall mean, when used with reference to a party, any individual or entity directly or indirectly controlling, controlled by or under common control with such party. For purposes of this definition, "control" means the direct or indirect ownership of at least 50% of the outstanding voting securities of a party, or the right to control the policy decisions of such party.
1.2. BANNER shall mean a graphical image advertising the Impresse Site that is posted in an area reasonably designated by VerticalNet for similar banner advertisements and shall contain a Link (defined below) to the Co-Branded Site.
1.3. CO-BRANDED CONTENT shall mean all materials, data and similar information presented on the pages of the Co-Branded Site.
1.4. CO-BRANDED SITE shall mean the Site (defined below) that contains both a Frame (defined below) and a Window (defined below) which includes the Impresse Area (defined below) and the VerticalNet Area (defined below) of the Co-Branded Site.
1.5. CONFIDENTIAL INFORMATION shall mean, subject to the provisions of Section 7.2 [EXCLUSIONS], all proprietary and confidential information of a party, including, without limitation, trade secrets, technical information, business information, sales information, customer and potential customer lists and identities, product sales plans, sublicense agreements, inventions, developments, discoveries, software, know-how, methods, techniques, formulae, data, processes and other trade secrets and proprietary ideas, whether or not protectable under patent, trademark, copyright or other areas of law, that the other party has access to or receives. For purposes of this Agreement,
1
* Represents confidential information for which Impresse Corporation is seeking confidential treatment with the Securities and Exchange Commission.
the Co-Branded Content shall not be considered Confidential Information of Impresse. For purposes of this Agreement, this Agreement shall be considered Confidential Information.
1.6. E-COMMERCE CENTER shall mean a web page on a VerticalNet Site which is customized by VerticalNet to include a vendor's information, including the vendor's branding; a Link to the vendor's catalog, auction item listings; the vendor's career center including employment information; archives of; and Links to other related content locations.
1.7. FRAME shall mean a portion of a Web page which surrounds a Window on the top and left.
1.8. IMPRESSE AREA shall mean the Window portion of the Impresse Site (defined below) less the Frame that will be placed around the Window of the Co-Branded Site.
1.9. IMPRESSE MARK shall mean any trademark, service mark, trade name, domain name, design or logo of Impresse or its Affiliates.
1.10. IMPRESSE SITE shall mean the Site located at www.impresse.com (and any successor Site thereto).
1.11. IMPRESSE-VERTICALNET REVENUE shall have the meaning defined in Section 4.6.2 [REVENUE SHARING].
1.12. INTELLECTUAL PROPERTY shall mean any and all trade secrets, patents, copyrights, trademarks, service marks, URLs, trade dress, brand features, know-how and similar rights of any type under the laws of any applicable governmental authority, including, without limitation, all applications and registrations relating to any of the foregoing.
1.13. INTELLECTUAL PROPERTY RIGHTS shall mean all rights in and to Intellectual Property, including, without limitation, all patent rights, copyrights, trademarks, service marks, know-how and trade secrets.
1.14. LAUNCH DATE shall mean the day on which the Co-Branded Site and the V-Solutions Area become fully operational and generally available on the Internet.
1.15. LINK shall mean a link, including but not limited to a hyperlink,
Source: IMPRESSE CORP, S-1/A, 3/22/2000
button or banner, that connects two Sites in a manner so that when a User clicks on the link, the User is transferred directly from one Site to a second Site.
1.16. NEWSLETTER shall mean a text message containing information supplied by Impresse and approved by VerticalNet (which approval shall not be unreasonably withheld) that is transmitted via e-mail to Users of the VerticalNet Sites who have provided their e-mail addresses to VerticalNet along with permission to transmit such messages to the e-mail address.
1.17. ONLINE COMMUNITY shall mean a VerticalNet Site that acts as a comprehensive source of information, dialogue and commerce for and links to E-Commerce Centers and other Sites for a particular industry or service market.
2
1.18. PROPRIETARY FEATURE shall mean any name, trademark, service mark, trade name, domain name, navigational element, copyright, or logo which is proprietary to Impresse and/or VerticalNet, as appropriate.
1.19. SITE shall mean a site located on the World Wide Web portion of the Internet.
1.20. TERM shall have the meaning set forth in Section 5.1 [TERMINATION AND RENEWAL]
1.21. URL shall mean a universal resource locator used for the purpose of identifying a Site located on the Internet.
1.22. USER shall mean a single person who accesses and views a Site whether directly from a web browser or through a Link.
1.23. USER DATA shall mean all data generated by an Internet server that relates to file requests, user identification, transaction logs, session times and other information regarding the Users generated or collected by or through a Co-Branded Site, but excluding any information that relates or refers to a particular project of such User.
1.24. V-SOLUTIONS AREA shall mean a hub page accessible via a Link from the home page of each VerticalNet Site which shall contain a list of categories of business services, with each category further listing entities that provide such services. Each individual company listing shall contain a Link to a Web page hosted by VerticalNet that describes such company and the services it offers. The V-Solutions Area will also feature the V-Solutions Link (defined below).
1.25. V-SOLUTIONS LINK shall mean the Link from the V-Solutions Area to the Co-Branded Site.
1.26. VERTICALNET AREA shall mean the Frame area of the Co-Branded Site.
1.27. VERTICALNET MARK shall mean any trademark, service mark, trade name, domain name, design or logo of VerticalNet.
1.28. VERTICALNET-IMPRESSE USERS shall have the meaning defined in Section 4.6.1 ["VerticalNet Impresse Users"]
1.29. VERTICALNET SITE shall mean a Site owned and operated by VerticalNet in the United States or a portion of such Site designated by VerticalNet.
1.30. WINDOW shall mean a portion of a Web page that is surrounded by a Frame.
1.31. YEAR 2000 COMPLIANT shall mean with respect to any computer software that to the extent that such software contains date-dependent functionality, will: (1) contain four digit year codes, (2) properly process dates and date values before, through and beyond January 1, 2000, including date calculations with dates both before and after January 1, 2000, and (3) not suffer any impact on performance as a result of dates beyond January 1, 2000; provided, however, that for this warranty to apply the operating systems on which such software is being run, and any network servers, Web browsers, databases and other software that is used in conjunction with such software must also be Year 2000 Compliant as defined herein.
3
2. CO-BRANDED SITE
2.1. Impresse shall be responsible for: (a) the design, layout, development, hosting and maintenance of the Impresse Area of the Co-Branded Site; (b) providing VerticalNet with reasonable instructions and information regarding the Impresse Services; (c) providing a tabbed area prominently featured in a user interface within the Impresse Area of the Co-Branded Site that points to a VerticalNet Online Community or Online Communities; (d) modifying the Impresse online registration forms and system available on the Co-Branded Site to require Impresse users to identify and match their business activities with a VerticalNet Online Community or Online Communities; and (e) providing VerticalNet with the URL addresses for the Co-Branded Site.
2.2. VerticalNet shall be responsible for: (a) the design, layout, development, hosting and maintenance of the VerticalNet Area of the Co-Branded Site; and (b) the design, layout, development, hosting and maintenance of the V-Solutions Link.
2.3. Beginning on the Launch Date and continuing during the Term, VerticalNet shall display the V-Solutions Area on the VerticalNet Sites. VerticalNet shall likewise, during the Term, implement and maintain the V-Solutions Link.
2.4. Beginning on the Launch Date and continuing during the Term, VerticalNet shall not place advertising relating to the commercial printing entities listed on Exhibit "A," or other such entities subsequently identified by Impresse, on the VerticalNet Area of the Co-Branded Site.
2.5. Impresse hereby grants to VerticalNet a non-exclusive, non-transferable, royalty-free, right and license to link to the Impresse Area of the Co-Branded Site. Impresse shall permit Users who access the Co-Branded Site to access and use Co-Branded Content from the Co-Branded Site for the personal use of such Users in accordance with the then-current terms of Impresse's standard license agreement governing the use of such Co-Branded Content.
Source: IMPRESSE CORP, S-1/A, 3/22/2000
2.6. Nothing in this Agreement shall be construed as preventing Impresse or VerticalNet from developing other co-branded versions of their materials, data, information and content.
3. ONGOING SUPPORT
3.1. Impresse shall use commercially reasonable efforts to respond to all support requests by VerticalNet relating to the Co-Branded Site within one Business Day (as defined below) of Impresse's receipt of such notification. Impresse shall use reasonable efforts to cure the reported problem as soon as reasonably possible. VerticalNet shall provide Impresse with all information reasonably requested by Impresse in connection with a reported problem for which VerticalNet is requesting support under this Section 3.1 [ONGOING SUPPORT]. VerticalNet shall use commercially reasonable efforts to respond to all support requests by Impresse relating to the Co-Branded Site within one Business Day (as defined below) of VerticalNet's receipt of such notification. VerticalNet shall use reasonable efforts to cure the reported problem as soon as reasonably possible. Impresse shall provide VerticalNet with all information reasonably requested by VerticalNet in connection with a reported problem for which Impresse is requesting support under this Section 3.1 [ONGOING SUPPORT].
4
[Confidential Treatment Requested]
3.2. Impresse will identify to VerticalNet primary and secondary contacts who will be familiar with the Co-Branded Site and this Agreement. VerticalNet will identify to Impresse primary and secondary contacts who will be familiar with the Co-Branded Site and this Agreement.
3.3. VerticalNet shall have access to technical support from Impresse by telephone from 8 a.m. Pacific Standard Time to 5 p.m. Pacific Standard Time, Monday through Friday, Impresse holidays excluded (each a "Business Day," collectively "Business Days"). Impresse shall have access to technical support from VerticalNet by telephone from 6 a.m. Eastern Standard Time to 6 p.m. Eastern Standard Time, Monday through Friday, VerticalNet holidays excluded.
4. THE COMMERCIAL TERMS
4.1. DEVELOPMENT FEES. For the design, development and integration of the V-Solutions Area and the VerticalNet Area of the Co-Branded Site, Impresse shall pay to VerticalNet a one-time, nonrefundable development fee in the amount of [*] payable on the Effective Date.
4.2. SLOTTING FEES. For the display of the V-Solutions Area and the V-Solutions Link, Impresse shall pay to VerticalNet a slotting fee in the amount of [*] payable pursuant to the terms of Section 4.5 [PAYMENT TERMS].
4.3. BANNER/NEWSLETTER PURCHASE COMMITMENT. During the Term of this Agreement, Impresse agrees to purchase from VerticalNet Banners and Newsletters for a total price of at least $[*] as set forth below in this Section 4.3 [BANNER/NEWSLETTER PURCHASE COMMITMENT]. All prices for such Banners and Newsletters shall be offered to Impresse at a [*]% discount off of VerticalNet's then current prices for similar Banners or Newsletters. All purchases shall be subject to VerticalNet's standard terms and conditions governing advertising on VerticalNet Sites. Impresse agrees to purchase at least $[*] of such Banners and Newsletters in each calendar quarter after the Effective Date until a total of $[*] have been purchased, provided, the total dollar amount purchased by Impresse in any calendar quarter shall not consist of greater than 70% of either Banners or Newsletters. Payment of the fees set forth in this Section shall be made pursuant to the terms of Section 4.5 [PAYMENT TERMS].
4.4. HOSTING FEE. Impresse shall pay VerticalNet a service fee of $[*] for the hosting and maintenance of the Co-Branded Site and the V-Solutions Link, payable pursuant to the terms of Section 4.5 [PAYMENT TERMS].
4.5. PAYMENT TERMS. Impresse shall pay the fees set forth in Sections 4.2 [SLOTTING FEES], 4.3 [BANNER/NEWSLETTER PURCHASE COMMITMENT] and 4.4 [HOSTING FEE] as an aggregate, totaling $[*] payable in four equal quarterly installments of $[*] beginning on May 31, 2000 and thereafter on August 31, 2000 November 30, 2000 and February 28, 2001, respectively.
4.6. REVENUE SHARING. Impresse shall pay VerticalNet [*]of Impresse VerticalNet Revenue accruing during the term of this Agreement, payable to VerticalNet on or before the thirtieth day of the calendar quarter immediately following the quarter in which such revenue was collected by Impresse. Such payments shall be accompanied by a statement containing reasonable detail of the type and number of transactions from which the Impresse
5
* Represents confidential information for which Impresse Corporation is seeking confidential treatment with the Securities and Exchange Commission.
VerticalNet Revenue was derived, the total Impresse VerticalNet Revenue for such period and the total fees payable to VerticalNet pursuant to this Section 4.6 [REVENUE SHARING].
4.6.1. "VerticalNet Impresse Users" are the Users that register with Impresse through the Co-Branded Site, but specifically excluding those Users who have previously registered with Impresse other than through the Co-Branded Site.
4.6.2. The "Impresse VerticalNet Revenue" is Impresse's total net transaction and subscription revenues collected by Impresse during the term of this Agreement from VerticalNet Impresse Users.
4.6.3. If government regulations prevent Impresse from sharing any revenues associated with Impresse Services, VerticalNet and Impresse shall negotiate in good faith a compensation structure that seeks to provide VerticalNet with compensation equal to that set forth in Section 4.6 [REVENUE SHARING].
4.7. TAXES. All payments required under this Agreement are exclusive of federal, state, local and foreign taxes, duties, tariffs, levies and similar assessments. When applicable, such taxes shall appear as separate items on a party's invoice or statement to the other party. Payment of such taxes or charges shall be the responsibility of the party whose obligation it is under this Agreement to make the payment in respect of which such taxes are assessed, excluding any taxes based upon the other party's net income. In lieu thereof, a party shall provide the other party with a tax or levy exemption certificate acceptable to the taxing or levying authority.
Source: IMPRESSE CORP, S-1/A, 3/22/2000
4.8. AUDITS. During the term of this Agreement and for one year thereafter, VerticalNet shall have the right to appoint a certified public accountant to audit Impresse's financial records relating to such payment to verify the accuracy of Impresse's financial records in order to verify the amount of the payments owed and/or paid hereunder, but no more frequently than once per year. If the amount owed by Impresse to VerticalNet was underpaid, the additional amount owed shall be paid to VerticalNet within 15 days of notice of such underpayment to Impresse. If the amount owed by Impresse to VerticalNet was underpaid in excess of 10% of the amount owed, the fees of such audit shall also be paid to VerticalNet within 15 days of notice of such to Impresse. If the amount owed by Impresse to VerticalNet was overpaid, the excess amount paid shall be returned by VerticalNet within 15 days of notice of such overpayment. VerticalNet shall give reasonable advance notice to Impresse of such audit and each audit shall be conducted in a manner that does not cause unreasonable disruption to the conduct of business by Impresse. The results of any such audit shall be deemed to be Confidential Information and may not be disclosed by either party or its certified public accountants except as may be necessary to enforce such party's rights.
4.9. INTEREST. All payments not paid by the date such payments are due shall bear interest from the due date to the date payments are actually paid at the lower of (i) 1% per month or (ii) the maximum rate permitted by law.
5. TERMINATION AND RENEWAL
5.1. The Term of this Agreement shall begin on the Effective Date and shall end fifteen months therefrom.
6
5.2. Either party may terminate this Agreement immediately upon written notice to the other party in the event of any material breach of a term of this Agreement by such other party that remains uncured 30 days after written notice of such breach was received by such other party or, if the breach is not reasonably capable of cure within 30 days, such longer period, not to exceed 60 days, so long as the cure is commenced within the 30-day period and thereafter is diligently prosecuted to completion as soon as possible and in any event within 60 days.
5.3. Upon termination or expiration of this Agreement, (i) Impresse shall no longer have the right to use any VerticalNet Mark, (ii) VerticalNet shall no longer have the right to use any Impresse Mark; (iii) Impresse may no longer make any Co-Branded Content available for access and use through the Co-Branded Site; (iv) VerticalNet shall cease framing the Window in the Co-Branded Site; (v) VerticalNet shall remove the V-Solutions Link from the V-Solutions Area; and (vi) VerticalNet shall cease displaying or transmitting all Banners and Newsletters of Impresse.
5.4. Following expiration or termination of this Agreement, the terms and provisions of Article 4 [THE COMMERCIAL TERMS] above shall continue to govern Impresse's payment obligations for any payment obligations accruing during the term of this Agreement. Following termination, Impresse shall provide VerticalNet with a final accounting with respect to this Agreement and tender payment of amounts due under Article 4 [THE COMMERCIAL TERMS] at the next scheduled payment date.
6. DISPUTE RESOLUTION
6.1. NEGOTIATION AND ESCALATION. If any controversy or claim arises relating to this Agreement, the parties will attempt in good faith to negotiate a solution to their differences, including progressively escalating any controversy or claim through senior levels of management. If negotiation does not result in a resolution within 30 days of the date one party first notifies the other of the controversy or claim, either party may resort to arbitration under Section 6.2 [ARBITRATION].
6.2. ARBITRATION. Any controversy or claim between the parties concerning any breach or alleged breach of this Agreement or performance or nonperformance of any obligation under this Agreement which cannot be resolved by negotiation will be resolved by binding arbitration under this Section 6.2 [ARBITRATION] and the then-current Commercial Rules and supervision of the American Arbitration Association (the "AAA"). If any part of this Section 6.2 [ARBITRATION] is held to be unenforceable, it will be severed and will not affect either the duty to arbitrate or any other part of this Section 6.2 [ARBITRATION]. The arbitration will be held before a sole disinterested arbitrator who is knowledgeable in business information and the Internet and experienced in handling commercial disputes. The arbitrator shall be appointed jointly by the parties hereto within 30 days following the date on which the arbitration is instituted. If the parties are unable to agree upon the arbitrator within such 30-day period, the AAA shall be instructed to select such arbitrator within 15 days thereafter. The arbitrator's award will be final and binding and may be entered in any court having jurisdiction. The arbitrator will not have the power to award punitive or exemplary damages, or any damages excluded by, or in excess of, any damage limitations expressed in this Agreement. Issues of arbitrability will be determined in accordance solely with the federal substantive and procedural laws relating to arbitration; in all other respects, the arbitrator will be obligated to apply and follow the substantive law of the State of Delaware.
7
6.3. EQUITABLE RELIEF. Notwithstanding anything to the contrary in this Agreement, in the event of an alleged violation of Article 7 [CONFIDENTIALITY] of this Agreement by either party, the party alleging such a violation may seek temporary and permanent injunctive or other appropriate equitable relief from any court of competent jurisdiction pending appointment of an arbitrator. The party requesting such relief shall simultaneously file a demand for arbitration of the dispute, and shall request that the AAA proceed under its rules for an expedited hearing.
6.4. COSTS. Unless the arbitrator, if any, determines otherwise, each party will bear its own attorneys' fees and other costs associated with the negotiation and arbitration provided for by this Article 6 [DISPUTE RESOLUTION], except that costs and expenses regarding the arbitrators shall be shared equally. If court proceedings to stay litigation or compel arbitration are necessary, the party who unsuccessfully opposes such proceedings will pay all associated costs, expenses and attorneys' fees that are reasonably incurred by the other party. To the extent that any claim in arbitration relates to the collection of amounts owed under Article 4 [THE COMMERCIAL TERMS], the party entitled to collect such amounts shall be entitled to recover all reasonable costs of collection, including expenses and attorneys' fees that are incurred.
6.5. TWO YEAR LIMITATION. Except for claims under Sections 9.4 [INDEMNIFICATION BY IMPRESSE] and 9.5 [INDEMNIFICATION BY VERTICALNET]
Source: IMPRESSE CORP, S-1/A, 3/22/2000
hereof, neither party may bring a claim or action regardless of form, arising out of or related to this Agreement, including any claim of fraud or misrepresentation, more than two years after the cause of action accrues or becomes known, whichever is later.
6.6. CONFIDENTIALITY. In order to facilitate the resolution of controversies or claims between the parties with respect to each party hereto, such controversies or claims, including details regarding negotiations, arbitration and settlement terms, shall be treated as Confidential Information of the other party hereto in accordance with Article 7 [CONFIDENTIALITY].
6.7. REMEDIAL MEASURES. In the event of (a) any material remediable breach of this Agreement by the other party which remains uncured 30 days after notice of such breach was received by the other party or (b) any material breach which cannot be cured, the non-breaching party may take reasonable remediable measures upon prior written notice and at the cost and expense of the breaching party without prejudice and in addition to any other rights arising from such breach. In addition, the non-breaching party shall take reasonable steps to mitigate damages arising out of such breach.
7. CONFIDENTIALITY
7.1. CONFIDENTIALITY OBLIGATIONS. Except as permitted elsewhere under this Agreement, each party agrees to take Reasonable Steps (as defined below) (a) to receive and maintain the Confidential Information of the other party in confidence and (b) not to disclose such Confidential Information to any third parties, provided, the receiving party may disclose such Confidential Information to its employees, representatives and agents who have a need to know such information for purposes of carrying out the terms of this Agreement. Neither party hereto shall use all or any part of the Confidential Information of the other party for any purpose other than to perform its obligations under this Agreement. The parties will take Reasonable Steps (as defined below) to ensure that their employees, representatives and agents comply with this provision. As used herein, "Reasonable Steps" means at least the same degree of care that the
8
receiving party uses to protect its own Confidential Information, and, in no event, not less than reasonable care.
7.2. EXCLUSIONS. "Confidential Information" does not include information that (a) is or becomes publicly available through no fault of the receiving party; (b) was already known to the receiving party at the time it was disclosed to the receiving party, as evidenced by records of the receiving party; (c) is independently developed by employees of the receiving party who had no knowledge of or access to such information, as evidenced by records of the receiving party; (d) is received from a third party who is under no obligation of confidentiality to the disclosing party; or (e) must be disclosed pursuant to applicable laws, rules or regulations; provided, however, that the receiving party first gives the disclosing party notice and a reasonable opportunity to secure confidential protection of such Confidential Information.
7.3. TERMINATION. Subject to Section 10.11 [SURVIVAL], upon termination of this Agreement, all Confidential Information shall be returned to the disclosing party or, at the request of the disclosing party, destroyed unless otherwise specified or permitted elsewhere under this Agreement. Subject to Section 7.6 [USER DATA], the confidentiality obligations contained in this Article 7 [CONFIDENTIALITY] shall survive termination of this Agreement for a period of three years.
7.4. INJUNCTION. Each party acknowledges and agrees that the provisions of this Article 7 [CONFIDENTIALITY] are reasonable and necessary to protect the other party's interests in its Confidential Information, that any breach of the provisions of this Article 7 [CONFIDENTIALITY] may result in irreparable harm to such other party, and that the remedy at law for such breach may be inadequate. Accordingly, in the event of any breach or threatened breach of the provisions of this Article 7 [CONFIDENTIALITY] by a party hereto, the other party, in addition to any other relief available to it at law, in equity or otherwise, shall be entitled to seek temporary and permanent injunctive relief restraining the breaching party from engaging in and/or continuing any conduct that would constitute a breach of this Article 7 [CONFIDENTIALITY], without posting a bond or other security.
7.5. PUBLICITY. Neither party will originate any press release concerning the relationship between the parties or the transactions described in this Agreement without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, as soon as reasonably practicable following the Effective Date, VerticalNet and Impresse shall jointly issue a press release with respect to entering into this Agreement.
7.6. USER DATA. Impresse shall provide VerticalNet with User Data on each User that submits information through the Co-Branded Site by sending an email with such information to an email address designated by VerticalNet at the time the request occurs. User Data shall be maintained by each Party as Confidential Information of the other Party during the Term and 5 years thereafter, provided such User Data may be disclosed only as part of an aggregation or analysis of all User Data but not as independent data. Upon termination of the Agreement, VerticalNet and Impresse shall jointly own all User Data. Neither Party shall use the User Data other than in accordance with the VerticalNet privacy policy and all applicable laws during the Term and thereafter.
9
8. REPRESENTATIONS AND WARRANTIES
8.1. REPRESENTATIONS AND WARRANTIES. Each party hereby represents, covenants and warrants that:
8.1.1. It has the corporate power to enter into this Agreement and to grant the rights and licenses granted herein and to otherwise perform this Agreement;
8.1.2. It is not a party to any agreement or understanding and knows of no law or regulation that would prohibit it from entering into and performing this Agreement or that would conflict with this Agreement;
8.1.3. When executed and delivered by it, this Agreement will constitute a legal, valid and binding obligation of it, enforceable against it in accordance with this Agreement's terms, except as enforcement may be limited by laws or regulations relating to bankruptcy, insolvency and creditors rights or by principles of equity;
Source: IMPRESSE CORP, S-1/A, 3/22/2000
8.1.4. The portions of the Co-Branded Site provided by such party are and will continue to be Year 2000 Compliant;
8.1.5. To the best of its knowledge, the portions of the Co-Branded Site provided by such party and its own Site do not and will not (i) contain any known viruses, Trojan Horse, worm or harmful code the purpose of which is to disable or interrupt the operating of a computer system or destroy, erase or otherwise harm any data, software or hardware, (ii) contain any false, misleading, libelous or defamatory statements, (iii) constitute an invasion of the rights of privacy or publicity of any third party, (iv) violate any applicable laws, rules and regulations or (v) infringe, violate or misappropriate any Intellectual Property Rights of any third party.
9. DISCLAIMER OF WARRANTY, LIMITATION OF LIABILITY AND INDEMNIFICATION
9.1. DISCLAIMER OF WARRANTIES BY VERTICALNET. EXCEPT AS EXPRESSELY SET FORTH IN THIS AGREEMENT, VERTICALNET HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE VERTICALNET SITES, THE V-SOLUTIONS AREA, THE V-SOLUTIONS LINK AND THE VERTICALNET AREA OF THE CO-BRANDED SITE, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. VERTICALNET EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES AS TO THE USER INTERFACE OR USER EXPERIENCE ASSOCIATED WITH THE VERTICALNET SITES AND RESERVES THE RIGHT, IN ITS SOLE DISCRETION, TO MODIFY THE PLACEMENT OF ALL LINKS, URLS AND PROPRIETARY FEATURES; PROVIDED, HOWEVER, THAT IN THE EVENT VERTICALNET REDESIGNS THE USER INTERFACE, SUCH LINKS, URLS AND PROPRIETARY FEATURES SHALL RECEIVE MUTUALLY AGREEABLE PLACEMENT SUBSTANTIALLY SIMILAR TO THE ORIGINAL DESIGN.
10
9.2. DISCLAIMER OF WARRANTIES BY IMPRESSE. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, IMPRESSE HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE IMPRESSE AREA OF THE CO-BRANDED SITE AND THE IMPRESSE SITE, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
9.3. LIMITATION OF LIABILITY. EXCEPT IN CONNECTION WITH A BREACH BY EITHER PARTY OF ARTICLE 7 OR SECTION 8.1.5 [REPRESENTATIONS AND WARRANTIES] (v) AND THE INDEMNIFICATION OBLIGATIONS OF IMPRESSE UNDER SECTION 9.4(i)(d) [INDEMNIFICATION BY IMPRESSE] AND THE INDEMNIFICATION OBLIGATIONS OF VERTICALNET UNDER SECTION 9.5(i)(d) [INDEMNIFICATION BY VERTICALNET], NEITHER PARTY WILL BE LIABLE FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE), EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
9.4. INDEMNIFICATION BY IMPRESSE. Subject to Section 9.6 [PROCEDURE], Impresse shall (i) defend at its sole expense VerticalNet and its officers, directors, employees and agents from and against any action, suit, proceeding or investigation brought by a third party and caused by, relating to, based upon, arising out of or in connection with (a) any breach by Impresse of the representations, warranties or agreements made by it in Section 8 of this Agreement, (b) negligence, recklessness or intentional misconduct on the part of Impresse or its officers, directors, employees, agents or consultants, (c) any claim arising out of VerticalNet's authorized use or possession of the portions of the Co-Branded Site provided by Impresse and the Impresse Site as permitted by this Agreement; or (d) any claim that any portion of the Impresse Site or the Impresse Area of the Co-Branded Site violates, infringes or misappropriates any Intellectual Property Right of any third party and (ii) pay all authorized costs, expenses and disbursements incurred in such defense, and any damages, liabilities, obligations, penalties or judgments awarded in any such action, or any settlement amount agreed to by Impresse.
9.5. INDEMNIFICATION BY VERTICALNET. Subject to Section 9.6 [PROCEDURE], VerticalNet shall (i) defend at its sole expense Impresse and its officers, directors, employees and agents from and against any action, suit, proceeding or investigation brought by a third party, caused by, relating to, based upon, arising out of or in connection with (a) any breach by VerticalNet of the representations, warranties or agreements made by it in Section 8 of this Agreement, (b) negligence, recklessness or intentional misconduct on the part of VerticalNet or its officers, directors, employees, agents or consultants, (c) any claim arising out of Impresse's use or possession of the portions of the Co-Branded Site provided by VerticalNet and the VerticalNet Sites as permitted by this Agreement; or (d) any claim that any portion of the VerticalNet Site or the VerticalNet Area of the Co-Branded Site violates, infringes or misappropriates any Intellectual Property Right of any third party and (ii) pay all costs, expenses and disbursements authorized by the Indemnitor (defined below) incurred in such defense, and any damages, liabilities, obligations, penalties or judgments awarded in any such action, or any settlement amount agreed to by VerticalNet.
11
9.6. PROCEDURE. If any action shall be brought against a party in respect to which indemnity may be sought from the other party pursuant to the provisions of this Article 9 [DISCLAIMER OF WARRANTY, LIMITATION OF LI...], the party seeking indemnity (the "Indemnitee") shall follow the procedures in this Section. If an Indemnitee receives any notice of a claim or other allegation with respect to which the other party (the "Indemnitor") has an obligation of indemnity hereunder, then the Indemnitee will, within 15 days of receipt of such notice, give the Indemnitor written notice of such claim or allegation setting forth in reasonable detail the facts and circumstances surrounding the claim. The Indemnitee will not make any payment or incur any costs or expenses with respect to such claim, except as requested by the Indemnitor or as necessary to comply with this procedure. The Indemnitee will not make any admission of liability or take any other action that limits the ability of the Indemnitor to defend the case. The Indemnitor shall immediately assume the full control of the defense or settlement of such claim or allegation, including the selection and employment of counsel, and shall pay all authorized costs and expenses of such defense. The Indemnitee will fully cooperate, at the expense of the Indemnitor, in the defense or settlement of the claim. The Indemnitee shall have the right, at its own expense, to employ separate counsel and participate in the defense or settlement of the claim; provided that the Indemnitor shall have no liability for costs or expenses incurred by the Indemnitee, except to the extent authorized by the Indemnitor pursuant to this procedure.
9.7. ESSENTIAL PART OF BARGAIN. The parties acknowledge that the disclaimers and limitations set forth in this Article 9 [DISCLAIMER OF WARRANTY, LIMITATION OF LI...] are an essential element of this Agreement between the parties and that the parties would not have entered into this Agreement without such disclaimers and limitations.
Source: IMPRESSE CORP, S-1/A, 3/22/2000
10. MISCELLANEOUS
10.1. INTELLECTUAL PROPERTY.
10.1.1. Except for the express rights granted to Impresse under this Agreement, Impresse acknowledges and agrees that the Intellectual Property of VerticalNet is and shall remain the sole property of VerticalNet and nothing in this Agreement shall confer in Impresse any right of ownership or license rights in VerticalNet's Intellectual Property. In addition, Impresse shall not now or in the future contest the validity of VerticalNet's ownership of its Intellectual Property; provided, however, that Impresse may contest the validity of VerticalNet's Intellectual Property in any proceeding brought against Impresse alleging infringement or misappropriation of VerticalNet's Intellectual Property.
10.1.2. Except for the express rights granted to VerticalNet under this Agreement, VerticalNet acknowledges and agrees that the Intellectual Property of Impresse is and shall remain the sole property of Impresse and nothing in this Agreement shall confer in VerticalNet any right of ownership or license rights in Impresse's Intellectual Property. In addition, VerticalNet shall not now or in the future contest the validity of Impresse's ownership of its Intellectual Property; provided, however, that VerticalNet may contest the validity of Impresse's Intellectual Property in any proceeding brought against VerticalNet alleging infringement or misappropriation of Impresse's Intellectual Property.
12
10.2. GOVERNING LAW. This Agreement shall be governed by and interpreted under the laws of the State of Delaware without regard to its conflicts of law provisions.
10.3. NO ASSIGNMENT. Except as otherwise set forth herein, neither party shall transfer, assign or cede any rights or delegate any obligations hereunder, in whole or in part, whether voluntarily or by operation of law, without the prior written consent of the other party, which consent may be withheld at the other party's reasonable business discretion; provided, however, that either party may transfer this Agreement without prior written consent of the other to an Affiliate of such party, or to the surviving party in a merger or consolidation, or to a purchaser of all or substantially all of its assets.
10.4. GOOD FAITH. The parties undertake to display to each other the utmost good faith, consistent with their respective rights and obligations set forth in this Agreement.
10.5. INDEPENDENT CONTRACTORS. In connection with this Agreement, each party is an independent contractor. This Agreement does not, and shall not be construed to, create an employer-employee, agency, joint venture or partnership relationship between the parties. Neither party shall have any authority to act for or to bind the other party in any way, to alter any of the terms or conditions of any of the other party's standard forms of invoices, sales agreements, warranties or otherwise, or to warrant or to execute agreements on behalf of the other or to represent that it is in any way responsible for the acts, debts, liabilities or omissions of the other party.
10.6. NOTICES. All notices, reports, payments and other communications required or permitted to be given under this Agreement (each, a "Notice") shall be in writing and shall be given either by personal delivery against a signed receipt, by express delivery using a nationally recognized overnight courier, or by facsimile. All Notices shall be properly addressed as follows, or to such other addresses as may be specified in a Notice given hereunder:
IF TO VERTICALNET:
Attn: General Counsel VerticalNet, Inc. 700 Dresher Road, Suite 100 Horsham, Pennsylvania 19044 Tel No.: (215) 315-3200 Fax No.: (215) 784-1962
IF TO IMPRESSE:
Attn: Siva Kumar Impresse Corporation 1309 South Mary Avenue Sunnyvale, CA 94087 Phone No.: (408) 530-2022 Fax No.: (408) 245-8336
13
A Notice shall be deemed to be effective upon personal delivery or, if sent via overnight delivery, upon receipt thereof. A Notice sent via facsimile is deemed effective on the same day (or if such day is not a business day, then on the next succeeding business day) if such facsimile is sent before 3:00 p.m. Prevailing Eastern Time and on the next day (or if such day is not a business day, then on the next succeeding business day) if such Notice is sent after 3:00 p.m. Prevailing Eastern Time.
10.7. AMENDMENT OR MODIFICATION. No subsequent amendment, modification or waiver of any of the provisions of this Agreement shall be effective unless in writing and signed by the parties.
10.8. ENTIRE AGREEMENT. This Agreement sets out the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements, proposals, arrangements and communications, whether oral or written, with respect to the subject matter hereof.
10.9. SEVERABILITY. If any provision of this Agreement is held by a tribunal of competent jurisdiction to be illegal, invalid, or otherwise unenforceable in any jurisdiction, then to the fullest extent permitted by law (a) the same shall not effect the other terms or provisions of this Agreement, (b) such term or provision shall be deemed modified to the extent necessary in the tribunal's opinion to render such term or provision enforceable, and the rights and obligations of the parties shall be construed and enforced accordingly, preserving to the fullest extent the intent and agreements of the parties set forth herein and (c) such finding of invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of
Source: IMPRESSE CORP, S-1/A, 3/22/2000
such term or provision in any other jurisdiction.
10.10. NO WAIVER. Failure to enforce any term of this Agreement is not a waiver of future enforcement of that or any other term. No term or provision of this Agreement will be deemed waived and no breach excused unless such waiver or excuse is in writing and signed by the party against whom enforcement of such waiver or excuse is sought.
10.11. SURVIVAL. Sections 5.3 [TERMINATION AND RENEWAL] and 5.4 [TERMINATION AND RENEWAL], and Articles 6 [DISPUTE RESOLUTION], 7, 8, 9 and 10, any payment obligations of the parties hereunder accruing prior to the date of termination; and any other provision herein expressly surviving termination or necessary to interpret the rights and obligations of the parties in connection with the termination of the term of this Agreement will survive the termination or expiration of this Agreement.
10.12. NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement is intended to confer benefits, rights or remedies unto any person or entity other than the parties and their permitted successors and assigns.
10.13. WAIVER OF JURY TRIAL. Each party hereby irrevocably waives all rights a party may have to a trial by jury in any legal action or proceeding arising out of or in connection with this Agreement or the transactions contemplated hereby.
10.14. TITLES. The headings appearing at the beginning of the Sections contained in this Agreement have been inserted for identification and reference purposes only and shall not be used to determine the construction or interpretation of this Agreement. The nomenclature of the
14
defined terms in this Agreement shall only be used for the construction of this Agreement, and are not to be used for any other purpose, including, but not limited to, interpretation for accounting purposes.
10.15. FORCE MAJEURE. Neither party shall be held to be in breach of this Agreement by reason of a force majeure event, including, but not limited to, act of God, delay in transportation, fire, flood, earthquake, storm, war, act of a public enemy, civil commotion or any law, rule, regulation, order or other action by any public authority or any other matter reasonably beyond a party's control. To the extent failure to perform is caused by such a force majeure event, such party shall be excused from performance hereunder so long as such event continues to prevent such performance, and provided the non-performing party takes all reasonable steps to resume full performance.
10.16. COMPLIANCE WITH LAWS. Each party shall comply with all prevailing laws, rules and regulations and obtain all necessary approvals, consents and permits required by the applicable agencies of the government of the jurisdictions that apply to its activities or obligations under this Agreement.
10.17. EXECUTION IN COUNTERPARTS, FACSIMILES. This Agreement may be executed in one or more counterparts, each of which when delivered to the other party shall be deemed an original and all of which together shall constitute one and the same instrument. This Agreement shall become binding when any one or more counterparts hereof, individually or taken together, bear the signatures of both parties hereto. For the purposes hereof, a facsimile copy of this Agreement, including the signature pages hereto, shall be deemed an original.
IN WITNESS WHEREOF, the parties to the Agreement by their duly authorized representatives have executed this Agreement as of the date first written above.
VERTICALNET, INC. IMPRESSE CORPORATION
By: /s/ Michael Hagon By: /s/ Siva Kumar ------------------------------- ----------------------------
Name: Name: ----------------------------- --------------------------
Title: Title: ---------------------------- -------------------------
15
Source: IMPRESSE CORP, S-1/A, 3/22/2000 [/INST] ```json
{<answer_start>
"answer": "Impresse Corporation"
<answer_end>
}
``` </s> | [Confidential Treatment Requested]
Exhibit 10.11
CO-BRANDING AGREEMENT
This Co-Branding Agreement (this "Agreement") dated March 3, 2000 (the "Effective Date") is entered into between VerticalNet, Inc., a Pennsylvania corporation having a principal place of business at 700 Dresher Road, Suite 100, Horsham, Pennsylvania, 19044 ("VerticalNet"), and Impresse Corporation, a California Corporation, having a principal place of business at 1309 South Mary Avenue, Sunnyvale, California, 94087 ("Impresse").
BACKGROUND
WHEREAS, VerticalNet owns and operates a series of Online Communities (defined below) that are accessible via the World Wide Web, each of which is designed to be an online gathering place for businesses of a certain type or within a certain industry; and
WHEREAS, Impresse desires to provide its commercial printing services (the "Impresse Services") to Users (defined below) of VerticalNet Sites (defined below); and
WHEREAS, Impresse and VerticalNet desire to create Co-Branded Site (defined below) where users will be able to register to review and utilize the Impresse Services and to promote such Co-Branded Site on VerticalNet Sites.
NOW, THEREFORE, in consideration of the mutual covenants herein, and intending to be legally bound hereby, VerticalNet and Impresse agree as follows:
1. DEFINITIONS
1.1. AFFILIATE shall mean, when used with reference to a party, any individual or entity directly or indirectly controlling, controlled by or under common control with such party. For purposes of this definition, "control" means the direct or indirect ownership of at least 50% of the outstanding voting securities of a party, or the right to control the policy decisions of such party.
1.2. BANNER shall mean a graphical image advertising the Impresse Site that is posted in an area reasonably designated by VerticalNet for similar banner advertisements and shall contain a Link (defined below) to the Co-Branded Site.
1.3. CO-BRANDED CONTENT shall mean all materials, data and similar information presented on the pages of the Co-Branded Site.
1.4. CO-BRANDED SITE shall mean the Site (defined below) that contains both a Frame (defined below) and a Window (defined below) which includes the Impresse Area (defined below) and the VerticalNet Area (defined below) of the Co-Branded Site.
1.5. CONFIDENTIAL INFORMATION shall mean, subject to the provisions of Section 7.2 [EXCLUSIONS], all proprietary and confidential information of a party, including, without limitation, trade secrets, technical information, business information, sales information, customer and potential customer lists and identities, product sales plans, sublicense agreements, inventions, developments, discoveries, software, know-how, methods, techniques, formulae, data, processes and other trade secrets and proprietary ideas, whether or not protectable under patent, trademark, copyright or other areas of law, that the other party has access to or receives. For purposes of this Agreement,
1
* Represents confidential information for which Impresse Corporation is seeking confidential treatment with the Securities and Exchange Commission.
the Co-Branded Content shall not be considered Confidential Information of Impresse. For purposes of this Agreement, this Agreement shall be considered Confidential Information.
1.6. E-COMMERCE CENTER shall mean a web page on a VerticalNet Site which is customized by VerticalNet to include a vendor's information, including the vendor's branding; a Link to the vendor's catalog, auction item listings; the vendor's career center including employment information; archives of; and Links to other related content locations.
1.7. FRAME shall mean a portion of a Web page which surrounds a Window on the top and left.
1.8. IMPRESSE AREA shall mean the Window portion of the Impresse Site (defined below) less the Frame that will be placed around the Window of the Co-Branded Site.
1.9. IMPRESSE MARK shall mean any trademark, service mark, trade name, domain name, design or logo of Impresse or its Affiliates.
1.10. IMPRESSE SITE shall mean the Site located at www.impresse.com (and any successor Site thereto).
1.11. IMPRESSE-VERTICALNET REVENUE shall have the meaning defined in Section 4.6.2 [REVENUE SHARING].
1.12. INTELLECTUAL PROPERTY shall mean any and all trade secrets, patents, copyrights, trademarks, service marks, URLs, trade dress, brand features, know-how and similar rights of any type under the laws of any applicable governmental authority, including, without limitation, all applications and registrations relating to any of the foregoing.
1.13. INTELLECTUAL PROPERTY RIGHTS shall mean all rights in and to Intellectual Property, including, without limitation, all patent rights, copyrights, trademarks, service marks, know-how and trade secrets.
1.14. LAUNCH DATE shall mean the day on which the Co-Branded Site and the V-Solutions Area become fully operational and generally available on the Internet.
1.15. LINK shall mean a link, including but not limited to a hyperlink,
Source: IMPRESSE CORP, S-1/A, 3/22/2000
button or banner, that connects two Sites in a manner so that when a User clicks on the link, the User is transferred directly from one Site to a second Site.
1.16. NEWSLETTER shall mean a text message containing information supplied by Impresse and approved by VerticalNet (which approval shall not be unreasonably withheld) that is transmitted via e-mail to Users of the VerticalNet Sites who have provided their e-mail addresses to VerticalNet along with permission to transmit such messages to the e-mail address.
1.17. ONLINE COMMUNITY shall mean a VerticalNet Site that acts as a comprehensive source of information, dialogue and commerce for and links to E-Commerce Centers and other Sites for a particular industry or service market.
2
1.18. PROPRIETARY FEATURE shall mean any name, trademark, service mark, trade name, domain name, navigational element, copyright, or logo which is proprietary to Impresse and/or VerticalNet, as appropriate.
1.19. SITE shall mean a site located on the World Wide Web portion of the Internet.
1.20. TERM shall have the meaning set forth in Section 5.1 [TERMINATION AND RENEWAL]
1.21. URL shall mean a universal resource locator used for the purpose of identifying a Site located on the Internet.
1.22. USER shall mean a single person who accesses and views a Site whether directly from a web browser or through a Link.
1.23. USER DATA shall mean all data generated by an Internet server that relates to file requests, user identification, transaction logs, session times and other information regarding the Users generated or collected by or through a Co-Branded Site, but excluding any information that relates or refers to a particular project of such User.
1.24. V-SOLUTIONS AREA shall mean a hub page accessible via a Link from the home page of each VerticalNet Site which shall contain a list of categories of business services, with each category further listing entities that provide such services. Each individual company listing shall contain a Link to a Web page hosted by VerticalNet that describes such company and the services it offers. The V-Solutions Area will also feature the V-Solutions Link (defined below).
1.25. V-SOLUTIONS LINK shall mean the Link from the V-Solutions Area to the Co-Branded Site.
1.26. VERTICALNET AREA shall mean the Frame area of the Co-Branded Site.
1.27. VERTICALNET MARK shall mean any trademark, service mark, trade name, domain name, design or logo of VerticalNet.
1.28. VERTICALNET-IMPRESSE USERS shall have the meaning defined in Section 4.6.1 ["VerticalNet Impresse Users"]
1.29. VERTICALNET SITE shall mean a Site owned and operated by VerticalNet in the United States or a portion of such Site designated by VerticalNet.
1.30. WINDOW shall mean a portion of a Web page that is surrounded by a Frame.
1.31. YEAR 2000 COMPLIANT shall mean with respect to any computer software that to the extent that such software contains date-dependent functionality, will: (1) contain four digit year codes, (2) properly process dates and date values before, through and beyond January 1, 2000, including date calculations with dates both before and after January 1, 2000, and (3) not suffer any impact on performance as a result of dates beyond January 1, 2000; provided, however, that for this warranty to apply the operating systems on which such software is being run, and any network servers, Web browsers, databases and other software that is used in conjunction with such software must also be Year 2000 Compliant as defined herein.
3
2. CO-BRANDED SITE
2.1. Impresse shall be responsible for: (a) the design, layout, development, hosting and maintenance of the Impresse Area of the Co-Branded Site; (b) providing VerticalNet with reasonable instructions and information regarding the Impresse Services; (c) providing a tabbed area prominently featured in a user interface within the Impresse Area of the Co-Branded Site that points to a VerticalNet Online Community or Online Communities; (d) modifying the Impresse online registration forms and system available on the Co-Branded Site to require Impresse users to identify and match their business activities with a VerticalNet Online Community or Online Communities; and (e) providing VerticalNet with the URL addresses for the Co-Branded Site.
2.2. VerticalNet shall be responsible for: (a) the design, layout, development, hosting and maintenance of the VerticalNet Area of the Co-Branded Site; and (b) the design, layout, development, hosting and maintenance of the V-Solutions Link.
2.3. Beginning on the Launch Date and continuing during the Term, VerticalNet shall display the V-Solutions Area on the VerticalNet Sites. VerticalNet shall likewise, during the Term, implement and maintain the V-Solutions Link.
2.4. Beginning on the Launch Date and continuing during the Term, VerticalNet shall not place advertising relating to the commercial printing entities listed on Exhibit "A," or other such entities subsequently identified by Impresse, on the VerticalNet Area of the Co-Branded Site.
2.5. Impresse hereby grants to VerticalNet a non-exclusive, non-transferable, royalty-free, right and license to link to the Impresse Area of the Co-Branded Site. Impresse shall permit Users who access the Co-Branded Site to access and use Co-Branded Content from the Co-Branded Site for the personal use of such Users in accordance with the then-current terms of Impresse's standard license agreement governing the use of such Co-Branded Content.
Source: IMPRESSE CORP, S-1/A, 3/22/2000
2.6. Nothing in this Agreement shall be construed as preventing Impresse or VerticalNet from developing other co-branded versions of their materials, data, information and content.
3. ONGOING SUPPORT
3.1. Impresse shall use commercially reasonable efforts to respond to all support requests by VerticalNet relating to the Co-Branded Site within one Business Day (as defined below) of Impresse's receipt of such notification. Impresse shall use reasonable efforts to cure the reported problem as soon as reasonably possible. VerticalNet shall provide Impresse with all information reasonably requested by Impresse in connection with a reported problem for which VerticalNet is requesting support under this Section 3.1 [ONGOING SUPPORT]. VerticalNet shall use commercially reasonable efforts to respond to all support requests by Impresse relating to the Co-Branded Site within one Business Day (as defined below) of VerticalNet's receipt of such notification. VerticalNet shall use reasonable efforts to cure the reported problem as soon as reasonably possible. Impresse shall provide VerticalNet with all information reasonably requested by VerticalNet in connection with a reported problem for which Impresse is requesting support under this Section 3.1 [ONGOING SUPPORT].
4
[Confidential Treatment Requested]
3.2. Impresse will identify to VerticalNet primary and secondary contacts who will be familiar with the Co-Branded Site and this Agreement. VerticalNet will identify to Impresse primary and secondary contacts who will be familiar with the Co-Branded Site and this Agreement.
3.3. VerticalNet shall have access to technical support from Impresse by telephone from 8 a.m. Pacific Standard Time to 5 p.m. Pacific Standard Time, Monday through Friday, Impresse holidays excluded (each a "Business Day," collectively "Business Days"). Impresse shall have access to technical support from VerticalNet by telephone from 6 a.m. Eastern Standard Time to 6 p.m. Eastern Standard Time, Monday through Friday, VerticalNet holidays excluded.
4. THE COMMERCIAL TERMS
4.1. DEVELOPMENT FEES. For the design, development and integration of the V-Solutions Area and the VerticalNet Area of the Co-Branded Site, Impresse shall pay to VerticalNet a one-time, nonrefundable development fee in the amount of [*] payable on the Effective Date.
4.2. SLOTTING FEES. For the display of the V-Solutions Area and the V-Solutions Link, Impresse shall pay to VerticalNet a slotting fee in the amount of [*] payable pursuant to the terms of Section 4.5 [PAYMENT TERMS].
4.3. BANNER/NEWSLETTER PURCHASE COMMITMENT. During the Term of this Agreement, Impresse agrees to purchase from VerticalNet Banners and Newsletters for a total price of at least $[*] as set forth below in this Section 4.3 [BANNER/NEWSLETTER PURCHASE COMMITMENT]. All prices for such Banners and Newsletters shall be offered to Impresse at a [*]% discount off of VerticalNet's then current prices for similar Banners or Newsletters. All purchases shall be subject to VerticalNet's standard terms and conditions governing advertising on VerticalNet Sites. Impresse agrees to purchase at least $[*] of such Banners and Newsletters in each calendar quarter after the Effective Date until a total of $[*] have been purchased, provided, the total dollar amount purchased by Impresse in any calendar quarter shall not consist of greater than 70% of either Banners or Newsletters. Payment of the fees set forth in this Section shall be made pursuant to the terms of Section 4.5 [PAYMENT TERMS].
4.4. HOSTING FEE. Impresse shall pay VerticalNet a service fee of $[*] for the hosting and maintenance of the Co-Branded Site and the V-Solutions Link, payable pursuant to the terms of Section 4.5 [PAYMENT TERMS].
4.5. PAYMENT TERMS. Impresse shall pay the fees set forth in Sections 4.2 [SLOTTING FEES], 4.3 [BANNER/NEWSLETTER PURCHASE COMMITMENT] and 4.4 [HOSTING FEE] as an aggregate, totaling $[*] payable in four equal quarterly installments of $[*] beginning on May 31, 2000 and thereafter on August 31, 2000 November 30, 2000 and February 28, 2001, respectively.
4.6. REVENUE SHARING. Impresse shall pay VerticalNet [*]of Impresse VerticalNet Revenue accruing during the term of this Agreement, payable to VerticalNet on or before the thirtieth day of the calendar quarter immediately following the quarter in which such revenue was collected by Impresse. Such payments shall be accompanied by a statement containing reasonable detail of the type and number of transactions from which the Impresse
5
* Represents confidential information for which Impresse Corporation is seeking confidential treatment with the Securities and Exchange Commission.
VerticalNet Revenue was derived, the total Impresse VerticalNet Revenue for such period and the total fees payable to VerticalNet pursuant to this Section 4.6 [REVENUE SHARING].
4.6.1. "VerticalNet Impresse Users" are the Users that register with Impresse through the Co-Branded Site, but specifically excluding those Users who have previously registered with Impresse other than through the Co-Branded Site.
4.6.2. The "Impresse VerticalNet Revenue" is Impresse's total net transaction and subscription revenues collected by Impresse during the term of this Agreement from VerticalNet Impresse Users.
4.6.3. If government regulations prevent Impresse from sharing any revenues associated with Impresse Services, VerticalNet and Impresse shall negotiate in good faith a compensation structure that seeks to provide VerticalNet with compensation equal to that set forth in Section 4.6 [REVENUE SHARING].
4.7. TAXES. All payments required under this Agreement are exclusive of federal, state, local and foreign taxes, duties, tariffs, levies and similar assessments. When applicable, such taxes shall appear as separate items on a party's invoice or statement to the other party. Payment of such taxes or charges shall be the responsibility of the party whose obligation it is under this Agreement to make the payment in respect of which such taxes are assessed, excluding any taxes based upon the other party's net income. In lieu thereof, a party shall provide the other party with a tax or levy exemption certificate acceptable to the taxing or levying authority.
Source: IMPRESSE CORP, S-1/A, 3/22/2000
4.8. AUDITS. During the term of this Agreement and for one year thereafter, VerticalNet shall have the right to appoint a certified public accountant to audit Impresse's financial records relating to such payment to verify the accuracy of Impresse's financial records in order to verify the amount of the payments owed and/or paid hereunder, but no more frequently than once per year. If the amount owed by Impresse to VerticalNet was underpaid, the additional amount owed shall be paid to VerticalNet within 15 days of notice of such underpayment to Impresse. If the amount owed by Impresse to VerticalNet was underpaid in excess of 10% of the amount owed, the fees of such audit shall also be paid to VerticalNet within 15 days of notice of such to Impresse. If the amount owed by Impresse to VerticalNet was overpaid, the excess amount paid shall be returned by VerticalNet within 15 days of notice of such overpayment. VerticalNet shall give reasonable advance notice to Impresse of such audit and each audit shall be conducted in a manner that does not cause unreasonable disruption to the conduct of business by Impresse. The results of any such audit shall be deemed to be Confidential Information and may not be disclosed by either party or its certified public accountants except as may be necessary to enforce such party's rights.
4.9. INTEREST. All payments not paid by the date such payments are due shall bear interest from the due date to the date payments are actually paid at the lower of (i) 1% per month or (ii) the maximum rate permitted by law.
5. TERMINATION AND RENEWAL
5.1. The Term of this Agreement shall begin on the Effective Date and shall end fifteen months therefrom.
6
5.2. Either party may terminate this Agreement immediately upon written notice to the other party in the event of any material breach of a term of this Agreement by such other party that remains uncured 30 days after written notice of such breach was received by such other party or, if the breach is not reasonably capable of cure within 30 days, such longer period, not to exceed 60 days, so long as the cure is commenced within the 30-day period and thereafter is diligently prosecuted to completion as soon as possible and in any event within 60 days.
5.3. Upon termination or expiration of this Agreement, (i) Impresse shall no longer have the right to use any VerticalNet Mark, (ii) VerticalNet shall no longer have the right to use any Impresse Mark; (iii) Impresse may no longer make any Co-Branded Content available for access and use through the Co-Branded Site; (iv) VerticalNet shall cease framing the Window in the Co-Branded Site; (v) VerticalNet shall remove the V-Solutions Link from the V-Solutions Area; and (vi) VerticalNet shall cease displaying or transmitting all Banners and Newsletters of Impresse.
5.4. Following expiration or termination of this Agreement, the terms and provisions of Article 4 [THE COMMERCIAL TERMS] above shall continue to govern Impresse's payment obligations for any payment obligations accruing during the term of this Agreement. Following termination, Impresse shall provide VerticalNet with a final accounting with respect to this Agreement and tender payment of amounts due under Article 4 [THE COMMERCIAL TERMS] at the next scheduled payment date.
6. DISPUTE RESOLUTION
6.1. NEGOTIATION AND ESCALATION. If any controversy or claim arises relating to this Agreement, the parties will attempt in good faith to negotiate a solution to their differences, including progressively escalating any controversy or claim through senior levels of management. If negotiation does not result in a resolution within 30 days of the date one party first notifies the other of the controversy or claim, either party may resort to arbitration under Section 6.2 [ARBITRATION].
6.2. ARBITRATION. Any controversy or claim between the parties concerning any breach or alleged breach of this Agreement or performance or nonperformance of any obligation under this Agreement which cannot be resolved by negotiation will be resolved by binding arbitration under this Section 6.2 [ARBITRATION] and the then-current Commercial Rules and supervision of the American Arbitration Association (the "AAA"). If any part of this Section 6.2 [ARBITRATION] is held to be unenforceable, it will be severed and will not affect either the duty to arbitrate or any other part of this Section 6.2 [ARBITRATION]. The arbitration will be held before a sole disinterested arbitrator who is knowledgeable in business information and the Internet and experienced in handling commercial disputes. The arbitrator shall be appointed jointly by the parties hereto within 30 days following the date on which the arbitration is instituted. If the parties are unable to agree upon the arbitrator within such 30-day period, the AAA shall be instructed to select such arbitrator within 15 days thereafter. The arbitrator's award will be final and binding and may be entered in any court having jurisdiction. The arbitrator will not have the power to award punitive or exemplary damages, or any damages excluded by, or in excess of, any damage limitations expressed in this Agreement. Issues of arbitrability will be determined in accordance solely with the federal substantive and procedural laws relating to arbitration; in all other respects, the arbitrator will be obligated to apply and follow the substantive law of the State of Delaware.
7
6.3. EQUITABLE RELIEF. Notwithstanding anything to the contrary in this Agreement, in the event of an alleged violation of Article 7 [CONFIDENTIALITY] of this Agreement by either party, the party alleging such a violation may seek temporary and permanent injunctive or other appropriate equitable relief from any court of competent jurisdiction pending appointment of an arbitrator. The party requesting such relief shall simultaneously file a demand for arbitration of the dispute, and shall request that the AAA proceed under its rules for an expedited hearing.
6.4. COSTS. Unless the arbitrator, if any, determines otherwise, each party will bear its own attorneys' fees and other costs associated with the negotiation and arbitration provided for by this Article 6 [DISPUTE RESOLUTION], except that costs and expenses regarding the arbitrators shall be shared equally. If court proceedings to stay litigation or compel arbitration are necessary, the party who unsuccessfully opposes such proceedings will pay all associated costs, expenses and attorneys' fees that are reasonably incurred by the other party. To the extent that any claim in arbitration relates to the collection of amounts owed under Article 4 [THE COMMERCIAL TERMS], the party entitled to collect such amounts shall be entitled to recover all reasonable costs of collection, including expenses and attorneys' fees that are incurred.
6.5. TWO YEAR LIMITATION. Except for claims under Sections 9.4 [INDEMNIFICATION BY IMPRESSE] and 9.5 [INDEMNIFICATION BY VERTICALNET]
Source: IMPRESSE CORP, S-1/A, 3/22/2000
hereof, neither party may bring a claim or action regardless of form, arising out of or related to this Agreement, including any claim of fraud or misrepresentation, more than two years after the cause of action accrues or becomes known, whichever is later.
6.6. CONFIDENTIALITY. In order to facilitate the resolution of controversies or claims between the parties with respect to each party hereto, such controversies or claims, including details regarding negotiations, arbitration and settlement terms, shall be treated as Confidential Information of the other party hereto in accordance with Article 7 [CONFIDENTIALITY].
6.7. REMEDIAL MEASURES. In the event of (a) any material remediable breach of this Agreement by the other party which remains uncured 30 days after notice of such breach was received by the other party or (b) any material breach which cannot be cured, the non-breaching party may take reasonable remediable measures upon prior written notice and at the cost and expense of the breaching party without prejudice and in addition to any other rights arising from such breach. In addition, the non-breaching party shall take reasonable steps to mitigate damages arising out of such breach.
7. CONFIDENTIALITY
7.1. CONFIDENTIALITY OBLIGATIONS. Except as permitted elsewhere under this Agreement, each party agrees to take Reasonable Steps (as defined below) (a) to receive and maintain the Confidential Information of the other party in confidence and (b) not to disclose such Confidential Information to any third parties, provided, the receiving party may disclose such Confidential Information to its employees, representatives and agents who have a need to know such information for purposes of carrying out the terms of this Agreement. Neither party hereto shall use all or any part of the Confidential Information of the other party for any purpose other than to perform its obligations under this Agreement. The parties will take Reasonable Steps (as defined below) to ensure that their employees, representatives and agents comply with this provision. As used herein, "Reasonable Steps" means at least the same degree of care that the
8
receiving party uses to protect its own Confidential Information, and, in no event, not less than reasonable care.
7.2. EXCLUSIONS. "Confidential Information" does not include information that (a) is or becomes publicly available through no fault of the receiving party; (b) was already known to the receiving party at the time it was disclosed to the receiving party, as evidenced by records of the receiving party; (c) is independently developed by employees of the receiving party who had no knowledge of or access to such information, as evidenced by records of the receiving party; (d) is received from a third party who is under no obligation of confidentiality to the disclosing party; or (e) must be disclosed pursuant to applicable laws, rules or regulations; provided, however, that the receiving party first gives the disclosing party notice and a reasonable opportunity to secure confidential protection of such Confidential Information.
7.3. TERMINATION. Subject to Section 10.11 [SURVIVAL], upon termination of this Agreement, all Confidential Information shall be returned to the disclosing party or, at the request of the disclosing party, destroyed unless otherwise specified or permitted elsewhere under this Agreement. Subject to Section 7.6 [USER DATA], the confidentiality obligations contained in this Article 7 [CONFIDENTIALITY] shall survive termination of this Agreement for a period of three years.
7.4. INJUNCTION. Each party acknowledges and agrees that the provisions of this Article 7 [CONFIDENTIALITY] are reasonable and necessary to protect the other party's interests in its Confidential Information, that any breach of the provisions of this Article 7 [CONFIDENTIALITY] may result in irreparable harm to such other party, and that the remedy at law for such breach may be inadequate. Accordingly, in the event of any breach or threatened breach of the provisions of this Article 7 [CONFIDENTIALITY] by a party hereto, the other party, in addition to any other relief available to it at law, in equity or otherwise, shall be entitled to seek temporary and permanent injunctive relief restraining the breaching party from engaging in and/or continuing any conduct that would constitute a breach of this Article 7 [CONFIDENTIALITY], without posting a bond or other security.
7.5. PUBLICITY. Neither party will originate any press release concerning the relationship between the parties or the transactions described in this Agreement without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, as soon as reasonably practicable following the Effective Date, VerticalNet and Impresse shall jointly issue a press release with respect to entering into this Agreement.
7.6. USER DATA. Impresse shall provide VerticalNet with User Data on each User that submits information through the Co-Branded Site by sending an email with such information to an email address designated by VerticalNet at the time the request occurs. User Data shall be maintained by each Party as Confidential Information of the other Party during the Term and 5 years thereafter, provided such User Data may be disclosed only as part of an aggregation or analysis of all User Data but not as independent data. Upon termination of the Agreement, VerticalNet and Impresse shall jointly own all User Data. Neither Party shall use the User Data other than in accordance with the VerticalNet privacy policy and all applicable laws during the Term and thereafter.
9
8. REPRESENTATIONS AND WARRANTIES
8.1. REPRESENTATIONS AND WARRANTIES. Each party hereby represents, covenants and warrants that:
8.1.1. It has the corporate power to enter into this Agreement and to grant the rights and licenses granted herein and to otherwise perform this Agreement;
8.1.2. It is not a party to any agreement or understanding and knows of no law or regulation that would prohibit it from entering into and performing this Agreement or that would conflict with this Agreement;
8.1.3. When executed and delivered by it, this Agreement will constitute a legal, valid and binding obligation of it, enforceable against it in accordance with this Agreement's terms, except as enforcement may be limited by laws or regulations relating to bankruptcy, insolvency and creditors rights or by principles of equity;
Source: IMPRESSE CORP, S-1/A, 3/22/2000
8.1.4. The portions of the Co-Branded Site provided by such party are and will continue to be Year 2000 Compliant;
8.1.5. To the best of its knowledge, the portions of the Co-Branded Site provided by such party and its own Site do not and will not (i) contain any known viruses, Trojan Horse, worm or harmful code the purpose of which is to disable or interrupt the operating of a computer system or destroy, erase or otherwise harm any data, software or hardware, (ii) contain any false, misleading, libelous or defamatory statements, (iii) constitute an invasion of the rights of privacy or publicity of any third party, (iv) violate any applicable laws, rules and regulations or (v) infringe, violate or misappropriate any Intellectual Property Rights of any third party.
9. DISCLAIMER OF WARRANTY, LIMITATION OF LIABILITY AND INDEMNIFICATION
9.1. DISCLAIMER OF WARRANTIES BY VERTICALNET. EXCEPT AS EXPRESSELY SET FORTH IN THIS AGREEMENT, VERTICALNET HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE VERTICALNET SITES, THE V-SOLUTIONS AREA, THE V-SOLUTIONS LINK AND THE VERTICALNET AREA OF THE CO-BRANDED SITE, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. VERTICALNET EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES AS TO THE USER INTERFACE OR USER EXPERIENCE ASSOCIATED WITH THE VERTICALNET SITES AND RESERVES THE RIGHT, IN ITS SOLE DISCRETION, TO MODIFY THE PLACEMENT OF ALL LINKS, URLS AND PROPRIETARY FEATURES; PROVIDED, HOWEVER, THAT IN THE EVENT VERTICALNET REDESIGNS THE USER INTERFACE, SUCH LINKS, URLS AND PROPRIETARY FEATURES SHALL RECEIVE MUTUALLY AGREEABLE PLACEMENT SUBSTANTIALLY SIMILAR TO THE ORIGINAL DESIGN.
10
9.2. DISCLAIMER OF WARRANTIES BY IMPRESSE. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, IMPRESSE HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE IMPRESSE AREA OF THE CO-BRANDED SITE AND THE IMPRESSE SITE, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
9.3. LIMITATION OF LIABILITY. EXCEPT IN CONNECTION WITH A BREACH BY EITHER PARTY OF ARTICLE 7 OR SECTION 8.1.5 [REPRESENTATIONS AND WARRANTIES] (v) AND THE INDEMNIFICATION OBLIGATIONS OF IMPRESSE UNDER SECTION 9.4(i)(d) [INDEMNIFICATION BY IMPRESSE] AND THE INDEMNIFICATION OBLIGATIONS OF VERTICALNET UNDER SECTION 9.5(i)(d) [INDEMNIFICATION BY VERTICALNET], NEITHER PARTY WILL BE LIABLE FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE), EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
9.4. INDEMNIFICATION BY IMPRESSE. Subject to Section 9.6 [PROCEDURE], Impresse shall (i) defend at its sole expense VerticalNet and its officers, directors, employees and agents from and against any action, suit, proceeding or investigation brought by a third party and caused by, relating to, based upon, arising out of or in connection with (a) any breach by Impresse of the representations, warranties or agreements made by it in Section 8 of this Agreement, (b) negligence, recklessness or intentional misconduct on the part of Impresse or its officers, directors, employees, agents or consultants, (c) any claim arising out of VerticalNet's authorized use or possession of the portions of the Co-Branded Site provided by Impresse and the Impresse Site as permitted by this Agreement; or (d) any claim that any portion of the Impresse Site or the Impresse Area of the Co-Branded Site violates, infringes or misappropriates any Intellectual Property Right of any third party and (ii) pay all authorized costs, expenses and disbursements incurred in such defense, and any damages, liabilities, obligations, penalties or judgments awarded in any such action, or any settlement amount agreed to by Impresse.
9.5. INDEMNIFICATION BY VERTICALNET. Subject to Section 9.6 [PROCEDURE], VerticalNet shall (i) defend at its sole expense Impresse and its officers, directors, employees and agents from and against any action, suit, proceeding or investigation brought by a third party, caused by, relating to, based upon, arising out of or in connection with (a) any breach by VerticalNet of the representations, warranties or agreements made by it in Section 8 of this Agreement, (b) negligence, recklessness or intentional misconduct on the part of VerticalNet or its officers, directors, employees, agents or consultants, (c) any claim arising out of Impresse's use or possession of the portions of the Co-Branded Site provided by VerticalNet and the VerticalNet Sites as permitted by this Agreement; or (d) any claim that any portion of the VerticalNet Site or the VerticalNet Area of the Co-Branded Site violates, infringes or misappropriates any Intellectual Property Right of any third party and (ii) pay all costs, expenses and disbursements authorized by the Indemnitor (defined below) incurred in such defense, and any damages, liabilities, obligations, penalties or judgments awarded in any such action, or any settlement amount agreed to by VerticalNet.
11
9.6. PROCEDURE. If any action shall be brought against a party in respect to which indemnity may be sought from the other party pursuant to the provisions of this Article 9 [DISCLAIMER OF WARRANTY, LIMITATION OF LI...], the party seeking indemnity (the "Indemnitee") shall follow the procedures in this Section. If an Indemnitee receives any notice of a claim or other allegation with respect to which the other party (the "Indemnitor") has an obligation of indemnity hereunder, then the Indemnitee will, within 15 days of receipt of such notice, give the Indemnitor written notice of such claim or allegation setting forth in reasonable detail the facts and circumstances surrounding the claim. The Indemnitee will not make any payment or incur any costs or expenses with respect to such claim, except as requested by the Indemnitor or as necessary to comply with this procedure. The Indemnitee will not make any admission of liability or take any other action that limits the ability of the Indemnitor to defend the case. The Indemnitor shall immediately assume the full control of the defense or settlement of such claim or allegation, including the selection and employment of counsel, and shall pay all authorized costs and expenses of such defense. The Indemnitee will fully cooperate, at the expense of the Indemnitor, in the defense or settlement of the claim. The Indemnitee shall have the right, at its own expense, to employ separate counsel and participate in the defense or settlement of the claim; provided that the Indemnitor shall have no liability for costs or expenses incurred by the Indemnitee, except to the extent authorized by the Indemnitor pursuant to this procedure.
9.7. ESSENTIAL PART OF BARGAIN. The parties acknowledge that the disclaimers and limitations set forth in this Article 9 [DISCLAIMER OF WARRANTY, LIMITATION OF LI...] are an essential element of this Agreement between the parties and that the parties would not have entered into this Agreement without such disclaimers and limitations.
Source: IMPRESSE CORP, S-1/A, 3/22/2000
10. MISCELLANEOUS
10.1. INTELLECTUAL PROPERTY.
10.1.1. Except for the express rights granted to Impresse under this Agreement, Impresse acknowledges and agrees that the Intellectual Property of VerticalNet is and shall remain the sole property of VerticalNet and nothing in this Agreement shall confer in Impresse any right of ownership or license rights in VerticalNet's Intellectual Property. In addition, Impresse shall not now or in the future contest the validity of VerticalNet's ownership of its Intellectual Property; provided, however, that Impresse may contest the validity of VerticalNet's Intellectual Property in any proceeding brought against Impresse alleging infringement or misappropriation of VerticalNet's Intellectual Property.
10.1.2. Except for the express rights granted to VerticalNet under this Agreement, VerticalNet acknowledges and agrees that the Intellectual Property of Impresse is and shall remain the sole property of Impresse and nothing in this Agreement shall confer in VerticalNet any right of ownership or license rights in Impresse's Intellectual Property. In addition, VerticalNet shall not now or in the future contest the validity of Impresse's ownership of its Intellectual Property; provided, however, that VerticalNet may contest the validity of Impresse's Intellectual Property in any proceeding brought against VerticalNet alleging infringement or misappropriation of Impresse's Intellectual Property.
12
10.2. GOVERNING LAW. This Agreement shall be governed by and interpreted under the laws of the State of Delaware without regard to its conflicts of law provisions.
10.3. NO ASSIGNMENT. Except as otherwise set forth herein, neither party shall transfer, assign or cede any rights or delegate any obligations hereunder, in whole or in part, whether voluntarily or by operation of law, without the prior written consent of the other party, which consent may be withheld at the other party's reasonable business discretion; provided, however, that either party may transfer this Agreement without prior written consent of the other to an Affiliate of such party, or to the surviving party in a merger or consolidation, or to a purchaser of all or substantially all of its assets.
10.4. GOOD FAITH. The parties undertake to display to each other the utmost good faith, consistent with their respective rights and obligations set forth in this Agreement.
10.5. INDEPENDENT CONTRACTORS. In connection with this Agreement, each party is an independent contractor. This Agreement does not, and shall not be construed to, create an employer-employee, agency, joint venture or partnership relationship between the parties. Neither party shall have any authority to act for or to bind the other party in any way, to alter any of the terms or conditions of any of the other party's standard forms of invoices, sales agreements, warranties or otherwise, or to warrant or to execute agreements on behalf of the other or to represent that it is in any way responsible for the acts, debts, liabilities or omissions of the other party.
10.6. NOTICES. All notices, reports, payments and other communications required or permitted to be given under this Agreement (each, a "Notice") shall be in writing and shall be given either by personal delivery against a signed receipt, by express delivery using a nationally recognized overnight courier, or by facsimile. All Notices shall be properly addressed as follows, or to such other addresses as may be specified in a Notice given hereunder:
IF TO VERTICALNET:
Attn: General Counsel VerticalNet, Inc. 700 Dresher Road, Suite 100 Horsham, Pennsylvania 19044 Tel No.: (215) 315-3200 Fax No.: (215) 784-1962
IF TO IMPRESSE:
Attn: Siva Kumar Impresse Corporation 1309 South Mary Avenue Sunnyvale, CA 94087 Phone No.: (408) 530-2022 Fax No.: (408) 245-8336
13
A Notice shall be deemed to be effective upon personal delivery or, if sent via overnight delivery, upon receipt thereof. A Notice sent via facsimile is deemed effective on the same day (or if such day is not a business day, then on the next succeeding business day) if such facsimile is sent before 3:00 p.m. Prevailing Eastern Time and on the next day (or if such day is not a business day, then on the next succeeding business day) if such Notice is sent after 3:00 p.m. Prevailing Eastern Time.
10.7. AMENDMENT OR MODIFICATION. No subsequent amendment, modification or waiver of any of the provisions of this Agreement shall be effective unless in writing and signed by the parties.
10.8. ENTIRE AGREEMENT. This Agreement sets out the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements, proposals, arrangements and communications, whether oral or written, with respect to the subject matter hereof.
10.9. SEVERABILITY. If any provision of this Agreement is held by a tribunal of competent jurisdiction to be illegal, invalid, or otherwise unenforceable in any jurisdiction, then to the fullest extent permitted by law (a) the same shall not effect the other terms or provisions of this Agreement, (b) such term or provision shall be deemed modified to the extent necessary in the tribunal's opinion to render such term or provision enforceable, and the rights and obligations of the parties shall be construed and enforced accordingly, preserving to the fullest extent the intent and agreements of the parties set forth herein and (c) such finding of invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of
Source: IMPRESSE CORP, S-1/A, 3/22/2000
such term or provision in any other jurisdiction.
10.10. NO WAIVER. Failure to enforce any term of this Agreement is not a waiver of future enforcement of that or any other term. No term or provision of this Agreement will be deemed waived and no breach excused unless such waiver or excuse is in writing and signed by the party against whom enforcement of such waiver or excuse is sought.
10.11. SURVIVAL. Sections 5.3 [TERMINATION AND RENEWAL] and 5.4 [TERMINATION AND RENEWAL], and Articles 6 [DISPUTE RESOLUTION], 7, 8, 9 and 10, any payment obligations of the parties hereunder accruing prior to the date of termination; and any other provision herein expressly surviving termination or necessary to interpret the rights and obligations of the parties in connection with the termination of the term of this Agreement will survive the termination or expiration of this Agreement.
10.12. NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement is intended to confer benefits, rights or remedies unto any person or entity other than the parties and their permitted successors and assigns.
10.13. WAIVER OF JURY TRIAL. Each party hereby irrevocably waives all rights a party may have to a trial by jury in any legal action or proceeding arising out of or in connection with this Agreement or the transactions contemplated hereby.
10.14. TITLES. The headings appearing at the beginning of the Sections contained in this Agreement have been inserted for identification and reference purposes only and shall not be used to determine the construction or interpretation of this Agreement. The nomenclature of the
14
defined terms in this Agreement shall only be used for the construction of this Agreement, and are not to be used for any other purpose, including, but not limited to, interpretation for accounting purposes.
10.15. FORCE MAJEURE. Neither party shall be held to be in breach of this Agreement by reason of a force majeure event, including, but not limited to, act of God, delay in transportation, fire, flood, earthquake, storm, war, act of a public enemy, civil commotion or any law, rule, regulation, order or other action by any public authority or any other matter reasonably beyond a party's control. To the extent failure to perform is caused by such a force majeure event, such party shall be excused from performance hereunder so long as such event continues to prevent such performance, and provided the non-performing party takes all reasonable steps to resume full performance.
10.16. COMPLIANCE WITH LAWS. Each party shall comply with all prevailing laws, rules and regulations and obtain all necessary approvals, consents and permits required by the applicable agencies of the government of the jurisdictions that apply to its activities or obligations under this Agreement.
10.17. EXECUTION IN COUNTERPARTS, FACSIMILES. This Agreement may be executed in one or more counterparts, each of which when delivered to the other party shall be deemed an original and all of which together shall constitute one and the same instrument. This Agreement shall become binding when any one or more counterparts hereof, individually or taken together, bear the signatures of both parties hereto. For the purposes hereof, a facsimile copy of this Agreement, including the signature pages hereto, shall be deemed an original.
IN WITNESS WHEREOF, the parties to the Agreement by their duly authorized representatives have executed this Agreement as of the date first written above.
VERTICALNET, INC. IMPRESSE CORPORATION
By: /s/ Michael Hagon By: /s/ Siva Kumar ------------------------------- ----------------------------
Name: Name: ----------------------------- --------------------------
Title: Title: ---------------------------- -------------------------
15
Source: IMPRESSE CORP, S-1/A, 3/22/2000 | Highlight the parts (if any) of this contract related to "Parties" that should be reviewed by a lawyer. Details: The two or more parties who signed the contract | {
"answer_start": [
373
],
"text": [
"Impresse Corporation"
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "No-Solicit Of Employees" that should be reviewed by a lawyer. Details: Is there a restriction on a party’s soliciting or hiring employees and/or contractors from the counterparty, whether during the contract or after the contract ends (or both)?
Context: Exhibit 16.1
AUTOMOTIVE REFINISH DISTRIBUTOR AGREEMENT (P.R.China)
THIS AGREEMENT, made as of the 1st day of December, (the "Effective Date") by and between:
PPG Paints Trading (Shanghai) Co Ltd hereinafter referred to as ("PPG Shanghai")
Address : Suite 2512, 5th Floor No. 2 Xin Kang Building, 28 Jia Feng Road Wai Gao Qiao Free Trade Zone Shanghai, P. R. China
Tel. : (86-21) 6291 3500
Fax : (86-21) 6291 2100
Business liscence no. : 0537762
Legal representative : Viktoras R. Sekmakas and
NeoMedia Micro Paint Repair hereinafter referred to as ("DISTRIBUTOR")
Address : 2201 Second Street, Suite 600 Ft. Myers, Florida, 33901
Tel. : 239-337-3434
Fax : 239-337-3668
Business licence no. : 2648151
Legal representative : Charles T. Jensen
WITNESSETH:
WHEREAS:
A. PPG SHANGHAI desires DISTRIBUTOR to market and sell PPG's "Deltron" and "ACS" brand products, as hereinafter defined in Section 2 (the "Products"), to the repair chain shops in P.R.China as listed on Appendix 4 (the "Territory");
B. DISTRIBUTOR has the means to market Products in the Territory. As soon as Distributor's China subsidary, NeoMeida Micro Paint Repair China, a Wholley Foreign Owned Enterprise ("WFOE") registered under the Chinese laws and regulations, will be established, this title of Distributor will be automatically switched to the WFOE.
C. PPG SHANGHAI desires to appoint DISTRIBUTOR as a PPG SHANGHAI distributor in the Territory and DISTRIBUTOR desires to be such distributor; and
D. Accordingly, PPG SHANGHAI and DISTRIBUTOR have reached an agreement as hereinafter set forth.
In consideration of the mutual covenants and agreements herein contained, the parties hereto, intending to be legally bound hereby, covenant and agree as follows:
1. APPOINTMENT
1.1 PPG SHANGHAI does hereby appoint DISTRIBUTOR to distribute in the Territory the Products (as defined in paragraph 2, below) upon the terms and conditions hereinafter set forth. DISTRIBUTOR does hereby accept such appointment.
1.2 It is agreed that such appointment is nonexclusive and PPG SHANGHAI may, without obligation to pay DISTRIBUTOR any commission or other compensation, make direct sales of Products to other customers in the Territory and/or appoint additional distributors of Products in the Territory. During the term of this Agreement, DISTRIBUTOR shall have the exclusive right for selling the Products to Beijing Sino-US Jinche Yingang Auto Technological Services Limited (the "Auto Center"). PPG Shanghai or any of its direct or indirect affiliates shall not sell any of its products directly to the Auto Center or to any of the Auto Center's affiliates in China or throughout the world, unless PPG Shanghai obtains Distributor's written approval. It is understood and agreed that as used herein the term "PPG" shall mean PPG Industries Inc. and/or one or more affiliated companies of PPG Industries Inc. as the context may require.
1.3 Notwithstanding anything to the contrary in this Section 1, PPG SHANGHAI may also sell Products to any person or entity located outside the Territory without being obligated to consider whether such Products may be resold in the Territory. DISTRIBUTOR shall not be entitled to any commission or other compensation in such event.
1.4 Deleted.
1.5 DISTRIBUTOR warrants that it will not handle any counterfeit, passing-off products or products other than those purchased directly from PPG SHANGHAI.
1.6 DISTRIBUTOR warrants and represents that it is a corporation duly organized, validly existing, and in good standing under the applicable laws, that it has full legal right, power, and authority to enter into this Agreement and to consummate or cause to be consummated all of the transactions contemplated hereby, and that the execution, delivery, and/or performance of this Agreement do not or will not conflict with or result in a breach of any provision of any articles of incorporation or by-laws, or any written undertaking to which it is a party or by which it, or any of its assets, may be bound or affected, or result in a violation of any law, regulation, order, or award of any authority or body having jurisdiction over the assets and operations of it.
2. PRODUCTS
2.1 The Products and subject matter of this Agreement shall be the products listed below manufactured and sold by PPG SHANGHAI or affiliated companies of PPG SHANGHAI. Additional Products may be added to or deleted from the list at the sole discretion of PPG SHANGHAI:
(a) Global Deltron Refinish Products.
(b) ACS Products.
(c) Ancilliaries confirmed in writing for distribution by PPG SHANGHAI.
(d) Mixing equipment and related accessories as approved and supplied by PPG SHANGHAI.
(e) Any other products as PPG SHANGHAI may launch from time to time, at its absolute discretion.
2.2 Specific product codes for above category a, b, c, d, and e shall reference PPG SHANGHAI Price List in effect as of January 1, 2005 on Appendix 5.
3. REPRESENTATIONS AND WARRANTIES BY DISTRIBUTOR
DISTRIBUTOR represents and warrants to PPG SHANGHAI that(pound)(0)
(a) it is a business entity duly incorporated and registered and validly existing under the relevant PRC laws and regulations;
(b) it has been issued a valid business licence in its name by the relevant local branch of the State Administration of Industry and Commerce, and that business licence shall be valid within the duration of this Agreement;
(c) it is permitted to distribute chemical products pursuant to this Agreement under its approved business scope;
(d) it has a Dangerous Goods Business Permit Licence issued by the appropriate local government;
(e) it has the qualification of a general taxpayer and is able to issue value added tax invoices;
(f) it shall comply with all the relevant laws, regulations and permits, which have jurisdiction over its business, in relation to the sale of Products,
4. DISTRIBUTOR'S RESPONSIBILITY
4.1 DISTRIBUTOR shall promote the sale of the Products in the Territory. DISTRIBUTOR will conduct its operations in the Territory through offices or agencies to be maintained by DISTRIBUTOR at its sole cost and expense.
4.2 If DISTRIBUTOR sells or distributes the Products outside the Territory, whether directly or indirectly through DISTRIBUTOR's cooperation or in conjunction with other third parties, or to customers outside the Territory without the prior knowledge and consent of PPG SHANGHAI, PPG SHANGHAI shall have the right to terminate with immediate effect this Agreement and any existing incentive arrangements between PPG SHANGHAI and DISTRIBUTOR, whether entered into before or after the commencement of the Agreement.
4.3 DISTRIBUTOR agrees to satisfy the annual and quarterly sale targets for the Products set forth in Appendix 3 herein as mutually agreed to by the parties hereof.
4.4 DISTRIBUTOR and PPG Shanghai shall be responsible for providing technical support and after sale services to the Territory. PPG Shanghai's responsibility under this Section 4.4 is defined in Section 8.
5. PRICES AND TERMS
5.1 PPG SHANGHAI agrees that PPG SHANGHAI will sell and DISTRIBUTOR agrees to buy the Products at the prices agreed to by the parties from time to time and subject to the terms and conditions stated herein. The prices in effect as of the Effective Date of the Agreement are set forth on Appendix 5. The prices for the Products must be agreed upon by PPG SHANGHAI at the time of PPG SHANGHAI's written acceptance of an order hereunder. Unless otherwise agreed by PPG SHANGHAI in writing, DISTRIBUTOR shall prepay all the invoiced amount in the currency and manner as indicated by PPG Shanghai. DISTRIBUTOR shall be deemed to complete its payment obligation upon full payment of the invoiced sum, and such amount has been allocated into the account as directed by PPG SHANGHAI. PPG SHANGHAI shall only have the obligation to deliver the Products upon full and due payment.
5.2 PPG SHANGHAI reserves the right to adjust its selling prices based on local market situation.
5.3 PPG SHANGHAI shall bear the cost of transportation from overseas to its own warehouse, insurance and export / import duty for any Products to be sold to Distributor hereunder. DISTRIBUTOR shall pick up the ordered Products from PPG SHANGHAI by its own transport agency to its own places at its own expenses.
6. INTENT
It is the intent of this Agreement, and PPG SHANGHAI and DISTRIBUTOR agree, that:
(a) no consignment shipments shall be made to DISTRIBUTOR;
(b) DISTRIBUTOR is not authorized to sell the Products in any area outside the Territory or to establish or operate a "permanent establishment" in any country on behalf of PPG SHANGHAI;
(c) DISTRIBUTOR shall take no action which would cause PPG SHANGHAI to be classified or to be considered as doing business in any country under the laws of any country, or which would cause PPG SHANGHAI to become subject to the income tax, excess profits tax, corporation receipts tax, or any other tax of any country;
(d) DISTRIBUTOR has no authority to conclude contracts on behalf of or in the name of PPG SHANGHAI;
(e) DISTRIBUTOR shall hold PPG SHANGHAI harmless from any taxes or other liability of any type, kind or nature, assessed against PPG SHANGHAI because of DISTRIBUTOR taking any action prohibited by subparagraphs (b), (c) and (d) above;
(f) DISTRIBUTOR distributes the Products solely as an independent contractor and is not a franchisee, employee, partner or agent of PPG SHANGHAI and agrees not to represent the relationship as otherwise;
(g) No fee or other mandatory consideration has been paid by DISTRIBUTOR to PPG SHANGHAI for issuance of this Agreement.
8. PPG SHANGHAI'S RESPONSIBILITIES
(a) PPG SHANGHAI shall use reasonable commercial efforts to support DISTRIBUTOR in its sale and marketing. PPG SHANGHAI shall provide its assistance in sale by providing DISTRIBUTOR with its usual and newly developed sale materials, samples and sale items from time to time through its sale/technical representatives.
(b) Upon request by DISTRIBUTOR, PPG SHANGHAI shall provide DISTRIBUTOR with extra support by generally providing the relevant technique and other manner of consultation in relation to sale and use of Products.
(c) In pursuance to the reasonable request of DISTRIBUTOR, PPG SHANGHAI shall arrange training for DISTRIBUTOR in accordance with the product training generally provided by PPG SHANGHAI at its Training Centers or other pre-agreed venues.
(d) PPG SHANGHAI shall use reasonable commercial efforts to provide forthwith DISTRIBUTOR with the quantity of Products ordered by it and accepted by PPG SHANGHAI. The supplying responsibility of PPG SHANGHAI shall be subject to the stock of the ordered products at the time when DISTRIBUTOR's order is made with PPG SHANGHAI.
(e) PPG SHANGHAI shall provide DISTRIBUTOR Quarterly and Annual Rebate as listed in Appendix 3 if agreed targets are achieved on time.
9. DISTRIBUTOR'S RESPONSIBILITIES
DISTRIBUTOR agrees that DISTRIBUTOR shall, use all reasonable efforts , do the following:
(a) provide its customers with services regarding the Products, including the safety and toxicological aspects of Products handling and ensure that delivery to customers is made of technical information provided by PPG SHANGHAI regarding Products, including the safety precautions and toxicological aspects of Products handling;
(b) maintain an adequate supply of Products to expedite customer deliveries and give prompt and efficient service to its customers in the Territory;
(c) maintain knowledge of the market in the Territory and regularly communicate such knowledge to PPG SHANGHAI;
(d) be responsible that the labels for the Products meet all governmental and all applicable laws of the Territory regulatory requirements and comply with all applicable laws of the Territory;
(e) provide to its customers, Product technical support and training and ensure its customers maintain technical support and training to end-users.
(f) plan and develop promotional and advertising strategies to enhance PPG SHANGHAI's image and sales value in the region.
(g) Achieve agreed and signed sales target (Appendix 3).
10. PPG SHANGHAI TRADEMARKS
10.1 PPG SHANGHAI represents that it has rights and interests in the trademarks used on the Products, including, without limitation, the PPG logo listed on Appendix 2 hereto which shall herein be collectively referred to as the "PPG Trademarks." PPG SHANGHAI hereby grants to DISTRIBUTOR during the Term, subject to the terms and conditions hereinafter specified, a limited, nonexclusive, nonassignable and nontransferable right to use the PPG Trademarks in the Territory for or in connection with its advertisement, promotion, sale and distribution of Products. In connection with any use of the PPG Trademarks, DISTRIBUTOR shall prominently indicate that DISTRIBUTOR is an independent distributor for PPG SHANGHAI. DISTRIBUTOR's use shall be subject to PPG SHANGHAI's approval and shall be limited to labels and advertisements of the Products in the Territory and shall be at the expense of DISTRIBUTOR. DISTRIBUTOR agrees to submit proposed uses of the PPG Trademarks on labels to the Director of Automotive Refinish (Asia Pacific region), or such other person as PPG SHANGHAI may designate from time to time, for review and approval. DISTRIBUTOR agrees that if it uses the PPG Trademarks on its labels and in its advertisements, it shall only be in the form approved in writing by PPG SHANGHAI. PPG SHANGHAI agrees that it will not unreasonably withhold approval of any labels or advertising material submitted to it by DISTRIBUTOR for approval and use pursuant to the provisions hereof. DISTRIBUTOR will not seek to obtain any registration of any of the PPG Trademarks. Upon termination of this Agreement, DISTRIBUTOR shall forthwith cease all further use of the PPG Trademarks and shall destroy all unused labels and advertisements containing the PPG Trademarks. Thereafter, DISTRIBUTOR shall not use any PPG Trademarks or trade or corporate names similar thereto.
10.2 DISTRIBUTOR acknowledges PPG SHANGHAI's exclusive right and interests in relation to the PPG Trademarks and further acknowledges that all copyrights, patent, utility model rights and all other industrial property rights of whatever kind used in or in connection with the Products are the sole and exclusive property of PPG SHANGHAI or PPG and that DISTRIBUTOR will not, whether during the Term of this appointment or after its expiry or termination, knowingly do or cause to be done any act or thing directly or indirectly, contest or in any way impair or attempting to impair PPG SHANGHAI or PPG's rights, titles or interests in the PPG Trademarks.
10.3 DISTRIBUTOR shall not apply for registration of the PPG Trademarks in the People's Republic of China or in any other countries.
11. WARRANTY AND LIMITATION
11.1 PPG SHANGHAI warrants only its title to the Products and that the &bbsp; Products will be as set forth in the warranty statement, if any, on the Products' labeling or in the absence of any such warranty statement that the Products will conform to PPG SHANGHAI's standard warranty when they are taken from PPG SHANGHAI's warehouse by DISTRIUTOR or its transport agent. DISTRIBUTOR is not authorized to make warranties or representations on behalf of PPG SHANGHAI and shall make no such warranties or representations. THESE ARE THE ONLY REPRESENTATIONS OR WARRANTIES THAT PPG SHANGHAI MAKES, AND ALL OTHER EXPRESS OR IMPLIED WARRANTIES UNDER STATUTE OR ARISING OTHERWISE IN LAW FROM A COURSE OF DEALING OR USAGE OF TRADE, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTIBILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE, ARE DISCLAIMED BY PPG SHANGHAI. In the event that the Product fails to conform to the warranties herein given, DISTRIBUTOR's exclusive remedy and PPG SHANGHAI's sole responsibility is, at PPG SHANGHAI's option, limited to the replacement of such nonconforming Product at PPG SHANGHAI's expense or the refund of the purchase price attributable to a specific delivery as to which a claim is made. For the avoidance of doubt, PPG SHANGHAI hereby declares and represents that PPG SHANGHAI is not responsible for any damage to the Products after they have been taken away from PPG SHANGHAI's warehouse and caused by DISTRIBUTOR or its transport agent.
11.2 It is PPG SHANGHAI's responsibility to ensure that mis-delivery of Product is kept to the minimum. DISTRIBUTOR shall inspect the Products within 48 hours upon delivery. In case of discrepancy found in Products
delivered, DISTRIBUTOR shall report to PPG SHANGHAI in writing, detailing all the discrepancies within 48 hours after delivery. PPG SHANGHAI will not accept any claims for discrepancy in delivery beyond the 48 hours period. If Products are found damaged upon delivery, DISTRIBUTOR or its customers who directly receive the delivery shall report to PPG SHANGHAI in writing within 48 hours. The necessary and sufficient evidence (and photos) required for insurance claim must be submitted altogether. None of the damaged Products shall be disposed of until the claim is settled by the insurance company or PPG SHANGHAI.
11.3 DISTRIBUTOR assumes all responsibility, risk and liability arising from (i) the unloading, discharge, storage, handling and use of the Products, including use thereof alone or in combination with other substances; (ii) the improper functioning or failure of unloading, discharge, transportation or storage systems equipment used by DISTRIBUTOR, whether furnished or recommended by PPG SHANGHAI or not; and (iii) the failure to comply with laws, rules and regulations governing unloading, discharge, storage, handling and use of the Products.
12. FORCE MAJEURE
PPG SHANGHAI's failure or inability to make, or DISTRIBUTOR's failure or inability to take, any delivery or deliveries when due, or the failure or inability of either party to effect timely performance of any other obligation required of it hereunder, if caused by "force majeure" as hereinafter defined, shall not constitute a default hereunder or subject the party affected by force majeure to any liability to the other; provided, however, that the party so affected shall promptly notify the other of the existence thereof and of its expected duration and the estimated effect thereof upon its ability to perform its obligations hereunder. Such party shall promptly notify the other party when such force majeure circumstance has ceased to affect its ability to perform its obligations hereunder. The quantity to be delivered hereunder shall be reduced to the extent of the deliveries omitted for such cause or causes, unless both parties agree that the total quantity to be delivered hereunder shall remain unchanged. For so long as its ability to perform hereunder is affected by such force majeure circumstance, PPG SHANGHAI may, at its option, elect to allocate its total production of Product among its various requirements therefor (e.g., manufacturing and sales) in such manner as PPG SHANGHAI deems practicable and which, in the opinion of PPG SHANGHAI, is fair and reasonable. During the time that PPG SHANGHAI is unable to make deliveries or otherwise perform, it shall not be obligated to procure, or to use its best efforts to procure, any quantity of Product sold hereunder from any alternate producer or supplier. As used herein, the term "force majeure" shall mean and include any act of God, nature or the public enemy, accident, explosion, operation malfunction or interruption, fire, storm, earthquake, flood, drought, perils of the sea, strikes, lockouts, labor disputes, riots, sabotage, embargo, war (whether or not declared and whether or not the United States of America is a participant), federal, state or municipal legal restriction or limitation or compliance therewith, inability to obtain export licenses, failure or delay of transportation, shortage of, or inability to obtain, raw materials, supplies, equipment, fuel, power, labor, or other operational necessity, interruption, or curtailment of power supply, or any other circumstance of a similar or different nature beyond the reasonable control of the party affected thereby. In this connection, a party shall not be required to resolve labor disputes or disputes with suppliers of raw materials, supplies, equipment, fuel or power, except in accordance with such party's business judgment as to its best interest.
13. PRODUCT HANDLING
DISTRIBUTOR acknowledges that it has experience and expertise in handling and storing the Products, and that DISTRIBUTOR has the obligation to handle, store and distribute the Products safely and properly.
14. PRODUCT SAFETY
PPG SHANGHAI and DISTRIBUTOR recognize the importance of product safety considerations and the need to protect persons and property against unsafe conditions that could occur from the improper use, transportation, storage, handling, distribution or disposal of the Products sold hereunder. PPG SHANGHAI and DISTRIBUTOR will follow PPG's Responsible Care(R) Distributor Guidelines as set forth in the attached Appendix I (Responsible Care(R) is a registered trademark in the United States of the American Chemistry Council ). Accordingly, PPG SHANGHAI will furnish certain information to DISTRIBUTOR regarding product safety and handling aspects of the Products, and DISTRIBUTOR, in addition to its independent responsibility to obtain and implement a product safety program regarding the Products, will implement and conform to PPG SHANGHAI's product safety recommendations and Responsible Care(R) Distributor Guidelines, DISTRIBUTOR will also provide its customers, employees and other third parties foreseeably exposed to the Products with appropriate warnings, advice and other material regarding the Products, including all product safety and handling material provided by PPG SHANGHAI, and will ensure that the Products are used, stored, handled, distributed, transported and disposed of in a manner consistent with all of the above recommendations.
15. PRODUCT DISCONTINUANCE
DISTRIBUTOR acknowledges that it has express notice that PPG or PPG SHANGHAI may at any time discontinue the production and/or sale of any of the Products. If PPG or PPG SHANGHAI does discontinue the production and/or sale of any of the Products, this Agreement shall automatically terminate with respect to such discontinued Product, and DISTRIBUTOR shall not be entitled to claim or receive
from PPG or PPG SHANGHAI any compensation, reimbursement or damages of any nature as a result (direct or indirect) of PPG or PPG SHANGHAI's discontinuance of the production and/or sale of the affected Product.
16. LIMITATION OF DAMAGES
Notwithstanding the provisions of any law, rule, or regulation to the contrary, on the termination of this Agreement for any cause whatsoever, DISTRIBUTOR shall not be entitled to claim or receive from PPG SHANGHAI any compensation, reimbursement, or damages on account of any expenditure or commitment of any kind in connection with its business or on account of goodwill or on account of loss of prospective profits or otherwise. In no event shall PPG SHANGHAI be liable for consequential damages.
17. BUSINESS CONDUCT
17.1 In the performance of its responsibilities pursuant to this Agreement, DISTRIBUTOR agrees to make every effort to operate as a good, responsible and ethical corporate entity in the Territory and will comply with the laws of the Territory, the applicable laws of the United States of America and the countries of origin of the Products. DISTRIBUTOR further agrees that it will not, in connection with this Agreement or its performance hereunder, directly or indirectly offer, pay, promise to pay or authorize the payment of any money or thing of value to any employee of a customer or to any government official or to any person,
(a) to improperly or unlawfully influence any act or decision of such customer employee or governmental official, including a decision to fail to perform his/her official functions, or
(b) to induce such customer employee or government official to use his/her influence with the customer or the government (or instrumentality thereof), respectively, to affect or influence any act or decision of such customer or government (or instrumentality), in order to assist PPG SHANGHAI or DISTRIBUTOR in obtaining or retaining business or directing business to any other party. As used in this Section, the term "government official" means any officer or employee of any government or any department, agency, instrumentality or wholly-owned corporation thereof, or any person acting in an official capacity for or on behalf of any such government or department, agency, instrumentality or wholly-owned corporation thereof, or any candidate for political office.
17.2 DISTRIBUTOR agrees to notify PPG SHANGHAI immediately of any solicitation, demand or other request for anything of value, by or on behalf of any employee of a customer, government official or employee of any government which is directed to itself or to PPG SHANGHAI related to the sale and/or service of the Products.
17.3 DISTRIBUTOR agrees to require any sub-distributor or other person which it hires or engages to assist in the performance of this Agreement to comply with the provisions of this Section 17.
18. TERM OF AGREEMENT
18.1 The term of this Agreement (the "Term") shall commence on the date first above written and shall terminate on 31 December 2006, unless sooner terminated in accordance with the provisions hereof.
18.2 The parties hereof intend to form a long-term relationship. To this end, if both parties wish to renew this Agreement, the parties shall agree on such intention in writing at least thirty(30) days before the expiry of the current Term of the Agreement. The parties shall agree on the terms and conditions of the renewal, and enter into a new agreement within sixty(60) days from the expiry of this Agreement. During this sixty(60) days period, both parties shall continue to perform their respective obligation under the same terms and conditions of this Agreement.
18.3 In the event that there is no written notice issued by either party to show the intention to renew this Agreement in the said thirty(30) days before the expiry of the current Term of the Agreement, the Agreement shall terminate at the end of the said thirty(30) days. In the event that such a notice of intention to renew is issued, but the parties are not able to enter into a new agreement within that sixty(60) days from the expiry of this Agreement, this Agreement shall terminate at the end of the said sixty(60) days.
19. DEFAULT AND TERMINATION
19.1 If either party be in default with respect to any of the terms or conditions of this Agreement, including, without limitation, DISTRIBUTOR's failure to pay any invoice of PPG SHANGHAI in accordance with its terms, and if it fails to correct such default or failure within ten (10) business days following written notice thereof from the other, the party serving such notice may, without prejudice to any other right or remedy, defer further performance hereunder until such default be remedied or terminate this Agreement by written notice to the other, and the same shall terminate immediately upon the giving of such notice.
19.2 PPG SHANGHAI shall have the right to terminate this Agreement and/or suspend its performance hereunder immediately upon giving notice to DISTRIBUTOR, which termination shall be effective upon receipt of notice, if any one of the following occurs: (i) DISTRIBUTOR engages in fraudulent conduct in its dealings with PPG SHANGHAI or the Products; (ii) DISTRIBUTOR, or any principal owner of DISTRIBUTOR, is convicted of a crime which, in PPG SHANGHAI's reasonable judgment, may adversely affect the goodwill or interest of DISTRIBUTOR or of PPG SHANGHAI; (iii) DISTRIBUTOR becomes insolvent, assigns or attempts to assign its business assets for the benefit of creditors, institutes or has instituted against it proceedings in bankruptcy, or dissolves or liquidates the business of DISTRIBUTOR; or (iv) the business licence of DISTRIBUTOR is cancelled by the State Administration of Industry and Commerce.
20. DISPUTE RESOLUTION
20.1 All disputes, controversies and claims arising from or incidental to this Agreement shall be resolved by both parties through friendly consultation. If no resolution can be reached within thirty (30) days following the date on which one party informed the other party his intention to refer the disputes, controversies and claims for arbitration, such disputes, controversies and claims shall be referred to the China International Economic and Trade Arbitration Committee ("Arbitration Committee") for a final and binding arbitration in pursuance to the arbitration rules which is effective on the date hereof.
20.2 The venue of arbitration shall be in Shanghai or Beijing, China (to be decided by PPG SHANGHAI).
20.3 The arbitration shall be conducted in English and Chinese.
20.4 There shall be three arbitrators. Each of PPG SHANGHAI and DISTRIBUTOR shall select one; the chief arbitrator shall be selected by the first two arbitrators, provided that where the first two arbitrators are not able to agree on the appointment of the chief arbitrator within ten (10) days of the later of their appointments, the chief arbitrator shall be selected by the chairman of the Arbitration Committee.
20.5 The chief arbitrator shall not be a PRC national or a national of the United States.
20.6 The arbitration award shall be final and binding on both parties. Each party agree to be bound by the arbitration award. The arbitration fees and enforcement costs (including witness fees and reasonable legal fees) shall be borne by the losing party unless provided otherwise in the arbitration award.
20.7 During the occurrence of the dispute and the arbitration, other than the issues in dispute, each party shall continuously exercise its undisturbed rights and discharge its undisturbed obligations under this agreement.
21. GOVERNING LAW
The validity, construction, and performance of this Agreement shall be governed by and interpreted in accordance with the laws of the People's Republic of China.
22. LANGUAGE AND COUNTERPART
This Agreement shall be executed in two (2) counterparts of the Chinese language text.
23. ENTIRE AGREEMENT
This writing, including all documents attached to and/or referenced herein, constitutes the entire agreement between PPG SHANGHAI and DISTRIBUTOR regarding the subject matter hereof, terminating and superseding any prior agreements relating to the subject matter hereof, and there are no understandings, representations, or warranties of any kind except as expressly set forth herein. No modification, amendment or change in this Agreement or addition hereto shall be effective or binding on either of the parties hereto unless set forth in a writing which specifically references this Agreement and is executed by the respective duly authorized representatives of PPG SHANGHAI and DISTRIBUTOR and, if required, upon approval by competent governmental authorities, and no modifications shall be effected by any DISTRIBUTOR purchase order forms or other documents containing terms or conditions at variance with or in addition to those in this Agreement.
IN WITNESS WHEREOF, PPG SHANGHAI and DISTRIBUTOR have executed this Distributor Agreement effective the day, month, and year first above written.
Witness: PPG Paints Trading (Shanghai) Co., Ltd.
/s/ Ju dian By: /s/ Yuen Kit Yeg, Pauline ---------------------------- ------------------------------ Name: Yuen Kit Yeg, Pauline ---------------------------- Title: General Manager ---------------------------
Witness: [DISTRIBUTOR]
/s/ Paul Grzebielucha By /s/ Charles T. Jensen ---------------------------- ------------------------------- Name: Charles T. Jensen ---------------------------- Title: CEO --------------------------- [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 16.1
AUTOMOTIVE REFINISH DISTRIBUTOR AGREEMENT (P.R.China)
THIS AGREEMENT, made as of the 1st day of December, (the "Effective Date") by and between:
PPG Paints Trading (Shanghai) Co Ltd hereinafter referred to as ("PPG Shanghai")
Address : Suite 2512, 5th Floor No. 2 Xin Kang Building, 28 Jia Feng Road Wai Gao Qiao Free Trade Zone Shanghai, P. R. China
Tel. : (86-21) 6291 3500
Fax : (86-21) 6291 2100
Business liscence no. : 0537762
Legal representative : Viktoras R. Sekmakas and
NeoMedia Micro Paint Repair hereinafter referred to as ("DISTRIBUTOR")
Address : 2201 Second Street, Suite 600 Ft. Myers, Florida, 33901
Tel. : 239-337-3434
Fax : 239-337-3668
Business licence no. : 2648151
Legal representative : Charles T. Jensen
WITNESSETH:
WHEREAS:
A. PPG SHANGHAI desires DISTRIBUTOR to market and sell PPG's "Deltron" and "ACS" brand products, as hereinafter defined in Section 2 (the "Products"), to the repair chain shops in P.R.China as listed on Appendix 4 (the "Territory");
B. DISTRIBUTOR has the means to market Products in the Territory. As soon as Distributor's China subsidary, NeoMeida Micro Paint Repair China, a Wholley Foreign Owned Enterprise ("WFOE") registered under the Chinese laws and regulations, will be established, this title of Distributor will be automatically switched to the WFOE.
C. PPG SHANGHAI desires to appoint DISTRIBUTOR as a PPG SHANGHAI distributor in the Territory and DISTRIBUTOR desires to be such distributor; and
D. Accordingly, PPG SHANGHAI and DISTRIBUTOR have reached an agreement as hereinafter set forth.
In consideration of the mutual covenants and agreements herein contained, the parties hereto, intending to be legally bound hereby, covenant and agree as follows:
1. APPOINTMENT
1.1 PPG SHANGHAI does hereby appoint DISTRIBUTOR to distribute in the Territory the Products (as defined in paragraph 2, below) upon the terms and conditions hereinafter set forth. DISTRIBUTOR does hereby accept such appointment.
1.2 It is agreed that such appointment is nonexclusive and PPG SHANGHAI may, without obligation to pay DISTRIBUTOR any commission or other compensation, make direct sales of Products to other customers in the Territory and/or appoint additional distributors of Products in the Territory. During the term of this Agreement, DISTRIBUTOR shall have the exclusive right for selling the Products to Beijing Sino-US Jinche Yingang Auto Technological Services Limited (the "Auto Center"). PPG Shanghai or any of its direct or indirect affiliates shall not sell any of its products directly to the Auto Center or to any of the Auto Center's affiliates in China or throughout the world, unless PPG Shanghai obtains Distributor's written approval. It is understood and agreed that as used herein the term "PPG" shall mean PPG Industries Inc. and/or one or more affiliated companies of PPG Industries Inc. as the context may require.
1.3 Notwithstanding anything to the contrary in this Section 1, PPG SHANGHAI may also sell Products to any person or entity located outside the Territory without being obligated to consider whether such Products may be resold in the Territory. DISTRIBUTOR shall not be entitled to any commission or other compensation in such event.
1.4 Deleted.
1.5 DISTRIBUTOR warrants that it will not handle any counterfeit, passing-off products or products other than those purchased directly from PPG SHANGHAI.
1.6 DISTRIBUTOR warrants and represents that it is a corporation duly organized, validly existing, and in good standing under the applicable laws, that it has full legal right, power, and authority to enter into this Agreement and to consummate or cause to be consummated all of the transactions contemplated hereby, and that the execution, delivery, and/or performance of this Agreement do not or will not conflict with or result in a breach of any provision of any articles of incorporation or by-laws, or any written undertaking to which it is a party or by which it, or any of its assets, may be bound or affected, or result in a violation of any law, regulation, order, or award of any authority or body having jurisdiction over the assets and operations of it.
2. PRODUCTS
2.1 The Products and subject matter of this Agreement shall be the products listed below manufactured and sold by PPG SHANGHAI or affiliated companies of PPG SHANGHAI. Additional Products may be added to or deleted from the list at the sole discretion of PPG SHANGHAI:
(a) Global Deltron Refinish Products.
(b) ACS Products.
(c) Ancilliaries confirmed in writing for distribution by PPG SHANGHAI.
(d) Mixing equipment and related accessories as approved and supplied by PPG SHANGHAI.
(e) Any other products as PPG SHANGHAI may launch from time to time, at its absolute discretion.
2.2 Specific product codes for above category a, b, c, d, and e shall reference PPG SHANGHAI Price List in effect as of January 1, 2005 on Appendix 5.
3. REPRESENTATIONS AND WARRANTIES BY DISTRIBUTOR
DISTRIBUTOR represents and warrants to PPG SHANGHAI that(pound)(0)
(a) it is a business entity duly incorporated and registered and validly existing under the relevant PRC laws and regulations;
(b) it has been issued a valid business licence in its name by the relevant local branch of the State Administration of Industry and Commerce, and that business licence shall be valid within the duration of this Agreement;
(c) it is permitted to distribute chemical products pursuant to this Agreement under its approved business scope;
(d) it has a Dangerous Goods Business Permit Licence issued by the appropriate local government;
(e) it has the qualification of a general taxpayer and is able to issue value added tax invoices;
(f) it shall comply with all the relevant laws, regulations and permits, which have jurisdiction over its business, in relation to the sale of Products,
4. DISTRIBUTOR'S RESPONSIBILITY
4.1 DISTRIBUTOR shall promote the sale of the Products in the Territory. DISTRIBUTOR will conduct its operations in the Territory through offices or agencies to be maintained by DISTRIBUTOR at its sole cost and expense.
4.2 If DISTRIBUTOR sells or distributes the Products outside the Territory, whether directly or indirectly through DISTRIBUTOR's cooperation or in conjunction with other third parties, or to customers outside the Territory without the prior knowledge and consent of PPG SHANGHAI, PPG SHANGHAI shall have the right to terminate with immediate effect this Agreement and any existing incentive arrangements between PPG SHANGHAI and DISTRIBUTOR, whether entered into before or after the commencement of the Agreement.
4.3 DISTRIBUTOR agrees to satisfy the annual and quarterly sale targets for the Products set forth in Appendix 3 herein as mutually agreed to by the parties hereof.
4.4 DISTRIBUTOR and PPG Shanghai shall be responsible for providing technical support and after sale services to the Territory. PPG Shanghai's responsibility under this Section 4.4 is defined in Section 8.
5. PRICES AND TERMS
5.1 PPG SHANGHAI agrees that PPG SHANGHAI will sell and DISTRIBUTOR agrees to buy the Products at the prices agreed to by the parties from time to time and subject to the terms and conditions stated herein. The prices in effect as of the Effective Date of the Agreement are set forth on Appendix 5. The prices for the Products must be agreed upon by PPG SHANGHAI at the time of PPG SHANGHAI's written acceptance of an order hereunder. Unless otherwise agreed by PPG SHANGHAI in writing, DISTRIBUTOR shall prepay all the invoiced amount in the currency and manner as indicated by PPG Shanghai. DISTRIBUTOR shall be deemed to complete its payment obligation upon full payment of the invoiced sum, and such amount has been allocated into the account as directed by PPG SHANGHAI. PPG SHANGHAI shall only have the obligation to deliver the Products upon full and due payment.
5.2 PPG SHANGHAI reserves the right to adjust its selling prices based on local market situation.
5.3 PPG SHANGHAI shall bear the cost of transportation from overseas to its own warehouse, insurance and export / import duty for any Products to be sold to Distributor hereunder. DISTRIBUTOR shall pick up the ordered Products from PPG SHANGHAI by its own transport agency to its own places at its own expenses.
6. INTENT
It is the intent of this Agreement, and PPG SHANGHAI and DISTRIBUTOR agree, that:
(a) no consignment shipments shall be made to DISTRIBUTOR;
(b) DISTRIBUTOR is not authorized to sell the Products in any area outside the Territory or to establish or operate a "permanent establishment" in any country on behalf of PPG SHANGHAI;
(c) DISTRIBUTOR shall take no action which would cause PPG SHANGHAI to be classified or to be considered as doing business in any country under the laws of any country, or which would cause PPG SHANGHAI to become subject to the income tax, excess profits tax, corporation receipts tax, or any other tax of any country;
(d) DISTRIBUTOR has no authority to conclude contracts on behalf of or in the name of PPG SHANGHAI;
(e) DISTRIBUTOR shall hold PPG SHANGHAI harmless from any taxes or other liability of any type, kind or nature, assessed against PPG SHANGHAI because of DISTRIBUTOR taking any action prohibited by subparagraphs (b), (c) and (d) above;
(f) DISTRIBUTOR distributes the Products solely as an independent contractor and is not a franchisee, employee, partner or agent of PPG SHANGHAI and agrees not to represent the relationship as otherwise;
(g) No fee or other mandatory consideration has been paid by DISTRIBUTOR to PPG SHANGHAI for issuance of this Agreement.
8. PPG SHANGHAI'S RESPONSIBILITIES
(a) PPG SHANGHAI shall use reasonable commercial efforts to support DISTRIBUTOR in its sale and marketing. PPG SHANGHAI shall provide its assistance in sale by providing DISTRIBUTOR with its usual and newly developed sale materials, samples and sale items from time to time through its sale/technical representatives.
(b) Upon request by DISTRIBUTOR, PPG SHANGHAI shall provide DISTRIBUTOR with extra support by generally providing the relevant technique and other manner of consultation in relation to sale and use of Products.
(c) In pursuance to the reasonable request of DISTRIBUTOR, PPG SHANGHAI shall arrange training for DISTRIBUTOR in accordance with the product training generally provided by PPG SHANGHAI at its Training Centers or other pre-agreed venues.
(d) PPG SHANGHAI shall use reasonable commercial efforts to provide forthwith DISTRIBUTOR with the quantity of Products ordered by it and accepted by PPG SHANGHAI. The supplying responsibility of PPG SHANGHAI shall be subject to the stock of the ordered products at the time when DISTRIBUTOR's order is made with PPG SHANGHAI.
(e) PPG SHANGHAI shall provide DISTRIBUTOR Quarterly and Annual Rebate as listed in Appendix 3 if agreed targets are achieved on time.
9. DISTRIBUTOR'S RESPONSIBILITIES
DISTRIBUTOR agrees that DISTRIBUTOR shall, use all reasonable efforts , do the following:
(a) provide its customers with services regarding the Products, including the safety and toxicological aspects of Products handling and ensure that delivery to customers is made of technical information provided by PPG SHANGHAI regarding Products, including the safety precautions and toxicological aspects of Products handling;
(b) maintain an adequate supply of Products to expedite customer deliveries and give prompt and efficient service to its customers in the Territory;
(c) maintain knowledge of the market in the Territory and regularly communicate such knowledge to PPG SHANGHAI;
(d) be responsible that the labels for the Products meet all governmental and all applicable laws of the Territory regulatory requirements and comply with all applicable laws of the Territory;
(e) provide to its customers, Product technical support and training and ensure its customers maintain technical support and training to end-users.
(f) plan and develop promotional and advertising strategies to enhance PPG SHANGHAI's image and sales value in the region.
(g) Achieve agreed and signed sales target (Appendix 3).
10. PPG SHANGHAI TRADEMARKS
10.1 PPG SHANGHAI represents that it has rights and interests in the trademarks used on the Products, including, without limitation, the PPG logo listed on Appendix 2 hereto which shall herein be collectively referred to as the "PPG Trademarks." PPG SHANGHAI hereby grants to DISTRIBUTOR during the Term, subject to the terms and conditions hereinafter specified, a limited, nonexclusive, nonassignable and nontransferable right to use the PPG Trademarks in the Territory for or in connection with its advertisement, promotion, sale and distribution of Products. In connection with any use of the PPG Trademarks, DISTRIBUTOR shall prominently indicate that DISTRIBUTOR is an independent distributor for PPG SHANGHAI. DISTRIBUTOR's use shall be subject to PPG SHANGHAI's approval and shall be limited to labels and advertisements of the Products in the Territory and shall be at the expense of DISTRIBUTOR. DISTRIBUTOR agrees to submit proposed uses of the PPG Trademarks on labels to the Director of Automotive Refinish (Asia Pacific region), or such other person as PPG SHANGHAI may designate from time to time, for review and approval. DISTRIBUTOR agrees that if it uses the PPG Trademarks on its labels and in its advertisements, it shall only be in the form approved in writing by PPG SHANGHAI. PPG SHANGHAI agrees that it will not unreasonably withhold approval of any labels or advertising material submitted to it by DISTRIBUTOR for approval and use pursuant to the provisions hereof. DISTRIBUTOR will not seek to obtain any registration of any of the PPG Trademarks. Upon termination of this Agreement, DISTRIBUTOR shall forthwith cease all further use of the PPG Trademarks and shall destroy all unused labels and advertisements containing the PPG Trademarks. Thereafter, DISTRIBUTOR shall not use any PPG Trademarks or trade or corporate names similar thereto.
10.2 DISTRIBUTOR acknowledges PPG SHANGHAI's exclusive right and interests in relation to the PPG Trademarks and further acknowledges that all copyrights, patent, utility model rights and all other industrial property rights of whatever kind used in or in connection with the Products are the sole and exclusive property of PPG SHANGHAI or PPG and that DISTRIBUTOR will not, whether during the Term of this appointment or after its expiry or termination, knowingly do or cause to be done any act or thing directly or indirectly, contest or in any way impair or attempting to impair PPG SHANGHAI or PPG's rights, titles or interests in the PPG Trademarks.
10.3 DISTRIBUTOR shall not apply for registration of the PPG Trademarks in the People's Republic of China or in any other countries.
11. WARRANTY AND LIMITATION
11.1 PPG SHANGHAI warrants only its title to the Products and that the &bbsp; Products will be as set forth in the warranty statement, if any, on the Products' labeling or in the absence of any such warranty statement that the Products will conform to PPG SHANGHAI's standard warranty when they are taken from PPG SHANGHAI's warehouse by DISTRIUTOR or its transport agent. DISTRIBUTOR is not authorized to make warranties or representations on behalf of PPG SHANGHAI and shall make no such warranties or representations. THESE ARE THE ONLY REPRESENTATIONS OR WARRANTIES THAT PPG SHANGHAI MAKES, AND ALL OTHER EXPRESS OR IMPLIED WARRANTIES UNDER STATUTE OR ARISING OTHERWISE IN LAW FROM A COURSE OF DEALING OR USAGE OF TRADE, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTIBILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE, ARE DISCLAIMED BY PPG SHANGHAI. In the event that the Product fails to conform to the warranties herein given, DISTRIBUTOR's exclusive remedy and PPG SHANGHAI's sole responsibility is, at PPG SHANGHAI's option, limited to the replacement of such nonconforming Product at PPG SHANGHAI's expense or the refund of the purchase price attributable to a specific delivery as to which a claim is made. For the avoidance of doubt, PPG SHANGHAI hereby declares and represents that PPG SHANGHAI is not responsible for any damage to the Products after they have been taken away from PPG SHANGHAI's warehouse and caused by DISTRIBUTOR or its transport agent.
11.2 It is PPG SHANGHAI's responsibility to ensure that mis-delivery of Product is kept to the minimum. DISTRIBUTOR shall inspect the Products within 48 hours upon delivery. In case of discrepancy found in Products
delivered, DISTRIBUTOR shall report to PPG SHANGHAI in writing, detailing all the discrepancies within 48 hours after delivery. PPG SHANGHAI will not accept any claims for discrepancy in delivery beyond the 48 hours period. If Products are found damaged upon delivery, DISTRIBUTOR or its customers who directly receive the delivery shall report to PPG SHANGHAI in writing within 48 hours. The necessary and sufficient evidence (and photos) required for insurance claim must be submitted altogether. None of the damaged Products shall be disposed of until the claim is settled by the insurance company or PPG SHANGHAI.
11.3 DISTRIBUTOR assumes all responsibility, risk and liability arising from (i) the unloading, discharge, storage, handling and use of the Products, including use thereof alone or in combination with other substances; (ii) the improper functioning or failure of unloading, discharge, transportation or storage systems equipment used by DISTRIBUTOR, whether furnished or recommended by PPG SHANGHAI or not; and (iii) the failure to comply with laws, rules and regulations governing unloading, discharge, storage, handling and use of the Products.
12. FORCE MAJEURE
PPG SHANGHAI's failure or inability to make, or DISTRIBUTOR's failure or inability to take, any delivery or deliveries when due, or the failure or inability of either party to effect timely performance of any other obligation required of it hereunder, if caused by "force majeure" as hereinafter defined, shall not constitute a default hereunder or subject the party affected by force majeure to any liability to the other; provided, however, that the party so affected shall promptly notify the other of the existence thereof and of its expected duration and the estimated effect thereof upon its ability to perform its obligations hereunder. Such party shall promptly notify the other party when such force majeure circumstance has ceased to affect its ability to perform its obligations hereunder. The quantity to be delivered hereunder shall be reduced to the extent of the deliveries omitted for such cause or causes, unless both parties agree that the total quantity to be delivered hereunder shall remain unchanged. For so long as its ability to perform hereunder is affected by such force majeure circumstance, PPG SHANGHAI may, at its option, elect to allocate its total production of Product among its various requirements therefor (e.g., manufacturing and sales) in such manner as PPG SHANGHAI deems practicable and which, in the opinion of PPG SHANGHAI, is fair and reasonable. During the time that PPG SHANGHAI is unable to make deliveries or otherwise perform, it shall not be obligated to procure, or to use its best efforts to procure, any quantity of Product sold hereunder from any alternate producer or supplier. As used herein, the term "force majeure" shall mean and include any act of God, nature or the public enemy, accident, explosion, operation malfunction or interruption, fire, storm, earthquake, flood, drought, perils of the sea, strikes, lockouts, labor disputes, riots, sabotage, embargo, war (whether or not declared and whether or not the United States of America is a participant), federal, state or municipal legal restriction or limitation or compliance therewith, inability to obtain export licenses, failure or delay of transportation, shortage of, or inability to obtain, raw materials, supplies, equipment, fuel, power, labor, or other operational necessity, interruption, or curtailment of power supply, or any other circumstance of a similar or different nature beyond the reasonable control of the party affected thereby. In this connection, a party shall not be required to resolve labor disputes or disputes with suppliers of raw materials, supplies, equipment, fuel or power, except in accordance with such party's business judgment as to its best interest.
13. PRODUCT HANDLING
DISTRIBUTOR acknowledges that it has experience and expertise in handling and storing the Products, and that DISTRIBUTOR has the obligation to handle, store and distribute the Products safely and properly.
14. PRODUCT SAFETY
PPG SHANGHAI and DISTRIBUTOR recognize the importance of product safety considerations and the need to protect persons and property against unsafe conditions that could occur from the improper use, transportation, storage, handling, distribution or disposal of the Products sold hereunder. PPG SHANGHAI and DISTRIBUTOR will follow PPG's Responsible Care(R) Distributor Guidelines as set forth in the attached Appendix I (Responsible Care(R) is a registered trademark in the United States of the American Chemistry Council ). Accordingly, PPG SHANGHAI will furnish certain information to DISTRIBUTOR regarding product safety and handling aspects of the Products, and DISTRIBUTOR, in addition to its independent responsibility to obtain and implement a product safety program regarding the Products, will implement and conform to PPG SHANGHAI's product safety recommendations and Responsible Care(R) Distributor Guidelines, DISTRIBUTOR will also provide its customers, employees and other third parties foreseeably exposed to the Products with appropriate warnings, advice and other material regarding the Products, including all product safety and handling material provided by PPG SHANGHAI, and will ensure that the Products are used, stored, handled, distributed, transported and disposed of in a manner consistent with all of the above recommendations.
15. PRODUCT DISCONTINUANCE
DISTRIBUTOR acknowledges that it has express notice that PPG or PPG SHANGHAI may at any time discontinue the production and/or sale of any of the Products. If PPG or PPG SHANGHAI does discontinue the production and/or sale of any of the Products, this Agreement shall automatically terminate with respect to such discontinued Product, and DISTRIBUTOR shall not be entitled to claim or receive
from PPG or PPG SHANGHAI any compensation, reimbursement or damages of any nature as a result (direct or indirect) of PPG or PPG SHANGHAI's discontinuance of the production and/or sale of the affected Product.
16. LIMITATION OF DAMAGES
Notwithstanding the provisions of any law, rule, or regulation to the contrary, on the termination of this Agreement for any cause whatsoever, DISTRIBUTOR shall not be entitled to claim or receive from PPG SHANGHAI any compensation, reimbursement, or damages on account of any expenditure or commitment of any kind in connection with its business or on account of goodwill or on account of loss of prospective profits or otherwise. In no event shall PPG SHANGHAI be liable for consequential damages.
17. BUSINESS CONDUCT
17.1 In the performance of its responsibilities pursuant to this Agreement, DISTRIBUTOR agrees to make every effort to operate as a good, responsible and ethical corporate entity in the Territory and will comply with the laws of the Territory, the applicable laws of the United States of America and the countries of origin of the Products. DISTRIBUTOR further agrees that it will not, in connection with this Agreement or its performance hereunder, directly or indirectly offer, pay, promise to pay or authorize the payment of any money or thing of value to any employee of a customer or to any government official or to any person,
(a) to improperly or unlawfully influence any act or decision of such customer employee or governmental official, including a decision to fail to perform his/her official functions, or
(b) to induce such customer employee or government official to use his/her influence with the customer or the government (or instrumentality thereof), respectively, to affect or influence any act or decision of such customer or government (or instrumentality), in order to assist PPG SHANGHAI or DISTRIBUTOR in obtaining or retaining business or directing business to any other party. As used in this Section, the term "government official" means any officer or employee of any government or any department, agency, instrumentality or wholly-owned corporation thereof, or any person acting in an official capacity for or on behalf of any such government or department, agency, instrumentality or wholly-owned corporation thereof, or any candidate for political office.
17.2 DISTRIBUTOR agrees to notify PPG SHANGHAI immediately of any solicitation, demand or other request for anything of value, by or on behalf of any employee of a customer, government official or employee of any government which is directed to itself or to PPG SHANGHAI related to the sale and/or service of the Products.
17.3 DISTRIBUTOR agrees to require any sub-distributor or other person which it hires or engages to assist in the performance of this Agreement to comply with the provisions of this Section 17.
18. TERM OF AGREEMENT
18.1 The term of this Agreement (the "Term") shall commence on the date first above written and shall terminate on 31 December 2006, unless sooner terminated in accordance with the provisions hereof.
18.2 The parties hereof intend to form a long-term relationship. To this end, if both parties wish to renew this Agreement, the parties shall agree on such intention in writing at least thirty(30) days before the expiry of the current Term of the Agreement. The parties shall agree on the terms and conditions of the renewal, and enter into a new agreement within sixty(60) days from the expiry of this Agreement. During this sixty(60) days period, both parties shall continue to perform their respective obligation under the same terms and conditions of this Agreement.
18.3 In the event that there is no written notice issued by either party to show the intention to renew this Agreement in the said thirty(30) days before the expiry of the current Term of the Agreement, the Agreement shall terminate at the end of the said thirty(30) days. In the event that such a notice of intention to renew is issued, but the parties are not able to enter into a new agreement within that sixty(60) days from the expiry of this Agreement, this Agreement shall terminate at the end of the said sixty(60) days.
19. DEFAULT AND TERMINATION
19.1 If either party be in default with respect to any of the terms or conditions of this Agreement, including, without limitation, DISTRIBUTOR's failure to pay any invoice of PPG SHANGHAI in accordance with its terms, and if it fails to correct such default or failure within ten (10) business days following written notice thereof from the other, the party serving such notice may, without prejudice to any other right or remedy, defer further performance hereunder until such default be remedied or terminate this Agreement by written notice to the other, and the same shall terminate immediately upon the giving of such notice.
19.2 PPG SHANGHAI shall have the right to terminate this Agreement and/or suspend its performance hereunder immediately upon giving notice to DISTRIBUTOR, which termination shall be effective upon receipt of notice, if any one of the following occurs: (i) DISTRIBUTOR engages in fraudulent conduct in its dealings with PPG SHANGHAI or the Products; (ii) DISTRIBUTOR, or any principal owner of DISTRIBUTOR, is convicted of a crime which, in PPG SHANGHAI's reasonable judgment, may adversely affect the goodwill or interest of DISTRIBUTOR or of PPG SHANGHAI; (iii) DISTRIBUTOR becomes insolvent, assigns or attempts to assign its business assets for the benefit of creditors, institutes or has instituted against it proceedings in bankruptcy, or dissolves or liquidates the business of DISTRIBUTOR; or (iv) the business licence of DISTRIBUTOR is cancelled by the State Administration of Industry and Commerce.
20. DISPUTE RESOLUTION
20.1 All disputes, controversies and claims arising from or incidental to this Agreement shall be resolved by both parties through friendly consultation. If no resolution can be reached within thirty (30) days following the date on which one party informed the other party his intention to refer the disputes, controversies and claims for arbitration, such disputes, controversies and claims shall be referred to the China International Economic and Trade Arbitration Committee ("Arbitration Committee") for a final and binding arbitration in pursuance to the arbitration rules which is effective on the date hereof.
20.2 The venue of arbitration shall be in Shanghai or Beijing, China (to be decided by PPG SHANGHAI).
20.3 The arbitration shall be conducted in English and Chinese.
20.4 There shall be three arbitrators. Each of PPG SHANGHAI and DISTRIBUTOR shall select one; the chief arbitrator shall be selected by the first two arbitrators, provided that where the first two arbitrators are not able to agree on the appointment of the chief arbitrator within ten (10) days of the later of their appointments, the chief arbitrator shall be selected by the chairman of the Arbitration Committee.
20.5 The chief arbitrator shall not be a PRC national or a national of the United States.
20.6 The arbitration award shall be final and binding on both parties. Each party agree to be bound by the arbitration award. The arbitration fees and enforcement costs (including witness fees and reasonable legal fees) shall be borne by the losing party unless provided otherwise in the arbitration award.
20.7 During the occurrence of the dispute and the arbitration, other than the issues in dispute, each party shall continuously exercise its undisturbed rights and discharge its undisturbed obligations under this agreement.
21. GOVERNING LAW
The validity, construction, and performance of this Agreement shall be governed by and interpreted in accordance with the laws of the People's Republic of China.
22. LANGUAGE AND COUNTERPART
This Agreement shall be executed in two (2) counterparts of the Chinese language text.
23. ENTIRE AGREEMENT
This writing, including all documents attached to and/or referenced herein, constitutes the entire agreement between PPG SHANGHAI and DISTRIBUTOR regarding the subject matter hereof, terminating and superseding any prior agreements relating to the subject matter hereof, and there are no understandings, representations, or warranties of any kind except as expressly set forth herein. No modification, amendment or change in this Agreement or addition hereto shall be effective or binding on either of the parties hereto unless set forth in a writing which specifically references this Agreement and is executed by the respective duly authorized representatives of PPG SHANGHAI and DISTRIBUTOR and, if required, upon approval by competent governmental authorities, and no modifications shall be effected by any DISTRIBUTOR purchase order forms or other documents containing terms or conditions at variance with or in addition to those in this Agreement.
IN WITNESS WHEREOF, PPG SHANGHAI and DISTRIBUTOR have executed this Distributor Agreement effective the day, month, and year first above written.
Witness: PPG Paints Trading (Shanghai) Co., Ltd.
/s/ Ju dian By: /s/ Yuen Kit Yeg, Pauline ---------------------------- ------------------------------ Name: Yuen Kit Yeg, Pauline ---------------------------- Title: General Manager ---------------------------
Witness: [DISTRIBUTOR]
/s/ Paul Grzebielucha By /s/ Charles T. Jensen ---------------------------- ------------------------------- Name: Charles T. Jensen ---------------------------- Title: CEO --------------------------- | Highlight the parts (if any) of this contract related to "No-Solicit Of Employees" that should be reviewed by a lawyer. Details: Is there a restriction on a party’s soliciting or hiring employees and/or contractors from the counterparty, whether during the contract or after the contract ends (or both)? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Rofr/Rofo/Rofn" that should be reviewed by a lawyer. Details: Is there a clause granting one party a right of first refusal, right of first offer or right of first negotiation to purchase, license, market, or distribute equity interest, technology, assets, products or services?
Context: 21
EXHIBIT C FORM OF SUBLICENSE
[Form follows.]
22
EXHIBIT D FORM OF AGREEMENT FOR TRIAL
[Form follows.]
23
FIRST AMENDMENT TO DISTRIBUTOR AGREEMENT
THIS FIRST AMENDMENT TO DISTRIBUTOR AGREEMENT (this "Amendment") is made and entered into as of the 1st day of January, 1999, by and between Peregrine/Bridge Transfer Corporation, a Delaware corporation ("Licensor"), and NEON Systems, Inc., a Delaware corporation ("Licensee").
RECITALS:
Licensor and Licensee are parties to that certain Distributor Agreement dated as of January 1, 1996 (the "Distributor Agreement"). Licensor and Licensee desire to amend the Distributor Agreement as set forth herein.
NOW, THEREFORE, for and consideration of the mutual covenants of the parties set forth herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follow:
1. AMENDMENT OF DEFINITIONS. Article 1 of the Distributor Agreement is hereby amended to add thereto the following:
1.11 "Annual Royalty Advance Requirement" shall mean (i) $1,000,000 in respect of Licensee's fiscal year beginning April 1, 1999, (ii) $2,000,000 in respect of Licensee's fiscal year beginning April 1, 2000, (iii) $3,000,000 in respect of Licensee's fiscal year beginning April 1, 2001, (iv) $4,000,000 in respect of Licensee's fiscal year beginning April 1, 2002 and (v) $5,000,000 in respect of Licensee's fiscal year beginning April 1, 2003. In the event that the term hereof extends beyond Licensee's fiscal year beginning April 1, 2003, the amount of the Annual Royalty Advance shall increase by $1,000,000 for each such fiscal year thereafter.
1.12 "Royalty Advance" shall have the meaning provided therefor in Section 3.2 hereof.
1.13 "Specified Royalty Percentage" shall mean fifty percent (50%) for the period from and including January 1, 1999 through and including March 31, 1994. Thereafter, the term "Specified Royalty Percentage" shall mean (i) fifty percent (50%) from and after the first day of each quarter of each fiscal year of Licensee
commencing with Licensee's fiscal year beginning April 1, 1999) until such time, if any, during such quarter that the aggregate amount of all Royalty Advances outstanding as of the first day of such quarter (including the Royalty Advance payable on such first day) has been credited against royalties earned hereunder (a "Satisfaction Date"), and (ii) forty percent (40%) from and after a Satisfaction Date through and including the last day of the fiscal quarter in which such Satisfaction Date occurs.
2. AMENDMENT OF SECTIONS 3.1 AND 3.2. Sections 3.1 and 3.2 of the Distributor Agreement are hereby amended to read in their entirety as follows:
Section 3.1 ROYALTIES TO LICENSOR.
(a) Licensee shall pay to Licensor for each Licensed Product licensed to a Redistributor or a Customer a
royalty equal to the Specified Royalty Percentage of all revenues received (without deduction for value added tax, if any, but excluding any revenues for maintenance and support or upgrade services, which revenues are covered in paragraph (b) below) by Licensee under the Redistributor Agreement or Sublicense applicable to such Licensed Product.
(b) Licensee shall pay to Licensor for maintenance and support and upgrade services provided under the applicable Sublicense or other written maintenance and support agreement with or approved by Licensee for each of the Licensed Products a royalty equal to the Specified Royalty Percentage of all revenues received (without deduction for value added tax, if any) by Licensee from a Redistributor or Customer relating to maintenance and support services or services for Upgrades or upgrades of systems for such Licensed Products.
Section 3.2 TERMS OF PAYMENT. The royalties payable to Licensor pursuant to Section 3.1 shall be payable in accordance with the provisions of this Section 3.2. On or before the first day of each fiscal quarter of each fiscal year during the term hereof, commencing with the Licensee's fiscal year which begins on April 1, 1999, Licensee shall pay to Licensor, as an advance (a "Royalty Advance") of royalties anticipated to be paid hereunder during such fiscal year, an amount equal to twenty-five percent (25%) of the Annual Royalty Advance Requirement for such fiscal year. The aggregate amount of Royalty Advances outstanding from time to time shall be credited against royalties payable hereunder pursuant to Section 3.1 as and when such royalties are recognized as earned in accordance with generally accepted accounting principles. Royalty Advances made hereunder shall be made in respect of royalties that may become payable in respect of any and all Licensed Products and shall not be deemed made in respect
2
of any particular Licensed Product. With respect to any royalty payments due hereunder from Licensee to Licensor in excess of the amount of Royalty Advances made by Licensee from time to time hereunder, such payments shall be payable on the later of (i) sixty (60) days after the date of the applicable invoice to a Redistributor or Customer, as the case may be, or (ii) five (5) business days following Licensee's receipt of payment from a Redistributor or Customer, as the case may be. Any royalty payment that is not paid when due will bear interest from the date such amount is due until the date payment is made at a rate equal to ten percent (10%) per annum. All royalty payments due to Licensor under this Agreement shall be paid in U.S. Dollars. Upon the expiration or any termination of this Agreement, Licensor shall repay to Licensee the aggregate amount of all Royalty Advances then outstanding.
3. AMENDMENT OF TERM. Section 14.1 of the Distributor Agreement is hereby amended to read in its entirety as follows:
Section 14.1 TERM. This Agreement shall be effective through and including March 31, 2004. Upon the expiration of such term, this Agreement will renew automatically for successive terms of one (1) year each unless either party to this Agreement delivers written notice of termination to the other party to this Agreement at least sixty (60) days prior to the end of the original or any renewal term. 4. AMENDMENT OF TERMINATION PROVISIONS. The provisions of Section 14.2 are amended by deleting in its entirety subsection (b) thereof and by amending Section 14.2(a)(2) to read in its entirety as follows:
(2) Immediately upon written notice if the other party defaults in the performance of any obligation under this Agreement, including failure to promptly pay any amount due hereunder, and fails to cure such default within thirty (30) days after delivery of written notice specifying the default (with any termination as a result of Licensee's failure to pay amounts due under this Agreement resulting in acceleration of Licensee's obligation to pay all sums accrued and payable to Licensor under this Agreement as of the date of such termination).
5. AMENDMENT OF NATURE OF DISTRIBUTORSHIP. Licensor and Licensee do hereby agree that this Amendment shall effect a change in the nature of the distributorship granted to Licensee pursuant to the Distributor Agreement from a non-exclusive to an exclusive distributorship (provided, however, that with respect to Licensor's Partitioned Database Facility product, Licensor also may license such product to International Business Machines Corporation for sublicensing and distribution). Any and all references in the Distributor Agreement to the rights granted to Licensee as non-exclusive rights are hereby amended to provide that such rights are
3
exclusive rights (including without limitation such references in Sections 2.1
(Use of Master Copy), 2.2 (Sublicensing) and 2.8 (Trademarks and Copyright).).
6. AMENDMENT OF SECTION 13.1. The Distributor Agreement is hereby amended by adding the following sentence to the end of Section 13.1:
Notwithstanding the foregoing, the foregoing limitation on liability shall not be applicable in respect of any liability of Licensor to Licensee resulting from any misrepresentation in, or breach of, the terms of Section 6.2 hereof or in respect of Licensor's obligation to repay Royalty Advances pursuant to Section 3.2 hereof.
7. CHANGE OF ADDRESSES FOR NOTICE. Section 15.2 of the Distributor Agreement is hereby amended by changing the address for notice to each of Licensor and Licensee to the following:
14100 Southwest Freeway, Suite 500 Sugar Land, Texas 77478 Attn: President
8. ADDITION OF RIGHT OF FIRST REFUSAL. The Distributor Agreement is hereby amended by adding thereto a new Section 15.11 and a new Section 15.12, which shall read in their entirety as follows: Section 15.11 Right of First Refusal. If, at any time or from time to time during the term hereof, Licensor or any stockholder in Licensor shall have received a bona fide offer from any person or entity to sell, transfer or otherwise convey all or any stock in, or assets of, Licensor which Licensor or such stockholder, as the case may be (the "Offeree"), desires to accept, the Offeree shall first give written notice (the "Offering Notice") to Licensee of the financial and other terms and conditions (the "Terms and Conditions") of such offer. Licensee shall have the right and a first opportunity to purchase, lease or otherwise acquire, as the case may be, all or the applicable portion of such stock or assets (as specified in the applicable Offering Notice) on the Terms and Conditions set forth in the Offering Notice, such right to be exercised by notice in writing to the Offeree within ninety (90) days after the giving of the Offering Notice. If Licensee shall have exercised such right, the closing shall be held at the corporate offices of Licensee on the closing date specified in the Offering Notice or the date that is ninety (90) days after the date of Licensee's notice of its exercise of such right, whichever is later. If either party shall default under this Section, the other party shall be entitled to specific performance. If Licensee shall fail to give notice of the exercise of its right of first
4
refusal under this Section within such ninety (90) day period, or if Licensee shall notify the Offeree within such ninety (90) day period that Licensee has waived such right, then the Offeree shall have the right to sell, transfer or convey all or the applicable portion of the stock in, or assets of, Licensor (as specified in the Offering Notice) pursuant to the terms of the specific offer described in the applicable Offering Notice, but not otherwise. If such sale, transfer or conveyance is not consummated in accordance with the offer and the Terms and Conditions specified in the applicable Offering Notice, the rights of Licensee to an Offering Notice shall be reinstated. No exercise or waiver by Licensee of any of its rights hereunder shall modify, abridge, impair or affect any of Licensee's rights under any of the other terms or provisions of this Agreement. Any sale, transfer or other conveyance of all or any part of the stock in, or assets of, Licensor in violation of this Section shall be null and void. Skunkware, Inc., a Delaware corporation and the sole stockholder of Licensor ("Skunkware"), is joining in this Agreement for the purpose of agreeing to the terms of this Section and Section 15.12.
Section 15.12 OPTION TO PURCHASE. Skunkware and Licensor hereby grant to Licensee the exclusive and irrevocable right and option to purchase (the "Option"), at Licensee's election, either (i) all of the assets of Licensor or (ii) all of the issued and outstanding stock of Licensor. Such option shall be exercisable during a period (the "Option Period") commencing on and including the earlier of (i) the date upon which Licensee shall have paid to Licensor, in any single fiscal year of Licensee, royalty payments hereunder in the aggregate amount of $10,000,000 or (ii) January 1, 2002, and ending upon the expiration or sooner termination of this Agreement. Licensee's exercise of the Option is at its sole discretion. Licensee may exercise the Option by written notice to Licensor and Skunkware at any time during the Option Period. Upon any such exercise of the Option, Licensee and Licensor or Skunkware (as the case may be) shall proceed to diligently and in good faith negotiate and execute a definitive purchase and sale agreement for Licensor's acquisition of all of the assets of, or outstanding capital stock in, Licensor, as the case may be. In the event that Licensee and Licensor or Skunkware, as the case may be, are unable to agree on any terms or conditions for such acquisition, the same shall be submitted to arbitration in accordance with the rules and procedures of the American Arbitration Association, with the arbitrator(s) to be experienced in the mainframe software industry. Notwithstanding the foregoing provision for arbitration concerning the terms of any purchase and sale agreement, and without
limiting any other
5
conditions that may be included in any such purchase and sale agreement, Licensee shall have no obligation to consummate the acquisition of the assets of, or stock in, Licensor pursuant to its exercise of the Option if Licensee's board of directors should determine, in its sole discretion, that such acquisition would not be accretive to the value of Licensee. The definitive purchase and sale agreement shall provide that License may pay the purchase price thereunder in cash, in shares of its Common Stock or in some combination thereof. So long as the Option shall be in existence (whether or not exercisable), Skunkware and Licensor agree that Licensor will conduct its business in the ordinary course and will not, without the prior written consent of Licensee, merge or consolidated with any other entity, sell all or substantially all of its assets, grant or permit to exist any lien or encumbrance on any material portion of its assets, issue any securities to any person other than Skunkware or engage in any other transaction or enter into any other agreement other than in the ordinary course of business. Skunkware further agrees that, so long as the Option shall be in existence (whether or not exercisable), it shall be and remain the sole Stockholder Licensor, and Licensor shall not issue to any other person or entity any stock, warrants or similar rights to acquire equity interests in Licensor.
9. MISCELLANEOUS.
(a) Capitalized terms used in this Amendment that are not defined herein shall have the meanings provided therefor in the Distributor Agreement.
(b) The captions used for the Sections in this Amendment are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope or the intent of this Amendment or any Section hereof.
(c) This Amendment may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall be construed as a single instrument.
(d) In the event any provision of this Amendment is declared or adjudged to be unenforceable or unlawful by any court, then such unenforceable or unlawful provision shall be excised herefrom, and the remainder of this Amendment, together with all rights and remedies granted thereby, shall continue and remain in full force and effect.
6
(e) The Distributor Agreement, as amended by this Amendment, constitutes the entire agreement between the parties hereto with respect to the matters covered hereby and thereby. All prior negotiations, representations and agreements with respect thereto not incorporated in this Amendment or the Distributor Agreement are hereby canceled. As modified hereby, the Distributor Agreement shall continue in full force and effect and be binding upon the parties hereto and their respective successors and permitted assigns. References to the Distributor Agreement after the date hereof shall mean the Distributor Agreement as amended pursuant to this Amendment. The amendments to the Distributor Agreement effected by this Amendment shall be effective from and after the date hereof.
(f) This Amendment shall be governed by and construed under the law governing the Distributor Agreement.
[The remainder of this page is intentionally left blank.]
7
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above.
PEREGRINE/BRIDGE TRANSFER CORPORATION
By: /s/ Joe Backer ---------------------------- Name: Joe Backer -------------------------- Title: CEO -------------------------
NEON SYSTEMS, INC.
By: /s/ John S. Reiland ----------------------------
Name: John S. Reiland -------------------------- Title: CFO -------------------------
8
JOINDER OF SKUNKWARE, INC.
Skunkware, Inc., a Delaware corporation, hereby joins in that certain Distributor Agreement dated as of January 1, 1996, between Peregrine/Bridge Transfer Corporation ("PBTC") and NEON Systems, Inc. ("NEON"), as amended by the First Amendment to Distributor Agreement dated as of November 19, 1998 by and between PBTC and NEON, such joinder being for purposes of acknowledging and agreeing to be bound by the terms of the Right of First Refusal set forth in Section 15.11 of the Distributor Agreement and the Option to Purchase set forth in Section 15.12 of the Distributor Agreement. Skunkware hereby represents and warrants to NEON that Skunkware is the sole stockholder of PBTC. Skunkware further agrees that its agreements set forth herein shall be binding on its successors and assigns and inure to the benefit of NEON's successors and assigns.
Skunkware's address for any notice to it under the terms of the Distributor Agreement is as follows: Skunkware, Inc., 14100 Southwest Freeway, Suite 500, Sugar Land, Texas 77478, Attn: President.
Executed as of the 1st day of January, 1999.
SKUNKWARE, INC.
By: /s/ Joe Backer ------------------------- Name: Joe Backer ----------------------- Title: CEO ----------------------
66049:53214:DALLAS:277267.9
9 [/INST] ```json
{<answer_start>
"answer": "If Licensee shall have exercised such right, the closing shall be held at the corporate offices of Licensee on the closing date specified in the Offering Notice or the date that is ninety (90) days after the date of Licensee's notice of its exercise of such right, whichever is later."
<answer_end>
}
``` </s> | 21
EXHIBIT C FORM OF SUBLICENSE
[Form follows.]
22
EXHIBIT D FORM OF AGREEMENT FOR TRIAL
[Form follows.]
23
FIRST AMENDMENT TO DISTRIBUTOR AGREEMENT
THIS FIRST AMENDMENT TO DISTRIBUTOR AGREEMENT (this "Amendment") is made and entered into as of the 1st day of January, 1999, by and between Peregrine/Bridge Transfer Corporation, a Delaware corporation ("Licensor"), and NEON Systems, Inc., a Delaware corporation ("Licensee").
RECITALS:
Licensor and Licensee are parties to that certain Distributor Agreement dated as of January 1, 1996 (the "Distributor Agreement"). Licensor and Licensee desire to amend the Distributor Agreement as set forth herein.
NOW, THEREFORE, for and consideration of the mutual covenants of the parties set forth herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follow:
1. AMENDMENT OF DEFINITIONS. Article 1 of the Distributor Agreement is hereby amended to add thereto the following:
1.11 "Annual Royalty Advance Requirement" shall mean (i) $1,000,000 in respect of Licensee's fiscal year beginning April 1, 1999, (ii) $2,000,000 in respect of Licensee's fiscal year beginning April 1, 2000, (iii) $3,000,000 in respect of Licensee's fiscal year beginning April 1, 2001, (iv) $4,000,000 in respect of Licensee's fiscal year beginning April 1, 2002 and (v) $5,000,000 in respect of Licensee's fiscal year beginning April 1, 2003. In the event that the term hereof extends beyond Licensee's fiscal year beginning April 1, 2003, the amount of the Annual Royalty Advance shall increase by $1,000,000 for each such fiscal year thereafter.
1.12 "Royalty Advance" shall have the meaning provided therefor in Section 3.2 hereof.
1.13 "Specified Royalty Percentage" shall mean fifty percent (50%) for the period from and including January 1, 1999 through and including March 31, 1994. Thereafter, the term "Specified Royalty Percentage" shall mean (i) fifty percent (50%) from and after the first day of each quarter of each fiscal year of Licensee
commencing with Licensee's fiscal year beginning April 1, 1999) until such time, if any, during such quarter that the aggregate amount of all Royalty Advances outstanding as of the first day of such quarter (including the Royalty Advance payable on such first day) has been credited against royalties earned hereunder (a "Satisfaction Date"), and (ii) forty percent (40%) from and after a Satisfaction Date through and including the last day of the fiscal quarter in which such Satisfaction Date occurs.
2. AMENDMENT OF SECTIONS 3.1 AND 3.2. Sections 3.1 and 3.2 of the Distributor Agreement are hereby amended to read in their entirety as follows:
Section 3.1 ROYALTIES TO LICENSOR.
(a) Licensee shall pay to Licensor for each Licensed Product licensed to a Redistributor or a Customer a
royalty equal to the Specified Royalty Percentage of all revenues received (without deduction for value added tax, if any, but excluding any revenues for maintenance and support or upgrade services, which revenues are covered in paragraph (b) below) by Licensee under the Redistributor Agreement or Sublicense applicable to such Licensed Product.
(b) Licensee shall pay to Licensor for maintenance and support and upgrade services provided under the applicable Sublicense or other written maintenance and support agreement with or approved by Licensee for each of the Licensed Products a royalty equal to the Specified Royalty Percentage of all revenues received (without deduction for value added tax, if any) by Licensee from a Redistributor or Customer relating to maintenance and support services or services for Upgrades or upgrades of systems for such Licensed Products.
Section 3.2 TERMS OF PAYMENT. The royalties payable to Licensor pursuant to Section 3.1 shall be payable in accordance with the provisions of this Section 3.2. On or before the first day of each fiscal quarter of each fiscal year during the term hereof, commencing with the Licensee's fiscal year which begins on April 1, 1999, Licensee shall pay to Licensor, as an advance (a "Royalty Advance") of royalties anticipated to be paid hereunder during such fiscal year, an amount equal to twenty-five percent (25%) of the Annual Royalty Advance Requirement for such fiscal year. The aggregate amount of Royalty Advances outstanding from time to time shall be credited against royalties payable hereunder pursuant to Section 3.1 as and when such royalties are recognized as earned in accordance with generally accepted accounting principles. Royalty Advances made hereunder shall be made in respect of royalties that may become payable in respect of any and all Licensed Products and shall not be deemed made in respect
2
of any particular Licensed Product. With respect to any royalty payments due hereunder from Licensee to Licensor in excess of the amount of Royalty Advances made by Licensee from time to time hereunder, such payments shall be payable on the later of (i) sixty (60) days after the date of the applicable invoice to a Redistributor or Customer, as the case may be, or (ii) five (5) business days following Licensee's receipt of payment from a Redistributor or Customer, as the case may be. Any royalty payment that is not paid when due will bear interest from the date such amount is due until the date payment is made at a rate equal to ten percent (10%) per annum. All royalty payments due to Licensor under this Agreement shall be paid in U.S. Dollars. Upon the expiration or any termination of this Agreement, Licensor shall repay to Licensee the aggregate amount of all Royalty Advances then outstanding.
3. AMENDMENT OF TERM. Section 14.1 of the Distributor Agreement is hereby amended to read in its entirety as follows:
Section 14.1 TERM. This Agreement shall be effective through and including March 31, 2004. Upon the expiration of such term, this Agreement will renew automatically for successive terms of one (1) year each unless either party to this Agreement delivers written notice of termination to the other party to this Agreement at least sixty (60) days prior to the end of the original or any renewal term. 4. AMENDMENT OF TERMINATION PROVISIONS. The provisions of Section 14.2 are amended by deleting in its entirety subsection (b) thereof and by amending Section 14.2(a)(2) to read in its entirety as follows:
(2) Immediately upon written notice if the other party defaults in the performance of any obligation under this Agreement, including failure to promptly pay any amount due hereunder, and fails to cure such default within thirty (30) days after delivery of written notice specifying the default (with any termination as a result of Licensee's failure to pay amounts due under this Agreement resulting in acceleration of Licensee's obligation to pay all sums accrued and payable to Licensor under this Agreement as of the date of such termination).
5. AMENDMENT OF NATURE OF DISTRIBUTORSHIP. Licensor and Licensee do hereby agree that this Amendment shall effect a change in the nature of the distributorship granted to Licensee pursuant to the Distributor Agreement from a non-exclusive to an exclusive distributorship (provided, however, that with respect to Licensor's Partitioned Database Facility product, Licensor also may license such product to International Business Machines Corporation for sublicensing and distribution). Any and all references in the Distributor Agreement to the rights granted to Licensee as non-exclusive rights are hereby amended to provide that such rights are
3
exclusive rights (including without limitation such references in Sections 2.1
(Use of Master Copy), 2.2 (Sublicensing) and 2.8 (Trademarks and Copyright).).
6. AMENDMENT OF SECTION 13.1. The Distributor Agreement is hereby amended by adding the following sentence to the end of Section 13.1:
Notwithstanding the foregoing, the foregoing limitation on liability shall not be applicable in respect of any liability of Licensor to Licensee resulting from any misrepresentation in, or breach of, the terms of Section 6.2 hereof or in respect of Licensor's obligation to repay Royalty Advances pursuant to Section 3.2 hereof.
7. CHANGE OF ADDRESSES FOR NOTICE. Section 15.2 of the Distributor Agreement is hereby amended by changing the address for notice to each of Licensor and Licensee to the following:
14100 Southwest Freeway, Suite 500 Sugar Land, Texas 77478 Attn: President
8. ADDITION OF RIGHT OF FIRST REFUSAL. The Distributor Agreement is hereby amended by adding thereto a new Section 15.11 and a new Section 15.12, which shall read in their entirety as follows: Section 15.11 Right of First Refusal. If, at any time or from time to time during the term hereof, Licensor or any stockholder in Licensor shall have received a bona fide offer from any person or entity to sell, transfer or otherwise convey all or any stock in, or assets of, Licensor which Licensor or such stockholder, as the case may be (the "Offeree"), desires to accept, the Offeree shall first give written notice (the "Offering Notice") to Licensee of the financial and other terms and conditions (the "Terms and Conditions") of such offer. Licensee shall have the right and a first opportunity to purchase, lease or otherwise acquire, as the case may be, all or the applicable portion of such stock or assets (as specified in the applicable Offering Notice) on the Terms and Conditions set forth in the Offering Notice, such right to be exercised by notice in writing to the Offeree within ninety (90) days after the giving of the Offering Notice. If Licensee shall have exercised such right, the closing shall be held at the corporate offices of Licensee on the closing date specified in the Offering Notice or the date that is ninety (90) days after the date of Licensee's notice of its exercise of such right, whichever is later. If either party shall default under this Section, the other party shall be entitled to specific performance. If Licensee shall fail to give notice of the exercise of its right of first
4
refusal under this Section within such ninety (90) day period, or if Licensee shall notify the Offeree within such ninety (90) day period that Licensee has waived such right, then the Offeree shall have the right to sell, transfer or convey all or the applicable portion of the stock in, or assets of, Licensor (as specified in the Offering Notice) pursuant to the terms of the specific offer described in the applicable Offering Notice, but not otherwise. If such sale, transfer or conveyance is not consummated in accordance with the offer and the Terms and Conditions specified in the applicable Offering Notice, the rights of Licensee to an Offering Notice shall be reinstated. No exercise or waiver by Licensee of any of its rights hereunder shall modify, abridge, impair or affect any of Licensee's rights under any of the other terms or provisions of this Agreement. Any sale, transfer or other conveyance of all or any part of the stock in, or assets of, Licensor in violation of this Section shall be null and void. Skunkware, Inc., a Delaware corporation and the sole stockholder of Licensor ("Skunkware"), is joining in this Agreement for the purpose of agreeing to the terms of this Section and Section 15.12.
Section 15.12 OPTION TO PURCHASE. Skunkware and Licensor hereby grant to Licensee the exclusive and irrevocable right and option to purchase (the "Option"), at Licensee's election, either (i) all of the assets of Licensor or (ii) all of the issued and outstanding stock of Licensor. Such option shall be exercisable during a period (the "Option Period") commencing on and including the earlier of (i) the date upon which Licensee shall have paid to Licensor, in any single fiscal year of Licensee, royalty payments hereunder in the aggregate amount of $10,000,000 or (ii) January 1, 2002, and ending upon the expiration or sooner termination of this Agreement. Licensee's exercise of the Option is at its sole discretion. Licensee may exercise the Option by written notice to Licensor and Skunkware at any time during the Option Period. Upon any such exercise of the Option, Licensee and Licensor or Skunkware (as the case may be) shall proceed to diligently and in good faith negotiate and execute a definitive purchase and sale agreement for Licensor's acquisition of all of the assets of, or outstanding capital stock in, Licensor, as the case may be. In the event that Licensee and Licensor or Skunkware, as the case may be, are unable to agree on any terms or conditions for such acquisition, the same shall be submitted to arbitration in accordance with the rules and procedures of the American Arbitration Association, with the arbitrator(s) to be experienced in the mainframe software industry. Notwithstanding the foregoing provision for arbitration concerning the terms of any purchase and sale agreement, and without
limiting any other
5
conditions that may be included in any such purchase and sale agreement, Licensee shall have no obligation to consummate the acquisition of the assets of, or stock in, Licensor pursuant to its exercise of the Option if Licensee's board of directors should determine, in its sole discretion, that such acquisition would not be accretive to the value of Licensee. The definitive purchase and sale agreement shall provide that License may pay the purchase price thereunder in cash, in shares of its Common Stock or in some combination thereof. So long as the Option shall be in existence (whether or not exercisable), Skunkware and Licensor agree that Licensor will conduct its business in the ordinary course and will not, without the prior written consent of Licensee, merge or consolidated with any other entity, sell all or substantially all of its assets, grant or permit to exist any lien or encumbrance on any material portion of its assets, issue any securities to any person other than Skunkware or engage in any other transaction or enter into any other agreement other than in the ordinary course of business. Skunkware further agrees that, so long as the Option shall be in existence (whether or not exercisable), it shall be and remain the sole Stockholder Licensor, and Licensor shall not issue to any other person or entity any stock, warrants or similar rights to acquire equity interests in Licensor.
9. MISCELLANEOUS.
(a) Capitalized terms used in this Amendment that are not defined herein shall have the meanings provided therefor in the Distributor Agreement.
(b) The captions used for the Sections in this Amendment are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope or the intent of this Amendment or any Section hereof.
(c) This Amendment may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall be construed as a single instrument.
(d) In the event any provision of this Amendment is declared or adjudged to be unenforceable or unlawful by any court, then such unenforceable or unlawful provision shall be excised herefrom, and the remainder of this Amendment, together with all rights and remedies granted thereby, shall continue and remain in full force and effect.
6
(e) The Distributor Agreement, as amended by this Amendment, constitutes the entire agreement between the parties hereto with respect to the matters covered hereby and thereby. All prior negotiations, representations and agreements with respect thereto not incorporated in this Amendment or the Distributor Agreement are hereby canceled. As modified hereby, the Distributor Agreement shall continue in full force and effect and be binding upon the parties hereto and their respective successors and permitted assigns. References to the Distributor Agreement after the date hereof shall mean the Distributor Agreement as amended pursuant to this Amendment. The amendments to the Distributor Agreement effected by this Amendment shall be effective from and after the date hereof.
(f) This Amendment shall be governed by and construed under the law governing the Distributor Agreement.
[The remainder of this page is intentionally left blank.]
7
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above.
PEREGRINE/BRIDGE TRANSFER CORPORATION
By: /s/ Joe Backer ---------------------------- Name: Joe Backer -------------------------- Title: CEO -------------------------
NEON SYSTEMS, INC.
By: /s/ John S. Reiland ----------------------------
Name: John S. Reiland -------------------------- Title: CFO -------------------------
8
JOINDER OF SKUNKWARE, INC.
Skunkware, Inc., a Delaware corporation, hereby joins in that certain Distributor Agreement dated as of January 1, 1996, between Peregrine/Bridge Transfer Corporation ("PBTC") and NEON Systems, Inc. ("NEON"), as amended by the First Amendment to Distributor Agreement dated as of November 19, 1998 by and between PBTC and NEON, such joinder being for purposes of acknowledging and agreeing to be bound by the terms of the Right of First Refusal set forth in Section 15.11 of the Distributor Agreement and the Option to Purchase set forth in Section 15.12 of the Distributor Agreement. Skunkware hereby represents and warrants to NEON that Skunkware is the sole stockholder of PBTC. Skunkware further agrees that its agreements set forth herein shall be binding on its successors and assigns and inure to the benefit of NEON's successors and assigns.
Skunkware's address for any notice to it under the terms of the Distributor Agreement is as follows: Skunkware, Inc., 14100 Southwest Freeway, Suite 500, Sugar Land, Texas 77478, Attn: President.
Executed as of the 1st day of January, 1999.
SKUNKWARE, INC.
By: /s/ Joe Backer ------------------------- Name: Joe Backer ----------------------- Title: CEO ----------------------
66049:53214:DALLAS:277267.9
9 | Highlight the parts (if any) of this contract related to "Rofr/Rofo/Rofn" that should be reviewed by a lawyer. Details: Is there a clause granting one party a right of first refusal, right of first offer or right of first negotiation to purchase, license, market, or distribute equity interest, technology, assets, products or services? | {
"answer_start": [
11694
],
"text": [
"If Licensee shall have exercised such right, the closing shall be held at the corporate offices of Licensee on the closing date specified in the Offering Notice or the date that is ninety (90) days after the date of Licensee's notice of its exercise of such right, whichever is later."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Renewal Term" that should be reviewed by a lawyer. Details: What is the renewal term after the initial term expires? This includes automatic extensions and unilateral extensions with prior notice.
Context: CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. SUCH OMITTED PORTIONS, WHICH ARE MARKED WITH BRACKETS [ ] AND AN ASTERISK*, HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. Exhibit 10.1 EXECUTION COPY COOPERATION AGREEMENT This AGREEMENT, dated as of June 27, 2017 (this "Agreement"), is made and entered into by The Meet Group, Inc., a Delaware corporation (the "Company"), and each of the persons set forth on the signature page hereto (each, an "Investor" and collectively, the "Investors" or, with their respective affiliates and associates, the "Investor Group"), which presently are or may be deemed to be members of a "group" with respect to the common stock of the Company, $0.001 par value per share (the "Common Stock"), pursuant to Rule 13d-5 promulgated by the U.S. Securities and Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"); WHEREAS, the Investor Group is deemed to beneficially own shares of the Common Stock totaling, in the aggregate, 4,425,000 shares of the Common Stock outstanding as of the date hereof; and WHEREAS, the Company has agreed, at the request of the Investor Group, to cause Jim Parmelee ("New Director A") and a person to be selected from the Director Candidate Pool (as defined herein) ("New Director B") (collectively, the "New Directors") to be appointed to the Company's Board of Directors (the "Board"), and to come to an agreement with respect to certain other matters as provided in this Agreement. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows: 1. Board Composition Matters. (a) Appointment of New Director A. The Company agrees that it shall take all action as is necessary (including, without limitation, calling a special meeting of the Board to approve all actions contemplated hereby), effective immediately following the execution of this Agreement, to (i) cause the Board to increase the size of its membership from six (6) to seven (7) members; (ii) accept the resignation of one existing member of the Board to become effective immediately prior to the appointment of New Director A; and (iii) appoint New Director A to the Board with a term on the Board expiring at the Company's 2018 Annual Meeting of Stockholders (the "2018 Annual Meeting") and until his successor is duly elected and qualified. The Company further agrees that without the unanimous approval of the Board, during the period from the execution of this Agreement until the expiration of the Standstill Period (as defined below), the size of the Board shall not be increased beyond seven (7) members.
(i) Identification and Appointment of New Director B. No later than ninety (90) calendar days from the date of execution of this Agreement (the "New Director B Appointment Deadline"), the Company shall take the necessary steps to cause the Board to appoint one of the candidates set forth on Exhibit A (as the same may be supplemented or otherwise amended from time to time by the mutual constent of the Company and the Investor Group, the "Director Candidate Pool") as New Director B with a term on the Board expiring at the 2018 Annual Meeting and until his or her successor is duly elected and qualified. The Company agrees that, if New Director B is not appointed to the Board prior to the New Director B Appointment Deadline and none of the candidates included in the Director Candidate Pool are willing to serve on the Board by the New Director B Appointment Deadline, (1) the Company and Investor Group will discuss in good faith the identification and selection of a mutually agreed upon substitute person to be added to the Director Candidate Pool following the same process that they would follow pursuant to Section 1(f) hereof if either of the New Directors, following their appointment to the Board, is unable to serve as a director for any reason, resigns as a director, or is removed as a director prior to the end of the term of office; and (2) the New Director B Appointment Deadline shall no longer apply and, in lieu thereof, shall be replaced by the time periods set forth in Section 1(f) hereof. (b) Board's Review of Qualifications and Determination of Independence. Prior to the execution of this Agreement (i) the Nominating and Governance Committee of the Board (the "Nominating Committee") has reviewed the qualifications of New Director A and each of the individuals included within the Director Candidate Pool to serve as members of the Board and has determined that they are so qualified, and (ii) the Board has determined that each of the New Directors and each of the individuals included within the Director Candidate Pool are "independent" as defined by the listing standards of NASDAQ. (c) Committees. The Company agrees that, concurrent with the appointment of the New Directors to the Board, the Board shall take such action as is necessary such that each of the New Directors is appointed to at least one (1) of the three (3) standing committees of the Board that the Company is required to maintain in accordance with the NASDAQ listing standards; provided that, with respect to each such committee appointment, the New Director is and continues to remain eligible to serve as a member of such committee pursuant to applicable law and the rules of NASDAQ that are applicable to the composition of such committee. (d) Board Policies and Procedures. The Investor Group acknowledges that each of the New Directors shall be required to comply with all policies, processes, procedures, codes, rules, standards, and guidelines applicable to members of the Board, as in effect from time to time, including, but not limited to, the Company's Code of Conduct, and policies on confidentiality, ethics, hedging and pledging of Company securities, public disclosures, stock trading, and stock ownership, and that each of the New Directors shall be required to strictly preserve the confidentiality of Company business and information, including the discussion of any matters considered in meetings of the Board whether or not the matters relate to material non-public information, unless previously publicly disclosed by the Company. Further, the Investor Group acknowledges that the New Directors will be requested to provide the Company with such information as is reasonably requested by the Company concerning the New Directors as is required to be disclosed under applicable law or stock exchange regulations, including the completion of the Company's standard director and officer questionnaire, in each case as promptly as necessary to enable the timely filing of the Company's proxy statement and other periodic reports with the SEC. 2
(e) Rights and Benefits of the New Directors. The Company agrees that each of the New Directors shall receive (i) the same benefits of director and officer insurance, and any indemnity and exculpation arrangements available generally to the directors on the Board, (ii) the same compensation for his service as a director as the compensation received by other non-management directors on the Board, and (iii) such other benefits on the same basis as all other non-management directors on the Board. (f) Replacements. The Company agrees that, during the Standstill Period (as defined below), if any of the New Directors is unable to serve as a director for any reason, resigns as a director, or is removed as a director prior to the end of the term of office, and at such time the Investor Group beneficially owns in the aggregate at least three percent (3.0%) of the Company's then outstanding Common Stock (subject to adjustment for share issuances, stock splits, reclassifications, combinations and similar actions by the Company that increase the number of outstanding shares of Common Stock), then the Company and the Investor Group shall work together in good faith to identify and select a replacement director candidate to be appointed to the Board which shall only be appointed to the Board after having been mutually agreed upon by both the Company and the Investor Group. Any such mutually agreed upon replacement director candidate shall qualify as "independent" pursuant to NASDAQ's listing standards and have the relevant financial and business experience to fill the resulting vacancy. Each of the Investor Group and the Company shall determine, and inform the other party of its determination, whether any proposed replacement director candidate is acceptable and meets the foregoing criteria, within ten (10) business days after such party has conducted interview(s) of such proposed replacement director candidate. Each of the Company and the Investor Group shall use their respective reasonable best efforts to cause any interview(s) contemplated by this Section 1(f) to be conducted as promptly as practicable, but in any case, assuming reasonable availability of the proposed replacement director candidate, within ten (10) business days after the receipt of such director candidate's credentials, including, but not limited to, a completed copy of the Company's standard director and officer questionnaire. Upon acceptance of a replacement director candidate by both the Company and the Investor Group, the Board shall take such actions as to appoint such replacement director candidate to the Board no later than ten (10) business days after both parties have confirmed in writing that they have mutually agreed upon such candidate. Following the appointment of any director to replace a New Director in accordance with this Section 1(f), any reference to New Directors herein shall be deemed to include such replacement director. 3
2. Actions by the Investor Group. (a) Voting Agreement. (i) Stockholders Meetings. At each annual and special meeting of stockholders held prior to the expiration of the Standstill Period (as defined below), each of the Investors agrees to (A) appear at such stockholders' meeting or otherwise cause all shares of Common Stock beneficially owned by each Investor and their respective Affiliates and Associates (as defined below) to be counted as present thereat for purposes of establishing a quorum; (B) vote, or cause to be voted, all shares of Common Stock beneficially owned by each Investor and their respective Affiliates and Associates on the Company's proxy card or voting instruction form in favor of each of the nominees for election as directors nominated by the Board and recommended by the Board (and not in favor of any other nominees to serve on the Board); and, except in connection with any Opposition Matter (as defined below) or Other Voting Recommendation (as defined below), each of the proposals listed on the Company's proxy card or voting instruction form as identified in the Company's definitive proxy statement or supplement thereto in accordance with the Board's recommendations, including in favor of all matters recommended by the Board for stockholder approval and against all matters which the Board recommends against stockholder approval; provided, however, in the event that Institutional Shareholder Services Inc. ("ISS") issues a recommendation with respect to any matter (other than with respect to the election of nominees as directors to the Board or the removal of directors from the Board) that is different from the recommendation of the Board, each of the Investors shall have the right to vote on the Company's proxy card or voting instruction form in accordance with the ISS recommendation (the "Other Voting Recommendation"); and (C) not execute any proxy card or voting instruction form in respect of such stockholders' meeting other than the proxy card and related voting instruction form being solicited by or on behalf of the Company or the Board. No later than five (5) business days prior to each annual or special meeting of stockholders held prior to the expiration of the Standstill Period, each Investor shall, and shall cause each of its Associates and Affiliates to, vote any shares of Common Stock beneficially owned by such Investors in accordance with this Section 2. No Investor nor any of its Affiliates or Associates nor any person under its direction or control shall take any position, make any statement or take any action inconsistent with this Section 2(a)(i). For purposes of this Agreement, "Opposition Matter" shall mean any of the following transactions but only to the extent submitted by the Board to the Company's stockholders for approval: (A) the sale or transfer of all or substantially all of the Company's assets in one or a series of transactions; (B) the sale or transfer of a majority of the outstanding shares of the Company's Common Stock (through a merger, stock purchase, or otherwise); (C) any merger, consolidation, acquisition of control or other business combination that results in a Change of Control (as defined below) of the Company; (D) any tender or exchange offer; (E) any dissolution, liquidation, or reorganization; (F) any changes in the Company's capital structure (but excluding any proposal regarding the adoption or amendment of equity plans, all of which shall not be deemed an Opposition Matter for purposes of this Agreement); or (G) any other transactions that would result in a Change of Control of the Company. (ii) Actions By Written Consent. In connection with any action by written consent that is sought to be taken by any party, other than the Company or the Board, prior to the expiration of the Standstill Period (as defined below), each of the Investors agrees not to vote and to take all necessary action, including, without limitation, the execution and completion of any consent revocation card solicited by the Company or the Board, in accordance with the recommendation of the Board, to cause not to be voted, any of their shares of Common Stock beneficially owned by each Investor and/or their respective Affiliates and Associates on any consent card related to or affecting the removal, replacement or election of Board members and solicited by any party, other than the Company or the Board. No Investor nor any of its Affiliates or Associates nor any person under its direction or control shall take any position, make any statement or take any action inconsistent with this Section 2(a)(ii). (iii) Special Meeting Demands. In connection with any demand by a stockholder of the Company that the Company call a special meeting of stockholders, made prior to the expiration of the Standstill Period (as defined below), each of the Investors agrees not to vote and shall take all necessary action, including, but not limited to, the execution and completion of any consent revocation card solicited by the Company or the Board in accordance with the recommendation of the Board, to cause not to be voted, any of their shares of Common Stock beneficially owned by each Investor and/or their respective Affiliates and Associates for any special meeting demand proposed or sought to be made by any party. No Investor nor any of its Affiliates or Associates nor any person under its direction or control shall take any position, make any statement or take any action inconsistent with this Section 2(a)(iii). 4
3. Standstill. (a) Each Investor agrees that, from the date of this Agreement until the expiration of the Standstill Period (as defined below), without the prior written consent of a majority of the Board specifically expressed in a written resolution, neither it nor any of its Related Persons (as defined herein) will, and it will cause each of its Related Persons not to, directly or indirectly, alone or with others, in any manner: (i) propose or publicly announce or otherwise publicly disclose an intent to propose or enter into or agree to enter into, singly or with any other person, directly or indirectly, (x) any form of business combination or acquisition or other transaction relating to a material amount of assets or securities of the Company or any of its subsidiaries, (y) any form of restructuring, recapitalization or similar transaction with respect to the Company or any of its subsidiaries or (z) any form of tender or exchange offer for the Common Stock, whether or not such transaction involves a change of control of the Company; (ii) engage in any solicitation of proxies or written consents to vote any voting securities of the Company, or conduct any non-binding referendum with respect to any voting securities of the Company, or assist or participate in any other way, directly or indirectly, in any solicitation of proxies or written consents with respect to any voting securities of the Company, or otherwise become a "participant" in a "solicitation," as such terms are defined in Instruction 3 of Item 4 of Schedule 14A and Rule 14a-1 of Regulation 14A, respectively, under the Exchange Act, to vote any securities of the Company in opposition to any recommendation or proposal of the Board; (iii) acquire, offer or propose to acquire, or agree to acquire, directly or indirectly, whether by purchase, tender or exchange offer, through the acquisition of control of another person, by joining a partnership, limited partnership, syndicate or other group (including any group of persons that would be treated as a single "person" under Section 13(d) of the Exchange Act), through swap or hedging transactions or otherwise, any additional securities (including common and preferred equity interests and debt that is convertible into any equity interests) of the Company or any rights decoupled from the underlying securities of the Company, that would result, or could result, in the Investor Group owning, in the aggregate (amongst all of the Investors and any Affiliate or Associate thereof), in excess of 10% of the shares of Common Stock outstanding; (iv) seek to advise, encourage or influence any person with respect to the voting of (or execution of a written consent in respect of) or disposition of any securities of the Company, other than in a manner in accordance with Section 2; (v) sell, offer or agree to sell directly or indirectly, through swap or hedging transactions or otherwise, any securities (including common and preferred equity interests and debt that is convertible into any equity interests) of the Company or any rights decoupled from the underlying securities held by the Investors to any person or entity that would knowingly result in any third party, together with its Affiliates and Associates, owning, controlling or otherwise having any, beneficial, economic or other ownership interest representing in the aggregate 5% or more of the shares of Common Stock outstanding at such time; 5
(vi) sell, offer or agree to sell directly or indirectly, through swap or hedging transactions or otherwise, any securities (including common and preferred equity interests and debt that is convertible into any equity interests) of the Company or any rights decoupled from the underlying securities held by the Investors to any Affiliate or Associate of the Investors not a party to this Agreement; (vii) except as otherwise set forth in this Agreement, take any action in support of or make any proposal or request that constitutes: (A) advising, controlling, changing or influencing the Board or management of the Company, including any plans or proposals to change the number or term of directors or to fill any vacancies on the Board, (B) any material change in the capitalization, stock repurchase programs and practices or dividend policy of the Company, (C) any other material change in the Company's management, governance, policies, strategic direction, business or corporate structure, (D) seeking to have the Company waive or make amendments or modifications to the Company's Amended and Restated Certificate of Incorporation or Bylaws, or other actions that may impede or facilitate the acquisition of control of the Company by any person, (E) causing a class of securities of the Company to be delisted from, or to cease to be authorized to be quoted on, any securities exchange, or (F) causing a class of securities of the Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; (viii) call or seek to call, or request the call of, alone or in concert with others, any meeting of stockholders, whether or not such a meeting is permitted by the Company's Amended and Restated Certificate of Incorporation or Bylaws, including, but not limited to, a "town hall meeting;" (ix) seek, alone or in concert with others, representation on the Board, except as expressly permitted by this Agreement; (x) initiate, encourage or participate in any "vote no," "withhold" or similar campaign; (xi) deposit any Common Stock in any voting trust or subject any Common Stock to any arrangement or agreement with respect to the voting of any Common Stock (other than any such voting trust, arrangement or agreement solely among the members of the Investor Group that is otherwise in accordance with this Agreement); (xii) seek, or encourage any person, to submit nominations in furtherance of a "contested solicitation" for the election or removal of directors with respect to the Company or seek, encourage or take any other action with respect to the election or removal of any directors of the Company or with respect to the submission of any stockholder proposals (including any submission of stockholder proposals pursuant to Rule 14a-8 under the Exchange Act); 6
(xiii) form, join or in any other way participate in any "group" (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to the Common Stock (other than the Investor Group); (xiv) demand a copy of the Company's list of stockholders or its other books and records, whether pursuant to Section 220 of the Delaware General Corporation Law (the "DGCL") or pursuant to any other statutory right; (xv) commence, encourage, or support any derivative action in the name of the Company, or any class action against the Company or any of its officers or directors in order to, directly or indirectly, effect any of the actions expressly prohibited by this Agreement or cause the Company to amend or waive any of the provisions of this Agreement; provided, however, that for the avoidance of doubt, the foregoing shall not prevent any Investor from (A) bringing litigation to enforce the provisions of this Agreement, (B) making counterclaims with respect to any proceeding initiated by, or on behalf of, the Company against an Investor, or (C) exercising statutory dissenters, appraisal or similar rights under the DGCL; provided, further, that the foregoing shall also not prevent the Investors from responding to or complying with a validly issued legal process in connection with litigation that it did not initiate, invite, facilitate or encourage, except as otherwise permitted in this Section (3)(a) (xv); (xvi) disclose publicly or privately, in a manner that could reasonably be expected to become public any intent, purpose, plan or proposal with respect to the Board, the Company, its management, policies or affairs, any of its securities or assets or this Agreement that is inconsistent with the provisions of this Agreement; provided, however, that nothing herein shall prohibit the Investor Group from engaging in private discussions with the Company concerning the Investor Group's views or suggestions concerning the Company; (xvii) enter into any negotiations, agreements or understandings with any person or entity with respect to any of the foregoing, or advise, assist, knowingly encourage or seek to persuade any person or entity to take any action or make any statement with respect to any of the foregoing, or otherwise take or cause any action or make any statement inconsistent with any of the foregoing; (xviii) make any request or submit any proposal to amend the terms of this Agreement other than through non-public communications with the Company that would not be reasonably determined to trigger public disclosure obligations for any party; (xix) take any action challenging the validity or enforceability of any of the provisions of this Section 3 or publicly disclose, or cause or facilitate the public disclosure (including, without limitation, the filing of any document with the SEC or any other governmental agency or any disclosure to any journalist, member of the media or securities analyst) of, any intent, purpose, plan or proposal to either (A) obtain any waiver or consent under, or any amendment of, any provision of this Agreement, or (B) take any action challenging the validity or enforceability of any provisions of this Section 3; or (xx) otherwise take, or solicit, cause or encourage others to take, any action inconsistent with the foregoing. 7
(b) Notwithstanding the foregoing, the provisions of this Section 3 shall not limit in any respect the actions of any director of the Company (including, but not limited to, the New Directors) in their capacity as such, recognizing that such actions are subject to such director's fiduciary duties to the Company and its stockholders (it being understood and agreed that neither the Investors nor any of their Affiliates or Associates shall seek to do indirectly through the New Directors anything that would be prohibited if done by any of the Investors or their Affiliates and Associates directly). For the avoidance of doubt, no provision in this Section 3 or elsewhere in this Agreement shall prohibit privately-negotiated transactions in the Common Stock solely between or among the Investors. (c) As of the date of this Agreement, none of the Investors are engaged in any discussions or negotiations with any person, and do not have any agreements, arrangements, or understandings, written or oral, formal or informal, and whether or not legally enforceable with any person concerning the acquisition of economic ownership of any securities of the Company, and have no actual and non-public knowledge that any other stockholders of the Company have any present or future intention of taking any actions that if taken by the Investors would violate any of the terms of this Agreement. The Investors agree to refrain from taking any actions during the Standstill Period to intentionally encourage other stockholders of the Company, or any other persons to engage in any of the actions referred to in the previous sentence. (d) As used in this Agreement, the terms "Affiliate" and "Associate" shall have the respective meanings set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act; the terms "beneficial owner" and "beneficial ownership" shall have the same meanings as set forth in Rule 13d-3 promulgated by the SEC under the Exchange Act; the terms "economic owner" and "economically own" shall have the same meanings as "beneficial owner" and "beneficially own," except that a person will also be deemed to economically own and to be the economic owner of (i) all shares of Common Stock which such person has the right to acquire pursuant to the exercise of any rights in connection with any securities or any agreement, regardless of when such rights may be exercised and whether they are conditional, and (ii) all shares of Common Stock in which such person has any economic interest, including, without limitation, pursuant to a cash settled call option or other derivative security, contract or instrument in any way related to the price of shares of Common Stock; the terms "person" or "persons" shall mean any individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature; and the term "Related Person" shall mean, as to any person, any Affiliates or Associates of such person. (e) Notwithstanding anything contained in this Agreement to the contrary: (i) The provisions of Sections 1, 2, and 3 of this Agreement shall automatically terminate upon the occurrence of a Change of Control transaction (as defined below) involving the Company if the acquiring or counter-party to the Change of Control transaction has conditioned the closing of the transaction on the termination of such sections; provided, however, that the Company shall not directly or indirectly, propose, seek, encourage or otherwise influence such acquiring or counter-party to the Change of Control transaction to condition the closing of such transaction on the termination of Sections 1, 2, and 3 of this Agreement; and 8
(ii) For purposes of this Agreement, a "Change of Control" transaction shall be deemed to have taken place if (1) any person is or becomes a beneficial owner, directly or indirectly, of securities of the Company representing more than 50% of the equity interests and voting power of the Company's then outstanding equity securities or (2) the Company enters into a stock-for-stock transaction whereby immediately after the consummation of the transaction the Company's stockholders retain less than 50% of the equity interests and voting power of the surviving entity's then outstanding equity securities. (f) For purposes of this Agreement, "Standstill Period" shall mean the period commencing on the date of this Agreement and ending at 11:59 p.m. Eastern Time on the date of the certification of the vote of stockholders at the 2018 Annual Meeting. 4. Expenses. Each of the Company and the Investors shall be responsible for its own fees and expenses incurred in connection with the negotiation, execution, and effectuation of this Agreement and the transactions contemplated hereby, including, but not limited to attorneys' fees incurred in connection with the negotiation and execution of this Agreement and all other activities related to the foregoing. 5. Representations and Warranties of the Company. The Company represents and warrants to the Investors that (a) the Company has the corporate power and authority to execute this Agreement and to bind it thereto, (b) this Agreement has been duly and validly authorized, executed and delivered by the Company, constitutes a valid and binding obligation and agreement of the Company, and is enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles and (c) the execution, delivery and performance of this Agreement by the Company does not and will not violate or conflict with (i) any law, rule, regulation, order, judgment or decree applicable to it, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could become a default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, or any material agreement, contract, commitment, understanding or arrangement to which the Company is a party or by which it is bound. 6. Representations and Warranties of the Investors. Each Investor, on behalf of itself, severally represents and warrants to the Company that (a) as of the date hereof, such Investor beneficially owns, directly or indirectly, only the number of shares of Common Stock as described opposite its name on Exhibit B and Exhibit B includes all Affiliates and Associates of any Investors that own any securities of the Company beneficially or of record and reflects all shares of Common Stock in which the Investors have any interest or right to acquire, whether through derivative securities, voting agreements or otherwise, (b) this Agreement has been duly and validly authorized, executed and delivered by such Investor, and constitutes a valid and binding obligation and agreement of such Investor, enforceable against such Investor in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles, (c) such Investor has the authority to execute this Agreement on behalf of itself and the applicable Investor associated with that signatory's name, and to bind such Investor to the terms hereof, (d) each of the Investors shall use its commercially reasonable efforts to cause its respective Affiliates and Associates to comply with the terms of this Agreement and (e) the execution, delivery and performance of this Agreement by such Investor does not and will not violate or conflict with (i) any law, rule, regulation, order, judgment or decree applicable to it, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could become a default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which such member is a party or by which it is bound. 9
7. Mutual Non-Disparagement. (a) Each Investor agrees that, until the earlier of (i) the expiration of the Standstill Period or (ii) any material breach of this Agreement by the Company (provided that the Company shall have three (3) business days following written notice from such Investor of any material breach to remedy such material breach if capable of remedy), neither it nor any of its Affiliates or Associates will, and it will cause each of its Affiliates and Associates not to, directly or indirectly, publicly make, express, transmit, speak, write, verbalize or otherwise publicly communicate in any way (or cause, further, assist, solicit, encourage, support or participate in any of the foregoing), any remark, comment, message, information, declaration, communication or other statement of any kind, whether verbal or in writing, that might reasonably be construed to be derogatory or critical of, or negative toward, the Company or any of its directors, officers, Affiliates, Associates, subsidiaries, employees, agents or representatives (collectively, the "Company Representatives"), or that reveals, discloses, incorporates, is based upon, discusses, includes or otherwise involves any confidential or proprietary information of the Company or its subsidiaries or Affiliates or Associates, or to malign, harm, disparage, defame or damage the reputation or good name of the Company, its business or any of the Company Representatives. (b) The Company hereby agrees that, until the earlier of (i) the expiration of the Standstill Period or (ii) any material breach of this Agreement by an Investor (provided that such Investor shall have three (3) business days following written notice from the Company of any material breach to remedy such material breach if capable of remedy), neither it nor any of its Affiliates will, and it will cause each of its Affiliates not to, directly or indirectly, publicly make, express, transmit, speak, write, verbalize or otherwise publicly communicate in any way (or cause, further, assist, solicit, encourage, support or participate in any of the foregoing), any remark, comment, message, information, declaration, communication or other statement of any kind, whether verbal or in writing, that might reasonably be construed to be derogatory or critical of, or negative toward, the Investors or their Affiliates or Associates or any of their agents or representatives (collectively, the "Investor Agents"), or that reveals, discloses, incorporates, is based upon, discusses, includes or otherwise involves any confidential or proprietary information of any Investor or its Affiliates or Associates, or to malign, harm, disparage, defame or damage the reputation or good name of any Investor, its business or any of the Investor Agents. (c) Notwithstanding the foregoing, nothing in this Section 7 or elsewhere in this Agreement shall prohibit any party from making any statement or disclosure required under the federal securities laws or other applicable laws. (d) The limitations set forth in Section 7(a) and 7(b) shall not prevent any party from responding to any public statement made by the other party of the nature described in Section 7(a) and 7(b) if such statement by the other party was made in breach of this Agreement. 10
8. Public Announcements. Promptly following the execution of this Agreement, the Company and the Investor Group shall issue a mutually agreeable press release (the "Mutual Press Release"), announcing certain terms of this Agreement, substantially in the form attached hereto as Exhibit C. Prior to the issuance of the Mutual Press Release, neither the Company nor any of the Investors shall issue any press release or make any public announcement regarding this Agreement or take any action that would require public disclosure thereof without the prior written consent of the other party. During the Standstill Period, neither the Company nor the Investor Group or any of its Affiliates or Associates shall make any public announcement or statement that is inconsistent with or contrary to the statements made in the Mutual Press Release, except as required by law or the rules of any stock exchange (and, in any event, each party will provide the other party, prior to making any such public announcement or statement, a reasonable opportunity to review and comment on such disclosure, to the extent reasonably practicable under the circumstances, and each party will consider any comments from the other in good faith) or with the prior written consent of the other party, and otherwise in accordance with this Agreement. 9. SEC Filings. (a) No later than two (2) business days following the execution of this Agreement, the Company shall file a Current Report on Form 8-K with the SEC reporting the entry into this Agreement and appending or incorporating by reference this Agreement as an exhibit thereto. The Company shall provide the Investor Group and its counsel a reasonable opportunity to review and comment on the Form 8-K prior to such filing, which comments shall be considered in good faith. (b) No later than two (2) business days following the execution of this Agreement, the Investor Group shall file an amendment to its Schedule 13D with respect to the Company that has been filed with the SEC, reporting the entry into this Agreement, amending applicable items to conform to their obligations hereunder and appending or incorporating by reference this Agreement as an exhibit thereto. The Investor Group shall provide the Company and its counsel a reasonable opportunity to review and comment on the Schedule 13D prior to such filing, which comments shall be considered in good faith. 10. Specific Performance. Each of the Investors, on the one hand, and the Company, on the other hand, acknowledges and agrees that irreparable injury to the other party hereto may occur in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached and that such injury would not be adequately compensable in monetary damages. It is accordingly agreed that the Investors or any Investor, on the one hand, and the Company, on the other hand (the "Moving Party"), shall each be entitled to seek specific enforcement of, and injunctive or other equitable relief to prevent any violation of, the terms hereof, and the other party hereto will not take action, directly or indirectly, in opposition to the Moving Party seeking such relief on the grounds that any other remedy or relief is available at law or in equity. 11
11. Notice. Any notices, consents, determinations, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); (iii) upon confirmation of receipt, when sent by email (provided such confirmation is not automatically generated) or (iv) one (1) business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be: If to the Company: The Meet Group, Inc. 100 Union Square Drive New Hope, PA 18938 Fax No.: (215) 862.7825 Email: fred@themeetgroup.com Attention: Frederic A. Beckley, Esq., General Counsel and Executive Vice President, Business Affairs With copies (which shall not constitute notice) to: Morgan, Lewis & Bockius LLP 1111 Pennsylvania Avenue, N.W. Washington, DC 20004 Fax No.: (202) 739-3001 Email: keith.gottfried@morganlewis.com Attention: Keith E. Gottfried, Esq. If to any Investor: Harvest Capital Strategies LLC 600 Montgomery Street, Suite 1700 San Francisco, CA 94111 Fax No.: (415) 869-4433 Email: investments@harvestcaps.com Attention: Jeffrey B. Osher, Managing Director With copies (which shall not constitute notice) to: Olshan Frome Wolosky LLP 1325 Avenue of the Americas New York, NY 10019 Fax No.: (212) 451-2222 E-mail: swolosky@olshanlaw.com afreedman@olshanlaw.com Attention: Steve Wolosky, Esq. Andrew Freedman, Esq. 12
12. Governing Law. This Agreement shall be governed in all respects, including validity, interpretation, and effect, by, and construed in accordance with, the laws of the State of Delaware executed and to be performed wholly within the State of Delaware, without giving effect to the choice of law or conflict of law principles thereof or of any other jurisdiction to the extent that such principles would require or permit the application of the laws of another jurisdiction. 13. Jurisdiction. Each of the parties hereto (a) consents to submit itself to the personal jurisdiction of federal or state courts of the State of Delaware in the event any dispute arises out of this Agreement or the transactions contemplated by this Agreement, (b) agrees that it shall not bring any action relating to this Agreement or the transactions contemplated by this Agreement in any court other than the federal or state courts of the State of Delaware, and each of the parties irrevocably waives the right to trial by jury, (c) agrees to waive any bonding requirement under any applicable law, in the case any other party seeks to enforce the terms by way of equitable relief, and (d) irrevocably consents to service of process by first class certified mail, return receipt requested, postage prepaid, to the address of such party's principal place of business or as otherwise provided by applicable law. Each of the parties hereto irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action, suit or other legal proceeding with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment before judgment, attachment in aid of execution of judgment, execution of judgment or otherwise), and (c) to the fullest extent permitted by applicable law, that (i) such action, suit or other legal proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such action, suit or other legal proceeding is improper or (iii) this agreement, or the subject matter hereof, may not be enforced in or by such court. 14. Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 14. 15. Representative. Each Investor hereby irrevocably appoints Jeffrey B. Osher as its attorney-in-fact and representative (the "Investor Group Representative"), in such Investor's place and stead, to do any and all things and to execute any and all documents and give and receive any and all notices or instructions in connection with this Agreement and the transactions contemplated hereby. The Company shall be entitled to rely, as being binding on each Investor, upon any action taken by the Investor Group Representative or upon any document, notice, instruction or other writing given or executed by the Investor Group Representative. 13
16. Entire Agreement. This Agreement constitutes the full and entire understanding and agreement among the parties with regard to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings and representations, whether oral or written, of the parties with respect to the subject matter hereof. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings, oral or written, between the parties other than those expressly set forth herein. 17. Headings. The section headings contained in this Agreement are for reference purposes only and shall not effect in any way the meaning or interpretation of this Agreement. 18. Waiver. No failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy. 19. Remedies. All remedies hereunder are cumulative and are not exclusive of any other remedies provided by law or equity. 20. Receipt of Adequate Information; No Reliance; Representation by Counsel. Each party acknowledges that it has received adequate information to enter into this Agreement, that it has had adequate opportunity to make whatever investigation or inquiry it may deem necessary or desirable in connection with the subject matter of this Agreement prior to the execution hereof, and that it has not relied on any promise, representation or warranty, express or implied not contained in this Agreement. Each of the parties hereto acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said independent counsel. Each party cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted or prepared it is of no application and is hereby expressly waived by each of the parties hereto, and any controversy over interpretations of this Agreement shall be decided without regards to events of drafting or preparation. Further, any rule of law or any legal decision that would provide any party with a defense to the enforcement of the terms of this Agreement against such party shall have no application and is expressly waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the intent of the parties. 21. Construction. When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement, unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include," "includes" and "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." The words "hereof, "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word "will" shall be construed to have the same meaning as the word "shall." The words "dates hereof" will refer to the date of this Agreement. The word "or" is not exclusive. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. Any agreement, instrument, law, rule or statute defined or referred to herein means, unless otherwise indicated, such agreement, instrument, law, rule or statute as from time to time amended, modified or supplemented. 14
22. Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree shall remain in full force and effect to the extent not held invalid or unenforceable. The parties further agree to replace such invalid or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the purposes of such invalid or unenforceable provision. 23. Amendment. This Agreement may be modified, amended or otherwise changed only in a writing signed by all of the parties hereto, or in the case of the Investors, the Investor Group Representative, or their respective successors or assigns. 24. Successors and Assigns. The terms and conditions of this Agreement shall be binding upon and be enforceable by the parties hereto and the respective successors, heirs, executors, legal representatives and permitted assigns of the parties, and inure to the benefit of any successor, heir, executor, legal representative or permitted assign of any of the parties; provided, however, that no party may assign this Agreement or any rights or obligations hereunder without, with respect to any Investor, the express prior written consent of the Company (with such consent specifically authorized in a written resolution adopted and approved by the unanimous vote of the entire membership of the Board), and with respect to the Company, the prior written consent of the Investor Group Representative. 25. No Third-Party Beneficiaries. The representations, warranties and agreements of the parties contained herein are intended solely for the benefit of the party to whom such representations, warranties or agreements are made, and shall confer no rights, benefits, remedies, obligations, or liabilities hereunder, whether legal or equitable, in any other person or entity, and no other person or entity shall be entitled to rely thereon. 26. Counterparts; Facsimile / PDF Signatures. This Agreement and any amendments hereto may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other parties hereto. In the event that any signature to this Agreement or any amendment hereto is delivered by facsimile transmission or by e-mail delivery of a portable document format (.pdf or similar format) data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page were an original thereof. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] [SIGNATURE PAGE FOLLOWS] 15
[SIGNATURE PAGE TO COOPERATION AGREEMENT] IN WITNESS WHEREOF the parties have duly executed and delivered this Agreement as of the date first above written. THE MEET GROUP, INC. By: /s/ Frederic Beckley Name: Frederic Beckley Title: General Counsel & EVP Business Affairs HARVEST SMALL CAP PARTNERS MASTER, LTD. By: Harvest Capital Strategies LLC Investment Manager By: /s/ Jeffrey B. Osher Name: Jeffrey B. Osher Title: Managing Director HARVEST SMALL CAP PARTNERS, L.P. By: Harvest Capital Strategies LLC Investment Manager By: /s/ Jeffrey B. Osher Name: Jeffrey B. Osher Title: Managing Director HARVEST SMALL CAP PARTNERS GP, LLC By: Harvest Capital Strategies LLC Investment Manager of the Limited Partner By: /s/ Jeffrey B. Osher Name: Jeffrey B. Osher Title: Managing Director HARVEST CAPITAL STRATEGIES LLC By: /s/ Jeffrey B. Osher Name: Jeffrey B. Osher Title: Managing Director /s/ Jeffrey B. Osher JEFFREY B. OSHER 16
CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. SUCH OMITTED PORTIONS, WHICH ARE MARKED WITH BRACKETS [ ] AND AN ASTERISK*, HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. EXHIBIT A DIRECTOR CANDIDATE POOL [***] 17
EXHIBIT B STOCKHOLDERS, AFFILIATES, AND OWNERSHIP
Investor Shares of Common Stock Beneficially Owned Harvest Small Cap Partners Master, Ltd. 2,763,182
Harvest Small Cap Partners, L.P. 1,661,818
Aggregate total beneficially owned by the Investor Group: 4,425,000
18
EXHIBIT C FORM OF PRESS RELEASE THE MEET GROUP REACHES AGREEMENT WITH HARVEST CAPITAL Agrees to Appoint Two New Independent Directors to The Meet Group's Board NEW HOPE, PA, June 27, 2017 - The Meet Group, Inc. (NASDAQ: MEET), a public market leader in the mobile meeting space, today announced that it has entered into a cooperation agreement with Harvest Capital Strategies LLC and its affiliates, which, in the aggregate, beneficially owns approximately 6.3% of The Meet Group's outstanding shares, regarding the composition of The Meet Group's Board of Directors. Under the terms of the agreement, The Meet Group has agreed to appoint to its Board two new independent directors: Jim Parmelee, who has agreed to join the Meet Group Board effective immediately, and a second director mutually acceptable to The Meet Group and Harvest Capital to be identified within the next ninety days. Spencer G. Rhodes, The Meet Group's Chairman of the Board, stated, "We are pleased to have reached this cooperation agreement with Harvest Capital, as we believe this outcome serves the best interests of The Meet Group and its stockholders. We are also pleased to welcome Jim Parmelee to our Board and look forward to the insights and experience he will bring." Jeffrey B. Osher, the Managing Director of Harvest Capital, stated, "We have spent considerable time with The Meet Group's senior management team and strongly support their strategy of creating a compelling portfolio of mobile meeting apps. Under Geoff Cook's leadership, The Meet Group has methodically grown its global platform while delivering consistent profitability and cash flow. We look forward to continuing our collaboration with The Meet Group's Board and senior management team as they execute on their long-term growth initiatives and focus on shareholder value creation." Pursuant to the cooperation agreement, Harvest Capital has agreed that, until the certification of the shareholder vote at The Meet Group's 2018 Annual Meeting of Stockholders, it will abide by certain customary standstill provisions. The cooperation agreement between The Meet Group and Harvest Capital will be included as an exhibit to a Current Report on Form 8-K that The Meet Group will file with the Securities and Exchange Commission. Morgan, Lewis & Bockius LLP served as legal counsel to The Meet Group. Olshan Frome Wolosky LLP served as legal advisor to Harvest Capital. The Meet Group also announced today that it has appointed The Blueshirt Group to lead its investor relations communications and strategy. The Blueshirt Group is a leading tech-focused investor relations firm that specializes in investor relations, IPO advisory, financial communications, financial media relations and crisis management. About Jim Parmelee Mr. Parmelee brings over 25 years of technology industry experience. He is currently an advisor to Hamilton Robinson Capital Partners, a middle market focused private equity firm. Jim was previously a Managing Director in Peak Ten Management LLC, where he was responsible for the firm's investments in the software, Internet and technology infrastructure verticals. Before Peak Ten, Jim was a Partner in Union Square Advisors, an M&A advisory firm focused on the technology sector, where he led the firm's global Information Technology infrastructure practice. Jim was previously a leading data networking and telecom equipment equity research analyst at Credit Suisse First Boston (now Credit Suisse). Jim was highly ranked by external polls throughout his research career including being named six times to Institutional Investor Magazine's All America Research Team. 19
About The Meet Group The Meet Group (NASDAQ: MEET) is a fast-growing portfolio of mobile apps designed to meet the universal need for human connection. Using innovative products and sophisticated data science, The Meet Group keeps its approximately 2.8 million mobile daily active users engaged and originates untold numbers of casual chats, friendships, dates, and marriages. The Meet Group offers advertisers the opportunity to reach customers on a global scale with hundreds of millions of daily mobile ad impressions. The Meet Group utilizes high user density, economies of scale, and leading monetization strategies with the goal of maximizing adjusted EBITDA. Our apps - currently MeetMe , Skout , Tagged , and Hi5 - let users in more than 100 countries chat, share photos, stream live video, and discuss topics of interest, and are available on iPhone, iPad, and Android in multiple languages. For more information, please visit themeetgroup.com. MEET Investor Contact: The Blueshirt Group Allise Furlani allise@blueshirtgroup.com 20
® ® ® ® [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. SUCH OMITTED PORTIONS, WHICH ARE MARKED WITH BRACKETS [ ] AND AN ASTERISK*, HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. Exhibit 10.1 EXECUTION COPY COOPERATION AGREEMENT This AGREEMENT, dated as of June 27, 2017 (this "Agreement"), is made and entered into by The Meet Group, Inc., a Delaware corporation (the "Company"), and each of the persons set forth on the signature page hereto (each, an "Investor" and collectively, the "Investors" or, with their respective affiliates and associates, the "Investor Group"), which presently are or may be deemed to be members of a "group" with respect to the common stock of the Company, $0.001 par value per share (the "Common Stock"), pursuant to Rule 13d-5 promulgated by the U.S. Securities and Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"); WHEREAS, the Investor Group is deemed to beneficially own shares of the Common Stock totaling, in the aggregate, 4,425,000 shares of the Common Stock outstanding as of the date hereof; and WHEREAS, the Company has agreed, at the request of the Investor Group, to cause Jim Parmelee ("New Director A") and a person to be selected from the Director Candidate Pool (as defined herein) ("New Director B") (collectively, the "New Directors") to be appointed to the Company's Board of Directors (the "Board"), and to come to an agreement with respect to certain other matters as provided in this Agreement. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows: 1. Board Composition Matters. (a) Appointment of New Director A. The Company agrees that it shall take all action as is necessary (including, without limitation, calling a special meeting of the Board to approve all actions contemplated hereby), effective immediately following the execution of this Agreement, to (i) cause the Board to increase the size of its membership from six (6) to seven (7) members; (ii) accept the resignation of one existing member of the Board to become effective immediately prior to the appointment of New Director A; and (iii) appoint New Director A to the Board with a term on the Board expiring at the Company's 2018 Annual Meeting of Stockholders (the "2018 Annual Meeting") and until his successor is duly elected and qualified. The Company further agrees that without the unanimous approval of the Board, during the period from the execution of this Agreement until the expiration of the Standstill Period (as defined below), the size of the Board shall not be increased beyond seven (7) members.
(i) Identification and Appointment of New Director B. No later than ninety (90) calendar days from the date of execution of this Agreement (the "New Director B Appointment Deadline"), the Company shall take the necessary steps to cause the Board to appoint one of the candidates set forth on Exhibit A (as the same may be supplemented or otherwise amended from time to time by the mutual constent of the Company and the Investor Group, the "Director Candidate Pool") as New Director B with a term on the Board expiring at the 2018 Annual Meeting and until his or her successor is duly elected and qualified. The Company agrees that, if New Director B is not appointed to the Board prior to the New Director B Appointment Deadline and none of the candidates included in the Director Candidate Pool are willing to serve on the Board by the New Director B Appointment Deadline, (1) the Company and Investor Group will discuss in good faith the identification and selection of a mutually agreed upon substitute person to be added to the Director Candidate Pool following the same process that they would follow pursuant to Section 1(f) hereof if either of the New Directors, following their appointment to the Board, is unable to serve as a director for any reason, resigns as a director, or is removed as a director prior to the end of the term of office; and (2) the New Director B Appointment Deadline shall no longer apply and, in lieu thereof, shall be replaced by the time periods set forth in Section 1(f) hereof. (b) Board's Review of Qualifications and Determination of Independence. Prior to the execution of this Agreement (i) the Nominating and Governance Committee of the Board (the "Nominating Committee") has reviewed the qualifications of New Director A and each of the individuals included within the Director Candidate Pool to serve as members of the Board and has determined that they are so qualified, and (ii) the Board has determined that each of the New Directors and each of the individuals included within the Director Candidate Pool are "independent" as defined by the listing standards of NASDAQ. (c) Committees. The Company agrees that, concurrent with the appointment of the New Directors to the Board, the Board shall take such action as is necessary such that each of the New Directors is appointed to at least one (1) of the three (3) standing committees of the Board that the Company is required to maintain in accordance with the NASDAQ listing standards; provided that, with respect to each such committee appointment, the New Director is and continues to remain eligible to serve as a member of such committee pursuant to applicable law and the rules of NASDAQ that are applicable to the composition of such committee. (d) Board Policies and Procedures. The Investor Group acknowledges that each of the New Directors shall be required to comply with all policies, processes, procedures, codes, rules, standards, and guidelines applicable to members of the Board, as in effect from time to time, including, but not limited to, the Company's Code of Conduct, and policies on confidentiality, ethics, hedging and pledging of Company securities, public disclosures, stock trading, and stock ownership, and that each of the New Directors shall be required to strictly preserve the confidentiality of Company business and information, including the discussion of any matters considered in meetings of the Board whether or not the matters relate to material non-public information, unless previously publicly disclosed by the Company. Further, the Investor Group acknowledges that the New Directors will be requested to provide the Company with such information as is reasonably requested by the Company concerning the New Directors as is required to be disclosed under applicable law or stock exchange regulations, including the completion of the Company's standard director and officer questionnaire, in each case as promptly as necessary to enable the timely filing of the Company's proxy statement and other periodic reports with the SEC. 2
(e) Rights and Benefits of the New Directors. The Company agrees that each of the New Directors shall receive (i) the same benefits of director and officer insurance, and any indemnity and exculpation arrangements available generally to the directors on the Board, (ii) the same compensation for his service as a director as the compensation received by other non-management directors on the Board, and (iii) such other benefits on the same basis as all other non-management directors on the Board. (f) Replacements. The Company agrees that, during the Standstill Period (as defined below), if any of the New Directors is unable to serve as a director for any reason, resigns as a director, or is removed as a director prior to the end of the term of office, and at such time the Investor Group beneficially owns in the aggregate at least three percent (3.0%) of the Company's then outstanding Common Stock (subject to adjustment for share issuances, stock splits, reclassifications, combinations and similar actions by the Company that increase the number of outstanding shares of Common Stock), then the Company and the Investor Group shall work together in good faith to identify and select a replacement director candidate to be appointed to the Board which shall only be appointed to the Board after having been mutually agreed upon by both the Company and the Investor Group. Any such mutually agreed upon replacement director candidate shall qualify as "independent" pursuant to NASDAQ's listing standards and have the relevant financial and business experience to fill the resulting vacancy. Each of the Investor Group and the Company shall determine, and inform the other party of its determination, whether any proposed replacement director candidate is acceptable and meets the foregoing criteria, within ten (10) business days after such party has conducted interview(s) of such proposed replacement director candidate. Each of the Company and the Investor Group shall use their respective reasonable best efforts to cause any interview(s) contemplated by this Section 1(f) to be conducted as promptly as practicable, but in any case, assuming reasonable availability of the proposed replacement director candidate, within ten (10) business days after the receipt of such director candidate's credentials, including, but not limited to, a completed copy of the Company's standard director and officer questionnaire. Upon acceptance of a replacement director candidate by both the Company and the Investor Group, the Board shall take such actions as to appoint such replacement director candidate to the Board no later than ten (10) business days after both parties have confirmed in writing that they have mutually agreed upon such candidate. Following the appointment of any director to replace a New Director in accordance with this Section 1(f), any reference to New Directors herein shall be deemed to include such replacement director. 3
2. Actions by the Investor Group. (a) Voting Agreement. (i) Stockholders Meetings. At each annual and special meeting of stockholders held prior to the expiration of the Standstill Period (as defined below), each of the Investors agrees to (A) appear at such stockholders' meeting or otherwise cause all shares of Common Stock beneficially owned by each Investor and their respective Affiliates and Associates (as defined below) to be counted as present thereat for purposes of establishing a quorum; (B) vote, or cause to be voted, all shares of Common Stock beneficially owned by each Investor and their respective Affiliates and Associates on the Company's proxy card or voting instruction form in favor of each of the nominees for election as directors nominated by the Board and recommended by the Board (and not in favor of any other nominees to serve on the Board); and, except in connection with any Opposition Matter (as defined below) or Other Voting Recommendation (as defined below), each of the proposals listed on the Company's proxy card or voting instruction form as identified in the Company's definitive proxy statement or supplement thereto in accordance with the Board's recommendations, including in favor of all matters recommended by the Board for stockholder approval and against all matters which the Board recommends against stockholder approval; provided, however, in the event that Institutional Shareholder Services Inc. ("ISS") issues a recommendation with respect to any matter (other than with respect to the election of nominees as directors to the Board or the removal of directors from the Board) that is different from the recommendation of the Board, each of the Investors shall have the right to vote on the Company's proxy card or voting instruction form in accordance with the ISS recommendation (the "Other Voting Recommendation"); and (C) not execute any proxy card or voting instruction form in respect of such stockholders' meeting other than the proxy card and related voting instruction form being solicited by or on behalf of the Company or the Board. No later than five (5) business days prior to each annual or special meeting of stockholders held prior to the expiration of the Standstill Period, each Investor shall, and shall cause each of its Associates and Affiliates to, vote any shares of Common Stock beneficially owned by such Investors in accordance with this Section 2. No Investor nor any of its Affiliates or Associates nor any person under its direction or control shall take any position, make any statement or take any action inconsistent with this Section 2(a)(i). For purposes of this Agreement, "Opposition Matter" shall mean any of the following transactions but only to the extent submitted by the Board to the Company's stockholders for approval: (A) the sale or transfer of all or substantially all of the Company's assets in one or a series of transactions; (B) the sale or transfer of a majority of the outstanding shares of the Company's Common Stock (through a merger, stock purchase, or otherwise); (C) any merger, consolidation, acquisition of control or other business combination that results in a Change of Control (as defined below) of the Company; (D) any tender or exchange offer; (E) any dissolution, liquidation, or reorganization; (F) any changes in the Company's capital structure (but excluding any proposal regarding the adoption or amendment of equity plans, all of which shall not be deemed an Opposition Matter for purposes of this Agreement); or (G) any other transactions that would result in a Change of Control of the Company. (ii) Actions By Written Consent. In connection with any action by written consent that is sought to be taken by any party, other than the Company or the Board, prior to the expiration of the Standstill Period (as defined below), each of the Investors agrees not to vote and to take all necessary action, including, without limitation, the execution and completion of any consent revocation card solicited by the Company or the Board, in accordance with the recommendation of the Board, to cause not to be voted, any of their shares of Common Stock beneficially owned by each Investor and/or their respective Affiliates and Associates on any consent card related to or affecting the removal, replacement or election of Board members and solicited by any party, other than the Company or the Board. No Investor nor any of its Affiliates or Associates nor any person under its direction or control shall take any position, make any statement or take any action inconsistent with this Section 2(a)(ii). (iii) Special Meeting Demands. In connection with any demand by a stockholder of the Company that the Company call a special meeting of stockholders, made prior to the expiration of the Standstill Period (as defined below), each of the Investors agrees not to vote and shall take all necessary action, including, but not limited to, the execution and completion of any consent revocation card solicited by the Company or the Board in accordance with the recommendation of the Board, to cause not to be voted, any of their shares of Common Stock beneficially owned by each Investor and/or their respective Affiliates and Associates for any special meeting demand proposed or sought to be made by any party. No Investor nor any of its Affiliates or Associates nor any person under its direction or control shall take any position, make any statement or take any action inconsistent with this Section 2(a)(iii). 4
3. Standstill. (a) Each Investor agrees that, from the date of this Agreement until the expiration of the Standstill Period (as defined below), without the prior written consent of a majority of the Board specifically expressed in a written resolution, neither it nor any of its Related Persons (as defined herein) will, and it will cause each of its Related Persons not to, directly or indirectly, alone or with others, in any manner: (i) propose or publicly announce or otherwise publicly disclose an intent to propose or enter into or agree to enter into, singly or with any other person, directly or indirectly, (x) any form of business combination or acquisition or other transaction relating to a material amount of assets or securities of the Company or any of its subsidiaries, (y) any form of restructuring, recapitalization or similar transaction with respect to the Company or any of its subsidiaries or (z) any form of tender or exchange offer for the Common Stock, whether or not such transaction involves a change of control of the Company; (ii) engage in any solicitation of proxies or written consents to vote any voting securities of the Company, or conduct any non-binding referendum with respect to any voting securities of the Company, or assist or participate in any other way, directly or indirectly, in any solicitation of proxies or written consents with respect to any voting securities of the Company, or otherwise become a "participant" in a "solicitation," as such terms are defined in Instruction 3 of Item 4 of Schedule 14A and Rule 14a-1 of Regulation 14A, respectively, under the Exchange Act, to vote any securities of the Company in opposition to any recommendation or proposal of the Board; (iii) acquire, offer or propose to acquire, or agree to acquire, directly or indirectly, whether by purchase, tender or exchange offer, through the acquisition of control of another person, by joining a partnership, limited partnership, syndicate or other group (including any group of persons that would be treated as a single "person" under Section 13(d) of the Exchange Act), through swap or hedging transactions or otherwise, any additional securities (including common and preferred equity interests and debt that is convertible into any equity interests) of the Company or any rights decoupled from the underlying securities of the Company, that would result, or could result, in the Investor Group owning, in the aggregate (amongst all of the Investors and any Affiliate or Associate thereof), in excess of 10% of the shares of Common Stock outstanding; (iv) seek to advise, encourage or influence any person with respect to the voting of (or execution of a written consent in respect of) or disposition of any securities of the Company, other than in a manner in accordance with Section 2; (v) sell, offer or agree to sell directly or indirectly, through swap or hedging transactions or otherwise, any securities (including common and preferred equity interests and debt that is convertible into any equity interests) of the Company or any rights decoupled from the underlying securities held by the Investors to any person or entity that would knowingly result in any third party, together with its Affiliates and Associates, owning, controlling or otherwise having any, beneficial, economic or other ownership interest representing in the aggregate 5% or more of the shares of Common Stock outstanding at such time; 5
(vi) sell, offer or agree to sell directly or indirectly, through swap or hedging transactions or otherwise, any securities (including common and preferred equity interests and debt that is convertible into any equity interests) of the Company or any rights decoupled from the underlying securities held by the Investors to any Affiliate or Associate of the Investors not a party to this Agreement; (vii) except as otherwise set forth in this Agreement, take any action in support of or make any proposal or request that constitutes: (A) advising, controlling, changing or influencing the Board or management of the Company, including any plans or proposals to change the number or term of directors or to fill any vacancies on the Board, (B) any material change in the capitalization, stock repurchase programs and practices or dividend policy of the Company, (C) any other material change in the Company's management, governance, policies, strategic direction, business or corporate structure, (D) seeking to have the Company waive or make amendments or modifications to the Company's Amended and Restated Certificate of Incorporation or Bylaws, or other actions that may impede or facilitate the acquisition of control of the Company by any person, (E) causing a class of securities of the Company to be delisted from, or to cease to be authorized to be quoted on, any securities exchange, or (F) causing a class of securities of the Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; (viii) call or seek to call, or request the call of, alone or in concert with others, any meeting of stockholders, whether or not such a meeting is permitted by the Company's Amended and Restated Certificate of Incorporation or Bylaws, including, but not limited to, a "town hall meeting;" (ix) seek, alone or in concert with others, representation on the Board, except as expressly permitted by this Agreement; (x) initiate, encourage or participate in any "vote no," "withhold" or similar campaign; (xi) deposit any Common Stock in any voting trust or subject any Common Stock to any arrangement or agreement with respect to the voting of any Common Stock (other than any such voting trust, arrangement or agreement solely among the members of the Investor Group that is otherwise in accordance with this Agreement); (xii) seek, or encourage any person, to submit nominations in furtherance of a "contested solicitation" for the election or removal of directors with respect to the Company or seek, encourage or take any other action with respect to the election or removal of any directors of the Company or with respect to the submission of any stockholder proposals (including any submission of stockholder proposals pursuant to Rule 14a-8 under the Exchange Act); 6
(xiii) form, join or in any other way participate in any "group" (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to the Common Stock (other than the Investor Group); (xiv) demand a copy of the Company's list of stockholders or its other books and records, whether pursuant to Section 220 of the Delaware General Corporation Law (the "DGCL") or pursuant to any other statutory right; (xv) commence, encourage, or support any derivative action in the name of the Company, or any class action against the Company or any of its officers or directors in order to, directly or indirectly, effect any of the actions expressly prohibited by this Agreement or cause the Company to amend or waive any of the provisions of this Agreement; provided, however, that for the avoidance of doubt, the foregoing shall not prevent any Investor from (A) bringing litigation to enforce the provisions of this Agreement, (B) making counterclaims with respect to any proceeding initiated by, or on behalf of, the Company against an Investor, or (C) exercising statutory dissenters, appraisal or similar rights under the DGCL; provided, further, that the foregoing shall also not prevent the Investors from responding to or complying with a validly issued legal process in connection with litigation that it did not initiate, invite, facilitate or encourage, except as otherwise permitted in this Section (3)(a) (xv); (xvi) disclose publicly or privately, in a manner that could reasonably be expected to become public any intent, purpose, plan or proposal with respect to the Board, the Company, its management, policies or affairs, any of its securities or assets or this Agreement that is inconsistent with the provisions of this Agreement; provided, however, that nothing herein shall prohibit the Investor Group from engaging in private discussions with the Company concerning the Investor Group's views or suggestions concerning the Company; (xvii) enter into any negotiations, agreements or understandings with any person or entity with respect to any of the foregoing, or advise, assist, knowingly encourage or seek to persuade any person or entity to take any action or make any statement with respect to any of the foregoing, or otherwise take or cause any action or make any statement inconsistent with any of the foregoing; (xviii) make any request or submit any proposal to amend the terms of this Agreement other than through non-public communications with the Company that would not be reasonably determined to trigger public disclosure obligations for any party; (xix) take any action challenging the validity or enforceability of any of the provisions of this Section 3 or publicly disclose, or cause or facilitate the public disclosure (including, without limitation, the filing of any document with the SEC or any other governmental agency or any disclosure to any journalist, member of the media or securities analyst) of, any intent, purpose, plan or proposal to either (A) obtain any waiver or consent under, or any amendment of, any provision of this Agreement, or (B) take any action challenging the validity or enforceability of any provisions of this Section 3; or (xx) otherwise take, or solicit, cause or encourage others to take, any action inconsistent with the foregoing. 7
(b) Notwithstanding the foregoing, the provisions of this Section 3 shall not limit in any respect the actions of any director of the Company (including, but not limited to, the New Directors) in their capacity as such, recognizing that such actions are subject to such director's fiduciary duties to the Company and its stockholders (it being understood and agreed that neither the Investors nor any of their Affiliates or Associates shall seek to do indirectly through the New Directors anything that would be prohibited if done by any of the Investors or their Affiliates and Associates directly). For the avoidance of doubt, no provision in this Section 3 or elsewhere in this Agreement shall prohibit privately-negotiated transactions in the Common Stock solely between or among the Investors. (c) As of the date of this Agreement, none of the Investors are engaged in any discussions or negotiations with any person, and do not have any agreements, arrangements, or understandings, written or oral, formal or informal, and whether or not legally enforceable with any person concerning the acquisition of economic ownership of any securities of the Company, and have no actual and non-public knowledge that any other stockholders of the Company have any present or future intention of taking any actions that if taken by the Investors would violate any of the terms of this Agreement. The Investors agree to refrain from taking any actions during the Standstill Period to intentionally encourage other stockholders of the Company, or any other persons to engage in any of the actions referred to in the previous sentence. (d) As used in this Agreement, the terms "Affiliate" and "Associate" shall have the respective meanings set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act; the terms "beneficial owner" and "beneficial ownership" shall have the same meanings as set forth in Rule 13d-3 promulgated by the SEC under the Exchange Act; the terms "economic owner" and "economically own" shall have the same meanings as "beneficial owner" and "beneficially own," except that a person will also be deemed to economically own and to be the economic owner of (i) all shares of Common Stock which such person has the right to acquire pursuant to the exercise of any rights in connection with any securities or any agreement, regardless of when such rights may be exercised and whether they are conditional, and (ii) all shares of Common Stock in which such person has any economic interest, including, without limitation, pursuant to a cash settled call option or other derivative security, contract or instrument in any way related to the price of shares of Common Stock; the terms "person" or "persons" shall mean any individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature; and the term "Related Person" shall mean, as to any person, any Affiliates or Associates of such person. (e) Notwithstanding anything contained in this Agreement to the contrary: (i) The provisions of Sections 1, 2, and 3 of this Agreement shall automatically terminate upon the occurrence of a Change of Control transaction (as defined below) involving the Company if the acquiring or counter-party to the Change of Control transaction has conditioned the closing of the transaction on the termination of such sections; provided, however, that the Company shall not directly or indirectly, propose, seek, encourage or otherwise influence such acquiring or counter-party to the Change of Control transaction to condition the closing of such transaction on the termination of Sections 1, 2, and 3 of this Agreement; and 8
(ii) For purposes of this Agreement, a "Change of Control" transaction shall be deemed to have taken place if (1) any person is or becomes a beneficial owner, directly or indirectly, of securities of the Company representing more than 50% of the equity interests and voting power of the Company's then outstanding equity securities or (2) the Company enters into a stock-for-stock transaction whereby immediately after the consummation of the transaction the Company's stockholders retain less than 50% of the equity interests and voting power of the surviving entity's then outstanding equity securities. (f) For purposes of this Agreement, "Standstill Period" shall mean the period commencing on the date of this Agreement and ending at 11:59 p.m. Eastern Time on the date of the certification of the vote of stockholders at the 2018 Annual Meeting. 4. Expenses. Each of the Company and the Investors shall be responsible for its own fees and expenses incurred in connection with the negotiation, execution, and effectuation of this Agreement and the transactions contemplated hereby, including, but not limited to attorneys' fees incurred in connection with the negotiation and execution of this Agreement and all other activities related to the foregoing. 5. Representations and Warranties of the Company. The Company represents and warrants to the Investors that (a) the Company has the corporate power and authority to execute this Agreement and to bind it thereto, (b) this Agreement has been duly and validly authorized, executed and delivered by the Company, constitutes a valid and binding obligation and agreement of the Company, and is enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles and (c) the execution, delivery and performance of this Agreement by the Company does not and will not violate or conflict with (i) any law, rule, regulation, order, judgment or decree applicable to it, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could become a default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, or any material agreement, contract, commitment, understanding or arrangement to which the Company is a party or by which it is bound. 6. Representations and Warranties of the Investors. Each Investor, on behalf of itself, severally represents and warrants to the Company that (a) as of the date hereof, such Investor beneficially owns, directly or indirectly, only the number of shares of Common Stock as described opposite its name on Exhibit B and Exhibit B includes all Affiliates and Associates of any Investors that own any securities of the Company beneficially or of record and reflects all shares of Common Stock in which the Investors have any interest or right to acquire, whether through derivative securities, voting agreements or otherwise, (b) this Agreement has been duly and validly authorized, executed and delivered by such Investor, and constitutes a valid and binding obligation and agreement of such Investor, enforceable against such Investor in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles, (c) such Investor has the authority to execute this Agreement on behalf of itself and the applicable Investor associated with that signatory's name, and to bind such Investor to the terms hereof, (d) each of the Investors shall use its commercially reasonable efforts to cause its respective Affiliates and Associates to comply with the terms of this Agreement and (e) the execution, delivery and performance of this Agreement by such Investor does not and will not violate or conflict with (i) any law, rule, regulation, order, judgment or decree applicable to it, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could become a default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which such member is a party or by which it is bound. 9
7. Mutual Non-Disparagement. (a) Each Investor agrees that, until the earlier of (i) the expiration of the Standstill Period or (ii) any material breach of this Agreement by the Company (provided that the Company shall have three (3) business days following written notice from such Investor of any material breach to remedy such material breach if capable of remedy), neither it nor any of its Affiliates or Associates will, and it will cause each of its Affiliates and Associates not to, directly or indirectly, publicly make, express, transmit, speak, write, verbalize or otherwise publicly communicate in any way (or cause, further, assist, solicit, encourage, support or participate in any of the foregoing), any remark, comment, message, information, declaration, communication or other statement of any kind, whether verbal or in writing, that might reasonably be construed to be derogatory or critical of, or negative toward, the Company or any of its directors, officers, Affiliates, Associates, subsidiaries, employees, agents or representatives (collectively, the "Company Representatives"), or that reveals, discloses, incorporates, is based upon, discusses, includes or otherwise involves any confidential or proprietary information of the Company or its subsidiaries or Affiliates or Associates, or to malign, harm, disparage, defame or damage the reputation or good name of the Company, its business or any of the Company Representatives. (b) The Company hereby agrees that, until the earlier of (i) the expiration of the Standstill Period or (ii) any material breach of this Agreement by an Investor (provided that such Investor shall have three (3) business days following written notice from the Company of any material breach to remedy such material breach if capable of remedy), neither it nor any of its Affiliates will, and it will cause each of its Affiliates not to, directly or indirectly, publicly make, express, transmit, speak, write, verbalize or otherwise publicly communicate in any way (or cause, further, assist, solicit, encourage, support or participate in any of the foregoing), any remark, comment, message, information, declaration, communication or other statement of any kind, whether verbal or in writing, that might reasonably be construed to be derogatory or critical of, or negative toward, the Investors or their Affiliates or Associates or any of their agents or representatives (collectively, the "Investor Agents"), or that reveals, discloses, incorporates, is based upon, discusses, includes or otherwise involves any confidential or proprietary information of any Investor or its Affiliates or Associates, or to malign, harm, disparage, defame or damage the reputation or good name of any Investor, its business or any of the Investor Agents. (c) Notwithstanding the foregoing, nothing in this Section 7 or elsewhere in this Agreement shall prohibit any party from making any statement or disclosure required under the federal securities laws or other applicable laws. (d) The limitations set forth in Section 7(a) and 7(b) shall not prevent any party from responding to any public statement made by the other party of the nature described in Section 7(a) and 7(b) if such statement by the other party was made in breach of this Agreement. 10
8. Public Announcements. Promptly following the execution of this Agreement, the Company and the Investor Group shall issue a mutually agreeable press release (the "Mutual Press Release"), announcing certain terms of this Agreement, substantially in the form attached hereto as Exhibit C. Prior to the issuance of the Mutual Press Release, neither the Company nor any of the Investors shall issue any press release or make any public announcement regarding this Agreement or take any action that would require public disclosure thereof without the prior written consent of the other party. During the Standstill Period, neither the Company nor the Investor Group or any of its Affiliates or Associates shall make any public announcement or statement that is inconsistent with or contrary to the statements made in the Mutual Press Release, except as required by law or the rules of any stock exchange (and, in any event, each party will provide the other party, prior to making any such public announcement or statement, a reasonable opportunity to review and comment on such disclosure, to the extent reasonably practicable under the circumstances, and each party will consider any comments from the other in good faith) or with the prior written consent of the other party, and otherwise in accordance with this Agreement. 9. SEC Filings. (a) No later than two (2) business days following the execution of this Agreement, the Company shall file a Current Report on Form 8-K with the SEC reporting the entry into this Agreement and appending or incorporating by reference this Agreement as an exhibit thereto. The Company shall provide the Investor Group and its counsel a reasonable opportunity to review and comment on the Form 8-K prior to such filing, which comments shall be considered in good faith. (b) No later than two (2) business days following the execution of this Agreement, the Investor Group shall file an amendment to its Schedule 13D with respect to the Company that has been filed with the SEC, reporting the entry into this Agreement, amending applicable items to conform to their obligations hereunder and appending or incorporating by reference this Agreement as an exhibit thereto. The Investor Group shall provide the Company and its counsel a reasonable opportunity to review and comment on the Schedule 13D prior to such filing, which comments shall be considered in good faith. 10. Specific Performance. Each of the Investors, on the one hand, and the Company, on the other hand, acknowledges and agrees that irreparable injury to the other party hereto may occur in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached and that such injury would not be adequately compensable in monetary damages. It is accordingly agreed that the Investors or any Investor, on the one hand, and the Company, on the other hand (the "Moving Party"), shall each be entitled to seek specific enforcement of, and injunctive or other equitable relief to prevent any violation of, the terms hereof, and the other party hereto will not take action, directly or indirectly, in opposition to the Moving Party seeking such relief on the grounds that any other remedy or relief is available at law or in equity. 11
11. Notice. Any notices, consents, determinations, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); (iii) upon confirmation of receipt, when sent by email (provided such confirmation is not automatically generated) or (iv) one (1) business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be: If to the Company: The Meet Group, Inc. 100 Union Square Drive New Hope, PA 18938 Fax No.: (215) 862.7825 Email: fred@themeetgroup.com Attention: Frederic A. Beckley, Esq., General Counsel and Executive Vice President, Business Affairs With copies (which shall not constitute notice) to: Morgan, Lewis & Bockius LLP 1111 Pennsylvania Avenue, N.W. Washington, DC 20004 Fax No.: (202) 739-3001 Email: keith.gottfried@morganlewis.com Attention: Keith E. Gottfried, Esq. If to any Investor: Harvest Capital Strategies LLC 600 Montgomery Street, Suite 1700 San Francisco, CA 94111 Fax No.: (415) 869-4433 Email: investments@harvestcaps.com Attention: Jeffrey B. Osher, Managing Director With copies (which shall not constitute notice) to: Olshan Frome Wolosky LLP 1325 Avenue of the Americas New York, NY 10019 Fax No.: (212) 451-2222 E-mail: swolosky@olshanlaw.com afreedman@olshanlaw.com Attention: Steve Wolosky, Esq. Andrew Freedman, Esq. 12
12. Governing Law. This Agreement shall be governed in all respects, including validity, interpretation, and effect, by, and construed in accordance with, the laws of the State of Delaware executed and to be performed wholly within the State of Delaware, without giving effect to the choice of law or conflict of law principles thereof or of any other jurisdiction to the extent that such principles would require or permit the application of the laws of another jurisdiction. 13. Jurisdiction. Each of the parties hereto (a) consents to submit itself to the personal jurisdiction of federal or state courts of the State of Delaware in the event any dispute arises out of this Agreement or the transactions contemplated by this Agreement, (b) agrees that it shall not bring any action relating to this Agreement or the transactions contemplated by this Agreement in any court other than the federal or state courts of the State of Delaware, and each of the parties irrevocably waives the right to trial by jury, (c) agrees to waive any bonding requirement under any applicable law, in the case any other party seeks to enforce the terms by way of equitable relief, and (d) irrevocably consents to service of process by first class certified mail, return receipt requested, postage prepaid, to the address of such party's principal place of business or as otherwise provided by applicable law. Each of the parties hereto irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action, suit or other legal proceeding with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment before judgment, attachment in aid of execution of judgment, execution of judgment or otherwise), and (c) to the fullest extent permitted by applicable law, that (i) such action, suit or other legal proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such action, suit or other legal proceeding is improper or (iii) this agreement, or the subject matter hereof, may not be enforced in or by such court. 14. Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 14. 15. Representative. Each Investor hereby irrevocably appoints Jeffrey B. Osher as its attorney-in-fact and representative (the "Investor Group Representative"), in such Investor's place and stead, to do any and all things and to execute any and all documents and give and receive any and all notices or instructions in connection with this Agreement and the transactions contemplated hereby. The Company shall be entitled to rely, as being binding on each Investor, upon any action taken by the Investor Group Representative or upon any document, notice, instruction or other writing given or executed by the Investor Group Representative. 13
16. Entire Agreement. This Agreement constitutes the full and entire understanding and agreement among the parties with regard to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings and representations, whether oral or written, of the parties with respect to the subject matter hereof. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings, oral or written, between the parties other than those expressly set forth herein. 17. Headings. The section headings contained in this Agreement are for reference purposes only and shall not effect in any way the meaning or interpretation of this Agreement. 18. Waiver. No failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy. 19. Remedies. All remedies hereunder are cumulative and are not exclusive of any other remedies provided by law or equity. 20. Receipt of Adequate Information; No Reliance; Representation by Counsel. Each party acknowledges that it has received adequate information to enter into this Agreement, that it has had adequate opportunity to make whatever investigation or inquiry it may deem necessary or desirable in connection with the subject matter of this Agreement prior to the execution hereof, and that it has not relied on any promise, representation or warranty, express or implied not contained in this Agreement. Each of the parties hereto acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said independent counsel. Each party cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted or prepared it is of no application and is hereby expressly waived by each of the parties hereto, and any controversy over interpretations of this Agreement shall be decided without regards to events of drafting or preparation. Further, any rule of law or any legal decision that would provide any party with a defense to the enforcement of the terms of this Agreement against such party shall have no application and is expressly waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the intent of the parties. 21. Construction. When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement, unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include," "includes" and "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." The words "hereof, "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word "will" shall be construed to have the same meaning as the word "shall." The words "dates hereof" will refer to the date of this Agreement. The word "or" is not exclusive. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. Any agreement, instrument, law, rule or statute defined or referred to herein means, unless otherwise indicated, such agreement, instrument, law, rule or statute as from time to time amended, modified or supplemented. 14
22. Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree shall remain in full force and effect to the extent not held invalid or unenforceable. The parties further agree to replace such invalid or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the purposes of such invalid or unenforceable provision. 23. Amendment. This Agreement may be modified, amended or otherwise changed only in a writing signed by all of the parties hereto, or in the case of the Investors, the Investor Group Representative, or their respective successors or assigns. 24. Successors and Assigns. The terms and conditions of this Agreement shall be binding upon and be enforceable by the parties hereto and the respective successors, heirs, executors, legal representatives and permitted assigns of the parties, and inure to the benefit of any successor, heir, executor, legal representative or permitted assign of any of the parties; provided, however, that no party may assign this Agreement or any rights or obligations hereunder without, with respect to any Investor, the express prior written consent of the Company (with such consent specifically authorized in a written resolution adopted and approved by the unanimous vote of the entire membership of the Board), and with respect to the Company, the prior written consent of the Investor Group Representative. 25. No Third-Party Beneficiaries. The representations, warranties and agreements of the parties contained herein are intended solely for the benefit of the party to whom such representations, warranties or agreements are made, and shall confer no rights, benefits, remedies, obligations, or liabilities hereunder, whether legal or equitable, in any other person or entity, and no other person or entity shall be entitled to rely thereon. 26. Counterparts; Facsimile / PDF Signatures. This Agreement and any amendments hereto may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other parties hereto. In the event that any signature to this Agreement or any amendment hereto is delivered by facsimile transmission or by e-mail delivery of a portable document format (.pdf or similar format) data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page were an original thereof. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] [SIGNATURE PAGE FOLLOWS] 15
[SIGNATURE PAGE TO COOPERATION AGREEMENT] IN WITNESS WHEREOF the parties have duly executed and delivered this Agreement as of the date first above written. THE MEET GROUP, INC. By: /s/ Frederic Beckley Name: Frederic Beckley Title: General Counsel & EVP Business Affairs HARVEST SMALL CAP PARTNERS MASTER, LTD. By: Harvest Capital Strategies LLC Investment Manager By: /s/ Jeffrey B. Osher Name: Jeffrey B. Osher Title: Managing Director HARVEST SMALL CAP PARTNERS, L.P. By: Harvest Capital Strategies LLC Investment Manager By: /s/ Jeffrey B. Osher Name: Jeffrey B. Osher Title: Managing Director HARVEST SMALL CAP PARTNERS GP, LLC By: Harvest Capital Strategies LLC Investment Manager of the Limited Partner By: /s/ Jeffrey B. Osher Name: Jeffrey B. Osher Title: Managing Director HARVEST CAPITAL STRATEGIES LLC By: /s/ Jeffrey B. Osher Name: Jeffrey B. Osher Title: Managing Director /s/ Jeffrey B. Osher JEFFREY B. OSHER 16
CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. SUCH OMITTED PORTIONS, WHICH ARE MARKED WITH BRACKETS [ ] AND AN ASTERISK*, HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. EXHIBIT A DIRECTOR CANDIDATE POOL [***] 17
EXHIBIT B STOCKHOLDERS, AFFILIATES, AND OWNERSHIP
Investor Shares of Common Stock Beneficially Owned Harvest Small Cap Partners Master, Ltd. 2,763,182
Harvest Small Cap Partners, L.P. 1,661,818
Aggregate total beneficially owned by the Investor Group: 4,425,000
18
EXHIBIT C FORM OF PRESS RELEASE THE MEET GROUP REACHES AGREEMENT WITH HARVEST CAPITAL Agrees to Appoint Two New Independent Directors to The Meet Group's Board NEW HOPE, PA, June 27, 2017 - The Meet Group, Inc. (NASDAQ: MEET), a public market leader in the mobile meeting space, today announced that it has entered into a cooperation agreement with Harvest Capital Strategies LLC and its affiliates, which, in the aggregate, beneficially owns approximately 6.3% of The Meet Group's outstanding shares, regarding the composition of The Meet Group's Board of Directors. Under the terms of the agreement, The Meet Group has agreed to appoint to its Board two new independent directors: Jim Parmelee, who has agreed to join the Meet Group Board effective immediately, and a second director mutually acceptable to The Meet Group and Harvest Capital to be identified within the next ninety days. Spencer G. Rhodes, The Meet Group's Chairman of the Board, stated, "We are pleased to have reached this cooperation agreement with Harvest Capital, as we believe this outcome serves the best interests of The Meet Group and its stockholders. We are also pleased to welcome Jim Parmelee to our Board and look forward to the insights and experience he will bring." Jeffrey B. Osher, the Managing Director of Harvest Capital, stated, "We have spent considerable time with The Meet Group's senior management team and strongly support their strategy of creating a compelling portfolio of mobile meeting apps. Under Geoff Cook's leadership, The Meet Group has methodically grown its global platform while delivering consistent profitability and cash flow. We look forward to continuing our collaboration with The Meet Group's Board and senior management team as they execute on their long-term growth initiatives and focus on shareholder value creation." Pursuant to the cooperation agreement, Harvest Capital has agreed that, until the certification of the shareholder vote at The Meet Group's 2018 Annual Meeting of Stockholders, it will abide by certain customary standstill provisions. The cooperation agreement between The Meet Group and Harvest Capital will be included as an exhibit to a Current Report on Form 8-K that The Meet Group will file with the Securities and Exchange Commission. Morgan, Lewis & Bockius LLP served as legal counsel to The Meet Group. Olshan Frome Wolosky LLP served as legal advisor to Harvest Capital. The Meet Group also announced today that it has appointed The Blueshirt Group to lead its investor relations communications and strategy. The Blueshirt Group is a leading tech-focused investor relations firm that specializes in investor relations, IPO advisory, financial communications, financial media relations and crisis management. About Jim Parmelee Mr. Parmelee brings over 25 years of technology industry experience. He is currently an advisor to Hamilton Robinson Capital Partners, a middle market focused private equity firm. Jim was previously a Managing Director in Peak Ten Management LLC, where he was responsible for the firm's investments in the software, Internet and technology infrastructure verticals. Before Peak Ten, Jim was a Partner in Union Square Advisors, an M&A advisory firm focused on the technology sector, where he led the firm's global Information Technology infrastructure practice. Jim was previously a leading data networking and telecom equipment equity research analyst at Credit Suisse First Boston (now Credit Suisse). Jim was highly ranked by external polls throughout his research career including being named six times to Institutional Investor Magazine's All America Research Team. 19
About The Meet Group The Meet Group (NASDAQ: MEET) is a fast-growing portfolio of mobile apps designed to meet the universal need for human connection. Using innovative products and sophisticated data science, The Meet Group keeps its approximately 2.8 million mobile daily active users engaged and originates untold numbers of casual chats, friendships, dates, and marriages. The Meet Group offers advertisers the opportunity to reach customers on a global scale with hundreds of millions of daily mobile ad impressions. The Meet Group utilizes high user density, economies of scale, and leading monetization strategies with the goal of maximizing adjusted EBITDA. Our apps - currently MeetMe , Skout , Tagged , and Hi5 - let users in more than 100 countries chat, share photos, stream live video, and discuss topics of interest, and are available on iPhone, iPad, and Android in multiple languages. For more information, please visit themeetgroup.com. MEET Investor Contact: The Blueshirt Group Allise Furlani allise@blueshirtgroup.com 20
® ® ® ® | Highlight the parts (if any) of this contract related to "Renewal Term" that should be reviewed by a lawyer. Details: What is the renewal term after the initial term expires? This includes automatic extensions and unilateral extensions with prior notice. | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Non-Transferable License" that should be reviewed by a lawyer. Details: Does the contract limit the ability of a party to transfer the license being granted to a third party?
Context: By Client: /s/ Natalija Tunevic
Website Design, Development and Hosting Agreement
This Website Design, Development and Hosting Agreement the ("Agreement") is entered into on January 11, 2018 by and between Natalija Tunevic, director of FreeCook (hereinafter referred to as "Client") and Mitchell Vitalis, director of Mitchell's Web Advance, PLC (hereinafter referred to as "Company").
1. Website Design and Development. Client agrees to pay to Company the sum of $5,000 (the "Contract Price") to design and develop a website for Client (the "Client Website") in accordance with the accompanying Scope of Work, attached to this Agreement as Exhibit A.
(a) Change Orders. Any changes to the Scope of Work following the execution of this Agreement requiring Additional Work must be submitted to and accepted by Company in writing as a "Change Order". The costs of any such changes shall be added to the Contract Price. Additional Work shall be defined as the addition or revision of pages, graphics, or other features, any text, graphic or page design or programming requiring more than two rounds of textual or graphical revisions, substantial revisions to text and/or content provided by Client, changes to elements which have been finalized, or significant changes in the Scope of Work.
(b) Due Dates and Delays. Company will use its best efforts to deliver the Client Website in the time frame specified in the Scope of Work. Terms of the project: 12 weeks from February 8, 2018 to May 3, 2018. Client acknowledges and agrees that any due dates set forth in the Scope of Work are subject to delay if Company does not receive the required materials or documentation in a timely manner or in the required format or if approvals are delayed by Client or if the Scope of Work is changed by Client.
(c) Client Submitted Content. All written content submitted by Client for use in the Client Website must be typewritten, proofread and delivered to Company in the body of an email message or as a Microsoft Word electronic document or plaint text electronic document. Any content submitted by Client in any other manner or format, including, but not limited to Adobe PDF format, will be returned to Client for resubmission. Company will not make any attempt to proof read or correct any contextual, grammatical or typographical errors in the written content submitted by Client. It is Client's sole responsibility to check the accuracy of the written content and correct any errors prior to submission for final publication. Company will assume that all the written content submitted by Client has been proofread and is ready for publication. Client may elect to pay Company the Hourly Rate set forth below to type and proofread any written content not submitted in the electronic formats specified above.
(d) Company License and Credit. Client hereby grants to Company a non-exclusive and limited license to use Client's trade names, logos and other trademarks in connection with Company advertising, marketing and promotion of its products and services. Client agrees that any unsolicited positive feedback Client provides to Company may be used in any Company marketing and/or advertising materials (i.e., customer testimonials). Client further agrees that Company may use and display the graphics and other web design elements of Client's website as examples of Company website design and development work. To maintain Company's portfolio credentials, and the integrity of any applicable copyrights, Company shall be entitled to place an unobtrusive credit in the footer on each page of Client's website. 2. Payment Terms. Upon the signing of this Agreement, Client agrees to pay to Company a total of $5,000. Client shall make a prepayment of $1,900 and pay the remaining $3,100 on completion of the Scope of Work.
3. Business Hours; Rush Work. Company representatives are available during Company's normal business hours which are 9 a.m. to 5 p.m. UTC +2, Monday through Friday. Any email or telephone correspondence received after normal business hours will be processed the following business day. Client shall pay an additional surcharge for any services requiring work to be performed outside of normal business hours by reason of a rush deadline requested by Client or as a result of Client's failure to meet scheduled times for delivery and/or review and approval of information, content and materials. The surcharge for rush work shall be the standard hourly rate of $40 plus twenty-five percent (25%).
4. Customer Service. Company, either directly or through its authorized service provider, shall provide customer service (the "Customer Service") relating to Client Website consisting of replying to customer questions or complaints regarding website hosting services during the normal business hours set forth. Company is not obligated to provide any Customer Service except as specified in this Section. Company at its sole discretion may at any time alter or cease providing the Customer Service which it has agreed to provide to Client relating to Client Website pursuant to this Agreement without any liability to Company.
AGREED AND ACCEPTED:
Date: Jan. 11, 2018
Source: FREECOOK, S-1, 6/5/2018
By Company: /s/ Mitchell Vitalis Date: Jan. 11, 2018
Mitchell's Web Advance - Website Design, Development and Hosting Agreement Page 1 of 2 Client: /s/ Natalija Tunevic Company: /s/ Mitchell Vitalis
Source: FREECOOK, S-1, 6/5/2018
Mitchell's Web Advance Website Design, Development and Hosting Agreement
Exhibit A
Scope of Work Development of design of Free Cook
Stage 1: 1. Search for competitors, collecting additional information on the subject. 2. Development of unique style of the Client Website. 3. Development of a logo based on the unique corporate style. 4. Designing UI/UX-practical parts. 5. Development of the main and internal pages of the Client Website.
Stage 2: 6. Emotional design (creation of web-assistants). 7. Adaptive design (mobile version of the Client Website). 8. Design adaptation to other languages. 9. Development of a prototype and interface testing.
Stage 3: 10. Search Engine Optimization.
Mitchell's Web Advance - Website Design, Development and Hosting Agreement Page 2 of 2 Client: /s/ Natalija Tunevic Company: /s/ Mitchell Vitalis
Source: FREECOOK, S-1, 6/5/2018 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | By Client: /s/ Natalija Tunevic
Website Design, Development and Hosting Agreement
This Website Design, Development and Hosting Agreement the ("Agreement") is entered into on January 11, 2018 by and between Natalija Tunevic, director of FreeCook (hereinafter referred to as "Client") and Mitchell Vitalis, director of Mitchell's Web Advance, PLC (hereinafter referred to as "Company").
1. Website Design and Development. Client agrees to pay to Company the sum of $5,000 (the "Contract Price") to design and develop a website for Client (the "Client Website") in accordance with the accompanying Scope of Work, attached to this Agreement as Exhibit A.
(a) Change Orders. Any changes to the Scope of Work following the execution of this Agreement requiring Additional Work must be submitted to and accepted by Company in writing as a "Change Order". The costs of any such changes shall be added to the Contract Price. Additional Work shall be defined as the addition or revision of pages, graphics, or other features, any text, graphic or page design or programming requiring more than two rounds of textual or graphical revisions, substantial revisions to text and/or content provided by Client, changes to elements which have been finalized, or significant changes in the Scope of Work.
(b) Due Dates and Delays. Company will use its best efforts to deliver the Client Website in the time frame specified in the Scope of Work. Terms of the project: 12 weeks from February 8, 2018 to May 3, 2018. Client acknowledges and agrees that any due dates set forth in the Scope of Work are subject to delay if Company does not receive the required materials or documentation in a timely manner or in the required format or if approvals are delayed by Client or if the Scope of Work is changed by Client.
(c) Client Submitted Content. All written content submitted by Client for use in the Client Website must be typewritten, proofread and delivered to Company in the body of an email message or as a Microsoft Word electronic document or plaint text electronic document. Any content submitted by Client in any other manner or format, including, but not limited to Adobe PDF format, will be returned to Client for resubmission. Company will not make any attempt to proof read or correct any contextual, grammatical or typographical errors in the written content submitted by Client. It is Client's sole responsibility to check the accuracy of the written content and correct any errors prior to submission for final publication. Company will assume that all the written content submitted by Client has been proofread and is ready for publication. Client may elect to pay Company the Hourly Rate set forth below to type and proofread any written content not submitted in the electronic formats specified above.
(d) Company License and Credit. Client hereby grants to Company a non-exclusive and limited license to use Client's trade names, logos and other trademarks in connection with Company advertising, marketing and promotion of its products and services. Client agrees that any unsolicited positive feedback Client provides to Company may be used in any Company marketing and/or advertising materials (i.e., customer testimonials). Client further agrees that Company may use and display the graphics and other web design elements of Client's website as examples of Company website design and development work. To maintain Company's portfolio credentials, and the integrity of any applicable copyrights, Company shall be entitled to place an unobtrusive credit in the footer on each page of Client's website. 2. Payment Terms. Upon the signing of this Agreement, Client agrees to pay to Company a total of $5,000. Client shall make a prepayment of $1,900 and pay the remaining $3,100 on completion of the Scope of Work.
3. Business Hours; Rush Work. Company representatives are available during Company's normal business hours which are 9 a.m. to 5 p.m. UTC +2, Monday through Friday. Any email or telephone correspondence received after normal business hours will be processed the following business day. Client shall pay an additional surcharge for any services requiring work to be performed outside of normal business hours by reason of a rush deadline requested by Client or as a result of Client's failure to meet scheduled times for delivery and/or review and approval of information, content and materials. The surcharge for rush work shall be the standard hourly rate of $40 plus twenty-five percent (25%).
4. Customer Service. Company, either directly or through its authorized service provider, shall provide customer service (the "Customer Service") relating to Client Website consisting of replying to customer questions or complaints regarding website hosting services during the normal business hours set forth. Company is not obligated to provide any Customer Service except as specified in this Section. Company at its sole discretion may at any time alter or cease providing the Customer Service which it has agreed to provide to Client relating to Client Website pursuant to this Agreement without any liability to Company.
AGREED AND ACCEPTED:
Date: Jan. 11, 2018
Source: FREECOOK, S-1, 6/5/2018
By Company: /s/ Mitchell Vitalis Date: Jan. 11, 2018
Mitchell's Web Advance - Website Design, Development and Hosting Agreement Page 1 of 2 Client: /s/ Natalija Tunevic Company: /s/ Mitchell Vitalis
Source: FREECOOK, S-1, 6/5/2018
Mitchell's Web Advance Website Design, Development and Hosting Agreement
Exhibit A
Scope of Work Development of design of Free Cook
Stage 1: 1. Search for competitors, collecting additional information on the subject. 2. Development of unique style of the Client Website. 3. Development of a logo based on the unique corporate style. 4. Designing UI/UX-practical parts. 5. Development of the main and internal pages of the Client Website.
Stage 2: 6. Emotional design (creation of web-assistants). 7. Adaptive design (mobile version of the Client Website). 8. Design adaptation to other languages. 9. Development of a prototype and interface testing.
Stage 3: 10. Search Engine Optimization.
Mitchell's Web Advance - Website Design, Development and Hosting Agreement Page 2 of 2 Client: /s/ Natalija Tunevic Company: /s/ Mitchell Vitalis
Source: FREECOOK, S-1, 6/5/2018 | Highlight the parts (if any) of this contract related to "Non-Transferable License" that should be reviewed by a lawyer. Details: Does the contract limit the ability of a party to transfer the license being granted to a third party? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Covenant Not To Sue" that should be reviewed by a lawyer. Details: Is a party restricted from contesting the validity of the counterparty’s ownership of intellectual property or otherwise bringing a claim against the counterparty for matters unrelated to the contract?
Context: Exhibit 10.09
***** CONFIDENTIAL TREATMENT REQUESTED
Agreement Number 12965
WIRELESS CONTENT LICENSE AGREEMENT
This License Agreement (this "Agreement") is entered into effective as of December 16, 2004, (the "Effective Date") by and between TWENTIETH CENTURY FOX LICENSING & MERCHANDISING, a division of Fox Entertainment Group, Inc. ("Fox"), as Administrator for Twentieth Century Fox Film Corporation ("Trademark Licensor"), and Sorrent, Inc. ("Licensee"). Fox and Licensee are collectively referred to as the "parties" and each individually as a "party."
RECITALS:
WHEREAS, Trademark Licensor owns the rights to develop, manufacture, publish, and distribute entertainment applications based on the story, plot, theme, distinctive creative elements and name/logo (collectively, the "PSM") appearing in the theatrical motion pictures set forth on Exhibit A attached hereto (individually, the "Property" and collectively, the "Properties," and further designated as "Major Release(s)" and "Targeted Release(s)"); and
WHEREAS, Fox is the administrator of such rights for Trademark Licensor; and
WHEREAS, Licensee is engaged in the business of, among other things, developing and producing interactive entertainment applications for wireless communication devices, such as mobile telephones; and
WHEREAS, Licensee desires to obtain a license from Fox to develop a variety of wireless products utilizing elements of the PSM and to be operated on mobile/cellular telephones; and further to publish, license, promote, distribute and sell such wireless products to end users through communications service provider(s) and portals providing wireless products ("CSP(s)") on the terms and conditions set forth herein; and
WHEREAS, Fox and Vodafone Group Services Limited ("VGSL") have entered into a wireless content distribution agreement ("VGSL Agreement") whereby Fox is to be the content provider for VGSL wireless products relating to various Properties, and Fox desires a license to distribute Wireless Products to VGSL pursuant to the VGSL Agreement.
AGREEMENT
NOW, THEREFORE, the parties do hereby agree as follows:
1. GRANT OF RIGHTS:
(a) Wireless Products and Wireless Platform: Fox grants to Licensee a limited, exclusive (except as otherwise may be provided in this Agreement), non-transferable (except as permitted in Paragraph 17(d)) right and license to use, make, have made (as set forth in Paragraph 1(a)(i) below), reproduce, modify, and create derivative works of
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-1-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
the PSM in each Property, solely for the purpose of developing the wireless applications specifically set forth for each of the Properties on Exhibits B through M attached hereto ("Wireless Products"), some of which Wireless Products are defined in the Glossary attached hereto as Exhibit N. To the extent not specified in this Agreement the parties will agree upon the specific Wireless Products to be developed for each Property in accordance with the procedure set forth in Paragraph 2. Notwithstanding the foregoing, Licensee acknowledges that it shall be obligated to develop all Wireless Products set forth on Exhibits B, C, D, and G, and any other Wireless Products for other Properties that the parties mutually agree in writing will be added to the VGSL Agreement for distribution by VGSL (the "VGSL Products"). The Wireless Products shall utilize elements of the PSM and shall be operated on mobile or cellular telephones. Furthermore, Fox grants to Licensee a limited, exclusive (except as may otherwise be provided in this Agreement), non-transferable (except as permitted in Paragraph 17(d)) right and license to make, have made, reproduce, modify, create derivative works of, advertise, promote, distribute, sell and license the Wireless Products, including any PSM included therein, solely (i) for use on mobile or cellular telephones (the "Wireless Platform"); (ii) in the Territory (as defined in Paragraph 3), (iii) during the Term (as defined in Paragraph 4), (iv) for distribution by Licensee through the Distribution Channels (as defined in Paragraph 2(c)) granted herein; and (v) by means of periodic subscription fee, a per-download basis, or through a retail purchase. Nothing contained herein shall be construed as granting Licensee the right to develop and/or distribute video clips and/or trailers for the Properties, except where Fox expressly agrees to development and/or distribution of such video clips and/or trailers.
(i) Sublicense: Licensee shall be permitted to sublicense the rights and licenses granted herein to third party contractors of Licensee, solely for purposes of development and distribution of the Wireless Products on behalf of Licensee in accordance with this Agreement; provided that such third party contractors have entered into binding written agreements with Licensee that are no less protective of Fox's intellectual property rights than are the terms and conditions of this Agreement, and provided further that Licensee will not subcontract development of any video games hereunder without Fox's prior written approval of the third party game development contractor. Notwithstanding the foregoing, Licensee shall remain the primary contact under this Agreement and shall remain liable for all obligations performed by a sublicensee.
(ii) Substitution of Properties and Addition of Properties: Fox reserves the right to remove any Property listed on Exhibit A in the event that Fox determines not to theatrically release such Property or is found to be legally prohibited from engaging in the development and sale of Wireless Products in connection with such Property, and shall replace the removed Property with a like Property, which designation shall be subject to the mutual agreement of Fox and Licensee. Any further additions to Exhibit A shall also be subject to the mutual agreement of Fox and Licensee, provided however Fox shall reasonably determine if the Property constitutes a Major Release or a Targeted Release consistent with its past practices. In no event will the number of Major Releases and Targeted Releases included as Properties licensed to Licensee under this Agreement be less than four (4) and eight (8) respectively.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-2-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
(iii) Addition of Wireless Products: The parties may amend this Agreement to include additional Wireless Products for the Properties set forth on Exhibit A, subject to their mutual agreement in writing, provided that if they are unable to agree upon such additions within five (5) business days of a request from Fox, Fox will have the right to develop or have developed the requested Wireless Products for the relevant Property notwithstanding the exclusivity granted to Licensee in this Agreement.
(b) Bundling: Neither party will solicit or enter into any agreement with any third party regarding the bundling of the Wireless Products with any other property (including a Fox property) or with any other products and services including preloading, OEM and soft bundling, except as mutually agreed between the parties. The parties will mutually agree upon the terms of each bundling transaction, the nature of the bundle, the timing, and any new or different royalties for such bundling on a case-by-case basis.
(c) Third-Party Promotions: Neither party may solicit or enter into any agreement with any third party regarding third-party promotional opportunities with respect to the Wireless Products without the other party's prior written consent; provided that the foregoing will not limit Licensee's rights to market and promote the Wireless Products directly and through (i) CSPs, subject to any Fox approval rights set forth elsewhere in this Agreement, or (ii) Fox's right to engage in third party promotions for the Properties involving wireless content otherwise sourced or created.
(d) Excluded Products: For the avoidance of any doubt, the rights granted in Paragraph 1(a) and (b) shall be specifically limited to the Wireless Products for the Wireless Platform and shall not extend to any other device, platform, operating system or distribution method, whether wired or wireless, pursuant to which interactive entertainment software may be delivered to or accessed by end-users, including, but not limited to, the following: (i) traditional entertainment software console platforms, such as Sony PlayStation and PlayStation 2, Microsoft Xbox, and Nintendo GameCube and successor platforms; (ii) desktop or laptop computer systems, such as PC Windows, Macintosh, (iii) hand-held electronic dedicated gaming devices (e.g., Nintendo's GameBoy Color and GameBoy Advance handheld devices, Sony's PSX handheld device, and Tiger Electronic hand- held devices); (iv) pay-per-play arcade systems and other forms of location-based entertainment; (v) interactive toys; (vi) television, whether via cable, satellite, set-top boxes or other on-demand service; (vii) massively multiplayer games; (viii) internet gaming and (ix) any other technology now known or hereafter devised. Except as otherwise specifically stated herein with respect to the Wireless Products, Licensee shall have no right to develop, manufacture, reproduce, distribute, sell or exploit any other products based on the PSM or the Property.
(e) Fox's Reservation of Rights: Fox expressly reserves and retains any and all rights that are expressly excluded from or not specifically granted to Licensee pursuant to this Agreement, including but not limited to the following:
(i) Development/Exploitation/Distribution: the right to develop, publish, and/or distribute (or grant a third party the right to develop, publish, and/or distribute) other wireless products or wireless content of any nature which may be derived from the Properties (and further, to exploit same) which are similar or in direct
Wireless Content License Agreement Multiple Properties /Sorrent, Inc. / Final PLZ
-3-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
competition with the Wireless Products at any time in Japan including during the Term and within Japan, provided that Fox will not grant to any other party any such rights to develop, publish, and/or distribute Wireless Products for the Wireless Platform to end users outside of Japan (with the exception of those distribution rights for Wireless Products granted to VGSL under the VGSL Agreement in accordance with Paragraph 1(f) of this Agreement), or provide to any Licensee Competitor (as defined in Exhibit Q) any Licensee Materials or otherwise grant any rights to any Licensee Competitor to develop, publish, and/or distribute Wireless Products, or other wireless products or content based on the Properties. Fox has not granted and will not grant any exclusive distribution rights with respect to the Wireless Products to VGSL or any other party; and
(ii) Use of Fox's Logo or Other Intellectual Property Rights: the right to use the Fox logo or trademark, or any other trademark(s), logo(s) or copyrights owned by Fox other than those specifically set forth herein in the manner set forth; and
(iii) Video Clips and Trailers: except as may otherwise be provided in this Agreement, the right to develop and/or distribute (or grant a third party the right to develop and distribute) video clips and/or trailers for the Properties. At any time during the Term, Fox may distribute directly (or grant a third party the right to distribute) video clips and/or trailers to CSPs in connection with the Properties; and
(iv) SMS/Text Messaging: the right to develop, market and distribute (or grant a third party the right to develop, market and distribute) SMS or text messaging in connection with the Properties; and
(v) Promotional Content: the right to develop and/or distribute (or grant a third party the right to develop and/or distribute) free promotional and/or give-away content in connection with the Properties, provided that Fox will use all reasonable efforts to make mention of the Wireless Products developed by Licensee, or cause the third party to do the same, in the context of the promotion and/or give-away.
(f) Licensee's Grant of Rights. Subject to Fox's compliance with the terms and conditions of this Agreement, including its payment obligations in accordance with Section 7, Licensee hereby grants to Fox a limited, non-exclusive, non-transferable (except as permitted in Section 17(d)), right to distribute Licensee Materials (as defined in Paragraph 11 (c)) to VGSL and T-Mobile, solely as incorporated into Wireless Products, and to authorize VGSL and T-Mobile to distribute such Wireless Products to end users outside of the United States. Fox's rights in the Licensee Materials will be limited to those expressly granted in this Paragraph 1(f). Licensee reserves all rights and licenses in and to the Licensee Materials not expressly granted to Fox in this Section 1(f). Any other marketing, distribution, or sale of the Wireless Products and/or Licensee Materials by Fox will be subject to Licensee's prior written consent, in Licensee's reasonable discretion.
2. DEVELOPMENT AND DISTRIBUTION OF THE WIRELESS PRODUCTS:
(a) Development: Subject to Fox's delivery of the PSM Materials (as defined in Paragraph 2(a)(i) below), Licensee shall be obligated to create, develop, and publish the Wireless Products, pursuant to the terms and conditions of this Agreement. Subject to
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-4-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
Fox's approval rights, Licensee shall assume full responsibility for the creation, development and production of the Wireless Products, which shall include, without limitation, (A) designing the creative and technical specifications for the Wireless Products, (B) creating all computer code for the Wireless Products, (C) creating all visual assets for the Wireless Products, (D) acquiring and/or licensing any and all other technology, software and hardware needed for purposes of creating and distributing the Wireless Products, (E) ensuring compatibility of technology with the CSPs to which Licensee grants distribution rights, which shall include without limitation VGSL and T-Mobile, (the "Licensed CSPs"), and (F) conducting quality assurance testing of the Wireless Products. For the avoidance of doubt, Licensee acknowledges and agrees that Fox will have no development obligations whatsoever with respect to the Wireless Products, and further that Fox's sole role with respect to such development will be limited to delivering the PSM Materials, supervising Licensee's obligations with respect to same, granting or denying approvals as set forth hereunder, providing photos, style guides and other materials to Licensee where necessary, and collaborating with Licensee on the creative direction with respect to the Wireless Products.
(i) Delivery of PSM Materials. For each of the Properties identified in or added by mutual agreement to Exhibit A, Fox will provide to Licensee no later than ***** prior to the release of any games to be developed in connection with each Property and no later than ***** prior to the release of any other wireless applications to be developed in connection with each Property, some or all of the following items, to the extent available, on a Property-by-Property basis and only in electronic format where available: style guides, one-sheets (art used for movie poster), digital images, audio clips, storyboards, video tapes of trailers as they are produced, hard-copy scripts, publicity photos, and non-trailer video which shall only be available for viewing on the Fox lot premises (collectively, the "PSM Materials"). For the avoidance of doubt, Licensee will not be provided electronic copies of any scripts. Fox will update the PSM Materials provided to Licensee as new or different materials become available.
(ii) VGSL Development: Licensee expressly acknowledges and agrees that Fox has entered into the VGSL Agreement with VGSL for the development of certain Wireless Products set forth on Exhibits B, C, D and G, in connection with the following Properties: "Robots;" Untitled Ridley Scott Film; "Ice Age 2;" and "Mr & Mrs. Smith." Licensee shall be obligated to develop such Wireless Products, and distribute them as set forth in Paragraph 2(c)(ii) below, on behalf of Fox.
(iii) Development for Japan: Upon Fox's notice to Licensee, Licensee shall immediately cease all development, publication and distribution of the Wireless Products in Japan.
(iv) Music and Sound Effects: If Licensee seeks to use music or sound effects from any of the Properties in connection with the development of the Wireless Products, such use shall be subject to the advance written approval of Fox, and, if applicable, Fox Music, Inc., c/o the Vice President, General Manager, Fox Music Publishing ("Fox Music"). Subject to Fox and Fox Music's approval, Licensee shall be solely responsible for any and all third party payments that may arise out of the
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-5-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
approved use of the music from the Property in connection with the Wireless Products, including without limitation any royalties, mechanical fees, residuals, publishing fees, license fees, reuse fees or other guild-related payments. In such event, Licensee shall pay directly to Fox Music a separate Royalty, at a rate subject to good faith negotiation between Licensee and Fox Music, on sales of the Wireless Products incorporating such music. Further, Licensee shall obtain the prior written approval of Fox Music concerning the final music arrangement to be so utilized and provide Fox Music with two samples of the final, approved Wireless Products prior to the sale or distribution thereof.
(A) No License for Music Realtones or Trutones: For the avoidance of doubt, nothing herein shall be construed as granting Licensee the right to develop and/or distribute any Wireless Products containing music Realtones or Trutones (each as defined in Exhibit N).
(b) Release:
(i) The Wireless Products: Subject to the timely delivery of the PSM Materials to Licensee by Fox, Licensee shall deliver the Wireless Products to VGSL a minimum of ***** before the initial theatrical release of each Property in each of the VGSL Territories as defined in Paragraph 2(c)(ii) (A) below, and to the other Licensed CSPs within such time frames mandated by such Licensed CSPs so as to enable the release of the Wireless Products ***** prior to the initial theatrical release of each Property in each of the Territories as defined in Paragraph 3 below (the "Wireless Products Latest Commencement Date"). If Licensee fails to make the Wireless Products commercially available to the CSPs by the Wireless Products Latest Commencement Date, and such failure is not due solely to any delay by Fox in delivery of the PSM Materials, Fox shall have the right to terminate this Agreement immediately upon notice to Licensee and all rights to utilize the PSM shall automatically revert to Fox; provided that, subject to Paragraph 9(b)(ii) below, Fox will not exercise the right to terminate with respect to any delayed delivery of Wireless Products for films that have their initial theatrical release prior to June 30, 2005; and provided further that nothing in this Paragraph 2(b)(i) will limit Fox's indemnification under Paragraph 14 or any other rights and remedies Fox may have under this Agreement. Licensee shall use all commercially reasonable efforts to cause the Licensed CSPs to make available to end users the Wireless Products for each of the Major Releases and Targeted Releases no later than ***** prior to the initial theatrical release of each of the Major Releases and Targeted Releases.
(c) Distribution:
(i) CSP Distribution: Licensee shall distribute the Wireless Products to end users through the Licensed CSPs and each Licensed CSP's respective Internet portals and distribution systems ("Distribution Channel").
(A) Minimum Subscriber Market Penetration: Licensee shall use all commercially reasonable efforts to secure distribution of the Wireless Products through CSPs and to ensure that the Wireless Products are
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-6-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
available on substantially all medium and high volume handsets of all Licensed CSPs, which for the purposes of this obligation shall include VGSL.
(1) Major Releases: Licensee furthermore shall use all commercially reasonable efforts to achieve the following market penetration targets in Europe for the Major Releases ("Market Penetration Targets"): (1) distribution of the Wireless Products for the Major Releases through CSP's that hold at least ***** (*****%) of the subscribers in Western Europe during the ***** of this Agreement; and (2) distribution of the Wireless Products for the Major Releases through CSP's that hold at least ***** percent (*****%) of the subscribers in Western Europe during the ***** of this Agreement. If Licensee fails to reach the Market Penetration Targets Fox shall in its sole discretion have the right to terminate Licensee's exclusivity under this Agreement. In the event of termination of Licensee's exclusivity for Licensee's failure to achieve the Market Penetration Targets, Fox shall not distribute the Wireless Products which have been developed by Licensee prior to such termination, without first obtaining a license from Licensee on terms to be mutually agreed in each party's reasonable discretion, for the exploitation of the Licensee Materials.
(2) Targeted Releases: Fox acknowledges that Licensee may not be able to secure placement of all Targeted Releases at the levels set forth for the Market Penetration Targets defined in the previous sub-Paragraph. Notwithstanding the foregoing, Licensee shall use all commercially reasonable efforts to secure the widest possible distribution of the Wireless Products derived from the Targeted Releases in Europe.
(ii) VGSL and T-Mobile Distribution: For the Territories (as defined in Paragraph 3 below) set forth in Paragraph 2(c)(ii)(A) below, Licensee expressly acknowledges and agrees that Fox has entered into the VGSL Agreement with VGSL for the development of certain Wireless Products as set forth in Paragraph 2(a)(ii) above, and for the distribution of such Wireless Products. Fox has also entered into a separate agreement with T-Mobile to permit T-Mobile to distribute certain Wireless Products to end users outside of the United States the "T-Mobile Agreement"). Licensee hereby grants all licenses to Fox to enable Fox to provide Wireless Products to VGSL and T-Mobile for distribution to VGSL and T-Mobile subscribers outside of the United States in accordance with the terms of this Agreement, and shall further deliver such Wireless Products to VGSL and T-Mobile on behalf of Fox. Licensee further acknowledges and agrees that pursuant to the VGSL Agreement and the T-Mobile Agreement, VGSL and T-Mobile will remit directly to Fox all receipts generated from sales of the Wireless Products to VGSL and T-Mobile subscribers. Fox will pass through all such receipts received from VGSL and T-Mobile to Licensee and such receipts shall be treated as Gross Receipts, as defined in Paragraph 7(a)(ii) below, for the purpose of this Agreement. Licensee shall not enter into an exclusive distribution agreement with
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-7-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
a CSP in any of the VGSL Territories listed in Paragraph 2(c)(ii)(A) below, and Fox has not granted and will not grant any exclusive distribution rights to VGSL or T-Mobile. Fox and Licensee will cooperate together in good faith, on a schedule to be mutually agreed, to jointly manage the VGSL and T-Mobile relationships with respect to the Wireless Products, subject to willingness on the parts of VGSL and T-Mobile to so cooperate. Notwithstanding the foregoing, any conversations undertaken between Fox and VGSL and/or T-Mobile without Licensee's participation shall not be a breach of this provision.
(A) Non-Exclusive CSP Distribution in VGSL Territories: Under no circumstances shall Licensee enter into an exclusive distribution agreement with a CSP other than VGSL in the following territories ("VGSL Territories") covered under the VGSL Agreement: (1) United Kingdom; (2) Ireland; (3) Germany; (4) Spain; (5) France; (6) Sweden; (7) Switzerland; (8) Portugal; (9) Netherlands; (10) Greece; (11) Italy; (12) Australia; (13) New Zealand; (14) Egypt; (15) Slovenia; (16) Belgium; (17) Austria; (18) Hungary; (19) Malta; (20) Croatia; (21) South Africa; and (22) Japan.
(iii) Japan Distribution: Upon Fox's notice to Licensee, Licensee shall cease immediately some or all distribution of the Wireless Products in Japan. In the event Fox provides such termination notice to Licensee, Licensee hereby grants Fox a license to the Licensee Materials in order for Fox to distribute the Wireless Products that Licensee has developed for distribution in Japan prior to such termination, either directly or through a third-party. In consideration of such license, Fox shall pay Licensee a royalty as set forth in Paragraph 7(b)(i) below.
(iv) Unless otherwise mutually agreed between Fox and Licensee, Licensee will require each Licensed CSP to distribute Wireless Products to end users only for the payment of a fee; provided that Licensee may permit limited distribution (i.e. one Wireless Product per Property in each category of Wireless Products and including only one game level for each game) of Wireless Products without a fee for promotional or marketing purposes. The fees will typically appear on the end user's Wireless Platform bill and be remitted by the end user to the CSP pursuant to an agreement between the end user and the CSP. The CSP will in turn remit fees to Licensee (less any Deductions as that term is defined in Paragraph 7(a)(ii) below) pursuant to an agreement between Licensee and the CSP. Licensee will then remit royalties to Fox in accordance with Paragraph 7, below.
3. TERRITORY: Licensee shall use commercially reasonable efforts to exploit the rights granted hereunder throughout the world (the "Territory"), including without limitation all of the following VGSL Territories set forth in Paragraph 2(c)(i)(B) above: (1) United Kingdom; (2) Ireland; (3) Germany; (4) Spain; (5) France; (6) Sweden; (7) Switzerland; (8) Portugal; (9) Netherlands; (10) Greece; (11) Italy; (12) Australia; (13) New Zealand; (14) Egypt; (15) Slovenia; (16) Belgium; (17) Austria; (18) Hungary; (19) Malta; (20) Croatia; (21) South Africa; and (22) Japan. Licensee shall localize the Wireless Products into the following languages: English, French, German, Italian, Spanish, and Japanese. In addition to the previously stated languages, to the extent practicable Licensee also shall localize the Wireless Products to be delivered to VGSL into Portuguese, Greek, Dutch and Swedish, to the extent that the Properties
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-8-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
are dubbed into such languages, Fox holds foreign rights to the dubbed tracks, and such dubbed tracks are timely available.
4. TERM: The rights granted hereunder shall be effective as of the Effective Date and shall expire on December 31, 2006 (the "Term"); provided, however, that with respect to each Property, all rights and licenses granted herein will continue in full force and effect for a period of eighteen (18) months after the initial theatrical release of that Property.
(a) Licensee's Right of First Negotiation on New Properties: For the Term of this Agreement, Fox hereby grants to Licensee a right of first negotiation with respect to those theatrical motion pictures released during the Term of this Agreement (in addition to the Properties identified in Exhibit A) in which (i) Fox owns or controls licensing and merchandising rights, for which Fox determines in its sole discretion to grant to any third party any licensing rights for the development and distribution of wireless products, and (ii) which theatrical motion pictures Fox reasonably deems to be a Major Release consistent with its past practices. The Right of First Negotiation shall be exercised as follows. Whenever Fox desires to grant to any third party any licensing rights for a Major Release (each such instance, an "Opportunity"), Fox shall request that Licensee submit a bid regarding the Opportunity. If Licensee intends to exercise its Right of First Negotiation, it must submit a bid in response to Fox's request within 10 business days. If Licensee does submit a bid, both parties shall negotiate in good faith over the bid for a reasonable period of time, not to exceed 10 additional business days. If the parties have not reached agreement in writing regarding the terms and conditions for the exploitation of the Opportunity within said time period, or if Licensee fails to submit a bid in a timely manner, Fox shall be free to accept any bid from any other party with respect to the Opportunity, or Fox shall be free not to exploit the Opportunity at all. Should Licensee choose to exercise its Right of First Negotiation, its floor bid shall be at least US$***** for each Major Release (as defined in Exhibit N).
5. ADVANCE: Licensee shall pay Fox a non-refundable recoupable advance in the amount of US$***** upon Licensee's signature of this Agreement (the "Advance"). The Advance shall be treated as the first installment of the Guarantee described in Section 6(a), and will be recoupable against royalties as part of the Guarantee.
6. GUARANTEE:
(a) Amount: Licensee shall pay to Fox a non-refundable guarantee in the amount of US$***** ("Guarantee"), inclusive of the Advance. The Guarantee shall be recoupable against royalty payments and payable as follows: (a) US$***** inclusive of the Advance above; (b) US$***** on or before *****; (c) US$***** on or before *****; (d) US$***** on or before *****; (e) US$***** on or before *****; (f) US$***** on or before *****; and (g) US$***** on or before *****. There shall be no cross-collateralization among the Royalties earned, as defined in Paragraph 7 below, for the purposes of recouping the Guarantee for any of the Major Releases or Targeted Releases.
(b) Individual Property Guarantees: Notwithstanding the payment schedule set forth in Paragraph 6(a) above, a minimum recoupable guarantee (each "Individual Property
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-9-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
Guarantee") shall be apportioned from the Guarantee set forth in Paragraph 6(a) above to each of the individual Major Releases and Targeted Releases set forth on Exhibit A as follows for the purposes of determining recoupment of Guarantees and Royalty payments attributable to each of the Major Releases and Targeted Releases as set forth in Paragraph 7 below:
(i) Major Releases: The Individual Property Guarantee for each of the Major Releases set forth on Exhibit A shall be US$*****.
(ii) Targeted Releases: The Individual Property Guarantee for each of the Targeted Releases set forth on Exhibit A shall be US$*****.
(c) Overages: At such time that Fox has earned in Royalties, as defined in Paragraph 7 below, the amount of an Individual Property Guarantee attributable to a specific Property, Licensee shall then remit to Fox on a quarterly basis in accordance with Paragraph 7(c) all Royalties due and payable in excess of such Individual Property Guarantee. Notwithstanding the foregoing, all Guarantee installments shall remain due and payable in accordance with the schedule of payments set forth in Paragraph 6(a) above and may not be allocated or apportioned to Royalty overages due.
7. ROYALTIES:
(a) Payments from Licensee to Fox: In consideration of the rights granted to Licensee pursuant to this Agreement, Licensee shall pay to Fox, or such other party as Fox may designate in writing, a royalty in the following amounts:
(i) Major Releases:
(A) Until such time as ***** percent (*****%) of an Individual Property Guarantee for a Major Release is recouped by Licensee, Fox shall earn, and credit against the Individual Property Guarantees, Royalties at the rate of ***** percent (*****%) of Licensee's Gross Receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Major Release; and
(B) Thereafter and until such time as ***** percent (*****%) of an Individual Property Guarantee for a Major Release is recouped by Licensee, Fox shall earn and Licensee shall pay to Fox Royalties at the rate of ***** percent (*****%) of Licensee's Gross Receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Major Release; and
(C) Thereafter (and for the remainder of the Term), Fox shall earn and Licensee shall pay to Fox Royalties at the rate of ***** percent (*****%) of Licensee's Gross Receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Major Release.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-10-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
(ii) Targeted Releases:
(A) Until such time as ***** percent (*****%) of an Individual Property Guarantee for a Targeted Release is recouped by Licensee, Fox shall earn, and credit against the Individual Property Guarantees, Royalties at the rate of ***** percent (*****%) of Licensee's Gross Receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Targeted Release; and
(B) Thereafter (and for the remainder of the Term), Fox shall earn and Licensee shall pay to Fox Royalties at the rate of ***** percent (*****%) of Licensee's gross receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Targeted Release.
Royalties shall accrue when the Wireless Products are sold, downloaded or otherwise distributed to the end user, whichever first occurs, and shall become payable upon receipt by Licensee. "Gross Receipts" shall mean all monies received by or credited to Licensee for download of the Wireless Products by end users less only monies actually retained by the CSPs (the "Deductions").
(b) Payments from Fox to Licensee: In consideration of the rights granted by Licensee to Fox and VGSL pursuant to this Agreement, Fox shall pay to Licensee, or such other party as Licensee may designate in writing, a royalty in the following amounts:
(i) Distribution in Japan. In the event that Fox distributes, licenses, or otherwise exploits the Wireless Products in Japan pursuant to Paragraph 2(c)(iii), or grants to any third party any rights to distribute the Wireless Products for the Wireless Platform to end users within Japan, or otherwise uses in Japan any elements of the Fox Intellectual Property (as defined in Paragraph 11(a) that are solely attributable to Licensee's development efforts pursuant to this Agreement, Fox agrees to pay Licensee a royalty in the amount of ***** percent (*****%) of Fox's gross receipts for any such activity, which shall be defined as all monies actually received by Fox for the Wireless Products or other such elements of the PSM, less any Deductions.
(ii) VGSL Payments: As set forth in Paragraph 2(c)(ii) above, pursuant to the VGSL Agreement, VGSL will remit directly to Fox Fox's contractual share (pursuant to the VGSL Agreement) of all revenue from sales of the Wireless Products by VGSL in the VGSL Territories ("VGSL Revenue"). Fox will remit all VGSL Revenue to Licensee and such VGSL Revenue shall be treated as Gross Receipts for the purpose of this Agreement. The VGSL Revenue shall be treated in accordance with Paragraph 7(a) in calculating Royalties due to Fox from Licensee.
(iii) Other Payments: To the extent that Fox enters into an agreement with a CSP other than VGSL with Licensee's consent in accordance with Paragraph 1(f),
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-11-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
whereby Fox's contractual share of revenue from the sale of the Wireless Products to the CSP's subscribers is remitted directly to Fox from the CSP, Fox will pass through all such revenue from the CSP to Licensee and such revenue shall be treated as Gross Receipts for the purpose of this Agreement. Payments of all royalties from the sale of Wireless Products through any such arrangements shall be made by Licensee to Fox in accordance with Paragraph 7(b) above. Except as otherwise provided under this Agreement, Fox hereby agrees not to enter into any future agreements with a CSP for the distribution of the Wireless Products without the involvement and prior written agreement of Licensee.
(iv) For the avoidance of doubt, Fox will have no right or license to develop, publish, and or distribute any Wireless Products for the Wireless Platform, or to permit any third party to do so, or to otherwise use or exploit any Licensee Materials, except in accordance with Paragraphs 1(b) (with respect to bundling), 2(c)(iii) (with respect to Japan), and 2(c)(ii) (with respect to VGSL and T-Mobile).
(c) Payment Terms. Payment of all royalties and other payments by either party to the other shall be made in United States Dollars by check or wire transfer to a bank account to be designated by the receiving party. Payment of all royalties shall be made without deduction, reduction or set-off of any kind, provided that the paying party shall be permitted to deduct withholding taxes as permitted by applicable law. Each party agrees that it shall not be entitled to withhold any portion of the royalties as a reserve. Each party agrees to provide the other with all necessary withholding tax forms.
(d) Accounting Statement: Royalty statements (which statements shall be on the form attached hereto as Exhibit O and incorporated herein by this reference or such other form as the receiving party may designate in its discretion) shall be due and payments made within thirty (30) days after the close of each calendar quarter in which the paying party received any applicable revenue. Each party shall keep a record of all sales and shall submit, together with the royalty statements, a quarterly summary report of such sales. Notwithstanding the foregoing, pursuant to Paragraphs 7(b) (2) and 7(b)(3), Fox shall make all payments of revenue remitted directly by VGSL or any other CSP with whom the parties prospectively agree Fox will receive revenue directly, within thirty (30) days of receipt of such revenue.
(e) Books and Records: Each party shall keep accurate and complete books and records as they relate hereto for the greater of three years from the Effective Date or two years from the termination or expiration of the Term. On reasonable notice, each party shall have the right to examine said books and records; provided that such examination will be made no more than twice in any given twelve month period, and shall be made during normal business hours. If any audit discloses that a party owes royalties in excess of 5% of royalties paid during any accounting period, the audited party shall pay the audit costs together with shortfall and interest at rates as specified in Paragraph 7(e) below.
(f) Late Payments: If a party does not receive the applicable royalty payment as specified on or before the thirtieth day after the close of any calendar quarter, the party owing such royalty shall pay interest with respect to any royalties owed from day to day until the date of payment at a rate of 5% above U.S. Prime Rate on an annual basis. Interest on royalties owed calculated in accordance with this Paragraph shall accrue after
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-12-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
as well as before any judgment. Neither the acceptance of any payment or royalty statement nor the deposit of any check shall preclude a party from questioning the correctness of any such payment or royalty statement at any time.
8. DUTIES OF LICENSEE:
(a) Marketing and Promotion: Licensee shall be responsible for all marketing, advertising and promotional efforts with respect to the Wireless Products throughout the Territory during the Term. Licensee shall (A) participate in face to face meetings and conference calls regarding marketing from time to time, the frequency, location and subject matter of which shall be mutually agreed; (B) submit a separate marketing plan for the Wireless Products for each Property for which Fox has approved a Treatment (as defined in Paragraph 9(a)(ii)) within thirty (30) days of Fox's approval of such Treatment, subject to Fox's providing sufficient information regarding its release plans for the applicable Property (each, a "Marketing Plan"); (C) commit funds to the marketing of the Wireless Products as is commensurate with Licensee's marketing efforts of other similar wireless products that Licensee publishes; (D) perform business to business and trade marketing efforts (e.g., to the CSPs) commensurate with industry standards; and (E) appoint a marketing point of contact which shall be responsible for coordinating communications and facilitating relationships between Fox and Licensee and for overseeing the performance of Licensee's obligations hereunder.
All marketing materials for the Wireless Products that incorporate and/or make reference to any part of the PSM or the Properties (collectively, the "Licensee Marketing Materials") shall be subject to Fox's approval as follows:
(i) Licensee Marketing Materials: Licensee shall be responsible for producing the Licensee Marketing Materials, all of which shall be subject to Fox's prior written approval, at Licensee's sole cost and expense. Licensee will submit samples of all Licensee Marketing Materials to Fox for review and approval prior to Licensee's use of the Licensee Marketing Materials. Fox shall endeavor to review the Licensee Marketing Materials within two (2) weeks of receipt thereof, provided however, a delayed Fox response shall not constitute a deemed approval under any circumstances. Only after Fox has approved the Licensee Marketing Materials may Licensee proceed with production thereof. Once approval has been granted by Fox, Licensee will not make alterations, modifications or revisions to the Licensee Marketing Materials without the prior written consent of Fox.
(ii) CSP Marketing Materials: If any Licensed CSP seeks to incorporate any element of the PSM in its advertising, marketing, packaging (if any), consumer and trade publicity and promotional materials as well as any collateral materials related thereto ("CSP Marketing Materials"), Licensee shall ensure that such Licensed CSP obtains Fox's approval in accordance with Paragraph 8(a)(i). Licensee shall submit any such proposed CSP Marketing Materials on the CSP's behalf. Once Fox has approved any such CSP Marketing Materials and notified Licensee, Licensee shall notify the CSP and Licensee and the CSP may proceed with production thereof, provided there are no alterations from the approved packaging.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-13-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
(b) Product Support: Licensee shall provide all customer product support, including technical support, for the Wireless Products in the same manner as it provides such support for any other product that it distributes and/or publishes, and in any case in accordance with wireless industry standards. Licensee will display (and ensure that the CSP displays) a toll free telephone number (or an email address, in Licensee's discretion, on a country by country basis) on its website so that customers may contact Licensee and/or the CSP regarding the Wireless Products ("Customer Request"). Licensee and/or the CSP will use all commercially reasonable efforts to respond to each such Customer Request within 24 hours after receipt of such request. Licensee shall exercise commercially reasonable efforts to resolve each such Customer Request. Licensee also shall respond to all inquiries from VGSL relating to the Wireless Products delivered to VGSL.
(c) Solicitation of Sales: So long as the Agreement has not been terminated or otherwise expired, Licensee shall use all commercially reasonable efforts to promote sales of the Wireless Products during the Term of this Agreement.
(d) No Preferential Treatment: Licensee agrees that it will use substantially similar efforts to advertise, promote, manufacture, sell and distribute the Wireless Products as it devotes to its other licensed products.
(e) Compliance with all Laws: Licensee shall comply with all laws, rules, treaties, and regulations governing the distribution of the Wireless Products throughout the Territory.
(f) Internet Data: Licensee shall comply with COPPA regulations as well as with Fox's Internet Privacy Policy with respect to the collection of any consumer information via the Internet. The policy is attached hereto as Exhibit P and incorporated herein by this reference.
(g) Localization: Licensee shall localize the Wireless Products into the following languages: English, French, German, Italian, Spanish, and Japanese, with Portuguese, Greek, Dutch and Swedish to be made available where practicable to the extent that the Properties are dubbed into such languages, Fox holds foreign rights to the dubbed tracks, and such dubbed tracks are timely available.
(h) Optimization: Licensee shall be required to optimize the Wireless Products for all Territories and Licensed CSPs.
(i) Compatibility Testing: Licensee shall be responsible for any compatibility testing of the Wireless Products required by CSPs, and further shall be responsible for the following: (i) quality assurance of the Wireless Products which is consistent with industry standards; and (ii) adequate operation and functionality of the Wireless Products on the Wireless Platform in connection with each Licensed CSP's networks. To the extent that a material bug or defect is discovered in the Wireless Products which impacts in any manner the functionality of the Wireless Products, Licensee will promptly investigate and correct such bugs or defects, whether discovered by Licensee, Fox, the Wireless Platform manufacturer(s) or the CSP(s). As between Fox and Licensee, all costs of performing the foregoing obligations shall be borne by Licensee.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-14-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
9. FOX APPROVALS:
(a) Wireless Products Approval: Fox shall have the right to approve the Wireless Products in accordance with the procedure set forth below. Licensee acknowledges that Fox's approval shall include the approval of any third party who has approval rights over any of the Properties, as applicable.
(i) Creative Meetings: Licensee shall participate in face to face creative meetings with Fox on a monthly basis to determine which Wireless Products shall be developed for upcoming Major Releases and Targeted Releases. The parties will mutually agree upon the list of Wireless Products for each Property, and will amend the applicable Exhibit for that property upon reaching such agreement. Notwithstanding the foregoing, Licensee shall develop the Wireless Products set forth in Exhibits B through M for each Property.
(ii) Concept / Treatment: For each of the Major Releases and Targeted Releases, within ***** after receipt from Fox of the applicable PSM Materials, Licensee will deliver to Fox a concept / treatment for the applicable Wireless Products, which will outline the technical and creative aspects of the Wireless Products (each, a "Treatment"). Each Treatment shall be subject to Fox's approval, which approval is within Fox's discretion. Once a Treatment is approved by Fox and to the extent the approved Treatment requires compatibility input from a Licensed CSP, it shall be Licensee's sole responsibility to secure concept approval from such Licensed CSP. If the Licensed CSP requires changes, modifications or alterations to a Treatment, or to any element of the Wireless Products, Licensee shall seek Fox's written approval of any such change, which approval may be withheld in Fox's sole discretion.
(iii) Design Document: Once a given Treatment is approved by Fox, Licensee shall then submit to Fox a game design document ("Design Document") which will lay out the creative and technical aspects for the Wireless Product, including how Licensee intends to use the Property and the PSM in the Wireless Product. The Design Document shall be subject to Fox's written approval, which approval is within Fox's sole discretion.
(iv) Alpha Testing: Upon approval of the Design Document by Fox, Licensee shall submit a prototype of the applicable Wireless Product, which demonstrates all of the features and functions set forth in the Design Document, although colors, graphics and related elements need not be in their final form (each, an "Alpha Prototype"). Each Alpha Prototype will be subject to Fox's written approval, which approval will be in Fox's sole discretion.
(v) Beta Testing: Upon approval of the Alpha Prototype, Licensee shall submit a post-Alpha prototype of the Wireless Product meeting all Alpha requirements and in substantial conformance with the Design Document, with all features and functions implemented and in which all interface, memory allocation and code size issues are effectively addressed (each, a "Beta Prototype"). Each Beta Prototype will have passed Licensee's established testing procedures and have no known Bugs. Each Beta Prototype shall be subject to Fox's written approval, which
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-15-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
approval will be in Fox's sole discretion. After Fox has approved a Beta Prototype, Licensee shall be free to release the Beta Prototype as a final commercial product.
(A) Modifications: After approval of a Beta Prototype, Licensee shall not modify the Wireless Products without the prior written approval of Fox. For purposes of this paragraph, porting, enhancements, optimization (which alters the content displayed in any material manner) and localization shall be deemed a modification requiring Fox's prior written approval. Notwithstanding the foregoing, Porting that does not require substantive changes to a Wireless Product will not be deemed a modification requiring Fox's prior approval.
(b) Approval Process:
(i) Evaluation: Fox shall approve or reject in writing all Treatments, Design Documents, Alpha Prototypes, and Beta Prototypes submitted to it for its approval (each individually a "Deliverable"). Fox's approval or rejection of all Deliverables shall be rendered in good faith.
(ii) Rejection: If Fox rejects any Deliverable, Fox shall provide to Licensee, in writing, the reasons for its rejection of that Deliverable. Licensee shall then use commercially reasonable efforts to make the changes to that Deliverable and resubmit the Deliverable to Fox for Fox's reconsideration. If Fox rejects a given Alpha Prototype more than twice based on a reason previously notified to Licensee by Fox, then Fox may terminate this Agreement in whole or with respect to the affected Property and Wireless Products and shall reserve all remedies available under this Agreement. Notwithstanding the foregoing, Fox will not terminate this Agreement for rejection of any Deliverables related to Properties that have their initial theatrical release prior to June 30, 2005, provided such Deliverables are accepted and delivered not later than ***** after the U.S. theatrical releases for each of the following Properties: "Robots"; "Mr. & Mrs. Smith"; and Untitled Ridley Scott Film.
(iii) Collaborative Process: The parties intend that development of the Wireless Products will be a collaborative effort between Fox and Licensee, such that Fox shall have a reasonable opportunity to provide input into the primary aspects of each Wireless Product through the review and approval procedure described above, including, but not limited to, the look and feel of the Wireless Products, art direction, as well as the use of the Property (and all elements therefrom) in the Wireless Products and in the advertising, promotion and marketing thereof in accordance with this Agreement. Licensee understands and agrees that approval of any two-dimensional artwork does not constitute approval of the implementation of the artwork in the Wireless Products.
(iv) Timing: Fox shall endeavor to approve or reject in writing all Deliverables and all materials submitted to it for its approval within two (2) weeks of Fox's receipt thereof. If Fox does not approve or reject in writing a Deliverable within two (2) weeks of its receipt and causes a significant delay in the development of the
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-16-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
Wireless Products, then Fox and Licensee shall mutually and in good faith discuss and agree to any adjustments in the Wireless Products Latest Commencement Date which are necessary due to such delay. Fox shall not terminate this Agreement for Licensee's delay in delivery of the Wireless Products, where such delay is solely caused by Fox's failure to deliver the PSM Materials in a timely manner in accordance with Paragraph 2(a)(i). Fox reserves the right to terminate this Agreement in accordance with paragraph 2(b)(i) where Licensee's delay in delivery of the Wireless Products is the result of Fox's disapproval of the Deliverables.
10. PRICING: As between Fox and Licensee, Licensee will be responsible for determining the prices and/or fees at which the Wireless Products will be offered for sale to the general public but will do so in accordance with Licensee's agreements with the CSPs. Licensee acknowledges that VGSL will be responsible for making pricing decisions for the Wireless Products distributed through VGSL, provided that Fox will not agree to any reduction in the share of revenue it receives from VGSL, other than the ***** percent (*****%) reduction in Fox's revenue share for late delivery provided for in the current version of the VGSL Agreement.
11. INTELLECTUAL PROPERTY RIGHTS:
(a) Intellectual Property Rights Defined: For purposes of this Agreement, the term "Intellectual Property Rights" means know-how, inventions, patents, patent rights, and registrations and applications, renewals, continuations and extensions thereof, works of authorship and art, copyrightable materials and copyrights (including, but not limited to, titles, computer code, designs, themes, objects, characters, character names, stories, dialog, catch phrases, concepts, artwork, animation, sounds, musical compositions, graphics and visual elements, audio-visual effects and methods of operation, and any related documentation), copyright registrations and applications, renewals and extensions thereof, mask works, industrial rights, trademarks, service marks, trade names, logos, trademark registrations and applications, renewals and extensions thereof, trade secrets, rights in trade dress and packaging, publicity, personality and privacy rights, rights of attribution, paternity, integrity and other similarly afforded "moral" rights, and all other forms of intellectual property and proprietary rights recognized by the U.S. laws, and other applicable foreign and international laws, treaties and conventions.
(b) Fox Intellectual Property: Fox shall own all Intellectual Property Rights in and to any derivative works made from the Properties, whether or not used in the Wireless Products, including without limitation design documents, graphics, animation, music, packaging, advertising, promotional and other artwork used in connection with the development and distribution of the Wireless Products but at all times excluding the Licensee Materials as defined in Paragraph 11(c) below (collectively, the "Fox Intellectual Property"). The Fox Intellectual Property includes all rights in and to the entire "look and feel" of the Wireless Products, all visual displays, scripts, dialogue, literary treatments, concepts, characters, backgrounds, environments, and other elements visible to the Wireless Products' users; all sounds, sound effects, soundtracks and other elements audible to the user. Licensee acknowledges and agrees Fox shall be the exclusive owner of these rights as a work made for hire. Licensee acknowledges that Licensee's use of any Property shall not confer or imply a grant of rights, title or interest in the Property or good will associated therewith, except as specifically provided herein.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-17-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
Fox's Intellectual Property Rights shall be indefeasible and irrevocable and shall not be subject to reversion under any circumstance, including cancellation, termination, expiration, or breach of this Agreement. Licensee further agrees to execute one or more copyright assignments at Fox's request, or any other subsequent document as further evidence of this assignment, and to cooperate with Fox in perfecting the assignment of any rights to the Fox Intellectual Property, and hereby appoints Fox as its attorney-in-fact to execute any documents required in connection with such assignment. All materials created hereunder shall be prepared by an employee-for-hire of Licensee under Licensee's sole supervision, responsibility and monetary obligation, or, if third parties who are not employees of Licensee, including without limitation all software developers developing the Wireless Products contribute to the creation of any Fox Intellectual Property, Licensee shall obtain from such third parties a full written assignment of rights so that all right, title and interest in the Fox Intellectual Property shall vest in Fox.
(c) Licensee Materials: Licensee owns and shall retain all right, title, and interest in and to (i) all software source code, tools, and technical documentation used by or for Licensee to create the Wireless Products, including without limitation any and all software code included in the Wireless Products, (ii) all aspects and elements of the Wireless Products other than the Fox Intellectual Property therein, including without limitation any and all gaming engines, game concepts, rules, scripts, and other Intellectual Property Rights therein; and (iii) any and all Intellectual Property Rights in any of the foregoing (the "Licensee Materials").
(d) Moral Rights: Licensee hereby does expressly assign to Fox any and all rights of paternity or integrity, rights to claim authorship, to object to any distortion, mutilation or other modification of, or other derogatory actions in relation to the PSM, the Fox Intellectual Property, and any of Fox's Intellectual Property Rights in and to the PSM and or the Fox Intellectual Property and any derivative works thereof, whether or not such would be prejudicial to Fox's honor or reputation, and any similar right, existing under judicial or statutory law of any country in the world, or under any treaty ("Moral Rights"), regardless of whether such right is denominated or generally referred to as a moral right. Licensee hereby does irrevocably transfer and assign to Fox any and all Moral Rights that Licensee may have in Fox's Intellectual Property Rights in and to the PSM and the Fox Intellectual Property and any derivative works thereof and shall cause Licensee's employees and contractors, including Licensee's developers of the Wireless Products, to do likewise. Licensee hereby does forever waive and agree never to assert any and all Moral Rights it may have in Fox's Intellectual Property Rights in and to the PSM and the Fox Intellectual Property and any derivative works thereof and shall cause its employees and contractors (including the developers) to do likewise.
(e) Licensee Cooperation: Licensee shall not by any act or omission to act impair or prejudice the Intellectual Property Rights of Fox in the PSM, the Fox Intellectual Property or the Properties, or violate any moral rights or deal with the PSM, the Fox Intellectual Property or Properties so that any third party might obtain any lien or other right of whatever nature incompatible with the Intellectual Property Rights of Fox. Licensee agrees to notify Fox of any known or suspected infringement of Fox's Intellectual Property Rights in the PSM and the Property that comes to Licensee's attention and to assist Fox, at Fox's expense, in taking such action as Fox, in its sole discretion, deems necessary or appropriate to prevent or remedy such infringing activities. Licensee shall
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-18-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
also promptly notify Fox in writing of any legal proceeding instituted, or written claim or demand asserted, by any third party against Licensee with respect to the infringement of any Intellectual Property Rights that is alleged to result from the use of the PSM or the Properties in connection with the Wireless Products in accordance with this Agreement.
(f) First Sale Doctrine Not Applicable: The PSM is licensed, not sold, by Fox to Licensee, and nothing in this Agreement will be interpreted or construed as a sale or purchase of the PSM, including but not limited to any use of a "purchase order" by Licensee in connection with the transactions contemplated hereunder. Furthermore, notwithstanding use of the terms "sale" and "sell" throughout this Agreement, any distribution or delivery of the Wireless Products by Licensee to any sublicensee (including, without limitation, CSPs and end-users) will be by license and not by sale (and Licensee shall post notice of that fact in sufficient size, location and manner on Licensee's website on the page from which the general public can subscribe to the Wireless Products). Accordingly, Licensee acknowledges that the "First Sale Doctrine" (as embodied in 17 U.S.C., Paragraph 109 of the United States Copyright Act of 1976, as amended, or the equivalent law or statute in the Territory) does not apply to Licensee's acquisition of rights in and to the PSM and the Property hereunder or to any sublicensee's acquisition of rights in and to the Wireless Products under any agreement between Licensee and a sublicensee.
12. TRADEMARKS AND COPYRIGHTS; FOX'S TITLE AND GOODWILL:
(a) Intellectual Property Notices: Licensee agrees to place on Licensee's website and in the Wireless Products, and on the packaging and related documentation, if any, and Marketing Materials for the Wireless Products, all trademarks, copyright notices, logos and other legal or proprietary designations of Fox in the form and manner reasonably directed by Fox, including, without limitation, a notice indicating that the Wireless Products are produced by Licensee under license from Fox. All copyrights, trademarks and service marks relating to the Properties, PSM Materials, and Fox Intellectual Property, are, will be and shall remain the sole property of Fox and any rights therein granted to Licensee shall terminate immediately upon termination of this Agreement. All goodwill and reputation attaching to such copyrights, trademarks and service marks shall vest in Fox. Licensee shall create, execute and deliver to Fox all documents and instruments reasonably required by Fox for the protection of or otherwise in connection with the copyrights, trademarks and service marks of Fox. Licensee shall not have the right to use Fox's trademarks or trade names except in connection with the promotion and distribution of the Wireless Products in the Territory in accordance with the terms of this Agreement. Notwithstanding the foregoing, Licensee may include a notice for the Licensee Materials, where appropriate.
(b) Goodwill: Licensee acknowledges that Fox is the owner of all right, title and interest in and to the PSM and the Properties, and further acknowledges the great value of the goodwill associated with the PSM and the Properties and that the PSM and the Properties have acquired secondary meaning in the mind of the public and that the trademarks and copyrights included in the PSM and the Properties, and the registrations thereof, are valid and subsisting, and further agrees that it shall not during the Term of this Agreement or at any time thereafter dispute or contest directly or indirectly, or do or cause to be done any act which in any way contests, impairs or tends to impair Fox's
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-19-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
exclusive rights and title to the PSM and the Properties, or the validity thereof or the validity of this Agreement, and shall not assist others in so doing.
(c) Cooperation: Licensee shall not in any manner represent that it has any ownership in the PSM or the Properties, or in any trademarks or copyrights included in the PSM or the Properties (or registrations thereof), but may, only during the Term, and only if Licensee has complied with any and all applicable laws and registration requirements within the Territory for so doing, represent that it is a "licensee" or "official licensee" hereunder. Licensee shall not register or attempt to register any copyright or trademark in the Properties, in its own name or that of any third party, nor shall it assist any third party in doing so.
13. REPRESENTATIONS AND WARRANTIES:
(a) By Licensee: Licensee represents and warrants to Fox that:
(i) Governmental Authority: Licensee has full power and authority to enter into and perform this Agreement without approval from any governmental entity or third party, and that such ability is not limited or restricted by any agreements or understanding between Licensee and any other person or company;
(ii) Corporate Authority: The execution, delivery and performance by Licensee of this Agreement have been duly authorized by any and all necessary corporate action by Licensee, and this Agreement constitutes the legal, valid and binding obligation of Licensee enforceable in accordance with its terms;
(iii) Expertise: Licensee possesses the expertise and know-how and experience to develop the Wireless Products and is otherwise fully capable of performing its obligations under this Agreement;
(iv) Infringement: The Licensee Materials and any other computer code, technology, information, art or other materials created, developed or used by Licensee pursuant to this Agreement will not infringe upon or misappropriate the Intellectual Property Rights or any other legal rights of any third party, and should any aspect of the Licensee Materials, or such other computer code, technology, information, art or materials created, developed or used by Licensee pursuant to this Agreement, become, or, in Fox's opinion, be likely to become, the object of any infringement or misappropriation claim or suit, Licensee will procure, at Licensee's expense, the right to use such Licensee Materials, computer code, technology, information, art or other materials in all respects, or will replace or modify the affected material to make it non- infringing; and
(v) Licensee Conduct: Licensee will (A) conduct its business in a manner that reflects favorably at all times on the Property, the Wireless Products and the good name, goodwill and reputation of Fox, (B) avoid deceptive, misleading or unethical practices, that are or might be detrimental to Fox, the Property, the Wireless Products or the public, (C) avoid making disparaging, false or misleading statements or representations with regard to Fox, the Property or the Wireless Products, (D) not employ or cooperate in the employment of any deceptive or
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-20-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
misleading advertising material with regard to Fox, the Property or the Wireless Products, (E) make no representations, warranties or guarantees to customers or to the trade with respect to the specifications, features or capabilities of the Wireless Products that are inconsistent with the warranties and disclaimers included in or with the Wireless Products, (F) not sell the Wireless Products to any party who it knows, or reasonably should know, will infringe Fox's Intellectual Property Rights in the Wireless Products, and (G) comply with all applicable international, national, regional, and local laws in performing its duties hereunder and in any of its dealings with respect to the Wireless Products.
(b) By Fox: Fox represents and warrants to Licensee that:
(i) Authority: Fox has full power and authority to enter into and perform this Agreement, and that such ability is not limited or restricted by any agreements or understanding between Fox and any other person or company. The execution, delivery and performance by Fox of this Agreement have been duly authorized by any and all necessary corporate action by Fox, and this Agreement constitutes the legal, valid and binding obligation of Fox enforceable in accordance with its terms.
(ii) No Representations/Warranties Regarding Revenue: Notwithstanding the representations and warranties made by Fox in this Paragraph 13(b), Fox makes no representations or warranties whatsoever regarding the amount of revenue that may be generated by sales of the Wireless Products.
14. INDEMNIFICATION:
(a) By Licensee: Licensee agrees to indemnify, defend and hold harmless Fox, Trademark Licensor and their respective successors, assigns, parents, subsidiaries, affiliates and co-venturers, and their respective directors, officers, employees and agents from and against all third party claims, damages, losses, liabilities, suits and expenses (including reasonable attorneys' fees), arising out of or in connection with any allegations that (i) the Licensee Materials or the manufacture, packaging, distribution, promotion, sale, or exploitation thereof (except with respect to those matters against which Fox has agreed to indemnify Licensee hereunder) infringes or misappropriates the Intellectual Property Rights of any third party or (ii) any breach of warranty, representation or covenant contained in this Agreement; provided that Fox (a) promptly notifies Licensee in writing of the claim; (b) grants Licensee sole control of the defense, subject to Fox's approval of counsel (to avoid conflicts of interest) and the terms of any settlement that affect Fox; and (c) provides Licensee, at Licensee's expense, with all assistance, information and authority reasonably required for the defense and settlement of the claim. If Licensee fails to undertake such defense, Licensee shall reimburse Fox for reasonable attorneys' fees incurred by Fox in its defense of such claim or suit. Furthermore, Licensee agrees to indemnify, defend and hold harmless Fox, Trademark Licensor and their respective successors, assigns, parents, subsidiaries, affiliates and co-venturers and all other parties associated with the Property, and their respective directors, officers, employees and agents from and against claims made by VGSL against Fox regarding failure to deliver and distribute the VGSL Products (as defined in Paragraph 1(a)) in a timely manner as set forth in Paragraphs 2(a)(ii), 2(b)(i) and 2(c)(ii), third-party Intellectual Property claims relating to the Licensee Materials, and all related damages, losses,
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-21-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
liabilities, suits and expenses (including reasonable attorneys' fees). Fox's failure to provide notice in accordance with this Paragraph shall not relieve Licensee of its obligations to indemnify, defend and hold Fox harmless from any such claims, unless and except to the extent that Licensee is prejudiced by any such failure.
(b) By Fox: Fox agrees to indemnify, defend and hold harmless Licensee, its successors, assigns, parents, subsidiaries, affiliates and co-venturers, and their respective directors, officers, employees and agents from and against all third party claims, damages, losses, liabilities, suits and expenses (including reasonable attorneys' fees), arising out of or in connection with any allegations that the PSM, PSM Materials, or Properties infringe or misappropriate any Intellectual Property Rights of any third party; provided that Licensee (a) promptly notifies Fox in writing of the claim; (b) grants Fox sole control of the defense and settlement of the claim; and (c) provides Fox, at Fox's expense, with all assistance, information and authority reasonably required for the defense and settlement of the claim. If Fox fails to undertake such defense, Fox shall reimburse Licensee for reasonable attorneys' fees incurred by Licensee in its defense of such claim or suit.
(c) Injunctions. If either party's use or exploitation of any materials provided and licensed hereunder is, or in the licensor's opinion is likely to be, enjoined due to the type of claim specified in Paragraphs 13(a) or (b), above, the licensor may, at its sole option and expense: (a) procure for the licensee the right to continue using such rights under the terms of this Agreement; (b) replace or modify any materials provided so that they are non-infringing; or (c) if options (a) and (b) above cannot be accomplished despite the licensor's reasonable efforts, then the licensor may terminate the licensee's rights and the licensor's obligations hereunder with respect to such materials, in which event the licensor will refund to the licensee any amounts paid by the licensee with respect to such materials. For the avoidance of doubt, Licensee is the licensor of the Licensee Materials, pursuant to Paragraph 1(e), for the purpose of this Paragraph.
(d) Sole Remedy. THE PROVISIONS OF THIS PARAGRAPH 14 SET FORTH EACH PARTY'S SOLE AND EXCLUSIVE OBLIGATIONS AND REMEDIES WITH RESPECT TO THIRD PARTY CLAIMS OF INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL PROPERTY RIGHTS OF ANY KIND UNLESS OTHERWISE STIPULATED BY JUDICIAL ORDER.
15. TERMINATION:
(a) Termination Rights;
(i) Bankruptcy: If Licensee's liabilities exceed its assets, or if Licensee becomes unable to pay its debts as they become due, or files or has filed against Licensee a petition in bankruptcy, reorganization or for the adoption of an arrangement under any present or future bankruptcy, reorganization or similar law (which petition if filed against Licensee shall not be dismissed within 30 days from the filing date), or if Licensee makes an assignment for the benefit of its creditors or is adjudicated a bankrupt, or if a receiver or trustee of all or substantially all of Licensee's property is appointed, or if Licensee discontinues its business, this Agreement shall automatically terminate forthwith without notice to Licensee.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-22-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
(ii) Transfer or Change of Control: If a substantial portion of the assets or controlling stock in Licensee's business is sold or transferred, or if there is a substantial change in Licensee's management, or if Licensee's property is expropriated, confiscated or nationalized by any government or if any government assumes de facto control of Licensee's business, in whole or in part, Fox may terminate this Agreement upon 30 days' notice to Licensee.
(iii) Unauthorized Uses: If Licensee transfers, sells or distributes to any unauthorized third party any artwork, voice clips, or other Fox proprietary materials related to the Property including but not limited to Marketing Materials, then Fox may terminate this Agreement forthwith on written notice without any cure period.
(iv) Failure to Exploit: If Licensee fails to exploit the PSM as set forth in Paragraph 2(a) and 2(b), or fails to release the Wireless Products in accordance with the dates set forth in Paragraph 2(b), then Fox may terminate this Agreement forthwith on written notice without any cure period subject to the terms and conditions set forth in Paragraph 2(a) and 2(b), respectively.
(v) Failure to Obtain Approvals: If Licensee releases a Wireless Product without first obtaining Fox's approval as specifically set forth in this Agreement in Paragraph 9, then Fox may terminate this Agreement forthwith on written notice without any cure period.
(vi) Other Defaults: Excepting only those Licensee defaults in this Paragraph 15 which permit Fox to terminate immediately without any cure period for Licensee, if either party fails to perform any of its material obligations hereunder, the other party may terminate this Agreement upon 30 days' notice, unless the breaching party cures any such breach within said 30 days and gives notice to the other party thereof within that period. Notwithstanding the foregoing, in the event that either party (A) fails to pay Royalties or other amounts when due, or (B) fails to make Royalty or other accountings in accordance with the terms of this Agreement, then the breaching party shall be subject to a one-time cure period of fifteen (15) days for such breach. If a party fails to cure the breach within such fifteen (15)-day period or another breach of either (A) or (B) above occurs following an initial cure within the fifteen (15)-day period, then the other party shall have the right in its sole discretion to terminate this Agreement forthwith on written notice without any cure period.
(vii) Other Agreements: Should any event of default by Licensee cause Fox to terminate this Agreement, Fox, in its sole discretion, may terminate, without any cure period, any other agreements concurrently existing between Fox and Licensee upon written notice specifying the agreements to be terminated. For the avoidance of doubt, this remedy shall only apply to any agreements concurrently existing between the specific parties to this Agreement and shall not apply to agreements between Licensee and Fox Sports.
(b) Effect of Termination/Expiration: In the event of termination of this Agreement, Licensee shall: (i) immediately stop in all respects the sale and distribution of the Wireless Products and provide Fox with a complete inventory report and accounting with
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-23-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
payment of all Royalties, and (ii) at Fox's election shall either (A) deliver to Fox all materials related to the Wireless Products or (B) give Fox satisfactory evidence of their destruction. Licensee agrees that its failure to stop in all respects the sale and/or distribution of the Wireless Products upon termination or expiration of the Agreement will result in immediate irreparable damage to Fox for which there is no adequate remedy at law, and in the event of such failure by Licensee, Fox shall be entitled to injunctive relief. Fox's exercise of any of the foregoing remedies shall not operate as a waiver of any other rights or remedies which Fox may have. Fox shall not distribute the Wireless Products after the termination or expiration of this Agreement without obtaining from Licensee a separate license to the Licensee Materials.
(i) Sell-Off Period: Notwithstanding Paragraph 15(b), in the event of termination of this Agreement, Licensee shall have a period of ***** from the date of such termination (unless such termination occurs less than ***** prior to the expiration of this Agreement in which case the time period shall be shortened accordingly so as not to exceed the date of expiration) in which to sell-off existing inventory of Wireless Products already in the Distribution Channels ("Sell Off Period"). Licensee agrees that no additional Wireless Products may be developed or distributed during the Sell Off Period and Licensee agrees to require that any Licensed CSP to comply with this provision. Upon the expiration of the Sell Off Period, Licensee agrees to destroy all such remaining inventory and confirm same in writing to Fox (and require that any Licensed CSP do the same). Any revenues, credits or other consideration received by Licensee for the Wireless Products during the Sell Off Period will be subject to Licensee's obligation to pay Fox Royalties pursuant to Paragraph 7 above.
(ii) Fox's Development of Wireless Products: In the event of termination or expiration of this Agreement or Licensee's loss of exclusive rights under this Agreement, Fox shall be free to create and exploit, or have a third party create or exploit, wireless products which may be similar to those developed and distributed by Licensee pursuant to this Agreement for the Properties.
(c) Guarantee Forfeiture: In the event of termination of this Agreement and without limitation of Fox's rights and remedies all of which are expressly reserved, the following payment penalties shall apply: (i) if termination occurs in the first year of the Term, Licensee shall forfeit any Guarantee paid, and shall immediately pay any remaining Guarantee, up to the amount of ***** dollars (US$*****), and any Guarantee payments made in excess of ***** dollars ($*****) shall be refunded by Fox to Licensee; and (ii) if termination occurs in the second year of the Term, Licensee shall forfeit any Guarantee paid, and shall immediately pay any remaining portion of the Guarantee then unpaid, up to the amount of ***** dollars (US$*****). Any forfeited Guarantees will apply as a set off against any additional damages claimed by Fox.
16. CONFIDENTIAL INFORMATION AND PRESS:
(a) Confidential: Each party agrees to use reasonable efforts, and at least the same care that it uses to protect its own confidential information of like importance, to prevent unauthorized dissemination and disclosure of the other party's confidential information
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-24-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
during and for a period of three (3) years after the Term. These obligations will be subject to the following terms and conditions:
(b) Confidential Information Defined: Confidential information includes, but is not limited to, the following: (i) the design, technology and know- how related to the Wireless Products, the PSM and the Property; (ii) the computer object and source code of the Wireless Products, the PSM and the Property; (iii) non-public information concerning either party's financing, financial status, research and development, proposed new products, marketing plans and pricing, unless and until publicly announced; and (iv) any information designated by either party as confidential or proprietary in writing:
(i) Certain Information Not Deemed Confidential: The foregoing obligations will not apply to any information that: (A) becomes known to the general public without fault or breach on the part of the receiving party; (B) the receiving party receives from a third party without breach of a nondisclosure obligation and without restriction on disclosure; (C) was in the possession of the receiving party prior to disclosure by the other; or (D) is independently developed by the receiving party's personnel having no access to similar confidential information obtained from the other.
(ii) Confidential Information of Another: Nothing in this Agreement will affect any obligation of either party to maintain the confidentiality of a third party's confidential information.
(c) Press Releases: Licensee may not issue a press release or otherwise disclose to or discuss with the press the existence or terms of this Agreement without the prior written consent of Fox (it being understood that Fox's legal counsel shall have final approval over the timing and/or content of any press release or other public disclosure by Licensee regarding this Agreement). Notwithstanding the foregoing, the parties (and their respective parent companies) shall be free to disclose Confidential information to the extent required by any law or regulation to any relevant stock exchange. The parties will liaise and endeavor to agree to the wording of any such disclosure in advance.
17. MISCELLANEOUS:
(a) Notices: All notices and statements shall be in writing and shall together with any payments be personally delivered or sent postage prepaid to the intended party at the address set forth below (unless notification of a change of address is given in writing). The date of mailing of a notice or statement shall be deemed the date the notice is given or statement rendered.
To Fox:
Mail: Twentieth Century Fox Licensing & Merchandising P.O. Box 900 Beverly Hills, California 90213 USA Attention: Vice President, Wireless Development
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-25-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
Messenger: 2121 Avenue of the Stars, 4th Floor Los Angeles, California 90067 USA Attention: Vice President, Wireless Development Facsimile: (310) 369-1465 With copies to: Mail: Twentieth Century Fox Licensing & Merchandising P.O. Box 900 Beverly Hills, California 90213 USA Attention: Legal Department Messenger: 2121 Avenue of the Stars, Suite 1334 Los Angeles, California 90067 USA Attention: Legal Department Facsimile: (310) 369-4241 and: Mail: Twentieth Century Fox Licensing & Merchandising P.O. Box 900 Beverly Hills, California 90213 USA Attention: Finance Department Messenger: 2121 Avenue of the Stars, 4th Floor Los Angeles, California 90067 USA Attention: Finance Department Facsimile: (310) 369-8531 To Licensee: Mail & Sorrent Inc.
Messenger: 1800 Gateway Drive, Suite 200 San Mateo, CA 94404 Attention: Paul Zuzelo E-mail: pzuzelo@sorrent.com Facsimile: (650) 571-5698
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-26-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
With copies to: Mail & Sorrent Inc. Messenger: 1800 Gateway Drive, Suite 200 San Mateo, CA 94404 Attention: Greg Suarez E-mail: greg.suarez@sorrent.com Facsimile: (650) 571-5698
(b) Waiver, Modification: The terms of this Agreement may not be waived or modified except by an agreement in writing executed by the parties hereto. The waiver by either party of any breach of this Agreement by the other party must be in writing and shall not be deemed to be a waiver of any prior or succeeding breach.
(c) Relationship of the Parties: Nothing herein contained shall be construed to place the parties in the relationship of principal and agent, partners or joint venturers and neither party shall have the power to obligate or bind the other party in any manner whatsoever.
(d) No Assignment: Licensee may not assign any of its rights and obligations under this Agreement without the prior written consent of Fox; provided that Licensee may assign all of its rights and obligations hereunder to its successor in the event of a sale of all or substantially all of its assets or voting securities, or of the business unit associated with this Agreement. Subject to the foregoing, this Agreement will inure to the benefit of each parties successors and assigns. Any purported assignment or transfer except in accordance with the above shall be void and of no effect.
(e) Governing Law; Jurisdiction; Service of Process: This Agreement shall be construed in accordance with the laws of the State of California applicable to agreements executed and to be wholly performed therein. The parties hereto agree that any suit, action or proceeding arising out of or relating to this Agreement shall be instituted and prosecuted in the United States District Court for the Central District of California or in any court of competent jurisdiction of the State of California. The parties hereto irrevocably submit to the jurisdiction of said courts and waive any rights to object to or challenge the appropriateness of said forums. Service of process shall be in accordance with the laws of the State of California.
(f) Appointment/Change of Agent: Upon notice to Licensee, Fox may appoint an agent or designate a substitute agent from time to time to act on Fox's behalf to collect from Licensee and remit to Fox all Royalty payments due to Fox under this Agreement. The termination or substitution of an agent by Fox shall not affect the rights, duties, privileges or obligations of Fox or of Licensee hereunder. No agent so appointed is authorized to make any representation or warranty with respect to the ownership or title of the Property and or to approve the manufacture, sale or distribution of the Wireless Products.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-27-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
(g) Binding Agreement: Licensee shall have no rights hereunder and neither Fox nor Trademark Licensor shall be bound hereby unless and until this Agreement has been accepted in writing by Fox. If Fox does not accept this Agreement, the parties shall be released from all liability and this document shall be of no force and effect.
(h) Limitation of Actions: No legal action shall be brought by Licensee under this Agreement unless commenced within 12 months from the date the cause of action arose.
(i) Severability: Should any paragraph, clause or provision of this Agreement be found invalid or unenforceable by any court having jurisdiction over this Agreement, the subject matter hereof, or the parties hereto, such decision shall affect only the paragraph, clause or provision so construed or interpreted and all remaining paragraphs, clauses or provisions shall remain valid and enforceable.
(j) Entire Agreement: There are no representations, warranties or covenants other than those set forth in this Agreement which sets forth the entire understanding among the parties hereto.
(k) Headings: The headings of the Paragraphs of this Agreement are for convenience only and shall not be of any effect in construing the meanings of the Paragraphs.
(l) Survival: The following Paragraphs shall survive the expiration or termination of this Agreement: 5; 6; 7; 11; 13(a)(iv); 14, and 16.
(m) Drafting: Because the parties hereto have participated in drafting and negotiating this Agreement, there shall be no presumption against any party on the ground that such party was responsible for preparing this Agreement or any part of it.
(n) Force Majeure: Neither party shall be liable for any delay or failure in performing any of its obligations hereunder when any such delay or failure is occasioned by causes or contingencies beyond its control, including but not limited to force majeure, fires, floods, war, strikes and governmental regulations, provided the party delaying or failing to perform shall promptly after its inception give written notice of such cause or contingency to the other party and provided further that the party giving such notice shall make all reasonable efforts to remove such disability as soon as possible. Notwithstanding the foregoing, in the event the events constituting force majeure cause a delay in performance of thirty consecutive days or more, either party may terminate this Agreement immediately upon written notice to the other party.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-28-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
By signing in the spaces provided below, the parties hereto have agreed to all of the terms and conditions of this Agreement. SORRENT, INC. TWENTIETH CENTURY FOX LICENSING & MERCHANDISING, a division of Fox Entertainment Group, Inc. ("Licensee") ("Fox") By /s/ Paul Zuzelo By /s/ Jamie Samson
Name Paul Zuzelo Jamie Samson Its Senior Vice President Its CAO & Exec. V.P. Date December 17, 2004 Date 12/17/04
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-29-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT A
Properties
Major Releases:
"Robots"
Untitled Ridley Scott Film
"Ice Age 2"
"Eragon"
• The inclusion of "Eragon" shall be contingent upon Fox's acquisition of the rights to the Property and its ability to grant licensing and merchandising rights thereto. For the avoidance of doubt, there shall be no grant of rights to the Property from Fox to Licensee without Fox's prior written notice advising of Fox's acquisition of the rights to the Property and related licensing and merchandising rights. This Exhibit A and Exhibit E will be amended at such time that Fox can grant such rights.
Targeted Releases:
Untitled Mike Judge Film
"Mr. & Mrs. Smith"
"Lady Luck"
• The inclusion of "Lady Luck" shall be contingent upon Fox's acquisition of the rights to the Property and its ability to grant licensing and merchandising rights thereto. For the avoidance of doubt, there shall be no grant of rights to the Property from Fox to Licensee without Fox's prior written notice advising of Fox's acquisition of the rights to the Property and related licensing and merchandising rights. This Exhibit A and Exhibit H will be amended at such time that Fox can grant such rights.
TBD
TBD
TBD
TBD
TBD
The Properties set forth on this Exhibit A may be removed and substituted, or additional Properties may be included, in accordance with Paragraph 1(a) (i).
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-30-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT B
"Robots" Wireless Products
A minimum of:
12-D Java Game in connection with the initial theatrical release
1 3-D Java Game in connection with the DVD release
5 Java Applications ('Screensavers') (2 3-D Screensavers and 3 2-D Screensavers) in connection with the initial theatrical release
5 MMS
10 Wallpapers
5 Voicetones
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-31-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT C
Untitled Ridley Scott Film Wireless Products
A minimum of:
1 2-D Java Game, which shall include mutually agreed upon 3-D elements
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-32-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT D
"Ice Age 2" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-33-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT E
"Eragon" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-34-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT F
"Untitled Mike Judge Film" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-35-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT G
"Mr. & Mrs. Smith" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-36-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT H
"Lady Luck" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-37-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT I
"TBD" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-38-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT J
"TBD" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-39-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT K
"TBD" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-40-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT L
"TBD" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-41-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT M
"TBD" Wireless Products
Up to:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-42-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT N
Glossary
"MMS" stands for Multimedia Messaging Service — a store and forward messaging service that allows mobile subscribers to exchange multimedia messages with other mobile subscribers. MMS supports the transmission of additional media types: text, picture, audio, video and combinations of them.
"Realtone" or "Trutone" (also referred to as Master Tone) shall mean a digital, audio file containing an excerpt of a master recording of a musical composition, no more than 45 seconds in length, formatted for playback by a wireless device when such wireless device receives an incoming call.
"Screensaver" shall mean a Java application that replaces the image on a screen when the screen is not in use.
"Wallpaper" on a mobile phone shall mean the background pattern or picture against which mobile phone screen menus, icons, and other elements are displayed and moved around. A wallpaper image can be in a JPEG or a GIF file format. Each model/make of the mobile phone provides several pre- installed wallpaper images for the user to choose from. A user can also choose to download and install third-party wallpapers and use one of these instead.
"Voicetone" shall mean the audio speech sound heard by a caller, such as lines from a movie or spoken lyrics of a song.
"Ringtone" shall mean a digital, audio file containing a portion of a musical composition, no more than 45 seconds in length, formatted for playback by a wireless device when such wireless device receives an incoming call. For the avoidance of doubt, a Ring Tone may be either monophonic or polyphonic.
[Remaining definitions are TBD]
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-43-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT O Royalty Statement
TWENTIETH CENTURY FOX LICENSING & MERCHANDISING LICENSING STATEMENT OF ROYALTIES PAYABLE Licensee Contract Number:
Property Report Period Start Date:
Territory Report Period End Date:
Wallpaper Screensaver MMS Game Ringer Wallpaper Screensaver MMS Game Ringer Name/Likeness No Music No Music No Music No Music No Music Music Music Music Music Music None
1
2
3
4
5
6
7 Mail to: Twentieth Century Fox Licensing & Merchandising Total Net Sales
P.O. Box 900 Royalty Rates
Beverly Hills, CA 90213-0900 Royalty Earned
Attn: Jimyong Kim Less: Advance Balance
Street address: 2121 Avenue of the Stars, Room 4014 Royalty Payment Enclosed
Los Angeles, CA 90067 -or-New Advance Balance
This report is based on our books and records and is, to the best of my knowledge, true, correct and complete for the period stated and complies with all contractual requirements Minimum Guarantee Amount
NAME TITLE Payment Required to Meet Guarantee due on:
SIGNATURE DATE
NOTE: This report is required to be filed whether or not there were any sales for the period. For most licenses, the report is due no later than 30 days following every calendar quarter the agreement is active.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-44-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT P
News America Incorporated Statement of Privacy Principles
PREAMBLE
News America Incorporated ("News America") is the principal U.S. subsidiary of The News Corporation Limited, one of the world's largest media companies. The businesses of News America and its subsidiary, Fox Entertainment Group, Inc., include: the production and distribution of motion pictures, television programming and related consumer products (Twentieth Century Fox); television and cable broadcasting (the Fox Network, Fox owned television stations, Fox Sports Net, Fox Sports World, Fox Sports World Espaňol, Speedvision, Fox News Channel, FX and Fox Movie Channel); the publication of newspapers, books, magazines and promotional free-standing inserts (The New York Post, HarperCollins Publishers, The Weekly Standard and News America Marketing); sports franchises (the Los Angeles Dodgers); and marketing services (SmartSource/iGroup). In this Statement of Privacy Principles these businesses are collectively called the News America Group. At the News America Group we strive to enhance our relationship with consumers. Collecting personal information about consumers is vital to this effort. This Statement of Privacy Principles describes the policies and procedures of the News America Group's U.S.-based businesses for the collection, use, and dissemination of personally identifiable information about U.S. consumers in both the online and offline world. The Principles are based on the concepts of consumer notice and choice.* The News America Group is actively involved in the ongoing privacy debate and is continually monitoring privacy developments. Accordingly, from time to time we may modify these Privacy Principles to reflect changes in the law, self-regulatory initiatives and technology.
COLLECTION
The News America Group obtains personally identifiable information only if we believe the information is relevant to our relationship with a consumer or to assist us in creating a relationship with a consumer. We obtain personally identifiable information about consumers directly from consumers whenever possible, primarily in the course of providing them with products, information and services. When the News America Group obtains personally identifiable information from third-party sources, we use only reputable sources. In those instances where our information collection activities involve children, the News America Group provides special privacy protections.
NOTICE
When The News America Group collects personally identifiable information from consumers, we inform them about who is collecting the information, why it is being collected, how it is being collected, the types of uses we will make of the information, whether we will disclose the information to third parties and the types of third parties to whom we will disclose the information, and consumers' options regarding the use of their information.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-45-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
CHOICE
The News America Group provides consumers with an opportunity to choose whether the business unit that collects their personally identifiable information may use it for purposes that are other than those for which the information was submitted, and whether the information may be shared with third parties.
USE OF PERSONAL INFORMATION
Inside the News America Group, we use personally identifiable information only in a manner consistent with these Privacy Principles. Personally identifiable information is available only to our employees, agents and contractors who have a business reason to have access to such information. The News America Group uses personally identifiable information to respond to our customers and to make decisions about the goods and services that the News America Group or its business partners provide or hope to provide to consumers. Subject to the exercise of consumer choice, personally identifiable information may be used for different purposes, or shared with our business partners. A News America Group business entity may disclose personally identifiable information without providing consumers with a choice in order to protect the rights of the companies within the News America Group or their respective employees, agents and contractors; to protect the safety and security of visitors to web sites operated by News America Group companies; to protect against fraud or for risk management purposes; or to comply with the law or legal process. In addition, if a News America Group entity sells all or part of one of its businesses, makes a sale or transfer of assets or is otherwise involved in a business merger or transfer, personally identifiable information may be transferred to a third party as part of that transaction.
SECURITY
The News America Group uses reasonable administrative, technical, personnel, and physical measures to safeguard personally identifiable information in its possession against loss, theft, and unauthorized use, disclosure or modification.
ACCESS, CORRECTION AND DELETION
Whenever possible, each News America Group business unit permits consumers to have a right to see the personally identifiable information that it has collected from them, to correct any information that is incorrect and to instruct the business unit to delete the information from its files.
REMEDIES
Consumers may contact a privacy officer at each News America Group business unit regarding privacy complaints and disputes.
COMPLIANCE
Each News America Group company will take appropriate measures to ensure compliance with these Privacy Principles.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-46-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT Q
LICENSEE COMPETITORS
Jamdat Mforma Digital Bridges Digital Chocolate Game Loft Infospace
Any further additions and/or deletions shall be mutually agreed and addressed via amendment to this Agreement.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-47-
Source: GLU MOBILE INC, S-1/A, 3/19/2007 [/INST] ```json
{<answer_start>
"answer": "Licensee hereby does forever waive and agree never to assert any and all Moral Rights it may have in Fox's Intellectual Property Rights in and to the PSM and the Fox Intellectual Property and any derivative works thereof and shall cause its employees and contractors (including the developers) to do likewise."
<answer_end>
}
``` </s> | Exhibit 10.09
***** CONFIDENTIAL TREATMENT REQUESTED
Agreement Number 12965
WIRELESS CONTENT LICENSE AGREEMENT
This License Agreement (this "Agreement") is entered into effective as of December 16, 2004, (the "Effective Date") by and between TWENTIETH CENTURY FOX LICENSING & MERCHANDISING, a division of Fox Entertainment Group, Inc. ("Fox"), as Administrator for Twentieth Century Fox Film Corporation ("Trademark Licensor"), and Sorrent, Inc. ("Licensee"). Fox and Licensee are collectively referred to as the "parties" and each individually as a "party."
RECITALS:
WHEREAS, Trademark Licensor owns the rights to develop, manufacture, publish, and distribute entertainment applications based on the story, plot, theme, distinctive creative elements and name/logo (collectively, the "PSM") appearing in the theatrical motion pictures set forth on Exhibit A attached hereto (individually, the "Property" and collectively, the "Properties," and further designated as "Major Release(s)" and "Targeted Release(s)"); and
WHEREAS, Fox is the administrator of such rights for Trademark Licensor; and
WHEREAS, Licensee is engaged in the business of, among other things, developing and producing interactive entertainment applications for wireless communication devices, such as mobile telephones; and
WHEREAS, Licensee desires to obtain a license from Fox to develop a variety of wireless products utilizing elements of the PSM and to be operated on mobile/cellular telephones; and further to publish, license, promote, distribute and sell such wireless products to end users through communications service provider(s) and portals providing wireless products ("CSP(s)") on the terms and conditions set forth herein; and
WHEREAS, Fox and Vodafone Group Services Limited ("VGSL") have entered into a wireless content distribution agreement ("VGSL Agreement") whereby Fox is to be the content provider for VGSL wireless products relating to various Properties, and Fox desires a license to distribute Wireless Products to VGSL pursuant to the VGSL Agreement.
AGREEMENT
NOW, THEREFORE, the parties do hereby agree as follows:
1. GRANT OF RIGHTS:
(a) Wireless Products and Wireless Platform: Fox grants to Licensee a limited, exclusive (except as otherwise may be provided in this Agreement), non-transferable (except as permitted in Paragraph 17(d)) right and license to use, make, have made (as set forth in Paragraph 1(a)(i) below), reproduce, modify, and create derivative works of
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-1-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
the PSM in each Property, solely for the purpose of developing the wireless applications specifically set forth for each of the Properties on Exhibits B through M attached hereto ("Wireless Products"), some of which Wireless Products are defined in the Glossary attached hereto as Exhibit N. To the extent not specified in this Agreement the parties will agree upon the specific Wireless Products to be developed for each Property in accordance with the procedure set forth in Paragraph 2. Notwithstanding the foregoing, Licensee acknowledges that it shall be obligated to develop all Wireless Products set forth on Exhibits B, C, D, and G, and any other Wireless Products for other Properties that the parties mutually agree in writing will be added to the VGSL Agreement for distribution by VGSL (the "VGSL Products"). The Wireless Products shall utilize elements of the PSM and shall be operated on mobile or cellular telephones. Furthermore, Fox grants to Licensee a limited, exclusive (except as may otherwise be provided in this Agreement), non-transferable (except as permitted in Paragraph 17(d)) right and license to make, have made, reproduce, modify, create derivative works of, advertise, promote, distribute, sell and license the Wireless Products, including any PSM included therein, solely (i) for use on mobile or cellular telephones (the "Wireless Platform"); (ii) in the Territory (as defined in Paragraph 3), (iii) during the Term (as defined in Paragraph 4), (iv) for distribution by Licensee through the Distribution Channels (as defined in Paragraph 2(c)) granted herein; and (v) by means of periodic subscription fee, a per-download basis, or through a retail purchase. Nothing contained herein shall be construed as granting Licensee the right to develop and/or distribute video clips and/or trailers for the Properties, except where Fox expressly agrees to development and/or distribution of such video clips and/or trailers.
(i) Sublicense: Licensee shall be permitted to sublicense the rights and licenses granted herein to third party contractors of Licensee, solely for purposes of development and distribution of the Wireless Products on behalf of Licensee in accordance with this Agreement; provided that such third party contractors have entered into binding written agreements with Licensee that are no less protective of Fox's intellectual property rights than are the terms and conditions of this Agreement, and provided further that Licensee will not subcontract development of any video games hereunder without Fox's prior written approval of the third party game development contractor. Notwithstanding the foregoing, Licensee shall remain the primary contact under this Agreement and shall remain liable for all obligations performed by a sublicensee.
(ii) Substitution of Properties and Addition of Properties: Fox reserves the right to remove any Property listed on Exhibit A in the event that Fox determines not to theatrically release such Property or is found to be legally prohibited from engaging in the development and sale of Wireless Products in connection with such Property, and shall replace the removed Property with a like Property, which designation shall be subject to the mutual agreement of Fox and Licensee. Any further additions to Exhibit A shall also be subject to the mutual agreement of Fox and Licensee, provided however Fox shall reasonably determine if the Property constitutes a Major Release or a Targeted Release consistent with its past practices. In no event will the number of Major Releases and Targeted Releases included as Properties licensed to Licensee under this Agreement be less than four (4) and eight (8) respectively.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-2-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
(iii) Addition of Wireless Products: The parties may amend this Agreement to include additional Wireless Products for the Properties set forth on Exhibit A, subject to their mutual agreement in writing, provided that if they are unable to agree upon such additions within five (5) business days of a request from Fox, Fox will have the right to develop or have developed the requested Wireless Products for the relevant Property notwithstanding the exclusivity granted to Licensee in this Agreement.
(b) Bundling: Neither party will solicit or enter into any agreement with any third party regarding the bundling of the Wireless Products with any other property (including a Fox property) or with any other products and services including preloading, OEM and soft bundling, except as mutually agreed between the parties. The parties will mutually agree upon the terms of each bundling transaction, the nature of the bundle, the timing, and any new or different royalties for such bundling on a case-by-case basis.
(c) Third-Party Promotions: Neither party may solicit or enter into any agreement with any third party regarding third-party promotional opportunities with respect to the Wireless Products without the other party's prior written consent; provided that the foregoing will not limit Licensee's rights to market and promote the Wireless Products directly and through (i) CSPs, subject to any Fox approval rights set forth elsewhere in this Agreement, or (ii) Fox's right to engage in third party promotions for the Properties involving wireless content otherwise sourced or created.
(d) Excluded Products: For the avoidance of any doubt, the rights granted in Paragraph 1(a) and (b) shall be specifically limited to the Wireless Products for the Wireless Platform and shall not extend to any other device, platform, operating system or distribution method, whether wired or wireless, pursuant to which interactive entertainment software may be delivered to or accessed by end-users, including, but not limited to, the following: (i) traditional entertainment software console platforms, such as Sony PlayStation and PlayStation 2, Microsoft Xbox, and Nintendo GameCube and successor platforms; (ii) desktop or laptop computer systems, such as PC Windows, Macintosh, (iii) hand-held electronic dedicated gaming devices (e.g., Nintendo's GameBoy Color and GameBoy Advance handheld devices, Sony's PSX handheld device, and Tiger Electronic hand- held devices); (iv) pay-per-play arcade systems and other forms of location-based entertainment; (v) interactive toys; (vi) television, whether via cable, satellite, set-top boxes or other on-demand service; (vii) massively multiplayer games; (viii) internet gaming and (ix) any other technology now known or hereafter devised. Except as otherwise specifically stated herein with respect to the Wireless Products, Licensee shall have no right to develop, manufacture, reproduce, distribute, sell or exploit any other products based on the PSM or the Property.
(e) Fox's Reservation of Rights: Fox expressly reserves and retains any and all rights that are expressly excluded from or not specifically granted to Licensee pursuant to this Agreement, including but not limited to the following:
(i) Development/Exploitation/Distribution: the right to develop, publish, and/or distribute (or grant a third party the right to develop, publish, and/or distribute) other wireless products or wireless content of any nature which may be derived from the Properties (and further, to exploit same) which are similar or in direct
Wireless Content License Agreement Multiple Properties /Sorrent, Inc. / Final PLZ
-3-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
competition with the Wireless Products at any time in Japan including during the Term and within Japan, provided that Fox will not grant to any other party any such rights to develop, publish, and/or distribute Wireless Products for the Wireless Platform to end users outside of Japan (with the exception of those distribution rights for Wireless Products granted to VGSL under the VGSL Agreement in accordance with Paragraph 1(f) of this Agreement), or provide to any Licensee Competitor (as defined in Exhibit Q) any Licensee Materials or otherwise grant any rights to any Licensee Competitor to develop, publish, and/or distribute Wireless Products, or other wireless products or content based on the Properties. Fox has not granted and will not grant any exclusive distribution rights with respect to the Wireless Products to VGSL or any other party; and
(ii) Use of Fox's Logo or Other Intellectual Property Rights: the right to use the Fox logo or trademark, or any other trademark(s), logo(s) or copyrights owned by Fox other than those specifically set forth herein in the manner set forth; and
(iii) Video Clips and Trailers: except as may otherwise be provided in this Agreement, the right to develop and/or distribute (or grant a third party the right to develop and distribute) video clips and/or trailers for the Properties. At any time during the Term, Fox may distribute directly (or grant a third party the right to distribute) video clips and/or trailers to CSPs in connection with the Properties; and
(iv) SMS/Text Messaging: the right to develop, market and distribute (or grant a third party the right to develop, market and distribute) SMS or text messaging in connection with the Properties; and
(v) Promotional Content: the right to develop and/or distribute (or grant a third party the right to develop and/or distribute) free promotional and/or give-away content in connection with the Properties, provided that Fox will use all reasonable efforts to make mention of the Wireless Products developed by Licensee, or cause the third party to do the same, in the context of the promotion and/or give-away.
(f) Licensee's Grant of Rights. Subject to Fox's compliance with the terms and conditions of this Agreement, including its payment obligations in accordance with Section 7, Licensee hereby grants to Fox a limited, non-exclusive, non-transferable (except as permitted in Section 17(d)), right to distribute Licensee Materials (as defined in Paragraph 11 (c)) to VGSL and T-Mobile, solely as incorporated into Wireless Products, and to authorize VGSL and T-Mobile to distribute such Wireless Products to end users outside of the United States. Fox's rights in the Licensee Materials will be limited to those expressly granted in this Paragraph 1(f). Licensee reserves all rights and licenses in and to the Licensee Materials not expressly granted to Fox in this Section 1(f). Any other marketing, distribution, or sale of the Wireless Products and/or Licensee Materials by Fox will be subject to Licensee's prior written consent, in Licensee's reasonable discretion.
2. DEVELOPMENT AND DISTRIBUTION OF THE WIRELESS PRODUCTS:
(a) Development: Subject to Fox's delivery of the PSM Materials (as defined in Paragraph 2(a)(i) below), Licensee shall be obligated to create, develop, and publish the Wireless Products, pursuant to the terms and conditions of this Agreement. Subject to
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-4-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
Fox's approval rights, Licensee shall assume full responsibility for the creation, development and production of the Wireless Products, which shall include, without limitation, (A) designing the creative and technical specifications for the Wireless Products, (B) creating all computer code for the Wireless Products, (C) creating all visual assets for the Wireless Products, (D) acquiring and/or licensing any and all other technology, software and hardware needed for purposes of creating and distributing the Wireless Products, (E) ensuring compatibility of technology with the CSPs to which Licensee grants distribution rights, which shall include without limitation VGSL and T-Mobile, (the "Licensed CSPs"), and (F) conducting quality assurance testing of the Wireless Products. For the avoidance of doubt, Licensee acknowledges and agrees that Fox will have no development obligations whatsoever with respect to the Wireless Products, and further that Fox's sole role with respect to such development will be limited to delivering the PSM Materials, supervising Licensee's obligations with respect to same, granting or denying approvals as set forth hereunder, providing photos, style guides and other materials to Licensee where necessary, and collaborating with Licensee on the creative direction with respect to the Wireless Products.
(i) Delivery of PSM Materials. For each of the Properties identified in or added by mutual agreement to Exhibit A, Fox will provide to Licensee no later than ***** prior to the release of any games to be developed in connection with each Property and no later than ***** prior to the release of any other wireless applications to be developed in connection with each Property, some or all of the following items, to the extent available, on a Property-by-Property basis and only in electronic format where available: style guides, one-sheets (art used for movie poster), digital images, audio clips, storyboards, video tapes of trailers as they are produced, hard-copy scripts, publicity photos, and non-trailer video which shall only be available for viewing on the Fox lot premises (collectively, the "PSM Materials"). For the avoidance of doubt, Licensee will not be provided electronic copies of any scripts. Fox will update the PSM Materials provided to Licensee as new or different materials become available.
(ii) VGSL Development: Licensee expressly acknowledges and agrees that Fox has entered into the VGSL Agreement with VGSL for the development of certain Wireless Products set forth on Exhibits B, C, D and G, in connection with the following Properties: "Robots;" Untitled Ridley Scott Film; "Ice Age 2;" and "Mr & Mrs. Smith." Licensee shall be obligated to develop such Wireless Products, and distribute them as set forth in Paragraph 2(c)(ii) below, on behalf of Fox.
(iii) Development for Japan: Upon Fox's notice to Licensee, Licensee shall immediately cease all development, publication and distribution of the Wireless Products in Japan.
(iv) Music and Sound Effects: If Licensee seeks to use music or sound effects from any of the Properties in connection with the development of the Wireless Products, such use shall be subject to the advance written approval of Fox, and, if applicable, Fox Music, Inc., c/o the Vice President, General Manager, Fox Music Publishing ("Fox Music"). Subject to Fox and Fox Music's approval, Licensee shall be solely responsible for any and all third party payments that may arise out of the
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-5-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
approved use of the music from the Property in connection with the Wireless Products, including without limitation any royalties, mechanical fees, residuals, publishing fees, license fees, reuse fees or other guild-related payments. In such event, Licensee shall pay directly to Fox Music a separate Royalty, at a rate subject to good faith negotiation between Licensee and Fox Music, on sales of the Wireless Products incorporating such music. Further, Licensee shall obtain the prior written approval of Fox Music concerning the final music arrangement to be so utilized and provide Fox Music with two samples of the final, approved Wireless Products prior to the sale or distribution thereof.
(A) No License for Music Realtones or Trutones: For the avoidance of doubt, nothing herein shall be construed as granting Licensee the right to develop and/or distribute any Wireless Products containing music Realtones or Trutones (each as defined in Exhibit N).
(b) Release:
(i) The Wireless Products: Subject to the timely delivery of the PSM Materials to Licensee by Fox, Licensee shall deliver the Wireless Products to VGSL a minimum of ***** before the initial theatrical release of each Property in each of the VGSL Territories as defined in Paragraph 2(c)(ii) (A) below, and to the other Licensed CSPs within such time frames mandated by such Licensed CSPs so as to enable the release of the Wireless Products ***** prior to the initial theatrical release of each Property in each of the Territories as defined in Paragraph 3 below (the "Wireless Products Latest Commencement Date"). If Licensee fails to make the Wireless Products commercially available to the CSPs by the Wireless Products Latest Commencement Date, and such failure is not due solely to any delay by Fox in delivery of the PSM Materials, Fox shall have the right to terminate this Agreement immediately upon notice to Licensee and all rights to utilize the PSM shall automatically revert to Fox; provided that, subject to Paragraph 9(b)(ii) below, Fox will not exercise the right to terminate with respect to any delayed delivery of Wireless Products for films that have their initial theatrical release prior to June 30, 2005; and provided further that nothing in this Paragraph 2(b)(i) will limit Fox's indemnification under Paragraph 14 or any other rights and remedies Fox may have under this Agreement. Licensee shall use all commercially reasonable efforts to cause the Licensed CSPs to make available to end users the Wireless Products for each of the Major Releases and Targeted Releases no later than ***** prior to the initial theatrical release of each of the Major Releases and Targeted Releases.
(c) Distribution:
(i) CSP Distribution: Licensee shall distribute the Wireless Products to end users through the Licensed CSPs and each Licensed CSP's respective Internet portals and distribution systems ("Distribution Channel").
(A) Minimum Subscriber Market Penetration: Licensee shall use all commercially reasonable efforts to secure distribution of the Wireless Products through CSPs and to ensure that the Wireless Products are
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-6-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
available on substantially all medium and high volume handsets of all Licensed CSPs, which for the purposes of this obligation shall include VGSL.
(1) Major Releases: Licensee furthermore shall use all commercially reasonable efforts to achieve the following market penetration targets in Europe for the Major Releases ("Market Penetration Targets"): (1) distribution of the Wireless Products for the Major Releases through CSP's that hold at least ***** (*****%) of the subscribers in Western Europe during the ***** of this Agreement; and (2) distribution of the Wireless Products for the Major Releases through CSP's that hold at least ***** percent (*****%) of the subscribers in Western Europe during the ***** of this Agreement. If Licensee fails to reach the Market Penetration Targets Fox shall in its sole discretion have the right to terminate Licensee's exclusivity under this Agreement. In the event of termination of Licensee's exclusivity for Licensee's failure to achieve the Market Penetration Targets, Fox shall not distribute the Wireless Products which have been developed by Licensee prior to such termination, without first obtaining a license from Licensee on terms to be mutually agreed in each party's reasonable discretion, for the exploitation of the Licensee Materials.
(2) Targeted Releases: Fox acknowledges that Licensee may not be able to secure placement of all Targeted Releases at the levels set forth for the Market Penetration Targets defined in the previous sub-Paragraph. Notwithstanding the foregoing, Licensee shall use all commercially reasonable efforts to secure the widest possible distribution of the Wireless Products derived from the Targeted Releases in Europe.
(ii) VGSL and T-Mobile Distribution: For the Territories (as defined in Paragraph 3 below) set forth in Paragraph 2(c)(ii)(A) below, Licensee expressly acknowledges and agrees that Fox has entered into the VGSL Agreement with VGSL for the development of certain Wireless Products as set forth in Paragraph 2(a)(ii) above, and for the distribution of such Wireless Products. Fox has also entered into a separate agreement with T-Mobile to permit T-Mobile to distribute certain Wireless Products to end users outside of the United States the "T-Mobile Agreement"). Licensee hereby grants all licenses to Fox to enable Fox to provide Wireless Products to VGSL and T-Mobile for distribution to VGSL and T-Mobile subscribers outside of the United States in accordance with the terms of this Agreement, and shall further deliver such Wireless Products to VGSL and T-Mobile on behalf of Fox. Licensee further acknowledges and agrees that pursuant to the VGSL Agreement and the T-Mobile Agreement, VGSL and T-Mobile will remit directly to Fox all receipts generated from sales of the Wireless Products to VGSL and T-Mobile subscribers. Fox will pass through all such receipts received from VGSL and T-Mobile to Licensee and such receipts shall be treated as Gross Receipts, as defined in Paragraph 7(a)(ii) below, for the purpose of this Agreement. Licensee shall not enter into an exclusive distribution agreement with
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-7-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
a CSP in any of the VGSL Territories listed in Paragraph 2(c)(ii)(A) below, and Fox has not granted and will not grant any exclusive distribution rights to VGSL or T-Mobile. Fox and Licensee will cooperate together in good faith, on a schedule to be mutually agreed, to jointly manage the VGSL and T-Mobile relationships with respect to the Wireless Products, subject to willingness on the parts of VGSL and T-Mobile to so cooperate. Notwithstanding the foregoing, any conversations undertaken between Fox and VGSL and/or T-Mobile without Licensee's participation shall not be a breach of this provision.
(A) Non-Exclusive CSP Distribution in VGSL Territories: Under no circumstances shall Licensee enter into an exclusive distribution agreement with a CSP other than VGSL in the following territories ("VGSL Territories") covered under the VGSL Agreement: (1) United Kingdom; (2) Ireland; (3) Germany; (4) Spain; (5) France; (6) Sweden; (7) Switzerland; (8) Portugal; (9) Netherlands; (10) Greece; (11) Italy; (12) Australia; (13) New Zealand; (14) Egypt; (15) Slovenia; (16) Belgium; (17) Austria; (18) Hungary; (19) Malta; (20) Croatia; (21) South Africa; and (22) Japan.
(iii) Japan Distribution: Upon Fox's notice to Licensee, Licensee shall cease immediately some or all distribution of the Wireless Products in Japan. In the event Fox provides such termination notice to Licensee, Licensee hereby grants Fox a license to the Licensee Materials in order for Fox to distribute the Wireless Products that Licensee has developed for distribution in Japan prior to such termination, either directly or through a third-party. In consideration of such license, Fox shall pay Licensee a royalty as set forth in Paragraph 7(b)(i) below.
(iv) Unless otherwise mutually agreed between Fox and Licensee, Licensee will require each Licensed CSP to distribute Wireless Products to end users only for the payment of a fee; provided that Licensee may permit limited distribution (i.e. one Wireless Product per Property in each category of Wireless Products and including only one game level for each game) of Wireless Products without a fee for promotional or marketing purposes. The fees will typically appear on the end user's Wireless Platform bill and be remitted by the end user to the CSP pursuant to an agreement between the end user and the CSP. The CSP will in turn remit fees to Licensee (less any Deductions as that term is defined in Paragraph 7(a)(ii) below) pursuant to an agreement between Licensee and the CSP. Licensee will then remit royalties to Fox in accordance with Paragraph 7, below.
3. TERRITORY: Licensee shall use commercially reasonable efforts to exploit the rights granted hereunder throughout the world (the "Territory"), including without limitation all of the following VGSL Territories set forth in Paragraph 2(c)(i)(B) above: (1) United Kingdom; (2) Ireland; (3) Germany; (4) Spain; (5) France; (6) Sweden; (7) Switzerland; (8) Portugal; (9) Netherlands; (10) Greece; (11) Italy; (12) Australia; (13) New Zealand; (14) Egypt; (15) Slovenia; (16) Belgium; (17) Austria; (18) Hungary; (19) Malta; (20) Croatia; (21) South Africa; and (22) Japan. Licensee shall localize the Wireless Products into the following languages: English, French, German, Italian, Spanish, and Japanese. In addition to the previously stated languages, to the extent practicable Licensee also shall localize the Wireless Products to be delivered to VGSL into Portuguese, Greek, Dutch and Swedish, to the extent that the Properties
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-8-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
are dubbed into such languages, Fox holds foreign rights to the dubbed tracks, and such dubbed tracks are timely available.
4. TERM: The rights granted hereunder shall be effective as of the Effective Date and shall expire on December 31, 2006 (the "Term"); provided, however, that with respect to each Property, all rights and licenses granted herein will continue in full force and effect for a period of eighteen (18) months after the initial theatrical release of that Property.
(a) Licensee's Right of First Negotiation on New Properties: For the Term of this Agreement, Fox hereby grants to Licensee a right of first negotiation with respect to those theatrical motion pictures released during the Term of this Agreement (in addition to the Properties identified in Exhibit A) in which (i) Fox owns or controls licensing and merchandising rights, for which Fox determines in its sole discretion to grant to any third party any licensing rights for the development and distribution of wireless products, and (ii) which theatrical motion pictures Fox reasonably deems to be a Major Release consistent with its past practices. The Right of First Negotiation shall be exercised as follows. Whenever Fox desires to grant to any third party any licensing rights for a Major Release (each such instance, an "Opportunity"), Fox shall request that Licensee submit a bid regarding the Opportunity. If Licensee intends to exercise its Right of First Negotiation, it must submit a bid in response to Fox's request within 10 business days. If Licensee does submit a bid, both parties shall negotiate in good faith over the bid for a reasonable period of time, not to exceed 10 additional business days. If the parties have not reached agreement in writing regarding the terms and conditions for the exploitation of the Opportunity within said time period, or if Licensee fails to submit a bid in a timely manner, Fox shall be free to accept any bid from any other party with respect to the Opportunity, or Fox shall be free not to exploit the Opportunity at all. Should Licensee choose to exercise its Right of First Negotiation, its floor bid shall be at least US$***** for each Major Release (as defined in Exhibit N).
5. ADVANCE: Licensee shall pay Fox a non-refundable recoupable advance in the amount of US$***** upon Licensee's signature of this Agreement (the "Advance"). The Advance shall be treated as the first installment of the Guarantee described in Section 6(a), and will be recoupable against royalties as part of the Guarantee.
6. GUARANTEE:
(a) Amount: Licensee shall pay to Fox a non-refundable guarantee in the amount of US$***** ("Guarantee"), inclusive of the Advance. The Guarantee shall be recoupable against royalty payments and payable as follows: (a) US$***** inclusive of the Advance above; (b) US$***** on or before *****; (c) US$***** on or before *****; (d) US$***** on or before *****; (e) US$***** on or before *****; (f) US$***** on or before *****; and (g) US$***** on or before *****. There shall be no cross-collateralization among the Royalties earned, as defined in Paragraph 7 below, for the purposes of recouping the Guarantee for any of the Major Releases or Targeted Releases.
(b) Individual Property Guarantees: Notwithstanding the payment schedule set forth in Paragraph 6(a) above, a minimum recoupable guarantee (each "Individual Property
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-9-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
Guarantee") shall be apportioned from the Guarantee set forth in Paragraph 6(a) above to each of the individual Major Releases and Targeted Releases set forth on Exhibit A as follows for the purposes of determining recoupment of Guarantees and Royalty payments attributable to each of the Major Releases and Targeted Releases as set forth in Paragraph 7 below:
(i) Major Releases: The Individual Property Guarantee for each of the Major Releases set forth on Exhibit A shall be US$*****.
(ii) Targeted Releases: The Individual Property Guarantee for each of the Targeted Releases set forth on Exhibit A shall be US$*****.
(c) Overages: At such time that Fox has earned in Royalties, as defined in Paragraph 7 below, the amount of an Individual Property Guarantee attributable to a specific Property, Licensee shall then remit to Fox on a quarterly basis in accordance with Paragraph 7(c) all Royalties due and payable in excess of such Individual Property Guarantee. Notwithstanding the foregoing, all Guarantee installments shall remain due and payable in accordance with the schedule of payments set forth in Paragraph 6(a) above and may not be allocated or apportioned to Royalty overages due.
7. ROYALTIES:
(a) Payments from Licensee to Fox: In consideration of the rights granted to Licensee pursuant to this Agreement, Licensee shall pay to Fox, or such other party as Fox may designate in writing, a royalty in the following amounts:
(i) Major Releases:
(A) Until such time as ***** percent (*****%) of an Individual Property Guarantee for a Major Release is recouped by Licensee, Fox shall earn, and credit against the Individual Property Guarantees, Royalties at the rate of ***** percent (*****%) of Licensee's Gross Receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Major Release; and
(B) Thereafter and until such time as ***** percent (*****%) of an Individual Property Guarantee for a Major Release is recouped by Licensee, Fox shall earn and Licensee shall pay to Fox Royalties at the rate of ***** percent (*****%) of Licensee's Gross Receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Major Release; and
(C) Thereafter (and for the remainder of the Term), Fox shall earn and Licensee shall pay to Fox Royalties at the rate of ***** percent (*****%) of Licensee's Gross Receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Major Release.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-10-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
(ii) Targeted Releases:
(A) Until such time as ***** percent (*****%) of an Individual Property Guarantee for a Targeted Release is recouped by Licensee, Fox shall earn, and credit against the Individual Property Guarantees, Royalties at the rate of ***** percent (*****%) of Licensee's Gross Receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Targeted Release; and
(B) Thereafter (and for the remainder of the Term), Fox shall earn and Licensee shall pay to Fox Royalties at the rate of ***** percent (*****%) of Licensee's gross receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Targeted Release.
Royalties shall accrue when the Wireless Products are sold, downloaded or otherwise distributed to the end user, whichever first occurs, and shall become payable upon receipt by Licensee. "Gross Receipts" shall mean all monies received by or credited to Licensee for download of the Wireless Products by end users less only monies actually retained by the CSPs (the "Deductions").
(b) Payments from Fox to Licensee: In consideration of the rights granted by Licensee to Fox and VGSL pursuant to this Agreement, Fox shall pay to Licensee, or such other party as Licensee may designate in writing, a royalty in the following amounts:
(i) Distribution in Japan. In the event that Fox distributes, licenses, or otherwise exploits the Wireless Products in Japan pursuant to Paragraph 2(c)(iii), or grants to any third party any rights to distribute the Wireless Products for the Wireless Platform to end users within Japan, or otherwise uses in Japan any elements of the Fox Intellectual Property (as defined in Paragraph 11(a) that are solely attributable to Licensee's development efforts pursuant to this Agreement, Fox agrees to pay Licensee a royalty in the amount of ***** percent (*****%) of Fox's gross receipts for any such activity, which shall be defined as all monies actually received by Fox for the Wireless Products or other such elements of the PSM, less any Deductions.
(ii) VGSL Payments: As set forth in Paragraph 2(c)(ii) above, pursuant to the VGSL Agreement, VGSL will remit directly to Fox Fox's contractual share (pursuant to the VGSL Agreement) of all revenue from sales of the Wireless Products by VGSL in the VGSL Territories ("VGSL Revenue"). Fox will remit all VGSL Revenue to Licensee and such VGSL Revenue shall be treated as Gross Receipts for the purpose of this Agreement. The VGSL Revenue shall be treated in accordance with Paragraph 7(a) in calculating Royalties due to Fox from Licensee.
(iii) Other Payments: To the extent that Fox enters into an agreement with a CSP other than VGSL with Licensee's consent in accordance with Paragraph 1(f),
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-11-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
whereby Fox's contractual share of revenue from the sale of the Wireless Products to the CSP's subscribers is remitted directly to Fox from the CSP, Fox will pass through all such revenue from the CSP to Licensee and such revenue shall be treated as Gross Receipts for the purpose of this Agreement. Payments of all royalties from the sale of Wireless Products through any such arrangements shall be made by Licensee to Fox in accordance with Paragraph 7(b) above. Except as otherwise provided under this Agreement, Fox hereby agrees not to enter into any future agreements with a CSP for the distribution of the Wireless Products without the involvement and prior written agreement of Licensee.
(iv) For the avoidance of doubt, Fox will have no right or license to develop, publish, and or distribute any Wireless Products for the Wireless Platform, or to permit any third party to do so, or to otherwise use or exploit any Licensee Materials, except in accordance with Paragraphs 1(b) (with respect to bundling), 2(c)(iii) (with respect to Japan), and 2(c)(ii) (with respect to VGSL and T-Mobile).
(c) Payment Terms. Payment of all royalties and other payments by either party to the other shall be made in United States Dollars by check or wire transfer to a bank account to be designated by the receiving party. Payment of all royalties shall be made without deduction, reduction or set-off of any kind, provided that the paying party shall be permitted to deduct withholding taxes as permitted by applicable law. Each party agrees that it shall not be entitled to withhold any portion of the royalties as a reserve. Each party agrees to provide the other with all necessary withholding tax forms.
(d) Accounting Statement: Royalty statements (which statements shall be on the form attached hereto as Exhibit O and incorporated herein by this reference or such other form as the receiving party may designate in its discretion) shall be due and payments made within thirty (30) days after the close of each calendar quarter in which the paying party received any applicable revenue. Each party shall keep a record of all sales and shall submit, together with the royalty statements, a quarterly summary report of such sales. Notwithstanding the foregoing, pursuant to Paragraphs 7(b) (2) and 7(b)(3), Fox shall make all payments of revenue remitted directly by VGSL or any other CSP with whom the parties prospectively agree Fox will receive revenue directly, within thirty (30) days of receipt of such revenue.
(e) Books and Records: Each party shall keep accurate and complete books and records as they relate hereto for the greater of three years from the Effective Date or two years from the termination or expiration of the Term. On reasonable notice, each party shall have the right to examine said books and records; provided that such examination will be made no more than twice in any given twelve month period, and shall be made during normal business hours. If any audit discloses that a party owes royalties in excess of 5% of royalties paid during any accounting period, the audited party shall pay the audit costs together with shortfall and interest at rates as specified in Paragraph 7(e) below.
(f) Late Payments: If a party does not receive the applicable royalty payment as specified on or before the thirtieth day after the close of any calendar quarter, the party owing such royalty shall pay interest with respect to any royalties owed from day to day until the date of payment at a rate of 5% above U.S. Prime Rate on an annual basis. Interest on royalties owed calculated in accordance with this Paragraph shall accrue after
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-12-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
as well as before any judgment. Neither the acceptance of any payment or royalty statement nor the deposit of any check shall preclude a party from questioning the correctness of any such payment or royalty statement at any time.
8. DUTIES OF LICENSEE:
(a) Marketing and Promotion: Licensee shall be responsible for all marketing, advertising and promotional efforts with respect to the Wireless Products throughout the Territory during the Term. Licensee shall (A) participate in face to face meetings and conference calls regarding marketing from time to time, the frequency, location and subject matter of which shall be mutually agreed; (B) submit a separate marketing plan for the Wireless Products for each Property for which Fox has approved a Treatment (as defined in Paragraph 9(a)(ii)) within thirty (30) days of Fox's approval of such Treatment, subject to Fox's providing sufficient information regarding its release plans for the applicable Property (each, a "Marketing Plan"); (C) commit funds to the marketing of the Wireless Products as is commensurate with Licensee's marketing efforts of other similar wireless products that Licensee publishes; (D) perform business to business and trade marketing efforts (e.g., to the CSPs) commensurate with industry standards; and (E) appoint a marketing point of contact which shall be responsible for coordinating communications and facilitating relationships between Fox and Licensee and for overseeing the performance of Licensee's obligations hereunder.
All marketing materials for the Wireless Products that incorporate and/or make reference to any part of the PSM or the Properties (collectively, the "Licensee Marketing Materials") shall be subject to Fox's approval as follows:
(i) Licensee Marketing Materials: Licensee shall be responsible for producing the Licensee Marketing Materials, all of which shall be subject to Fox's prior written approval, at Licensee's sole cost and expense. Licensee will submit samples of all Licensee Marketing Materials to Fox for review and approval prior to Licensee's use of the Licensee Marketing Materials. Fox shall endeavor to review the Licensee Marketing Materials within two (2) weeks of receipt thereof, provided however, a delayed Fox response shall not constitute a deemed approval under any circumstances. Only after Fox has approved the Licensee Marketing Materials may Licensee proceed with production thereof. Once approval has been granted by Fox, Licensee will not make alterations, modifications or revisions to the Licensee Marketing Materials without the prior written consent of Fox.
(ii) CSP Marketing Materials: If any Licensed CSP seeks to incorporate any element of the PSM in its advertising, marketing, packaging (if any), consumer and trade publicity and promotional materials as well as any collateral materials related thereto ("CSP Marketing Materials"), Licensee shall ensure that such Licensed CSP obtains Fox's approval in accordance with Paragraph 8(a)(i). Licensee shall submit any such proposed CSP Marketing Materials on the CSP's behalf. Once Fox has approved any such CSP Marketing Materials and notified Licensee, Licensee shall notify the CSP and Licensee and the CSP may proceed with production thereof, provided there are no alterations from the approved packaging.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-13-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
(b) Product Support: Licensee shall provide all customer product support, including technical support, for the Wireless Products in the same manner as it provides such support for any other product that it distributes and/or publishes, and in any case in accordance with wireless industry standards. Licensee will display (and ensure that the CSP displays) a toll free telephone number (or an email address, in Licensee's discretion, on a country by country basis) on its website so that customers may contact Licensee and/or the CSP regarding the Wireless Products ("Customer Request"). Licensee and/or the CSP will use all commercially reasonable efforts to respond to each such Customer Request within 24 hours after receipt of such request. Licensee shall exercise commercially reasonable efforts to resolve each such Customer Request. Licensee also shall respond to all inquiries from VGSL relating to the Wireless Products delivered to VGSL.
(c) Solicitation of Sales: So long as the Agreement has not been terminated or otherwise expired, Licensee shall use all commercially reasonable efforts to promote sales of the Wireless Products during the Term of this Agreement.
(d) No Preferential Treatment: Licensee agrees that it will use substantially similar efforts to advertise, promote, manufacture, sell and distribute the Wireless Products as it devotes to its other licensed products.
(e) Compliance with all Laws: Licensee shall comply with all laws, rules, treaties, and regulations governing the distribution of the Wireless Products throughout the Territory.
(f) Internet Data: Licensee shall comply with COPPA regulations as well as with Fox's Internet Privacy Policy with respect to the collection of any consumer information via the Internet. The policy is attached hereto as Exhibit P and incorporated herein by this reference.
(g) Localization: Licensee shall localize the Wireless Products into the following languages: English, French, German, Italian, Spanish, and Japanese, with Portuguese, Greek, Dutch and Swedish to be made available where practicable to the extent that the Properties are dubbed into such languages, Fox holds foreign rights to the dubbed tracks, and such dubbed tracks are timely available.
(h) Optimization: Licensee shall be required to optimize the Wireless Products for all Territories and Licensed CSPs.
(i) Compatibility Testing: Licensee shall be responsible for any compatibility testing of the Wireless Products required by CSPs, and further shall be responsible for the following: (i) quality assurance of the Wireless Products which is consistent with industry standards; and (ii) adequate operation and functionality of the Wireless Products on the Wireless Platform in connection with each Licensed CSP's networks. To the extent that a material bug or defect is discovered in the Wireless Products which impacts in any manner the functionality of the Wireless Products, Licensee will promptly investigate and correct such bugs or defects, whether discovered by Licensee, Fox, the Wireless Platform manufacturer(s) or the CSP(s). As between Fox and Licensee, all costs of performing the foregoing obligations shall be borne by Licensee.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-14-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
9. FOX APPROVALS:
(a) Wireless Products Approval: Fox shall have the right to approve the Wireless Products in accordance with the procedure set forth below. Licensee acknowledges that Fox's approval shall include the approval of any third party who has approval rights over any of the Properties, as applicable.
(i) Creative Meetings: Licensee shall participate in face to face creative meetings with Fox on a monthly basis to determine which Wireless Products shall be developed for upcoming Major Releases and Targeted Releases. The parties will mutually agree upon the list of Wireless Products for each Property, and will amend the applicable Exhibit for that property upon reaching such agreement. Notwithstanding the foregoing, Licensee shall develop the Wireless Products set forth in Exhibits B through M for each Property.
(ii) Concept / Treatment: For each of the Major Releases and Targeted Releases, within ***** after receipt from Fox of the applicable PSM Materials, Licensee will deliver to Fox a concept / treatment for the applicable Wireless Products, which will outline the technical and creative aspects of the Wireless Products (each, a "Treatment"). Each Treatment shall be subject to Fox's approval, which approval is within Fox's discretion. Once a Treatment is approved by Fox and to the extent the approved Treatment requires compatibility input from a Licensed CSP, it shall be Licensee's sole responsibility to secure concept approval from such Licensed CSP. If the Licensed CSP requires changes, modifications or alterations to a Treatment, or to any element of the Wireless Products, Licensee shall seek Fox's written approval of any such change, which approval may be withheld in Fox's sole discretion.
(iii) Design Document: Once a given Treatment is approved by Fox, Licensee shall then submit to Fox a game design document ("Design Document") which will lay out the creative and technical aspects for the Wireless Product, including how Licensee intends to use the Property and the PSM in the Wireless Product. The Design Document shall be subject to Fox's written approval, which approval is within Fox's sole discretion.
(iv) Alpha Testing: Upon approval of the Design Document by Fox, Licensee shall submit a prototype of the applicable Wireless Product, which demonstrates all of the features and functions set forth in the Design Document, although colors, graphics and related elements need not be in their final form (each, an "Alpha Prototype"). Each Alpha Prototype will be subject to Fox's written approval, which approval will be in Fox's sole discretion.
(v) Beta Testing: Upon approval of the Alpha Prototype, Licensee shall submit a post-Alpha prototype of the Wireless Product meeting all Alpha requirements and in substantial conformance with the Design Document, with all features and functions implemented and in which all interface, memory allocation and code size issues are effectively addressed (each, a "Beta Prototype"). Each Beta Prototype will have passed Licensee's established testing procedures and have no known Bugs. Each Beta Prototype shall be subject to Fox's written approval, which
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-15-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
approval will be in Fox's sole discretion. After Fox has approved a Beta Prototype, Licensee shall be free to release the Beta Prototype as a final commercial product.
(A) Modifications: After approval of a Beta Prototype, Licensee shall not modify the Wireless Products without the prior written approval of Fox. For purposes of this paragraph, porting, enhancements, optimization (which alters the content displayed in any material manner) and localization shall be deemed a modification requiring Fox's prior written approval. Notwithstanding the foregoing, Porting that does not require substantive changes to a Wireless Product will not be deemed a modification requiring Fox's prior approval.
(b) Approval Process:
(i) Evaluation: Fox shall approve or reject in writing all Treatments, Design Documents, Alpha Prototypes, and Beta Prototypes submitted to it for its approval (each individually a "Deliverable"). Fox's approval or rejection of all Deliverables shall be rendered in good faith.
(ii) Rejection: If Fox rejects any Deliverable, Fox shall provide to Licensee, in writing, the reasons for its rejection of that Deliverable. Licensee shall then use commercially reasonable efforts to make the changes to that Deliverable and resubmit the Deliverable to Fox for Fox's reconsideration. If Fox rejects a given Alpha Prototype more than twice based on a reason previously notified to Licensee by Fox, then Fox may terminate this Agreement in whole or with respect to the affected Property and Wireless Products and shall reserve all remedies available under this Agreement. Notwithstanding the foregoing, Fox will not terminate this Agreement for rejection of any Deliverables related to Properties that have their initial theatrical release prior to June 30, 2005, provided such Deliverables are accepted and delivered not later than ***** after the U.S. theatrical releases for each of the following Properties: "Robots"; "Mr. & Mrs. Smith"; and Untitled Ridley Scott Film.
(iii) Collaborative Process: The parties intend that development of the Wireless Products will be a collaborative effort between Fox and Licensee, such that Fox shall have a reasonable opportunity to provide input into the primary aspects of each Wireless Product through the review and approval procedure described above, including, but not limited to, the look and feel of the Wireless Products, art direction, as well as the use of the Property (and all elements therefrom) in the Wireless Products and in the advertising, promotion and marketing thereof in accordance with this Agreement. Licensee understands and agrees that approval of any two-dimensional artwork does not constitute approval of the implementation of the artwork in the Wireless Products.
(iv) Timing: Fox shall endeavor to approve or reject in writing all Deliverables and all materials submitted to it for its approval within two (2) weeks of Fox's receipt thereof. If Fox does not approve or reject in writing a Deliverable within two (2) weeks of its receipt and causes a significant delay in the development of the
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-16-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
Wireless Products, then Fox and Licensee shall mutually and in good faith discuss and agree to any adjustments in the Wireless Products Latest Commencement Date which are necessary due to such delay. Fox shall not terminate this Agreement for Licensee's delay in delivery of the Wireless Products, where such delay is solely caused by Fox's failure to deliver the PSM Materials in a timely manner in accordance with Paragraph 2(a)(i). Fox reserves the right to terminate this Agreement in accordance with paragraph 2(b)(i) where Licensee's delay in delivery of the Wireless Products is the result of Fox's disapproval of the Deliverables.
10. PRICING: As between Fox and Licensee, Licensee will be responsible for determining the prices and/or fees at which the Wireless Products will be offered for sale to the general public but will do so in accordance with Licensee's agreements with the CSPs. Licensee acknowledges that VGSL will be responsible for making pricing decisions for the Wireless Products distributed through VGSL, provided that Fox will not agree to any reduction in the share of revenue it receives from VGSL, other than the ***** percent (*****%) reduction in Fox's revenue share for late delivery provided for in the current version of the VGSL Agreement.
11. INTELLECTUAL PROPERTY RIGHTS:
(a) Intellectual Property Rights Defined: For purposes of this Agreement, the term "Intellectual Property Rights" means know-how, inventions, patents, patent rights, and registrations and applications, renewals, continuations and extensions thereof, works of authorship and art, copyrightable materials and copyrights (including, but not limited to, titles, computer code, designs, themes, objects, characters, character names, stories, dialog, catch phrases, concepts, artwork, animation, sounds, musical compositions, graphics and visual elements, audio-visual effects and methods of operation, and any related documentation), copyright registrations and applications, renewals and extensions thereof, mask works, industrial rights, trademarks, service marks, trade names, logos, trademark registrations and applications, renewals and extensions thereof, trade secrets, rights in trade dress and packaging, publicity, personality and privacy rights, rights of attribution, paternity, integrity and other similarly afforded "moral" rights, and all other forms of intellectual property and proprietary rights recognized by the U.S. laws, and other applicable foreign and international laws, treaties and conventions.
(b) Fox Intellectual Property: Fox shall own all Intellectual Property Rights in and to any derivative works made from the Properties, whether or not used in the Wireless Products, including without limitation design documents, graphics, animation, music, packaging, advertising, promotional and other artwork used in connection with the development and distribution of the Wireless Products but at all times excluding the Licensee Materials as defined in Paragraph 11(c) below (collectively, the "Fox Intellectual Property"). The Fox Intellectual Property includes all rights in and to the entire "look and feel" of the Wireless Products, all visual displays, scripts, dialogue, literary treatments, concepts, characters, backgrounds, environments, and other elements visible to the Wireless Products' users; all sounds, sound effects, soundtracks and other elements audible to the user. Licensee acknowledges and agrees Fox shall be the exclusive owner of these rights as a work made for hire. Licensee acknowledges that Licensee's use of any Property shall not confer or imply a grant of rights, title or interest in the Property or good will associated therewith, except as specifically provided herein.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-17-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
Fox's Intellectual Property Rights shall be indefeasible and irrevocable and shall not be subject to reversion under any circumstance, including cancellation, termination, expiration, or breach of this Agreement. Licensee further agrees to execute one or more copyright assignments at Fox's request, or any other subsequent document as further evidence of this assignment, and to cooperate with Fox in perfecting the assignment of any rights to the Fox Intellectual Property, and hereby appoints Fox as its attorney-in-fact to execute any documents required in connection with such assignment. All materials created hereunder shall be prepared by an employee-for-hire of Licensee under Licensee's sole supervision, responsibility and monetary obligation, or, if third parties who are not employees of Licensee, including without limitation all software developers developing the Wireless Products contribute to the creation of any Fox Intellectual Property, Licensee shall obtain from such third parties a full written assignment of rights so that all right, title and interest in the Fox Intellectual Property shall vest in Fox.
(c) Licensee Materials: Licensee owns and shall retain all right, title, and interest in and to (i) all software source code, tools, and technical documentation used by or for Licensee to create the Wireless Products, including without limitation any and all software code included in the Wireless Products, (ii) all aspects and elements of the Wireless Products other than the Fox Intellectual Property therein, including without limitation any and all gaming engines, game concepts, rules, scripts, and other Intellectual Property Rights therein; and (iii) any and all Intellectual Property Rights in any of the foregoing (the "Licensee Materials").
(d) Moral Rights: Licensee hereby does expressly assign to Fox any and all rights of paternity or integrity, rights to claim authorship, to object to any distortion, mutilation or other modification of, or other derogatory actions in relation to the PSM, the Fox Intellectual Property, and any of Fox's Intellectual Property Rights in and to the PSM and or the Fox Intellectual Property and any derivative works thereof, whether or not such would be prejudicial to Fox's honor or reputation, and any similar right, existing under judicial or statutory law of any country in the world, or under any treaty ("Moral Rights"), regardless of whether such right is denominated or generally referred to as a moral right. Licensee hereby does irrevocably transfer and assign to Fox any and all Moral Rights that Licensee may have in Fox's Intellectual Property Rights in and to the PSM and the Fox Intellectual Property and any derivative works thereof and shall cause Licensee's employees and contractors, including Licensee's developers of the Wireless Products, to do likewise. Licensee hereby does forever waive and agree never to assert any and all Moral Rights it may have in Fox's Intellectual Property Rights in and to the PSM and the Fox Intellectual Property and any derivative works thereof and shall cause its employees and contractors (including the developers) to do likewise.
(e) Licensee Cooperation: Licensee shall not by any act or omission to act impair or prejudice the Intellectual Property Rights of Fox in the PSM, the Fox Intellectual Property or the Properties, or violate any moral rights or deal with the PSM, the Fox Intellectual Property or Properties so that any third party might obtain any lien or other right of whatever nature incompatible with the Intellectual Property Rights of Fox. Licensee agrees to notify Fox of any known or suspected infringement of Fox's Intellectual Property Rights in the PSM and the Property that comes to Licensee's attention and to assist Fox, at Fox's expense, in taking such action as Fox, in its sole discretion, deems necessary or appropriate to prevent or remedy such infringing activities. Licensee shall
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-18-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
also promptly notify Fox in writing of any legal proceeding instituted, or written claim or demand asserted, by any third party against Licensee with respect to the infringement of any Intellectual Property Rights that is alleged to result from the use of the PSM or the Properties in connection with the Wireless Products in accordance with this Agreement.
(f) First Sale Doctrine Not Applicable: The PSM is licensed, not sold, by Fox to Licensee, and nothing in this Agreement will be interpreted or construed as a sale or purchase of the PSM, including but not limited to any use of a "purchase order" by Licensee in connection with the transactions contemplated hereunder. Furthermore, notwithstanding use of the terms "sale" and "sell" throughout this Agreement, any distribution or delivery of the Wireless Products by Licensee to any sublicensee (including, without limitation, CSPs and end-users) will be by license and not by sale (and Licensee shall post notice of that fact in sufficient size, location and manner on Licensee's website on the page from which the general public can subscribe to the Wireless Products). Accordingly, Licensee acknowledges that the "First Sale Doctrine" (as embodied in 17 U.S.C., Paragraph 109 of the United States Copyright Act of 1976, as amended, or the equivalent law or statute in the Territory) does not apply to Licensee's acquisition of rights in and to the PSM and the Property hereunder or to any sublicensee's acquisition of rights in and to the Wireless Products under any agreement between Licensee and a sublicensee.
12. TRADEMARKS AND COPYRIGHTS; FOX'S TITLE AND GOODWILL:
(a) Intellectual Property Notices: Licensee agrees to place on Licensee's website and in the Wireless Products, and on the packaging and related documentation, if any, and Marketing Materials for the Wireless Products, all trademarks, copyright notices, logos and other legal or proprietary designations of Fox in the form and manner reasonably directed by Fox, including, without limitation, a notice indicating that the Wireless Products are produced by Licensee under license from Fox. All copyrights, trademarks and service marks relating to the Properties, PSM Materials, and Fox Intellectual Property, are, will be and shall remain the sole property of Fox and any rights therein granted to Licensee shall terminate immediately upon termination of this Agreement. All goodwill and reputation attaching to such copyrights, trademarks and service marks shall vest in Fox. Licensee shall create, execute and deliver to Fox all documents and instruments reasonably required by Fox for the protection of or otherwise in connection with the copyrights, trademarks and service marks of Fox. Licensee shall not have the right to use Fox's trademarks or trade names except in connection with the promotion and distribution of the Wireless Products in the Territory in accordance with the terms of this Agreement. Notwithstanding the foregoing, Licensee may include a notice for the Licensee Materials, where appropriate.
(b) Goodwill: Licensee acknowledges that Fox is the owner of all right, title and interest in and to the PSM and the Properties, and further acknowledges the great value of the goodwill associated with the PSM and the Properties and that the PSM and the Properties have acquired secondary meaning in the mind of the public and that the trademarks and copyrights included in the PSM and the Properties, and the registrations thereof, are valid and subsisting, and further agrees that it shall not during the Term of this Agreement or at any time thereafter dispute or contest directly or indirectly, or do or cause to be done any act which in any way contests, impairs or tends to impair Fox's
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-19-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
exclusive rights and title to the PSM and the Properties, or the validity thereof or the validity of this Agreement, and shall not assist others in so doing.
(c) Cooperation: Licensee shall not in any manner represent that it has any ownership in the PSM or the Properties, or in any trademarks or copyrights included in the PSM or the Properties (or registrations thereof), but may, only during the Term, and only if Licensee has complied with any and all applicable laws and registration requirements within the Territory for so doing, represent that it is a "licensee" or "official licensee" hereunder. Licensee shall not register or attempt to register any copyright or trademark in the Properties, in its own name or that of any third party, nor shall it assist any third party in doing so.
13. REPRESENTATIONS AND WARRANTIES:
(a) By Licensee: Licensee represents and warrants to Fox that:
(i) Governmental Authority: Licensee has full power and authority to enter into and perform this Agreement without approval from any governmental entity or third party, and that such ability is not limited or restricted by any agreements or understanding between Licensee and any other person or company;
(ii) Corporate Authority: The execution, delivery and performance by Licensee of this Agreement have been duly authorized by any and all necessary corporate action by Licensee, and this Agreement constitutes the legal, valid and binding obligation of Licensee enforceable in accordance with its terms;
(iii) Expertise: Licensee possesses the expertise and know-how and experience to develop the Wireless Products and is otherwise fully capable of performing its obligations under this Agreement;
(iv) Infringement: The Licensee Materials and any other computer code, technology, information, art or other materials created, developed or used by Licensee pursuant to this Agreement will not infringe upon or misappropriate the Intellectual Property Rights or any other legal rights of any third party, and should any aspect of the Licensee Materials, or such other computer code, technology, information, art or materials created, developed or used by Licensee pursuant to this Agreement, become, or, in Fox's opinion, be likely to become, the object of any infringement or misappropriation claim or suit, Licensee will procure, at Licensee's expense, the right to use such Licensee Materials, computer code, technology, information, art or other materials in all respects, or will replace or modify the affected material to make it non- infringing; and
(v) Licensee Conduct: Licensee will (A) conduct its business in a manner that reflects favorably at all times on the Property, the Wireless Products and the good name, goodwill and reputation of Fox, (B) avoid deceptive, misleading or unethical practices, that are or might be detrimental to Fox, the Property, the Wireless Products or the public, (C) avoid making disparaging, false or misleading statements or representations with regard to Fox, the Property or the Wireless Products, (D) not employ or cooperate in the employment of any deceptive or
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-20-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
misleading advertising material with regard to Fox, the Property or the Wireless Products, (E) make no representations, warranties or guarantees to customers or to the trade with respect to the specifications, features or capabilities of the Wireless Products that are inconsistent with the warranties and disclaimers included in or with the Wireless Products, (F) not sell the Wireless Products to any party who it knows, or reasonably should know, will infringe Fox's Intellectual Property Rights in the Wireless Products, and (G) comply with all applicable international, national, regional, and local laws in performing its duties hereunder and in any of its dealings with respect to the Wireless Products.
(b) By Fox: Fox represents and warrants to Licensee that:
(i) Authority: Fox has full power and authority to enter into and perform this Agreement, and that such ability is not limited or restricted by any agreements or understanding between Fox and any other person or company. The execution, delivery and performance by Fox of this Agreement have been duly authorized by any and all necessary corporate action by Fox, and this Agreement constitutes the legal, valid and binding obligation of Fox enforceable in accordance with its terms.
(ii) No Representations/Warranties Regarding Revenue: Notwithstanding the representations and warranties made by Fox in this Paragraph 13(b), Fox makes no representations or warranties whatsoever regarding the amount of revenue that may be generated by sales of the Wireless Products.
14. INDEMNIFICATION:
(a) By Licensee: Licensee agrees to indemnify, defend and hold harmless Fox, Trademark Licensor and their respective successors, assigns, parents, subsidiaries, affiliates and co-venturers, and their respective directors, officers, employees and agents from and against all third party claims, damages, losses, liabilities, suits and expenses (including reasonable attorneys' fees), arising out of or in connection with any allegations that (i) the Licensee Materials or the manufacture, packaging, distribution, promotion, sale, or exploitation thereof (except with respect to those matters against which Fox has agreed to indemnify Licensee hereunder) infringes or misappropriates the Intellectual Property Rights of any third party or (ii) any breach of warranty, representation or covenant contained in this Agreement; provided that Fox (a) promptly notifies Licensee in writing of the claim; (b) grants Licensee sole control of the defense, subject to Fox's approval of counsel (to avoid conflicts of interest) and the terms of any settlement that affect Fox; and (c) provides Licensee, at Licensee's expense, with all assistance, information and authority reasonably required for the defense and settlement of the claim. If Licensee fails to undertake such defense, Licensee shall reimburse Fox for reasonable attorneys' fees incurred by Fox in its defense of such claim or suit. Furthermore, Licensee agrees to indemnify, defend and hold harmless Fox, Trademark Licensor and their respective successors, assigns, parents, subsidiaries, affiliates and co-venturers and all other parties associated with the Property, and their respective directors, officers, employees and agents from and against claims made by VGSL against Fox regarding failure to deliver and distribute the VGSL Products (as defined in Paragraph 1(a)) in a timely manner as set forth in Paragraphs 2(a)(ii), 2(b)(i) and 2(c)(ii), third-party Intellectual Property claims relating to the Licensee Materials, and all related damages, losses,
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-21-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
liabilities, suits and expenses (including reasonable attorneys' fees). Fox's failure to provide notice in accordance with this Paragraph shall not relieve Licensee of its obligations to indemnify, defend and hold Fox harmless from any such claims, unless and except to the extent that Licensee is prejudiced by any such failure.
(b) By Fox: Fox agrees to indemnify, defend and hold harmless Licensee, its successors, assigns, parents, subsidiaries, affiliates and co-venturers, and their respective directors, officers, employees and agents from and against all third party claims, damages, losses, liabilities, suits and expenses (including reasonable attorneys' fees), arising out of or in connection with any allegations that the PSM, PSM Materials, or Properties infringe or misappropriate any Intellectual Property Rights of any third party; provided that Licensee (a) promptly notifies Fox in writing of the claim; (b) grants Fox sole control of the defense and settlement of the claim; and (c) provides Fox, at Fox's expense, with all assistance, information and authority reasonably required for the defense and settlement of the claim. If Fox fails to undertake such defense, Fox shall reimburse Licensee for reasonable attorneys' fees incurred by Licensee in its defense of such claim or suit.
(c) Injunctions. If either party's use or exploitation of any materials provided and licensed hereunder is, or in the licensor's opinion is likely to be, enjoined due to the type of claim specified in Paragraphs 13(a) or (b), above, the licensor may, at its sole option and expense: (a) procure for the licensee the right to continue using such rights under the terms of this Agreement; (b) replace or modify any materials provided so that they are non-infringing; or (c) if options (a) and (b) above cannot be accomplished despite the licensor's reasonable efforts, then the licensor may terminate the licensee's rights and the licensor's obligations hereunder with respect to such materials, in which event the licensor will refund to the licensee any amounts paid by the licensee with respect to such materials. For the avoidance of doubt, Licensee is the licensor of the Licensee Materials, pursuant to Paragraph 1(e), for the purpose of this Paragraph.
(d) Sole Remedy. THE PROVISIONS OF THIS PARAGRAPH 14 SET FORTH EACH PARTY'S SOLE AND EXCLUSIVE OBLIGATIONS AND REMEDIES WITH RESPECT TO THIRD PARTY CLAIMS OF INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL PROPERTY RIGHTS OF ANY KIND UNLESS OTHERWISE STIPULATED BY JUDICIAL ORDER.
15. TERMINATION:
(a) Termination Rights;
(i) Bankruptcy: If Licensee's liabilities exceed its assets, or if Licensee becomes unable to pay its debts as they become due, or files or has filed against Licensee a petition in bankruptcy, reorganization or for the adoption of an arrangement under any present or future bankruptcy, reorganization or similar law (which petition if filed against Licensee shall not be dismissed within 30 days from the filing date), or if Licensee makes an assignment for the benefit of its creditors or is adjudicated a bankrupt, or if a receiver or trustee of all or substantially all of Licensee's property is appointed, or if Licensee discontinues its business, this Agreement shall automatically terminate forthwith without notice to Licensee.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-22-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
(ii) Transfer or Change of Control: If a substantial portion of the assets or controlling stock in Licensee's business is sold or transferred, or if there is a substantial change in Licensee's management, or if Licensee's property is expropriated, confiscated or nationalized by any government or if any government assumes de facto control of Licensee's business, in whole or in part, Fox may terminate this Agreement upon 30 days' notice to Licensee.
(iii) Unauthorized Uses: If Licensee transfers, sells or distributes to any unauthorized third party any artwork, voice clips, or other Fox proprietary materials related to the Property including but not limited to Marketing Materials, then Fox may terminate this Agreement forthwith on written notice without any cure period.
(iv) Failure to Exploit: If Licensee fails to exploit the PSM as set forth in Paragraph 2(a) and 2(b), or fails to release the Wireless Products in accordance with the dates set forth in Paragraph 2(b), then Fox may terminate this Agreement forthwith on written notice without any cure period subject to the terms and conditions set forth in Paragraph 2(a) and 2(b), respectively.
(v) Failure to Obtain Approvals: If Licensee releases a Wireless Product without first obtaining Fox's approval as specifically set forth in this Agreement in Paragraph 9, then Fox may terminate this Agreement forthwith on written notice without any cure period.
(vi) Other Defaults: Excepting only those Licensee defaults in this Paragraph 15 which permit Fox to terminate immediately without any cure period for Licensee, if either party fails to perform any of its material obligations hereunder, the other party may terminate this Agreement upon 30 days' notice, unless the breaching party cures any such breach within said 30 days and gives notice to the other party thereof within that period. Notwithstanding the foregoing, in the event that either party (A) fails to pay Royalties or other amounts when due, or (B) fails to make Royalty or other accountings in accordance with the terms of this Agreement, then the breaching party shall be subject to a one-time cure period of fifteen (15) days for such breach. If a party fails to cure the breach within such fifteen (15)-day period or another breach of either (A) or (B) above occurs following an initial cure within the fifteen (15)-day period, then the other party shall have the right in its sole discretion to terminate this Agreement forthwith on written notice without any cure period.
(vii) Other Agreements: Should any event of default by Licensee cause Fox to terminate this Agreement, Fox, in its sole discretion, may terminate, without any cure period, any other agreements concurrently existing between Fox and Licensee upon written notice specifying the agreements to be terminated. For the avoidance of doubt, this remedy shall only apply to any agreements concurrently existing between the specific parties to this Agreement and shall not apply to agreements between Licensee and Fox Sports.
(b) Effect of Termination/Expiration: In the event of termination of this Agreement, Licensee shall: (i) immediately stop in all respects the sale and distribution of the Wireless Products and provide Fox with a complete inventory report and accounting with
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-23-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
payment of all Royalties, and (ii) at Fox's election shall either (A) deliver to Fox all materials related to the Wireless Products or (B) give Fox satisfactory evidence of their destruction. Licensee agrees that its failure to stop in all respects the sale and/or distribution of the Wireless Products upon termination or expiration of the Agreement will result in immediate irreparable damage to Fox for which there is no adequate remedy at law, and in the event of such failure by Licensee, Fox shall be entitled to injunctive relief. Fox's exercise of any of the foregoing remedies shall not operate as a waiver of any other rights or remedies which Fox may have. Fox shall not distribute the Wireless Products after the termination or expiration of this Agreement without obtaining from Licensee a separate license to the Licensee Materials.
(i) Sell-Off Period: Notwithstanding Paragraph 15(b), in the event of termination of this Agreement, Licensee shall have a period of ***** from the date of such termination (unless such termination occurs less than ***** prior to the expiration of this Agreement in which case the time period shall be shortened accordingly so as not to exceed the date of expiration) in which to sell-off existing inventory of Wireless Products already in the Distribution Channels ("Sell Off Period"). Licensee agrees that no additional Wireless Products may be developed or distributed during the Sell Off Period and Licensee agrees to require that any Licensed CSP to comply with this provision. Upon the expiration of the Sell Off Period, Licensee agrees to destroy all such remaining inventory and confirm same in writing to Fox (and require that any Licensed CSP do the same). Any revenues, credits or other consideration received by Licensee for the Wireless Products during the Sell Off Period will be subject to Licensee's obligation to pay Fox Royalties pursuant to Paragraph 7 above.
(ii) Fox's Development of Wireless Products: In the event of termination or expiration of this Agreement or Licensee's loss of exclusive rights under this Agreement, Fox shall be free to create and exploit, or have a third party create or exploit, wireless products which may be similar to those developed and distributed by Licensee pursuant to this Agreement for the Properties.
(c) Guarantee Forfeiture: In the event of termination of this Agreement and without limitation of Fox's rights and remedies all of which are expressly reserved, the following payment penalties shall apply: (i) if termination occurs in the first year of the Term, Licensee shall forfeit any Guarantee paid, and shall immediately pay any remaining Guarantee, up to the amount of ***** dollars (US$*****), and any Guarantee payments made in excess of ***** dollars ($*****) shall be refunded by Fox to Licensee; and (ii) if termination occurs in the second year of the Term, Licensee shall forfeit any Guarantee paid, and shall immediately pay any remaining portion of the Guarantee then unpaid, up to the amount of ***** dollars (US$*****). Any forfeited Guarantees will apply as a set off against any additional damages claimed by Fox.
16. CONFIDENTIAL INFORMATION AND PRESS:
(a) Confidential: Each party agrees to use reasonable efforts, and at least the same care that it uses to protect its own confidential information of like importance, to prevent unauthorized dissemination and disclosure of the other party's confidential information
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-24-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
during and for a period of three (3) years after the Term. These obligations will be subject to the following terms and conditions:
(b) Confidential Information Defined: Confidential information includes, but is not limited to, the following: (i) the design, technology and know- how related to the Wireless Products, the PSM and the Property; (ii) the computer object and source code of the Wireless Products, the PSM and the Property; (iii) non-public information concerning either party's financing, financial status, research and development, proposed new products, marketing plans and pricing, unless and until publicly announced; and (iv) any information designated by either party as confidential or proprietary in writing:
(i) Certain Information Not Deemed Confidential: The foregoing obligations will not apply to any information that: (A) becomes known to the general public without fault or breach on the part of the receiving party; (B) the receiving party receives from a third party without breach of a nondisclosure obligation and without restriction on disclosure; (C) was in the possession of the receiving party prior to disclosure by the other; or (D) is independently developed by the receiving party's personnel having no access to similar confidential information obtained from the other.
(ii) Confidential Information of Another: Nothing in this Agreement will affect any obligation of either party to maintain the confidentiality of a third party's confidential information.
(c) Press Releases: Licensee may not issue a press release or otherwise disclose to or discuss with the press the existence or terms of this Agreement without the prior written consent of Fox (it being understood that Fox's legal counsel shall have final approval over the timing and/or content of any press release or other public disclosure by Licensee regarding this Agreement). Notwithstanding the foregoing, the parties (and their respective parent companies) shall be free to disclose Confidential information to the extent required by any law or regulation to any relevant stock exchange. The parties will liaise and endeavor to agree to the wording of any such disclosure in advance.
17. MISCELLANEOUS:
(a) Notices: All notices and statements shall be in writing and shall together with any payments be personally delivered or sent postage prepaid to the intended party at the address set forth below (unless notification of a change of address is given in writing). The date of mailing of a notice or statement shall be deemed the date the notice is given or statement rendered.
To Fox:
Mail: Twentieth Century Fox Licensing & Merchandising P.O. Box 900 Beverly Hills, California 90213 USA Attention: Vice President, Wireless Development
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-25-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
Messenger: 2121 Avenue of the Stars, 4th Floor Los Angeles, California 90067 USA Attention: Vice President, Wireless Development Facsimile: (310) 369-1465 With copies to: Mail: Twentieth Century Fox Licensing & Merchandising P.O. Box 900 Beverly Hills, California 90213 USA Attention: Legal Department Messenger: 2121 Avenue of the Stars, Suite 1334 Los Angeles, California 90067 USA Attention: Legal Department Facsimile: (310) 369-4241 and: Mail: Twentieth Century Fox Licensing & Merchandising P.O. Box 900 Beverly Hills, California 90213 USA Attention: Finance Department Messenger: 2121 Avenue of the Stars, 4th Floor Los Angeles, California 90067 USA Attention: Finance Department Facsimile: (310) 369-8531 To Licensee: Mail & Sorrent Inc.
Messenger: 1800 Gateway Drive, Suite 200 San Mateo, CA 94404 Attention: Paul Zuzelo E-mail: pzuzelo@sorrent.com Facsimile: (650) 571-5698
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-26-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
With copies to: Mail & Sorrent Inc. Messenger: 1800 Gateway Drive, Suite 200 San Mateo, CA 94404 Attention: Greg Suarez E-mail: greg.suarez@sorrent.com Facsimile: (650) 571-5698
(b) Waiver, Modification: The terms of this Agreement may not be waived or modified except by an agreement in writing executed by the parties hereto. The waiver by either party of any breach of this Agreement by the other party must be in writing and shall not be deemed to be a waiver of any prior or succeeding breach.
(c) Relationship of the Parties: Nothing herein contained shall be construed to place the parties in the relationship of principal and agent, partners or joint venturers and neither party shall have the power to obligate or bind the other party in any manner whatsoever.
(d) No Assignment: Licensee may not assign any of its rights and obligations under this Agreement without the prior written consent of Fox; provided that Licensee may assign all of its rights and obligations hereunder to its successor in the event of a sale of all or substantially all of its assets or voting securities, or of the business unit associated with this Agreement. Subject to the foregoing, this Agreement will inure to the benefit of each parties successors and assigns. Any purported assignment or transfer except in accordance with the above shall be void and of no effect.
(e) Governing Law; Jurisdiction; Service of Process: This Agreement shall be construed in accordance with the laws of the State of California applicable to agreements executed and to be wholly performed therein. The parties hereto agree that any suit, action or proceeding arising out of or relating to this Agreement shall be instituted and prosecuted in the United States District Court for the Central District of California or in any court of competent jurisdiction of the State of California. The parties hereto irrevocably submit to the jurisdiction of said courts and waive any rights to object to or challenge the appropriateness of said forums. Service of process shall be in accordance with the laws of the State of California.
(f) Appointment/Change of Agent: Upon notice to Licensee, Fox may appoint an agent or designate a substitute agent from time to time to act on Fox's behalf to collect from Licensee and remit to Fox all Royalty payments due to Fox under this Agreement. The termination or substitution of an agent by Fox shall not affect the rights, duties, privileges or obligations of Fox or of Licensee hereunder. No agent so appointed is authorized to make any representation or warranty with respect to the ownership or title of the Property and or to approve the manufacture, sale or distribution of the Wireless Products.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-27-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
(g) Binding Agreement: Licensee shall have no rights hereunder and neither Fox nor Trademark Licensor shall be bound hereby unless and until this Agreement has been accepted in writing by Fox. If Fox does not accept this Agreement, the parties shall be released from all liability and this document shall be of no force and effect.
(h) Limitation of Actions: No legal action shall be brought by Licensee under this Agreement unless commenced within 12 months from the date the cause of action arose.
(i) Severability: Should any paragraph, clause or provision of this Agreement be found invalid or unenforceable by any court having jurisdiction over this Agreement, the subject matter hereof, or the parties hereto, such decision shall affect only the paragraph, clause or provision so construed or interpreted and all remaining paragraphs, clauses or provisions shall remain valid and enforceable.
(j) Entire Agreement: There are no representations, warranties or covenants other than those set forth in this Agreement which sets forth the entire understanding among the parties hereto.
(k) Headings: The headings of the Paragraphs of this Agreement are for convenience only and shall not be of any effect in construing the meanings of the Paragraphs.
(l) Survival: The following Paragraphs shall survive the expiration or termination of this Agreement: 5; 6; 7; 11; 13(a)(iv); 14, and 16.
(m) Drafting: Because the parties hereto have participated in drafting and negotiating this Agreement, there shall be no presumption against any party on the ground that such party was responsible for preparing this Agreement or any part of it.
(n) Force Majeure: Neither party shall be liable for any delay or failure in performing any of its obligations hereunder when any such delay or failure is occasioned by causes or contingencies beyond its control, including but not limited to force majeure, fires, floods, war, strikes and governmental regulations, provided the party delaying or failing to perform shall promptly after its inception give written notice of such cause or contingency to the other party and provided further that the party giving such notice shall make all reasonable efforts to remove such disability as soon as possible. Notwithstanding the foregoing, in the event the events constituting force majeure cause a delay in performance of thirty consecutive days or more, either party may terminate this Agreement immediately upon written notice to the other party.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-28-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
By signing in the spaces provided below, the parties hereto have agreed to all of the terms and conditions of this Agreement. SORRENT, INC. TWENTIETH CENTURY FOX LICENSING & MERCHANDISING, a division of Fox Entertainment Group, Inc. ("Licensee") ("Fox") By /s/ Paul Zuzelo By /s/ Jamie Samson
Name Paul Zuzelo Jamie Samson Its Senior Vice President Its CAO & Exec. V.P. Date December 17, 2004 Date 12/17/04
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-29-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT A
Properties
Major Releases:
"Robots"
Untitled Ridley Scott Film
"Ice Age 2"
"Eragon"
• The inclusion of "Eragon" shall be contingent upon Fox's acquisition of the rights to the Property and its ability to grant licensing and merchandising rights thereto. For the avoidance of doubt, there shall be no grant of rights to the Property from Fox to Licensee without Fox's prior written notice advising of Fox's acquisition of the rights to the Property and related licensing and merchandising rights. This Exhibit A and Exhibit E will be amended at such time that Fox can grant such rights.
Targeted Releases:
Untitled Mike Judge Film
"Mr. & Mrs. Smith"
"Lady Luck"
• The inclusion of "Lady Luck" shall be contingent upon Fox's acquisition of the rights to the Property and its ability to grant licensing and merchandising rights thereto. For the avoidance of doubt, there shall be no grant of rights to the Property from Fox to Licensee without Fox's prior written notice advising of Fox's acquisition of the rights to the Property and related licensing and merchandising rights. This Exhibit A and Exhibit H will be amended at such time that Fox can grant such rights.
TBD
TBD
TBD
TBD
TBD
The Properties set forth on this Exhibit A may be removed and substituted, or additional Properties may be included, in accordance with Paragraph 1(a) (i).
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-30-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT B
"Robots" Wireless Products
A minimum of:
12-D Java Game in connection with the initial theatrical release
1 3-D Java Game in connection with the DVD release
5 Java Applications ('Screensavers') (2 3-D Screensavers and 3 2-D Screensavers) in connection with the initial theatrical release
5 MMS
10 Wallpapers
5 Voicetones
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-31-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT C
Untitled Ridley Scott Film Wireless Products
A minimum of:
1 2-D Java Game, which shall include mutually agreed upon 3-D elements
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-32-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT D
"Ice Age 2" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-33-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT E
"Eragon" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-34-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT F
"Untitled Mike Judge Film" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-35-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT G
"Mr. & Mrs. Smith" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-36-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT H
"Lady Luck" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-37-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT I
"TBD" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-38-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT J
"TBD" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-39-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT K
"TBD" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-40-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT L
"TBD" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-41-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT M
"TBD" Wireless Products
Up to:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-42-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT N
Glossary
"MMS" stands for Multimedia Messaging Service — a store and forward messaging service that allows mobile subscribers to exchange multimedia messages with other mobile subscribers. MMS supports the transmission of additional media types: text, picture, audio, video and combinations of them.
"Realtone" or "Trutone" (also referred to as Master Tone) shall mean a digital, audio file containing an excerpt of a master recording of a musical composition, no more than 45 seconds in length, formatted for playback by a wireless device when such wireless device receives an incoming call.
"Screensaver" shall mean a Java application that replaces the image on a screen when the screen is not in use.
"Wallpaper" on a mobile phone shall mean the background pattern or picture against which mobile phone screen menus, icons, and other elements are displayed and moved around. A wallpaper image can be in a JPEG or a GIF file format. Each model/make of the mobile phone provides several pre- installed wallpaper images for the user to choose from. A user can also choose to download and install third-party wallpapers and use one of these instead.
"Voicetone" shall mean the audio speech sound heard by a caller, such as lines from a movie or spoken lyrics of a song.
"Ringtone" shall mean a digital, audio file containing a portion of a musical composition, no more than 45 seconds in length, formatted for playback by a wireless device when such wireless device receives an incoming call. For the avoidance of doubt, a Ring Tone may be either monophonic or polyphonic.
[Remaining definitions are TBD]
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-43-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT O Royalty Statement
TWENTIETH CENTURY FOX LICENSING & MERCHANDISING LICENSING STATEMENT OF ROYALTIES PAYABLE Licensee Contract Number:
Property Report Period Start Date:
Territory Report Period End Date:
Wallpaper Screensaver MMS Game Ringer Wallpaper Screensaver MMS Game Ringer Name/Likeness No Music No Music No Music No Music No Music Music Music Music Music Music None
1
2
3
4
5
6
7 Mail to: Twentieth Century Fox Licensing & Merchandising Total Net Sales
P.O. Box 900 Royalty Rates
Beverly Hills, CA 90213-0900 Royalty Earned
Attn: Jimyong Kim Less: Advance Balance
Street address: 2121 Avenue of the Stars, Room 4014 Royalty Payment Enclosed
Los Angeles, CA 90067 -or-New Advance Balance
This report is based on our books and records and is, to the best of my knowledge, true, correct and complete for the period stated and complies with all contractual requirements Minimum Guarantee Amount
NAME TITLE Payment Required to Meet Guarantee due on:
SIGNATURE DATE
NOTE: This report is required to be filed whether or not there were any sales for the period. For most licenses, the report is due no later than 30 days following every calendar quarter the agreement is active.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-44-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT P
News America Incorporated Statement of Privacy Principles
PREAMBLE
News America Incorporated ("News America") is the principal U.S. subsidiary of The News Corporation Limited, one of the world's largest media companies. The businesses of News America and its subsidiary, Fox Entertainment Group, Inc., include: the production and distribution of motion pictures, television programming and related consumer products (Twentieth Century Fox); television and cable broadcasting (the Fox Network, Fox owned television stations, Fox Sports Net, Fox Sports World, Fox Sports World Espaňol, Speedvision, Fox News Channel, FX and Fox Movie Channel); the publication of newspapers, books, magazines and promotional free-standing inserts (The New York Post, HarperCollins Publishers, The Weekly Standard and News America Marketing); sports franchises (the Los Angeles Dodgers); and marketing services (SmartSource/iGroup). In this Statement of Privacy Principles these businesses are collectively called the News America Group. At the News America Group we strive to enhance our relationship with consumers. Collecting personal information about consumers is vital to this effort. This Statement of Privacy Principles describes the policies and procedures of the News America Group's U.S.-based businesses for the collection, use, and dissemination of personally identifiable information about U.S. consumers in both the online and offline world. The Principles are based on the concepts of consumer notice and choice.* The News America Group is actively involved in the ongoing privacy debate and is continually monitoring privacy developments. Accordingly, from time to time we may modify these Privacy Principles to reflect changes in the law, self-regulatory initiatives and technology.
COLLECTION
The News America Group obtains personally identifiable information only if we believe the information is relevant to our relationship with a consumer or to assist us in creating a relationship with a consumer. We obtain personally identifiable information about consumers directly from consumers whenever possible, primarily in the course of providing them with products, information and services. When the News America Group obtains personally identifiable information from third-party sources, we use only reputable sources. In those instances where our information collection activities involve children, the News America Group provides special privacy protections.
NOTICE
When The News America Group collects personally identifiable information from consumers, we inform them about who is collecting the information, why it is being collected, how it is being collected, the types of uses we will make of the information, whether we will disclose the information to third parties and the types of third parties to whom we will disclose the information, and consumers' options regarding the use of their information.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-45-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
CHOICE
The News America Group provides consumers with an opportunity to choose whether the business unit that collects their personally identifiable information may use it for purposes that are other than those for which the information was submitted, and whether the information may be shared with third parties.
USE OF PERSONAL INFORMATION
Inside the News America Group, we use personally identifiable information only in a manner consistent with these Privacy Principles. Personally identifiable information is available only to our employees, agents and contractors who have a business reason to have access to such information. The News America Group uses personally identifiable information to respond to our customers and to make decisions about the goods and services that the News America Group or its business partners provide or hope to provide to consumers. Subject to the exercise of consumer choice, personally identifiable information may be used for different purposes, or shared with our business partners. A News America Group business entity may disclose personally identifiable information without providing consumers with a choice in order to protect the rights of the companies within the News America Group or their respective employees, agents and contractors; to protect the safety and security of visitors to web sites operated by News America Group companies; to protect against fraud or for risk management purposes; or to comply with the law or legal process. In addition, if a News America Group entity sells all or part of one of its businesses, makes a sale or transfer of assets or is otherwise involved in a business merger or transfer, personally identifiable information may be transferred to a third party as part of that transaction.
SECURITY
The News America Group uses reasonable administrative, technical, personnel, and physical measures to safeguard personally identifiable information in its possession against loss, theft, and unauthorized use, disclosure or modification.
ACCESS, CORRECTION AND DELETION
Whenever possible, each News America Group business unit permits consumers to have a right to see the personally identifiable information that it has collected from them, to correct any information that is incorrect and to instruct the business unit to delete the information from its files.
REMEDIES
Consumers may contact a privacy officer at each News America Group business unit regarding privacy complaints and disputes.
COMPLIANCE
Each News America Group company will take appropriate measures to ensure compliance with these Privacy Principles.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-46-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT Q
LICENSEE COMPETITORS
Jamdat Mforma Digital Bridges Digital Chocolate Game Loft Infospace
Any further additions and/or deletions shall be mutually agreed and addressed via amendment to this Agreement.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-47-
Source: GLU MOBILE INC, S-1/A, 3/19/2007 | Highlight the parts (if any) of this contract related to "Covenant Not To Sue" that should be reviewed by a lawyer. Details: Is a party restricted from contesting the validity of the counterparty’s ownership of intellectual property or otherwise bringing a claim against the counterparty for matters unrelated to the contract? | {
"answer_start": [
62812
],
"text": [
"Licensee hereby does forever waive and agree never to assert any and all Moral Rights it may have in Fox's Intellectual Property Rights in and to the PSM and the Fox Intellectual Property and any derivative works thereof and shall cause its employees and contractors (including the developers) to do likewise."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Parties" that should be reviewed by a lawyer. Details: The two or more parties who signed the contract
Context: EXHIBIT 10.1
JOINT DEVELOPMENT AGREEMENT
between
FUELCELL ENERGY, INC.
and
EXXONMOBIL RESEARCH AND ENGINEERING COMPANY
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
TABLE OF CONTENTS ARTICLE 1 - DEFINITIONS 1 ARTICLE 2 - PROGRAM 1 ARTICLE 3 - PROGRAM GOVERNANCE 2 ARTICLE 4 - DISCLOSURE, CONFIDENTIALITY AND RESTRICTED USE 3 ARTICLE 5 - PUBLICITY AND PUBLICATIONS 5 ARTICLE 6 - OWNERSHIP / PROCUREMENT OF PROGRAM RESULTS 6 ARTICLE 7 -LICENSE TO PROGRAM RESULTS 7 ARTICLE 8 - LICENSE TO BACKGROUND INFORMATION AND PATENTS 8 ARTICLE 9 - INFRINGEMENT OF THIRD PARTY PATENTS 11 ARTICLE 10 - PAYMENT 11 ARTICLE 11 - REPRESENTATIONS, WARRANTIES, INDEMNITIES AND LIABILITIES 13 ARTICLE 12 - TERM AND TERMINATION 14 ARTICLE 13 - ARBITRATION AND GOVERNING LAW 17 ARTICLE 14 - ASSIGNMENT 18 ARTICLE 15 - FORCE MAJEURE 18 ARTICLE 16 - ADDRESSES AND NOTICES 18 ARTICLE 17 - COMPLIANCE 19 ARTICLE 18 - RECORDS AND AUDIT 20 ARTICLE 19 - TAXES 20 ARTICLE 20 - ADDITIONAL PROVISIONS 20 APPENDIX A - DEFINITIONS 24 APPENDIX B - SAMPLE PROJECT DESCRIPTION FORMAT 30
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
JOINT DEVELOPMENT AGREEMENT
This Agreement is made as of the Effective Date between:
ExxonMobil Research and Engineering Company, a corporation of the State of Delaware having offices at 1545 Route 22 East, Annandale, New Jersey 08801 ("ExxonMobil"); and
FuelCell Energy, Inc., a corporation of the State of Delaware having offices at 3 Great Pasture Road, Danbury, Connecticut 06810 ("FCE").
ExxonMobil and FCE are engaged in collaborative research and development projects to evaluate and develop Molten Carbonate Fuel Cells (MCFCs) to reduce carbon dioxide emissions (i.e., achieve low cost carbon dioxide capture). ExxonMobil and FCE wish to further the research and development efforts to evaluate and develop new and/or improved MCFCs to reduce carbon dioxide emissions from industrial and power sources ("Scope"). Therefore, in consideration of the foregoing premises and mutual covenants contained herein, ExxonMobil and FCE (each a "Party" and collectively the "Parties") agree as follows:
ARTICLE 1 - DEFINITIONS
1.01 Definitions. The terms appearing in this Agreement in initial capital letters, not otherwise defined in the preamble or body of this Agreement, are defined in Appendix A.
ARTICLE 2 - PROGRAM
2.01 Program / Projects. The collaborative research and development effort will comprise one or more mutually agreed upon projects within the Scope during the Term of this Agreement (each a "Project" and, collectively, the "Projects" or the "Program"). The details of each Project will be described in a written, mutually agreed upon document ("Project Description") - a template for which is set forth in Appendix B. Each Project Description will specify the scope and content of the Project, the work to be undertaken by each Party and potential third parties, the deliverables, the timing, any payments to be made not otherwise set forth in this Agreement, and any other related objectives and expectations. When completed and signed by duly authorized representatives of both Parties, each Project Description will become part of this Agreement and will be governed by the terms and conditions of this Agreement. Neither Party makes any representations as to the number, frequency, or monetary value of the Projects, except as otherwise set forth herein or in any Project Description.
2.02 Subcontracting. ExxonMobil hereby consents to FCE hiring trade contractors commonly used for facility modifications and individual engineering contractors and individual staff from temporary agencies as needed to perform work pursuant to a Project Description, provided that such contractors and staff are under confidentiality and use restrictions no less restrictive than the terms and conditions set forth herein.
2.03 Work Exclusivity/Independent Work. During the Term of this Agreement, FCE will not conduct any Work using Generation 1 Technology in Carbon Capture Applications or any Work using Generation 2 Technology, independently or with third parties outside this Agreement, without prior written approval from ExxonMobil. Notwithstanding the foregoing, ExxonMobil hereby grants approval for FCE solely to conduct Authorized Work using Generation 1 Technology with Authorized Third Parties for Carbon Capture Applications and any Work using Generation 2 Technology solely for Power Applications and Hydrogen Applications.
Page 1 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
ARTICLE 3 - PROGRAM GOVERNANCE
3.01 Steering Committee. Promptly after the Effective Date, the Parties will establish a committee that will oversee technical support and provide overall supervision and administrative guidance for the Program ("Steering Committee" or "SC"), further detailed as follows -
(a) Composition. Each Party will appoint in writing one or more of its employees as SC members. Each Party will have the right to change its SC members at any time by giving written notice of such change to the other Party.
(b) Meetings. Meetings of the SC will be in person or by phone at a location and time agreed to in advance by the SC members.
(c) Other Attendees. In addition to the attendance of SC members, with prior written notice to the other Party's SC members, each Party may also bring to any SC meeting such technical and other advisors as it may deem appropriate, provided that such advisors are employees of a Party or its Affiliates and are under written confidentiality and use restrictions at least as strict as those imposed herein. Otherwise, a Party's additional invitees may attend a SC meeting only with the other Party's advance written approval.
(d) Responsibilities. The responsibilities of the SC will include, but are not limited to:
i. Project Endorsement and Monitoring. The SC will review and approve each Project Description and amendment thereto prior to execution by the Parties. (However, no Project Description or amendment thereto will be effective unless and until it is executed by duly authorized representatives of both Parties.) The SC will periodically monitor the ongoing status of all Projects, and make adjustments to priorities within and between the Projects.
ii. Dispute Resolution. Assist the Parties in resolving any disputes.
(e) Votes. Each Party only gets one vote on the SC regardless of the number of SC members it appoints. Except as otherwise stated in this Agreement, all decisions by the SC will be by unanimous agreement. In the absence of unanimity, ExxonMobil's SC representatives will have final decision making authority with respect to only the following decisions required by the SC: whether and where to seek patent protection and whether to maintain patent assets, subject to the provisions of Paragraph 6.04 (Solicitation of Program Patents Discretionary).
(f) Minutes. All decisions by the SC will be documented in agreed upon minutes distributed to SC members after the meeting.
(g) No Amendment Rights. The SC may recommend but has no authority to amend the terms and conditions of this Agreement.
(h) Costs. ExxonMobil will bear its own costs associated with participating in the SC. FCE's costs and expenses associated with its participation in the SC are included in each Project's budget as Direct Costs.
3.02 Technical Managers. Each Party will appoint one manager for each Project ("Technical Manager"). The Technical Managers will be responsible for the coordination of all technical activities arising under such Project, and will serve as their Party's technical liaison with the SC for the Project. Each Party will promptly notify the other Party in writing upon changing the appointments. The Technical Managers for each Project will be the primary technical contacts between the Parties for that Project. The Technical Managers for each Project will jointly:
• direct the work performed under a Project in accordance with the terms and conditions of the Project Description;
Page 2 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
• report to the SC on the progress of technical activities conducted under the Project;
• monitor and coordinate all intellectual property activities relative to each Project; and
• make recommendations to the SC on proposed publications containing Program Information.
Unless otherwise mutually agreed, the Technical Managers for a Project will meet in person at least once each calendar quarter during a Project at such locations as the Technical Managers agree. The Technical Managers will communicate regularly by telephone or similar means between such meetings.
ARTICLE 4 - DISCLOSURE, CONFIDENTIALITY AND RESTRICTED USE
4.01 Program Information Disclosure, Confidentiality and Use Restriction. FCE will promptly disclose to ExxonMobil, in written or other tangible form, any and all Program Information including any Program Inventions. Except as otherwise permitted under this Agreement, FCE agrees to hold Program Information in confidence, and not to disclose or make it available to any third party without the express prior written consent of ExxonMobil, for a period commencing on the Effective Date and ending twenty (20) years thereafter. Without the express prior written consent of ExxonMobil, FCE agrees to use and practice Program Information only for the Program or as authorized in Article 7 (License to Program Results).
4.02 Background Information Disclosure, Confidentiality and Use Restriction. Each Party will make available its Background Information to the other Party that it believes will be useful in carrying out work under the Program. Except as otherwise permitted under this Agreement, each Party agrees to hold the Background Information it receives from the other Party in confidence, and to not disclose or make available the other Party's Background Information to any third party without the express prior written consent of the other Party, for a period commencing on the Effective Date and ending twenty (20) years thereafter. Without the express prior written consent of the other Party, each Party agrees to use and practice the other Party's Background Information only for the Program or as authorized in Article 8 (License to Background Information and Patents).
4.03 Non-Analysis of Background Samples. Except as otherwise agreed by the Parties in writing, each Party agrees not to determine or have determined the composition or physical structure of any Background Sample received from the other Party, which includes unused, used and spent Background Samples or portions thereof, whether by analyzing, having analyzed, inspection, reverse engineering or otherwise.
4.04 Information Handling Obligations. Each Party will endeavor to mark Confidential Information as follows:
(a) Confidential Information first disclosed in tangible form or electronically will be marked by the Disclosing Party as "confidential" or "proprietary" or with words of similar import when provided, indicating whether the information is "Program Information" or "Background Information";
(b) Confidential Information first disclosed orally or by visual display will be identified by the Disclosing Party as "confidential" or "proprietary" or with words of similar import at first disclosure and subsequently confirmed as confidential in a summary provided in an e-mail or other written communication delivered to the other Party within thirty (30) days after first disclosure, that references the date of the confidential disclosure indicating whether the information is "Program Information" or "Background Information"; and
(c) If a Sample is sent to the other Party, the Sample will be marked by the Disclosing Party as "confidential" or "proprietary" or with words of similar import at the time of disclosure indicating whether the Sample is "Program Information" or "Background Information".
Page 3 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
The failure to appropriately mark information/materials as "confidential" or "proprietary" upon initial disclosure to the Receiving Party will not be considered a waiver of confidentiality. Information/materials marked as "proprietary" or "confidential" when first disclosed, without further identification of the category of confidential information, will be presumptively considered and treated as Program Information until the Disclosing Party notifies the Receiving Party otherwise in writing.
4.05 Exceptions. For the purposes of this Agreement, the obligations of confidentiality and restricted use herein shall not apply to any information or materials to the extent the Receiving Party can establish by documentary evidence that one or more of the following exceptions apply:
a. the information or material was already in the Receiving Party's or its Affiliate's lawful possession (free of any confidentiality and use restrictions) and was not previously acquired directly or indirectly from the other Party under a current obligation of confidentiality;
b. the information or material was already in the public domain or subsequently entered the public domain after disclosure through no fault of the Receiving Party;
c. the information or material was or is hereafter furnished to the Receiving Party, or its Affiliate, on a non- confidential basis by a third party legally entitled to provide the information or material without restriction;
d. the information or material was independently developed by employees or agents of the Receiving Party or its Affiliate who did not have access to relevant information provided by the Disclosing Party; and/or
e. the information or material was released from the confidentiality obligations of this Agreement by the Disclosing Party's written authorization.
The later occurrence of any one of the aforementioned exceptions will not excuse any failure to adequately protect Confidential Information pursuant to this Agreement prior to the existence of the exception. More specific Confidential Information will not be deemed to be within the foregoing exceptions merely because it is embraced by more general information that is publicly available or in the possession of Receiving Party pursuant to one of the exceptions. Also a combination of features will not be deemed within the foregoing exceptions merely because individual features are publicly available or in Receiving Party's possession pursuant to one of the exceptions.
4.06 Disclosure to Affiliates, Contractors, and Sub-licensees. Notwithstanding anything to the contrary in this Agreement, a Receiving Party may disclose a Disclosing Party's Confidential Information to its Affiliates, and said Receiving Party may disclose the Disclosing Party's Confidential Information to their respective contractors providing services in furtherance of a Project as well as to permitted sub-licensees hereunder, provided such Affiliates, contractors, and sub-licensees have agreed to be bound by confidentiality and limited use obligations no less protective of Disclosing Party's Confidential Information than the terms contained herein. The Receiving Party will be liable to the Disclosing Party for any unauthorized disclosure or misuse of the Disclosing Party's Confidential Information by such Affiliates, contractors, and sub-licensees.
4.07 Compelled Disclosure. In the event that a Receiving Party (or its Affiliate) is required by law, court order or rule, or government authority to disclose the Confidential Information that Receiving Party is obligated to hold in confidence pursuant to Paragraph 4.01 (Program Information Disclosure, Confidentiality and Use Restriction) and/or Paragraph 4.02 (Background Information Disclosure, Confidentiality and Use Restriction), then the Receiving Party will promptly notify the Disclosing Party prior to disclosure in order to enable the Disclosing Party to seek a protective order at the Disclosing Party's sole expense. In any event, the Receiving Party who is required to disclose such information will request confidential treatment of the information and only disclose the minimum amount of information reasonably necessary to comply with such law, court order or rule, or government authority.
Page 4 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
4.08 Disclosures in Patent Applications. Notwithstanding anything else in this Agreement, ExxonMobil may disclose the minimum amount of FCE's Confidential Background Information reasonably necessary to support a Program Patent subject to the review process in Paragraph 6.02 (Solicitation of Program Patents).
4.09 Return/Destruction. At the Disclosing Party's written request, the Receiving Party agrees to return to Disclosing Party or, at Disclosing Party's option, dispose of or destroy, Disclosing Party's Confidential Background Information and any of Disclosing Party's unused Background Samples. However, notwithstanding anything else in this Paragraph, the Receiving Party may retain such documents and materials to the extent such documents and materials are identified as necessary for beneficial use of a further Project or a license granted herein and the Receiving Party has notified the Disclosing Party in writing of the need for such documents and materials. Any dispute over whether such documents and materials are necessary shall be escalated to senior management for resolution. Furthermore, notwithstanding anything else in this Paragraph 4.09, the Receiving Party may retain one (1) copy of such documents and materials in its secure files for the sole purpose of administering its obligations under this Agreement and the Receiving Party will not be required to purge or cause others to purge electronic archival media automatically generated by backup computer systems if said media will be destroyed pursuant to a systematic records retention process and not otherwise utilized.
4.10 Third Party Information. Neither Party will knowingly disclose to the other Party any proprietary or confidential information belonging to a Non-Affiliated Third Party without the Receiving Party's prior written consent.
ARTICLE 5 - PUBLICITY AND PUBLICATIONS
5.01 Publicity. During the Term, and except for disclosures pursuant to Paragraphs 4.06 (Disclosure to Affiliates, Contractors and Sub-licensees), 4.07 (Compelled Disclosure), 4.08 (Disclosure in Patent Applications), or as otherwise permitted in this Agreement, the Parties agree that they will not disclose to any Non-Affiliated Third Party that they have entered into this Agreement, nor make any publications or publicity releases concerning the nature of this Agreement, without first acquiring the written consent of the other Party, which consent will not be unreasonably withheld, conditioned or delayed.
Notwithstanding the foregoing, either Party may make such disclosure as it may determine to be required by applicable law (such as filing with the U.S. Securities and Exchange Commission), provided that in such case the Disclosing Party will provide advance notice of such disclosure to the other Party and, where legally permitted, an opportunity to redact its sensitive proprietary information from such disclosure.
Further, during the Term, each Party agrees that it will not use the name, service mark or trademark of the other Party, or any Affiliate of the other Party, or provide any indication from which the identity of the other Party or its Affiliate may reasonably be inferred in any publicity release or other announcement, without first obtaining the written approval of the other Party. Notwithstanding the foregoing, each Party hereby grants approval for the other Party to use its name, service mark or trademark in promotional materials that have a generally accepted description of the Scope, which such generally accepted description shall be mutually agreed to in writing beforehand. An exception to this Paragraph will include U.S. patent prosecution that refers to this Agreement as a "joint research agreement" under 35 U.S.C. § 102(c).
Further, each Party agrees to include appropriate attribution of the other Party in any publicity release, advertising, print, media or other announcement concerning the use of MCFCs for carbon capture, the Program or the Program Results.
Page 5 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
5.02 Publications. The Parties recognize that Program Information may be suitable for publication either jointly or individually. Unless the other Party specifically requests in writing not to be credited, appropriate recognition of the support or encouragement of the other Party will be included in such publications. The Parties agree to cooperate with each other on the preparation of any such publications. If any proposed publication contains the non-publishing Party's Background Information, such information (including reference thereto) will be deleted at the non-publishing Party's request. No publication that violates Article 4 (Disclosure, Confidentiality and Restricted Use) or Paragraph 5.01 (Publicity) will be permitted without the prior written consent of the other Party which may be obtained from a duly authorized member of each Party.
ARTICLE 6 - OWNERSHIP / PROCUREMENT OF PROGRAM RESULTS
6.01 Ownership of Program Results. ExxonMobil will solely own Program Information, Program Patents, and copyrightable works resulting from the Program (collectively, "Program Results"), irrespective of whether the Program Results are conceived, created, developed or acquired by employees or other representatives of FCE, ExxonMobil, or both. FCE will assign, and hereby assigns, to ExxonMobil ownership of Program Results.
6.02 Solicitation of Program Patents. ExxonMobil will have the sole responsibility and the exclusive right to prepare, file, prosecute, and maintain Program Patents pursuant to Paragraph 6.01 (Ownership of Program Results). Such right will include the right to determine if, where, and when patent applications are filed, and the scope of such patent applications. Notwithstanding the foregoing, ExxonMobil shall provide FCE notice of its intent to file any patent application containing FCE's Confidential Background Information and an opportunity for FCE to review any such patent application for FCE's Confidential Background Information. If FCE does not respond within thirty (30) days from ExxonMobil seeking such consent, then ExxonMobil may proceed with such filing. The cost of preparing, filing, prosecuting, and maintaining any such patent applications that ExxonMobil decides to pursue and maintain, as well as the cost of maintaining any patents resulting therefrom, will be paid in full by ExxonMobil. For Program Patents, if one or more employees or other representatives of FCE are determined to be inventors, then FCE will:
(i) cause its employees, contractors, and consultants to render reasonable and timely assistance to ExxonMobil and its attorneys or agents;
(ii) assign, and will cause its and its Affiliates' employees, contractors, and consultants to assign, its right, title, and interest in and to such Program Patent to ExxonMobil for filing; and
(iii) cause its and its Affiliate employees, contractors, and consultants, to execute any documents as may be required to effect such assignments, or file, prosecute, and maintain any patent applications or patents that are based on, derived from, or protect such Program Patent.
ExxonMobil will hold formal legal title to all such patent applications, and resulting patents.
6.03 Cooperation in Soliciting Program Patents. The Parties agree to cooperate in the preparation, filing, prosecution, and securing of patent applications and patents, all without charge to such other Party. When ExxonMobil's patent counsel sends to FCE documents for review that contains FCE Confidential Background Information, the Parties will follow the review process pursuant to Paragraph 6.02 (Solicitation of Program Patents). Upon FCE's written request, ExxonMobil will provide a courtesy copy of any Program Patent that does not contain any FCE Confidential Background Information prior to filing such document. All Program Patent filings, and the status thereof, will be reported to the Steering Committee.
Page 6 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
6.04 Solicitation of Program Patents Discretionary. ExxonMobil has the unencumbered right to file or not to file, prosecute, defend, maintain, abandon, or enforce any Program Invention or Program Patent. Notwithstanding the foregoing, in the event ExxonMobil decides not to prosecute, defend, enforce, maintain or decides to abandon any Program Patent, then ExxonMobil will provide notice thereof to FCE, and FCE will then have the right, but not the obligation, to prosecute or maintain the Program Patent and sole responsibility for the continuing costs, taxes, legal fees, maintenance fees and other fees associated with that Program Patent. The ownership of such Program Patent will remain with ExxonMobil.
The abandonment of a pending patent application in favor of a continuation patent application, continuation-in-part patent application, or divisional patent application, or in favor of another application of a related subject (e.g. to overcome a double patenting rejection) and ExxonMobil's decision not to file any Program Patent, will not be deemed to be an election not to continue to prosecute, issue, or maintain any Program Patent under Paragraph 6.04. In addition, (a) the failure to appeal a patent office or any administrative tribunal or judicial decision adverse to any patent or patent application, or (b) in the case of a co-pending non-provisional application in the U.S., (i) failure to enter an international patent application into the national phase, or (ii) to ratify a patent in any country, will not be deemed to be an election not to continue to prosecute, issue, or maintain any Program Patent under Paragraph 6.04.
6.06 Joint Research Agreement. The Parties acknowledge and agree that this Agreement is a "joint research agreement" as defined in 35 U.S.C. §100(h). The specification of any patent application filed pursuant to this Agreement may contain (or may be amended to contain) language required to invoke 35 U.S.C. §102(b)(2)(C) and §102(c) as applicable. Notwithstanding anything to the contrary in Paragraph 5.01 (Publicity), ExxonMobil will have the right to invoke these statutory provisions when exercising its rights to file patent applications under this Agreement, without the prior written consent of FCE, subject to the provisions of Paragraph 6.02 (Solicitation of Program Patents). Where ExxonMobil intends to invoke these statutory provisions, FCE, upon request, will cooperate and coordinate its activities with ExxonMobil with respect to any submissions, filings or other activities in support thereof.
6.07 Inventor Awards. A Party will not be responsible for any inventor awards or compensation that may be owed to the other Party's employee(s) or to any employees of the other Party's Affiliates, agents, consultants, or contractors, who are inventors of any Program Invention.
6.08 Disposal of Prior JDA Project Patents. During the Term of this Agreement and for two (2) years thereafter, in the event that either Party decides to sell or convey its interest in or otherwise dispose of any Prior JDA Project Patent to any Non-Affiliated Third Party, such Party will inform the other Party, who will then have the right of first refusal to purchase or otherwise acquire the sole interest at same or better terms. Any sale of a Prior JDA Project Patent to a Non-Affiliated Third Party is subject to the licenses granted and other obligations set forth in this Agreement.
ARTICLE 7 - LICENSE TO PROGRAM RESULTS
7.01 Grants to FCE of Program Results.
(a) FCE's R&D Rights. ExxonMobil grants FCE a worldwide, non-exclusive, royalty-free, non-transferable (except pursuant to Article 14 (Assignment)), non-sub-licensable (except as set forth in this Paragraph 7.01(a)) right and license to practice Program Results solely to conduct research and development for the Program. More particularly, said right and license to practice includes the right to use, reproduce, and create derivative works of Program Information under applicable copyrights and to make, use, and import (but not sell or offer to sell) under the claims of Program Patents, in each case solely for research and development for the Program. Said right and license may be extended to contractors performing work on behalf of FCE but is not otherwise sub-licensable.
Page 7 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
(b) FCE's Commercial Rights. ExxonMobil agrees to grant or hereby grants FCE the following rights and licenses:
(1) Power Applications and Hydrogen Applications. ExxonMobil grants FCE a worldwide, non-exclusive, royalty-free, perpetual, irrevocable (except as stated in Paragraphs 12.03 (Failure to Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy)), sub-licensable, non-transferable (except pursuant to Article 14 (Assignment)), right and license to practice Program Results solely for Power Applications and Hydrogen Applications. More particularly, said right and license to practice Program Results solely for Power Applications and Hydrogen Applications includes the right to use, reproduce, and create derivative works of Program Information under applicable copyrights and to make, use, import, and sell or offer to sell under the claims of Program Patents; and
(2) Carbon Capture Applications. In the event ExxonMobil notifies FCE that it has formally decided not to pursue Generation 2 Technology for Carbon Capture Applications, then upon FCE's written request, ExxonMobil agrees to negotiate a grant to FCE, under commercially reasonable terms to be determined in good faith, a worldwide, non-exclusive, royalty-bearing (with the royalty to be negotiated), non-sub- licensable (except as set forth in this Paragraph 7.01(b)(2)), non-transferable (except pursuant to Article 14 (Assignment)), right and license to practice Program Results solely for Carbon Capture Applications. More particularly, said right and license to practice Program Results solely for Hydrogen Applications and Carbon Capture Applications will include the right to use, reproduce, and creative derivative works of Program Information under applicable copyrights and to make, use, import, and sell or offer to sell under the claims of Program Patents. Said right and license will be extendable to contractors performing work on behalf of FCE but will not otherwise sub-licensable. Nothing in this Paragraph 7.01(b)(2) will create an obligation on the part of ExxonMobil to grant FCE a right or license under Program Results if the Parties do not agree on the terms and conditions of such license.
ARTICLE 8 - LICENSE TO BACKGROUND INFORMATION AND PATENTS
8.01 Ownership Retained. Each Party will retain its title and ownership rights to its Background Information and Background Patents in all applicable jurisdictions.
8.02 Grant of Rights to Background Information and Background Patents.
(a) Grant to ExxonMobil.
1) Carbon Capture Applications and Hydrogen Applications. To the extent not already granted pursuant to the License Agreement, FCE grants ExxonMobil and its Affiliates a worldwide, non-exclusive, royalty-free, irrevocable, perpetual, sub-licensable, non-transferable (except pursuant to Article 14 (Assignment)) right and license to practice FCE Background Information and FCE Background Patents for Generation 2 Technology in Carbon Capture Applications and Hydrogen Applications. More particularly, said right and license to practice FCE Background Information and FCE Background Patents for Generation 2 Technology in Carbon Capture Applications and Hydrogen Applications includes the right to use, reproduce, and create derivative works of FCE Background Information under applicable copyrights and the right to make, use, import, and sell or offer to sell under the claims of FCE Background Patents.
Page 8 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
2) Other Applications. In the event FCE notifies ExxonMobil that it has formally decided not to pursue Generation 2 Technology for Power Applications, then upon ExxonMobil's written request, FCE agrees to negotiate a grant to ExxonMobil and its Affiliates, under commercially reasonable terms to be determined in good faith, a worldwide, royalty-bearing (with the royalty to be negotiated), non-exclusive, sub-licensable right and license to practice FCE Background Information and FCE Background Patents for Generation 2 Technology in any application outside of Carbon Capture Applications and Hydrogen Applications. More particularly, said right and license to practice FCE Background Information and FCE Background Patents for Generation 2 Technology in any application outside of Carbon Capture Applications and Hydrogen Applications will include the right to use, reproduce, and create derivative works of FCE Background Information under applicable copyrights and the right to make, use, import, and sell or offer to sell under the claims of FCE Background Patents. Nothing in this Paragraph 8.02(a)(2) will create an obligation on the part of FCE to grant ExxonMobil a license or right under FCE Background Patents or FCE Background Information if the Parties do not agree on the terms and conditions of such license.
(b) Grant to FCE.
1) Generation 1 Technology.
i. Outside of Carbon Capture Applications. ExxonMobil grants FCE a worldwide, non-exclusive, royalty- free, non-sub-licensable (except as set forth herein), perpetual, irrevocable (except as stated in Paragraphs 12.03 (Failure to Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy)), non- transferable (except pursuant to Article 14 (Assignment)) right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 1 Technology in any applications outside of Carbon Capture Applications. More particularly, said right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 1 Technology in any applications outside of Carbon Capture Applications includes the right to use, reproduce, and create derivative works of ExxonMobil Background Information under applicable copyrights and the right to make, use, import, and sell or offer to sell under the claims of ExxonMobil Background Patents. All rights and licenses in this Paragraph (b)(1)(i) may be extended to contractors performing work on behalf of FCE but are not otherwise sub-licensable.
ii. Authorized Third Parties. ExxonMobil grants FCE a worldwide, non-exclusive, royalty-free, non-sub- licensable (except as set forth herein), perpetual, irrevocable (except as stated in Paragraphs 12.03 (Failure to Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy)), non-transferable (except pursuant to Article 14 (Assignment)) right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 1 Technology in Carbon Capture Applications, solely to conduct Authorized Work with Authorized Third Parties. More particularly, said right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 1 Technology in Carbon Capture Applications includes the right to use, reproduce, and create derivative works of ExxonMobil Background Information under applicable copyrights and the right to make, use, and import (but not sell or offer to sell) under the claims of ExxonMobil Background Patents, solely to conduct Authorized Work with Authorized Third Parties. All rights and licenses in this Paragraph (b)(1)(ii) may be extended to contractors performing work on behalf of FCE but are not otherwise sub-licensable.
Page 9 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
iii. Carbon Capture Application. In the event that ExxonMobil fails to notify FCE before the end of the Term of the Agreement of ExxonMobil's intent to negotiate a subsequent or follow-on commercial agreement, ExxonMobil agrees to negotiate a grant to FCE, under commercially reasonable terms to be determined in good faith, a worldwide, royalty-free, non-exclusive, non-sub-licensable (except as set forth herein) right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 1 Technology in Carbon Capture Applications. More particularly, said right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 1 Technology in Carbon Capture Applications will include the right to use, reproduce, and create derivative works of ExxonMobil Background Information under applicable copyrights and the right to make, use, import, and sell or offer to sell under the claims of ExxonMobil Background Patents. The rights and licenses in this Paragraph (b)(1)(iii) will be extendable t o contractors performing work on behalf of FCE but will not otherwise sub-licensable. Nothing in this section will create an obligation on the part of ExxonMobil to grant FCE a license or right under ExxonMobil Background Patents or ExxonMobil Background Information if the Parties do not agree on the terms and conditions of such license.
2) Generation 2 Technology.
i. Power Applications and Hydrogen Applications. ExxonMobil grants FCE a worldwide, non-exclusive, royalty-free, non-sub-licensable (except as set forth herein), perpetual, irrevocable (except as stated in Paragraphs 12.03 (Failure to Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy)), non- transferable (except pursuant to Article 14 (Assignment)) right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 2 Technology in Power Applications and Hydrogen Applications. More particularly, said right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 2 Technology in Power Applications and Hydrogen Applications includes the right to use, reproduce, and create derivative works of ExxonMobil Background Information under applicable copyrights and the right to make, use, import, and sell or offer to sell under the claims of ExxonMobil Background Patents. The right and license in this Paragraph (b)(2)(i) may be extended to contractors performing work on behalf of FCE but is not otherwise sub-licensable.
ii. Outside of Power Applications and Hydrogen Applications. In the event ExxonMobil notifies FCE that it has formally decided not to pursue Generation 2 Technology for Carbon Capture Applications, then upon FCE's written request, ExxonMobil agrees to grant to FCE, under commercially reasonable terms to be determined in good faith, a worldwide, royalty-bearing (with the royalty to be negotiated), non- exclusive, sub-licensable, right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 2 Technology in any application outside of Power Applications and Hydrogen Applications. More particularly, said right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 2 Technology in any application outside of Power Applications includes the right to use, reproduce, and create derivative works of ExxonMobil Background Information under applicable copyrights and the right to make, use, import, and sell or offer to sell under the claims of ExxonMobil Background Patents. Nothing in this section will create an obligation on the part of ExxonMobil to grant FCE a license or right under ExxonMobil Background Patents or ExxonMobil Background Information if the Parties do not agree on the terms and conditions of such license.
Page 10 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
(c) No Further Rights. Notwithstanding any other provision in this Agreement, under no circumstances will a Party to this Agreement, as a result of this Agreement, have any right under or to the Background Information and Background Patents of the other Party except as set forth in this Article. Any other right and license to Background Information and Background Patents not found in this Article will be subject to a separate license agreement to be negotiated between the Parties, as necessary.
ARTICLE 9 - INFRINGEMENT OF THIRD PARTY PATENTS
9.01 Notification of Potential Infringement. If either Party becomes aware of alleged infringement of a third party's intellectual property rights relating to its work under this Agreement, such Party will promptly notify the other Party of such discovery and the Parties will consult with each other and discuss any action to be taken.
9.02 Defense of Infringement Claims. Each Party will be responsible for all expenses (including attorney fees) and damages (e.g. royalties, settlement costs) incurred in defense of a claim of infringement by its own equipment, products, or processes, or by equipment, products, or processes of its Affiliates, contractors or consultants.
9.03 Settlements. Each Party may resolve any risk or threat, or settle any suits or action related to use of any Program Results, without the prior approval of the other Party unless such resolution or settlement would cause the other Party to be: (a) obligated to make any payment or part with any tangible or intangible property right, or (b) obligated to assume any obligations with respect thereto, or (c) subject to any injunction.
ARTICLE 10 -PAYMENT
10.01 Project Costs.
a) ExxonMobil will reimburse FCE for Research Costs (i.e., cumulative FTE Costs and Direct Costs) for each Project subject to total caps set forth herein and in the relevant Project Description. Research Costs of FCE paid for by ExxonMobil will be limited to FTE Costs for time actually spent on the Program and Direct Costs actually incurred and approved in advance by the Steering Committee. The cumulative Research Costs for the Program will not exceed forty-five million United States dollars ($45,000,000 USD) over the Term of the Agreement ("Total Research Cost"). ExxonMobil will reimburse FCE for Research Costs after receipt of invoices on a monthly basis. Invoices for Direct Costs will be supported by relevant third party invoices received by FCE documenting such costs. Materials shall be invoiced as incurred and subject to a thirty percent (30%) service fee. All such payments will be made after ExxonMobil's receipt of invoices in accordance with the invoicing procedures specified in Paragraphs 10.01(b)-(e) and in Paragraph 10.04 (Invoices).
b) First Invoice. FCE will invoice ExxonMobil an advance payment on or promptly after the Effective Date ("Initial Payment"), said Initial Payment not to exceed one-twelfth (1/12) of the Total Research Cost (i.e., three-million and seven-hundred and fifty thousand United States dollars ($3,750,000 USD)). Notwithstanding anything contained herein to the contrary, including Paragraph 10.04 (Invoices), such payment will be made within fifteen (15) days after ExxonMobil's receipt of invoice.
c) Subsequent Monthly Invoices. Within fifteen (15) days after the end of each calendar month that occurs during the remainder of the Term of the Agreement, subject to Paragraph 10.01(e), FCE will calculate and invoice ExxonMobil for the actual amounts incurred (for charges permitted in accordance with the respective Project Description(s)) during the immediately preceding calendar month.
Page 11 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
d) End of Term of the Program.
i. By the fifteenth (15th) day of the last month of the Term of the Agreement, ExxonMobil will have been invoiced for the actual charges incurred in all of the prior months of the Term of the Agreement, but the most recently issued invoice will not be due. Therefore, at such time ExxonMobil will not have yet paid for the last two (2) months of the Term of the Agreement. When FCE issues the invoice during the last month of the Term of the Agreement ("8th Inning Invoice"), FCE will apply some or all of the Initial Payment, as applicable, as credit against the amount due.
ii. Within fifteen (15) days after the end of the Term of the Agreement, FCE will issue an invoice ("9th Inning Invoice") for the actual charges incurred during the last month of the Term of the Agreement, subject to Paragraph 10.01(a). FCE will apply any balance of the Initial Payment remaining after the 8th Inning Invoice as a credit towards the amount due on the 9th Inning Invoice. If after applying such credit, a balance of the Initial Payment still remains, FCE will refund the balance to ExxonMobil within thirty (30) days, unless otherwise mutually agreed (such as the Parties mutually agreeing to enter into a new Project and apply the balance as a credit towards amounts payable by ExxonMobil thereunder).
e) Maximum Charges. The invoices sent by FCE under the foregoing procedure for each year of the Agreement may not in the aggregate be more than half the Total Research Cost, without prior written consent of ExxonMobil or amendment to the Project Description. All such payments will be made after ExxonMobil's receipt of invoice in accordance with the invoicing procedures specified Paragraph 10.04 (Invoices).
10.02 Up-Front Exclusivity and Technology Access Payment. In exchange for FCE working exclusively with ExxonMobil during the Term of the Agreement, pursuant to Paragraph 2.03 (Work Exclusivity/Independent Work), and ExxonMobil's access to FCE Background Patents, pursuant to Paragraph 8.02(a) (Grant of Rights to Background Information and Background Patents), on the Effective Date, FCE will separately invoice, and ExxonMobil will pay a one-time up-front fee ("Exclusivity and Technology Access Fee") of five million United States dollars ($5,000,000 USD).
Such payment will be made within fifteen (15) days after ExxonMobil's receipt of invoice, notwithstanding anything contained herein to the contrary, including Paragraph 10.04 (Invoices).
10.03 Milestone Payments. As further consideration for technical progress in the Program, ExxonMobil shall pay the following sums upon achievement of the following Program milestones ("Milestone Payments"):
(a) ExxonMobil will pay FCE a first Milestone Payment of five million United States dollars ($5,000,000 USD) upon FCE achieving Milestone 1 to ExxonMobil's satisfaction; and
(b) ExxonMobil will pay FCE a second and final Milestone Payment of five million United States dollars ($5,000,000 USD), upon FCE achieving Milestone 2 to ExxonMobil's satisfaction.
All such Milestone Payments will be made after ExxonMobil's receipt of invoice in accordance with the invoicing procedures specified Paragraph 10.04 (Invoices). The obligation to pay any such installment ends upon termination of this Agreement by either Party for any reason prior to FCE achieving the respective milestone.
Page 12 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
10.04 Invoices. FCE will invoice ExxonMobil for any amount due under a Project at the address (including the email address) in Article 16 (Addresses and Notices). Each invoice will identify this Agreement's identification number LAW-2019-3608, the number of the particular Project Description to which it pertains, and details of FTE Costs (including unique employee identifiers of the FTEs) and Direct Costs. FCE will not include charges relating to more than one Project Description in any given invoice. Except as otherwise specifically provided herein, ExxonMobil agrees to pay FCE the amount of each invoice under this Agreement within thirty (30) days following ExxonMobil's receipt. Notwithstanding the foregoing, if ExxonMobil has a good faith dispute regarding any amounts invoiced by FCE, ExxonMobil may withhold payment for the disputed amount, provided that ExxonMobil pays the undisputed amount and notifies FCE in writing of the specific amount and nature of the dispute promptly upon receipt of FCE's invoice in which case the Parties shall attempt to resolve the dispute in good faith. The Parties shall endeavor to resolve such dispute within fifteen (15) days of notice of the dispute, and ExxonMobil shall remit payment to FCE within fifteen (15) days of resolution of such dispute.
All such payments by ExxonMobil to FCE will be made by wire transfer in United States Dollars. FCE shall provide the Bank Name, Bank Address, Bank Account, and Swift Code in each invoice.
ARTICLE 11 - REPRESENTATIONS, WARRANTIES, INDEMNITIES AND LIABILITIES
11.01 Mutual Representations and Warranties. Each Party hereby represents and warrants to the other, to the best of its knowledge, that:
(a) as of the Effective Date:
1. the execution, delivery and performance of this Agreement by such Party does not conflict with any agreement, instrument or undertaking, oral or written, to which it is a party or by which it may be bound, and
2. all necessary consents, approvals and authorizations of all governmental authorities and third parties required to be obtained by such Party in connection with the execution, delivery, and performance of this Agreement have been or will be obtained;
(b) it owns or controls, in the same sense of having the right to license or convey, any Background Information to be provided to the other Party hereunder, and at the date of transmittal to the other Party, such Background Information in the Disclosing Party's good faith belief will not be subject to any encumbrances or restrictions on use by any third party that would materially affect the Receiving Party's exploitation of the rights granted in this Agreement; and
(c) all of its professional and technical personnel who perform services on or for all Projects are under written obligation:
(1) not to disclose secret or confidential information except as authorized under this Agreement or by their employer;
(2) to assign to their employer all Program Inventions; and
(3) to assign to their employer sole ownership of copyrights to all copyrightable works created in connection with any Project.
Page 13 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
11.02 Warranty and Liability Disclaimers. RECEIVING PARTY IS RESPONSIBLE FOR DETERMINING HOW TO USE THE INFORMATION AND MATERIALS PROVIDED HEREUNDER. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, DISCLOSING PARTY DISCLAIMS LIABILITY FOR ANY LOSS OR DAMAGE SUSTAINED BY RECEIVING PARTY (BUT NOT ANY THIRD PARTY) THAT MAY OCCUR FROM RECEIVING PARTY'S USE OF, OR RELIANCE ON, SUCH INFORMATION AND MATERIALS AND RECEIVING PARTY RELEASES DISCLOSING PARTY AND ITS AFFILIATES FROM AND FOR ANY SUCH LIABILITY, LOSS OR DAMAGE, EVEN IF CAUSED BY DISCLOSING PARTY'S OR ITS AFFILIATES' NEGLIGENCE EXCEPT AS PROVIDED IN PARAGRAPH 11.04 (EXCEPTIONS TO LIMITATIONS ON LIABILITY). NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IS MADE REGARDING SUCH INFORMATION AND MATERIAL, OR ITS COMPLETENESS, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE.
11.03 Indirect or Enhanced Damages. In no event will either Party be liable to the other Party under this Agreement for any consequential, indirect, special, incidental, punitive or exemplary loss or damage, including, without limitation, business interruption, cost of capital, loss of anticipated revenues and profits, loss of goodwill or increased operating costs, whether arising from contract, warranty, tort, strict liability or otherwise regardless of whether the possibility of such losses or damages have been made known to the first Party, and each Party hereby expressly waives all such rights and remedies, except for breach of any confidentiality or restricted use provisions of this Agreement and except as provided in Paragraph 11.04 (Exceptions to Limitations of Liability).
11.04 Exceptions to Limitations of Liability. Notwithstanding anything to the contrary in this Agreement, each Party will bear full responsibility, without limit, for the following:
(i) Gross Negligence or Willful Misconduct attributable to its personnel, and, in no event, will a Party be required to release or indemnify the other Party for Gross Negligence or Willful Misconduct attributable to the other Party; and
(ii) its legal obligations to third parties wherein nothing in this Agreement is intended to impair a party's contribution and indemnity rights under law with respect to third party claims.
ARTICLE 12 - TERM AND TERMINATION
12.01 Term. Unless sooner terminated in accordance with this Article, this Agreement will continue in full force beginning on the Effective Date and ending two (2) years thereafter ("Term").
12.02 Early Termination. The Parties recognize that circumstances may arise where this Agreement's early termination would be desirable. Accordingly, either Party may terminate this Agreement or all/part of a Project for any reason and at any time upon giving the other Party sixty (60) days prior written notice. In the event of early termination of a Project or this Agreement. In addition, if this Agreement is terminated by ExxonMobil, ExxonMobil will pay FCE reasonable non- refundable expenses incurred by FCE in satisfying authorized commitments entered into by FCE with third parties prior to receipt of the termination notice. FCE will uses its best efforts to minimize termination expenses and will give appropriate credit to ExxonMobil where applicable. The total amount paid FCE under this Agreement or for a Project, including all amounts paid following termination, will not exceed the maximum authorized charge specified in this Agreement or for a Project.
Page 14 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
12.03 Failure to Perform. If ExxonMobil fails to fulfill a material monetary obligation or FCE fails to execute material tasks or obligations in material compliance with all criteria set forth in a respective mutually agreed upon Project Description, in the time and manner required herein, provided that in the case of FCE's tasks or obligations any non-compliance or delay in meeting said criteria is not due to ExxonMobil or force majeure pursuant to Paragraph 15.01 (Force Majeure), the non- defaulting Party may give written notice of intent to terminate this Agreement, specifying the details of such default. Unless the defaulting Party has remedied such default within the Cure Period, this Agreement may be terminated, without penalty, payment or prejudice to claims then accrued, by written notice to the defaulting Party by the non-defaulting Party specifying the date of termination which will be of immediate effect. In the event of termination under this Paragraph 12.03 where FCE is the defaulting Party, FCE's royalty-free licenses described in Paragraph 7.01(b)(1), 8.02(b)(1)(i), 8.02 (b)(1)(ii), 8.02(b)(1)(iii), and 8.02(b)(2)(i) will immediately convert to royalty-bearing licenses, with the royalty rate to be negotiated by the Parties in good faith.
12.04 Other Termination. ExxonMobil may terminate this Agreement upon fifteen (15) days written notice, without penalty, payment or prejudice to claims and obligations then accrued, if FCE undergoes a Change in Control. Subject to requirements of applicable law, FCE will provide notice to ExxonMobil prior to, or promptly after, it becomes aware of any such Change in Control, and if prior notice is prohibited by applicable Law, as soon as practicable or after such notice is no longer prohibited, but in no event later than one (1) business day after any public announcement with respect to any such asset transfer or Change in Control. Notwithstanding anything else in this Agreement, in the event of termination under this Paragraph 12.04 ExxonMobil may terminate any licenses granted to FCE under this Agreement that would otherwise survive termination, taking into account the circumstances surrounding the Change in Control. Any licenses granted to ExxonMobil under this Agreement that would otherwise survive termination will continue to survive termination.
12.05 Bankruptcy.
(A) To the extent a court of competent jurisdiction determines that this Agreement is subject to assumption or rejection under Title 11 of the U.S. Code (the "Bankruptcy Code") or the applicable law of a bankruptcy or insolvency proceeding in a non-U.S. jurisdiction:
(i) All rights and licenses granted to ExxonMobil and its Affiliates under or pursuant to this Agreement are, and will otherwise be deemed to be, for all purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to "intellectual property" as defined in section 101 of the Bankruptcy Code.
(ii) If a case is commenced under the Bankruptcy Code by or against FCE and this Agreement is rejected as provided in the Bankruptcy Code, and ExxonMobil or any of its Affiliates elects to retain its rights hereunder as provided in the Bankruptcy Code, then ExxonMobil and its Affiliates shall retain all rights hereunder in perpetuity without further royalty payments of any kind and FCE (in any capacity, including debtor-in- possession) and its successors and assigns (including, without limitations, a trustee) shall not interfere with such rights.
(iii) In the event of bankruptcy or insolvency proceedings of FCE in a non-U.S. jurisdiction, the rights, powers and remedies of ExxonMobil and its Affiliates shall be applied under any applicable laws which are equivalent to Section 365(n) of the Bankruptcy Code, or if there is no such equivalent, the Parties will take all such actions as are permissible under applicable law to permit the continuation of the licenses contained in this Agreement to the maximum extent possible.
Page 15 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
(iv) In the event FCE admits in writing its inability generally to pay its debts as they fall due in the general course, becomes or is determined to be insolvent, makes a general assignment for the benefit of creditors, suffers or permits the appointment of a receiver for its business or assets, or a substantial part thereof, or becomes subject to a proceeding under any statute or act relating to insolvency or the protection of rights of creditors, ExxonMobil receives, at its election, continued access to all Program Information, including the Project materials, equipment, and FCE's Background Information and Background Patents, and ExxonMobil will have access to relevant lab notebooks, computers containing technical information and know-how, journals, ledgers and manuals containing technical information and know-how in each case relating to the Program Information and FCE's Background Information and Background Patents.
(B) To the maximum extent permitted under law, ExxonMobil may terminate this Agreement upon fifteen (15) days written notice, without penalty, payment or prejudice to claims and obligations then accrued, if FCE commences a voluntary case under the Bankruptcy Code or a similar voluntary bankruptcy or insolvency proceeding in a non- U.S. jurisdiction, or if an order for relief is entered in an involuntary case filed against FCE under the Bankruptcy Code, and such case is not dismissed within sixty (60) days of the entry of such order, or if FCE makes a voluntary general assignment for the benefit of creditors, or suffers or permits agrees to the entry of an order appointing a receiver in an action actually pending in a court of competent jurisdiction for that portion of its business or assets related to the Project. In the event of termination under this Paragraph 12.05 and subject to ExxonMobil's waiver (in its sole discretion), any licenses granted to FCE under this Agreement that would otherwise survive termination will automatically terminate and any licenses granted to ExxonMobil under this Agreement that would otherwise survive termination will continue to survive termination.
12.06 Continuing Rights and Obligations. Except as otherwise stated in this Agreement, the following Articles and Paragraphs will survive termination of this Agreement:
o Article 1 (Definitions);
o Article 4 (Disclosure, Confidentiality and Restricted Use);
o Article 6 (Procurement and Ownership of Program Results)
o Article 7 (License to Program Results), subject to Paragraphs 12.03 (Failure to Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy);
o Article 8 (License to Background Information and Patents), subject to Paragraphs 12.03 (Failure to Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy);
o Article 10 (Payment), but only to the extent there are continuing license and/or royalty share obligations pertaining to the commercial use of Program Results, Background Information and/or Background Patents;
o Article 11 (Representations, Warranties, Indemnities and Liabilities);
o Article 12 (Term and Termination) to the extent any clause therein speaks to post termination rights and obligations;
o Article 13 (Arbitration and Governing Law);
o Article 14 (Assignment);
o Article 16 (Addresses and Notices);
Page 16 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
o Paragraph 17.03 (Export Controls and Trade Sanctions);
o Article 18 (Records and Audit);
o Article 19 (Taxes);
o Paragraphs 20.02 (Independent Contractors), 20.03 (Independent Entities), 20.06 (No Third-Party Beneficiaries), 20.07 (Internal Conflict), 20.08 (Severability), 20.09 (Amendments; Modification; Waiver), 20.10 (Integration), and 20.11 (Execution); and
o any rights and obligations contained in this Agreement which by their nature should continue.
Any rights and obligations that have accrued to either Party against the other prior to the effective date of termination or expiration of this Agreement in any respect will survive such termination or expiration, and rights that have accrued to an Affiliate of a Party will continue regardless of any change in Affiliate status during the Term of this Agreement or thereafter.
ARTICLE 13 - ARBITRATION AND GOVERNING LAW
13.01 Governing Law. The validity and interpretation of this Agreement and the legal relations of the Parties to it will be governed by the laws of the State of New York without recourse to its conflicts of law rules.
13.02 Arbitration Proceedings. Both Parties will try to amicably resolve any dispute arising out of or relating to this Agreement by involving representatives of the Parties with authority to settle such disputes. In the event the Parties are unable to agree upon a resolution within a reasonable period of time, not to exceed sixty (60) days after first notice of the difference unless otherwise agreed in writing, any dispute arising out of or relating to this Agreement may be referred to final and binding arbitration before three arbitrators under the Rules of Arbitration of the International Chamber of Commerce. Each Party will appoint one arbitrator within thirty (30) days of notice of such referral and the two (2) so appointed will, within thirty (30) days from the appointment of the last of the two (2) arbitrators, select a third arbitrator who will act as the Chairman. The arbitration will take place in New York City, New York and the proceedings will be conducted in the English language. The arbitrators will decide all questions and settle all disputes strictly in accordance with the provisions of this Agreement, including the relevant indemnities and liability limitations. The arbitrators will have no authority to award exemplary or punitive damages, and the arbitral panel will certify in the decision that no part of the award includes such damages. The Parties waive their rights to seek rulings from any court on issues of law that arise during the arbitration and to challenge the award on the grounds that the arbitrators made errors of law. Awards made pursuant to this Paragraph will be final and binding on the Parties from the date made and judgment upon any award may be entered in any court having jurisdiction. No Party hereto will raise defenses based on sovereign immunity with respect to the arbitration, any judicial proceeding or ancillary thereto or with respect to enforcement of any award, order or judgment rendered in the arbitration or related judicial proceedings.
13.03 Cost of Arbitration. The prevailing Party in an arbitration proceeding will be entitled to recover from the other Party reasonable attorneys' fees, reasonable out-of-pocket costs and disbursements, as well as any charges for the cost of the arbitration and the fees of the arbitrators.
13.05 Injunctive Relief. No provision of this Agreement will prohibit any Party from approaching any court having competent jurisdiction to seek injunctive relief in case of urgency to prevent disclosure of its Confidential Information.
Page 17 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
ARTICLE 14 - ASSIGNMENT
14.01 Assignment. The Agreement is not assignable, including any assignment by operation of law (including but not limited to as a result of a merger or other corporate action), by either Party without the prior written consent of the other Party. Any and all assignments of this Agreement or of any part thereof not made in accordance with this Article will be void. Notwithstanding the foregoing, ExxonMobil may assign this Agreement to its Affiliates and FCE may assign this Agreement to any of its wholly-owned and wholly-controlled Affiliates, with prior written notice to the other Party, provided that (i) such assignment by FCE shall be void if at any point such Affiliate ceases to be both wholly-owned and wholly- controlled by FCE, (ii) Article 12, including but not limited to Paragraphs 12.03, 12.04 and 12.05, shall be applicable to both FCE and any Affiliate assignee of FCE, and (iii) no assignment pursuant to this sentence will relieve the Parties of their obligations under this Agreement.
14.02 Assignees Bound. Any assignee permitted in Paragraph 14.01 (Assignment) will agree in writing to be bound by all the obligations of the assigning Party under this Agreement, and a copy of such written agreement will be promptly provided to the other Party. Any Party making an assignment of this Agreement as permitted in Paragraph 14.01 (Assignment) will remain bound by the continuing obligations of confidentiality and nonuse applicable to such Party prior to the assignment.
ARTICLE 15 - FORCE MAJEURE
15.01 A Party will not be liable to the other Party and will not be considered in breach of this Agreement for delays or failures in performance resulting from causes beyond the reasonable control of that Party, including, but not limited to, acts of God, labor disputes or disturbances, material shortages or rationing, riots, acts of war, new governmental regulations, communication or utility failures, or casualties. In such instance, the Party so affected will promptly notify the other Party in writing of such prevention, restriction or interference. ExxonMobil or FCE, as the case may be, will be excused from performing such obligations to the extent of such prevention, restriction or interference; provided, however, that the Party so prevented, restricted or interfered with will take all appropriate and reasonable steps to remedy such failure or delay and will resume its performance under this Agreement with all proper dispatch whenever such causes are removed.
ARTICLE 16 - ADDRESSES AND NOTICES
16.01 All notices, demands, requests, or other communications which a Party may desire or be required to give under this Agreement to the other Party will be in writing addressed as follows or to such other address designated by notice in writing:
Page 18 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
ExxonMobil: ExxonMobil Research and Engineering Company 1545 Route 22 East Annandale, NJ 08801-0900 Attention: Timothy Barckholtz, Senior Scientific Advisor Email: tim.barckholtz@exxonmobil.com FCE: FuelCell Energy, Inc. 3 Great Pasture Road Danbury, CT 06810 Attention: Anthony Leo, Executive Vice President Email: tleo@fce.com With a copy to: FuelCell Energy, Inc. 3 Great Pasture Road Danbury, CT 06810 Attention: Legal Department Such notice, demand, request, or other communications will be deemed to have been sufficiently given by and will be effective upon the earliest of: (a) delivering the same to a reputable courier service that requires a signature upon delivery; (b) mailing the same by registered or certified first-class mail, postage prepaid, return receipt requested; (c) if an e-mail is provided, then by e-mail with receipt confirmation followed by mailing the same or (d) actual receipt by the addressee.
ARTICLE 17 - COMPLIANCE
17.01 Business Standards. The Parties have established and maintain standards, policies, and/or guidelines ("Policies") applicable to lawful and ethical conduct when conducting their business activities. Upon written request, a Party will provide to the other Party a copy of, or electronic access to, such Policies. The Parties agree to comply with such Policies when conducting activities under this Agreement. These Policies pertain to, but may not be limited to, gifts/entertainment/and other things of value and drugs and alcohol. These Policies are communicated to the Parties' employees, along with an expectation that the employees will comply with these Policies.
17.02 Compliance with Laws. All actions by each Party related to this Agreement will comply with applicable laws and regulations. Notwithstanding anything in this Agreement to the contrary, no provision will be interpreted or applied so as to require a Party or its Affiliates, to do, or to refrain from doing, anything which would constitute a violation of, or be penalized by, any applicable laws and regulations or result in a loss of economic benefit under such laws or regulations.
17.03 Export Control and Trade Sanctions. Neither Party will furnish, deliver, or release the technology, services, software, or commodities made available to it hereunder to any individual, entity, or destination, or for any use, except in full accordance with all applicable laws, regulations, and requirements of the United States with regard to export control and trade sanctions. Both Parties agree and understand that each will be responsible for ongoing compliance with all such applicable laws, regulations, and requirements. It will be a material breach if a Receiving Party takes any action or uses any of a Disclosing Party's information in any manner which would violate United States laws, regulations, or requirements restricting the export, re-export, transfer or release to certain entities or destinations, including to persons within the Receiving Party or its Affiliates, or to unrelated Third Parties.
Page 19 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
ARTICLE 18 - RECORDS AND AUDIT
18.01 Recordkeeping. FCE will keep, or cause to be kept, true books, records, and accounts in accordance with Generally Accepted Accounting Principles and containing all information necessary for the accurate determination of all amounts payable to FCE under this Agreement, and any other obligations under this Agreement. Such books, records and accounts will be maintained for a period of at least three (3) years following the termination or expiration of this Agreement, provided there are no pending disputes between the Parties. In the case of a dispute, the books, records, and accounts will be maintained for one (1) year following resolution of such dispute.
18.02 Audit Rights. At the request of ExxonMobil, FCE will permit, at reasonable intervals and during regular business hours, during the Term of this Agreement and at least three (3) years thereafter, but no more than once per fiscal year, an independent certified public accounting firm of nationally recognized standing selected by ExxonMobil (and approved by FCE, which approval will not be unreasonably withheld) to inspect, during regular business hours, such books, records, and accounts and any part of the applicable operations and facilities of FCE relevant to this Agreement, and to have access to FCE's knowledgeable personnel, as may be necessary to determine the completeness and accuracy of any accounting and payments required to be made under this Agreement and compliance with other terms of this Agreement, subject to the following:
(a) ExxonMobil and its employees or other representatives will have the right to reproduce for its internal records any of the documents kept by FCE in accordance with Paragraph 18.01 (Recordkeeping), such reproduced documents shall be subject to the confidentiality and use provisions contained in Article 4; and
(b) all expenses of each such audit, including any pre-approved reasonable expenses incurred by FCE for such audit, will be for the account of ExxonMobil.
FCE will cause any subcontractors to preserve documentation and allow ExxonMobil to audit such books, records, and accounts of subcontractors by way of auditing FCE.
18.03 Accurate Records. Both Parties agree that all records relating to any Project, including invoices, financial reports, accounting reports, and other financial records relating to any Project will be complete and reflect accurately the facts about all activities and transactions, and both Parties may rely on all such records as being complete and accurate in any further recordings and reports made by the Parties for any purpose. If either Party becomes aware that any such records are inaccurate or incomplete, that Party will promptly notify the other Party in writing and provide accurate and complete information.
ARTICLE 19 - TAXES
19.01 Tax Responsibility. Each Party will be responsible for and will bear its own tax liabilities, of whatever kind and imposed by whatever taxing entity or entities incurred in connection with the existence or any performance of any activities under this Agreement or the granting of licenses or other rights and considerations hereunder.
19.02 Tax Cooperation. Each Party will reasonably cooperate with the other Party to assist the other Party in providing information to support tax filings associated with this Agreement.
ARTICLE 20 - ADDITIONAL PROVISIONS
20.01 Site Requirements. Each Party agrees that if any employees of the Party or its Affiliates visit, or are physically located at, the facilities of the other Party, during the course of the Program, then such employees will abide by all site requirements of the other Party made known to them, including but not limited to, site requirements pertaining to safety, security, health and the environment.
Page 20 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
20.02 Independent Contractors. The relationship between the Parties is that of independent contractors. Nothing contained in this Agreement, or any course of action by either Party pursuant to this Agreement, will be construed or deemed to constitute or create a joint venture, partnership, agency or employment relationship between the Parties or between either Party and the employees or other representatives of the other Party.
20.03 Independent Entities. Each Party enters into this Agreement solely on its own behalf and not on behalf of any other person or entity. Each Party warrants that it is an independent legal entity with the power and authority to enter into Agreements solely on its own behalf. No Party hereto will assert any defense of sovereign immunity that may be available to it in any resolution of any dispute under this Agreement; all such defenses are expressly waived by the Parties.
20.04 Future Work. This Agreement shall not constitute or imply any promise or intention: (a) to enter into any other agreement of any nature, (b) to make any purchase of products or services by either Party or its Affiliates, or (c) to make any commitment by either Party, its Affiliates, or licensees with respect to present or future marketing or supply of any product or service.
Notwithstanding the foregoing, prior to the end of the Term of this Agreement and subject to FCE achieving Milestone 1 and Milestone 2 to ExxonMobil's satisfaction, the Parties agree to negotiate in good faith commercially reasonable terms for the demonstration of Generation 2 Technology at one or more of ExxonMobil's commercial facilities.
20.05 Workplace Harassment. Each Party's employees, agents, and subcontractors who will perform work hereunder or communicate with the other Party's employees, agents, customers, or contractors will not engage in any harassment of the other Party's employees, agents, customers, or contractors. The term "harassment" as used herein includes all forms of unlawful harassment based on race, color, sex, religion, national origin, citizenship status, age, genetic information, physical or mental disability, veteran, sexual orientation, gender identity or other legally protected status; as well as all other forms of harassment, which, while not unlawful, are inappropriate in a business setting. If any of one Party's employees, agents, or subcontractors who perform work hereunder or communicate with the other Party's employees, agents, customers, or contractors have not been informed of the standard of conduct above, the one Party will inform them. Each Party will promptly notify the other Party contact for the applicable services of any report or complaint of harassment or of any violation of the above standard of conduct. Each Party will cooperate with the other Party in any investigation the other Party may make, including making each Party's employees, agents and subcontractors available for questioning by the other Party's designated investigators. Each Party agrees not to retaliate against anyone who reports an incident of harassment or who cooperates in any investigation of a report of an incident.
20.06 No Third Party Beneficiaries. No third parties are intended to be third party beneficiaries under this Agreement. None of the provisions of this Agreement will be enforceable by a third party. For the avoidance of doubt, permitted assignees of a Party pursuant to Article 14 (Assignment) will not be considered third parties for purposes of this Paragraph.
20.07 Internal Conflict. In the event of a conflict between the provisions in the body of this Agreement and any Project Description, the terms of the body of this Agreement will control.
20.08 Severability. The provisions of this Agreement are deemed severable. The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision hereof which can be given effect without the invalid or unenforceable provision, and to this end the provisions of this Agreement are declared to be severable and the balance of this Agreement will be construed and enforced as if this Agreement did not contain such invalid or unenforceable provision.
Page 21 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
20.09 Amendment; Modification; Waiver. This Agreement may only be amended, modified, or supplemented by an agreement in writing signed by authorized representatives of each party hereto. No waiver by any party of any of the provisions hereof will be effective unless explicitly set forth in writing and signed by the waiving party. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any rights, remedy, power, or privilege arising from this Agreement will operate or be construed as a waiver thereof; nor will any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.
20.10 Integration. The Parties have entered into the following related agreements: Prior JDA, Non-Disclosure Agreement, License Agreement, and Memorandum of Understanding. This Agreement (including, for the avoidance of doubt, any fully executed Project Descriptions) constitutes the entire agreement between the Parties and it supersedes all negotiations, representations or agreements, oral or written, express or implied, as to its specific subject matter. Notwithstanding the foregoing, the status of the related agreements shall be as follows:
Prior JDA. As of the Effective Date of this Agreement, the Prior JDA is terminated. Any rights and obligations that were to survive termination of the Prior JDA (pursuant to Section 14.06 of the Prior JDA) are also terminated, except the confidentiality and use restrictions on Prior JDA Background Information and Prior JDA Project Results. Such confidentiality and use restrictions, as set forth in the Prior JDA, will survive termination but will be superseded and replaced by the confidentiality and use restrictions set forth in Article 4 (Disclosure, Confidentiality, and Restricted Use) of this Agreement.
Memorandum of Understanding. As of the Effective Date of this Agreement, the Memorandum of Understanding is terminated, but the confidentiality obligations set forth in the Memorandum of Understanding shall survive termination.
Non-Disclosure Agreement and License Agreement. This Agreement does not modify, abrogate, terminate or supersede any other prior written agreements between the Parties except as specifically noted herein, and such agreements will continue to be applicable in accordance with their terms. For clarity, this Agreement does not modify, abrogate, terminate or supersede the terms and conditions of the Non-Disclosure Agreement or the License Agreement.
20.11 Arm's Length Transaction. This Agreement represents a negotiated, arm's length transaction. The transactions contemplated under this Agreement are being made by each Party for reasonably equivalent value and fair consideration. The transactions contemplated in this Agreement will not constitute a fraudulent transfer or fraudulent conveyance or any act with similar consequences or potential consequences under 11 U.S.C. Section 548 and other similar laws, or otherwise give rise to any right of any creditor of a Party whatsoever to lodge any claim against the other Party or avoid the transactions hereunder.
20.12 Execution. This Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument. Where provided for in applicable law, this Agreement may be executed and delivered electronically. If executing this Agreement using a handwritten signature, a Party may deliver a copy of such signature via electronic transmission and may provide the other Party a duplicate original so each Party retains an original for its records.
Page 22 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in their respective corporate names by their duly authorized officers. FUELCELL ENERGY, INC. EXXONMOBIL RESEARCH AND ENGINEERING COMPANY
By: /s/ Jason B. Few By: /s/ Vijay Swarup
Name: Jason B. Few Name: Vijay Swarup
Title: President, Chief Executive Officer and Chief Commercial Officer Title: VP R&D
Date: November 5, 2019 Date: November 5, 2019
Page 23 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
APPENDIX A - DEFINITIONS
"Affiliate(s)" means any legal entity which, directly or indirectly, at the time in question, controls, is controlled by, or is under common control with the designated Party. For the purposes of this definition, "control" is defined as direct or indirect ownership of fifty percent (50%) or more of the voting interest or economic interest in the controlled entity or such other relationship whereby the controlling entity determines or has the right to determine the majority of the Board of Directors or an equivalent governing body of the controlled entity.
"Agreement" means this agreement, together with the appendices attached to this agreement and any Project Descriptions, extensions, renewals, or amendments hereof agreed to in writing and signed by the Parties.
"Authorized Third Parties" means Drax Group Plc. and Alberta Innovates Corporation, and, subject to FCE obtaining the prior written consent of ExxonMobil, which consent will not be unreasonably withheld, conditioned, or delayed, the respective successors, assigns, joint venturers, partners and contractors of each of them.
"Authorized Work" means non-commercial activities restricted to research and development, pilot plant, deployment, and demonstration projects, and commercial activities for which FCE has obtained the prior written consent of ExxonMobil.
"Background Information" in connection with a designated Party means technical information, data, know-how, expertise, materials (including hardware, samples, models, algorithms, and software), calculations, innovations, inventions, discoveries, improvements, formulations, manufacturing techniques, equipment designs, methods, processes, and the like, of the designated Party or its Affiliates that is:
(a) owned or controlled by the designated Party or its Affiliates (in the sense of having the right to license without accounting to others); and
(b) conceived, created, developed, or acquired by the designated Party or its Affiliates:
(1) prior to the Effective Date of this Agreement; or
(2) at any time, but independently of any Project prior to the termination of this Agreement.
Background Information includes Background Samples but does not include Program Information.
Background Information further includes any business or financial information of the indicated Party relating to the subject matter of this Agreement that is disclosed to the other Party under this Agreement, including, but not limited to, financial data, costs, margins, overhead, returns on capital employed, marketing strategies, and licensing strategies and terms.
"Background Patents" in connection with a designated Party means all patents and patent applications (including continuations, continuations-in-part, or divisions thereof, any patent resulting therefrom, and reissues, re-exams or extensions thereof, and revisions thereof arising from oppositions, inter or ex parte proceedings, or other patent office or judicial proceedings) of all countries, whenever filed, that are:
(a) owned or controlled by the designated Party or its Affiliates (in the sense of having the right to license without accounting to others); and
(b) based solely on Background Information and not included in the definition of Project Patents.
"Background Sample(s)" means ExxonMobil Background Sample(s) and/or FCE Background Sample(s) depending on the context in which the term is utilized.
"Bankruptcy Code" is defined in Paragraph 12.05 (Bankruptcy).
Page 24 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
"Capture Rate" means the percentage of CO2 transferred from the cathode inlet to the anode outlet.
"Carbon Capture Applications" means applications in which the MCFCs concentrate carbon dioxide from industrial or power sources, and for any other purpose attendant thereto or associated therewith.
"Carbonate Transference" means the current density that is due to carbonate transfer as a percentage of total current density.
"Change in Control" means the occurrence of any one or more of the following at any time after the date hereof with respect to FCE:
a) a merger or consolidation with any Person which results in the holders of the voting securities of FCE outstanding immediately prior thereto (other than the acquirer, its "affiliates" and "associates" (as such terms are used in the Securities Exchange Act of 1934)) ceasing to represent at least fifty percent (50%) of the combined voting power of the surviving entity (or, if applicable, its parent company) immediately after such merger or consolidation;
b) any Major Competitor is or becomes the beneficial owner by purchasing directly from FCE, voting securities representing ten percent (10%) or greater than the actual voting power of any such entity;
c) the sale to any Major Competitor of all or substantially all of the business of FCE to which this Agreement relates (whether by merger, consolidation, sale of stock, sale of assets or other similar transaction);
d) any Person (which shall not be any trustee or other fiduciary holding securities under an employee benefit plan of such Person, or any corporation owned directly or indirectly by the stockholders of such Person, in substantially the same proportion as their ownership of stock of such Person), together with any of such Person's "affiliates" or "associates", as such terms are used in the Securities Exchange Act of 1934, becoming the beneficial owner of fifty percent (50%) or more of the combined voting power of the outstanding securities of FCE or by contract or otherwise having the right to control the board of directors or equivalent governing body of FCE or the ability to cause the direction of management of FCE (or, if applicable, its parent company);
e) the approval by such entity's board of directors or shareholders of any reorganization or transaction that would cause any of the situations described in clauses (a) through (d) to occur; or
f) the approval by the board of directors or other governing body or the shareholders or other equity holders of FCE of any plan or proposal for its liquidation or dissolution.
The occurrence or non-occurrence of a Change in Control does not alter or limit section 14.01 of this Agreement.
"Confidential Background Information" means, collectively, any and all Background Information that a Party is required to keep confidential pursuant to the terms and conditions of this Agreement.
"Confidential Information" means, collectively, any and all Confidential Program Information, Confidential Background Information, and any other types of information, that a Party is required to keep confidential pursuant to the terms and conditions of this Agreement.
"Confidential Program Information" means, collectively, any and all Program Information that FCE is required to keep confidential pursuant to the terms and conditions of this Agreement.
Page 25 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
"Cure Period" means a period commencing on the date the defaulting Party receives the written notice of breach or default from the non-defaulting Party pursuant to Paragraph 12.03 and continuing until thirty (30) calendar days thereafter; provided, however, that if prior to the expiration of this period the defaulting Party provides the non-defaulting Party with written evidence that the breach or default cannot reasonably be cured within such period and the defaulting Party has promptly commenced and is diligently pursuing efforts to cure the breach or default, then the Cure Period shall continue as long as such diligent efforts to cure continue, but not beyond the date that is sixty (60) days after the expiration of the initial thirty (30) calendar day Cure Period.
"Definition Agreement" means the agreement between the Parties effective as of October 31, 2019, bearing ExxonMobil Document No. LAW-2019-3850.
"Disclosing Party" means the Party that discloses, directly or indirectly, information or other materials to the Receiving Party hereunder.
"Direct Costs" means reimbursable costs, approved in advance by the Steering Committee, which are (i) operational expenditures of FCE associated with the Program not included in the FTE Cost, including subcontractors, (ii) material or capital expenditures of FCE associated with the Program; and (iii) approved FCE travel costs to attend SC meetings or conferences, and use of contractors in furtherance of a Project.
"Effective Date" means October 31, 2019.
"Exclusivity and Technology Access Fee" is defined in Paragraph 10.02 (Up-front Exclusivity and Technology Access Fee Payment).
"ExxonMobil" is defined in the preamble.
"ExxonMobil Background Information" means Background Information that: (a) was developed or acquired by ExxonMobil independently of a Project, and (b) is provided by ExxonMobil for use in a Project under this Agreement. ExxonMobil Background Information does not include Program Information.
"ExxonMobil Background Sample" means a non-commercial sample of material, component, device, or the like that: (a) was developed or acquired by ExxonMobil independently of the Project, and (b) is provided by ExxonMobil for use in a Project under this Agreement. ExxonMobil Background Samples does not include Program Samples.
"FCE" is defined in the preamble.
"FCE Background Information" means Background Information that: (a) was developed or acquired by FCE independently of a Project, and (b) is provided by FCE for use in a Project under this Agreement. FCE Background Information does not include Program Information.
"FCE Background Sample" means a non-commercial sample of material, component, device, or the like that: (a) was developed or acquired by FCE independently of a Project, and (b) is provided by FCE for use in a Project under this Agreement. FCE Background Samples does not include Program Samples.
"FTE" means a full-time employee of FCE or an equivalent thereof, dedicated to the conduct of the Program based on a total of one thousand eight hundred and fifty-six (1,856) hours per year of direct project work per year. FTEs will include engineers, scientists, and any other functions mutually agreed to by the Steering Committee. Non-devoted personnel (e.g., FCE's Board of Directors, management, secretarial, administrative, human resources, finance, purchasing, shipping and receiving, information technology specialists, lawyers, cleaning and food service personnel) are not FTEs. Individuals may be counted as fractional FTEs by using the individual's total hours of work for FCE on the Program (as opposed to total hours of work) as the numerator and 1,856 as the denominator. For clarity, the phrase "direct project work" means the applicable person is engaged in activities contemplated to be performed by Project Description and excludes time incurred by a person on indirect work-related functions, such as time spent on management, training, general meetings, workplace events, completing time cards, and similar administrative functions, except for attendance at Steering Committee meetings.
Page 26 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
"FTE Costs" means the product of the FTE Rate and the hours worked of the total number of FTEs.
"FTE Rate" means the hourly amount agreed to by the Parties per FTE. As of the Effective Date, the FTE Rate for scientists and engineers is three-hundred and twenty-seven United States dollars ($327.00 USD) and the FTE Rate for all other FTEs is one- hundred and ninety-four United States dollars ($194.00 USD). Increases in the FTE Rate must be approved by the Steering Committee.
"Generation 1 Technology" is defined in the Definition Agreement.
"Generation 2 Technology" is defined in the Definition Agreement.
"Gross Negligence" means any act or failure to act (whether sole, joint or concurrent) which seriously and substantially deviates from a diligent course of action or which is in reckless disregard of or indifference to the harmful consequences.
"Hydrogen Applications" means applications in which the MCFCs are used solely for hydrogen generation in combination with power generation or combined heat and power generation.
"Initial Payment" is defined in Paragraph 10.01(b) (Project Costs).
"Inlet CO2 Concentration" means CO2 concentration in the cathode inlet measured at room temperature conditions (about 23oC) via gas chromatography, as calibrated according to conventional methods.
"Inlet O2 Concentration" means O2 concentration in the cathode inlet measured at room temperature conditions (about 23oC) via gas chromatography, as calibrated according to conventional methods.
"Inlet Water Concentration" means water concentration in the cathode inlet measured at room temperature conditions (about 23oC) via gas chromatography, as calibrated according to conventional methods.
"8th Inning Invoice" is defined in Paragraph 10.01(d) (Project Costs).
"9th Inning Invoice" is defined in Paragraph 10.01(d) (Project Costs).
"License Agreement" means the agreement between the Parties effective June 11, 2019 entitled License Agreement bearing ExxonMobil Document No. LAW-2019-3245.
"Major Competitor" means a company with a market capitalization in excess of fifty billion United States dollars ($50 billion USD) and whose principal business involves exploration for, and/or production of, crude oil and/or natural gas, manufacture of petroleum products and/or transportation and/or sale of crude oil, natural gas, and/or petroleum products.
"Memorandum of Understanding" means the non-binding agreement between ExxonMobil and FCE effective August 26, 2019.
"Milestone 1" is defined in the Definition Agreement.
"Milestone 2" is defined in the Definition Agreement.
"Milestone Payments" is defined in Paragraph 10.03 (Milestone Payments).
"Molten Carbon Fuel Cells" or "MCFCs" means a powerplant system including MCFC Stacks and Balance of Plant based on a fuel cell that comprises an electrolyte, an anode, and a cathode wherein the electrolyte comprises one or more carbonate salts that are molten (liquid) at operating temperatures. An "MCFC Stack" is a set of fuel cells connected electrically in series, arranged vertically or horizontally, that share common ducting for the cathode and anode streams. The ducting is considered part of the MCFC Stack. Further, the MCFC Stack may include "Reformer Units", which are non-electrochemical units that catalytically reform the anode feed to H2 and CO, but do so without producing any electricity. "Balance of Plant" or "BOP" means all other equipment besides the MCFC Stack that is required to operate the MCFC as a stand-alone device, i.e., not in CO2 capture mode or in H2/syngas generation mode. For power generation this can include the dc-to-ac power conversion, fuel and water processing, air supply, and heat exchange equipment.
Page 27 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
"Non-Affiliated Third Party" means a third party who is not Party or an Affiliate of a Party.
"Non-Disclosure Agreement" means the agreement between the Parties effective December 7, 2018 entitled Mutual Non- Disclosure Agreement bearing ExxonMobil Document No. EM11762.
"Party" and "Parties" is defined in the preamble.
"Person" means any trust, natural person, firm or partnership, company, corporation, or other entity that is given, or is recognized as having, legal personality by the law of any jurisdiction, country, state or territory, unincorporated body and association (including joint venture and consortium), any emanation of a sovereign state or government, whether national, provincial, local or otherwise, any international organization or body (whether or not having legal personality), and any other juridical entity, in each case wherever resident, domiciled, incorporated or formed, and more than one of the foregoing acting as a group.
"Policies" are defined in Paragraph 17.01 (Business Standards).
"Potential Decay Rate" is defined in the Definition Agreement.
"Power Applications" means applications in which the MCFCs are solely used for power generation, combined heat and power generation, or both.
"Power Density" means the product of the average cell or stack current density and the average cell potential.
"Prior JDA" means the agreement between the Parties effective April 30, 2016 entitled Joint Development Agreement bearing ExxonMobil Document No. EM09080.
"Prior JDA Background Information" means Background Information as defined in the Prior JDA.
"Prior JDA Project Patents" means Project Patents as defined in the Prior JDA, which by definition are jointly-owned by the Parties.
"Prior JDA Project Results" means Project Results as defined in the Prior JDA, which by definition are jointly-owned by the Parties.
"Project(s)" is defined in Paragraphs 2.01 (Program / Projects).
"Project Description" is defined in Paragraph 2.01 (Program / Projects).
"Program" is defined in Paragraph 2.01 (Program / Projects).
"Program Information" means all information and associated copyrights, whether or not patentable, that is conceived, created, developed or acquired in or for the Program during the Term of the Agreement from any source (including from any employee of either Party or its Affiliates, or from any Party's or its Affiliates' contractors or consultants, whether alone or jointly with one or more others) in the course of and as a result of working directly on the Program. Program Information shall be owned by ExxonMobil and its Affiliates.
Program Information specifically includes Program Inventions and Program Samples. Program Information also includes improvements to either Party's Background Information conceived, created, developed or acquired in or for the Program and resulting directly from activities performed in the course of and as a result of working directly on the Program.
"Program Inventions" means Program Information that is characterized as inventions, discoveries, or improvements (whether patentable or not) that are conceived, created, developed, or acquired by or on behalf a Party or its Affiliates during the Term of this Agreement and one (1) year thereafter, and in the course of and as a result of working directly on the Program. Program Inventions shall also include Project Inventions (as defined in the Prior JDA) that have not been filed with any national, regional, or international patent body or organization by the Effective Date of this Agreement. Program Inventions shall be owned by ExxonMobil and its Affiliates.
Page 28 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
"Program Patents" means all patents and patent applications (including continuations, continuations-in-part, or divisions thereof, any patent resulting therefrom, and reissues, re-exams or extensions thereof, and revisions thereof arising from oppositions, inter or ex partes proceedings, or other patent office or judicial proceedings) filed with any national, regional, or international patent body or organization after the Effective Date of this Agreement, that are based upon and/or claim one or more features of Program Inventions. Program Patents shall be owned by ExxonMobil and its Affiliates.
"Program Results" means, collectively Program Information, Program Patents, and copyrightable works resulting from the Program.
"Program Sample" means a sample of material, component, device, or the like that is developed during the Term of this Agreement, in the course of and as a result of working directly on the Program.
"Receiving Party" means the Party that receives, directly or indirectly, information or other materials from the Disclosing Party.
"Research Costs" means Direct Costs plus FTE Costs.
"Scope" is defined in the preamble.
"Steering Committee" or "SC" is defined in Paragraph 3.01 (Steering Committee).
"Sample" means collectively FCE Background Sample, ExxonMobil Background Sample, and Program Sample.
"Technical Manager" is defined in Paragraph 3.02 (Technical Managers).
"Term" or "Term of this Agreement" is defined in Paragraph 12.01 (Term).
"Total Research Cost" is defined in Paragraph 10.01(a) (Project Costs).
"Willful Misconduct" means an intentional disregard of good and prudent standards of performance or of any of the substantive terms of this Agreement.
"Work" means any activities of any kind, including but not limited to, research and development, pilot plant, manufacture testing, demonstration, or commercial development/deployment.
Page 29 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
APPENDIX B - SAMPLE PROJECT DESCRIPTION FORMAT
PROJECT DESCRIPTION No. ____
Project Name: __________________
LAW-2019-3608
FCE Agreement No. :____________
Date: ________________________
Receiving Company Name & Address
Attention: ______________________
Dear ______________,
This Project Description No. [NUMBER] is issued pursuant to the Joint Development Agreement, effective [EFFECTIVE DATE] between ExxonMobil Research and Engineering Company ("ExxonMobil") and FuelCell Energy, Inc. ("FCE"), bearing ExxonMobil Agreement No. LAW-2019-3608 ("Agreement"). Each Party's activities hereunder will be conducted in accordance with and subject to the terms and conditions of the Agreement. The specific terms which will apply to this Project are described below.
1. PROJECT DESCRIPTION/OBJECTIVES:
_________________
2. TIME SCHEDULE:
Commencement Date: ____________
Completion Date: ________________
3. STEERING COMMITTEE MEMBERS / TECHNICAL MANAGERS:
FCE: ______________________
ExxonMobil: __________________________
4. PROJECT BUDGET Task 1A 1B 1C ….
N u m b e r o f FTEs
FTE Cost
Direct Costs
TOTAL
5. DELIVERABLES:
____________________
Page 30 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
If the foregoing is satisfactory, please have a duly authorized representative of your company sign duplicate originals of this Project Description and return both to for counter-execution on behalf of our company. A fully-executed original will be returned for your files. Very truly yours, EXXONMOBIL RESEARCH AND ENGINEERING COMPANY By: Name: Title: Date:
ACCEPTED AND AGREED TO: FUELCELL ENERGY, INC. By: Name: Title: Date:
Page 31 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 [/INST] ```json
{<answer_start>
"answer": "ExxonMobil Research and Engineering Company"
<answer_end>
}
``` </s> | EXHIBIT 10.1
JOINT DEVELOPMENT AGREEMENT
between
FUELCELL ENERGY, INC.
and
EXXONMOBIL RESEARCH AND ENGINEERING COMPANY
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
TABLE OF CONTENTS ARTICLE 1 - DEFINITIONS 1 ARTICLE 2 - PROGRAM 1 ARTICLE 3 - PROGRAM GOVERNANCE 2 ARTICLE 4 - DISCLOSURE, CONFIDENTIALITY AND RESTRICTED USE 3 ARTICLE 5 - PUBLICITY AND PUBLICATIONS 5 ARTICLE 6 - OWNERSHIP / PROCUREMENT OF PROGRAM RESULTS 6 ARTICLE 7 -LICENSE TO PROGRAM RESULTS 7 ARTICLE 8 - LICENSE TO BACKGROUND INFORMATION AND PATENTS 8 ARTICLE 9 - INFRINGEMENT OF THIRD PARTY PATENTS 11 ARTICLE 10 - PAYMENT 11 ARTICLE 11 - REPRESENTATIONS, WARRANTIES, INDEMNITIES AND LIABILITIES 13 ARTICLE 12 - TERM AND TERMINATION 14 ARTICLE 13 - ARBITRATION AND GOVERNING LAW 17 ARTICLE 14 - ASSIGNMENT 18 ARTICLE 15 - FORCE MAJEURE 18 ARTICLE 16 - ADDRESSES AND NOTICES 18 ARTICLE 17 - COMPLIANCE 19 ARTICLE 18 - RECORDS AND AUDIT 20 ARTICLE 19 - TAXES 20 ARTICLE 20 - ADDITIONAL PROVISIONS 20 APPENDIX A - DEFINITIONS 24 APPENDIX B - SAMPLE PROJECT DESCRIPTION FORMAT 30
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
JOINT DEVELOPMENT AGREEMENT
This Agreement is made as of the Effective Date between:
ExxonMobil Research and Engineering Company, a corporation of the State of Delaware having offices at 1545 Route 22 East, Annandale, New Jersey 08801 ("ExxonMobil"); and
FuelCell Energy, Inc., a corporation of the State of Delaware having offices at 3 Great Pasture Road, Danbury, Connecticut 06810 ("FCE").
ExxonMobil and FCE are engaged in collaborative research and development projects to evaluate and develop Molten Carbonate Fuel Cells (MCFCs) to reduce carbon dioxide emissions (i.e., achieve low cost carbon dioxide capture). ExxonMobil and FCE wish to further the research and development efforts to evaluate and develop new and/or improved MCFCs to reduce carbon dioxide emissions from industrial and power sources ("Scope"). Therefore, in consideration of the foregoing premises and mutual covenants contained herein, ExxonMobil and FCE (each a "Party" and collectively the "Parties") agree as follows:
ARTICLE 1 - DEFINITIONS
1.01 Definitions. The terms appearing in this Agreement in initial capital letters, not otherwise defined in the preamble or body of this Agreement, are defined in Appendix A.
ARTICLE 2 - PROGRAM
2.01 Program / Projects. The collaborative research and development effort will comprise one or more mutually agreed upon projects within the Scope during the Term of this Agreement (each a "Project" and, collectively, the "Projects" or the "Program"). The details of each Project will be described in a written, mutually agreed upon document ("Project Description") - a template for which is set forth in Appendix B. Each Project Description will specify the scope and content of the Project, the work to be undertaken by each Party and potential third parties, the deliverables, the timing, any payments to be made not otherwise set forth in this Agreement, and any other related objectives and expectations. When completed and signed by duly authorized representatives of both Parties, each Project Description will become part of this Agreement and will be governed by the terms and conditions of this Agreement. Neither Party makes any representations as to the number, frequency, or monetary value of the Projects, except as otherwise set forth herein or in any Project Description.
2.02 Subcontracting. ExxonMobil hereby consents to FCE hiring trade contractors commonly used for facility modifications and individual engineering contractors and individual staff from temporary agencies as needed to perform work pursuant to a Project Description, provided that such contractors and staff are under confidentiality and use restrictions no less restrictive than the terms and conditions set forth herein.
2.03 Work Exclusivity/Independent Work. During the Term of this Agreement, FCE will not conduct any Work using Generation 1 Technology in Carbon Capture Applications or any Work using Generation 2 Technology, independently or with third parties outside this Agreement, without prior written approval from ExxonMobil. Notwithstanding the foregoing, ExxonMobil hereby grants approval for FCE solely to conduct Authorized Work using Generation 1 Technology with Authorized Third Parties for Carbon Capture Applications and any Work using Generation 2 Technology solely for Power Applications and Hydrogen Applications.
Page 1 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
ARTICLE 3 - PROGRAM GOVERNANCE
3.01 Steering Committee. Promptly after the Effective Date, the Parties will establish a committee that will oversee technical support and provide overall supervision and administrative guidance for the Program ("Steering Committee" or "SC"), further detailed as follows -
(a) Composition. Each Party will appoint in writing one or more of its employees as SC members. Each Party will have the right to change its SC members at any time by giving written notice of such change to the other Party.
(b) Meetings. Meetings of the SC will be in person or by phone at a location and time agreed to in advance by the SC members.
(c) Other Attendees. In addition to the attendance of SC members, with prior written notice to the other Party's SC members, each Party may also bring to any SC meeting such technical and other advisors as it may deem appropriate, provided that such advisors are employees of a Party or its Affiliates and are under written confidentiality and use restrictions at least as strict as those imposed herein. Otherwise, a Party's additional invitees may attend a SC meeting only with the other Party's advance written approval.
(d) Responsibilities. The responsibilities of the SC will include, but are not limited to:
i. Project Endorsement and Monitoring. The SC will review and approve each Project Description and amendment thereto prior to execution by the Parties. (However, no Project Description or amendment thereto will be effective unless and until it is executed by duly authorized representatives of both Parties.) The SC will periodically monitor the ongoing status of all Projects, and make adjustments to priorities within and between the Projects.
ii. Dispute Resolution. Assist the Parties in resolving any disputes.
(e) Votes. Each Party only gets one vote on the SC regardless of the number of SC members it appoints. Except as otherwise stated in this Agreement, all decisions by the SC will be by unanimous agreement. In the absence of unanimity, ExxonMobil's SC representatives will have final decision making authority with respect to only the following decisions required by the SC: whether and where to seek patent protection and whether to maintain patent assets, subject to the provisions of Paragraph 6.04 (Solicitation of Program Patents Discretionary).
(f) Minutes. All decisions by the SC will be documented in agreed upon minutes distributed to SC members after the meeting.
(g) No Amendment Rights. The SC may recommend but has no authority to amend the terms and conditions of this Agreement.
(h) Costs. ExxonMobil will bear its own costs associated with participating in the SC. FCE's costs and expenses associated with its participation in the SC are included in each Project's budget as Direct Costs.
3.02 Technical Managers. Each Party will appoint one manager for each Project ("Technical Manager"). The Technical Managers will be responsible for the coordination of all technical activities arising under such Project, and will serve as their Party's technical liaison with the SC for the Project. Each Party will promptly notify the other Party in writing upon changing the appointments. The Technical Managers for each Project will be the primary technical contacts between the Parties for that Project. The Technical Managers for each Project will jointly:
• direct the work performed under a Project in accordance with the terms and conditions of the Project Description;
Page 2 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
• report to the SC on the progress of technical activities conducted under the Project;
• monitor and coordinate all intellectual property activities relative to each Project; and
• make recommendations to the SC on proposed publications containing Program Information.
Unless otherwise mutually agreed, the Technical Managers for a Project will meet in person at least once each calendar quarter during a Project at such locations as the Technical Managers agree. The Technical Managers will communicate regularly by telephone or similar means between such meetings.
ARTICLE 4 - DISCLOSURE, CONFIDENTIALITY AND RESTRICTED USE
4.01 Program Information Disclosure, Confidentiality and Use Restriction. FCE will promptly disclose to ExxonMobil, in written or other tangible form, any and all Program Information including any Program Inventions. Except as otherwise permitted under this Agreement, FCE agrees to hold Program Information in confidence, and not to disclose or make it available to any third party without the express prior written consent of ExxonMobil, for a period commencing on the Effective Date and ending twenty (20) years thereafter. Without the express prior written consent of ExxonMobil, FCE agrees to use and practice Program Information only for the Program or as authorized in Article 7 (License to Program Results).
4.02 Background Information Disclosure, Confidentiality and Use Restriction. Each Party will make available its Background Information to the other Party that it believes will be useful in carrying out work under the Program. Except as otherwise permitted under this Agreement, each Party agrees to hold the Background Information it receives from the other Party in confidence, and to not disclose or make available the other Party's Background Information to any third party without the express prior written consent of the other Party, for a period commencing on the Effective Date and ending twenty (20) years thereafter. Without the express prior written consent of the other Party, each Party agrees to use and practice the other Party's Background Information only for the Program or as authorized in Article 8 (License to Background Information and Patents).
4.03 Non-Analysis of Background Samples. Except as otherwise agreed by the Parties in writing, each Party agrees not to determine or have determined the composition or physical structure of any Background Sample received from the other Party, which includes unused, used and spent Background Samples or portions thereof, whether by analyzing, having analyzed, inspection, reverse engineering or otherwise.
4.04 Information Handling Obligations. Each Party will endeavor to mark Confidential Information as follows:
(a) Confidential Information first disclosed in tangible form or electronically will be marked by the Disclosing Party as "confidential" or "proprietary" or with words of similar import when provided, indicating whether the information is "Program Information" or "Background Information";
(b) Confidential Information first disclosed orally or by visual display will be identified by the Disclosing Party as "confidential" or "proprietary" or with words of similar import at first disclosure and subsequently confirmed as confidential in a summary provided in an e-mail or other written communication delivered to the other Party within thirty (30) days after first disclosure, that references the date of the confidential disclosure indicating whether the information is "Program Information" or "Background Information"; and
(c) If a Sample is sent to the other Party, the Sample will be marked by the Disclosing Party as "confidential" or "proprietary" or with words of similar import at the time of disclosure indicating whether the Sample is "Program Information" or "Background Information".
Page 3 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
The failure to appropriately mark information/materials as "confidential" or "proprietary" upon initial disclosure to the Receiving Party will not be considered a waiver of confidentiality. Information/materials marked as "proprietary" or "confidential" when first disclosed, without further identification of the category of confidential information, will be presumptively considered and treated as Program Information until the Disclosing Party notifies the Receiving Party otherwise in writing.
4.05 Exceptions. For the purposes of this Agreement, the obligations of confidentiality and restricted use herein shall not apply to any information or materials to the extent the Receiving Party can establish by documentary evidence that one or more of the following exceptions apply:
a. the information or material was already in the Receiving Party's or its Affiliate's lawful possession (free of any confidentiality and use restrictions) and was not previously acquired directly or indirectly from the other Party under a current obligation of confidentiality;
b. the information or material was already in the public domain or subsequently entered the public domain after disclosure through no fault of the Receiving Party;
c. the information or material was or is hereafter furnished to the Receiving Party, or its Affiliate, on a non- confidential basis by a third party legally entitled to provide the information or material without restriction;
d. the information or material was independently developed by employees or agents of the Receiving Party or its Affiliate who did not have access to relevant information provided by the Disclosing Party; and/or
e. the information or material was released from the confidentiality obligations of this Agreement by the Disclosing Party's written authorization.
The later occurrence of any one of the aforementioned exceptions will not excuse any failure to adequately protect Confidential Information pursuant to this Agreement prior to the existence of the exception. More specific Confidential Information will not be deemed to be within the foregoing exceptions merely because it is embraced by more general information that is publicly available or in the possession of Receiving Party pursuant to one of the exceptions. Also a combination of features will not be deemed within the foregoing exceptions merely because individual features are publicly available or in Receiving Party's possession pursuant to one of the exceptions.
4.06 Disclosure to Affiliates, Contractors, and Sub-licensees. Notwithstanding anything to the contrary in this Agreement, a Receiving Party may disclose a Disclosing Party's Confidential Information to its Affiliates, and said Receiving Party may disclose the Disclosing Party's Confidential Information to their respective contractors providing services in furtherance of a Project as well as to permitted sub-licensees hereunder, provided such Affiliates, contractors, and sub-licensees have agreed to be bound by confidentiality and limited use obligations no less protective of Disclosing Party's Confidential Information than the terms contained herein. The Receiving Party will be liable to the Disclosing Party for any unauthorized disclosure or misuse of the Disclosing Party's Confidential Information by such Affiliates, contractors, and sub-licensees.
4.07 Compelled Disclosure. In the event that a Receiving Party (or its Affiliate) is required by law, court order or rule, or government authority to disclose the Confidential Information that Receiving Party is obligated to hold in confidence pursuant to Paragraph 4.01 (Program Information Disclosure, Confidentiality and Use Restriction) and/or Paragraph 4.02 (Background Information Disclosure, Confidentiality and Use Restriction), then the Receiving Party will promptly notify the Disclosing Party prior to disclosure in order to enable the Disclosing Party to seek a protective order at the Disclosing Party's sole expense. In any event, the Receiving Party who is required to disclose such information will request confidential treatment of the information and only disclose the minimum amount of information reasonably necessary to comply with such law, court order or rule, or government authority.
Page 4 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
4.08 Disclosures in Patent Applications. Notwithstanding anything else in this Agreement, ExxonMobil may disclose the minimum amount of FCE's Confidential Background Information reasonably necessary to support a Program Patent subject to the review process in Paragraph 6.02 (Solicitation of Program Patents).
4.09 Return/Destruction. At the Disclosing Party's written request, the Receiving Party agrees to return to Disclosing Party or, at Disclosing Party's option, dispose of or destroy, Disclosing Party's Confidential Background Information and any of Disclosing Party's unused Background Samples. However, notwithstanding anything else in this Paragraph, the Receiving Party may retain such documents and materials to the extent such documents and materials are identified as necessary for beneficial use of a further Project or a license granted herein and the Receiving Party has notified the Disclosing Party in writing of the need for such documents and materials. Any dispute over whether such documents and materials are necessary shall be escalated to senior management for resolution. Furthermore, notwithstanding anything else in this Paragraph 4.09, the Receiving Party may retain one (1) copy of such documents and materials in its secure files for the sole purpose of administering its obligations under this Agreement and the Receiving Party will not be required to purge or cause others to purge electronic archival media automatically generated by backup computer systems if said media will be destroyed pursuant to a systematic records retention process and not otherwise utilized.
4.10 Third Party Information. Neither Party will knowingly disclose to the other Party any proprietary or confidential information belonging to a Non-Affiliated Third Party without the Receiving Party's prior written consent.
ARTICLE 5 - PUBLICITY AND PUBLICATIONS
5.01 Publicity. During the Term, and except for disclosures pursuant to Paragraphs 4.06 (Disclosure to Affiliates, Contractors and Sub-licensees), 4.07 (Compelled Disclosure), 4.08 (Disclosure in Patent Applications), or as otherwise permitted in this Agreement, the Parties agree that they will not disclose to any Non-Affiliated Third Party that they have entered into this Agreement, nor make any publications or publicity releases concerning the nature of this Agreement, without first acquiring the written consent of the other Party, which consent will not be unreasonably withheld, conditioned or delayed.
Notwithstanding the foregoing, either Party may make such disclosure as it may determine to be required by applicable law (such as filing with the U.S. Securities and Exchange Commission), provided that in such case the Disclosing Party will provide advance notice of such disclosure to the other Party and, where legally permitted, an opportunity to redact its sensitive proprietary information from such disclosure.
Further, during the Term, each Party agrees that it will not use the name, service mark or trademark of the other Party, or any Affiliate of the other Party, or provide any indication from which the identity of the other Party or its Affiliate may reasonably be inferred in any publicity release or other announcement, without first obtaining the written approval of the other Party. Notwithstanding the foregoing, each Party hereby grants approval for the other Party to use its name, service mark or trademark in promotional materials that have a generally accepted description of the Scope, which such generally accepted description shall be mutually agreed to in writing beforehand. An exception to this Paragraph will include U.S. patent prosecution that refers to this Agreement as a "joint research agreement" under 35 U.S.C. § 102(c).
Further, each Party agrees to include appropriate attribution of the other Party in any publicity release, advertising, print, media or other announcement concerning the use of MCFCs for carbon capture, the Program or the Program Results.
Page 5 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
5.02 Publications. The Parties recognize that Program Information may be suitable for publication either jointly or individually. Unless the other Party specifically requests in writing not to be credited, appropriate recognition of the support or encouragement of the other Party will be included in such publications. The Parties agree to cooperate with each other on the preparation of any such publications. If any proposed publication contains the non-publishing Party's Background Information, such information (including reference thereto) will be deleted at the non-publishing Party's request. No publication that violates Article 4 (Disclosure, Confidentiality and Restricted Use) or Paragraph 5.01 (Publicity) will be permitted without the prior written consent of the other Party which may be obtained from a duly authorized member of each Party.
ARTICLE 6 - OWNERSHIP / PROCUREMENT OF PROGRAM RESULTS
6.01 Ownership of Program Results. ExxonMobil will solely own Program Information, Program Patents, and copyrightable works resulting from the Program (collectively, "Program Results"), irrespective of whether the Program Results are conceived, created, developed or acquired by employees or other representatives of FCE, ExxonMobil, or both. FCE will assign, and hereby assigns, to ExxonMobil ownership of Program Results.
6.02 Solicitation of Program Patents. ExxonMobil will have the sole responsibility and the exclusive right to prepare, file, prosecute, and maintain Program Patents pursuant to Paragraph 6.01 (Ownership of Program Results). Such right will include the right to determine if, where, and when patent applications are filed, and the scope of such patent applications. Notwithstanding the foregoing, ExxonMobil shall provide FCE notice of its intent to file any patent application containing FCE's Confidential Background Information and an opportunity for FCE to review any such patent application for FCE's Confidential Background Information. If FCE does not respond within thirty (30) days from ExxonMobil seeking such consent, then ExxonMobil may proceed with such filing. The cost of preparing, filing, prosecuting, and maintaining any such patent applications that ExxonMobil decides to pursue and maintain, as well as the cost of maintaining any patents resulting therefrom, will be paid in full by ExxonMobil. For Program Patents, if one or more employees or other representatives of FCE are determined to be inventors, then FCE will:
(i) cause its employees, contractors, and consultants to render reasonable and timely assistance to ExxonMobil and its attorneys or agents;
(ii) assign, and will cause its and its Affiliates' employees, contractors, and consultants to assign, its right, title, and interest in and to such Program Patent to ExxonMobil for filing; and
(iii) cause its and its Affiliate employees, contractors, and consultants, to execute any documents as may be required to effect such assignments, or file, prosecute, and maintain any patent applications or patents that are based on, derived from, or protect such Program Patent.
ExxonMobil will hold formal legal title to all such patent applications, and resulting patents.
6.03 Cooperation in Soliciting Program Patents. The Parties agree to cooperate in the preparation, filing, prosecution, and securing of patent applications and patents, all without charge to such other Party. When ExxonMobil's patent counsel sends to FCE documents for review that contains FCE Confidential Background Information, the Parties will follow the review process pursuant to Paragraph 6.02 (Solicitation of Program Patents). Upon FCE's written request, ExxonMobil will provide a courtesy copy of any Program Patent that does not contain any FCE Confidential Background Information prior to filing such document. All Program Patent filings, and the status thereof, will be reported to the Steering Committee.
Page 6 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
6.04 Solicitation of Program Patents Discretionary. ExxonMobil has the unencumbered right to file or not to file, prosecute, defend, maintain, abandon, or enforce any Program Invention or Program Patent. Notwithstanding the foregoing, in the event ExxonMobil decides not to prosecute, defend, enforce, maintain or decides to abandon any Program Patent, then ExxonMobil will provide notice thereof to FCE, and FCE will then have the right, but not the obligation, to prosecute or maintain the Program Patent and sole responsibility for the continuing costs, taxes, legal fees, maintenance fees and other fees associated with that Program Patent. The ownership of such Program Patent will remain with ExxonMobil.
The abandonment of a pending patent application in favor of a continuation patent application, continuation-in-part patent application, or divisional patent application, or in favor of another application of a related subject (e.g. to overcome a double patenting rejection) and ExxonMobil's decision not to file any Program Patent, will not be deemed to be an election not to continue to prosecute, issue, or maintain any Program Patent under Paragraph 6.04. In addition, (a) the failure to appeal a patent office or any administrative tribunal or judicial decision adverse to any patent or patent application, or (b) in the case of a co-pending non-provisional application in the U.S., (i) failure to enter an international patent application into the national phase, or (ii) to ratify a patent in any country, will not be deemed to be an election not to continue to prosecute, issue, or maintain any Program Patent under Paragraph 6.04.
6.06 Joint Research Agreement. The Parties acknowledge and agree that this Agreement is a "joint research agreement" as defined in 35 U.S.C. §100(h). The specification of any patent application filed pursuant to this Agreement may contain (or may be amended to contain) language required to invoke 35 U.S.C. §102(b)(2)(C) and §102(c) as applicable. Notwithstanding anything to the contrary in Paragraph 5.01 (Publicity), ExxonMobil will have the right to invoke these statutory provisions when exercising its rights to file patent applications under this Agreement, without the prior written consent of FCE, subject to the provisions of Paragraph 6.02 (Solicitation of Program Patents). Where ExxonMobil intends to invoke these statutory provisions, FCE, upon request, will cooperate and coordinate its activities with ExxonMobil with respect to any submissions, filings or other activities in support thereof.
6.07 Inventor Awards. A Party will not be responsible for any inventor awards or compensation that may be owed to the other Party's employee(s) or to any employees of the other Party's Affiliates, agents, consultants, or contractors, who are inventors of any Program Invention.
6.08 Disposal of Prior JDA Project Patents. During the Term of this Agreement and for two (2) years thereafter, in the event that either Party decides to sell or convey its interest in or otherwise dispose of any Prior JDA Project Patent to any Non-Affiliated Third Party, such Party will inform the other Party, who will then have the right of first refusal to purchase or otherwise acquire the sole interest at same or better terms. Any sale of a Prior JDA Project Patent to a Non-Affiliated Third Party is subject to the licenses granted and other obligations set forth in this Agreement.
ARTICLE 7 - LICENSE TO PROGRAM RESULTS
7.01 Grants to FCE of Program Results.
(a) FCE's R&D Rights. ExxonMobil grants FCE a worldwide, non-exclusive, royalty-free, non-transferable (except pursuant to Article 14 (Assignment)), non-sub-licensable (except as set forth in this Paragraph 7.01(a)) right and license to practice Program Results solely to conduct research and development for the Program. More particularly, said right and license to practice includes the right to use, reproduce, and create derivative works of Program Information under applicable copyrights and to make, use, and import (but not sell or offer to sell) under the claims of Program Patents, in each case solely for research and development for the Program. Said right and license may be extended to contractors performing work on behalf of FCE but is not otherwise sub-licensable.
Page 7 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
(b) FCE's Commercial Rights. ExxonMobil agrees to grant or hereby grants FCE the following rights and licenses:
(1) Power Applications and Hydrogen Applications. ExxonMobil grants FCE a worldwide, non-exclusive, royalty-free, perpetual, irrevocable (except as stated in Paragraphs 12.03 (Failure to Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy)), sub-licensable, non-transferable (except pursuant to Article 14 (Assignment)), right and license to practice Program Results solely for Power Applications and Hydrogen Applications. More particularly, said right and license to practice Program Results solely for Power Applications and Hydrogen Applications includes the right to use, reproduce, and create derivative works of Program Information under applicable copyrights and to make, use, import, and sell or offer to sell under the claims of Program Patents; and
(2) Carbon Capture Applications. In the event ExxonMobil notifies FCE that it has formally decided not to pursue Generation 2 Technology for Carbon Capture Applications, then upon FCE's written request, ExxonMobil agrees to negotiate a grant to FCE, under commercially reasonable terms to be determined in good faith, a worldwide, non-exclusive, royalty-bearing (with the royalty to be negotiated), non-sub- licensable (except as set forth in this Paragraph 7.01(b)(2)), non-transferable (except pursuant to Article 14 (Assignment)), right and license to practice Program Results solely for Carbon Capture Applications. More particularly, said right and license to practice Program Results solely for Hydrogen Applications and Carbon Capture Applications will include the right to use, reproduce, and creative derivative works of Program Information under applicable copyrights and to make, use, import, and sell or offer to sell under the claims of Program Patents. Said right and license will be extendable to contractors performing work on behalf of FCE but will not otherwise sub-licensable. Nothing in this Paragraph 7.01(b)(2) will create an obligation on the part of ExxonMobil to grant FCE a right or license under Program Results if the Parties do not agree on the terms and conditions of such license.
ARTICLE 8 - LICENSE TO BACKGROUND INFORMATION AND PATENTS
8.01 Ownership Retained. Each Party will retain its title and ownership rights to its Background Information and Background Patents in all applicable jurisdictions.
8.02 Grant of Rights to Background Information and Background Patents.
(a) Grant to ExxonMobil.
1) Carbon Capture Applications and Hydrogen Applications. To the extent not already granted pursuant to the License Agreement, FCE grants ExxonMobil and its Affiliates a worldwide, non-exclusive, royalty-free, irrevocable, perpetual, sub-licensable, non-transferable (except pursuant to Article 14 (Assignment)) right and license to practice FCE Background Information and FCE Background Patents for Generation 2 Technology in Carbon Capture Applications and Hydrogen Applications. More particularly, said right and license to practice FCE Background Information and FCE Background Patents for Generation 2 Technology in Carbon Capture Applications and Hydrogen Applications includes the right to use, reproduce, and create derivative works of FCE Background Information under applicable copyrights and the right to make, use, import, and sell or offer to sell under the claims of FCE Background Patents.
Page 8 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
2) Other Applications. In the event FCE notifies ExxonMobil that it has formally decided not to pursue Generation 2 Technology for Power Applications, then upon ExxonMobil's written request, FCE agrees to negotiate a grant to ExxonMobil and its Affiliates, under commercially reasonable terms to be determined in good faith, a worldwide, royalty-bearing (with the royalty to be negotiated), non-exclusive, sub-licensable right and license to practice FCE Background Information and FCE Background Patents for Generation 2 Technology in any application outside of Carbon Capture Applications and Hydrogen Applications. More particularly, said right and license to practice FCE Background Information and FCE Background Patents for Generation 2 Technology in any application outside of Carbon Capture Applications and Hydrogen Applications will include the right to use, reproduce, and create derivative works of FCE Background Information under applicable copyrights and the right to make, use, import, and sell or offer to sell under the claims of FCE Background Patents. Nothing in this Paragraph 8.02(a)(2) will create an obligation on the part of FCE to grant ExxonMobil a license or right under FCE Background Patents or FCE Background Information if the Parties do not agree on the terms and conditions of such license.
(b) Grant to FCE.
1) Generation 1 Technology.
i. Outside of Carbon Capture Applications. ExxonMobil grants FCE a worldwide, non-exclusive, royalty- free, non-sub-licensable (except as set forth herein), perpetual, irrevocable (except as stated in Paragraphs 12.03 (Failure to Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy)), non- transferable (except pursuant to Article 14 (Assignment)) right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 1 Technology in any applications outside of Carbon Capture Applications. More particularly, said right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 1 Technology in any applications outside of Carbon Capture Applications includes the right to use, reproduce, and create derivative works of ExxonMobil Background Information under applicable copyrights and the right to make, use, import, and sell or offer to sell under the claims of ExxonMobil Background Patents. All rights and licenses in this Paragraph (b)(1)(i) may be extended to contractors performing work on behalf of FCE but are not otherwise sub-licensable.
ii. Authorized Third Parties. ExxonMobil grants FCE a worldwide, non-exclusive, royalty-free, non-sub- licensable (except as set forth herein), perpetual, irrevocable (except as stated in Paragraphs 12.03 (Failure to Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy)), non-transferable (except pursuant to Article 14 (Assignment)) right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 1 Technology in Carbon Capture Applications, solely to conduct Authorized Work with Authorized Third Parties. More particularly, said right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 1 Technology in Carbon Capture Applications includes the right to use, reproduce, and create derivative works of ExxonMobil Background Information under applicable copyrights and the right to make, use, and import (but not sell or offer to sell) under the claims of ExxonMobil Background Patents, solely to conduct Authorized Work with Authorized Third Parties. All rights and licenses in this Paragraph (b)(1)(ii) may be extended to contractors performing work on behalf of FCE but are not otherwise sub-licensable.
Page 9 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
iii. Carbon Capture Application. In the event that ExxonMobil fails to notify FCE before the end of the Term of the Agreement of ExxonMobil's intent to negotiate a subsequent or follow-on commercial agreement, ExxonMobil agrees to negotiate a grant to FCE, under commercially reasonable terms to be determined in good faith, a worldwide, royalty-free, non-exclusive, non-sub-licensable (except as set forth herein) right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 1 Technology in Carbon Capture Applications. More particularly, said right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 1 Technology in Carbon Capture Applications will include the right to use, reproduce, and create derivative works of ExxonMobil Background Information under applicable copyrights and the right to make, use, import, and sell or offer to sell under the claims of ExxonMobil Background Patents. The rights and licenses in this Paragraph (b)(1)(iii) will be extendable t o contractors performing work on behalf of FCE but will not otherwise sub-licensable. Nothing in this section will create an obligation on the part of ExxonMobil to grant FCE a license or right under ExxonMobil Background Patents or ExxonMobil Background Information if the Parties do not agree on the terms and conditions of such license.
2) Generation 2 Technology.
i. Power Applications and Hydrogen Applications. ExxonMobil grants FCE a worldwide, non-exclusive, royalty-free, non-sub-licensable (except as set forth herein), perpetual, irrevocable (except as stated in Paragraphs 12.03 (Failure to Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy)), non- transferable (except pursuant to Article 14 (Assignment)) right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 2 Technology in Power Applications and Hydrogen Applications. More particularly, said right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 2 Technology in Power Applications and Hydrogen Applications includes the right to use, reproduce, and create derivative works of ExxonMobil Background Information under applicable copyrights and the right to make, use, import, and sell or offer to sell under the claims of ExxonMobil Background Patents. The right and license in this Paragraph (b)(2)(i) may be extended to contractors performing work on behalf of FCE but is not otherwise sub-licensable.
ii. Outside of Power Applications and Hydrogen Applications. In the event ExxonMobil notifies FCE that it has formally decided not to pursue Generation 2 Technology for Carbon Capture Applications, then upon FCE's written request, ExxonMobil agrees to grant to FCE, under commercially reasonable terms to be determined in good faith, a worldwide, royalty-bearing (with the royalty to be negotiated), non- exclusive, sub-licensable, right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 2 Technology in any application outside of Power Applications and Hydrogen Applications. More particularly, said right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 2 Technology in any application outside of Power Applications includes the right to use, reproduce, and create derivative works of ExxonMobil Background Information under applicable copyrights and the right to make, use, import, and sell or offer to sell under the claims of ExxonMobil Background Patents. Nothing in this section will create an obligation on the part of ExxonMobil to grant FCE a license or right under ExxonMobil Background Patents or ExxonMobil Background Information if the Parties do not agree on the terms and conditions of such license.
Page 10 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
(c) No Further Rights. Notwithstanding any other provision in this Agreement, under no circumstances will a Party to this Agreement, as a result of this Agreement, have any right under or to the Background Information and Background Patents of the other Party except as set forth in this Article. Any other right and license to Background Information and Background Patents not found in this Article will be subject to a separate license agreement to be negotiated between the Parties, as necessary.
ARTICLE 9 - INFRINGEMENT OF THIRD PARTY PATENTS
9.01 Notification of Potential Infringement. If either Party becomes aware of alleged infringement of a third party's intellectual property rights relating to its work under this Agreement, such Party will promptly notify the other Party of such discovery and the Parties will consult with each other and discuss any action to be taken.
9.02 Defense of Infringement Claims. Each Party will be responsible for all expenses (including attorney fees) and damages (e.g. royalties, settlement costs) incurred in defense of a claim of infringement by its own equipment, products, or processes, or by equipment, products, or processes of its Affiliates, contractors or consultants.
9.03 Settlements. Each Party may resolve any risk or threat, or settle any suits or action related to use of any Program Results, without the prior approval of the other Party unless such resolution or settlement would cause the other Party to be: (a) obligated to make any payment or part with any tangible or intangible property right, or (b) obligated to assume any obligations with respect thereto, or (c) subject to any injunction.
ARTICLE 10 -PAYMENT
10.01 Project Costs.
a) ExxonMobil will reimburse FCE for Research Costs (i.e., cumulative FTE Costs and Direct Costs) for each Project subject to total caps set forth herein and in the relevant Project Description. Research Costs of FCE paid for by ExxonMobil will be limited to FTE Costs for time actually spent on the Program and Direct Costs actually incurred and approved in advance by the Steering Committee. The cumulative Research Costs for the Program will not exceed forty-five million United States dollars ($45,000,000 USD) over the Term of the Agreement ("Total Research Cost"). ExxonMobil will reimburse FCE for Research Costs after receipt of invoices on a monthly basis. Invoices for Direct Costs will be supported by relevant third party invoices received by FCE documenting such costs. Materials shall be invoiced as incurred and subject to a thirty percent (30%) service fee. All such payments will be made after ExxonMobil's receipt of invoices in accordance with the invoicing procedures specified in Paragraphs 10.01(b)-(e) and in Paragraph 10.04 (Invoices).
b) First Invoice. FCE will invoice ExxonMobil an advance payment on or promptly after the Effective Date ("Initial Payment"), said Initial Payment not to exceed one-twelfth (1/12) of the Total Research Cost (i.e., three-million and seven-hundred and fifty thousand United States dollars ($3,750,000 USD)). Notwithstanding anything contained herein to the contrary, including Paragraph 10.04 (Invoices), such payment will be made within fifteen (15) days after ExxonMobil's receipt of invoice.
c) Subsequent Monthly Invoices. Within fifteen (15) days after the end of each calendar month that occurs during the remainder of the Term of the Agreement, subject to Paragraph 10.01(e), FCE will calculate and invoice ExxonMobil for the actual amounts incurred (for charges permitted in accordance with the respective Project Description(s)) during the immediately preceding calendar month.
Page 11 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
d) End of Term of the Program.
i. By the fifteenth (15th) day of the last month of the Term of the Agreement, ExxonMobil will have been invoiced for the actual charges incurred in all of the prior months of the Term of the Agreement, but the most recently issued invoice will not be due. Therefore, at such time ExxonMobil will not have yet paid for the last two (2) months of the Term of the Agreement. When FCE issues the invoice during the last month of the Term of the Agreement ("8th Inning Invoice"), FCE will apply some or all of the Initial Payment, as applicable, as credit against the amount due.
ii. Within fifteen (15) days after the end of the Term of the Agreement, FCE will issue an invoice ("9th Inning Invoice") for the actual charges incurred during the last month of the Term of the Agreement, subject to Paragraph 10.01(a). FCE will apply any balance of the Initial Payment remaining after the 8th Inning Invoice as a credit towards the amount due on the 9th Inning Invoice. If after applying such credit, a balance of the Initial Payment still remains, FCE will refund the balance to ExxonMobil within thirty (30) days, unless otherwise mutually agreed (such as the Parties mutually agreeing to enter into a new Project and apply the balance as a credit towards amounts payable by ExxonMobil thereunder).
e) Maximum Charges. The invoices sent by FCE under the foregoing procedure for each year of the Agreement may not in the aggregate be more than half the Total Research Cost, without prior written consent of ExxonMobil or amendment to the Project Description. All such payments will be made after ExxonMobil's receipt of invoice in accordance with the invoicing procedures specified Paragraph 10.04 (Invoices).
10.02 Up-Front Exclusivity and Technology Access Payment. In exchange for FCE working exclusively with ExxonMobil during the Term of the Agreement, pursuant to Paragraph 2.03 (Work Exclusivity/Independent Work), and ExxonMobil's access to FCE Background Patents, pursuant to Paragraph 8.02(a) (Grant of Rights to Background Information and Background Patents), on the Effective Date, FCE will separately invoice, and ExxonMobil will pay a one-time up-front fee ("Exclusivity and Technology Access Fee") of five million United States dollars ($5,000,000 USD).
Such payment will be made within fifteen (15) days after ExxonMobil's receipt of invoice, notwithstanding anything contained herein to the contrary, including Paragraph 10.04 (Invoices).
10.03 Milestone Payments. As further consideration for technical progress in the Program, ExxonMobil shall pay the following sums upon achievement of the following Program milestones ("Milestone Payments"):
(a) ExxonMobil will pay FCE a first Milestone Payment of five million United States dollars ($5,000,000 USD) upon FCE achieving Milestone 1 to ExxonMobil's satisfaction; and
(b) ExxonMobil will pay FCE a second and final Milestone Payment of five million United States dollars ($5,000,000 USD), upon FCE achieving Milestone 2 to ExxonMobil's satisfaction.
All such Milestone Payments will be made after ExxonMobil's receipt of invoice in accordance with the invoicing procedures specified Paragraph 10.04 (Invoices). The obligation to pay any such installment ends upon termination of this Agreement by either Party for any reason prior to FCE achieving the respective milestone.
Page 12 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
10.04 Invoices. FCE will invoice ExxonMobil for any amount due under a Project at the address (including the email address) in Article 16 (Addresses and Notices). Each invoice will identify this Agreement's identification number LAW-2019-3608, the number of the particular Project Description to which it pertains, and details of FTE Costs (including unique employee identifiers of the FTEs) and Direct Costs. FCE will not include charges relating to more than one Project Description in any given invoice. Except as otherwise specifically provided herein, ExxonMobil agrees to pay FCE the amount of each invoice under this Agreement within thirty (30) days following ExxonMobil's receipt. Notwithstanding the foregoing, if ExxonMobil has a good faith dispute regarding any amounts invoiced by FCE, ExxonMobil may withhold payment for the disputed amount, provided that ExxonMobil pays the undisputed amount and notifies FCE in writing of the specific amount and nature of the dispute promptly upon receipt of FCE's invoice in which case the Parties shall attempt to resolve the dispute in good faith. The Parties shall endeavor to resolve such dispute within fifteen (15) days of notice of the dispute, and ExxonMobil shall remit payment to FCE within fifteen (15) days of resolution of such dispute.
All such payments by ExxonMobil to FCE will be made by wire transfer in United States Dollars. FCE shall provide the Bank Name, Bank Address, Bank Account, and Swift Code in each invoice.
ARTICLE 11 - REPRESENTATIONS, WARRANTIES, INDEMNITIES AND LIABILITIES
11.01 Mutual Representations and Warranties. Each Party hereby represents and warrants to the other, to the best of its knowledge, that:
(a) as of the Effective Date:
1. the execution, delivery and performance of this Agreement by such Party does not conflict with any agreement, instrument or undertaking, oral or written, to which it is a party or by which it may be bound, and
2. all necessary consents, approvals and authorizations of all governmental authorities and third parties required to be obtained by such Party in connection with the execution, delivery, and performance of this Agreement have been or will be obtained;
(b) it owns or controls, in the same sense of having the right to license or convey, any Background Information to be provided to the other Party hereunder, and at the date of transmittal to the other Party, such Background Information in the Disclosing Party's good faith belief will not be subject to any encumbrances or restrictions on use by any third party that would materially affect the Receiving Party's exploitation of the rights granted in this Agreement; and
(c) all of its professional and technical personnel who perform services on or for all Projects are under written obligation:
(1) not to disclose secret or confidential information except as authorized under this Agreement or by their employer;
(2) to assign to their employer all Program Inventions; and
(3) to assign to their employer sole ownership of copyrights to all copyrightable works created in connection with any Project.
Page 13 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
11.02 Warranty and Liability Disclaimers. RECEIVING PARTY IS RESPONSIBLE FOR DETERMINING HOW TO USE THE INFORMATION AND MATERIALS PROVIDED HEREUNDER. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, DISCLOSING PARTY DISCLAIMS LIABILITY FOR ANY LOSS OR DAMAGE SUSTAINED BY RECEIVING PARTY (BUT NOT ANY THIRD PARTY) THAT MAY OCCUR FROM RECEIVING PARTY'S USE OF, OR RELIANCE ON, SUCH INFORMATION AND MATERIALS AND RECEIVING PARTY RELEASES DISCLOSING PARTY AND ITS AFFILIATES FROM AND FOR ANY SUCH LIABILITY, LOSS OR DAMAGE, EVEN IF CAUSED BY DISCLOSING PARTY'S OR ITS AFFILIATES' NEGLIGENCE EXCEPT AS PROVIDED IN PARAGRAPH 11.04 (EXCEPTIONS TO LIMITATIONS ON LIABILITY). NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IS MADE REGARDING SUCH INFORMATION AND MATERIAL, OR ITS COMPLETENESS, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE.
11.03 Indirect or Enhanced Damages. In no event will either Party be liable to the other Party under this Agreement for any consequential, indirect, special, incidental, punitive or exemplary loss or damage, including, without limitation, business interruption, cost of capital, loss of anticipated revenues and profits, loss of goodwill or increased operating costs, whether arising from contract, warranty, tort, strict liability or otherwise regardless of whether the possibility of such losses or damages have been made known to the first Party, and each Party hereby expressly waives all such rights and remedies, except for breach of any confidentiality or restricted use provisions of this Agreement and except as provided in Paragraph 11.04 (Exceptions to Limitations of Liability).
11.04 Exceptions to Limitations of Liability. Notwithstanding anything to the contrary in this Agreement, each Party will bear full responsibility, without limit, for the following:
(i) Gross Negligence or Willful Misconduct attributable to its personnel, and, in no event, will a Party be required to release or indemnify the other Party for Gross Negligence or Willful Misconduct attributable to the other Party; and
(ii) its legal obligations to third parties wherein nothing in this Agreement is intended to impair a party's contribution and indemnity rights under law with respect to third party claims.
ARTICLE 12 - TERM AND TERMINATION
12.01 Term. Unless sooner terminated in accordance with this Article, this Agreement will continue in full force beginning on the Effective Date and ending two (2) years thereafter ("Term").
12.02 Early Termination. The Parties recognize that circumstances may arise where this Agreement's early termination would be desirable. Accordingly, either Party may terminate this Agreement or all/part of a Project for any reason and at any time upon giving the other Party sixty (60) days prior written notice. In the event of early termination of a Project or this Agreement. In addition, if this Agreement is terminated by ExxonMobil, ExxonMobil will pay FCE reasonable non- refundable expenses incurred by FCE in satisfying authorized commitments entered into by FCE with third parties prior to receipt of the termination notice. FCE will uses its best efforts to minimize termination expenses and will give appropriate credit to ExxonMobil where applicable. The total amount paid FCE under this Agreement or for a Project, including all amounts paid following termination, will not exceed the maximum authorized charge specified in this Agreement or for a Project.
Page 14 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
12.03 Failure to Perform. If ExxonMobil fails to fulfill a material monetary obligation or FCE fails to execute material tasks or obligations in material compliance with all criteria set forth in a respective mutually agreed upon Project Description, in the time and manner required herein, provided that in the case of FCE's tasks or obligations any non-compliance or delay in meeting said criteria is not due to ExxonMobil or force majeure pursuant to Paragraph 15.01 (Force Majeure), the non- defaulting Party may give written notice of intent to terminate this Agreement, specifying the details of such default. Unless the defaulting Party has remedied such default within the Cure Period, this Agreement may be terminated, without penalty, payment or prejudice to claims then accrued, by written notice to the defaulting Party by the non-defaulting Party specifying the date of termination which will be of immediate effect. In the event of termination under this Paragraph 12.03 where FCE is the defaulting Party, FCE's royalty-free licenses described in Paragraph 7.01(b)(1), 8.02(b)(1)(i), 8.02 (b)(1)(ii), 8.02(b)(1)(iii), and 8.02(b)(2)(i) will immediately convert to royalty-bearing licenses, with the royalty rate to be negotiated by the Parties in good faith.
12.04 Other Termination. ExxonMobil may terminate this Agreement upon fifteen (15) days written notice, without penalty, payment or prejudice to claims and obligations then accrued, if FCE undergoes a Change in Control. Subject to requirements of applicable law, FCE will provide notice to ExxonMobil prior to, or promptly after, it becomes aware of any such Change in Control, and if prior notice is prohibited by applicable Law, as soon as practicable or after such notice is no longer prohibited, but in no event later than one (1) business day after any public announcement with respect to any such asset transfer or Change in Control. Notwithstanding anything else in this Agreement, in the event of termination under this Paragraph 12.04 ExxonMobil may terminate any licenses granted to FCE under this Agreement that would otherwise survive termination, taking into account the circumstances surrounding the Change in Control. Any licenses granted to ExxonMobil under this Agreement that would otherwise survive termination will continue to survive termination.
12.05 Bankruptcy.
(A) To the extent a court of competent jurisdiction determines that this Agreement is subject to assumption or rejection under Title 11 of the U.S. Code (the "Bankruptcy Code") or the applicable law of a bankruptcy or insolvency proceeding in a non-U.S. jurisdiction:
(i) All rights and licenses granted to ExxonMobil and its Affiliates under or pursuant to this Agreement are, and will otherwise be deemed to be, for all purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to "intellectual property" as defined in section 101 of the Bankruptcy Code.
(ii) If a case is commenced under the Bankruptcy Code by or against FCE and this Agreement is rejected as provided in the Bankruptcy Code, and ExxonMobil or any of its Affiliates elects to retain its rights hereunder as provided in the Bankruptcy Code, then ExxonMobil and its Affiliates shall retain all rights hereunder in perpetuity without further royalty payments of any kind and FCE (in any capacity, including debtor-in- possession) and its successors and assigns (including, without limitations, a trustee) shall not interfere with such rights.
(iii) In the event of bankruptcy or insolvency proceedings of FCE in a non-U.S. jurisdiction, the rights, powers and remedies of ExxonMobil and its Affiliates shall be applied under any applicable laws which are equivalent to Section 365(n) of the Bankruptcy Code, or if there is no such equivalent, the Parties will take all such actions as are permissible under applicable law to permit the continuation of the licenses contained in this Agreement to the maximum extent possible.
Page 15 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
(iv) In the event FCE admits in writing its inability generally to pay its debts as they fall due in the general course, becomes or is determined to be insolvent, makes a general assignment for the benefit of creditors, suffers or permits the appointment of a receiver for its business or assets, or a substantial part thereof, or becomes subject to a proceeding under any statute or act relating to insolvency or the protection of rights of creditors, ExxonMobil receives, at its election, continued access to all Program Information, including the Project materials, equipment, and FCE's Background Information and Background Patents, and ExxonMobil will have access to relevant lab notebooks, computers containing technical information and know-how, journals, ledgers and manuals containing technical information and know-how in each case relating to the Program Information and FCE's Background Information and Background Patents.
(B) To the maximum extent permitted under law, ExxonMobil may terminate this Agreement upon fifteen (15) days written notice, without penalty, payment or prejudice to claims and obligations then accrued, if FCE commences a voluntary case under the Bankruptcy Code or a similar voluntary bankruptcy or insolvency proceeding in a non- U.S. jurisdiction, or if an order for relief is entered in an involuntary case filed against FCE under the Bankruptcy Code, and such case is not dismissed within sixty (60) days of the entry of such order, or if FCE makes a voluntary general assignment for the benefit of creditors, or suffers or permits agrees to the entry of an order appointing a receiver in an action actually pending in a court of competent jurisdiction for that portion of its business or assets related to the Project. In the event of termination under this Paragraph 12.05 and subject to ExxonMobil's waiver (in its sole discretion), any licenses granted to FCE under this Agreement that would otherwise survive termination will automatically terminate and any licenses granted to ExxonMobil under this Agreement that would otherwise survive termination will continue to survive termination.
12.06 Continuing Rights and Obligations. Except as otherwise stated in this Agreement, the following Articles and Paragraphs will survive termination of this Agreement:
o Article 1 (Definitions);
o Article 4 (Disclosure, Confidentiality and Restricted Use);
o Article 6 (Procurement and Ownership of Program Results)
o Article 7 (License to Program Results), subject to Paragraphs 12.03 (Failure to Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy);
o Article 8 (License to Background Information and Patents), subject to Paragraphs 12.03 (Failure to Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy);
o Article 10 (Payment), but only to the extent there are continuing license and/or royalty share obligations pertaining to the commercial use of Program Results, Background Information and/or Background Patents;
o Article 11 (Representations, Warranties, Indemnities and Liabilities);
o Article 12 (Term and Termination) to the extent any clause therein speaks to post termination rights and obligations;
o Article 13 (Arbitration and Governing Law);
o Article 14 (Assignment);
o Article 16 (Addresses and Notices);
Page 16 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
o Paragraph 17.03 (Export Controls and Trade Sanctions);
o Article 18 (Records and Audit);
o Article 19 (Taxes);
o Paragraphs 20.02 (Independent Contractors), 20.03 (Independent Entities), 20.06 (No Third-Party Beneficiaries), 20.07 (Internal Conflict), 20.08 (Severability), 20.09 (Amendments; Modification; Waiver), 20.10 (Integration), and 20.11 (Execution); and
o any rights and obligations contained in this Agreement which by their nature should continue.
Any rights and obligations that have accrued to either Party against the other prior to the effective date of termination or expiration of this Agreement in any respect will survive such termination or expiration, and rights that have accrued to an Affiliate of a Party will continue regardless of any change in Affiliate status during the Term of this Agreement or thereafter.
ARTICLE 13 - ARBITRATION AND GOVERNING LAW
13.01 Governing Law. The validity and interpretation of this Agreement and the legal relations of the Parties to it will be governed by the laws of the State of New York without recourse to its conflicts of law rules.
13.02 Arbitration Proceedings. Both Parties will try to amicably resolve any dispute arising out of or relating to this Agreement by involving representatives of the Parties with authority to settle such disputes. In the event the Parties are unable to agree upon a resolution within a reasonable period of time, not to exceed sixty (60) days after first notice of the difference unless otherwise agreed in writing, any dispute arising out of or relating to this Agreement may be referred to final and binding arbitration before three arbitrators under the Rules of Arbitration of the International Chamber of Commerce. Each Party will appoint one arbitrator within thirty (30) days of notice of such referral and the two (2) so appointed will, within thirty (30) days from the appointment of the last of the two (2) arbitrators, select a third arbitrator who will act as the Chairman. The arbitration will take place in New York City, New York and the proceedings will be conducted in the English language. The arbitrators will decide all questions and settle all disputes strictly in accordance with the provisions of this Agreement, including the relevant indemnities and liability limitations. The arbitrators will have no authority to award exemplary or punitive damages, and the arbitral panel will certify in the decision that no part of the award includes such damages. The Parties waive their rights to seek rulings from any court on issues of law that arise during the arbitration and to challenge the award on the grounds that the arbitrators made errors of law. Awards made pursuant to this Paragraph will be final and binding on the Parties from the date made and judgment upon any award may be entered in any court having jurisdiction. No Party hereto will raise defenses based on sovereign immunity with respect to the arbitration, any judicial proceeding or ancillary thereto or with respect to enforcement of any award, order or judgment rendered in the arbitration or related judicial proceedings.
13.03 Cost of Arbitration. The prevailing Party in an arbitration proceeding will be entitled to recover from the other Party reasonable attorneys' fees, reasonable out-of-pocket costs and disbursements, as well as any charges for the cost of the arbitration and the fees of the arbitrators.
13.05 Injunctive Relief. No provision of this Agreement will prohibit any Party from approaching any court having competent jurisdiction to seek injunctive relief in case of urgency to prevent disclosure of its Confidential Information.
Page 17 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
ARTICLE 14 - ASSIGNMENT
14.01 Assignment. The Agreement is not assignable, including any assignment by operation of law (including but not limited to as a result of a merger or other corporate action), by either Party without the prior written consent of the other Party. Any and all assignments of this Agreement or of any part thereof not made in accordance with this Article will be void. Notwithstanding the foregoing, ExxonMobil may assign this Agreement to its Affiliates and FCE may assign this Agreement to any of its wholly-owned and wholly-controlled Affiliates, with prior written notice to the other Party, provided that (i) such assignment by FCE shall be void if at any point such Affiliate ceases to be both wholly-owned and wholly- controlled by FCE, (ii) Article 12, including but not limited to Paragraphs 12.03, 12.04 and 12.05, shall be applicable to both FCE and any Affiliate assignee of FCE, and (iii) no assignment pursuant to this sentence will relieve the Parties of their obligations under this Agreement.
14.02 Assignees Bound. Any assignee permitted in Paragraph 14.01 (Assignment) will agree in writing to be bound by all the obligations of the assigning Party under this Agreement, and a copy of such written agreement will be promptly provided to the other Party. Any Party making an assignment of this Agreement as permitted in Paragraph 14.01 (Assignment) will remain bound by the continuing obligations of confidentiality and nonuse applicable to such Party prior to the assignment.
ARTICLE 15 - FORCE MAJEURE
15.01 A Party will not be liable to the other Party and will not be considered in breach of this Agreement for delays or failures in performance resulting from causes beyond the reasonable control of that Party, including, but not limited to, acts of God, labor disputes or disturbances, material shortages or rationing, riots, acts of war, new governmental regulations, communication or utility failures, or casualties. In such instance, the Party so affected will promptly notify the other Party in writing of such prevention, restriction or interference. ExxonMobil or FCE, as the case may be, will be excused from performing such obligations to the extent of such prevention, restriction or interference; provided, however, that the Party so prevented, restricted or interfered with will take all appropriate and reasonable steps to remedy such failure or delay and will resume its performance under this Agreement with all proper dispatch whenever such causes are removed.
ARTICLE 16 - ADDRESSES AND NOTICES
16.01 All notices, demands, requests, or other communications which a Party may desire or be required to give under this Agreement to the other Party will be in writing addressed as follows or to such other address designated by notice in writing:
Page 18 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
ExxonMobil: ExxonMobil Research and Engineering Company 1545 Route 22 East Annandale, NJ 08801-0900 Attention: Timothy Barckholtz, Senior Scientific Advisor Email: tim.barckholtz@exxonmobil.com FCE: FuelCell Energy, Inc. 3 Great Pasture Road Danbury, CT 06810 Attention: Anthony Leo, Executive Vice President Email: tleo@fce.com With a copy to: FuelCell Energy, Inc. 3 Great Pasture Road Danbury, CT 06810 Attention: Legal Department Such notice, demand, request, or other communications will be deemed to have been sufficiently given by and will be effective upon the earliest of: (a) delivering the same to a reputable courier service that requires a signature upon delivery; (b) mailing the same by registered or certified first-class mail, postage prepaid, return receipt requested; (c) if an e-mail is provided, then by e-mail with receipt confirmation followed by mailing the same or (d) actual receipt by the addressee.
ARTICLE 17 - COMPLIANCE
17.01 Business Standards. The Parties have established and maintain standards, policies, and/or guidelines ("Policies") applicable to lawful and ethical conduct when conducting their business activities. Upon written request, a Party will provide to the other Party a copy of, or electronic access to, such Policies. The Parties agree to comply with such Policies when conducting activities under this Agreement. These Policies pertain to, but may not be limited to, gifts/entertainment/and other things of value and drugs and alcohol. These Policies are communicated to the Parties' employees, along with an expectation that the employees will comply with these Policies.
17.02 Compliance with Laws. All actions by each Party related to this Agreement will comply with applicable laws and regulations. Notwithstanding anything in this Agreement to the contrary, no provision will be interpreted or applied so as to require a Party or its Affiliates, to do, or to refrain from doing, anything which would constitute a violation of, or be penalized by, any applicable laws and regulations or result in a loss of economic benefit under such laws or regulations.
17.03 Export Control and Trade Sanctions. Neither Party will furnish, deliver, or release the technology, services, software, or commodities made available to it hereunder to any individual, entity, or destination, or for any use, except in full accordance with all applicable laws, regulations, and requirements of the United States with regard to export control and trade sanctions. Both Parties agree and understand that each will be responsible for ongoing compliance with all such applicable laws, regulations, and requirements. It will be a material breach if a Receiving Party takes any action or uses any of a Disclosing Party's information in any manner which would violate United States laws, regulations, or requirements restricting the export, re-export, transfer or release to certain entities or destinations, including to persons within the Receiving Party or its Affiliates, or to unrelated Third Parties.
Page 19 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
ARTICLE 18 - RECORDS AND AUDIT
18.01 Recordkeeping. FCE will keep, or cause to be kept, true books, records, and accounts in accordance with Generally Accepted Accounting Principles and containing all information necessary for the accurate determination of all amounts payable to FCE under this Agreement, and any other obligations under this Agreement. Such books, records and accounts will be maintained for a period of at least three (3) years following the termination or expiration of this Agreement, provided there are no pending disputes between the Parties. In the case of a dispute, the books, records, and accounts will be maintained for one (1) year following resolution of such dispute.
18.02 Audit Rights. At the request of ExxonMobil, FCE will permit, at reasonable intervals and during regular business hours, during the Term of this Agreement and at least three (3) years thereafter, but no more than once per fiscal year, an independent certified public accounting firm of nationally recognized standing selected by ExxonMobil (and approved by FCE, which approval will not be unreasonably withheld) to inspect, during regular business hours, such books, records, and accounts and any part of the applicable operations and facilities of FCE relevant to this Agreement, and to have access to FCE's knowledgeable personnel, as may be necessary to determine the completeness and accuracy of any accounting and payments required to be made under this Agreement and compliance with other terms of this Agreement, subject to the following:
(a) ExxonMobil and its employees or other representatives will have the right to reproduce for its internal records any of the documents kept by FCE in accordance with Paragraph 18.01 (Recordkeeping), such reproduced documents shall be subject to the confidentiality and use provisions contained in Article 4; and
(b) all expenses of each such audit, including any pre-approved reasonable expenses incurred by FCE for such audit, will be for the account of ExxonMobil.
FCE will cause any subcontractors to preserve documentation and allow ExxonMobil to audit such books, records, and accounts of subcontractors by way of auditing FCE.
18.03 Accurate Records. Both Parties agree that all records relating to any Project, including invoices, financial reports, accounting reports, and other financial records relating to any Project will be complete and reflect accurately the facts about all activities and transactions, and both Parties may rely on all such records as being complete and accurate in any further recordings and reports made by the Parties for any purpose. If either Party becomes aware that any such records are inaccurate or incomplete, that Party will promptly notify the other Party in writing and provide accurate and complete information.
ARTICLE 19 - TAXES
19.01 Tax Responsibility. Each Party will be responsible for and will bear its own tax liabilities, of whatever kind and imposed by whatever taxing entity or entities incurred in connection with the existence or any performance of any activities under this Agreement or the granting of licenses or other rights and considerations hereunder.
19.02 Tax Cooperation. Each Party will reasonably cooperate with the other Party to assist the other Party in providing information to support tax filings associated with this Agreement.
ARTICLE 20 - ADDITIONAL PROVISIONS
20.01 Site Requirements. Each Party agrees that if any employees of the Party or its Affiliates visit, or are physically located at, the facilities of the other Party, during the course of the Program, then such employees will abide by all site requirements of the other Party made known to them, including but not limited to, site requirements pertaining to safety, security, health and the environment.
Page 20 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
20.02 Independent Contractors. The relationship between the Parties is that of independent contractors. Nothing contained in this Agreement, or any course of action by either Party pursuant to this Agreement, will be construed or deemed to constitute or create a joint venture, partnership, agency or employment relationship between the Parties or between either Party and the employees or other representatives of the other Party.
20.03 Independent Entities. Each Party enters into this Agreement solely on its own behalf and not on behalf of any other person or entity. Each Party warrants that it is an independent legal entity with the power and authority to enter into Agreements solely on its own behalf. No Party hereto will assert any defense of sovereign immunity that may be available to it in any resolution of any dispute under this Agreement; all such defenses are expressly waived by the Parties.
20.04 Future Work. This Agreement shall not constitute or imply any promise or intention: (a) to enter into any other agreement of any nature, (b) to make any purchase of products or services by either Party or its Affiliates, or (c) to make any commitment by either Party, its Affiliates, or licensees with respect to present or future marketing or supply of any product or service.
Notwithstanding the foregoing, prior to the end of the Term of this Agreement and subject to FCE achieving Milestone 1 and Milestone 2 to ExxonMobil's satisfaction, the Parties agree to negotiate in good faith commercially reasonable terms for the demonstration of Generation 2 Technology at one or more of ExxonMobil's commercial facilities.
20.05 Workplace Harassment. Each Party's employees, agents, and subcontractors who will perform work hereunder or communicate with the other Party's employees, agents, customers, or contractors will not engage in any harassment of the other Party's employees, agents, customers, or contractors. The term "harassment" as used herein includes all forms of unlawful harassment based on race, color, sex, religion, national origin, citizenship status, age, genetic information, physical or mental disability, veteran, sexual orientation, gender identity or other legally protected status; as well as all other forms of harassment, which, while not unlawful, are inappropriate in a business setting. If any of one Party's employees, agents, or subcontractors who perform work hereunder or communicate with the other Party's employees, agents, customers, or contractors have not been informed of the standard of conduct above, the one Party will inform them. Each Party will promptly notify the other Party contact for the applicable services of any report or complaint of harassment or of any violation of the above standard of conduct. Each Party will cooperate with the other Party in any investigation the other Party may make, including making each Party's employees, agents and subcontractors available for questioning by the other Party's designated investigators. Each Party agrees not to retaliate against anyone who reports an incident of harassment or who cooperates in any investigation of a report of an incident.
20.06 No Third Party Beneficiaries. No third parties are intended to be third party beneficiaries under this Agreement. None of the provisions of this Agreement will be enforceable by a third party. For the avoidance of doubt, permitted assignees of a Party pursuant to Article 14 (Assignment) will not be considered third parties for purposes of this Paragraph.
20.07 Internal Conflict. In the event of a conflict between the provisions in the body of this Agreement and any Project Description, the terms of the body of this Agreement will control.
20.08 Severability. The provisions of this Agreement are deemed severable. The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision hereof which can be given effect without the invalid or unenforceable provision, and to this end the provisions of this Agreement are declared to be severable and the balance of this Agreement will be construed and enforced as if this Agreement did not contain such invalid or unenforceable provision.
Page 21 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
20.09 Amendment; Modification; Waiver. This Agreement may only be amended, modified, or supplemented by an agreement in writing signed by authorized representatives of each party hereto. No waiver by any party of any of the provisions hereof will be effective unless explicitly set forth in writing and signed by the waiving party. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any rights, remedy, power, or privilege arising from this Agreement will operate or be construed as a waiver thereof; nor will any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.
20.10 Integration. The Parties have entered into the following related agreements: Prior JDA, Non-Disclosure Agreement, License Agreement, and Memorandum of Understanding. This Agreement (including, for the avoidance of doubt, any fully executed Project Descriptions) constitutes the entire agreement between the Parties and it supersedes all negotiations, representations or agreements, oral or written, express or implied, as to its specific subject matter. Notwithstanding the foregoing, the status of the related agreements shall be as follows:
Prior JDA. As of the Effective Date of this Agreement, the Prior JDA is terminated. Any rights and obligations that were to survive termination of the Prior JDA (pursuant to Section 14.06 of the Prior JDA) are also terminated, except the confidentiality and use restrictions on Prior JDA Background Information and Prior JDA Project Results. Such confidentiality and use restrictions, as set forth in the Prior JDA, will survive termination but will be superseded and replaced by the confidentiality and use restrictions set forth in Article 4 (Disclosure, Confidentiality, and Restricted Use) of this Agreement.
Memorandum of Understanding. As of the Effective Date of this Agreement, the Memorandum of Understanding is terminated, but the confidentiality obligations set forth in the Memorandum of Understanding shall survive termination.
Non-Disclosure Agreement and License Agreement. This Agreement does not modify, abrogate, terminate or supersede any other prior written agreements between the Parties except as specifically noted herein, and such agreements will continue to be applicable in accordance with their terms. For clarity, this Agreement does not modify, abrogate, terminate or supersede the terms and conditions of the Non-Disclosure Agreement or the License Agreement.
20.11 Arm's Length Transaction. This Agreement represents a negotiated, arm's length transaction. The transactions contemplated under this Agreement are being made by each Party for reasonably equivalent value and fair consideration. The transactions contemplated in this Agreement will not constitute a fraudulent transfer or fraudulent conveyance or any act with similar consequences or potential consequences under 11 U.S.C. Section 548 and other similar laws, or otherwise give rise to any right of any creditor of a Party whatsoever to lodge any claim against the other Party or avoid the transactions hereunder.
20.12 Execution. This Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument. Where provided for in applicable law, this Agreement may be executed and delivered electronically. If executing this Agreement using a handwritten signature, a Party may deliver a copy of such signature via electronic transmission and may provide the other Party a duplicate original so each Party retains an original for its records.
Page 22 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in their respective corporate names by their duly authorized officers. FUELCELL ENERGY, INC. EXXONMOBIL RESEARCH AND ENGINEERING COMPANY
By: /s/ Jason B. Few By: /s/ Vijay Swarup
Name: Jason B. Few Name: Vijay Swarup
Title: President, Chief Executive Officer and Chief Commercial Officer Title: VP R&D
Date: November 5, 2019 Date: November 5, 2019
Page 23 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
APPENDIX A - DEFINITIONS
"Affiliate(s)" means any legal entity which, directly or indirectly, at the time in question, controls, is controlled by, or is under common control with the designated Party. For the purposes of this definition, "control" is defined as direct or indirect ownership of fifty percent (50%) or more of the voting interest or economic interest in the controlled entity or such other relationship whereby the controlling entity determines or has the right to determine the majority of the Board of Directors or an equivalent governing body of the controlled entity.
"Agreement" means this agreement, together with the appendices attached to this agreement and any Project Descriptions, extensions, renewals, or amendments hereof agreed to in writing and signed by the Parties.
"Authorized Third Parties" means Drax Group Plc. and Alberta Innovates Corporation, and, subject to FCE obtaining the prior written consent of ExxonMobil, which consent will not be unreasonably withheld, conditioned, or delayed, the respective successors, assigns, joint venturers, partners and contractors of each of them.
"Authorized Work" means non-commercial activities restricted to research and development, pilot plant, deployment, and demonstration projects, and commercial activities for which FCE has obtained the prior written consent of ExxonMobil.
"Background Information" in connection with a designated Party means technical information, data, know-how, expertise, materials (including hardware, samples, models, algorithms, and software), calculations, innovations, inventions, discoveries, improvements, formulations, manufacturing techniques, equipment designs, methods, processes, and the like, of the designated Party or its Affiliates that is:
(a) owned or controlled by the designated Party or its Affiliates (in the sense of having the right to license without accounting to others); and
(b) conceived, created, developed, or acquired by the designated Party or its Affiliates:
(1) prior to the Effective Date of this Agreement; or
(2) at any time, but independently of any Project prior to the termination of this Agreement.
Background Information includes Background Samples but does not include Program Information.
Background Information further includes any business or financial information of the indicated Party relating to the subject matter of this Agreement that is disclosed to the other Party under this Agreement, including, but not limited to, financial data, costs, margins, overhead, returns on capital employed, marketing strategies, and licensing strategies and terms.
"Background Patents" in connection with a designated Party means all patents and patent applications (including continuations, continuations-in-part, or divisions thereof, any patent resulting therefrom, and reissues, re-exams or extensions thereof, and revisions thereof arising from oppositions, inter or ex parte proceedings, or other patent office or judicial proceedings) of all countries, whenever filed, that are:
(a) owned or controlled by the designated Party or its Affiliates (in the sense of having the right to license without accounting to others); and
(b) based solely on Background Information and not included in the definition of Project Patents.
"Background Sample(s)" means ExxonMobil Background Sample(s) and/or FCE Background Sample(s) depending on the context in which the term is utilized.
"Bankruptcy Code" is defined in Paragraph 12.05 (Bankruptcy).
Page 24 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
"Capture Rate" means the percentage of CO2 transferred from the cathode inlet to the anode outlet.
"Carbon Capture Applications" means applications in which the MCFCs concentrate carbon dioxide from industrial or power sources, and for any other purpose attendant thereto or associated therewith.
"Carbonate Transference" means the current density that is due to carbonate transfer as a percentage of total current density.
"Change in Control" means the occurrence of any one or more of the following at any time after the date hereof with respect to FCE:
a) a merger or consolidation with any Person which results in the holders of the voting securities of FCE outstanding immediately prior thereto (other than the acquirer, its "affiliates" and "associates" (as such terms are used in the Securities Exchange Act of 1934)) ceasing to represent at least fifty percent (50%) of the combined voting power of the surviving entity (or, if applicable, its parent company) immediately after such merger or consolidation;
b) any Major Competitor is or becomes the beneficial owner by purchasing directly from FCE, voting securities representing ten percent (10%) or greater than the actual voting power of any such entity;
c) the sale to any Major Competitor of all or substantially all of the business of FCE to which this Agreement relates (whether by merger, consolidation, sale of stock, sale of assets or other similar transaction);
d) any Person (which shall not be any trustee or other fiduciary holding securities under an employee benefit plan of such Person, or any corporation owned directly or indirectly by the stockholders of such Person, in substantially the same proportion as their ownership of stock of such Person), together with any of such Person's "affiliates" or "associates", as such terms are used in the Securities Exchange Act of 1934, becoming the beneficial owner of fifty percent (50%) or more of the combined voting power of the outstanding securities of FCE or by contract or otherwise having the right to control the board of directors or equivalent governing body of FCE or the ability to cause the direction of management of FCE (or, if applicable, its parent company);
e) the approval by such entity's board of directors or shareholders of any reorganization or transaction that would cause any of the situations described in clauses (a) through (d) to occur; or
f) the approval by the board of directors or other governing body or the shareholders or other equity holders of FCE of any plan or proposal for its liquidation or dissolution.
The occurrence or non-occurrence of a Change in Control does not alter or limit section 14.01 of this Agreement.
"Confidential Background Information" means, collectively, any and all Background Information that a Party is required to keep confidential pursuant to the terms and conditions of this Agreement.
"Confidential Information" means, collectively, any and all Confidential Program Information, Confidential Background Information, and any other types of information, that a Party is required to keep confidential pursuant to the terms and conditions of this Agreement.
"Confidential Program Information" means, collectively, any and all Program Information that FCE is required to keep confidential pursuant to the terms and conditions of this Agreement.
Page 25 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
"Cure Period" means a period commencing on the date the defaulting Party receives the written notice of breach or default from the non-defaulting Party pursuant to Paragraph 12.03 and continuing until thirty (30) calendar days thereafter; provided, however, that if prior to the expiration of this period the defaulting Party provides the non-defaulting Party with written evidence that the breach or default cannot reasonably be cured within such period and the defaulting Party has promptly commenced and is diligently pursuing efforts to cure the breach or default, then the Cure Period shall continue as long as such diligent efforts to cure continue, but not beyond the date that is sixty (60) days after the expiration of the initial thirty (30) calendar day Cure Period.
"Definition Agreement" means the agreement between the Parties effective as of October 31, 2019, bearing ExxonMobil Document No. LAW-2019-3850.
"Disclosing Party" means the Party that discloses, directly or indirectly, information or other materials to the Receiving Party hereunder.
"Direct Costs" means reimbursable costs, approved in advance by the Steering Committee, which are (i) operational expenditures of FCE associated with the Program not included in the FTE Cost, including subcontractors, (ii) material or capital expenditures of FCE associated with the Program; and (iii) approved FCE travel costs to attend SC meetings or conferences, and use of contractors in furtherance of a Project.
"Effective Date" means October 31, 2019.
"Exclusivity and Technology Access Fee" is defined in Paragraph 10.02 (Up-front Exclusivity and Technology Access Fee Payment).
"ExxonMobil" is defined in the preamble.
"ExxonMobil Background Information" means Background Information that: (a) was developed or acquired by ExxonMobil independently of a Project, and (b) is provided by ExxonMobil for use in a Project under this Agreement. ExxonMobil Background Information does not include Program Information.
"ExxonMobil Background Sample" means a non-commercial sample of material, component, device, or the like that: (a) was developed or acquired by ExxonMobil independently of the Project, and (b) is provided by ExxonMobil for use in a Project under this Agreement. ExxonMobil Background Samples does not include Program Samples.
"FCE" is defined in the preamble.
"FCE Background Information" means Background Information that: (a) was developed or acquired by FCE independently of a Project, and (b) is provided by FCE for use in a Project under this Agreement. FCE Background Information does not include Program Information.
"FCE Background Sample" means a non-commercial sample of material, component, device, or the like that: (a) was developed or acquired by FCE independently of a Project, and (b) is provided by FCE for use in a Project under this Agreement. FCE Background Samples does not include Program Samples.
"FTE" means a full-time employee of FCE or an equivalent thereof, dedicated to the conduct of the Program based on a total of one thousand eight hundred and fifty-six (1,856) hours per year of direct project work per year. FTEs will include engineers, scientists, and any other functions mutually agreed to by the Steering Committee. Non-devoted personnel (e.g., FCE's Board of Directors, management, secretarial, administrative, human resources, finance, purchasing, shipping and receiving, information technology specialists, lawyers, cleaning and food service personnel) are not FTEs. Individuals may be counted as fractional FTEs by using the individual's total hours of work for FCE on the Program (as opposed to total hours of work) as the numerator and 1,856 as the denominator. For clarity, the phrase "direct project work" means the applicable person is engaged in activities contemplated to be performed by Project Description and excludes time incurred by a person on indirect work-related functions, such as time spent on management, training, general meetings, workplace events, completing time cards, and similar administrative functions, except for attendance at Steering Committee meetings.
Page 26 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
"FTE Costs" means the product of the FTE Rate and the hours worked of the total number of FTEs.
"FTE Rate" means the hourly amount agreed to by the Parties per FTE. As of the Effective Date, the FTE Rate for scientists and engineers is three-hundred and twenty-seven United States dollars ($327.00 USD) and the FTE Rate for all other FTEs is one- hundred and ninety-four United States dollars ($194.00 USD). Increases in the FTE Rate must be approved by the Steering Committee.
"Generation 1 Technology" is defined in the Definition Agreement.
"Generation 2 Technology" is defined in the Definition Agreement.
"Gross Negligence" means any act or failure to act (whether sole, joint or concurrent) which seriously and substantially deviates from a diligent course of action or which is in reckless disregard of or indifference to the harmful consequences.
"Hydrogen Applications" means applications in which the MCFCs are used solely for hydrogen generation in combination with power generation or combined heat and power generation.
"Initial Payment" is defined in Paragraph 10.01(b) (Project Costs).
"Inlet CO2 Concentration" means CO2 concentration in the cathode inlet measured at room temperature conditions (about 23oC) via gas chromatography, as calibrated according to conventional methods.
"Inlet O2 Concentration" means O2 concentration in the cathode inlet measured at room temperature conditions (about 23oC) via gas chromatography, as calibrated according to conventional methods.
"Inlet Water Concentration" means water concentration in the cathode inlet measured at room temperature conditions (about 23oC) via gas chromatography, as calibrated according to conventional methods.
"8th Inning Invoice" is defined in Paragraph 10.01(d) (Project Costs).
"9th Inning Invoice" is defined in Paragraph 10.01(d) (Project Costs).
"License Agreement" means the agreement between the Parties effective June 11, 2019 entitled License Agreement bearing ExxonMobil Document No. LAW-2019-3245.
"Major Competitor" means a company with a market capitalization in excess of fifty billion United States dollars ($50 billion USD) and whose principal business involves exploration for, and/or production of, crude oil and/or natural gas, manufacture of petroleum products and/or transportation and/or sale of crude oil, natural gas, and/or petroleum products.
"Memorandum of Understanding" means the non-binding agreement between ExxonMobil and FCE effective August 26, 2019.
"Milestone 1" is defined in the Definition Agreement.
"Milestone 2" is defined in the Definition Agreement.
"Milestone Payments" is defined in Paragraph 10.03 (Milestone Payments).
"Molten Carbon Fuel Cells" or "MCFCs" means a powerplant system including MCFC Stacks and Balance of Plant based on a fuel cell that comprises an electrolyte, an anode, and a cathode wherein the electrolyte comprises one or more carbonate salts that are molten (liquid) at operating temperatures. An "MCFC Stack" is a set of fuel cells connected electrically in series, arranged vertically or horizontally, that share common ducting for the cathode and anode streams. The ducting is considered part of the MCFC Stack. Further, the MCFC Stack may include "Reformer Units", which are non-electrochemical units that catalytically reform the anode feed to H2 and CO, but do so without producing any electricity. "Balance of Plant" or "BOP" means all other equipment besides the MCFC Stack that is required to operate the MCFC as a stand-alone device, i.e., not in CO2 capture mode or in H2/syngas generation mode. For power generation this can include the dc-to-ac power conversion, fuel and water processing, air supply, and heat exchange equipment.
Page 27 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
"Non-Affiliated Third Party" means a third party who is not Party or an Affiliate of a Party.
"Non-Disclosure Agreement" means the agreement between the Parties effective December 7, 2018 entitled Mutual Non- Disclosure Agreement bearing ExxonMobil Document No. EM11762.
"Party" and "Parties" is defined in the preamble.
"Person" means any trust, natural person, firm or partnership, company, corporation, or other entity that is given, or is recognized as having, legal personality by the law of any jurisdiction, country, state or territory, unincorporated body and association (including joint venture and consortium), any emanation of a sovereign state or government, whether national, provincial, local or otherwise, any international organization or body (whether or not having legal personality), and any other juridical entity, in each case wherever resident, domiciled, incorporated or formed, and more than one of the foregoing acting as a group.
"Policies" are defined in Paragraph 17.01 (Business Standards).
"Potential Decay Rate" is defined in the Definition Agreement.
"Power Applications" means applications in which the MCFCs are solely used for power generation, combined heat and power generation, or both.
"Power Density" means the product of the average cell or stack current density and the average cell potential.
"Prior JDA" means the agreement between the Parties effective April 30, 2016 entitled Joint Development Agreement bearing ExxonMobil Document No. EM09080.
"Prior JDA Background Information" means Background Information as defined in the Prior JDA.
"Prior JDA Project Patents" means Project Patents as defined in the Prior JDA, which by definition are jointly-owned by the Parties.
"Prior JDA Project Results" means Project Results as defined in the Prior JDA, which by definition are jointly-owned by the Parties.
"Project(s)" is defined in Paragraphs 2.01 (Program / Projects).
"Project Description" is defined in Paragraph 2.01 (Program / Projects).
"Program" is defined in Paragraph 2.01 (Program / Projects).
"Program Information" means all information and associated copyrights, whether or not patentable, that is conceived, created, developed or acquired in or for the Program during the Term of the Agreement from any source (including from any employee of either Party or its Affiliates, or from any Party's or its Affiliates' contractors or consultants, whether alone or jointly with one or more others) in the course of and as a result of working directly on the Program. Program Information shall be owned by ExxonMobil and its Affiliates.
Program Information specifically includes Program Inventions and Program Samples. Program Information also includes improvements to either Party's Background Information conceived, created, developed or acquired in or for the Program and resulting directly from activities performed in the course of and as a result of working directly on the Program.
"Program Inventions" means Program Information that is characterized as inventions, discoveries, or improvements (whether patentable or not) that are conceived, created, developed, or acquired by or on behalf a Party or its Affiliates during the Term of this Agreement and one (1) year thereafter, and in the course of and as a result of working directly on the Program. Program Inventions shall also include Project Inventions (as defined in the Prior JDA) that have not been filed with any national, regional, or international patent body or organization by the Effective Date of this Agreement. Program Inventions shall be owned by ExxonMobil and its Affiliates.
Page 28 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
"Program Patents" means all patents and patent applications (including continuations, continuations-in-part, or divisions thereof, any patent resulting therefrom, and reissues, re-exams or extensions thereof, and revisions thereof arising from oppositions, inter or ex partes proceedings, or other patent office or judicial proceedings) filed with any national, regional, or international patent body or organization after the Effective Date of this Agreement, that are based upon and/or claim one or more features of Program Inventions. Program Patents shall be owned by ExxonMobil and its Affiliates.
"Program Results" means, collectively Program Information, Program Patents, and copyrightable works resulting from the Program.
"Program Sample" means a sample of material, component, device, or the like that is developed during the Term of this Agreement, in the course of and as a result of working directly on the Program.
"Receiving Party" means the Party that receives, directly or indirectly, information or other materials from the Disclosing Party.
"Research Costs" means Direct Costs plus FTE Costs.
"Scope" is defined in the preamble.
"Steering Committee" or "SC" is defined in Paragraph 3.01 (Steering Committee).
"Sample" means collectively FCE Background Sample, ExxonMobil Background Sample, and Program Sample.
"Technical Manager" is defined in Paragraph 3.02 (Technical Managers).
"Term" or "Term of this Agreement" is defined in Paragraph 12.01 (Term).
"Total Research Cost" is defined in Paragraph 10.01(a) (Project Costs).
"Willful Misconduct" means an intentional disregard of good and prudent standards of performance or of any of the substantive terms of this Agreement.
"Work" means any activities of any kind, including but not limited to, research and development, pilot plant, manufacture testing, demonstration, or commercial development/deployment.
Page 29 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
APPENDIX B - SAMPLE PROJECT DESCRIPTION FORMAT
PROJECT DESCRIPTION No. ____
Project Name: __________________
LAW-2019-3608
FCE Agreement No. :____________
Date: ________________________
Receiving Company Name & Address
Attention: ______________________
Dear ______________,
This Project Description No. [NUMBER] is issued pursuant to the Joint Development Agreement, effective [EFFECTIVE DATE] between ExxonMobil Research and Engineering Company ("ExxonMobil") and FuelCell Energy, Inc. ("FCE"), bearing ExxonMobil Agreement No. LAW-2019-3608 ("Agreement"). Each Party's activities hereunder will be conducted in accordance with and subject to the terms and conditions of the Agreement. The specific terms which will apply to this Project are described below.
1. PROJECT DESCRIPTION/OBJECTIVES:
_________________
2. TIME SCHEDULE:
Commencement Date: ____________
Completion Date: ________________
3. STEERING COMMITTEE MEMBERS / TECHNICAL MANAGERS:
FCE: ______________________
ExxonMobil: __________________________
4. PROJECT BUDGET Task 1A 1B 1C ….
N u m b e r o f FTEs
FTE Cost
Direct Costs
TOTAL
5. DELIVERABLES:
____________________
Page 30 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019
If the foregoing is satisfactory, please have a duly authorized representative of your company sign duplicate originals of this Project Description and return both to for counter-execution on behalf of our company. A fully-executed original will be returned for your files. Very truly yours, EXXONMOBIL RESEARCH AND ENGINEERING COMPANY By: Name: Title: Date:
ACCEPTED AND AGREED TO: FUELCELL ENERGY, INC. By: Name: Title: Date:
Page 31 of 31
Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 | Highlight the parts (if any) of this contract related to "Parties" that should be reviewed by a lawyer. Details: The two or more parties who signed the contract | {
"answer_start": [
1194
],
"text": [
"ExxonMobil Research and Engineering Company"
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Most Favored Nation" that should be reviewed by a lawyer. Details: Is there a clause that if a third party gets better terms on the licensing or sale of technology/goods/services described in the contract, the buyer of such technology/goods/services under the contract shall be entitled to those better terms?
Context: -8- 9
EXECUTION COPY
11.6. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
11.7. INTELLECTUAL PROPERTY RIGHTS, CONFIDENTIALITY AND NON-USE. The Professional acknowledges her obligations under the provisions of the Intellectual Property Rights Confidentiality and Non-Use Obligations Agreement attached hereto as "Exhibit A" and made a part hereof by this reference. The rights and obligations of the parties set forth in Exhibit A shall survive the termination or expiration of this endorsement agreement, regardless of cause or circumstances of the termination or expiration.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
SQUARE TWO GOLF, INC.
By: /s/DOUGLAS A. BUFFINGTON --------------------------------- Douglas A. Buffington President
PROFESSIONAL
/s/ KATHY WHITWORTH ------------------------------ Kathy Whitworth
-9- 10
EXECUTION COPY
EXHIBIT A
Intellectual Property Rights Confidentiality and Non-Use Obligations Agreement
This Agreement by and between SQUARE TWO GOLF INC., a New Jersey corporation (the "Company") and KATHY WHITWORTH, an individual residing at 302 La Mancha Court, Santa Fe, New Mexico 87501 (the "Recipient"), is part of the Endorsement Agreement of the parties. In consideration of and as an inducement for the Company entering into said Endorsement Agreement with Recipient:
(a) Recipient acknowledges and agrees that communications for the purpose of proposing to work for or working for the Company have in the past or will entail the disclosure, observation and display to Recipient of information and materials of the Company that are proprietary, confidential and trade secret, which include, but are not limited to, golf equipment marketing plans, research, development and designs, computer software, screens, user interfaces, systems designs and documentation, processes, methods, fees, charges, know-how and any result from the work performed by Recipient or the Company, new discoveries, Intellectual Property (as defined below) and improvements to the Company's products made for or on behalf of the Company (all of which, singly and collectively, "Information").
With regard to such Information, whether or not labeled or specified as confidential, proprietary or trade secret, Recipient agrees:
(i) to use the Information solely for the purpose of making proposals to or working under contracts with the Company; and
(ii) not to disclose or transfer the Information to others without the Company's written permission.
(b) Recipient will not be prevented from using or disclosing Information:
(i) which Recipient can demonstrate, by written records, was known to it before the disclosure or display of the Information by the Company to Recipient; or
(ii) which is now, or becomes in the future, public knowledge other than by breach of this Agreement or the endorsement agreement by Recipient, its employees or agents; or
(iii) that is lawfully obtained by Recipient from a source independent of the Company, which source was lawfully in possession of the Information and which source had the unrestricted right to disclose or display the Information to the Recipient; or
(iv) that is required by legal process to be disclosed, provided that Recipient will timely inform the Company of the requirement for disclosure, will permit the Company to attempt, by appropriate legal means, to limit such disclosure and will itself
A-1
11
EXECUTION COPY
use appropriate efforts to limit the disclosure and maintain confidentiality to the extent possible.
(c) The confidentiality and non-use obligations of Recipient will remain in effect after all work for the Company has been completed.
(d) All Information, including any copies thereof, in any media, in the possession or control of Recipient and Information embodied or included in any software or data files loaded or stored on computers in the possession or control of Recipient, its agents or employees, shall be removed and returned to the Company upon demand, but no later than the completion of work for the Company.
(e) Recipient agrees that she will not copy the Information in whole or in part or use all or any part of the Information to reverse engineer, duplicate the function, sequence or organization of the Information for any purpose without the prior written permission of the Company.
(f) Recipient further acknowledges and agrees that all new discoveries, inventions, improvements, processes, formulae, designs, drawings, training materials, original works of authorship, photos, video tapes, electronic images, documentation, trademarks and copyrights (the "Intellectual Property"), that may be developed, conceived, or made by Recipient, alone or jointly with others during her work for the Company, shall be the exclusive property of the Company and shall be deemed a work for hire. Recipient hereby assigns and agrees to assign all Recipient's rights in any Intellectual Property to the Company. Recipient hereby grants to the Company power of attorney for the purpose of assigning all Recipient's rights in Intellectual Property to the Company for the purposes of filings, registrations and other formalities deemed necessary by the Company to prosecute, protect, perfect or exploit its ownership and interests in Intellectual Property. Recipient further agrees to execute, acknowledge and deliver any documentation, instruments, specifications or disclosures necessary to assign, prosecute, protect, perfect or exploit the Company ownership of Intellectual Property.
(g) Recipient acknowledges and agrees that the Company possesses valuable know-how, proprietary, confidential and trade secret Information that has been procured or developed by the Company at great expense and that its unauthorized disclosure would result in substantial damages to the Company that may not be adequately compensated by monetary relief. Accordingly, Recipient hereby consents to the jurisdiction of the Federal and County Courts in Essex County, New Jersey and agrees that the Company may seek temporary restraining orders against it or other extraordinary relief necessary to protect the Information.
A-2 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | -8- 9
EXECUTION COPY
11.6. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
11.7. INTELLECTUAL PROPERTY RIGHTS, CONFIDENTIALITY AND NON-USE. The Professional acknowledges her obligations under the provisions of the Intellectual Property Rights Confidentiality and Non-Use Obligations Agreement attached hereto as "Exhibit A" and made a part hereof by this reference. The rights and obligations of the parties set forth in Exhibit A shall survive the termination or expiration of this endorsement agreement, regardless of cause or circumstances of the termination or expiration.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
SQUARE TWO GOLF, INC.
By: /s/DOUGLAS A. BUFFINGTON --------------------------------- Douglas A. Buffington President
PROFESSIONAL
/s/ KATHY WHITWORTH ------------------------------ Kathy Whitworth
-9- 10
EXECUTION COPY
EXHIBIT A
Intellectual Property Rights Confidentiality and Non-Use Obligations Agreement
This Agreement by and between SQUARE TWO GOLF INC., a New Jersey corporation (the "Company") and KATHY WHITWORTH, an individual residing at 302 La Mancha Court, Santa Fe, New Mexico 87501 (the "Recipient"), is part of the Endorsement Agreement of the parties. In consideration of and as an inducement for the Company entering into said Endorsement Agreement with Recipient:
(a) Recipient acknowledges and agrees that communications for the purpose of proposing to work for or working for the Company have in the past or will entail the disclosure, observation and display to Recipient of information and materials of the Company that are proprietary, confidential and trade secret, which include, but are not limited to, golf equipment marketing plans, research, development and designs, computer software, screens, user interfaces, systems designs and documentation, processes, methods, fees, charges, know-how and any result from the work performed by Recipient or the Company, new discoveries, Intellectual Property (as defined below) and improvements to the Company's products made for or on behalf of the Company (all of which, singly and collectively, "Information").
With regard to such Information, whether or not labeled or specified as confidential, proprietary or trade secret, Recipient agrees:
(i) to use the Information solely for the purpose of making proposals to or working under contracts with the Company; and
(ii) not to disclose or transfer the Information to others without the Company's written permission.
(b) Recipient will not be prevented from using or disclosing Information:
(i) which Recipient can demonstrate, by written records, was known to it before the disclosure or display of the Information by the Company to Recipient; or
(ii) which is now, or becomes in the future, public knowledge other than by breach of this Agreement or the endorsement agreement by Recipient, its employees or agents; or
(iii) that is lawfully obtained by Recipient from a source independent of the Company, which source was lawfully in possession of the Information and which source had the unrestricted right to disclose or display the Information to the Recipient; or
(iv) that is required by legal process to be disclosed, provided that Recipient will timely inform the Company of the requirement for disclosure, will permit the Company to attempt, by appropriate legal means, to limit such disclosure and will itself
A-1
11
EXECUTION COPY
use appropriate efforts to limit the disclosure and maintain confidentiality to the extent possible.
(c) The confidentiality and non-use obligations of Recipient will remain in effect after all work for the Company has been completed.
(d) All Information, including any copies thereof, in any media, in the possession or control of Recipient and Information embodied or included in any software or data files loaded or stored on computers in the possession or control of Recipient, its agents or employees, shall be removed and returned to the Company upon demand, but no later than the completion of work for the Company.
(e) Recipient agrees that she will not copy the Information in whole or in part or use all or any part of the Information to reverse engineer, duplicate the function, sequence or organization of the Information for any purpose without the prior written permission of the Company.
(f) Recipient further acknowledges and agrees that all new discoveries, inventions, improvements, processes, formulae, designs, drawings, training materials, original works of authorship, photos, video tapes, electronic images, documentation, trademarks and copyrights (the "Intellectual Property"), that may be developed, conceived, or made by Recipient, alone or jointly with others during her work for the Company, shall be the exclusive property of the Company and shall be deemed a work for hire. Recipient hereby assigns and agrees to assign all Recipient's rights in any Intellectual Property to the Company. Recipient hereby grants to the Company power of attorney for the purpose of assigning all Recipient's rights in Intellectual Property to the Company for the purposes of filings, registrations and other formalities deemed necessary by the Company to prosecute, protect, perfect or exploit its ownership and interests in Intellectual Property. Recipient further agrees to execute, acknowledge and deliver any documentation, instruments, specifications or disclosures necessary to assign, prosecute, protect, perfect or exploit the Company ownership of Intellectual Property.
(g) Recipient acknowledges and agrees that the Company possesses valuable know-how, proprietary, confidential and trade secret Information that has been procured or developed by the Company at great expense and that its unauthorized disclosure would result in substantial damages to the Company that may not be adequately compensated by monetary relief. Accordingly, Recipient hereby consents to the jurisdiction of the Federal and County Courts in Essex County, New Jersey and agrees that the Company may seek temporary restraining orders against it or other extraordinary relief necessary to protect the Information.
A-2 | Highlight the parts (if any) of this contract related to "Most Favored Nation" that should be reviewed by a lawyer. Details: Is there a clause that if a third party gets better terms on the licensing or sale of technology/goods/services described in the contract, the buyer of such technology/goods/services under the contract shall be entitled to those better terms? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Document Name" that should be reviewed by a lawyer. Details: The name of the contract
Context: EXHIBIT 10.9 GLOBAL MUSIC INTERNATIONAL, INC. DBA IMNTV CONTENT LICENSE AGREEMENT
This Content License Agreement ("Agreement") is between Global Music International, Inc. d/b/a Independent Music Network (IMNTV), located at 20 Old Stagecoach Road, Redding, Connecticut, 06896 ("IMNTV"), and Distributor, as set forth below, and describes the terms and conditions under which Distributor will distribute Programming provided by IMNTV as described herein. Distributor's distribution of the Programming is subject to the Master Terms of Service ("MTS") attached hereto as Exhibit A. All capitalized terms shall have the meaning set forth on the MTS. In consideration for the mutual promises and covenants contained herein, the parties agree as follows:
Distributor's authorized signature, is REQUIRED:
A. Distributor Information N/A Provider Name: MobileVision Communications Ltd.
Address: 100 Ba Li Zhuang Xi Li, Suite 907, ZhuBang2000 Plaza, East Building, Beijing, China
COUNTRY PROVINCE: P.R.China
Web Site www.looklook.cn
Tax ID #: N/A
Business Contact: Name: MengDi Xu
Phone: +86 135 010 37211
Email: xumengdi@looklook.cn
Marketing Contact: Name: BaoQing (Angel) Song
Phone: +86 13911178981
Email: angelsong@looklook.cn
Technical Contact: Name: WeiLi Cheng
Phone: +86 13011813916
Email: chengwl@mobiledata.com.cn
Billing contact: Name: RuoXian Qi
Phone: +86 13161502302
Email: ruoxian@looklook.cn
Billing Address: (if different from above) Customer Service Contact: Name: Liang (Dean) Wang
Phone: +86 136 2131 5977
Email: deanwang@looklook.cn
Notice Contact: Name: RuoXian Qi
Phone: +86 13161502302
Email: ruoxian@looklook.cn
Notice Address: (if different from above)
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
B. Term
This Agreement is effective as of the last date signed below ("Effective Date"). The initial term of this Agreement will begin on the Effective Date and end twelve (12) months after the Launch (the "Term"). IMNTV will extend the Agreement on the same terms and conditions for additional one-year terms, providing Distributor and IMNTV agree, predicated on satisfactory performance by both parties IN WITNESS WHEREOF, the parties have executed this Agreement by their duly authorized representatives. DISTRIBUTOR
MOBILEVISION COMMUNICATIONS LTD. By: Name Andrew Zhang Title PRESIDENT Signature /s/ Andrew Zhang Date 13/07/05
GLOBAL MUSIC INTERNATIONAL, INC. D/B/A INDEPENDENT MUSIC NETWORK (IMNTV)
By: Name Corinne Fallacaro Title PRESIDENT Signature /s/ Corinne Fallacaro Date 13/07/05
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
EXHIBIT A
GLOBAL MUSIC INTERNATIONAL, INC. DBA IMNTV MASTER TERMS OF SERVICE
1. DEFINITIONS
The following capitalized terms will have the meanings set forth below: "Bundles" means, any version of the Mobile Product that includes IMNTV content bundled with any other product or service.
"Confidential Information" means the confidential or proprietary technical or business information of a party, including without limitation (a) proposals or research related to possible new products or services; (b) financial statements and other financial information; (c) reporting information; (d) the material terms of this Agreement and the relationship between the parties; and (e) planned launch dates. All of the information will be considered confidential only if it is conspicuously designated as "Confidential," or if provided orally, identified at the time of disclosure as confidential. "Confidential Information" does not include information that (i) is in or enters the public domain without breach of this Agreement, (ii) the receiving party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation, or (iii) the receiving party knew prior to receiving such information from the disclosing party or develops independently.
"Content" means generally text, images, video, audio, and other material.
"Fees" means Subscription Fees that include IMNTV content..
"Internet Protocol" means any protocol used to route data on the Internet, or on any portion of the Internet, including all versions currently in existence or developed or implemented in the future.
"Landing Page" means the destination web page for a Special Link, created and hosted by Distributor, from where individuals may begin the Registration Process for the Subscription Service or a Bundle, at such individual's election.
"Launch" means the date that the Programming is made generally available for purchase by consumers under the terms and conditions of the Agreement.
"Programming"means IMNTV's Content, as specifically described on Section B (1) of the Agreement. As used herein, "Programming" also includes any promotional and marketing Content provided by Provider for IMNTV's promotional and marketing activities as described herein.
"Programming Bundle Fee" means the fee actually paid by a Subscriber for a Programming Bundle that includes IMNTV content provided in accordance with this Agreement.
"Distributor Marks" means the trademarks, service marks, brands, logos and trade names of Distributor.
"Distributor Portal" means, collectively, the Distributor's Site and any other web site or property from where Distributor promotes the Programming.
"Distributor Site" means Distributor's Internet web site intended to promote the availability of any Distributor Content, including the Programming, via mobile and wireless networks. Distributor Site is more fully described in Section A of the Agreement.
"Subscription Fee" means the fee actually paid by a Subscriber for the applicable Mobile Content.
"Subscriber" means any individual who purchases mobile content programming and: (a) who actually pays the applicable Subscription Fee; and (b) does not receive a refund of such Subscription Fee for any reason within thirty (30) days from the end of the payment period for which the Subscription Fee was paid. A Subscriber remains a "Subscriber" for the purposes of this Agreement so long as such individual continues to pay the applicable Subscription Fee.
"Registration Process" means the download, payment, installation, and electronic registration process of the Programming, a Bundle or the applicable Software. "Registration Process" may include an online registration form
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
provided, hosted, and managed by Distributor, and may also, at Distributor's discretion, include other methods by which a Subscriber may affirmatively request access to the Programming, a Bundle, or the Software. "IMNTV Marks" means the trademarks, service marks, brands, logos and trade names of IMNTV and/or Global Music International.
"IMNTV Portal" means the IMNTV Sites where IMNTV promotes the Programming.
"IMNTV Sites" means the Internet web sites owned and operated by IMNTV.
"Special Link"means a formatted or "tagged" link that tracks traffic from the Distributor Portal to the Landing Page.
"Subscribers" means, collectively, end users who have completed the Registration Process for any of the Subscription Products described herein. "Subscribers" includes "Recurring Subscribers."
"Subscription Products" means, collectively Products and Bundles that include IMNTV content.
"IMNTV Mobile Product" means an IMNTV branded subscription product distributed to mobile and wireless devices, which includes services, products and Content from one or a variety of third parties, and includes any derivative, follow-on, repackaged, or substantially similar product offered by Distributor that includes IMNTV Programming.
"Bundle Fee" means the fee actually paid by a Subscriber for the Mobile Product Bundle that includes provider content provided in accordance with this Agreement.
"IMNTV Mobile Product Fee" means the fee actually paid by a Subscriber for the IMNTV Mobile Product.
"Recurring Subscriber" for the purpose of this Agreement so as long as such individual continues to pay the applicable Subscription Fee, so long as IMNTV actually receives such fee.
"Territory" means China. Other territories are subject to approval by IMNTV.
2. DISTRIBUTOR OBLIGATIONS.
2.1 Subscription Transactions. Distributor will provide the following services to market, launch and distribute the Programming using its existing infrastructure as follows:
(a) Fulfillment. Each individual who purchases a Subscription must complete the Registration Process, where such individual will be prompted to provide certain personally identifiable information including a valid major credit card (e.g. Visa, MasterCard, Discover, American Express) to receive the Programming. Support for additional payment methods and additional credit cards may be developed by Distributor, with IMNTV's prior written approval.
(b) Customer Support. Distributor will provide customer support in target Territory in a workmanlike and professional manner.
2.2 Distribution Channels. Distributor and IMNTV may create, sell and market Bundles that include the IMNTV Programming. Distributor may offer the Programming and any Bundles through all wireless distribution channels in target Territory. To enable all Subscribers to have access to the Programming, the Programming may be distributed in whole or in part via Internet Protocol in a manner that enables the Programming to be received and played back by mobile devices in the target Territory.
2.3 Hosting Services. Hosting of on-demand Programming will be provided at no cost to IMNTV in a format acceptable to local Territory wireless devices. Distributor will provide reports of aggregated Subscriber access and usage data concerning the Programming on a monthly basis, together with reports described in Section 6.5, below.
2.4 Promotion of Programming. Distributor may use the Programming and IMNTV's Marks to market, advertise and promote the Programming in the Mobile Software Application(s), the Distributor's Portal, and in other on and off-line marketing efforts as follows: (a) promoting the Programming in directories, listings, and keyword searches; (b) deep linking to the Programming; (c) featuring Programming in various areas within the Distributor's Software and Distributor's Portal, (d) communicating to users via Distributor's consumer marketing channels such as on-line messages, member newsletters or email campaigns; (e) featuring excerpts, screenshots of Programming in marketing collateral and advertisements; (f) featuring the Programming in product demonstrations relating to Distributor's
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
software or subscription products at trade shows and conferences; (g) creating collateral for joint promotional efforts between Distributor and third parties; (h) promoting the Programming in television, radio and print media. IMNTV may use Distributor's logos and marks in the marketing of the Product, subject to pre- approved trademark usage policy and Brand Standards to be provided by Distributor to IMNTV.
2.5 Distributor Support and Operational Responsibilities. Distributor will provide all "middleware" programming to facilitate connection of the content delivery platform to local Territory wireless networks. Distributor will perform localization of any software components to make the program possible to use in the local Territory. This is to include language translations or interface design changes. Provider will act as liaison with local Territory wireless carriers. This will include content review to insure content meets local broadcast standards and meets any local regulatory requirements. Distributor also agrees to secure necessary governmental approvals or permits necessary to operate in the Territory and to secure permission to enable distribution of IMNTV's share of Subscription Fees to IMNTV in the United States. Distributor is solely responsible for monitoring, performance and ensuring the availability of the Programming and will notify IMNTV immediately of planned and unplanned Programming delays or outages.
2.6 Privacy. Distributor is responsible for complying with all applicable laws, rules and regulations relating to its collection and use of personal information from users of the Distributor Portal. At a minimum, Distributor must adopt, implement and comply with a Privacy Policy that: (a) is easy to find, read and understand; (b) is prominently posted at the time that any personally identifiable information is collected or requested; and (c) clearly states what information is being collected, what the information will be used for, whether such information will be provided to third parties, and the choices available regarding collection, use and distribution of the collected information.
3. IMNTV OBLIGATIONS.
3.1 Grant of License. During the Term, for the activities described in this Agreement, IMNTV hereby grants Distributor non-exclusive rights and licenses necessary within the Territory to: (a) copy, store digitally, host and stream the Programming; (b) publicly perform, publicly display, electronically transmit, distribute and broadcast the Programming; (c) promote the Programming and use IMNTV Marks for Distributor's promotion of the Programming as activities described in Section 2.4 above; (d) archive the Programming on Distributor's servers; (e) encode, copy, and create continuous Programming excerpts of up to sixty (60) seconds and transmit, publicly perform, distribute, and redistribute such excerpts to end users via the Distributor's Portal for marketing purposes only(f) deep link to the Programming.
3.2 Right of distribution N/A 3.3 Removed N/A 3.4 Programming Obligations. IMNTV will create and maintain it's programming content and will deliver same to Distributor in a format suitable for the distribution over wireless networks in Distributor's Territory on a regular basis.
3.5 Logo Trademarks. Distributor may use IMNTV logos and marks in the marketing of the Product, subject to pre-approved trademark usage policy and Brand Standards.
3.6 Dedicated Personnel. Throughout the Term, IMNTV shall designate at least one (1) staff member to provide Distributor with all reasonably necessary assistance, information and support relating to its obligations herein including, but not limited to, updating and maintaining the Programming.
3.7 Responsibility for Programming. Except as expressly set forth herein, IMNTV is solely responsible for all costs, activities, obligations and liabilities associated with: (a) obtaining all rights and licenses necessary for the authorized use and distribution of the IMNTV Programming as described herein including, but not limited to, all copyright, trademark rights, rights of publicity and rights of privacy, and any broadcast, rebroadcast, or retransmission rights or permissions; and (b) obtaining all necessary permissions and/or release documentation from all persons associated with the distribution of the Programming as described herein, including, without limitation, all performers.
4. ADVERTISING The IMNTV Programming will not contain any advertising, either integrated or before or after each clip, except IMNTV I'Ds and IMNTV commercials for solicitation of Chinese music videos,without the prior written approval of both parties.
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
5. OWNERSHIP.
5.1 By IMNTV. As between Distributor and IMNTV, IMNTV owns or has the necessary licenses to all copyright, trademark, patent and other intellectual property rights in and to, and all other right, title and interest in and to the Programming, the Trademarks and the IMNTV Portal. Except as expressly provided herein, IMNTV retains the right to distribute the Programming in any medium now known or hereafter developed. As between IMNTV and Distributor (excluding the Programming and other Provider intellectual property), IMNTV owns all copyright, trademark, patent and other intellectual property rights therein, and all other right, title and interest in and to or associated with the Subscription Products, the IMNTV Sites, the IMNTV Marks, and the System and Subscriber data.
5.3 Trademarks. Each party: (a) will not create a unitary composite mark involving a trademark of the other party without the prior written approval of such other party; (b) will display symbols and notices clearly and sufficiently indicating the trademark status and ownership of the other party's trademarks in accordance with applicable trademark law and practice; (c) acknowledges that its utilization of the other party's trademarks will not create in it, nor will it represent it has, any right, title or interest in or to such trademarks other than the licenses expressly granted herein; (d) agrees not to do anything contesting or impairing the trademark rights of the other party; (e) agrees to promptly notify the other party of any unauthorized use of the other party's trademarks of which it has actual knowledge; and (f) will have the sole right and discretion to bring proceedings alleging infringement of its trademarks or unfair competition related thereto; provided, however, that each party agrees to provide the other party, at such other party's expense, with its reasonable cooperation and assistance with respect to any such infringement proceedings
6. FEES AND ROYALTIES
6.1 Mobile Product Payments. Subscription fee in Territory is to be determined based on market research performed by Distributor with pricing to be agreed upon jointly and in writing Each quarter, Distributor will make royalty payments to IMNTV based on a Structure as follows:
55% of subscriber revenue for the subscription based services broadcasting IMNTV content only, net of telecom percentage provided in accordance with this Agreement. ("Programming Payments"), subject to the following: The parties acknowledge that some mobile carriers may bill end users for a full month in a single billing, and that others may bill for partial months or pro-rate the billing of Recurring Subscribers. For each full month of Fees received from a Recurring Subscriber, Distributor will pay IMNTV based on the Rate Structure (the "Full Month Payment"). To the extent that Distributor receives a partial month's Fee or pro-rated Fee from a Recurring Subscriber as a result of a carrier's billing practices, Distributor will pay IMNTV a proportionate or pro-rated portion of such Full Month Payment based on the amount received by Distributor.
6.2 Payments. All payments hereunder shall be payable to IMNTV in United States Dollars on a quarterly basis upon receipt from the wireless carriers in the Territory, except as follows:
(a) First Payment. The first payment to IMNTV will be payable upon receipt at the end of the first calendar quarter after Launch, and will include any amounts due, pro-rated based on the number of days in such period of time; and
(b) Last Payment. The last payment to IMNTV will be payable upon receipt at the end of the first full month after the termination or expiration of this Agreement, and will include any amounts due: for the last month that the Programming is available, prorated based on the number of days in such final period.
(c) Other Exceptions. All payments hereunder are exclusive of: (i) any trial or promotional periods during which a Subscriber receives access to the Programming before such Subscriber's credit card is charged; and (ii) refunds, charge backs and fees attributable to contested credit card transactions
(d) Summary of Timing. The parties acknowledge the following that establishes timing of payments: (1) Distributor receives a carrier statement saying how much Distributor will be paid; (2) 30-45 days later the Carrier pays Distributor; (3) when Distributor is paid by a carrier, Distributor makes royalty payments to IMNTV.
(e) Exchange Rate. Payments to IMNTV will be converted from local currency to US Dollars at the official exchange rate posted on the day payments are made to IMNTV via wire transfer provided that currency exchange is approved by the relevant Chinese currency exchange administrative agency.
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
6.3 Provider Payment Location. Distributor will remit such payments a bank account specifically named by IMNTV..
6.4 Taxes. Distributor will collect and remit to the appropriate taxing authority, or require Subscribers to pay, any sales, use or similar taxes applicable to any retail sale or distribution of the Programming. Except for the foregoing, each party is solely and separately responsible for its own taxes, user fees, or similar levies.
6.5 Reporting. Distributor will provide IMNTV with a quarterly report or monthly report if available, summarizing the data relevant to the payment obligations herein within five (5) business days from the end of the calendar quarter. The reports will contain sufficient information to permit Provider to verify payments hereunder.
7. TERMINATION
7.1 General Termination Rights. Either party may terminate the Agreement at any time in the event of a material breach by the other party that remains uncured after thirty (30) days written notice of the breach.
7.2 Termination for Programming Deficiency. Distributor reserves the right to issue a warning immediately to Subscribers, to temporarily or indefinitely suspend the availability of the Programming, or to terminate this Agreement (the "Remedies") if IMNTV breaches this Agreement. In the event that Distributor exercises any of its rights set forth in this Section 7.2, Distributor will notify IMNTV of the Programming Deficiency, Distributor's elected Remedy, and the available cure options, and will provide IMNTV with a reasonable period of time in which IMNTV may cure the Programming Deficiency (the "Cure Period"). During the Cure Period, if commercially reasonable, the Distributor may help IMNTV cure the Programming Deficiency, but is under no affirmative obligation to do so. If IMNTV fails to cure the Programming Deficiency within the Cure Period, Distributor may terminate this Agreement immediately upon written notice. In the event of a suspension or termination under this Section 7.2, Distributor will notify Subscribers that the Programming is no longer available. Distributor will be solely liable for any refunds pertaining to the Programming that are issued to Subscribers as a result of termination under this Section 7.2.
7.3 Termination for Bankruptcy/Insolvency. Either party may terminate this Agreement immediately following written notice to the other party if the other party: (a) ceases to do business in the normal course; (b) becomes or is declared insolvent or bankrupt; (c) is the subject of any proceeding related to its liquidation or insolvency (whether voluntary or involuntary) which is not dismissed within ninety (90) calendar days; or (d) makes an assignment for the benefit of creditors.
7.4 Effect of Termination. Except as set forth in Section 7.3 above, upon termination or expiration of this Agreement: (a) the licenses granted to Distributor will immediately terminate; and (b) all fees due to IMNTV will be paid to IMNTV pursuant to Section 6.3 of this Agreement. In the event that Distributor terminates this Agreement pursuant to either Section 7.2 or 7.3 above, Distributor will notify Subscribers that the Programming is no longer available. Sections 5, 6.3, 6.6, 7.2, 7.4, 8, and 9 of this MTS will survive the expiration or termination of the Agreement for any reason.
8. WARRANTIES AND INDEMNIFICATION
8.1 Provider Warranty and Indemnification. IMNTV represents and warrants to Distributor that: (i) IMNTV is an entity duly organized and validly existing under the laws of its state of organization; (ii) IMNTV has the power and authority to enter into this Agreement and to perform fully its obligations under this Agreement; (iii) IMNTV is under no contractual or other legal obligation which could reasonably be expected to interfere in any way with its prompt and complete performance under this Agreement; and (iv) the person executing this Agreement on behalf of IMNTV has been duly authorized to do so and such execution is binding upon IMNTV.
IMNTV will defend, indemnify, and hold Distributor harmless from and against any and all liabilities, claims, losses, costs, damages and expenses (including reasonable attorneys' fees and court costs) (collectively, "Claims") relating to or arising out of: (a) IMNTV's breach of this Agreement; (b) the Content of the Programming (e.g., if such Claim alleges copyright or trademark infringement or infringement of any other proprietary right) as furnished by IMNTV under this Agreement (excluding any Claim to the extent based on any alteration of or insertion in any IMNTV content by Distributor that is not specifically authorized by IMNTV in writing), IMNTV Marks or IMNTV Site; (c) any IMNTV online subscription service, the Programming with the Mobile Subscription Products, or IMNTV's acts or omissions with
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
respect thereto (including the marketing of the foregoing by IMNTV and excluding any Claim to the extent based on any alteration of or insertion in any Programming by Distributor); (d) violation by IMNTV of any contractual obligation, including payments or royalties, that IMNTV has to any third party; (e) a claim that the Programming as provided by IMNTV does not comply with any federal, state and local laws and regulations that are applicable to Distributor's transmission or use of Programming as permitted this Agreement; or (f) IMNTV not having obtained all necessary consents, licenses, permissions and releases necessary to grant Distributor the rights IMNTV grants to Distributor hereunder.
8.2 Distributor Warranty and Indemnification. Distributor represents and warrants to IMNTV that: (i) Distributor is an entity duly organized and validly existing under the laws of its country of organization; (ii) Distributor has the power and authority to enter into this Agreement and to perform fully its obligations under this Agreement; (iii) Distributor is under no contractual or other legal obligation which could reasonably be expected to interfere in any way with its prompt and complete performance under this Agreement; and (iv) the person executing this Agreement on behalf of Distributor has been duly authorized to do so and such execution is binding upon Distributor. Distributor will defend, indemnify, and hold IMNTV harmless from and against any and all Claims relating to or arising out of: (a) the marketing by Distributor of the Programming (excluding Claims to the extent based on Programming or other content provided by or approved by IMNTV), or any Subscription Product which includes any Programming, (b) any Claim by any Subscriber concerning Distributor's operation and maintenance of the Subscription Products (except for content Claims described in Section 9.1, Claims concerning the transmission of Subscriber Information to IMNTV, or the use of Subscriber Information by IMNTV or by any third party to whom IMNTV has disclosed such information); (c) Distributor's alternation of, or insertion of material (including commercial advertisements) in, any Programming, except as explicitly authorized in each case in writing by IMNTV; and (d) any infringement of the Subscription Products on the rights of others (excluding any Claim to the extend based on any Programming).
8.3 Conditions of Indemnification. A party's obligation to indemnify the other party is expressly conditioned on the indemnified party: (a) giving written notice of the claim promptly to the indemnifying party; (b) giving the indemnifying party control of the defense and settlement of the claim utilizing, if necessary, legal counsel to be selected by the indemnifying party upon reasonable approval of the other party; (c) providing to the indemnifying party all available information and assistance (at the indemnifying party's expense); and (d) not compromising or settling such claim, without the other party's prior written consent which may not be unreasonably withheld.
8.4 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH HEREIN, NEITHER PARTY MAKES ANY WARRANTIES OR REPRESENTATIONS RELATING TO THE SUBSCRIPTION PRODUCTS, OR THE LIKELIHOOD OF SUCCESS OF THE PROGRAMMING, THE MOBILE NTENT PRODUCT, OR ANY BUNDLE. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IMNTV FURTHER DISCLAIMS ALL WARRANTIES IN THE SUBSCRIPTION PRODUCTS, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT.
8.5 Limitation of Liability. NO PARTY WILL BE LIABLE TO THE OTHER PARTY IN TORT, CONTRACT OR UNDER ANY OTHER LEGAL THEORY FOR ANY CONSEQUENTIAL, INDIRECT, INCIDENTAL, PUNITIVE OR SPECIAL LOSS OR DAMAGES ARISING OUT OF THIS AGREEMENT, EVEN IF APPRISED OF THE LIKELIHOOD OF SUCH DAMAGES OCCURRING. IN NO EVENT WILL IMNTV'S LIABILITY TO DISTRIBUTOR UNDER THIS AGREEMENT EXCEED THE AMOUNT ACTUALLY DUE TO IMNTV HEREIN.
9. GENERAL
9.1 Notices and Contact Information. All notices and demands under this Agreement will be in writing and will be delivered by personal service, express courier, or United States mail, to the following addresses: If to IMNTV: Independent Music Network 20 Old Stagecoach Road Redding, CT 06896 USA Attention: General Counsel If to Provider: To the Notice Contact as set forth in Section A of the Agreement.
Either party may change the addresses set forth above by written notice to the other party. Notice will be effective on receipt. Any notice or report delivered in accordance with this Section will be deemed given on the date actually
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
delivered; provided that any notice or report deemed given or due on a Saturday, Sunday or legal holiday will be deemed given or due on the next business day. If any notice or report is delivered to any party in a manner which does not comply with this Section 9.1, such notice or report will be deemed delivered on the date, if any, such notice or report is actually received by the other party. 9.2 Non-Assignment. This Agreement is binding upon each party's assigns, transferees and successors; provided that no party may assign or otherwise transfer, by operation of law or otherwise, this Agreement in whole or in part, without the other party's prior written consent. Notwithstanding the prior sentence, either party may assign this Agreement in its entirety without the other party's consent to any of the following: (i) the assignor's successor in a consolidation or merger, (ii) the assignor's successor in an acquisition of all or substantially all of the assets, equity or beneficial interests of the assignor, (iii) an entity under common control with, controlled by or in control of the assignor, or (iv) a lender, as an assignment of collateral to secure credit extended to the assignor. The assignor will give the other party written notice within thirty (30) days of any assignment described in the immediately preceding sentence.
9.3 Confidentiality. The parties acknowledge that Confidential Information is valuable and unique and that disclosure in breach of this confidentiality provision will result in irreparable injury to its owner. From the Effective Date and for a period of two (2) years from the date of termination or expiration of this Agreement, neither party will use, disclose, or permit any person to obtain any Confidential Information of the other party. If either party receives a request from any third party for the Confidential Information of the other party, or if such party is directed to disclose any portion of any Confidential Information of the other party by operation of law or in connection with a judicial or governmental proceeding or arbitration, it will immediately notify the other party and will assist the other party in seeking a suitable protective order or assurance of confidential treatment to preserve the confidentiality of any such Confidential Information. If either party breaches or threatens to breach the terms of this confidentiality provision, the non-breaching party will be entitled to an injunction prohibiting any such breach. Any such relief will be in addition to and not in lieu of any appropriate relief in the way of money damages.
9.4 Press Releases and Public Statements. Neither party will issue any press releases or make public statements relating to this Agreement or the relationship between the parties without the other party's review of and written consent to such press release or public statement.
9.5 Force Majeure. No party shall be deemed in default hereunder for any cessation, interruption or delay in the performance of its obligations due to causes beyond its reasonable control, including but not limited to: earthquake, flood, or other natural disaster, act of God, labor controversy, civil disturbance, war (whether or not officially declared) or the inability to obtain sufficient supplies, transportation, or other essential commodity or service required in the conduct of its business, or any change in or the adoption of any law, regulation, judgment or decree (each a "Force Majeure Event"). Each party shall have the right to terminate this Agreement immediately upon written notice if any Force Majeure Event of another party continues for more than ten (10) days.
9.6 Miscellaneous. This Agreement and Exhibits A, B, and C constitute the final agreement between the parties with regard to the subject matter herein, and supersedes and cancels all prior negotiations, understandings, correspondence and agreements, oral and written, express or implied, between the parties with regard to the subject matter herein. No waiver, amendment or modification of any provision of this Agreement will be effective unless it is in a document that expressly refers to this Agreement and is signed by both parties. Failure or delay by either party in exercising any rights or remedy under this Agreement will not operate as a waiver of any such right or remedy. The parties are independent contractors. Neither party will be deemed to be an employee, agent, partner or legal representative of the other for any purpose and neither will have any right, power or authority to create any obligation or responsibility on behalf of the other. This Agreement will be governed by the laws of the State of Florida without regard to conflicts of law provisions.
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
EXHIBIT B 1. TECHNICAL REQUIREMENTS. IMNTV will comply with the following technical requirements, as applicable:
On Demand. Provider will provide all on-demand media files encoded in the Format appropriate for each stream type (e.g., audio, video, animation and other media file types as they become supported and as IMNTV may then elect to provide) to the Distributor via the File Transfer Protocol (FTP).
2. LIVE/STREAMING PROGRAMMING (AS APPLICABLE)
2.1 Preparing Content. IMNTV will provide Distributor with the URL for each live or simulated live stream remotely encoded by IMNTV using the conventions established by both parties.
2.2 Feed Delivery. At IMNTV's election, IMNTV will deliver live feeds to the Distributor via methods other than FTP over the Internet, including delivery of physical media.
(a) General. IMNTV shall take the appropriate measures to ensure that all live or simulated live feeds will be delivered continuously to the Distributor 24 hours/day, 7 days/week, except for scheduled maintenance. If any feed is provided to Distributor using transmission methods that are proprietary or uncommon, Provider agrees to provide -at no cost -- the receiver equipment to Distributor and to allow adequate time for setup and testing of equipment prior to delivery of live content.
(b) Encoding. IMNTV will encode feeds to be delivered to Distributor.
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
EXHIBIT C
Programming Technical Specifications
1. REPRESENTATION OF PROGRAMMING
1.1 Programming Presentation. The following are requirements for all Programming:
(a) Each individual item of Programming will be identified with a Programming identification code ("Programming ID")
(b) Clicking on any Programming will instigate an "Optimized" presentation as follows:
(i) When a Subscriber selects the Programming, the default start-up audio/video sequence for the presentation will start playing in the playback window of the Mobile Platform Software ("Playback Window").
2. POLICIES FOR ADVERTISING AND PROMOTION WITHIN SOFTWARE
2.1 The Programming will have a IMNTV Identification ("IMNTV ID"), which is similar to on-air network id, which is played each time the Programming is launched. Distributor may utilize the IMNTV ID in the Distributor's Portal for promotional purposes.
(a) The IMNTV ID will be no longer than two (2) to five (5) seconds in length, and may be audio and Real Flash visual media clip.
(b) All IMNTV Ids will be hosted and served by Distributor.
(c) If Programming is currently playing, the IMNTV Id cannot interrupt the stream
(d) If any advertisement other than a streaming advertisement is scheduled, the IMNTV ID must precede it.
3. PROGRAMMING DESIGN GUIDELINES
3.1 The initial opening of IMNTV ID should be authored to the following standards:
(a) For a 120 W x 96H video space (without scroll bars) subject to review with Distributor to determine suitability for Distributor's territory.
3.2 Design Restrictions. The following requirements serve to ensure a consistent Subscriber experience across all Programming.
(a) Distributor will provide IMNTV with page size and load time goals for the Programming.
(b) Bullet points describing the Programming
(c) Descriptions of the Programming that correspond with each bullet point and elaborate more on the bullet point
(d) Link to the Provider's Privacy Policy
(e) Link to the Provider's Terms of Use
(f) Information for Customer Service and/or Technical Support to use while servicing Subscribers
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
EXHIBIT D
Distribution of the Provider's Content through China Unicom Tianjin Branch
1. Service Offering a. MobileVision is an authorized and fully licensed Service Provider (SP) partner who provides the programming and supports the underlyingtechnical operation of the streaming service for China Unicom Tianjin. b. MobileVision will be making available the music video content from IMNTV on its WAP Portal pages and in links contained in its WAPpush messages through China Unicom Tianjin's networks. 2. Terms of Service a. The China Unicom Tianjin streaming media service is offered as a pilot commercial program without charge for the period of two to threemonths. IMNTV agrees to participate in this pilot program by providing the content to China Unicom Tianjin via MobileVision without charge during this period. b. Starting on October 1, 2005, China Unicom Tianjin intends to charge for the streaming service. The revenue sharing and payment termsbetween IMNTV and MobileVision takes effect starting on the same date of commercial service. 3. Pricing of Service a. TBD subject to Carrier's pricing policy and IMNTV acceptance of terms
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005 [/INST] ```json
{<answer_start>
"answer": "CONTENT LICENSE AGREEMENT"
<answer_end>
}
``` </s> | EXHIBIT 10.9 GLOBAL MUSIC INTERNATIONAL, INC. DBA IMNTV CONTENT LICENSE AGREEMENT
This Content License Agreement ("Agreement") is between Global Music International, Inc. d/b/a Independent Music Network (IMNTV), located at 20 Old Stagecoach Road, Redding, Connecticut, 06896 ("IMNTV"), and Distributor, as set forth below, and describes the terms and conditions under which Distributor will distribute Programming provided by IMNTV as described herein. Distributor's distribution of the Programming is subject to the Master Terms of Service ("MTS") attached hereto as Exhibit A. All capitalized terms shall have the meaning set forth on the MTS. In consideration for the mutual promises and covenants contained herein, the parties agree as follows:
Distributor's authorized signature, is REQUIRED:
A. Distributor Information N/A Provider Name: MobileVision Communications Ltd.
Address: 100 Ba Li Zhuang Xi Li, Suite 907, ZhuBang2000 Plaza, East Building, Beijing, China
COUNTRY PROVINCE: P.R.China
Web Site www.looklook.cn
Tax ID #: N/A
Business Contact: Name: MengDi Xu
Phone: +86 135 010 37211
Email: xumengdi@looklook.cn
Marketing Contact: Name: BaoQing (Angel) Song
Phone: +86 13911178981
Email: angelsong@looklook.cn
Technical Contact: Name: WeiLi Cheng
Phone: +86 13011813916
Email: chengwl@mobiledata.com.cn
Billing contact: Name: RuoXian Qi
Phone: +86 13161502302
Email: ruoxian@looklook.cn
Billing Address: (if different from above) Customer Service Contact: Name: Liang (Dean) Wang
Phone: +86 136 2131 5977
Email: deanwang@looklook.cn
Notice Contact: Name: RuoXian Qi
Phone: +86 13161502302
Email: ruoxian@looklook.cn
Notice Address: (if different from above)
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
B. Term
This Agreement is effective as of the last date signed below ("Effective Date"). The initial term of this Agreement will begin on the Effective Date and end twelve (12) months after the Launch (the "Term"). IMNTV will extend the Agreement on the same terms and conditions for additional one-year terms, providing Distributor and IMNTV agree, predicated on satisfactory performance by both parties IN WITNESS WHEREOF, the parties have executed this Agreement by their duly authorized representatives. DISTRIBUTOR
MOBILEVISION COMMUNICATIONS LTD. By: Name Andrew Zhang Title PRESIDENT Signature /s/ Andrew Zhang Date 13/07/05
GLOBAL MUSIC INTERNATIONAL, INC. D/B/A INDEPENDENT MUSIC NETWORK (IMNTV)
By: Name Corinne Fallacaro Title PRESIDENT Signature /s/ Corinne Fallacaro Date 13/07/05
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
EXHIBIT A
GLOBAL MUSIC INTERNATIONAL, INC. DBA IMNTV MASTER TERMS OF SERVICE
1. DEFINITIONS
The following capitalized terms will have the meanings set forth below: "Bundles" means, any version of the Mobile Product that includes IMNTV content bundled with any other product or service.
"Confidential Information" means the confidential or proprietary technical or business information of a party, including without limitation (a) proposals or research related to possible new products or services; (b) financial statements and other financial information; (c) reporting information; (d) the material terms of this Agreement and the relationship between the parties; and (e) planned launch dates. All of the information will be considered confidential only if it is conspicuously designated as "Confidential," or if provided orally, identified at the time of disclosure as confidential. "Confidential Information" does not include information that (i) is in or enters the public domain without breach of this Agreement, (ii) the receiving party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation, or (iii) the receiving party knew prior to receiving such information from the disclosing party or develops independently.
"Content" means generally text, images, video, audio, and other material.
"Fees" means Subscription Fees that include IMNTV content..
"Internet Protocol" means any protocol used to route data on the Internet, or on any portion of the Internet, including all versions currently in existence or developed or implemented in the future.
"Landing Page" means the destination web page for a Special Link, created and hosted by Distributor, from where individuals may begin the Registration Process for the Subscription Service or a Bundle, at such individual's election.
"Launch" means the date that the Programming is made generally available for purchase by consumers under the terms and conditions of the Agreement.
"Programming"means IMNTV's Content, as specifically described on Section B (1) of the Agreement. As used herein, "Programming" also includes any promotional and marketing Content provided by Provider for IMNTV's promotional and marketing activities as described herein.
"Programming Bundle Fee" means the fee actually paid by a Subscriber for a Programming Bundle that includes IMNTV content provided in accordance with this Agreement.
"Distributor Marks" means the trademarks, service marks, brands, logos and trade names of Distributor.
"Distributor Portal" means, collectively, the Distributor's Site and any other web site or property from where Distributor promotes the Programming.
"Distributor Site" means Distributor's Internet web site intended to promote the availability of any Distributor Content, including the Programming, via mobile and wireless networks. Distributor Site is more fully described in Section A of the Agreement.
"Subscription Fee" means the fee actually paid by a Subscriber for the applicable Mobile Content.
"Subscriber" means any individual who purchases mobile content programming and: (a) who actually pays the applicable Subscription Fee; and (b) does not receive a refund of such Subscription Fee for any reason within thirty (30) days from the end of the payment period for which the Subscription Fee was paid. A Subscriber remains a "Subscriber" for the purposes of this Agreement so long as such individual continues to pay the applicable Subscription Fee.
"Registration Process" means the download, payment, installation, and electronic registration process of the Programming, a Bundle or the applicable Software. "Registration Process" may include an online registration form
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
provided, hosted, and managed by Distributor, and may also, at Distributor's discretion, include other methods by which a Subscriber may affirmatively request access to the Programming, a Bundle, or the Software. "IMNTV Marks" means the trademarks, service marks, brands, logos and trade names of IMNTV and/or Global Music International.
"IMNTV Portal" means the IMNTV Sites where IMNTV promotes the Programming.
"IMNTV Sites" means the Internet web sites owned and operated by IMNTV.
"Special Link"means a formatted or "tagged" link that tracks traffic from the Distributor Portal to the Landing Page.
"Subscribers" means, collectively, end users who have completed the Registration Process for any of the Subscription Products described herein. "Subscribers" includes "Recurring Subscribers."
"Subscription Products" means, collectively Products and Bundles that include IMNTV content.
"IMNTV Mobile Product" means an IMNTV branded subscription product distributed to mobile and wireless devices, which includes services, products and Content from one or a variety of third parties, and includes any derivative, follow-on, repackaged, or substantially similar product offered by Distributor that includes IMNTV Programming.
"Bundle Fee" means the fee actually paid by a Subscriber for the Mobile Product Bundle that includes provider content provided in accordance with this Agreement.
"IMNTV Mobile Product Fee" means the fee actually paid by a Subscriber for the IMNTV Mobile Product.
"Recurring Subscriber" for the purpose of this Agreement so as long as such individual continues to pay the applicable Subscription Fee, so long as IMNTV actually receives such fee.
"Territory" means China. Other territories are subject to approval by IMNTV.
2. DISTRIBUTOR OBLIGATIONS.
2.1 Subscription Transactions. Distributor will provide the following services to market, launch and distribute the Programming using its existing infrastructure as follows:
(a) Fulfillment. Each individual who purchases a Subscription must complete the Registration Process, where such individual will be prompted to provide certain personally identifiable information including a valid major credit card (e.g. Visa, MasterCard, Discover, American Express) to receive the Programming. Support for additional payment methods and additional credit cards may be developed by Distributor, with IMNTV's prior written approval.
(b) Customer Support. Distributor will provide customer support in target Territory in a workmanlike and professional manner.
2.2 Distribution Channels. Distributor and IMNTV may create, sell and market Bundles that include the IMNTV Programming. Distributor may offer the Programming and any Bundles through all wireless distribution channels in target Territory. To enable all Subscribers to have access to the Programming, the Programming may be distributed in whole or in part via Internet Protocol in a manner that enables the Programming to be received and played back by mobile devices in the target Territory.
2.3 Hosting Services. Hosting of on-demand Programming will be provided at no cost to IMNTV in a format acceptable to local Territory wireless devices. Distributor will provide reports of aggregated Subscriber access and usage data concerning the Programming on a monthly basis, together with reports described in Section 6.5, below.
2.4 Promotion of Programming. Distributor may use the Programming and IMNTV's Marks to market, advertise and promote the Programming in the Mobile Software Application(s), the Distributor's Portal, and in other on and off-line marketing efforts as follows: (a) promoting the Programming in directories, listings, and keyword searches; (b) deep linking to the Programming; (c) featuring Programming in various areas within the Distributor's Software and Distributor's Portal, (d) communicating to users via Distributor's consumer marketing channels such as on-line messages, member newsletters or email campaigns; (e) featuring excerpts, screenshots of Programming in marketing collateral and advertisements; (f) featuring the Programming in product demonstrations relating to Distributor's
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
software or subscription products at trade shows and conferences; (g) creating collateral for joint promotional efforts between Distributor and third parties; (h) promoting the Programming in television, radio and print media. IMNTV may use Distributor's logos and marks in the marketing of the Product, subject to pre- approved trademark usage policy and Brand Standards to be provided by Distributor to IMNTV.
2.5 Distributor Support and Operational Responsibilities. Distributor will provide all "middleware" programming to facilitate connection of the content delivery platform to local Territory wireless networks. Distributor will perform localization of any software components to make the program possible to use in the local Territory. This is to include language translations or interface design changes. Provider will act as liaison with local Territory wireless carriers. This will include content review to insure content meets local broadcast standards and meets any local regulatory requirements. Distributor also agrees to secure necessary governmental approvals or permits necessary to operate in the Territory and to secure permission to enable distribution of IMNTV's share of Subscription Fees to IMNTV in the United States. Distributor is solely responsible for monitoring, performance and ensuring the availability of the Programming and will notify IMNTV immediately of planned and unplanned Programming delays or outages.
2.6 Privacy. Distributor is responsible for complying with all applicable laws, rules and regulations relating to its collection and use of personal information from users of the Distributor Portal. At a minimum, Distributor must adopt, implement and comply with a Privacy Policy that: (a) is easy to find, read and understand; (b) is prominently posted at the time that any personally identifiable information is collected or requested; and (c) clearly states what information is being collected, what the information will be used for, whether such information will be provided to third parties, and the choices available regarding collection, use and distribution of the collected information.
3. IMNTV OBLIGATIONS.
3.1 Grant of License. During the Term, for the activities described in this Agreement, IMNTV hereby grants Distributor non-exclusive rights and licenses necessary within the Territory to: (a) copy, store digitally, host and stream the Programming; (b) publicly perform, publicly display, electronically transmit, distribute and broadcast the Programming; (c) promote the Programming and use IMNTV Marks for Distributor's promotion of the Programming as activities described in Section 2.4 above; (d) archive the Programming on Distributor's servers; (e) encode, copy, and create continuous Programming excerpts of up to sixty (60) seconds and transmit, publicly perform, distribute, and redistribute such excerpts to end users via the Distributor's Portal for marketing purposes only(f) deep link to the Programming.
3.2 Right of distribution N/A 3.3 Removed N/A 3.4 Programming Obligations. IMNTV will create and maintain it's programming content and will deliver same to Distributor in a format suitable for the distribution over wireless networks in Distributor's Territory on a regular basis.
3.5 Logo Trademarks. Distributor may use IMNTV logos and marks in the marketing of the Product, subject to pre-approved trademark usage policy and Brand Standards.
3.6 Dedicated Personnel. Throughout the Term, IMNTV shall designate at least one (1) staff member to provide Distributor with all reasonably necessary assistance, information and support relating to its obligations herein including, but not limited to, updating and maintaining the Programming.
3.7 Responsibility for Programming. Except as expressly set forth herein, IMNTV is solely responsible for all costs, activities, obligations and liabilities associated with: (a) obtaining all rights and licenses necessary for the authorized use and distribution of the IMNTV Programming as described herein including, but not limited to, all copyright, trademark rights, rights of publicity and rights of privacy, and any broadcast, rebroadcast, or retransmission rights or permissions; and (b) obtaining all necessary permissions and/or release documentation from all persons associated with the distribution of the Programming as described herein, including, without limitation, all performers.
4. ADVERTISING The IMNTV Programming will not contain any advertising, either integrated or before or after each clip, except IMNTV I'Ds and IMNTV commercials for solicitation of Chinese music videos,without the prior written approval of both parties.
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
5. OWNERSHIP.
5.1 By IMNTV. As between Distributor and IMNTV, IMNTV owns or has the necessary licenses to all copyright, trademark, patent and other intellectual property rights in and to, and all other right, title and interest in and to the Programming, the Trademarks and the IMNTV Portal. Except as expressly provided herein, IMNTV retains the right to distribute the Programming in any medium now known or hereafter developed. As between IMNTV and Distributor (excluding the Programming and other Provider intellectual property), IMNTV owns all copyright, trademark, patent and other intellectual property rights therein, and all other right, title and interest in and to or associated with the Subscription Products, the IMNTV Sites, the IMNTV Marks, and the System and Subscriber data.
5.3 Trademarks. Each party: (a) will not create a unitary composite mark involving a trademark of the other party without the prior written approval of such other party; (b) will display symbols and notices clearly and sufficiently indicating the trademark status and ownership of the other party's trademarks in accordance with applicable trademark law and practice; (c) acknowledges that its utilization of the other party's trademarks will not create in it, nor will it represent it has, any right, title or interest in or to such trademarks other than the licenses expressly granted herein; (d) agrees not to do anything contesting or impairing the trademark rights of the other party; (e) agrees to promptly notify the other party of any unauthorized use of the other party's trademarks of which it has actual knowledge; and (f) will have the sole right and discretion to bring proceedings alleging infringement of its trademarks or unfair competition related thereto; provided, however, that each party agrees to provide the other party, at such other party's expense, with its reasonable cooperation and assistance with respect to any such infringement proceedings
6. FEES AND ROYALTIES
6.1 Mobile Product Payments. Subscription fee in Territory is to be determined based on market research performed by Distributor with pricing to be agreed upon jointly and in writing Each quarter, Distributor will make royalty payments to IMNTV based on a Structure as follows:
55% of subscriber revenue for the subscription based services broadcasting IMNTV content only, net of telecom percentage provided in accordance with this Agreement. ("Programming Payments"), subject to the following: The parties acknowledge that some mobile carriers may bill end users for a full month in a single billing, and that others may bill for partial months or pro-rate the billing of Recurring Subscribers. For each full month of Fees received from a Recurring Subscriber, Distributor will pay IMNTV based on the Rate Structure (the "Full Month Payment"). To the extent that Distributor receives a partial month's Fee or pro-rated Fee from a Recurring Subscriber as a result of a carrier's billing practices, Distributor will pay IMNTV a proportionate or pro-rated portion of such Full Month Payment based on the amount received by Distributor.
6.2 Payments. All payments hereunder shall be payable to IMNTV in United States Dollars on a quarterly basis upon receipt from the wireless carriers in the Territory, except as follows:
(a) First Payment. The first payment to IMNTV will be payable upon receipt at the end of the first calendar quarter after Launch, and will include any amounts due, pro-rated based on the number of days in such period of time; and
(b) Last Payment. The last payment to IMNTV will be payable upon receipt at the end of the first full month after the termination or expiration of this Agreement, and will include any amounts due: for the last month that the Programming is available, prorated based on the number of days in such final period.
(c) Other Exceptions. All payments hereunder are exclusive of: (i) any trial or promotional periods during which a Subscriber receives access to the Programming before such Subscriber's credit card is charged; and (ii) refunds, charge backs and fees attributable to contested credit card transactions
(d) Summary of Timing. The parties acknowledge the following that establishes timing of payments: (1) Distributor receives a carrier statement saying how much Distributor will be paid; (2) 30-45 days later the Carrier pays Distributor; (3) when Distributor is paid by a carrier, Distributor makes royalty payments to IMNTV.
(e) Exchange Rate. Payments to IMNTV will be converted from local currency to US Dollars at the official exchange rate posted on the day payments are made to IMNTV via wire transfer provided that currency exchange is approved by the relevant Chinese currency exchange administrative agency.
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
6.3 Provider Payment Location. Distributor will remit such payments a bank account specifically named by IMNTV..
6.4 Taxes. Distributor will collect and remit to the appropriate taxing authority, or require Subscribers to pay, any sales, use or similar taxes applicable to any retail sale or distribution of the Programming. Except for the foregoing, each party is solely and separately responsible for its own taxes, user fees, or similar levies.
6.5 Reporting. Distributor will provide IMNTV with a quarterly report or monthly report if available, summarizing the data relevant to the payment obligations herein within five (5) business days from the end of the calendar quarter. The reports will contain sufficient information to permit Provider to verify payments hereunder.
7. TERMINATION
7.1 General Termination Rights. Either party may terminate the Agreement at any time in the event of a material breach by the other party that remains uncured after thirty (30) days written notice of the breach.
7.2 Termination for Programming Deficiency. Distributor reserves the right to issue a warning immediately to Subscribers, to temporarily or indefinitely suspend the availability of the Programming, or to terminate this Agreement (the "Remedies") if IMNTV breaches this Agreement. In the event that Distributor exercises any of its rights set forth in this Section 7.2, Distributor will notify IMNTV of the Programming Deficiency, Distributor's elected Remedy, and the available cure options, and will provide IMNTV with a reasonable period of time in which IMNTV may cure the Programming Deficiency (the "Cure Period"). During the Cure Period, if commercially reasonable, the Distributor may help IMNTV cure the Programming Deficiency, but is under no affirmative obligation to do so. If IMNTV fails to cure the Programming Deficiency within the Cure Period, Distributor may terminate this Agreement immediately upon written notice. In the event of a suspension or termination under this Section 7.2, Distributor will notify Subscribers that the Programming is no longer available. Distributor will be solely liable for any refunds pertaining to the Programming that are issued to Subscribers as a result of termination under this Section 7.2.
7.3 Termination for Bankruptcy/Insolvency. Either party may terminate this Agreement immediately following written notice to the other party if the other party: (a) ceases to do business in the normal course; (b) becomes or is declared insolvent or bankrupt; (c) is the subject of any proceeding related to its liquidation or insolvency (whether voluntary or involuntary) which is not dismissed within ninety (90) calendar days; or (d) makes an assignment for the benefit of creditors.
7.4 Effect of Termination. Except as set forth in Section 7.3 above, upon termination or expiration of this Agreement: (a) the licenses granted to Distributor will immediately terminate; and (b) all fees due to IMNTV will be paid to IMNTV pursuant to Section 6.3 of this Agreement. In the event that Distributor terminates this Agreement pursuant to either Section 7.2 or 7.3 above, Distributor will notify Subscribers that the Programming is no longer available. Sections 5, 6.3, 6.6, 7.2, 7.4, 8, and 9 of this MTS will survive the expiration or termination of the Agreement for any reason.
8. WARRANTIES AND INDEMNIFICATION
8.1 Provider Warranty and Indemnification. IMNTV represents and warrants to Distributor that: (i) IMNTV is an entity duly organized and validly existing under the laws of its state of organization; (ii) IMNTV has the power and authority to enter into this Agreement and to perform fully its obligations under this Agreement; (iii) IMNTV is under no contractual or other legal obligation which could reasonably be expected to interfere in any way with its prompt and complete performance under this Agreement; and (iv) the person executing this Agreement on behalf of IMNTV has been duly authorized to do so and such execution is binding upon IMNTV.
IMNTV will defend, indemnify, and hold Distributor harmless from and against any and all liabilities, claims, losses, costs, damages and expenses (including reasonable attorneys' fees and court costs) (collectively, "Claims") relating to or arising out of: (a) IMNTV's breach of this Agreement; (b) the Content of the Programming (e.g., if such Claim alleges copyright or trademark infringement or infringement of any other proprietary right) as furnished by IMNTV under this Agreement (excluding any Claim to the extent based on any alteration of or insertion in any IMNTV content by Distributor that is not specifically authorized by IMNTV in writing), IMNTV Marks or IMNTV Site; (c) any IMNTV online subscription service, the Programming with the Mobile Subscription Products, or IMNTV's acts or omissions with
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
respect thereto (including the marketing of the foregoing by IMNTV and excluding any Claim to the extent based on any alteration of or insertion in any Programming by Distributor); (d) violation by IMNTV of any contractual obligation, including payments or royalties, that IMNTV has to any third party; (e) a claim that the Programming as provided by IMNTV does not comply with any federal, state and local laws and regulations that are applicable to Distributor's transmission or use of Programming as permitted this Agreement; or (f) IMNTV not having obtained all necessary consents, licenses, permissions and releases necessary to grant Distributor the rights IMNTV grants to Distributor hereunder.
8.2 Distributor Warranty and Indemnification. Distributor represents and warrants to IMNTV that: (i) Distributor is an entity duly organized and validly existing under the laws of its country of organization; (ii) Distributor has the power and authority to enter into this Agreement and to perform fully its obligations under this Agreement; (iii) Distributor is under no contractual or other legal obligation which could reasonably be expected to interfere in any way with its prompt and complete performance under this Agreement; and (iv) the person executing this Agreement on behalf of Distributor has been duly authorized to do so and such execution is binding upon Distributor. Distributor will defend, indemnify, and hold IMNTV harmless from and against any and all Claims relating to or arising out of: (a) the marketing by Distributor of the Programming (excluding Claims to the extent based on Programming or other content provided by or approved by IMNTV), or any Subscription Product which includes any Programming, (b) any Claim by any Subscriber concerning Distributor's operation and maintenance of the Subscription Products (except for content Claims described in Section 9.1, Claims concerning the transmission of Subscriber Information to IMNTV, or the use of Subscriber Information by IMNTV or by any third party to whom IMNTV has disclosed such information); (c) Distributor's alternation of, or insertion of material (including commercial advertisements) in, any Programming, except as explicitly authorized in each case in writing by IMNTV; and (d) any infringement of the Subscription Products on the rights of others (excluding any Claim to the extend based on any Programming).
8.3 Conditions of Indemnification. A party's obligation to indemnify the other party is expressly conditioned on the indemnified party: (a) giving written notice of the claim promptly to the indemnifying party; (b) giving the indemnifying party control of the defense and settlement of the claim utilizing, if necessary, legal counsel to be selected by the indemnifying party upon reasonable approval of the other party; (c) providing to the indemnifying party all available information and assistance (at the indemnifying party's expense); and (d) not compromising or settling such claim, without the other party's prior written consent which may not be unreasonably withheld.
8.4 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH HEREIN, NEITHER PARTY MAKES ANY WARRANTIES OR REPRESENTATIONS RELATING TO THE SUBSCRIPTION PRODUCTS, OR THE LIKELIHOOD OF SUCCESS OF THE PROGRAMMING, THE MOBILE NTENT PRODUCT, OR ANY BUNDLE. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IMNTV FURTHER DISCLAIMS ALL WARRANTIES IN THE SUBSCRIPTION PRODUCTS, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT.
8.5 Limitation of Liability. NO PARTY WILL BE LIABLE TO THE OTHER PARTY IN TORT, CONTRACT OR UNDER ANY OTHER LEGAL THEORY FOR ANY CONSEQUENTIAL, INDIRECT, INCIDENTAL, PUNITIVE OR SPECIAL LOSS OR DAMAGES ARISING OUT OF THIS AGREEMENT, EVEN IF APPRISED OF THE LIKELIHOOD OF SUCH DAMAGES OCCURRING. IN NO EVENT WILL IMNTV'S LIABILITY TO DISTRIBUTOR UNDER THIS AGREEMENT EXCEED THE AMOUNT ACTUALLY DUE TO IMNTV HEREIN.
9. GENERAL
9.1 Notices and Contact Information. All notices and demands under this Agreement will be in writing and will be delivered by personal service, express courier, or United States mail, to the following addresses: If to IMNTV: Independent Music Network 20 Old Stagecoach Road Redding, CT 06896 USA Attention: General Counsel If to Provider: To the Notice Contact as set forth in Section A of the Agreement.
Either party may change the addresses set forth above by written notice to the other party. Notice will be effective on receipt. Any notice or report delivered in accordance with this Section will be deemed given on the date actually
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
delivered; provided that any notice or report deemed given or due on a Saturday, Sunday or legal holiday will be deemed given or due on the next business day. If any notice or report is delivered to any party in a manner which does not comply with this Section 9.1, such notice or report will be deemed delivered on the date, if any, such notice or report is actually received by the other party. 9.2 Non-Assignment. This Agreement is binding upon each party's assigns, transferees and successors; provided that no party may assign or otherwise transfer, by operation of law or otherwise, this Agreement in whole or in part, without the other party's prior written consent. Notwithstanding the prior sentence, either party may assign this Agreement in its entirety without the other party's consent to any of the following: (i) the assignor's successor in a consolidation or merger, (ii) the assignor's successor in an acquisition of all or substantially all of the assets, equity or beneficial interests of the assignor, (iii) an entity under common control with, controlled by or in control of the assignor, or (iv) a lender, as an assignment of collateral to secure credit extended to the assignor. The assignor will give the other party written notice within thirty (30) days of any assignment described in the immediately preceding sentence.
9.3 Confidentiality. The parties acknowledge that Confidential Information is valuable and unique and that disclosure in breach of this confidentiality provision will result in irreparable injury to its owner. From the Effective Date and for a period of two (2) years from the date of termination or expiration of this Agreement, neither party will use, disclose, or permit any person to obtain any Confidential Information of the other party. If either party receives a request from any third party for the Confidential Information of the other party, or if such party is directed to disclose any portion of any Confidential Information of the other party by operation of law or in connection with a judicial or governmental proceeding or arbitration, it will immediately notify the other party and will assist the other party in seeking a suitable protective order or assurance of confidential treatment to preserve the confidentiality of any such Confidential Information. If either party breaches or threatens to breach the terms of this confidentiality provision, the non-breaching party will be entitled to an injunction prohibiting any such breach. Any such relief will be in addition to and not in lieu of any appropriate relief in the way of money damages.
9.4 Press Releases and Public Statements. Neither party will issue any press releases or make public statements relating to this Agreement or the relationship between the parties without the other party's review of and written consent to such press release or public statement.
9.5 Force Majeure. No party shall be deemed in default hereunder for any cessation, interruption or delay in the performance of its obligations due to causes beyond its reasonable control, including but not limited to: earthquake, flood, or other natural disaster, act of God, labor controversy, civil disturbance, war (whether or not officially declared) or the inability to obtain sufficient supplies, transportation, or other essential commodity or service required in the conduct of its business, or any change in or the adoption of any law, regulation, judgment or decree (each a "Force Majeure Event"). Each party shall have the right to terminate this Agreement immediately upon written notice if any Force Majeure Event of another party continues for more than ten (10) days.
9.6 Miscellaneous. This Agreement and Exhibits A, B, and C constitute the final agreement between the parties with regard to the subject matter herein, and supersedes and cancels all prior negotiations, understandings, correspondence and agreements, oral and written, express or implied, between the parties with regard to the subject matter herein. No waiver, amendment or modification of any provision of this Agreement will be effective unless it is in a document that expressly refers to this Agreement and is signed by both parties. Failure or delay by either party in exercising any rights or remedy under this Agreement will not operate as a waiver of any such right or remedy. The parties are independent contractors. Neither party will be deemed to be an employee, agent, partner or legal representative of the other for any purpose and neither will have any right, power or authority to create any obligation or responsibility on behalf of the other. This Agreement will be governed by the laws of the State of Florida without regard to conflicts of law provisions.
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
EXHIBIT B 1. TECHNICAL REQUIREMENTS. IMNTV will comply with the following technical requirements, as applicable:
On Demand. Provider will provide all on-demand media files encoded in the Format appropriate for each stream type (e.g., audio, video, animation and other media file types as they become supported and as IMNTV may then elect to provide) to the Distributor via the File Transfer Protocol (FTP).
2. LIVE/STREAMING PROGRAMMING (AS APPLICABLE)
2.1 Preparing Content. IMNTV will provide Distributor with the URL for each live or simulated live stream remotely encoded by IMNTV using the conventions established by both parties.
2.2 Feed Delivery. At IMNTV's election, IMNTV will deliver live feeds to the Distributor via methods other than FTP over the Internet, including delivery of physical media.
(a) General. IMNTV shall take the appropriate measures to ensure that all live or simulated live feeds will be delivered continuously to the Distributor 24 hours/day, 7 days/week, except for scheduled maintenance. If any feed is provided to Distributor using transmission methods that are proprietary or uncommon, Provider agrees to provide -at no cost -- the receiver equipment to Distributor and to allow adequate time for setup and testing of equipment prior to delivery of live content.
(b) Encoding. IMNTV will encode feeds to be delivered to Distributor.
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
EXHIBIT C
Programming Technical Specifications
1. REPRESENTATION OF PROGRAMMING
1.1 Programming Presentation. The following are requirements for all Programming:
(a) Each individual item of Programming will be identified with a Programming identification code ("Programming ID")
(b) Clicking on any Programming will instigate an "Optimized" presentation as follows:
(i) When a Subscriber selects the Programming, the default start-up audio/video sequence for the presentation will start playing in the playback window of the Mobile Platform Software ("Playback Window").
2. POLICIES FOR ADVERTISING AND PROMOTION WITHIN SOFTWARE
2.1 The Programming will have a IMNTV Identification ("IMNTV ID"), which is similar to on-air network id, which is played each time the Programming is launched. Distributor may utilize the IMNTV ID in the Distributor's Portal for promotional purposes.
(a) The IMNTV ID will be no longer than two (2) to five (5) seconds in length, and may be audio and Real Flash visual media clip.
(b) All IMNTV Ids will be hosted and served by Distributor.
(c) If Programming is currently playing, the IMNTV Id cannot interrupt the stream
(d) If any advertisement other than a streaming advertisement is scheduled, the IMNTV ID must precede it.
3. PROGRAMMING DESIGN GUIDELINES
3.1 The initial opening of IMNTV ID should be authored to the following standards:
(a) For a 120 W x 96H video space (without scroll bars) subject to review with Distributor to determine suitability for Distributor's territory.
3.2 Design Restrictions. The following requirements serve to ensure a consistent Subscriber experience across all Programming.
(a) Distributor will provide IMNTV with page size and load time goals for the Programming.
(b) Bullet points describing the Programming
(c) Descriptions of the Programming that correspond with each bullet point and elaborate more on the bullet point
(d) Link to the Provider's Privacy Policy
(e) Link to the Provider's Terms of Use
(f) Information for Customer Service and/or Technical Support to use while servicing Subscribers
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005
EXHIBIT D
Distribution of the Provider's Content through China Unicom Tianjin Branch
1. Service Offering a. MobileVision is an authorized and fully licensed Service Provider (SP) partner who provides the programming and supports the underlyingtechnical operation of the streaming service for China Unicom Tianjin. b. MobileVision will be making available the music video content from IMNTV on its WAP Portal pages and in links contained in its WAPpush messages through China Unicom Tianjin's networks. 2. Terms of Service a. The China Unicom Tianjin streaming media service is offered as a pilot commercial program without charge for the period of two to threemonths. IMNTV agrees to participate in this pilot program by providing the content to China Unicom Tianjin via MobileVision without charge during this period. b. Starting on October 1, 2005, China Unicom Tianjin intends to charge for the streaming service. The revenue sharing and payment termsbetween IMNTV and MobileVision takes effect starting on the same date of commercial service. 3. Pricing of Service a. TBD subject to Carrier's pricing policy and IMNTV acceptance of terms
Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005 | Highlight the parts (if any) of this contract related to "Document Name" that should be reviewed by a lawyer. Details: The name of the contract | {
"answer_start": [
60
],
"text": [
"CONTENT LICENSE AGREEMENT"
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Anti-Assignment" that should be reviewed by a lawyer. Details: Is consent or notice required of a party if the contract is assigned to a third party?
Context: Exhibit 10.1
Execution Copy
SPONSORSHIP AGREEMENT
dated January 29, 2007
between
FIRST DATA MERCHANT SERVICES CORPORATION,
WELLS FARGO BANK, N.A.
and
iPAYMENT, INC.
SPONSORSHIP AGREEMENT
This Sponsorship Agreement (this "Agreement") dated as of January 29, 2007 (the "Effective Date") is by and between iPayment, Inc. ("ISO"), First Data Merchant Services Corporation ("FDMS"), and Wells Fargo Bank, N.A. ("Bank"). Under this Agreement, FDMS and Bank will collectively be referred to as "SERVICERS."
RECITALS
A. Bank is a Member of Visa and MasterCard, and, as such, is authorized to sign agreements enabling Merchants to accept Visa and MasterCard Bank Cards from their customers in accordance with the terms and conditions of their respective Rules and regulations.
B. ISO is a registered "independent sales organization" with Visa and a registered "member service provider" with MasterCard and is in the business of developing and marketing Merchant Bank Card programs, originating Merchant relationships, and providing Merchant Bank Card management services.
C. In conjunction with the processing services rendered to ISO by FDMS pursuant to the Service Agreement dated as of July 1, 2002 by and between ISO and FDMS, as amended (the "Service Agreement"), ISO and SERVICERS desire to establish the sponsorship of a Merchant processing Program on the terms and conditions set forth in this Agreement.
D. ISO, as assignee of Transaction Solutions, LLC, and Concord Transaction Services, LLC, successor in interest to EFS National Bank and an Affiliate of FDMS, are parties to that certain ISO Services and Marketing Agreement dated as of April 17, 2002, as amended (the "TS ISO Agreement"). The parties now desire to terminate the TS ISO Agreement and to incorporate the services provided thereunder into this Agreement and the Service Agreement.
E. ISO, as assignee of Petroleum Card Services, Inc., and CTS Holdings, LLC successor in interest to Concord Payment Systems, Inc. and National Payment Systems, Inc. and an Affiliate of FDMS, are parties to that certain Processing Service Agreement dated as of April 16, 2001, as amended (the "PCS ISO Agreement"). The parties now desire to terminate the PCS ISO Agreement and to incorporate the services provided thereunder into this Agreement and the Service Agreement.
F. Bank is the acquiring bank for the transactions processed under the TS ISO Agreement and the PCS ISO Agreement.
AGREEMENT
In consideration of the foregoing and the covenants and conditions contained herein, the parties agree as follows:
Page 1
SECTION 1 DEFINITIONS
As used in this Agreement (including the recitals set forth above), the following terms shall have the meanings set forth below (each of which includes the singular and the plural):
"ACH" shall mean the electronic transfer of funds through an automated clearing house system.
"Affiliate" shall mean any entity that directly or indirectly controls, is controlled by or is under common control with a party.
"Applicant" shall mean a Merchant who submits an Application.
"Application" shall mean the Merchant application used by ISO, as provided by and/or approved by SERVICERS and ISO, and other existing Merchant applications assigned to Bank as part of the initial BIN/ICA transfer.
"Application Materials" shall mean the Application and all other materials developed to facilitate the execution of Merchant Processing Agreements, as approved by SERVICERS and ISO. ISO shall cease its use of any Application Materials that become unacceptable to SERVICERS within ninety (90) days of receipt of written notice from SERVICERS or such shorter period of time as may be required to comply with the Rules or to prevent a loss to SERVICERS.
"Approved Merchant" means any Merchant that:
(a) Is solicited by ISO (or ISO's Other MSP's or IC's) for participation in the Program;
(b) Meets the established criteria for participation in the Program, including the Merchant Processing Policy; and
(c) Enters into a Merchant Processing Agreement.
Approved Merchants may also include Merchants converted to the Program as part of the initial BIN/ICA transfer and/or subsequently acquired Merchants that meet the established criteria for participation in the Program, including the Merchant Processing Policy, and whose sponsorship is assigned to Bank.
"Bank Card" shall mean a credit card or debit card issued by a member of MasterCard, Visa or any other association or card issuing organization (including Debit Networks) and bearing its respective trade names, trademarks, and/or trade symbols.
"Business Day" shall mean any day on which Bank is open for business, other than Saturdays, Sundays, or state or federal holidays.
Page 2
"Change of Control" means a change in the power to direct the management or affairs of ISO or the beneficial ownership of more than 51% of the equity securities; provided, however, that becoming a public company with the same management team or changing the beneficial ownership of more than 51% of the equity securities while maintaining the same management team will not constitute a change in control.
"Confidential Information" shall mean non-public information about, and proprietary materials of, any party as defined and more fully described in Section 9.1.
"Deconversion" shall mean the activities performed by SERVICERS at the request of ISO to effect a Program Transfer, which activities and associated fees/costs will be set forth in a written plan developed before any such activities are begun and in good faith by ISO and SERVICERS that is designed to complete the Program Transfer within 6 months, at SERVICERS' then-current fees/costs. If ISO requests no services from SERVICERS in connection with the deconversion, then there will be no fees/costs to ISO other than any pass-through Bank Card association fees, if any.
"Effective Date" is defined in the first paragraph of this Agreement.
"Eligible Merchant" shall mean a Merchant that meets the Merchant Processing Policy and is solicited for the Program by ISO or ISO's Other MSP's or IC's.
"FFB" means FDMS's Affiliate, First Financial FFB, an industrial bank formed under the laws of the State of Colorado.
"IC" shall have the meaning provided in Section 2.4.
"Including" whether capitalized or not, means "including but not limited to."
"Intellectual Property" shall mean copyrights, Marks, trade secrets, patents or other proprietary rights of a party.
"ISO" includes ISO's wholly-owned subsidiaries that are either independently registered with Visa and MasterCard or solicit Merchants under the ISO's registration, and also includes, when the context so requires, ISO's Other MSP's and IC's.
"Losses" shall mean any losses, damages, liabilities, judgments, orders of restitution, and penalties (including civil monetary penalties and Visa and MasterCard fines and penalties).
"Marks" shall mean the trademarks or service marks of a party.
"MasterCard" shall mean MasterCard International, Incorporated.
Page 3
"Material" when used with reference to information, a fact or circumstance, a course of action, a decision-making process or other matter, shall be limited to information, facts and circumstances, courses of action, decision-making processes or other matters as to which there is a substantial likelihood that a reasonable person would attach importance.
"Member" shall mean an acquiring member of Visa and MasterCard.
"Merchant" shall mean an individual or entity that engages in, or desires to engage in, Bank Card transactions with its customers.
"Merchant Account" shall mean the account relationship established between ISO, Bank and an Approved Merchant pursuant to a Merchant Processing Agreement.
"Merchant Discount Amount" shall mean the portion of the face amount of Bank Card transactions submitted by Approved Merchants and processed through the Program that is paid to SERVICERS. Further, this portion shall be determined by application of the Merchant Discount Rate that is reflected in each Merchant Processing Agreement.
"Merchant Discount Rate" shall mean a percentage rate to be applied to determine the portion of the face amount of a Bank Card transaction that will be charged to the originating Merchant, which rate shall be reflected in each Merchant Processing Agreement and subject to change from time to time pursuant to the terms of the Merchant Processing Agreement.
"Merchant Portfolio" shall mean the group of Approved Merchants participating in the Program pursuant to this Agreement.
"Merchant Processing Policy" shall mean the merchant policy, guidelines and standards established by SERVICERS under which SERVICERS will enter into a Merchant Processing Agreement with a Merchant as it may be modified by SERVICERS in their discretion from time to time during the term of this Agreement. Attached as Exhibit B is a list of certain categories of Merchants who are always unacceptable under the Merchant Processing Policy, along with a summary of other policy guidelines and standards.
"Merchant Processing Agreement" shall mean a written agreement among ISO, Bank and an Approved Merchant that governs the Approved Merchant's participation in the Program, as provided by and/or approved by SERVICERS and ISO. ISO shall cease its use of any form of Merchant Processing Agreement that becomes unacceptable to SERVICERS within ninety (90) days of receipt of written notice from SERVICERS or such shorter period of time as may be required to comply with the Rules or to prevent a loss to SERVICERS. For the avoidance of doubt, ISO shall be responsible for effecting any necessary and appropriate amendments to the Merchant Processing Agreement that may become necessary as a result of subsequent amendments to the Rules or SERVICERS' requirements. In the event a Merchant refuses to consent to any such amendment during the applicable ninety (90) day period, ISO will notify SERVICERS,
Page 4
and Bank or FFB will have the right to terminate its sponsorship of such Merchant and the applicable Merchant Processing Agreement.
"Merchant Reserve Account" shall mean one or more accounts maintained by SERVICERS as security against Merchant liabilities to ISO or SERVICERS.
"Minimum Balance" shall have the meaning provided in Section 6.1(a).
"Net Program Participation Fees" shall mean, at any point in time, all Program Participation Fees minus the sum of:
(a) All compensation and other amounts (including unreimbursed chargebacks and payments to the Reserve Account) due SERVICERS;
(b) [***]
(c) Pass-Through Costs and Interchange.
"Offset Account" shall mean an account at Bank that is established and maintained by FDMS to allow SERVICERS to credit and debit funds as provided in Section 6.
"Other MSP" shall have the meaning provided in Section 2.4.
"Pass-Through Costs and Interchange" shall mean the amounts charged by MasterCard, Visa, and other networks or Bank Card associations (including interchange fees, dues and assessments) in connection with the Approved Merchant transactions, the liability for which shall be the sole responsibility of ISO except as otherwise described herein.
"Payment Date" means: (i) for Merchant Accounts originally covered by the TS ISO Agreement and the PCS ISO Agreement, the [***] day (or first Business Day thereafter if such day is not a Business Day) of each calendar month during the term of this Agreement; and (ii) for all other Merchant Accounts on the FDMS "Omaha" platform covered by this Agreement, the first Business Day after the day the funds are available and in Bank's settlement account, but in no event later than [***] [***] days after the end of each month.
"Processing Year 1" means the period commencing on the Effective Date and ending on June 30, 2007.
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 5
"Processing Year" means each twelve (12) calendar month period commencing on the first day of July and ending on the last day of the following June, except for Processing Year 1 which is specifically defined.
"Program" shall mean ISO's sales and marketing activities on behalf of itself and SERVICERS, the processing of Merchant Applications, and the provision of Bank Card transaction processing services to Approved Merchants under the terms of their Merchant Processing Agreements.
"Program Participation Fees" shall mean all fees owed by Merchants to Bank and ISO under the applicable Merchant Processing Agreements, including the Merchant Discount Amounts or transaction fees, which amounts shall be recommended by ISO, but in all cases will be subject to final approval by Bank, which approval shall not be unreasonably withheld or delayed.
"Program Standards" means the policies and procedures established by SERVICERS to be used by ISO in connection with the solicitation of prospective Merchants and other policies, procedures, fines and penalties established by SERVICERS that are designed to promote the financial safety or soundness of the Program. The Program Standards may be modified by SERVICERS from time to time in their sole discretion; provided, however, that SERVICERS will discuss in good faith any concerns that ISO may have that any such change will adversely affect ISO's ability to add Approved Merchants to the Program. The current form of the Program Standards are attached hereto as Exhibit D.
"Program Transfer" shall mean Bank's transfer and assignment of the Merchant Portfolio and the dedicated BINs/ICAs, including Bank's interest in all Merchant Processing Agreements, to a third party designated by ISO in accordance with Section 10.4.
"Promotional Materials" shall mean all written solicitations and advertisements and other communications (including telemarketing scripts) used to market, promote, and solicit the establishment of Merchant Processing Agreements with Merchants.
"PS ISO Agreement" is defined in Recital E of this Agreement.
"Reserve Account" shall mean the account at Bank that is to be established by ISO and fully controlled by SERVICERS as described in Section 8.1 to insure payment of chargebacks, fees and other amounts due to SERVICERS.
"Residual Account" shall mean an account established and maintained by (and in the name of) ISO to allow Bank to credit funds as provided in Section 6.
"Rules" shall mean the by-laws, regulations and/or requirements that are promulgated by Visa, MasterCard, Debit Networks and/or other Bank Card associations.
Page 6
"Service Agreement" is defined in Recital C of this Agreement.
"Termination Reserve Account" shall mean a reserve account to be established upon notice of termination of this Agreement to insure the payment of chargebacks and credit/fraud losses related to transactions with an acquirer's processing date on or before the effective date of termination of this Agreement, fees and other amounts which may become due to SERVICERS following termination of this Agreement.
"TS ISO Agreement" is defined in Recital D of this Agreement.
"Visa" shall mean VISA USA Incorporated.
SECTION 2 PROGRAM SERVICES
2.1 SERVICERS' Services/Pricing.
(a) SERVICERS shall provide the services specified in this Agreement and the exhibits and shall be compensated therefor as set forth in the Service Agreement and in Exhibit A hereto. Any and all processing and related services rendered by SERVICERS to an Approved Merchant in the Merchant Portfolio covered by this Agreement (including without limitation Merchants initially processed under the TS ISO Agreement and the PCS ISO Agreement) will be rendered pursuant to and billed at the rates set forth in the Service Agreement. Any and all sponsorship, clearing and related services rendered by SERVICERS in connection with an Approved Merchant in the Merchant Portfolio covered by this Agreement (including without limitation Merchants initially processed under the TS ISO Agreement and the PCS ISO Agreement) will be rendered pursuant to and billed at the rates set forth in this Agreement. Any Approved Merchant added to the Merchant Portfolio and Program covered by this Agreement will be subject to all terms and conditions of this Agreement.
(b) Any service described in this Agreement is subject to periodic revision by SERVICERS to reflect changes (i) to the SERVICERS' systems or the services provided by SERVICERS and offered generally to SERVICERS' customers and (ii) in the specific services provided to ISO; provided, however, that SERVICERS will not implement any changes or improvements to the services if such action will materially degrade the quality of the services being provided to ISO by SERVICERS hereunder unless such change is required by the VISA or MasterCard rules and regulations.
(c) SERVICERS may from time to time pass through to ISO actual increases in the Pass-Through Costs and Interchange, to reflect any increases in such fees, costs and charges to SERVICERS, upon thirty (30) days prior written notice to ISO (or, if SERVICERS receive less than thirty (30) days notice of such increase, as much prior notice as is practicable under the circumstances).
Page 7
(d) In the event of any fee increases to ISO, SERVICERS shall provide reasonable assistance to ISO in passing such fee increases through to Merchants under the Merchant Processing Agreements.
(e) From time to time and in their sole discretion, SERVICERS may also perform certain risk management services, such as periodic credit reviews, fraud reviews and monitoring and collections, with respect to Applicants and Approved Merchants; provided, however, that SERVICERS will not contact such Applicants or Approved Merchants directly and will request any reasonably necessary information or documentation from ISO. SERVICERS' participation in any such activity shall not in any way relieve ISO from its responsibility for credit and fraud losses which may result from or be related to the Program.
(f) SERVICERS will provide ISO with a point of contact to address issues that arise in connection with this Agreement, which will be one or more employees of FDMS.
2.2 ISO Obligations.
(a) ISO shall perform all sales and marketing activities in furtherance of the Program, subject to the terms of this Agreement. It is understood that (at all times) SERVICERS have the ultimate approval right for ISO's solicitation procedures, Application Materials, Application processing procedures, Merchant qualification criteria, transaction processing procedures, Merchant Processing Agreements, Program terms, Program Participation Fees, and other Program policies, all of which must be approved in advance by SERVICERS in writing.
(b) ISO shall also perform all initial Merchant credit review and underwriting on Applicants in a manner consistent with Section 4 of this Agreement, including the Merchant Processing Policy. ISO shall at all times comply with the Program Standards.
(c) ISO will use reasonable efforts to convert the sponsorship and clearing of all Merchants processing on the FDMS system under the Service Agreement to the sponsorship and clearing of Bank under the terms and conditions of this Agreement; provided, however, that ISO will not be required to attempt to convert any such Merchants if the Merchant refuses to be sponsored by Bank, if the applicable Other MSP or IC refuses to board accounts on the FDMS System or be sponsored by Bank, or if the conversion of such merchants would not make economic or strategic business sense to ISO.
(d) For the avoidance of doubt, the parties acknowledge that ISO may utilize SERVICERS' services under this Agreement on a non- exclusive basis and there are no minimum fees or utilization commitments under this Agreement.
Page 8
2.3 BIN and ICA Assignment. SERVICERS will utilize BINs (Bank Identification Number) and ICAs (Interbank Card Association) dedicated solely to ISO to facilitate the Program, and no merchants other than Program Merchants will be under the dedicated BIN/ICA. The initial BINs/ICAs to be transferred to Bank from ISO's current sponsoring Member as part of the Program launch are listed on Exhibit E. ISO shall be responsible, and shall reimburse SERVICERS, for all actual, documented fees and costs imposed by third parties associated with obtaining, installing and maintaining the BIN/ICA on the FDMS system, including any Visa and MasterCard fees and assessments. Upon a Program Transfer in accordance with Section 10.4, Bank will transfer the dedicated BINs/ICAs used in connection with the Program to a Visa and MasterCard Member designated by ISO.
2.4 Use of Other Independent Sales Organizations/Independent Contractors.
(a) Except as expressly set forth herein, ISO shall not subcontract, assign, license or in any other manner extend or transfer to any third party any right or obligation ISO has with respect to SERVICERS' Program. If ISO desires to use the services of any other independent sales organization/member service provider ("Other MSP"), such Other MSP must be (i) reviewed and approved by SERVICERS, in their sole discretion, (ii) contracted with SERVICERS or Bank upon mutually agreeable terms, and (iii) registered with Visa and MasterCard by Bank in accordance with the Rules. If ISO desires to use the services of an individual independent contractor who represents himself or herself as working for ISO using ISO's legal/business name ("IC"), then ISO shall enter into a written agreement with each such IC that (i) requires the IC to comply with all applicable terms of this Agreement and all applicable Rules, laws and regulations, and (ii) prohibits the making of any representation or creating any liability on behalf of SERVICERS.
(b) ISO's currently utilizes the Other MSP's and IC's listed on Exhibit E attached hereto in its Merchant processing business. The parties agree to work together expeditiously and in good faith to transfer the registration or re-register all such entities with the appropriate Bank Card associations as required under the Rules. All Other MSP's must be appropriately registered before boarding accounts under Bank's sponsorship.
2.5 SERVICERS' Obligations.
(a) Bank will sponsor ISO, at ISO's expense, as an ISO for Visa, as an MSP for MasterCard and, to the extent applicable, as similarly required for all other Bank Card associations and, to the extent required by any Bank Card association, Bank also agrees to sponsor for registration with Visa and/or MasterCard those Other MSP's, IC's, subsidiaries and marketing representatives of ISO which are approved by SERVICERS. Unless otherwise disallowed by a Bank Card association, Bank agrees to maintain such sponsorships throughout the term of this Agreement and until the first of either to occur: (i) [***] days after the
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 9
expiration or earlier termination of this Agreement, or (ii) the effective date of the assignment of all of the Merchant Processing Agreements or all of the BINs/ICAs and other items specified and contemplated in Section 10.4.
(b) From time to time, and within a reasonable time from Bank's receipt of notice of an amendment to the Rules that is not otherwise available to ISO, Bank will advise ISO, who shall, in turn, notify each Merchant, of any change in the Merchant Program imposed by the Rules.
(c) At ISO's request, Bank will obtain copies for ISO of any Bank Card association manuals and publications (including Rules) that are available to acquiring members and that are not otherwise available to ISO and that are allowed to be shared with ISO under the Rules. Bank will forward to ISO all information routinely provided by each Bank Card association that is not otherwise available to ISO that are allowed to be shared with ISO under the Rules that would be helpful to ISO in fulfilling its obligations under this Agreement.
(d) Bank will maintain all cardholder information under its control and/or possession in a safe and secure manner in compliance with the Rules, and will report to Bank Card associations as required by the Rules relating to internal policies and procedures related to cardholder information security. Furthermore, Bank agrees to inform the ISO immediately regarding any breach of information security that may have an adverse effect to the ISO or to its Merchants.
(e) Bank, as the acquiring principal member, agrees to represent ISO's interest in disputes that might arise from time to time with a Bank Card association over compliance with Rules and fines; provided, however, that ISO shall pay any fines or other charges imposed on Bank by a Bank Card association relating to the Merchant Program and any and all costs reasonably incurred by Bank in disputing the same, including reasonable associated legal fees.
(f) FDMS has entered into an agreement with FFB, pursuant to which FFB will sponsor (or assume the sponsorship of) Merchants, FDMS and its customers, including ISO, into certain networks ("Debit Sponsorship"). ISO agrees to the additional terms and conditions relating specifically to the Debit Sponsorship, as set forth in Exhibit G.
SECTION 3 MARKETING AND COMPLIANCE
3.1 Application Materials. ISO shall use reasonable efforts to ensure that each Application completed by an Applicant is current and contains accurate and complete information. ISO's Application Materials shall comply with all applicable Rules, laws and regulations. All Application Materials and any changes to the form and content thereof must be approved in writing by SERVICERS prior to use by ISO, which approval will not be unreasonably withheld or delayed beyond [***] [***] days unless such changes
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 10
are voluminous. The initial approved Application Materials are attached hereto as Exhibit C.
3.2 Compliance Responsibility. ISO shall be responsible for ensuring that the Application Materials, the marketing plans, the Promotional Materials and all services performed by ISO hereunder comply, and remain in compliance with, all applicable Rules, laws and regulations; provided, however, that SERVICERS will in good faith inform ISO of issues or concerns with ISO's materials or practices observed by SERVICERS that SERVICERS reasonably believe may be in violation of applicable Rules. All documents and any changes to the form and content thereof must be approved in writing by SERVICERS prior to use by ISO, which approval will not be unreasonably withheld or delayed beyond fifteen (15) days.
3.3 Promotional Materials. ISO shall be responsible, at its sole expense, for the development of all Promotional Materials and shall bear the cost of the development and the printing and distribution of the Promotional Materials. The Promotional Materials shall comply with all applicable Rules, laws and regulations. All Promotional Materials and any changes to the form and content thereof must be approved in writing by SERVICERS prior to use by ISO, which approval will not be unreasonably withheld or delayed beyond fifteen (15) days. ISO and ISO's Other MSP's and IC's will not use SERVICERS' or SERVICERS' Affiliates' Marks in any advertising, promotional or display materials without SERVICERS' prior written approval, which approval will not be unreasonably withheld or delayed beyond fifteen (15) days.
SECTION 4 APPLICATION AND UNDERWRITING PROCEDURES
4.1 Applications. ISO shall solicit Applications from Eligible Merchants at ISO's sole expense and shall provide each Applicant with Application Materials. ISO shall collect completed and signed Application Materials and Merchant Processing Agreements from Applicants and shall forward them to SERVICERS within [***] [***] Business Days after the merchant is boarded (which may be accessed by SERVICERS online or forwarded to SERVICERS via ISO's automated application system or to a facsimile number designated by SERVICERS, provided such complies with the Rules and applicable laws, rules and regulations) or to any other place(s) as SERVICERS may designate for processing and document storage. ISO shall retain copies of all Application Materials, Merchant Processing Agreements and documents forwarded to SERVICERS. ISO shall provide SERVICERS with access to ISO's automated application system and ISO's online Merchant Account system (BAMS, or any such successor or replacement system) at no cost to SERVICERS.
4.2 Underwriting. ISO shall underwrite, perform a credit review and conduct a site inspection, when applicable, for each Application as required by this Agreement, the Merchant Processing Policy and the Rules to determine whether each Applicant is an Eligible Merchant. ISO may conduct such credit review without notification to and participation by SERVICERS, except as otherwise provided below (i.e., for any
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 11
prospective Merchant that falls within the risk and volume parameters set forth in this Section 4.2), provided that ISO performs the credit review in accordance with the Merchant Processing Policy, the terms of this Agreement and the Rules. In accordance with and as permitted by this Agreement, a third-party service provider approved by SERVICERS may perform site inspections for ISO. In order to assist ISO in its underwriting hereunder, SERVICERS shall assist ISO with checking Merchants and prospective Merchants against the Terminated Merchant File/MATCH List or any similar list maintained by any entity. ISO shall be responsible for all credit and fraud losses associated with the Merchant Portfolio or the Program, regardless of any services or assistance that may be provided by SERVICERS. For any high risk Merchant who in good faith ISO anticipates will have annual Visa and MasterCard transaction volume equal to or greater than $[***] and any low risk Merchant who in good faith ISO anticipates will have annual Visa and MasterCard transaction volume equal to or greater than $[***], ISO shall advise SERVICERS and permit SERVICERS to conduct their own credit review prior to boarding the account. Upon receipt of a complete underwriting package from ISO, SERVICERS will respond to ISO within [***] [***] Business Days as to SERVICERS' acceptance or rejection of such Merchant. SERVICERS' participation in any credit review will not in any way relieve ISO from its responsibility for credit and fraud losses which may result from a Merchant's transaction processing. SERVICERS may at any time require that a Merchant relationship be terminated by ISO and Bank may cease the provision of services to any such Merchant pursuant to the terms of the Merchant Processing Agreement. SERVICERS shall have the right and authority to accept or reject any Application. ISO shall obtain prospective Merchants' authorization for ISO and/or SERVICERS to obtain all reports (including personal and business credit reports) and other information necessary in connection with the Application. ISO shall have the right, subject to and pursuant to the terms and conditions of the Merchant Processing Policy, to cause any Eligible Merchant with transaction card volume processing limits up to but not more than $[***] per month, that has been approved by ISO, to be activated immediately in SERVICES' systems. SERVICERS agree to provide ISO with a final approval decision (i.e., acceptance, rejection or required modification of the submitted Application) on submitted and complete Merchant Applications for Eligible Merchants that are not classified as "high risk" on the High Risk Merchant List attached hereto as Exhibit F and which seek approval for transaction card volume processing limits in excess of $[***] per month but not more than $[***] per month, within [***] [***] Business Days after SERVICERS' receipt of such completed Merchant Application and documentation.
4.3 Credit Decisions. ISO shall employ the Merchant Processing Policy guidelines provided by SERVICERS in making credit evaluations. SERVICERS reserve the right, in their sole and absolute discretion, to:
(a) Change the Merchant Processing Policy;
(b) Reject the Application of any Applicant who SERVICERS determine does not satisfy SERVICERS' Merchant Processing Policy; and
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 12
(c) Terminate the Merchant Processing Agreement with respect to any Merchant at any time, according to the Merchant Processing Agreement terms.
Notwithstanding anything contained herein, so long as all of the following are true with respect to a Merchant or Merchant Account, SERVICERS agree that, except as required by the Rules, SERVICERS shall neither terminate nor make any change with respect to the discount or reserve of said Merchant or Merchant Account that will have an adverse effect on the Merchant or Merchant Account without the prior written consent of ISO:
(i) The Merchant or Merchant Account is not in a Bank Card association monitoring program;
(ii) The Merchant or Merchant Account is not engaged in, or aiding and abetting, any illegal activity or fraud;
(iii) The Merchant or Merchant Account is in compliance with the Merchant Processing Policy;
(iv) The Merchant or Merchant Account is not processing transactions where products are delivered or services rendered more than one (1) year (on the average, based upon transactions of the immediately preceding three (3) months) following the date of the transaction;
(v) No Bank Card association nor any regulatory agency has requested that the Merchant or Merchant Account be terminated;
(vi) In its sole judgment, SERVICERS do not feel that they may be at financial risk as a result of the activity of a Merchant or Merchant Account; and
(vii) The Merchant or Merchant Account is not causing reputational harm or risk to either of SERVICERS in their reasonable judgment.
In the event SERVICERS decide to terminate or make any such adverse change with respect to a Merchant or Merchant Account, SERVICERS shall first attempt to give ISO notice of SERVICERS' decision.
4.4 Merchant Reserve Accounts. ISO shall be responsible for determining the amount of any Merchant Reserve Accounts. ISO shall also be responsible for ensuring all Merchant Reserve Accounts are adequately funded. All Merchant Reserve Accounts, along with any other monies or collateral collected from Approved Merchants, shall be deposited with Bank. [***] ISO will monitor daily Merchant account activity and if in ISO's reasonable judgment certain Approved Merchants and/or certain transactions are possibly fraudulent or otherwise not in
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 13
compliance with the Rules or in violation of the Merchant Processing Agreement, ISO will instruct SERVICERS to change the Merchant bank account information to cause funds otherwise due such Merchant to be diverted and deposited into the Merchant Reserve Account for such Merchant. ISO will thereafter promptly investigate each such suspicious incident and, upon request, promptly notify SERVICERS of the result of any such investigation. If in any case ISO's investigation determines that no violation occurred, ISO will promptly request SERVICERS to release any funds diverted to the Merchant Reserve Account to the Merchant's deposit account. Once monies or other collateral are deposited in a Merchant Reserve Account, SERVICERS shall control the disbursements of such funds which are to be (a) paid to ISO or SERVICERS to cover losses incurred in connection with the applicable Approved Merchant or (b) returned to the applicable Approved Merchant upon a reduction in the potential risk to ISO and SERVICERS arising from the provision of services to such Merchant within two (2) Business Days after receipt of a written request by ISO. From time to time, ISO may request SERVICERS to disburse monies held in a Merchant Reserve Account to ISO or an Approved Merchant as set forth in the preceding sentence, and SERVICERS shall consider such requests in good faith. Bank may draw against any Merchant Reserve Account to cover any Losses or credit and fraud losses incurred by SERVICERS with respect to an Approved Merchant without the consent of ISO or the applicable Approved Merchant.
4.5 Maintenance of Underwriting Staff. ISO shall at all times maintain an adequate and qualified staff to perform underwriting and credit reviews of Program Merchants.
SECTION 5 PROPRIETARY RIGHTS
5.1 General. To the extent required by the Rules, legal title to all Merchant Applications, Merchant Processing Agreements and Merchant Accounts and records shall be in the name of Bank, subject to its obligations to effect a Program Transfer pursuant to Section 10.4 of this Agreement; provided, however, that Bank acknowledges and agrees that ISO shall own and maintain the Merchant relationship during the term of this Agreement and thereafter. ISO acknowledges and agrees that all Merchant Applications, Merchant Processing Agreements and Merchant Accounts and records may not be transferred, assigned, sold or exchanged by ISO except as set forth in this Agreement or the applicable Merchant Processing Agreement. Bank shall be exclusively responsible and entitled to receive all payments, collections, and other amounts due from Merchants, subject to its payment obligations to ISO. Each of ISO's and Bank's rights shall survive the termination of this Agreement by either party and for whatever cause. For the avoidance of doubt, the parties acknowledge and agree that ISO owns all Merchant Processing Agreements, Merchant Accounts and Merchant relationships except as otherwise specifically set forth herein.
SECTION 6 SETTLEMENT AND PAYMENT
Page 14
6.1 Offset Account.
(a) FDMS shall establish and maintain the Offset Account at Bank during the term of this Agreement to facilitate the making of all payments due to SERVICERS from ISO and to ISO from SERVICERS. ISO agrees that the initial amount of the Offset Account will be $[***] and, thereafter, the Offset Account will, at all times, maintain collected funds in an amount at least equal to the amount then due SERVICERS hereunder (which shall be referred to herein as the "Minimum Balance").
(b) If the collected funds on deposit in the Offset Account at any point in time are less than the Minimum Balance, SERVICERS may fund the Offset Account with any monies or funds belonging or payable to ISO which are in SERVICERS' possession. SERVICERS will promptly notify ISO after making any such transfer.
(c) ISO hereby grants SERVICERS a security interest in the Offset Account to secure all of ISO's obligations to SERVICERS under this Agreement.
6.2 Settlement Procedures.
(a) SERVICERS shall settle each Merchant Account in accordance with the terms of the applicable Merchant Processing Agreement, remitting to each Approved Merchant, by ACH or other acceptable method, all settled funds due to the Approved Merchant after first deducting from such settled funds all applicable Program Participation Fees and any other amounts owed or withheld under the applicable Merchant Processing Agreement. Merchant Account settlement is included in the fees set forth in Exhibit A and will not incur an additional fee.
(b) On each Payment Date, SERVICERS shall credit ISO's Residual Account in an amount equal to all Net Program Participation Fees collected by SERVICERS since the immediately preceding Payment Date and which have not otherwise been paid to ISO.
(c) In the event that the Net Program Participation Fees are insufficient to pay any amounts due to SERVICERS' under this Agreement (including compensation, funding the Offset Account, funding the Reserve Account, or paying third party processing fees), then ISO shall provide sufficient additional funds to SERVICERS upon demand.
(d) [***]
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 15
[***]
6.3 Payment Deferrals. In addition to any rights now or hereafter granted under this Agreement or applicable law and not by way of limitation of any such rights, SERVICERS are hereby authorized by ISO, at any time and from time to time, without notice or demand to ISO or to any other person (any such notice and demand being hereby expressly waived), to setoff, recoup and to appropriate and to apply any and all monies or funds belonging or payable to ISO which are in Bank's possession against and on account of ISO's obligations to SERVICERS under this Agreement (including funding the Offset Account, the Reserve Account, the Termination Reserve Account or funding chargebacks), whether such obligations are liquidated, unliquidated, fixed, contingent, matured or unmatured.
6.4 Expenses. Except as otherwise provided, each party shall bear its own administrative costs and overhead expenses arising out of its performance of this Agreement.
6.5 Liability for Losses. Unless any Losses are caused by SERVICERS or are attributable to the negligence or willful misconduct of SERVICERS, SERVICERS shall have recourse from ISO, and ISO shall fully reimburse SERVICERS, for any Losses to SERVICERS that are caused by:
(a) Chargebacks, purchase returns, refunds, credits, adjustments, fees or Bank Card association fines, costs and expenses related to Approved Merchants, Eligible Merchants, or any Merchant activity hereunder; and
(b) Amounts remaining due to SERVICERS after the deduction of SERVICERS' compensation as provided herein.
6.6 Bank Card Association Assessments/Fees. ISO shall pay or fund when due all Bank Card association assessments/fees, including any and all quarterly assessments/fees.
6.7 Survival. The provisions of this Section 6 shall survive the termination or expiration of this Agreement.
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 16
6.8 Assignment of Merchant Losses. SERVICERS agree that after SERVICERS have been fully reimbursed by ISO for a Merchant loss pursuant to this Agreement, and provided that the Merchant Account resulting in the Merchant loss has been terminated, that SERVICERS will, at the request of ISO, assign to ISO any and all of SERVICERS' subrogation rights under or related to the Merchant Processing Agreement (including guarantees, security or otherwise) related to the indebtedness of such Merchant under the Merchant Processing Agreement (including guarantees, security or otherwise), so that ISO may pursue collection recovery activities in connection with such Merchant loss. Any such collection recovery activities shall be conducted in the name of ISO and shall be subject to the indemnification obligations of ISO. Bank agrees to execute and deliver to ISO such assignment documents as reasonably requested and required by ISO to vest such collection loss(es) recovery right to ISO and as reasonably required in connection with such collection recovery activities.
SECTION 7 REPRESENTATIONS AND WARRANTIES OF ISO
ISO represents and warrants to SERVICERS that, as of the date of this Agreement, the following are true and correct:
7.1 Organization and Good Standing. ISO is a Delaware corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has full corporate power and authority to carry on its business as it is now being conducted. ISO is and will be qualified as a foreign corporation in good standing under the laws of each jurisdiction in which the conduct of its business or the ownership of its properties requires the qualification.
7.2 Execution and Effect of Agreement. ISO has the corporate power and authority to enter into this Agreement and the execution and delivery of this Agreement and the performance of ISO's obligations hereunder have been duly authorized by all necessary corporate action. This Agreement has been duly executed and delivered by ISO and constitutes a legal, valid, and binding obligation of ISO, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and other laws affecting the rights of creditors generally.
7.3 Restrictions. Neither the execution and delivery of this Agreement nor the conduct of the Program contemplated hereby will:
(a) Violate any of the provisions of the charter or by-laws of ISO; or
(b) Conflict with, or result in a breach of, or give rise to a right of termination of, or accelerate the performance required by the terms of any judgment, court order or consent decree, or any agreement, including a restrictive covenant or covenant against competition, indenture, mortgage, or instrument to which ISO is a party or to which its property is subject, or constitute a default thereunder, except where the conflict, breach, right of termination, acceleration or default would not
Page 17
prevent or have a Material adverse effect on the conduct of the activities contemplated hereby.
7.4 Consents. Except for filings, consents, waivers, approvals, and authorizations that the failure to obtain or make would not have a Material adverse effect on ISO or the Program, no filing, consent, waiver, approval, or authorization of any governmental authority or of any third party other than Visa and MasterCard, or notice to, or filing with, any governmental authority or any third party on the part of ISO is required in connection with the execution and delivery of this Agreement or the conduct of the activities contemplated hereby.
7.5 Litigation. To the knowledge of ISO and except as disclosed in public filings with the Securities and Exchange Commission, there is no action at law or in equity, arbitration, proceeding, or governmental investigation pending, or to the knowledge of ISO threatened, by or before any court, any governmental or administrative agency or commission, or arbitrator, against ISO regarding this Agreement or any of the transactions contemplated hereby that could reasonably be expected to prevent or have a Material adverse effect on the conduct of the activities contemplated hereby.
SECTION 8 ADDITIONAL COVENANTS
8.1 Reserve Account.
(a) ISO expressly authorizes SERVICERS to establish a Reserve Account pursuant to the terms and conditions set forth in this Section 8.1. The initial amount of such Reserve Account shall be [***]. In addition, the amount of the Reserve Account may be increased by SERVICERS from time to time based upon any reasonably anticipated risk of loss to SERVICERS, material breach of the Agreement by ISO, or any material adverse change in the financial condition of ISO. Such Reserve Account shall be established and maintained at Bank. [***]
(b) The Reserve Account shall be fully funded upon five (5) Business Days' notice to ISO. Such Reserve Account may be funded by all or any combination of the following: (i) one or more debits to the Offset Account or any other accounts of ISO held by Bank or any of its Affiliates; (ii) one or more deductions or offsets to any payments otherwise due to ISO; or (iii) ISO's delivery to SERVICERS of a letter of credit issued by a bank acceptable to SERVICERS and in a form acceptable to SERVICERS.
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 18
(c) If ISO's funds in the Reserve Account are not sufficient to cover the chargebacks, adjustments, fees and other charges due to SERVICERS from ISO or Merchants, or if the funds in the Reserve Account have been released, ISO agrees to pay SERVICERS such sums within five (5) Business Days of any such request by SERVICERS. In the event of a failure by ISO to fund the Reserve Account, SERVICERS may fund such Reserve Account in any of the manners set forth above.
(d) To secure ISO's obligations to SERVICERS under this Agreement, ISO grants to SERVICERS a lien and security interest in and to any of ISO's funds in the Reserve Account or otherwise related to this Agreement now or hereafter in the possession of SERVICERS, whether now or hereafter due or to become due to ISO from SERVICERS. ISO agrees to duly execute and deliver to SERVICERS such instruments and documents as SERVICERS may reasonably request to perfect and confirm the lien, security interest, right of setoff, recoupment and subordination set forth in this Agreement.
8.2 Inspection.ISO will, at any and all reasonable times, permit SERVICERS' employees, agents, attorneys, auditors, or bank regulators to inspect ISO's place of business to audit its operations for compliance with all Rules, laws, regulations, and directives of any governmental regulatory agency or Bank Card association, all at SERVICERS' expense.
8.3 Cooperation.SERVICERS and ISO will each timely furnish to the other any and all information and materials that the other may, from time to time, reasonably request in connection with all matters contemplated by this Agreement. Each party also shall take the action as the other may, from time to time, reasonably request in order that the purposes of this Agreement will be fully accomplished and that all matters contemplated hereby will comply with all Rules or other applicable statutory, regulatory or other legal requirements. ISO shall promptly deliver to SERVICERS after receipt by ISO a copy of all non-routine notices or correspondence that it receives from MasterCard, Visa, or other networks or Bank Card associations, or any other third party, which in any way relates to any Merchant's or ISO's participation in MasterCard, Visa, and other networks or Bank Card associations under this Agreement.
8.4 Compliance With Rules. ISO also covenants to the following:
(a) ISO will obtain copies of all available Rules from Visa and MasterCard and any other Bank Card association that makes its Rules available to ISOs. For all Rules not reasonably available to ISO, SERVICERS will provide ISO with information regarding such Rules and compliance therewith. ISO understands and agrees to comply fully with all Rules and applicable laws and regulations.
(b) On an ongoing basis, ISO will regularly provide SERVICERS with the current addresses for all its offices.
Page 19
(c) In the event of any inconsistency between any provision of this Agreement and the Rules, the Rules in each instance shall be afforded precedence and shall apply.
(d) ISO acknowledges and agrees that Visa and/or MasterCard are the sole and exclusive owner of Visa and/or MasterCard marks. ISO agrees to never contest the ownership of these marks and Visa and/or MasterCard may at any time immediately and without advance notice prohibit ISO from using their respective marks.
(e) ISO acknowledges and agrees that Visa and/or MasterCard shall have the right, either in law or in equity, to enforce any provision of the Rules and to prohibit ISO's conduct that creates a risk of injury to Visa and/or MasterCard or that may adversely affect the integrity of Visa's and/or MasterCard's systems, information or both. ISO agrees to refrain from taking any action that would have the effect of interfering with or preventing an exercise of these rights by Visa and/or MasterCard.
(f) ISO agrees not to use any marks of Visa and/or MasterCard on its own behalf in the furtherance of the Program. ISO also agrees not to suggest, imply or in any manner create an impression that it is a Member or an authorized representative of Visa and/or MasterCard or that it is other than an independent sales organization or member service provider for a Member. Further, ISO may not create an impression that Visa and/or MasterCard in any way endorses ISO or the Program it coordinates through SERVICERS.
(g) ISO may use one or more of Visa's or MasterCard's marks under the following conditions:
(i) The marks are used in accordance with the Rules; and
(ii) The marks are used pursuant to the express written permission of Bank.
(h) Except as expressly set forth herein, ISO may not subcontract, sublicense, assign, license, franchise or in any other manner extend or transfer to any third party any right or obligation ISO may have in connection with the Program. ISO agrees to provide services under the Program only with ISO's employees, Other MSP's or IC's in accordance with Section 2.4. An employee of ISO is defined as an individual who, while providing services for the Program (i) represents himself or herself as working for ISO while using only ISO's legal or "doing business as" name(s) as registered with Visa and/or MasterCard, and (ii) receives compensation for services rendered for the Program from ISO. An employee may not extend or transfer to any third party any right or obligation the employee may have regarding the Program as an employee of ISO. ISO will provide SERVICERS with a list of the names of all of its employees and IC's and such additional information as SERVICERS may reasonably request from time to time regarding any employee or IC. ISO will conduct appropriate background checks
Page 20
(including credit and criminal background checks) on all employees, Other MSP's and IC's.
(i) ISO further agrees to the following:
(i) ISO will not use Visa's and/or MasterCard's equipment and software ("V/MC Systems") and Visa and/or MasterCard information identified or reasonably understood to be confidential or proprietary ("V/MC Confidential Information") for anything other than to perform its duties on behalf of SERVICERS and definitely not for its own use or for any other purpose;
(ii) To treat the V/MC Systems and V/MC Confidential Information in at least as careful and confidential a manner as ISO treats its own or the SERVICERS' systems and confidential or proprietary information;
(iii) To acknowledge that access to the V/MC Systems and V/MC Confidential Information does not convey to ISO any right, title, interest or copyright therein or any license to use, sell, exploit, copy or develop them further;
(iv) To limit access to the V/MC Systems and V/MC Confidential Information to only those ISO employees and Other MSP's with a need to have access for the ISO to perform services under the Program and to implement and maintain reasonable and appropriate safeguards to prevent unauthorized access to or use of the V/MC Systems or V/MC Confidential Information;
(v) Solely with respect to the Program and this Agreement, upon request by SERVICERS, or, absent such requests, upon termination of ISO's performance under the Program, to immediately cease any and all use of V/MC Systems and promptly thereafter deliver to SERVICERS all V/MC Confidential Information then in the possession or control of ISO or, upon request by Visa and/or MasterCard, to immediately cease any and all use of the V/MC Systems and promptly thereafter deliver all V/MC Confidential Information that was provided by SERVICERS then in its possession or control to Visa and/or MasterCard; and
(vi) To immediately advise both SERVICERS and Visa and/or MasterCard if any unauthorized person or external entity seeks access to the V/MC Systems or V/MC Confidential Information whether by legal proceeding or otherwise.
(j) Visa and/or MasterCard may at any time conduct financial and procedural audits of ISO. ISO agrees to cooperate with and promptly supply Visa and/or MasterCard with all information and material requested.
Page 21
(k) ISO understands that all Program Materials including Merchant Applications, Merchant Processing Agreements, Merchant statements, and Promotional Materials (i) must be approved by SERVICERS before use, such approval not to unreasonably withheld or delayed beyond [***] [***] days, and (ii) may not state or imply that ISO is participating in or conducting any activity precluded by the Rules.
(l) ISO recognizes that SERVICERS must approve (in advance) any fee associated with the Program which must be clearly and conspicuously disclosed in writing to the Merchant prior to any payment or Application.
8.5 Registration as ISO. ISO and each Other MSP shall at all times, at ISO's and/or each Other MSP's cost and expense, maintain in effect during the term of this Agreement, a valid and effective registration as an independent service organization with Visa and a member service provider with MasterCard and shall provide any information as Visa and MasterCard may reasonably request in connection therewith or in connection with the services of ISO hereunder, and shall provide SERVICERS the information as it may reasonably request concerning compliance with all applicable Rules, laws, regulations and the requirements set forth herein in connection with this Agreement. The parties hereto will work together expeditiously and in good faith to register and maintain the registration of ISO and each Other MSP with the appropriate Bank Card associations as required under the Rules.
8.6 Mark Restriction. ISO shall not make any use of SERVICERS' Marks or any other Intellectual Property without SERVICERS' prior written consent, which will not be unreasonably withheld or delayed beyond [***] [***] days.
8.7 Financial Statements/Audit Rights. ISO shall make available (whether through public filings or directly) SERVICERS with annual audited financial statements prepared by an independent auditing firm within 90 days of the end of each fiscal year (and shall make available to SERVICERS quarterly financial statements upon request of SERVICERS). In addition, ISO will provide any shareholder/owner personal financial information as required by the Rules. ISO will, at any and all reasonable times, permit SERVICERS' employees, agents and/or auditors to inspect ISO's books and records at SERVICERS' expense prior request and notice and if for a particular need.
SECTION 9 CONFIDENTIAL INFORMATION
9.1 Confidential Information. Confidential Information is non-public and proprietary information relating to the business of ISO or its Affiliates that SERVICERS and their Affiliates acquire during the term of this Agreement, and information relating to the business of SERVICERS and their Affiliates. It includes, but is not limited to, the following, whether used in, or to be used in, the business of ISO or SERVICERS: physical systems for the operation of the business; all present and planned strategies, business plans, and projections; all market and sales and marketing information; all
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 22
financial, accounting, and credit information; and the terms and conditions of this Agreement. Neither party will disclose, furnish, sell, convey, or use for any purpose other than as contemplated under this Agreement any of the other parties' Confidential Information or materials without written authorization. For the avoidance of doubt, the parties acknowledge and agree that all Merchant information is the Confidential Information of ISO and (i) may not be used by SERVICERS for any purpose other than to provide the services contemplated hereunder during the term of this Agreement and thereafter, and (ii) will not be used by SERVICERS, directly or indirectly, to solicit any Merchants in the Merchant Portfolio.
9.2 Exclusions. Nothing in this Section 9 shall restrict either party with respect to Confidential Information which: (a) the receiving party can demonstrate was rightfully possessed by it before it received the information from the disclosing party; (b) was in the public domain prior to the date of this Agreement or subsequently becomes publicly available through no fault of the receiving party or any person acting on its behalf; (c) was previously received by the receiving party from a third party or is subsequently furnished rightfully to the receiving party by a third party not known to be under restrictions on use or disclosure; (d) is independently developed by such party; (e) is required to be disclosed by the Rules, law, regulation or court order, provided that the disclosing party will exercise reasonable efforts to notify the other party prior to disclosure; or (f) is required to be disclosed to comply with or to enforce the terms of this Agreement.
9.3 Ownership of Work Product. Each party shall have and retain all ownership rights (including ownership of any Marks) in the work product developed for the implementation of the Program, including the Application, Merchant Processing Agreement and Promotional Materials that it creates, prepares or produces in connection with this Agreement, and all the work products shall remain the exclusive property of that party. Upon termination of the Agreement, each party shall immediately cease using any materials using the other's Marks or Intellectual Property, and shall immediately destroy all such materials.
9.4 Remedy; Survival. If any party breaches this Section 9, the non-breaching party will suffer irreparable harm and the total amount of monetary damages for any injury to such party will be impossible to calculate and therefore an inadequate remedy. Accordingly, the non-breaching party may (i) seek temporary and permanent injunctive relief against the breaching party or (ii) exercise any other rights and seek any other remedies to which the non-breaching party may be entitled to at law, in equity and under this Agreement for any violation of this Section 9. The provisions of this Section 9 shall survive the termination or expiration of this Agreement.
SECTION 10 TERM AND TERMINATION
10.1 Initial Term. The initial term of this Agreement shall be four (4) Processing Years commencing on the Effective Date of this Agreement and ending on June 30, 2010 unless
Page 23
terminated earlier as provided in this Section 10. Thereafter, this Agreement shall automatically continue in effect until either party gives the other at least six (6) months prior written notice of termination.
10.2 Termination by SERVICERS. SERVICERS may terminate this Agreement prior to its expiration for cause upon prior written notice to ISO as follows:
(a) Upon a Material breach of any representation, warranty or covenant in this Agreement by ISO which is not cured by ISO within sixty (60) days of receipt of written notice from SERVICERS; provided however, that if ISO is attempting in good faith to cure such breach within said sixty (60) day cure period but the nature of the breach prevents a cure within sixty (60) days, then ISO shall be allotted an additional number of days to cure, provided the total number of days of the cure period shall be no greater than one hundred twenty (120) days;
(b) Upon a breach of any Material Rule by ISO, or repeated breach of any Rule by ISO which is not cured by ISO within sixty (60) days of receipt of written notice from SERVICERS; provided however, that if ISO is attempting in good faith to cure such breach within said sixty (60) day cure period but the nature of the breach prevents a cure within sixty (60) days, then ISO shall be allotted an additional number of days to cure, provided the total number of days of the cure period shall be no greater than one hundred twenty (120) days;
(c) Upon any commission of any fraudulent activity by ISO, or the illegal activity of ISO's employees in the performance of their duties in connection with this Agreement;
(d) Upon any failure by ISO to pay (or make arrangements to pay that are acceptable to SERVICERS) any amount due under this Agreement to SERVICERS which does not give rise to the right to terminate under any other provision of this Agreement within ten (10) Business Days after written notice to ISO of its failure to pay the amount;
(e) Upon the insolvency or bankruptcy of ISO;
(f) Upon a Material adverse change in the business or financial condition of ISO;
(g) Upon an assignment of this Agreement by ISO without SERVICERS' prior written consent;
(h) Upon the failure by ISO to maintain good standing as an "independent sales organization" with Visa or a "member services provider" with MasterCard;
(i) If SERVICERS are required by a governmental or regulatory body or agency or by any Bank Card association to terminate the Services on behalf of ISO with as much prior notice as is practicable under the circumstances;
Page 24
(j) If ISO fails to fund the Offset Account or the Reserve Account as required under this Agreement within ten (10) Business Days after written notice to ISO of its failure to pay the amount;
(k) Upon the termination of the Service Agreement for any reason with one hundred eighty (180) days prior written notice to ISO; or
(l) Upon a Change of Control of ISO with one hundred eighty (180) days prior written notice to ISO, unless the SERVICERS had previously consented to such change in control.
10.3 Termination by ISO. ISO may terminate this Agreement prior to its expiration for cause upon prior written notice to SERVICERS as follows:
(a) Upon a Material breach of any representation, warranty or covenant in this Agreement by SERVICERS which is not cured by SERVICERS within sixty (60) days of receipt of written notice from ISO; provided however, that if SERVICES are attempting in good faith to cure such breach within said sixty (60) day cure period but the nature of the breach prevents a cure within sixty (60) days, then SERVICERS shall be allotted an additional number of days to cure, provided the total number of days of the cure period shall be no greater than one hundred twenty (120) days;
(b) Upon any failure by SERVICERS to pay any amount due under this Agreement which does not give rise to the right to terminate under any other provision of this Agreement within five (5) Business Days after written notice to SERVICERS of its failure to pay the amount;
(c) Upon the insolvency or bankruptcy of either of the SERVICERS;
(d) Upon the termination of the Service Agreement for any reason;
(e) Upon a Material adverse change in the business or financial condition of either of SERVICERS;
(f) Upon an assignment of this Agreement by SERVICERS without ISO's prior written consent;
(g) Upon the failure by SERVICERS to maintain good standing with Visa or a MasterCard;
(h) If required by a governmental or regulatory body or agency or by any Bank Card association to terminate;
(i) Upon cessation of Bank Card operations by SERVICERS; or
Page 25
(j) At any time upon one hundred eighty (180) days prior written notice to the SERVICERS with no penalty.
10.4 Effect of Termination.
(a) Upon the expiration or termination of this Agreement for any reason, at the direction of ISO and pursuant to the plan of Deconversion, SERVICERS will transfer and assign all their interest in the Merchant Portfolio (including Merchant Processing Agreements and Merchant Accounts) and the dedicated BINs/ICAs to a Visa and MasterCard Member designated by ISO, provided first that: (a) all amounts due (or estimated to become due) in connection with each Merchant Processing Agreement and under this Agreement have been paid to SERVICERS; (b) the Termination Reserve Account has been adequately funded; (c) ISO provides full written indemnities to SERVICERS regarding actual and potential losses or other obligations arising out of operation of the Program or arising out of, or related to, this Agreement or any Merchant Processing Agreement; and (d) the Program Transfer complies with all applicable Rules, laws and regulations (the "Program Transfer"). [***]
(b) Until the completion of the Deconversion of the Merchant Portfolio, the parties shall continue to operate under the terms and conditions of this Agreement; provided, however, that upon the effective date of expiration or termination of this Agreement, ISO will promptly discontinue its promotion and recommendation of the Program and will cease to board new accounts on Bank's BINs and ICAs or for sponsorship by Bank. ISO will reimburse SERVICERS for any Deconversion pursuant to the plan for Deconversion, regardless of whether such Deconversion occurs before or after the expiration or termination of this Agreement. ISO shall continue to hold all risks associated with transactions processed by SERVICERS prior to the effective date of Deconversion of each respective Merchant in the Merchant Portfolio, including all risk relating to chargebacks and fraudulent transactions. ISO shall pay SERVICERS any amounts associated with such risks immediately upon demand.
10.5 Termination Reserve Account. Within ten (10) Business Days of the issuing of a notice of termination by any party, ISO shall fund a Termination Reserve Account. Except as specifically set forth otherwise in this Section 10.5, all provisions of Section 8.1 of this Agreement with regard to the Reserve Account shall also apply to the Termination Reserve Account. The amount of the Termination Reserve Account shall be the greater of (i) the most recent required amount for the Reserve Account prior to termination, or (ii) the amount calculated as follows:
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 26
(a) The amount of all chargebacks during the [***] [***] months preceding termination, plus
(b) The amount of all assessed Bank Card association fines or penalties and all fees and contingent fees which are or shall become due to SERVICERS from ISO, plus
(c) The estimated maximum amount of any known or likely significant loss events (defined as a credit or fraud loss that is likely to exceed $[***]).
Upon termination, any balance in the Reserve Account shall be transferred to, and be applied toward, the Termination Reserve Account. The Termination Reserve Account will be held by SERVICERS until the completion of the Program Transfer or for such longer period of time as is consistent with SERVICERS' liability for Bank Card transactions in accordance with the Rules. SERVICERS will reduce the Termination Reserve Account balance to reflect any reductions in ISO's then-potential liability as the Program Transfer and Deconversion progress. [***]
SECTION 11 INDEMNIFICATION ; EXCLUSIONS ; LIMITATIONS
11.1 ISO's Indemnification. ISO shall indemnify, defend, protect, and hold SERVICERS, their Affiliates, and their respective officers, directors, employees, attorneys, and permitted assigns, harmless from and against any Losses and credit/fraud losses arising directly from:
(a) Any failure by ISO to comply with any Material term or condition of this Agreement applicable to ISO, or the failure of any warranty or representations made by ISO in this Agreement to be true and correct;
(b) Any claim for which ISO has otherwise agreed herein to pay or indemnify SERVICERS;
(c) Credit or fraud losses, regardless of whether SERVICERS performed any underwriting, credit review, periodic review or fraud monitoring reviews on their own behalf;
(d) Any negligence, misrepresentation or willful misconduct on the part of ISO or any of its employees, agents, Other MSP's or IC's related to this Agreement; and
(e) Any claim by any third party related to this Agreement of a Merchant in the Merchant Portfolio that ISO's Intellectual Property violates or infringes any proprietary right of such third party, without any limitation of liability whatsoever.
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 27
11.2 SERVICERS' Indemnification. SERVICERS, jointly and severally, shall indemnify, defend, protect, and hold ISO, its Affiliates and their respective officers, directors, employees, attorneys, permitted assigns, Other MSP's and IC's harmless from and against any Losses and credit/fraud losses arising directly from:
(a) Any failure by SERVICERS to comply with any Material term or condition of this Agreement applicable to SERVICERS, or the failure of any warranty or representations made by SERVICERS in this Agreement to be true and correct;
(b) Any claim for which SERVICERS have otherwise agreed herein to pay or indemnify ISO;
(c) Any Losses caused by SERVICERS' breach of a Merchant Processing Agreement;
(d) Any negligence, misrepresentation or willful misconduct on the part of SERVICERS or any of their employees or agents related to this Agreement; and
(e) Any claim by any third party related to this Agreement of a Merchant in the Merchant Portfolio that SERVICERS' Intellectual Property violates or infringes any proprietary right of such third party, without any limitation of liability whatsoever.
11.3 Exclusion of Warranties, Limitations of Liability.
(a) Except as expressly provided in this Agreement, SERVICERS specifically disclaim all warranties of any kind, express or implied, including any warranties regarding merchantability, fitness for a particular purpose, non-infringement or otherwise (regardless of any course of dealing, custom or usage of trade), arising out of or related to this Agreement, which are hereby excluded by agreement of the parties. The parties agree that this Agreement is a service agreement and is not subject to the provisions of the Uniform Commercial Code.
(b) Notwithstanding anything in this Agreement to the contrary, in no event shall any party hereto, their respective Affiliates or any of their respective directors, officers, employees, agents or subcontractors, be liable under any theory of tort, contract, strict liability or other legal theory for lost profits, lost revenues, lost business opportunities, exemplary, punitive, special, incidental, indirect or consequential damages, each of which is hereby excluded by agreement of the parties, regardless of whether the damages were foreseeable or whether any party or any entity has been advised of the possibility of the damages.
(c) Notwithstanding anything in this Agreement to the contrary, the cumulative liability of each of SERVICERS and ISO for all Losses, claims, suits, controversies, breaches or damages arising out of or related to this Agreement
Page 28
regardless of the form of action or legal theory relating to events in any one Processing Year shall not exceed [***] [***] times the amount of clearing/sponsorship fees paid to SERVICERS by ISO pursuant to this Agreement during the immediately preceding [***] [***] full months; provided, however, that this limitation shall not apply to either party's obligation to indemnify the other for credit/fraud losses or Losses arising from or related to the indemnifying party's (or its agents, representatives, Merchants, Other MSP's or IC's) failure to comply with Rules.
(d) The parties acknowledge and agree that no party will be obligated to indemnify the other party to the extent that the liability, lawsuit, penalty, claim, demand or Loss resulted from the negligence or intentional misconduct of the party to be indemnified.
(e) Notwithstanding anything in this Agreement to the contrary, neither ISO nor SERVICERS nor their Affiliates shall have any liability under this Agreement for breach of their respective duties and obligations under this Agreement to the extent such breach was caused by labor disputes, strikes, acts of God, floods, terrorist acts, lightning, severe weather, shortages of materials, rationing, utility or communication failures or interruptions, failure of MasterCard, Visa, and other networks or Bank Card associations, earthquakes, war, revolution, civil commotion, blockade, embargo, or any law, order, proclamation, regulation, ordinance, demand or requirement having legal effect of any government or any judicial authority or representative of any such government, or any other act, omission or cause whatsoever, whether similar or dissimilar to those referred to in this clause, which are beyond ISO's, SERVICERS' or their Affiliates reasonable control.
11.4 Survival. The provisions of this Section 11 shall survive the termination or expiration of this Agreement.
SECTION 12 MISCELLANEOUS
12.1 Books and Records. SERVICERS shall provide ISO promptly with monthly reports showing for the month the total number of active accounts and inactive accounts, the net sales processed for each Approved Merchant (provided ISO is either a party to the Merchant Processing Agreement (or assignee of a named party) or has obtained such Merchant's written authorization to obtain such information and SERVICERS' disclosure is not prohibited by any Rule, law, regulation or agreement with a governmental agency) and the net sales processed for all Approved Merchants.
12.2 Relationship of the Parties. SERVICERS and ISO agree that in performing their responsibilities pursuant to this Agreement they are in the position of independent contractors. This Agreement is not intended to create, nor does it create and shall not be construed to create, a relationship of partnership or joint venture or agency or any
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 29
association for profit between SERVICERS and ISO. ISO is not authorized hereunder to hold itself out as an agent of SERVICERS or to inform or represent to any person that ISO has authority to bind or obligate SERVICERS or to otherwise act on behalf of SERVICERS except as expressly set forth herein. ISO shall not make any representation or warranty, or create any liability or potential liability on behalf of SERVICERS except as expressly set forth herein.
12.3 No Third Party Beneficiaries. Nothing in this Agreement is intended to confer upon any person or entity other than the parties and their Affiliates any rights or remedies.
12.4 Assignment and Transfer. Except as expressly set forth herein, ISO shall not assign or otherwise transfer this Agreement or any of its rights or obligations hereunder, by operation of law or otherwise, or contract with any third party (other than the third parties named herein) to perform any of its responsibilities or obligations relating to this Agreement without the prior written consent of SERVICERS, which consent will not be unreasonably withheld. In addition, ISO shall provide written notice to SERVICERS within three (3) Business Days of any Change of Control of ISO.
12.5 Notices. Any notice, request, consent, waiver or other communication required or permitted to be given hereunder shall be effective only if in writing and shall be deemed sufficiently given only if delivered in person or sent by certified, registered, or overnight mail or overnight courier service, postage prepaid, return receipt requested, addressed as follows:
If to FDMS:
First Data Merchant Services Corporation 6902 Pine Street PS-11 Omaha, NE 68106 Attn: VP - Omaha Processing Facsimile Number: 402-222-6384
With a copy to:
First Data Merchant Services Corporation 12500 E. Belford Avenue, Suite M5-C Englewood, CO 80112 Attn: General Counsel Facsimile Number: 720-332-0033
If to Bank:
Wells Fargo Bank, N.A. 1200 Montego Way Walnut Creek, CA 94598
Page 30
Attn: EVP Merchant Card Services Facsimile Number:
If to ISO:
iPayment, Inc. 26707 West Agoura Hills Road, Suite 100 Calabasas, CA 91302 Attn: Operations Manager Facsimile Number:
With a copy to:
iPayment, Inc. 40 Burton Hills Boulevard, Suite 415 Nashville, TN 37215 Attn: General Counsel Facsimile: 615-665-8434
or to such other person or address as either party may designate by notice given to the other party as provided herein. The notice or communication shall be deemed to have been given as of the date so delivered.
12.6 Prior Agreements, Entire Agreement, and Modifications. This Agreement, along with the Service Agreement, supersedes all prior agreements, whether verbal or in writing, and contains the entire Agreement between the parties regarding all matters, issues and claims relating to the subject matter of this Agreement, and any other written documents exchanged, verbal agreements reached and representations made by or between the parties in the course of the negotiation of this Agreement. This Agreement may be changed only by a written instrument specifically stating that it modifies this Agreement and it must be signed by all parties.
12.7 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to New York conflict laws.
12.8 Waivers. No failure or delay by any party to exercise, and no course of dealing regarding any right of the party concerning an obligation of any other party to this Agreement, shall operate as a waiver unless agreed to in writing by all parties. The parties hereto waive their right to a jury trial in the event of any legal proceedings between them.
12.9 Binding Effect, Remedies. This Agreement will not become legally binding and may not be enforced by any party until and unless executed by all parties hereto. This Agreement and the rights and obligations created hereunder shall be binding upon and inure solely to the benefit of the parties and their respective successors and permitted assigns, and no other person or legal entity shall acquire or have any rights under or by
Page 31
virtue of this Agreement. The remedies provided for in this Agreement shall be cumulative in nature, not exclusive, and shall be in addition to any other remedy allowed in law or equity.
12.10 Severability. If any provision of this Agreement is held illegal, invalid, void, or unenforceable in any jurisdiction where this Agreement or any part thereof is to be performed by reason of any rule of law, administrative or judicial proceeding or public policy, the provision shall be deemed deleted and the remaining provisions of this Agreement shall remain valid and binding.
12.11 Headings. The Section headings of this Agreement are inserted as a matter of convenience only and shall in no way define, limit, extend or describe the scope of this Agreement or the intent of any provisions herein.
12.12 Counterparts. Provided that all parties execute a copy of this Agreement, this Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. The parties acknowledge that delivery of executed copies of this Agreement may be effected by facsimile or other comparable means, as well as by delivery of manually signed copies.
12.13 Construction. As used in this Agreement, any reference to the masculine, feminine or neuter gender shall include all genders, the plural shall include the singular, and the singular shall include the plural.
12.14 Exhibits. All exhibits to this Agreement are incorporated by reference with the same force and effect as if fully set forth herein. This Agreement shall be given full force and effect without the exhibits or as to those exhibits that are attached, in the event less than all of the exhibits referenced herein are in fact attached.
12.15 Termination of Other Agreements. The following agreements are herby terminated without penalty to any party and are of no further force and effect: (i) the TS ISO Agreement; and (ii) the PCS ISO Agreement; provided, however, that neither the termination of the TS ISO Agreement or the PCS ISO Agreement nor anything contained in this Agreement shall act as a waiver or otherwise preclude FDMS from reconciling and/or collecting any billing, residual or other fee-related issues under either the TS ISO Agreement or the PCS ISO Agreement except where otherwise agreed to by FDMS.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
iPAYMENT, INC.
By: \s\ Greg Daily
Name: Greg Daily
Page 32
Title: Chief Executive Officer
FIRST DATA MERCHANT SERVICES CORPORATION
By: \s\ Rick Learch
Name: Rick Learch
Title: Senior Vice President
WELLS FARGO BANK, N.A.
By: \s\ Deirdre P. Cohen
Name: Deirdre P. Cohen
Title: Vice President
Page 33
[***]
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Exhibit A, Page 1
EXHIBIT B UNACCEPTABLE BUSINESS
The following industries are considered unacceptable merchant processing candidates due to Association prohibition; illegal or likely to be deemed illegal activity; high fraud potential; high potential for excessive chargebacks; or excessive risk exposure.
• All sexually oriented or pornographic merchants: — Adult telephone conversations or Internet - Modeling agencies — Massage parlors - Adult book stores — Misc. entertainment (not elsewhere classified) - Topless bars/clubs
• Any illegal products/services
• Any service providing peripheral support of illegal activities (i.e., drugs)
• Chain letters
• Collection agencies or firms involved in recovering/collecting past due receivables
• Drug paraphernalia
• Free gift, prize, sweepstakes or contest as an inducement to purchase a product/service
• "Get-rich-quick" schemes
• Lotteries and/or illegal gambling, including Internet gambling
• Sports forecasting or odds-making
• Merchants offering rebates or special incentives
• Credit card protection (including identity theft protection)
• Extended warranty companies
• Non-face to face tobacco sales
• Non-face to face prescription drug sales
• Non-face to face sales of firearms
• Aggregators/Internet Payment Service Providers/Third Party Payment Processors
• Audio/Video Text
• Airlines
• Cruise lines
• Travel Agents/Tour Operators
• Money transfer services
• Check cashing
• Currency exchange
• Dating Services
• Pseudo-pharmaceuticals (anti-aging pills, sex nutrients, etc.)
• Outbound telemarketing
• "Up-sell" Merchants
Exhibit B, Page 1
EXHIBIT C APPLICATION MATERIALS
See Attached.
Exhibit C, Page 1
EXHIBIT D PROGRAM STANDARDS
See Attached.
Exhibit D, Page 1
EXHIBIT E LIST OF CURRENT BINs/ICAs and CURRENTLY ACTIVE OTHER MSP's and IC's
See attached.
Exhibit E, Page 1
EXHIBIT F HIGH RISK MERCHANT LIST (Not Elsewhere Classified As Unqualified / Unacceptable) MCC MERCHANT TYPE ALL Internet Merchants ALL Mail Order/ Telephone Order Merchants ALL Merchants Engaged In Extended Delivery 2741 Printing and Publishing Services — (Wholesale) 2791 Typesetting, Plate Making & Related Services-(Wholesale) 2842 Sanitation, Polishing & Specialty Cleaning Preparations 4121 Limousines, Taxis, Cabs 4784 Bridge and Tolls Fees 4812 Telecommunication Equipment and Telephone Sales, Beepers, Pagers, Paging Equipment, Cell Phones 4814 Telephone Services (Billing), Local and Long Distance Telecommunication Services, Cellular Telephone Services 4815 VisaPhone / MasterPhone 4816 Computer Network/Information Services. Internet Service Providers, Electronic Bulletin Boards 4821 Cablegrams, Telegrams 4899 Cable and Other Pay Television Services 5013 Parts — Motor Vehicle Supplies, New Parts — (Wholesale) 5021 Office, Commercial Furniture — (Wholesale) 5039 Construction Material — not elsewhere classified -(Wholesale) 5044 Copy Services — Photographic, Photocopy, Microfilm Supplies- (Wholesale) 5045 Computer, Computer Peripheral Equipment and Software — (Wholesale) 5046 Commercial Equipment — not Elsewhere classified (Wholesale) 5047 Equipment — Medical, Dental, Ophthalmic, Orthopedic, Hospital Equipment, Supplies — (Wholesale) 5051 Metal Service Centers and Offices — non-precious (Wholesale) 5065 Parts — Electrical, Equipment — (Wholesale) 5072 Hardware Equipment and Supplies — (Wholesale) 5074 Equipment — Heating Equipment, Supplies, Water Conditioning, Purification, Softening — (Wholesale) 5085 Industrial Supplies -Not elsewhere classified (Wholesale) 5094 Gemstones, Precious Stones, Metals, Watches, Jewelry (Wholesale) 5099 Durable Goods Not Elsewhere Classified (Wholesale)
Exhibit F, Page 1
MCC MERCHANT TYPE 5111 Paper — Writing, Printing, Stationery, Office Supplies — (Wholesale) 5122 Pharmaceuticals — (Wholesale) 5131 Fabrics and Dry Goods — (Wholesale) 5137 Commercial Work Clothing and Uniform — (Wholesale) 5139 Footwear — Commercial (Wholesale) 5169 Chemicals & Allied products — (Wholesale) 5172 Petroleum and Petroleum Products — (Wholesale) 5192 Books, Periodicals & Newspapers — (Wholesale) 5193 Florist Supplies, Nursery Stock and Flowers — (Wholesale) 5198 Paints, Varnishes and Supplies — (Wholesale) 5199 Non-Durable Goods — Not Elsewhere Classified (Wholesale) 5521 Used Car & Truck Dealers 5712 Furniture, Home Furnishing, Bedding, Mattress Stores 5713 Carpet, Rugs, Floor Covering Stores 5719 Miscellaneous Home Furnishing Specialty Stores 5732 Computers, Electronics, Electronic Stores, Electronic Parts 5734 Computer Software 5932 Antiques, Collectible, Memorabilia Stores 5933 Pawnbrokers 5937 Antique Reproductions 5946 Camera & Photographic Supply Stores 5960 Direct Marketing — Insurance Services. 5963 Door-To-Door Sales 5968 Direct Marketing — Continuity/Subscription Merchant. 5969 Direct Marketing — Other Direct Marketers (Not Elsewhere Classified) Including Infomercials 5972 Stamp, Coin Stores, Stamp Collecting — Philatelic, Numismatic Supplies 6211 Securities Brokers, Mutual Funds, Stocks, Commodities, Bonds 6300 Insurance Sales, Underwriting, and Premiums 6513 Real Estate Agents, Brokers, Managers 7032 Camps — Sporting, Recreational 7033 Camping — Trailer Parks, Campgrounds 7273 Dating / Escort Services 7297 Massage Parlors 7298 Health & Beauty Spas 7372 Computer Programming, Data Processing, and Integrated Systems Design Services
7375 Information Retrieval Services 7379 Computer Maintenance, Repair & Services — (Wholesale) 7829 Motion Picture and Video Tape Production and Distribution — (Wholesale) 7922 Theatrical Producers/Productions (except Motion Pictures) and Ticket Agencies
Exhibit F, Page 2
MCC MERCHANT TYPE 7929 Bands, Orchestras, and Miscellaneous Entertainers, Not Elsewhere Classified 7941 Commercial Sports, Professional Sports Clubs, Athletic Fields, and Sports Promoters 7997 Health Clubs, Country Clubs, Membership (Athletic, Recreation, Sports), Private Golf Courses 8241 Correspondence School 8244 Business & Secretarial Schools 8249 Trade & Vocational Schools 8299 Schools & Educational Services-Not Elsewhere Classified 8398 Organizations — Charitable, Social Service, Non-Political 8641 Associations — Civic, Social. Fraternal Associations 8651 Political Organizations 8661 Religious Organizations 8675 Automobile Associations, Automobile Clubs 8699 Membership Organizations — Not Elsewhere Classified 8734 Testing Laboratories (Non-Medical) 9211 Court Costs, Including Alimony, Child Support 9222 Fines 9223 Bail, Bond Payments 9311 Tax Payments 9399 Government Services — Not Elsewhere Classified 9401 Food Stamps 9402 Postal Services — U.S. Government 9700 Automated Referral Service
Exhibit F, Page 3
EXHIBIT G ADDITIONAL TERMS AND CONDITIONS FOR POS NETWORKS MERCHANT SPONSORSHIP
1. General.
1.1. ISO desires to deploy and service (or cause to be deployed and serviced), at merchant locations, terminals ("POS Terminals") that will be connected to the shared electronic funds transfer networks set forth on Schedule A to this Exhibit G, as it may be amended from time to time by FDMS in its sole discretion (the "Debit Networks"), to transmit point of sale transactions ("POS Transactions") generated by these POS Terminals through the Debit Networks' telecommunications and processing systems which effectuate the switching, processing and settlement of transactions ("Debit Network Systems"). (The services described in this paragraph shall be referred to in this Exhibit G as the "POS Services.").
1.2. ISO may offer qualified merchants the ability to provide, or have Customer provide on such merchant's behalf, merchants' ISOs with the option to pay their bills by initiating funds transfers through Debit Network Systems without PIN entry or verification, subject to additional terms and conditions agreed to by the ISO and FDMS ("PIN-less Debit"). (The services described in this paragraph shall be referred to in this Exhibit G as the "PIN-less Debit Services." The POS Services and PIN-less Debit Services, collectively, will be referred to in this Exhibit G as the "Debit Services").
1.3. Debit Networks require that in order for ISO to provide the POS Services to merchants, merchants must be sponsored into the Debit Network by a member of such Debit Network ("Network Member"). Certain Networks ("Standard Networks") require that in order for ISO to provide the PIN-less Debit Services to merchants, merchants must be sponsored into the Debit Network by a Network Member.
2. Duties of FDMS. Subject to the provisions of this Agreement, FDMS agrees to cause FFB, a Network Member, to: (a) sponsor Merchants into Debit Networks for provision of POS Services; (b) sponsor Merchants into Standard Networks for provision of PIN-less Debit Services through Standard Networks, subject to additional terms agreed upon by FDMS and ISO; provided, that FFB, in its absolute discretion, may refuse to sponsor any Merchant and may terminate its sponsorship of a Merchant or direct ISO to refuse to provide or terminate its provision of Debit Services to a Merchant.
2.1. Neither SERVICERS nor FFB will be responsible for the acts or omissions of any Debit Network or its agents or representatives.
3. Conflict with Agreement. In the event of a conflict between this Exhibit G and the remainder of the Agreement as it relates to the subject matter hereof, the terms of this Exhibit G shall control. Otherwise, all terms and conditions of the remainder of the Agreement shall likewise apply to this Exhibit.
Exhibit G, Page 1
Schedule A
DEBIT NETWORKS
1. All EDS networks, including; ACCEL, The Exchange, Instant Teller, Mpact, and TX.
2. Alaska Option
3. All Pulse networks, including; TYME, Money Station, and Gulfnet
4. All Star networks, including; MAC, Cash Station, Alert, Avail, Bankmate, Cactus, Explore, Honor, Lynx, Most, and Relay
5. NYCE
6. Interlink
7. Maestro
8. Any other network added by FFB after the Effective Date.
Schedule A to Exhibit G, Page 1 [/INST] ```json
{<answer_start>
"answer": "Except as expressly set forth herein, ISO shall not assign or otherwise transfer this Agreement or any of its rights or obligations hereunder, by operation of law or otherwise, or contract with any third party (other than the third parties named herein) to perform any of its responsibilities or obligations relating to this Agreement without the prior written consent of SERVICERS, which consent will not be unreasonably withheld."
<answer_end>
}
``` </s> | Exhibit 10.1
Execution Copy
SPONSORSHIP AGREEMENT
dated January 29, 2007
between
FIRST DATA MERCHANT SERVICES CORPORATION,
WELLS FARGO BANK, N.A.
and
iPAYMENT, INC.
SPONSORSHIP AGREEMENT
This Sponsorship Agreement (this "Agreement") dated as of January 29, 2007 (the "Effective Date") is by and between iPayment, Inc. ("ISO"), First Data Merchant Services Corporation ("FDMS"), and Wells Fargo Bank, N.A. ("Bank"). Under this Agreement, FDMS and Bank will collectively be referred to as "SERVICERS."
RECITALS
A. Bank is a Member of Visa and MasterCard, and, as such, is authorized to sign agreements enabling Merchants to accept Visa and MasterCard Bank Cards from their customers in accordance with the terms and conditions of their respective Rules and regulations.
B. ISO is a registered "independent sales organization" with Visa and a registered "member service provider" with MasterCard and is in the business of developing and marketing Merchant Bank Card programs, originating Merchant relationships, and providing Merchant Bank Card management services.
C. In conjunction with the processing services rendered to ISO by FDMS pursuant to the Service Agreement dated as of July 1, 2002 by and between ISO and FDMS, as amended (the "Service Agreement"), ISO and SERVICERS desire to establish the sponsorship of a Merchant processing Program on the terms and conditions set forth in this Agreement.
D. ISO, as assignee of Transaction Solutions, LLC, and Concord Transaction Services, LLC, successor in interest to EFS National Bank and an Affiliate of FDMS, are parties to that certain ISO Services and Marketing Agreement dated as of April 17, 2002, as amended (the "TS ISO Agreement"). The parties now desire to terminate the TS ISO Agreement and to incorporate the services provided thereunder into this Agreement and the Service Agreement.
E. ISO, as assignee of Petroleum Card Services, Inc., and CTS Holdings, LLC successor in interest to Concord Payment Systems, Inc. and National Payment Systems, Inc. and an Affiliate of FDMS, are parties to that certain Processing Service Agreement dated as of April 16, 2001, as amended (the "PCS ISO Agreement"). The parties now desire to terminate the PCS ISO Agreement and to incorporate the services provided thereunder into this Agreement and the Service Agreement.
F. Bank is the acquiring bank for the transactions processed under the TS ISO Agreement and the PCS ISO Agreement.
AGREEMENT
In consideration of the foregoing and the covenants and conditions contained herein, the parties agree as follows:
Page 1
SECTION 1 DEFINITIONS
As used in this Agreement (including the recitals set forth above), the following terms shall have the meanings set forth below (each of which includes the singular and the plural):
"ACH" shall mean the electronic transfer of funds through an automated clearing house system.
"Affiliate" shall mean any entity that directly or indirectly controls, is controlled by or is under common control with a party.
"Applicant" shall mean a Merchant who submits an Application.
"Application" shall mean the Merchant application used by ISO, as provided by and/or approved by SERVICERS and ISO, and other existing Merchant applications assigned to Bank as part of the initial BIN/ICA transfer.
"Application Materials" shall mean the Application and all other materials developed to facilitate the execution of Merchant Processing Agreements, as approved by SERVICERS and ISO. ISO shall cease its use of any Application Materials that become unacceptable to SERVICERS within ninety (90) days of receipt of written notice from SERVICERS or such shorter period of time as may be required to comply with the Rules or to prevent a loss to SERVICERS.
"Approved Merchant" means any Merchant that:
(a) Is solicited by ISO (or ISO's Other MSP's or IC's) for participation in the Program;
(b) Meets the established criteria for participation in the Program, including the Merchant Processing Policy; and
(c) Enters into a Merchant Processing Agreement.
Approved Merchants may also include Merchants converted to the Program as part of the initial BIN/ICA transfer and/or subsequently acquired Merchants that meet the established criteria for participation in the Program, including the Merchant Processing Policy, and whose sponsorship is assigned to Bank.
"Bank Card" shall mean a credit card or debit card issued by a member of MasterCard, Visa or any other association or card issuing organization (including Debit Networks) and bearing its respective trade names, trademarks, and/or trade symbols.
"Business Day" shall mean any day on which Bank is open for business, other than Saturdays, Sundays, or state or federal holidays.
Page 2
"Change of Control" means a change in the power to direct the management or affairs of ISO or the beneficial ownership of more than 51% of the equity securities; provided, however, that becoming a public company with the same management team or changing the beneficial ownership of more than 51% of the equity securities while maintaining the same management team will not constitute a change in control.
"Confidential Information" shall mean non-public information about, and proprietary materials of, any party as defined and more fully described in Section 9.1.
"Deconversion" shall mean the activities performed by SERVICERS at the request of ISO to effect a Program Transfer, which activities and associated fees/costs will be set forth in a written plan developed before any such activities are begun and in good faith by ISO and SERVICERS that is designed to complete the Program Transfer within 6 months, at SERVICERS' then-current fees/costs. If ISO requests no services from SERVICERS in connection with the deconversion, then there will be no fees/costs to ISO other than any pass-through Bank Card association fees, if any.
"Effective Date" is defined in the first paragraph of this Agreement.
"Eligible Merchant" shall mean a Merchant that meets the Merchant Processing Policy and is solicited for the Program by ISO or ISO's Other MSP's or IC's.
"FFB" means FDMS's Affiliate, First Financial FFB, an industrial bank formed under the laws of the State of Colorado.
"IC" shall have the meaning provided in Section 2.4.
"Including" whether capitalized or not, means "including but not limited to."
"Intellectual Property" shall mean copyrights, Marks, trade secrets, patents or other proprietary rights of a party.
"ISO" includes ISO's wholly-owned subsidiaries that are either independently registered with Visa and MasterCard or solicit Merchants under the ISO's registration, and also includes, when the context so requires, ISO's Other MSP's and IC's.
"Losses" shall mean any losses, damages, liabilities, judgments, orders of restitution, and penalties (including civil monetary penalties and Visa and MasterCard fines and penalties).
"Marks" shall mean the trademarks or service marks of a party.
"MasterCard" shall mean MasterCard International, Incorporated.
Page 3
"Material" when used with reference to information, a fact or circumstance, a course of action, a decision-making process or other matter, shall be limited to information, facts and circumstances, courses of action, decision-making processes or other matters as to which there is a substantial likelihood that a reasonable person would attach importance.
"Member" shall mean an acquiring member of Visa and MasterCard.
"Merchant" shall mean an individual or entity that engages in, or desires to engage in, Bank Card transactions with its customers.
"Merchant Account" shall mean the account relationship established between ISO, Bank and an Approved Merchant pursuant to a Merchant Processing Agreement.
"Merchant Discount Amount" shall mean the portion of the face amount of Bank Card transactions submitted by Approved Merchants and processed through the Program that is paid to SERVICERS. Further, this portion shall be determined by application of the Merchant Discount Rate that is reflected in each Merchant Processing Agreement.
"Merchant Discount Rate" shall mean a percentage rate to be applied to determine the portion of the face amount of a Bank Card transaction that will be charged to the originating Merchant, which rate shall be reflected in each Merchant Processing Agreement and subject to change from time to time pursuant to the terms of the Merchant Processing Agreement.
"Merchant Portfolio" shall mean the group of Approved Merchants participating in the Program pursuant to this Agreement.
"Merchant Processing Policy" shall mean the merchant policy, guidelines and standards established by SERVICERS under which SERVICERS will enter into a Merchant Processing Agreement with a Merchant as it may be modified by SERVICERS in their discretion from time to time during the term of this Agreement. Attached as Exhibit B is a list of certain categories of Merchants who are always unacceptable under the Merchant Processing Policy, along with a summary of other policy guidelines and standards.
"Merchant Processing Agreement" shall mean a written agreement among ISO, Bank and an Approved Merchant that governs the Approved Merchant's participation in the Program, as provided by and/or approved by SERVICERS and ISO. ISO shall cease its use of any form of Merchant Processing Agreement that becomes unacceptable to SERVICERS within ninety (90) days of receipt of written notice from SERVICERS or such shorter period of time as may be required to comply with the Rules or to prevent a loss to SERVICERS. For the avoidance of doubt, ISO shall be responsible for effecting any necessary and appropriate amendments to the Merchant Processing Agreement that may become necessary as a result of subsequent amendments to the Rules or SERVICERS' requirements. In the event a Merchant refuses to consent to any such amendment during the applicable ninety (90) day period, ISO will notify SERVICERS,
Page 4
and Bank or FFB will have the right to terminate its sponsorship of such Merchant and the applicable Merchant Processing Agreement.
"Merchant Reserve Account" shall mean one or more accounts maintained by SERVICERS as security against Merchant liabilities to ISO or SERVICERS.
"Minimum Balance" shall have the meaning provided in Section 6.1(a).
"Net Program Participation Fees" shall mean, at any point in time, all Program Participation Fees minus the sum of:
(a) All compensation and other amounts (including unreimbursed chargebacks and payments to the Reserve Account) due SERVICERS;
(b) [***]
(c) Pass-Through Costs and Interchange.
"Offset Account" shall mean an account at Bank that is established and maintained by FDMS to allow SERVICERS to credit and debit funds as provided in Section 6.
"Other MSP" shall have the meaning provided in Section 2.4.
"Pass-Through Costs and Interchange" shall mean the amounts charged by MasterCard, Visa, and other networks or Bank Card associations (including interchange fees, dues and assessments) in connection with the Approved Merchant transactions, the liability for which shall be the sole responsibility of ISO except as otherwise described herein.
"Payment Date" means: (i) for Merchant Accounts originally covered by the TS ISO Agreement and the PCS ISO Agreement, the [***] day (or first Business Day thereafter if such day is not a Business Day) of each calendar month during the term of this Agreement; and (ii) for all other Merchant Accounts on the FDMS "Omaha" platform covered by this Agreement, the first Business Day after the day the funds are available and in Bank's settlement account, but in no event later than [***] [***] days after the end of each month.
"Processing Year 1" means the period commencing on the Effective Date and ending on June 30, 2007.
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 5
"Processing Year" means each twelve (12) calendar month period commencing on the first day of July and ending on the last day of the following June, except for Processing Year 1 which is specifically defined.
"Program" shall mean ISO's sales and marketing activities on behalf of itself and SERVICERS, the processing of Merchant Applications, and the provision of Bank Card transaction processing services to Approved Merchants under the terms of their Merchant Processing Agreements.
"Program Participation Fees" shall mean all fees owed by Merchants to Bank and ISO under the applicable Merchant Processing Agreements, including the Merchant Discount Amounts or transaction fees, which amounts shall be recommended by ISO, but in all cases will be subject to final approval by Bank, which approval shall not be unreasonably withheld or delayed.
"Program Standards" means the policies and procedures established by SERVICERS to be used by ISO in connection with the solicitation of prospective Merchants and other policies, procedures, fines and penalties established by SERVICERS that are designed to promote the financial safety or soundness of the Program. The Program Standards may be modified by SERVICERS from time to time in their sole discretion; provided, however, that SERVICERS will discuss in good faith any concerns that ISO may have that any such change will adversely affect ISO's ability to add Approved Merchants to the Program. The current form of the Program Standards are attached hereto as Exhibit D.
"Program Transfer" shall mean Bank's transfer and assignment of the Merchant Portfolio and the dedicated BINs/ICAs, including Bank's interest in all Merchant Processing Agreements, to a third party designated by ISO in accordance with Section 10.4.
"Promotional Materials" shall mean all written solicitations and advertisements and other communications (including telemarketing scripts) used to market, promote, and solicit the establishment of Merchant Processing Agreements with Merchants.
"PS ISO Agreement" is defined in Recital E of this Agreement.
"Reserve Account" shall mean the account at Bank that is to be established by ISO and fully controlled by SERVICERS as described in Section 8.1 to insure payment of chargebacks, fees and other amounts due to SERVICERS.
"Residual Account" shall mean an account established and maintained by (and in the name of) ISO to allow Bank to credit funds as provided in Section 6.
"Rules" shall mean the by-laws, regulations and/or requirements that are promulgated by Visa, MasterCard, Debit Networks and/or other Bank Card associations.
Page 6
"Service Agreement" is defined in Recital C of this Agreement.
"Termination Reserve Account" shall mean a reserve account to be established upon notice of termination of this Agreement to insure the payment of chargebacks and credit/fraud losses related to transactions with an acquirer's processing date on or before the effective date of termination of this Agreement, fees and other amounts which may become due to SERVICERS following termination of this Agreement.
"TS ISO Agreement" is defined in Recital D of this Agreement.
"Visa" shall mean VISA USA Incorporated.
SECTION 2 PROGRAM SERVICES
2.1 SERVICERS' Services/Pricing.
(a) SERVICERS shall provide the services specified in this Agreement and the exhibits and shall be compensated therefor as set forth in the Service Agreement and in Exhibit A hereto. Any and all processing and related services rendered by SERVICERS to an Approved Merchant in the Merchant Portfolio covered by this Agreement (including without limitation Merchants initially processed under the TS ISO Agreement and the PCS ISO Agreement) will be rendered pursuant to and billed at the rates set forth in the Service Agreement. Any and all sponsorship, clearing and related services rendered by SERVICERS in connection with an Approved Merchant in the Merchant Portfolio covered by this Agreement (including without limitation Merchants initially processed under the TS ISO Agreement and the PCS ISO Agreement) will be rendered pursuant to and billed at the rates set forth in this Agreement. Any Approved Merchant added to the Merchant Portfolio and Program covered by this Agreement will be subject to all terms and conditions of this Agreement.
(b) Any service described in this Agreement is subject to periodic revision by SERVICERS to reflect changes (i) to the SERVICERS' systems or the services provided by SERVICERS and offered generally to SERVICERS' customers and (ii) in the specific services provided to ISO; provided, however, that SERVICERS will not implement any changes or improvements to the services if such action will materially degrade the quality of the services being provided to ISO by SERVICERS hereunder unless such change is required by the VISA or MasterCard rules and regulations.
(c) SERVICERS may from time to time pass through to ISO actual increases in the Pass-Through Costs and Interchange, to reflect any increases in such fees, costs and charges to SERVICERS, upon thirty (30) days prior written notice to ISO (or, if SERVICERS receive less than thirty (30) days notice of such increase, as much prior notice as is practicable under the circumstances).
Page 7
(d) In the event of any fee increases to ISO, SERVICERS shall provide reasonable assistance to ISO in passing such fee increases through to Merchants under the Merchant Processing Agreements.
(e) From time to time and in their sole discretion, SERVICERS may also perform certain risk management services, such as periodic credit reviews, fraud reviews and monitoring and collections, with respect to Applicants and Approved Merchants; provided, however, that SERVICERS will not contact such Applicants or Approved Merchants directly and will request any reasonably necessary information or documentation from ISO. SERVICERS' participation in any such activity shall not in any way relieve ISO from its responsibility for credit and fraud losses which may result from or be related to the Program.
(f) SERVICERS will provide ISO with a point of contact to address issues that arise in connection with this Agreement, which will be one or more employees of FDMS.
2.2 ISO Obligations.
(a) ISO shall perform all sales and marketing activities in furtherance of the Program, subject to the terms of this Agreement. It is understood that (at all times) SERVICERS have the ultimate approval right for ISO's solicitation procedures, Application Materials, Application processing procedures, Merchant qualification criteria, transaction processing procedures, Merchant Processing Agreements, Program terms, Program Participation Fees, and other Program policies, all of which must be approved in advance by SERVICERS in writing.
(b) ISO shall also perform all initial Merchant credit review and underwriting on Applicants in a manner consistent with Section 4 of this Agreement, including the Merchant Processing Policy. ISO shall at all times comply with the Program Standards.
(c) ISO will use reasonable efforts to convert the sponsorship and clearing of all Merchants processing on the FDMS system under the Service Agreement to the sponsorship and clearing of Bank under the terms and conditions of this Agreement; provided, however, that ISO will not be required to attempt to convert any such Merchants if the Merchant refuses to be sponsored by Bank, if the applicable Other MSP or IC refuses to board accounts on the FDMS System or be sponsored by Bank, or if the conversion of such merchants would not make economic or strategic business sense to ISO.
(d) For the avoidance of doubt, the parties acknowledge that ISO may utilize SERVICERS' services under this Agreement on a non- exclusive basis and there are no minimum fees or utilization commitments under this Agreement.
Page 8
2.3 BIN and ICA Assignment. SERVICERS will utilize BINs (Bank Identification Number) and ICAs (Interbank Card Association) dedicated solely to ISO to facilitate the Program, and no merchants other than Program Merchants will be under the dedicated BIN/ICA. The initial BINs/ICAs to be transferred to Bank from ISO's current sponsoring Member as part of the Program launch are listed on Exhibit E. ISO shall be responsible, and shall reimburse SERVICERS, for all actual, documented fees and costs imposed by third parties associated with obtaining, installing and maintaining the BIN/ICA on the FDMS system, including any Visa and MasterCard fees and assessments. Upon a Program Transfer in accordance with Section 10.4, Bank will transfer the dedicated BINs/ICAs used in connection with the Program to a Visa and MasterCard Member designated by ISO.
2.4 Use of Other Independent Sales Organizations/Independent Contractors.
(a) Except as expressly set forth herein, ISO shall not subcontract, assign, license or in any other manner extend or transfer to any third party any right or obligation ISO has with respect to SERVICERS' Program. If ISO desires to use the services of any other independent sales organization/member service provider ("Other MSP"), such Other MSP must be (i) reviewed and approved by SERVICERS, in their sole discretion, (ii) contracted with SERVICERS or Bank upon mutually agreeable terms, and (iii) registered with Visa and MasterCard by Bank in accordance with the Rules. If ISO desires to use the services of an individual independent contractor who represents himself or herself as working for ISO using ISO's legal/business name ("IC"), then ISO shall enter into a written agreement with each such IC that (i) requires the IC to comply with all applicable terms of this Agreement and all applicable Rules, laws and regulations, and (ii) prohibits the making of any representation or creating any liability on behalf of SERVICERS.
(b) ISO's currently utilizes the Other MSP's and IC's listed on Exhibit E attached hereto in its Merchant processing business. The parties agree to work together expeditiously and in good faith to transfer the registration or re-register all such entities with the appropriate Bank Card associations as required under the Rules. All Other MSP's must be appropriately registered before boarding accounts under Bank's sponsorship.
2.5 SERVICERS' Obligations.
(a) Bank will sponsor ISO, at ISO's expense, as an ISO for Visa, as an MSP for MasterCard and, to the extent applicable, as similarly required for all other Bank Card associations and, to the extent required by any Bank Card association, Bank also agrees to sponsor for registration with Visa and/or MasterCard those Other MSP's, IC's, subsidiaries and marketing representatives of ISO which are approved by SERVICERS. Unless otherwise disallowed by a Bank Card association, Bank agrees to maintain such sponsorships throughout the term of this Agreement and until the first of either to occur: (i) [***] days after the
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 9
expiration or earlier termination of this Agreement, or (ii) the effective date of the assignment of all of the Merchant Processing Agreements or all of the BINs/ICAs and other items specified and contemplated in Section 10.4.
(b) From time to time, and within a reasonable time from Bank's receipt of notice of an amendment to the Rules that is not otherwise available to ISO, Bank will advise ISO, who shall, in turn, notify each Merchant, of any change in the Merchant Program imposed by the Rules.
(c) At ISO's request, Bank will obtain copies for ISO of any Bank Card association manuals and publications (including Rules) that are available to acquiring members and that are not otherwise available to ISO and that are allowed to be shared with ISO under the Rules. Bank will forward to ISO all information routinely provided by each Bank Card association that is not otherwise available to ISO that are allowed to be shared with ISO under the Rules that would be helpful to ISO in fulfilling its obligations under this Agreement.
(d) Bank will maintain all cardholder information under its control and/or possession in a safe and secure manner in compliance with the Rules, and will report to Bank Card associations as required by the Rules relating to internal policies and procedures related to cardholder information security. Furthermore, Bank agrees to inform the ISO immediately regarding any breach of information security that may have an adverse effect to the ISO or to its Merchants.
(e) Bank, as the acquiring principal member, agrees to represent ISO's interest in disputes that might arise from time to time with a Bank Card association over compliance with Rules and fines; provided, however, that ISO shall pay any fines or other charges imposed on Bank by a Bank Card association relating to the Merchant Program and any and all costs reasonably incurred by Bank in disputing the same, including reasonable associated legal fees.
(f) FDMS has entered into an agreement with FFB, pursuant to which FFB will sponsor (or assume the sponsorship of) Merchants, FDMS and its customers, including ISO, into certain networks ("Debit Sponsorship"). ISO agrees to the additional terms and conditions relating specifically to the Debit Sponsorship, as set forth in Exhibit G.
SECTION 3 MARKETING AND COMPLIANCE
3.1 Application Materials. ISO shall use reasonable efforts to ensure that each Application completed by an Applicant is current and contains accurate and complete information. ISO's Application Materials shall comply with all applicable Rules, laws and regulations. All Application Materials and any changes to the form and content thereof must be approved in writing by SERVICERS prior to use by ISO, which approval will not be unreasonably withheld or delayed beyond [***] [***] days unless such changes
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 10
are voluminous. The initial approved Application Materials are attached hereto as Exhibit C.
3.2 Compliance Responsibility. ISO shall be responsible for ensuring that the Application Materials, the marketing plans, the Promotional Materials and all services performed by ISO hereunder comply, and remain in compliance with, all applicable Rules, laws and regulations; provided, however, that SERVICERS will in good faith inform ISO of issues or concerns with ISO's materials or practices observed by SERVICERS that SERVICERS reasonably believe may be in violation of applicable Rules. All documents and any changes to the form and content thereof must be approved in writing by SERVICERS prior to use by ISO, which approval will not be unreasonably withheld or delayed beyond fifteen (15) days.
3.3 Promotional Materials. ISO shall be responsible, at its sole expense, for the development of all Promotional Materials and shall bear the cost of the development and the printing and distribution of the Promotional Materials. The Promotional Materials shall comply with all applicable Rules, laws and regulations. All Promotional Materials and any changes to the form and content thereof must be approved in writing by SERVICERS prior to use by ISO, which approval will not be unreasonably withheld or delayed beyond fifteen (15) days. ISO and ISO's Other MSP's and IC's will not use SERVICERS' or SERVICERS' Affiliates' Marks in any advertising, promotional or display materials without SERVICERS' prior written approval, which approval will not be unreasonably withheld or delayed beyond fifteen (15) days.
SECTION 4 APPLICATION AND UNDERWRITING PROCEDURES
4.1 Applications. ISO shall solicit Applications from Eligible Merchants at ISO's sole expense and shall provide each Applicant with Application Materials. ISO shall collect completed and signed Application Materials and Merchant Processing Agreements from Applicants and shall forward them to SERVICERS within [***] [***] Business Days after the merchant is boarded (which may be accessed by SERVICERS online or forwarded to SERVICERS via ISO's automated application system or to a facsimile number designated by SERVICERS, provided such complies with the Rules and applicable laws, rules and regulations) or to any other place(s) as SERVICERS may designate for processing and document storage. ISO shall retain copies of all Application Materials, Merchant Processing Agreements and documents forwarded to SERVICERS. ISO shall provide SERVICERS with access to ISO's automated application system and ISO's online Merchant Account system (BAMS, or any such successor or replacement system) at no cost to SERVICERS.
4.2 Underwriting. ISO shall underwrite, perform a credit review and conduct a site inspection, when applicable, for each Application as required by this Agreement, the Merchant Processing Policy and the Rules to determine whether each Applicant is an Eligible Merchant. ISO may conduct such credit review without notification to and participation by SERVICERS, except as otherwise provided below (i.e., for any
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 11
prospective Merchant that falls within the risk and volume parameters set forth in this Section 4.2), provided that ISO performs the credit review in accordance with the Merchant Processing Policy, the terms of this Agreement and the Rules. In accordance with and as permitted by this Agreement, a third-party service provider approved by SERVICERS may perform site inspections for ISO. In order to assist ISO in its underwriting hereunder, SERVICERS shall assist ISO with checking Merchants and prospective Merchants against the Terminated Merchant File/MATCH List or any similar list maintained by any entity. ISO shall be responsible for all credit and fraud losses associated with the Merchant Portfolio or the Program, regardless of any services or assistance that may be provided by SERVICERS. For any high risk Merchant who in good faith ISO anticipates will have annual Visa and MasterCard transaction volume equal to or greater than $[***] and any low risk Merchant who in good faith ISO anticipates will have annual Visa and MasterCard transaction volume equal to or greater than $[***], ISO shall advise SERVICERS and permit SERVICERS to conduct their own credit review prior to boarding the account. Upon receipt of a complete underwriting package from ISO, SERVICERS will respond to ISO within [***] [***] Business Days as to SERVICERS' acceptance or rejection of such Merchant. SERVICERS' participation in any credit review will not in any way relieve ISO from its responsibility for credit and fraud losses which may result from a Merchant's transaction processing. SERVICERS may at any time require that a Merchant relationship be terminated by ISO and Bank may cease the provision of services to any such Merchant pursuant to the terms of the Merchant Processing Agreement. SERVICERS shall have the right and authority to accept or reject any Application. ISO shall obtain prospective Merchants' authorization for ISO and/or SERVICERS to obtain all reports (including personal and business credit reports) and other information necessary in connection with the Application. ISO shall have the right, subject to and pursuant to the terms and conditions of the Merchant Processing Policy, to cause any Eligible Merchant with transaction card volume processing limits up to but not more than $[***] per month, that has been approved by ISO, to be activated immediately in SERVICES' systems. SERVICERS agree to provide ISO with a final approval decision (i.e., acceptance, rejection or required modification of the submitted Application) on submitted and complete Merchant Applications for Eligible Merchants that are not classified as "high risk" on the High Risk Merchant List attached hereto as Exhibit F and which seek approval for transaction card volume processing limits in excess of $[***] per month but not more than $[***] per month, within [***] [***] Business Days after SERVICERS' receipt of such completed Merchant Application and documentation.
4.3 Credit Decisions. ISO shall employ the Merchant Processing Policy guidelines provided by SERVICERS in making credit evaluations. SERVICERS reserve the right, in their sole and absolute discretion, to:
(a) Change the Merchant Processing Policy;
(b) Reject the Application of any Applicant who SERVICERS determine does not satisfy SERVICERS' Merchant Processing Policy; and
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 12
(c) Terminate the Merchant Processing Agreement with respect to any Merchant at any time, according to the Merchant Processing Agreement terms.
Notwithstanding anything contained herein, so long as all of the following are true with respect to a Merchant or Merchant Account, SERVICERS agree that, except as required by the Rules, SERVICERS shall neither terminate nor make any change with respect to the discount or reserve of said Merchant or Merchant Account that will have an adverse effect on the Merchant or Merchant Account without the prior written consent of ISO:
(i) The Merchant or Merchant Account is not in a Bank Card association monitoring program;
(ii) The Merchant or Merchant Account is not engaged in, or aiding and abetting, any illegal activity or fraud;
(iii) The Merchant or Merchant Account is in compliance with the Merchant Processing Policy;
(iv) The Merchant or Merchant Account is not processing transactions where products are delivered or services rendered more than one (1) year (on the average, based upon transactions of the immediately preceding three (3) months) following the date of the transaction;
(v) No Bank Card association nor any regulatory agency has requested that the Merchant or Merchant Account be terminated;
(vi) In its sole judgment, SERVICERS do not feel that they may be at financial risk as a result of the activity of a Merchant or Merchant Account; and
(vii) The Merchant or Merchant Account is not causing reputational harm or risk to either of SERVICERS in their reasonable judgment.
In the event SERVICERS decide to terminate or make any such adverse change with respect to a Merchant or Merchant Account, SERVICERS shall first attempt to give ISO notice of SERVICERS' decision.
4.4 Merchant Reserve Accounts. ISO shall be responsible for determining the amount of any Merchant Reserve Accounts. ISO shall also be responsible for ensuring all Merchant Reserve Accounts are adequately funded. All Merchant Reserve Accounts, along with any other monies or collateral collected from Approved Merchants, shall be deposited with Bank. [***] ISO will monitor daily Merchant account activity and if in ISO's reasonable judgment certain Approved Merchants and/or certain transactions are possibly fraudulent or otherwise not in
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 13
compliance with the Rules or in violation of the Merchant Processing Agreement, ISO will instruct SERVICERS to change the Merchant bank account information to cause funds otherwise due such Merchant to be diverted and deposited into the Merchant Reserve Account for such Merchant. ISO will thereafter promptly investigate each such suspicious incident and, upon request, promptly notify SERVICERS of the result of any such investigation. If in any case ISO's investigation determines that no violation occurred, ISO will promptly request SERVICERS to release any funds diverted to the Merchant Reserve Account to the Merchant's deposit account. Once monies or other collateral are deposited in a Merchant Reserve Account, SERVICERS shall control the disbursements of such funds which are to be (a) paid to ISO or SERVICERS to cover losses incurred in connection with the applicable Approved Merchant or (b) returned to the applicable Approved Merchant upon a reduction in the potential risk to ISO and SERVICERS arising from the provision of services to such Merchant within two (2) Business Days after receipt of a written request by ISO. From time to time, ISO may request SERVICERS to disburse monies held in a Merchant Reserve Account to ISO or an Approved Merchant as set forth in the preceding sentence, and SERVICERS shall consider such requests in good faith. Bank may draw against any Merchant Reserve Account to cover any Losses or credit and fraud losses incurred by SERVICERS with respect to an Approved Merchant without the consent of ISO or the applicable Approved Merchant.
4.5 Maintenance of Underwriting Staff. ISO shall at all times maintain an adequate and qualified staff to perform underwriting and credit reviews of Program Merchants.
SECTION 5 PROPRIETARY RIGHTS
5.1 General. To the extent required by the Rules, legal title to all Merchant Applications, Merchant Processing Agreements and Merchant Accounts and records shall be in the name of Bank, subject to its obligations to effect a Program Transfer pursuant to Section 10.4 of this Agreement; provided, however, that Bank acknowledges and agrees that ISO shall own and maintain the Merchant relationship during the term of this Agreement and thereafter. ISO acknowledges and agrees that all Merchant Applications, Merchant Processing Agreements and Merchant Accounts and records may not be transferred, assigned, sold or exchanged by ISO except as set forth in this Agreement or the applicable Merchant Processing Agreement. Bank shall be exclusively responsible and entitled to receive all payments, collections, and other amounts due from Merchants, subject to its payment obligations to ISO. Each of ISO's and Bank's rights shall survive the termination of this Agreement by either party and for whatever cause. For the avoidance of doubt, the parties acknowledge and agree that ISO owns all Merchant Processing Agreements, Merchant Accounts and Merchant relationships except as otherwise specifically set forth herein.
SECTION 6 SETTLEMENT AND PAYMENT
Page 14
6.1 Offset Account.
(a) FDMS shall establish and maintain the Offset Account at Bank during the term of this Agreement to facilitate the making of all payments due to SERVICERS from ISO and to ISO from SERVICERS. ISO agrees that the initial amount of the Offset Account will be $[***] and, thereafter, the Offset Account will, at all times, maintain collected funds in an amount at least equal to the amount then due SERVICERS hereunder (which shall be referred to herein as the "Minimum Balance").
(b) If the collected funds on deposit in the Offset Account at any point in time are less than the Minimum Balance, SERVICERS may fund the Offset Account with any monies or funds belonging or payable to ISO which are in SERVICERS' possession. SERVICERS will promptly notify ISO after making any such transfer.
(c) ISO hereby grants SERVICERS a security interest in the Offset Account to secure all of ISO's obligations to SERVICERS under this Agreement.
6.2 Settlement Procedures.
(a) SERVICERS shall settle each Merchant Account in accordance with the terms of the applicable Merchant Processing Agreement, remitting to each Approved Merchant, by ACH or other acceptable method, all settled funds due to the Approved Merchant after first deducting from such settled funds all applicable Program Participation Fees and any other amounts owed or withheld under the applicable Merchant Processing Agreement. Merchant Account settlement is included in the fees set forth in Exhibit A and will not incur an additional fee.
(b) On each Payment Date, SERVICERS shall credit ISO's Residual Account in an amount equal to all Net Program Participation Fees collected by SERVICERS since the immediately preceding Payment Date and which have not otherwise been paid to ISO.
(c) In the event that the Net Program Participation Fees are insufficient to pay any amounts due to SERVICERS' under this Agreement (including compensation, funding the Offset Account, funding the Reserve Account, or paying third party processing fees), then ISO shall provide sufficient additional funds to SERVICERS upon demand.
(d) [***]
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 15
[***]
6.3 Payment Deferrals. In addition to any rights now or hereafter granted under this Agreement or applicable law and not by way of limitation of any such rights, SERVICERS are hereby authorized by ISO, at any time and from time to time, without notice or demand to ISO or to any other person (any such notice and demand being hereby expressly waived), to setoff, recoup and to appropriate and to apply any and all monies or funds belonging or payable to ISO which are in Bank's possession against and on account of ISO's obligations to SERVICERS under this Agreement (including funding the Offset Account, the Reserve Account, the Termination Reserve Account or funding chargebacks), whether such obligations are liquidated, unliquidated, fixed, contingent, matured or unmatured.
6.4 Expenses. Except as otherwise provided, each party shall bear its own administrative costs and overhead expenses arising out of its performance of this Agreement.
6.5 Liability for Losses. Unless any Losses are caused by SERVICERS or are attributable to the negligence or willful misconduct of SERVICERS, SERVICERS shall have recourse from ISO, and ISO shall fully reimburse SERVICERS, for any Losses to SERVICERS that are caused by:
(a) Chargebacks, purchase returns, refunds, credits, adjustments, fees or Bank Card association fines, costs and expenses related to Approved Merchants, Eligible Merchants, or any Merchant activity hereunder; and
(b) Amounts remaining due to SERVICERS after the deduction of SERVICERS' compensation as provided herein.
6.6 Bank Card Association Assessments/Fees. ISO shall pay or fund when due all Bank Card association assessments/fees, including any and all quarterly assessments/fees.
6.7 Survival. The provisions of this Section 6 shall survive the termination or expiration of this Agreement.
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 16
6.8 Assignment of Merchant Losses. SERVICERS agree that after SERVICERS have been fully reimbursed by ISO for a Merchant loss pursuant to this Agreement, and provided that the Merchant Account resulting in the Merchant loss has been terminated, that SERVICERS will, at the request of ISO, assign to ISO any and all of SERVICERS' subrogation rights under or related to the Merchant Processing Agreement (including guarantees, security or otherwise) related to the indebtedness of such Merchant under the Merchant Processing Agreement (including guarantees, security or otherwise), so that ISO may pursue collection recovery activities in connection with such Merchant loss. Any such collection recovery activities shall be conducted in the name of ISO and shall be subject to the indemnification obligations of ISO. Bank agrees to execute and deliver to ISO such assignment documents as reasonably requested and required by ISO to vest such collection loss(es) recovery right to ISO and as reasonably required in connection with such collection recovery activities.
SECTION 7 REPRESENTATIONS AND WARRANTIES OF ISO
ISO represents and warrants to SERVICERS that, as of the date of this Agreement, the following are true and correct:
7.1 Organization and Good Standing. ISO is a Delaware corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has full corporate power and authority to carry on its business as it is now being conducted. ISO is and will be qualified as a foreign corporation in good standing under the laws of each jurisdiction in which the conduct of its business or the ownership of its properties requires the qualification.
7.2 Execution and Effect of Agreement. ISO has the corporate power and authority to enter into this Agreement and the execution and delivery of this Agreement and the performance of ISO's obligations hereunder have been duly authorized by all necessary corporate action. This Agreement has been duly executed and delivered by ISO and constitutes a legal, valid, and binding obligation of ISO, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and other laws affecting the rights of creditors generally.
7.3 Restrictions. Neither the execution and delivery of this Agreement nor the conduct of the Program contemplated hereby will:
(a) Violate any of the provisions of the charter or by-laws of ISO; or
(b) Conflict with, or result in a breach of, or give rise to a right of termination of, or accelerate the performance required by the terms of any judgment, court order or consent decree, or any agreement, including a restrictive covenant or covenant against competition, indenture, mortgage, or instrument to which ISO is a party or to which its property is subject, or constitute a default thereunder, except where the conflict, breach, right of termination, acceleration or default would not
Page 17
prevent or have a Material adverse effect on the conduct of the activities contemplated hereby.
7.4 Consents. Except for filings, consents, waivers, approvals, and authorizations that the failure to obtain or make would not have a Material adverse effect on ISO or the Program, no filing, consent, waiver, approval, or authorization of any governmental authority or of any third party other than Visa and MasterCard, or notice to, or filing with, any governmental authority or any third party on the part of ISO is required in connection with the execution and delivery of this Agreement or the conduct of the activities contemplated hereby.
7.5 Litigation. To the knowledge of ISO and except as disclosed in public filings with the Securities and Exchange Commission, there is no action at law or in equity, arbitration, proceeding, or governmental investigation pending, or to the knowledge of ISO threatened, by or before any court, any governmental or administrative agency or commission, or arbitrator, against ISO regarding this Agreement or any of the transactions contemplated hereby that could reasonably be expected to prevent or have a Material adverse effect on the conduct of the activities contemplated hereby.
SECTION 8 ADDITIONAL COVENANTS
8.1 Reserve Account.
(a) ISO expressly authorizes SERVICERS to establish a Reserve Account pursuant to the terms and conditions set forth in this Section 8.1. The initial amount of such Reserve Account shall be [***]. In addition, the amount of the Reserve Account may be increased by SERVICERS from time to time based upon any reasonably anticipated risk of loss to SERVICERS, material breach of the Agreement by ISO, or any material adverse change in the financial condition of ISO. Such Reserve Account shall be established and maintained at Bank. [***]
(b) The Reserve Account shall be fully funded upon five (5) Business Days' notice to ISO. Such Reserve Account may be funded by all or any combination of the following: (i) one or more debits to the Offset Account or any other accounts of ISO held by Bank or any of its Affiliates; (ii) one or more deductions or offsets to any payments otherwise due to ISO; or (iii) ISO's delivery to SERVICERS of a letter of credit issued by a bank acceptable to SERVICERS and in a form acceptable to SERVICERS.
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 18
(c) If ISO's funds in the Reserve Account are not sufficient to cover the chargebacks, adjustments, fees and other charges due to SERVICERS from ISO or Merchants, or if the funds in the Reserve Account have been released, ISO agrees to pay SERVICERS such sums within five (5) Business Days of any such request by SERVICERS. In the event of a failure by ISO to fund the Reserve Account, SERVICERS may fund such Reserve Account in any of the manners set forth above.
(d) To secure ISO's obligations to SERVICERS under this Agreement, ISO grants to SERVICERS a lien and security interest in and to any of ISO's funds in the Reserve Account or otherwise related to this Agreement now or hereafter in the possession of SERVICERS, whether now or hereafter due or to become due to ISO from SERVICERS. ISO agrees to duly execute and deliver to SERVICERS such instruments and documents as SERVICERS may reasonably request to perfect and confirm the lien, security interest, right of setoff, recoupment and subordination set forth in this Agreement.
8.2 Inspection.ISO will, at any and all reasonable times, permit SERVICERS' employees, agents, attorneys, auditors, or bank regulators to inspect ISO's place of business to audit its operations for compliance with all Rules, laws, regulations, and directives of any governmental regulatory agency or Bank Card association, all at SERVICERS' expense.
8.3 Cooperation.SERVICERS and ISO will each timely furnish to the other any and all information and materials that the other may, from time to time, reasonably request in connection with all matters contemplated by this Agreement. Each party also shall take the action as the other may, from time to time, reasonably request in order that the purposes of this Agreement will be fully accomplished and that all matters contemplated hereby will comply with all Rules or other applicable statutory, regulatory or other legal requirements. ISO shall promptly deliver to SERVICERS after receipt by ISO a copy of all non-routine notices or correspondence that it receives from MasterCard, Visa, or other networks or Bank Card associations, or any other third party, which in any way relates to any Merchant's or ISO's participation in MasterCard, Visa, and other networks or Bank Card associations under this Agreement.
8.4 Compliance With Rules. ISO also covenants to the following:
(a) ISO will obtain copies of all available Rules from Visa and MasterCard and any other Bank Card association that makes its Rules available to ISOs. For all Rules not reasonably available to ISO, SERVICERS will provide ISO with information regarding such Rules and compliance therewith. ISO understands and agrees to comply fully with all Rules and applicable laws and regulations.
(b) On an ongoing basis, ISO will regularly provide SERVICERS with the current addresses for all its offices.
Page 19
(c) In the event of any inconsistency between any provision of this Agreement and the Rules, the Rules in each instance shall be afforded precedence and shall apply.
(d) ISO acknowledges and agrees that Visa and/or MasterCard are the sole and exclusive owner of Visa and/or MasterCard marks. ISO agrees to never contest the ownership of these marks and Visa and/or MasterCard may at any time immediately and without advance notice prohibit ISO from using their respective marks.
(e) ISO acknowledges and agrees that Visa and/or MasterCard shall have the right, either in law or in equity, to enforce any provision of the Rules and to prohibit ISO's conduct that creates a risk of injury to Visa and/or MasterCard or that may adversely affect the integrity of Visa's and/or MasterCard's systems, information or both. ISO agrees to refrain from taking any action that would have the effect of interfering with or preventing an exercise of these rights by Visa and/or MasterCard.
(f) ISO agrees not to use any marks of Visa and/or MasterCard on its own behalf in the furtherance of the Program. ISO also agrees not to suggest, imply or in any manner create an impression that it is a Member or an authorized representative of Visa and/or MasterCard or that it is other than an independent sales organization or member service provider for a Member. Further, ISO may not create an impression that Visa and/or MasterCard in any way endorses ISO or the Program it coordinates through SERVICERS.
(g) ISO may use one or more of Visa's or MasterCard's marks under the following conditions:
(i) The marks are used in accordance with the Rules; and
(ii) The marks are used pursuant to the express written permission of Bank.
(h) Except as expressly set forth herein, ISO may not subcontract, sublicense, assign, license, franchise or in any other manner extend or transfer to any third party any right or obligation ISO may have in connection with the Program. ISO agrees to provide services under the Program only with ISO's employees, Other MSP's or IC's in accordance with Section 2.4. An employee of ISO is defined as an individual who, while providing services for the Program (i) represents himself or herself as working for ISO while using only ISO's legal or "doing business as" name(s) as registered with Visa and/or MasterCard, and (ii) receives compensation for services rendered for the Program from ISO. An employee may not extend or transfer to any third party any right or obligation the employee may have regarding the Program as an employee of ISO. ISO will provide SERVICERS with a list of the names of all of its employees and IC's and such additional information as SERVICERS may reasonably request from time to time regarding any employee or IC. ISO will conduct appropriate background checks
Page 20
(including credit and criminal background checks) on all employees, Other MSP's and IC's.
(i) ISO further agrees to the following:
(i) ISO will not use Visa's and/or MasterCard's equipment and software ("V/MC Systems") and Visa and/or MasterCard information identified or reasonably understood to be confidential or proprietary ("V/MC Confidential Information") for anything other than to perform its duties on behalf of SERVICERS and definitely not for its own use or for any other purpose;
(ii) To treat the V/MC Systems and V/MC Confidential Information in at least as careful and confidential a manner as ISO treats its own or the SERVICERS' systems and confidential or proprietary information;
(iii) To acknowledge that access to the V/MC Systems and V/MC Confidential Information does not convey to ISO any right, title, interest or copyright therein or any license to use, sell, exploit, copy or develop them further;
(iv) To limit access to the V/MC Systems and V/MC Confidential Information to only those ISO employees and Other MSP's with a need to have access for the ISO to perform services under the Program and to implement and maintain reasonable and appropriate safeguards to prevent unauthorized access to or use of the V/MC Systems or V/MC Confidential Information;
(v) Solely with respect to the Program and this Agreement, upon request by SERVICERS, or, absent such requests, upon termination of ISO's performance under the Program, to immediately cease any and all use of V/MC Systems and promptly thereafter deliver to SERVICERS all V/MC Confidential Information then in the possession or control of ISO or, upon request by Visa and/or MasterCard, to immediately cease any and all use of the V/MC Systems and promptly thereafter deliver all V/MC Confidential Information that was provided by SERVICERS then in its possession or control to Visa and/or MasterCard; and
(vi) To immediately advise both SERVICERS and Visa and/or MasterCard if any unauthorized person or external entity seeks access to the V/MC Systems or V/MC Confidential Information whether by legal proceeding or otherwise.
(j) Visa and/or MasterCard may at any time conduct financial and procedural audits of ISO. ISO agrees to cooperate with and promptly supply Visa and/or MasterCard with all information and material requested.
Page 21
(k) ISO understands that all Program Materials including Merchant Applications, Merchant Processing Agreements, Merchant statements, and Promotional Materials (i) must be approved by SERVICERS before use, such approval not to unreasonably withheld or delayed beyond [***] [***] days, and (ii) may not state or imply that ISO is participating in or conducting any activity precluded by the Rules.
(l) ISO recognizes that SERVICERS must approve (in advance) any fee associated with the Program which must be clearly and conspicuously disclosed in writing to the Merchant prior to any payment or Application.
8.5 Registration as ISO. ISO and each Other MSP shall at all times, at ISO's and/or each Other MSP's cost and expense, maintain in effect during the term of this Agreement, a valid and effective registration as an independent service organization with Visa and a member service provider with MasterCard and shall provide any information as Visa and MasterCard may reasonably request in connection therewith or in connection with the services of ISO hereunder, and shall provide SERVICERS the information as it may reasonably request concerning compliance with all applicable Rules, laws, regulations and the requirements set forth herein in connection with this Agreement. The parties hereto will work together expeditiously and in good faith to register and maintain the registration of ISO and each Other MSP with the appropriate Bank Card associations as required under the Rules.
8.6 Mark Restriction. ISO shall not make any use of SERVICERS' Marks or any other Intellectual Property without SERVICERS' prior written consent, which will not be unreasonably withheld or delayed beyond [***] [***] days.
8.7 Financial Statements/Audit Rights. ISO shall make available (whether through public filings or directly) SERVICERS with annual audited financial statements prepared by an independent auditing firm within 90 days of the end of each fiscal year (and shall make available to SERVICERS quarterly financial statements upon request of SERVICERS). In addition, ISO will provide any shareholder/owner personal financial information as required by the Rules. ISO will, at any and all reasonable times, permit SERVICERS' employees, agents and/or auditors to inspect ISO's books and records at SERVICERS' expense prior request and notice and if for a particular need.
SECTION 9 CONFIDENTIAL INFORMATION
9.1 Confidential Information. Confidential Information is non-public and proprietary information relating to the business of ISO or its Affiliates that SERVICERS and their Affiliates acquire during the term of this Agreement, and information relating to the business of SERVICERS and their Affiliates. It includes, but is not limited to, the following, whether used in, or to be used in, the business of ISO or SERVICERS: physical systems for the operation of the business; all present and planned strategies, business plans, and projections; all market and sales and marketing information; all
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 22
financial, accounting, and credit information; and the terms and conditions of this Agreement. Neither party will disclose, furnish, sell, convey, or use for any purpose other than as contemplated under this Agreement any of the other parties' Confidential Information or materials without written authorization. For the avoidance of doubt, the parties acknowledge and agree that all Merchant information is the Confidential Information of ISO and (i) may not be used by SERVICERS for any purpose other than to provide the services contemplated hereunder during the term of this Agreement and thereafter, and (ii) will not be used by SERVICERS, directly or indirectly, to solicit any Merchants in the Merchant Portfolio.
9.2 Exclusions. Nothing in this Section 9 shall restrict either party with respect to Confidential Information which: (a) the receiving party can demonstrate was rightfully possessed by it before it received the information from the disclosing party; (b) was in the public domain prior to the date of this Agreement or subsequently becomes publicly available through no fault of the receiving party or any person acting on its behalf; (c) was previously received by the receiving party from a third party or is subsequently furnished rightfully to the receiving party by a third party not known to be under restrictions on use or disclosure; (d) is independently developed by such party; (e) is required to be disclosed by the Rules, law, regulation or court order, provided that the disclosing party will exercise reasonable efforts to notify the other party prior to disclosure; or (f) is required to be disclosed to comply with or to enforce the terms of this Agreement.
9.3 Ownership of Work Product. Each party shall have and retain all ownership rights (including ownership of any Marks) in the work product developed for the implementation of the Program, including the Application, Merchant Processing Agreement and Promotional Materials that it creates, prepares or produces in connection with this Agreement, and all the work products shall remain the exclusive property of that party. Upon termination of the Agreement, each party shall immediately cease using any materials using the other's Marks or Intellectual Property, and shall immediately destroy all such materials.
9.4 Remedy; Survival. If any party breaches this Section 9, the non-breaching party will suffer irreparable harm and the total amount of monetary damages for any injury to such party will be impossible to calculate and therefore an inadequate remedy. Accordingly, the non-breaching party may (i) seek temporary and permanent injunctive relief against the breaching party or (ii) exercise any other rights and seek any other remedies to which the non-breaching party may be entitled to at law, in equity and under this Agreement for any violation of this Section 9. The provisions of this Section 9 shall survive the termination or expiration of this Agreement.
SECTION 10 TERM AND TERMINATION
10.1 Initial Term. The initial term of this Agreement shall be four (4) Processing Years commencing on the Effective Date of this Agreement and ending on June 30, 2010 unless
Page 23
terminated earlier as provided in this Section 10. Thereafter, this Agreement shall automatically continue in effect until either party gives the other at least six (6) months prior written notice of termination.
10.2 Termination by SERVICERS. SERVICERS may terminate this Agreement prior to its expiration for cause upon prior written notice to ISO as follows:
(a) Upon a Material breach of any representation, warranty or covenant in this Agreement by ISO which is not cured by ISO within sixty (60) days of receipt of written notice from SERVICERS; provided however, that if ISO is attempting in good faith to cure such breach within said sixty (60) day cure period but the nature of the breach prevents a cure within sixty (60) days, then ISO shall be allotted an additional number of days to cure, provided the total number of days of the cure period shall be no greater than one hundred twenty (120) days;
(b) Upon a breach of any Material Rule by ISO, or repeated breach of any Rule by ISO which is not cured by ISO within sixty (60) days of receipt of written notice from SERVICERS; provided however, that if ISO is attempting in good faith to cure such breach within said sixty (60) day cure period but the nature of the breach prevents a cure within sixty (60) days, then ISO shall be allotted an additional number of days to cure, provided the total number of days of the cure period shall be no greater than one hundred twenty (120) days;
(c) Upon any commission of any fraudulent activity by ISO, or the illegal activity of ISO's employees in the performance of their duties in connection with this Agreement;
(d) Upon any failure by ISO to pay (or make arrangements to pay that are acceptable to SERVICERS) any amount due under this Agreement to SERVICERS which does not give rise to the right to terminate under any other provision of this Agreement within ten (10) Business Days after written notice to ISO of its failure to pay the amount;
(e) Upon the insolvency or bankruptcy of ISO;
(f) Upon a Material adverse change in the business or financial condition of ISO;
(g) Upon an assignment of this Agreement by ISO without SERVICERS' prior written consent;
(h) Upon the failure by ISO to maintain good standing as an "independent sales organization" with Visa or a "member services provider" with MasterCard;
(i) If SERVICERS are required by a governmental or regulatory body or agency or by any Bank Card association to terminate the Services on behalf of ISO with as much prior notice as is practicable under the circumstances;
Page 24
(j) If ISO fails to fund the Offset Account or the Reserve Account as required under this Agreement within ten (10) Business Days after written notice to ISO of its failure to pay the amount;
(k) Upon the termination of the Service Agreement for any reason with one hundred eighty (180) days prior written notice to ISO; or
(l) Upon a Change of Control of ISO with one hundred eighty (180) days prior written notice to ISO, unless the SERVICERS had previously consented to such change in control.
10.3 Termination by ISO. ISO may terminate this Agreement prior to its expiration for cause upon prior written notice to SERVICERS as follows:
(a) Upon a Material breach of any representation, warranty or covenant in this Agreement by SERVICERS which is not cured by SERVICERS within sixty (60) days of receipt of written notice from ISO; provided however, that if SERVICES are attempting in good faith to cure such breach within said sixty (60) day cure period but the nature of the breach prevents a cure within sixty (60) days, then SERVICERS shall be allotted an additional number of days to cure, provided the total number of days of the cure period shall be no greater than one hundred twenty (120) days;
(b) Upon any failure by SERVICERS to pay any amount due under this Agreement which does not give rise to the right to terminate under any other provision of this Agreement within five (5) Business Days after written notice to SERVICERS of its failure to pay the amount;
(c) Upon the insolvency or bankruptcy of either of the SERVICERS;
(d) Upon the termination of the Service Agreement for any reason;
(e) Upon a Material adverse change in the business or financial condition of either of SERVICERS;
(f) Upon an assignment of this Agreement by SERVICERS without ISO's prior written consent;
(g) Upon the failure by SERVICERS to maintain good standing with Visa or a MasterCard;
(h) If required by a governmental or regulatory body or agency or by any Bank Card association to terminate;
(i) Upon cessation of Bank Card operations by SERVICERS; or
Page 25
(j) At any time upon one hundred eighty (180) days prior written notice to the SERVICERS with no penalty.
10.4 Effect of Termination.
(a) Upon the expiration or termination of this Agreement for any reason, at the direction of ISO and pursuant to the plan of Deconversion, SERVICERS will transfer and assign all their interest in the Merchant Portfolio (including Merchant Processing Agreements and Merchant Accounts) and the dedicated BINs/ICAs to a Visa and MasterCard Member designated by ISO, provided first that: (a) all amounts due (or estimated to become due) in connection with each Merchant Processing Agreement and under this Agreement have been paid to SERVICERS; (b) the Termination Reserve Account has been adequately funded; (c) ISO provides full written indemnities to SERVICERS regarding actual and potential losses or other obligations arising out of operation of the Program or arising out of, or related to, this Agreement or any Merchant Processing Agreement; and (d) the Program Transfer complies with all applicable Rules, laws and regulations (the "Program Transfer"). [***]
(b) Until the completion of the Deconversion of the Merchant Portfolio, the parties shall continue to operate under the terms and conditions of this Agreement; provided, however, that upon the effective date of expiration or termination of this Agreement, ISO will promptly discontinue its promotion and recommendation of the Program and will cease to board new accounts on Bank's BINs and ICAs or for sponsorship by Bank. ISO will reimburse SERVICERS for any Deconversion pursuant to the plan for Deconversion, regardless of whether such Deconversion occurs before or after the expiration or termination of this Agreement. ISO shall continue to hold all risks associated with transactions processed by SERVICERS prior to the effective date of Deconversion of each respective Merchant in the Merchant Portfolio, including all risk relating to chargebacks and fraudulent transactions. ISO shall pay SERVICERS any amounts associated with such risks immediately upon demand.
10.5 Termination Reserve Account. Within ten (10) Business Days of the issuing of a notice of termination by any party, ISO shall fund a Termination Reserve Account. Except as specifically set forth otherwise in this Section 10.5, all provisions of Section 8.1 of this Agreement with regard to the Reserve Account shall also apply to the Termination Reserve Account. The amount of the Termination Reserve Account shall be the greater of (i) the most recent required amount for the Reserve Account prior to termination, or (ii) the amount calculated as follows:
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 26
(a) The amount of all chargebacks during the [***] [***] months preceding termination, plus
(b) The amount of all assessed Bank Card association fines or penalties and all fees and contingent fees which are or shall become due to SERVICERS from ISO, plus
(c) The estimated maximum amount of any known or likely significant loss events (defined as a credit or fraud loss that is likely to exceed $[***]).
Upon termination, any balance in the Reserve Account shall be transferred to, and be applied toward, the Termination Reserve Account. The Termination Reserve Account will be held by SERVICERS until the completion of the Program Transfer or for such longer period of time as is consistent with SERVICERS' liability for Bank Card transactions in accordance with the Rules. SERVICERS will reduce the Termination Reserve Account balance to reflect any reductions in ISO's then-potential liability as the Program Transfer and Deconversion progress. [***]
SECTION 11 INDEMNIFICATION ; EXCLUSIONS ; LIMITATIONS
11.1 ISO's Indemnification. ISO shall indemnify, defend, protect, and hold SERVICERS, their Affiliates, and their respective officers, directors, employees, attorneys, and permitted assigns, harmless from and against any Losses and credit/fraud losses arising directly from:
(a) Any failure by ISO to comply with any Material term or condition of this Agreement applicable to ISO, or the failure of any warranty or representations made by ISO in this Agreement to be true and correct;
(b) Any claim for which ISO has otherwise agreed herein to pay or indemnify SERVICERS;
(c) Credit or fraud losses, regardless of whether SERVICERS performed any underwriting, credit review, periodic review or fraud monitoring reviews on their own behalf;
(d) Any negligence, misrepresentation or willful misconduct on the part of ISO or any of its employees, agents, Other MSP's or IC's related to this Agreement; and
(e) Any claim by any third party related to this Agreement of a Merchant in the Merchant Portfolio that ISO's Intellectual Property violates or infringes any proprietary right of such third party, without any limitation of liability whatsoever.
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 27
11.2 SERVICERS' Indemnification. SERVICERS, jointly and severally, shall indemnify, defend, protect, and hold ISO, its Affiliates and their respective officers, directors, employees, attorneys, permitted assigns, Other MSP's and IC's harmless from and against any Losses and credit/fraud losses arising directly from:
(a) Any failure by SERVICERS to comply with any Material term or condition of this Agreement applicable to SERVICERS, or the failure of any warranty or representations made by SERVICERS in this Agreement to be true and correct;
(b) Any claim for which SERVICERS have otherwise agreed herein to pay or indemnify ISO;
(c) Any Losses caused by SERVICERS' breach of a Merchant Processing Agreement;
(d) Any negligence, misrepresentation or willful misconduct on the part of SERVICERS or any of their employees or agents related to this Agreement; and
(e) Any claim by any third party related to this Agreement of a Merchant in the Merchant Portfolio that SERVICERS' Intellectual Property violates or infringes any proprietary right of such third party, without any limitation of liability whatsoever.
11.3 Exclusion of Warranties, Limitations of Liability.
(a) Except as expressly provided in this Agreement, SERVICERS specifically disclaim all warranties of any kind, express or implied, including any warranties regarding merchantability, fitness for a particular purpose, non-infringement or otherwise (regardless of any course of dealing, custom or usage of trade), arising out of or related to this Agreement, which are hereby excluded by agreement of the parties. The parties agree that this Agreement is a service agreement and is not subject to the provisions of the Uniform Commercial Code.
(b) Notwithstanding anything in this Agreement to the contrary, in no event shall any party hereto, their respective Affiliates or any of their respective directors, officers, employees, agents or subcontractors, be liable under any theory of tort, contract, strict liability or other legal theory for lost profits, lost revenues, lost business opportunities, exemplary, punitive, special, incidental, indirect or consequential damages, each of which is hereby excluded by agreement of the parties, regardless of whether the damages were foreseeable or whether any party or any entity has been advised of the possibility of the damages.
(c) Notwithstanding anything in this Agreement to the contrary, the cumulative liability of each of SERVICERS and ISO for all Losses, claims, suits, controversies, breaches or damages arising out of or related to this Agreement
Page 28
regardless of the form of action or legal theory relating to events in any one Processing Year shall not exceed [***] [***] times the amount of clearing/sponsorship fees paid to SERVICERS by ISO pursuant to this Agreement during the immediately preceding [***] [***] full months; provided, however, that this limitation shall not apply to either party's obligation to indemnify the other for credit/fraud losses or Losses arising from or related to the indemnifying party's (or its agents, representatives, Merchants, Other MSP's or IC's) failure to comply with Rules.
(d) The parties acknowledge and agree that no party will be obligated to indemnify the other party to the extent that the liability, lawsuit, penalty, claim, demand or Loss resulted from the negligence or intentional misconduct of the party to be indemnified.
(e) Notwithstanding anything in this Agreement to the contrary, neither ISO nor SERVICERS nor their Affiliates shall have any liability under this Agreement for breach of their respective duties and obligations under this Agreement to the extent such breach was caused by labor disputes, strikes, acts of God, floods, terrorist acts, lightning, severe weather, shortages of materials, rationing, utility or communication failures or interruptions, failure of MasterCard, Visa, and other networks or Bank Card associations, earthquakes, war, revolution, civil commotion, blockade, embargo, or any law, order, proclamation, regulation, ordinance, demand or requirement having legal effect of any government or any judicial authority or representative of any such government, or any other act, omission or cause whatsoever, whether similar or dissimilar to those referred to in this clause, which are beyond ISO's, SERVICERS' or their Affiliates reasonable control.
11.4 Survival. The provisions of this Section 11 shall survive the termination or expiration of this Agreement.
SECTION 12 MISCELLANEOUS
12.1 Books and Records. SERVICERS shall provide ISO promptly with monthly reports showing for the month the total number of active accounts and inactive accounts, the net sales processed for each Approved Merchant (provided ISO is either a party to the Merchant Processing Agreement (or assignee of a named party) or has obtained such Merchant's written authorization to obtain such information and SERVICERS' disclosure is not prohibited by any Rule, law, regulation or agreement with a governmental agency) and the net sales processed for all Approved Merchants.
12.2 Relationship of the Parties. SERVICERS and ISO agree that in performing their responsibilities pursuant to this Agreement they are in the position of independent contractors. This Agreement is not intended to create, nor does it create and shall not be construed to create, a relationship of partnership or joint venture or agency or any
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Page 29
association for profit between SERVICERS and ISO. ISO is not authorized hereunder to hold itself out as an agent of SERVICERS or to inform or represent to any person that ISO has authority to bind or obligate SERVICERS or to otherwise act on behalf of SERVICERS except as expressly set forth herein. ISO shall not make any representation or warranty, or create any liability or potential liability on behalf of SERVICERS except as expressly set forth herein.
12.3 No Third Party Beneficiaries. Nothing in this Agreement is intended to confer upon any person or entity other than the parties and their Affiliates any rights or remedies.
12.4 Assignment and Transfer. Except as expressly set forth herein, ISO shall not assign or otherwise transfer this Agreement or any of its rights or obligations hereunder, by operation of law or otherwise, or contract with any third party (other than the third parties named herein) to perform any of its responsibilities or obligations relating to this Agreement without the prior written consent of SERVICERS, which consent will not be unreasonably withheld. In addition, ISO shall provide written notice to SERVICERS within three (3) Business Days of any Change of Control of ISO.
12.5 Notices. Any notice, request, consent, waiver or other communication required or permitted to be given hereunder shall be effective only if in writing and shall be deemed sufficiently given only if delivered in person or sent by certified, registered, or overnight mail or overnight courier service, postage prepaid, return receipt requested, addressed as follows:
If to FDMS:
First Data Merchant Services Corporation 6902 Pine Street PS-11 Omaha, NE 68106 Attn: VP - Omaha Processing Facsimile Number: 402-222-6384
With a copy to:
First Data Merchant Services Corporation 12500 E. Belford Avenue, Suite M5-C Englewood, CO 80112 Attn: General Counsel Facsimile Number: 720-332-0033
If to Bank:
Wells Fargo Bank, N.A. 1200 Montego Way Walnut Creek, CA 94598
Page 30
Attn: EVP Merchant Card Services Facsimile Number:
If to ISO:
iPayment, Inc. 26707 West Agoura Hills Road, Suite 100 Calabasas, CA 91302 Attn: Operations Manager Facsimile Number:
With a copy to:
iPayment, Inc. 40 Burton Hills Boulevard, Suite 415 Nashville, TN 37215 Attn: General Counsel Facsimile: 615-665-8434
or to such other person or address as either party may designate by notice given to the other party as provided herein. The notice or communication shall be deemed to have been given as of the date so delivered.
12.6 Prior Agreements, Entire Agreement, and Modifications. This Agreement, along with the Service Agreement, supersedes all prior agreements, whether verbal or in writing, and contains the entire Agreement between the parties regarding all matters, issues and claims relating to the subject matter of this Agreement, and any other written documents exchanged, verbal agreements reached and representations made by or between the parties in the course of the negotiation of this Agreement. This Agreement may be changed only by a written instrument specifically stating that it modifies this Agreement and it must be signed by all parties.
12.7 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to New York conflict laws.
12.8 Waivers. No failure or delay by any party to exercise, and no course of dealing regarding any right of the party concerning an obligation of any other party to this Agreement, shall operate as a waiver unless agreed to in writing by all parties. The parties hereto waive their right to a jury trial in the event of any legal proceedings between them.
12.9 Binding Effect, Remedies. This Agreement will not become legally binding and may not be enforced by any party until and unless executed by all parties hereto. This Agreement and the rights and obligations created hereunder shall be binding upon and inure solely to the benefit of the parties and their respective successors and permitted assigns, and no other person or legal entity shall acquire or have any rights under or by
Page 31
virtue of this Agreement. The remedies provided for in this Agreement shall be cumulative in nature, not exclusive, and shall be in addition to any other remedy allowed in law or equity.
12.10 Severability. If any provision of this Agreement is held illegal, invalid, void, or unenforceable in any jurisdiction where this Agreement or any part thereof is to be performed by reason of any rule of law, administrative or judicial proceeding or public policy, the provision shall be deemed deleted and the remaining provisions of this Agreement shall remain valid and binding.
12.11 Headings. The Section headings of this Agreement are inserted as a matter of convenience only and shall in no way define, limit, extend or describe the scope of this Agreement or the intent of any provisions herein.
12.12 Counterparts. Provided that all parties execute a copy of this Agreement, this Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. The parties acknowledge that delivery of executed copies of this Agreement may be effected by facsimile or other comparable means, as well as by delivery of manually signed copies.
12.13 Construction. As used in this Agreement, any reference to the masculine, feminine or neuter gender shall include all genders, the plural shall include the singular, and the singular shall include the plural.
12.14 Exhibits. All exhibits to this Agreement are incorporated by reference with the same force and effect as if fully set forth herein. This Agreement shall be given full force and effect without the exhibits or as to those exhibits that are attached, in the event less than all of the exhibits referenced herein are in fact attached.
12.15 Termination of Other Agreements. The following agreements are herby terminated without penalty to any party and are of no further force and effect: (i) the TS ISO Agreement; and (ii) the PCS ISO Agreement; provided, however, that neither the termination of the TS ISO Agreement or the PCS ISO Agreement nor anything contained in this Agreement shall act as a waiver or otherwise preclude FDMS from reconciling and/or collecting any billing, residual or other fee-related issues under either the TS ISO Agreement or the PCS ISO Agreement except where otherwise agreed to by FDMS.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
iPAYMENT, INC.
By: \s\ Greg Daily
Name: Greg Daily
Page 32
Title: Chief Executive Officer
FIRST DATA MERCHANT SERVICES CORPORATION
By: \s\ Rick Learch
Name: Rick Learch
Title: Senior Vice President
WELLS FARGO BANK, N.A.
By: \s\ Deirdre P. Cohen
Name: Deirdre P. Cohen
Title: Vice President
Page 33
[***]
*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
Exhibit A, Page 1
EXHIBIT B UNACCEPTABLE BUSINESS
The following industries are considered unacceptable merchant processing candidates due to Association prohibition; illegal or likely to be deemed illegal activity; high fraud potential; high potential for excessive chargebacks; or excessive risk exposure.
• All sexually oriented or pornographic merchants: — Adult telephone conversations or Internet - Modeling agencies — Massage parlors - Adult book stores — Misc. entertainment (not elsewhere classified) - Topless bars/clubs
• Any illegal products/services
• Any service providing peripheral support of illegal activities (i.e., drugs)
• Chain letters
• Collection agencies or firms involved in recovering/collecting past due receivables
• Drug paraphernalia
• Free gift, prize, sweepstakes or contest as an inducement to purchase a product/service
• "Get-rich-quick" schemes
• Lotteries and/or illegal gambling, including Internet gambling
• Sports forecasting or odds-making
• Merchants offering rebates or special incentives
• Credit card protection (including identity theft protection)
• Extended warranty companies
• Non-face to face tobacco sales
• Non-face to face prescription drug sales
• Non-face to face sales of firearms
• Aggregators/Internet Payment Service Providers/Third Party Payment Processors
• Audio/Video Text
• Airlines
• Cruise lines
• Travel Agents/Tour Operators
• Money transfer services
• Check cashing
• Currency exchange
• Dating Services
• Pseudo-pharmaceuticals (anti-aging pills, sex nutrients, etc.)
• Outbound telemarketing
• "Up-sell" Merchants
Exhibit B, Page 1
EXHIBIT C APPLICATION MATERIALS
See Attached.
Exhibit C, Page 1
EXHIBIT D PROGRAM STANDARDS
See Attached.
Exhibit D, Page 1
EXHIBIT E LIST OF CURRENT BINs/ICAs and CURRENTLY ACTIVE OTHER MSP's and IC's
See attached.
Exhibit E, Page 1
EXHIBIT F HIGH RISK MERCHANT LIST (Not Elsewhere Classified As Unqualified / Unacceptable) MCC MERCHANT TYPE ALL Internet Merchants ALL Mail Order/ Telephone Order Merchants ALL Merchants Engaged In Extended Delivery 2741 Printing and Publishing Services — (Wholesale) 2791 Typesetting, Plate Making & Related Services-(Wholesale) 2842 Sanitation, Polishing & Specialty Cleaning Preparations 4121 Limousines, Taxis, Cabs 4784 Bridge and Tolls Fees 4812 Telecommunication Equipment and Telephone Sales, Beepers, Pagers, Paging Equipment, Cell Phones 4814 Telephone Services (Billing), Local and Long Distance Telecommunication Services, Cellular Telephone Services 4815 VisaPhone / MasterPhone 4816 Computer Network/Information Services. Internet Service Providers, Electronic Bulletin Boards 4821 Cablegrams, Telegrams 4899 Cable and Other Pay Television Services 5013 Parts — Motor Vehicle Supplies, New Parts — (Wholesale) 5021 Office, Commercial Furniture — (Wholesale) 5039 Construction Material — not elsewhere classified -(Wholesale) 5044 Copy Services — Photographic, Photocopy, Microfilm Supplies- (Wholesale) 5045 Computer, Computer Peripheral Equipment and Software — (Wholesale) 5046 Commercial Equipment — not Elsewhere classified (Wholesale) 5047 Equipment — Medical, Dental, Ophthalmic, Orthopedic, Hospital Equipment, Supplies — (Wholesale) 5051 Metal Service Centers and Offices — non-precious (Wholesale) 5065 Parts — Electrical, Equipment — (Wholesale) 5072 Hardware Equipment and Supplies — (Wholesale) 5074 Equipment — Heating Equipment, Supplies, Water Conditioning, Purification, Softening — (Wholesale) 5085 Industrial Supplies -Not elsewhere classified (Wholesale) 5094 Gemstones, Precious Stones, Metals, Watches, Jewelry (Wholesale) 5099 Durable Goods Not Elsewhere Classified (Wholesale)
Exhibit F, Page 1
MCC MERCHANT TYPE 5111 Paper — Writing, Printing, Stationery, Office Supplies — (Wholesale) 5122 Pharmaceuticals — (Wholesale) 5131 Fabrics and Dry Goods — (Wholesale) 5137 Commercial Work Clothing and Uniform — (Wholesale) 5139 Footwear — Commercial (Wholesale) 5169 Chemicals & Allied products — (Wholesale) 5172 Petroleum and Petroleum Products — (Wholesale) 5192 Books, Periodicals & Newspapers — (Wholesale) 5193 Florist Supplies, Nursery Stock and Flowers — (Wholesale) 5198 Paints, Varnishes and Supplies — (Wholesale) 5199 Non-Durable Goods — Not Elsewhere Classified (Wholesale) 5521 Used Car & Truck Dealers 5712 Furniture, Home Furnishing, Bedding, Mattress Stores 5713 Carpet, Rugs, Floor Covering Stores 5719 Miscellaneous Home Furnishing Specialty Stores 5732 Computers, Electronics, Electronic Stores, Electronic Parts 5734 Computer Software 5932 Antiques, Collectible, Memorabilia Stores 5933 Pawnbrokers 5937 Antique Reproductions 5946 Camera & Photographic Supply Stores 5960 Direct Marketing — Insurance Services. 5963 Door-To-Door Sales 5968 Direct Marketing — Continuity/Subscription Merchant. 5969 Direct Marketing — Other Direct Marketers (Not Elsewhere Classified) Including Infomercials 5972 Stamp, Coin Stores, Stamp Collecting — Philatelic, Numismatic Supplies 6211 Securities Brokers, Mutual Funds, Stocks, Commodities, Bonds 6300 Insurance Sales, Underwriting, and Premiums 6513 Real Estate Agents, Brokers, Managers 7032 Camps — Sporting, Recreational 7033 Camping — Trailer Parks, Campgrounds 7273 Dating / Escort Services 7297 Massage Parlors 7298 Health & Beauty Spas 7372 Computer Programming, Data Processing, and Integrated Systems Design Services
7375 Information Retrieval Services 7379 Computer Maintenance, Repair & Services — (Wholesale) 7829 Motion Picture and Video Tape Production and Distribution — (Wholesale) 7922 Theatrical Producers/Productions (except Motion Pictures) and Ticket Agencies
Exhibit F, Page 2
MCC MERCHANT TYPE 7929 Bands, Orchestras, and Miscellaneous Entertainers, Not Elsewhere Classified 7941 Commercial Sports, Professional Sports Clubs, Athletic Fields, and Sports Promoters 7997 Health Clubs, Country Clubs, Membership (Athletic, Recreation, Sports), Private Golf Courses 8241 Correspondence School 8244 Business & Secretarial Schools 8249 Trade & Vocational Schools 8299 Schools & Educational Services-Not Elsewhere Classified 8398 Organizations — Charitable, Social Service, Non-Political 8641 Associations — Civic, Social. Fraternal Associations 8651 Political Organizations 8661 Religious Organizations 8675 Automobile Associations, Automobile Clubs 8699 Membership Organizations — Not Elsewhere Classified 8734 Testing Laboratories (Non-Medical) 9211 Court Costs, Including Alimony, Child Support 9222 Fines 9223 Bail, Bond Payments 9311 Tax Payments 9399 Government Services — Not Elsewhere Classified 9401 Food Stamps 9402 Postal Services — U.S. Government 9700 Automated Referral Service
Exhibit F, Page 3
EXHIBIT G ADDITIONAL TERMS AND CONDITIONS FOR POS NETWORKS MERCHANT SPONSORSHIP
1. General.
1.1. ISO desires to deploy and service (or cause to be deployed and serviced), at merchant locations, terminals ("POS Terminals") that will be connected to the shared electronic funds transfer networks set forth on Schedule A to this Exhibit G, as it may be amended from time to time by FDMS in its sole discretion (the "Debit Networks"), to transmit point of sale transactions ("POS Transactions") generated by these POS Terminals through the Debit Networks' telecommunications and processing systems which effectuate the switching, processing and settlement of transactions ("Debit Network Systems"). (The services described in this paragraph shall be referred to in this Exhibit G as the "POS Services.").
1.2. ISO may offer qualified merchants the ability to provide, or have Customer provide on such merchant's behalf, merchants' ISOs with the option to pay their bills by initiating funds transfers through Debit Network Systems without PIN entry or verification, subject to additional terms and conditions agreed to by the ISO and FDMS ("PIN-less Debit"). (The services described in this paragraph shall be referred to in this Exhibit G as the "PIN-less Debit Services." The POS Services and PIN-less Debit Services, collectively, will be referred to in this Exhibit G as the "Debit Services").
1.3. Debit Networks require that in order for ISO to provide the POS Services to merchants, merchants must be sponsored into the Debit Network by a member of such Debit Network ("Network Member"). Certain Networks ("Standard Networks") require that in order for ISO to provide the PIN-less Debit Services to merchants, merchants must be sponsored into the Debit Network by a Network Member.
2. Duties of FDMS. Subject to the provisions of this Agreement, FDMS agrees to cause FFB, a Network Member, to: (a) sponsor Merchants into Debit Networks for provision of POS Services; (b) sponsor Merchants into Standard Networks for provision of PIN-less Debit Services through Standard Networks, subject to additional terms agreed upon by FDMS and ISO; provided, that FFB, in its absolute discretion, may refuse to sponsor any Merchant and may terminate its sponsorship of a Merchant or direct ISO to refuse to provide or terminate its provision of Debit Services to a Merchant.
2.1. Neither SERVICERS nor FFB will be responsible for the acts or omissions of any Debit Network or its agents or representatives.
3. Conflict with Agreement. In the event of a conflict between this Exhibit G and the remainder of the Agreement as it relates to the subject matter hereof, the terms of this Exhibit G shall control. Otherwise, all terms and conditions of the remainder of the Agreement shall likewise apply to this Exhibit.
Exhibit G, Page 1
Schedule A
DEBIT NETWORKS
1. All EDS networks, including; ACCEL, The Exchange, Instant Teller, Mpact, and TX.
2. Alaska Option
3. All Pulse networks, including; TYME, Money Station, and Gulfnet
4. All Star networks, including; MAC, Cash Station, Alert, Avail, Bankmate, Cactus, Explore, Honor, Lynx, Most, and Relay
5. NYCE
6. Interlink
7. Maestro
8. Any other network added by FFB after the Effective Date.
Schedule A to Exhibit G, Page 1 | Highlight the parts (if any) of this contract related to "Anti-Assignment" that should be reviewed by a lawyer. Details: Is consent or notice required of a party if the contract is assigned to a third party? | {
"answer_start": [
78873
],
"text": [
"Except as expressly set forth herein, ISO shall not assign or otherwise transfer this Agreement or any of its rights or obligations hereunder, by operation of law or otherwise, or contract with any third party (other than the third parties named herein) to perform any of its responsibilities or obligations relating to this Agreement without the prior written consent of SERVICERS, which consent will not be unreasonably withheld."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Most Favored Nation" that should be reviewed by a lawyer. Details: Is there a clause that if a third party gets better terms on the licensing or sale of technology/goods/services described in the contract, the buyer of such technology/goods/services under the contract shall be entitled to those better terms?
Context: 925 West Georgia Street Suite 1820 Vancouver, British Columbia Canada V6C 3L2 Facsimile: 604-632-1730 PROMOTION AGREEMENT (the "Agreement") This agreement (the "Agreement") is made between Charity Tunes Inc., a British Columbia corporation with registered office located at Suite 1800, 925 West Georgia Street, Vancouver, British Columbia, Canada V6C 3L2 ("Charity Tunes") and ConAgra Foods Canada Inc. ("Sponsor") a Canada corporation, 5935 Airport Rd, Suite 405, Mississauga, Ontario, Canada L4V 1W5. WHEREAS as a new initiative, Charity Tunes and Sponsor will enter into a promotional partnership, whereby Sponsor will offer Charity Tunes music downloads on Sponsor's Pogo products consistent with the terms and conditions of this Agreement (the "Promotion"). NOW THEREFORE in consideration of the mutual covenants made herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Charity Tunes and Sponsor, the parties agree as follows
A consumer who purchases a specially Designated Sponsor Product (as defined below) will receive exactly one (1) unique pin code (a "Pin Code") in-pack. Such a consumer wil l be entitled to visit a custom interactive landing page at the CharityTunes.com website to enter the unique code and consumer's valid email address to receive downloads up to a maximum of either three (3), five (5), or seven (7) free MP3 song downloads having a retail value of $1.29 per song or less. Charity Tunes shall make its music catalogue available to the purchasers in MP3 file format to the fullest extent that such format is available to Charity Tunes pursuant to any agreements in effect between Charity Tunes and its wholesalers on the date of this Agreement. Accordingly, Charity Tunes shall use its best efforts to update its music catalogue with available MP3 files by June 30, 2009. The custom interactive landing page shall be designed, operated and maintained at the expense of Sponsor, and shall be subject to the mutual approval by Charity Tunes and Sponsor, which approval shall not be unreasonably withheld. The landing page shall feature the Charity Tunes logo in a size and prominence substantially equal to that of Sponsor.
POGO 8 pack, POGO 10 pack, POGO 20 pack and POGO 30 pack products sold at participating retail locations in Canada (individually and collectively the "Designated Sponsor Products") are the only products for which a Pin Code will be distributed and each consumer who purchases a Designated Sponsor Product will receive one and only one Pin Code while supplies last and subject to the limitations detailed herein. A Pin Code for three (3) songs shall be distributed exclusively with POGO 8 or 10 packs. A Pin Code for five (5) songs shall be distributed exclusively with POGO 20 packs. A Pin Code for seven (7) songs shall be distributed exclusively with POGO 30 packs. Designated Sponsor Products sold by Sponsor with the Promotion offer may not be sold at a higher list price than the same (or substantially similar) product(s) that do not contain the Promotion offer. Pin Codes themselves may not be retailed in any way.
1.PROMOTION OFFER:
2.DESIGNATED SPONSOR PRODUCTS:
1
Pin codes will only be distributed in the Designated Sponsor Products during the Promotion Period (defined below). The total number of Pin Codes to be distributed as prizes in the Promotion shall not exceed: (i) 277,760 Pin Codes containing three (3) music downloads per Pin Code ; (ii) 130,300 Pin Codes containing five (5) music downloads per Pin Code; and (iii) 27,900 Pin Codes containing seven (7) music downloads per Pin Code. No Designated Sponsor Product shall contain more than 1 Pin Code per pack. The distribution limits stated above are the maximum number of Pin Codes that may be distributed in the Promotion. No 3- song, 5-song, or 7-song Pin Codes may be subdivided, duplicated or distributed in combination with one another. Charity Tunes agrees to generate the unique Pin Codes for the Promotion. The parties therefore understand and acknowledge the critical need to maintain in absolute secrecy the Pin Codes generated for the Promotion such that they are only disclosed to the appropriate recipient via the authorized distribution method described herein. If the Pin Codes are made available to the public by Sponsor or by any of its employees, officers, directors, consultants, agents, representatives or advisors, except in the manner provided for herein, all parties agree that Pin Code security will be deemed compromised, and Charity Tunes may terminate all subsequent Pin Code redemptions. Sponsor agrees that it will not increase the list price to its customers of Designated Sponsor Products that form part of this promotion as compared to its otherwise identical products that do not form part of the promotion.
The offer shall be communicated to potential consumers only via in-store on-pack advertising, and retailer flyer advertising. Any communication of offer, including but not limited to Sponsor's rules for the Promotion, must indicate that the offer is only available while supplies last.
A consumer who receives a Pin Code for a designated number of music downloads in accordance with paragraph 3 above will be directed to visit the custom interactive landing page in order to redeem his/her free music downloads. Consumer will have to enter the Pin Code in order to complete the transaction. Consumer will be required to enter the Pin Code exactly as it appears in the email and follow the instructions on the web site to download the selected music download. In no case may any Pin Code be redeemed later than March 31, 2010. To assist as required with the redemption process, consumers shall have access to Charity Tunes customer support by emailing at support@charitytunes.com.
Sponsor shall received 435,960 unique Pin Codes for this Promotion and Sponsor is responsible for maintaining a record of all Pin Codes distributed or withheld, such record being subject to the confidentiality terms set forth above.
Designated Sponsor Products with Pin Codes may be distributed from approximately October 1, 2009 to approximately December 31, 2009 (the "Promotion Period"). Eligible Pin Codes may be entered on the www.charitytunes.com website and corresponding music downloaded from October 1, 2009 to March 31, 2010. Pin Codes entered for redemption after 11:59:59 pm PT on March 31, 2010 may be rejected as ineligible. The contents of this section are to be reflected in the Sponsor's rules for the Promotion.
The Charity Tunes system used for redemption of downloads will ensure that (i) downloads are obtained under the Promotion only by way of redemption of eligible Pin Codes and only up to the maximum number of music downloads per Pin Code set out at paragraph 3 above, (ii) otherwise eligible Pin Codes are invalidated once they have been used to download their respective per Pin Code maximum, and (iii) the total maximum download limits described herein are observed.
3.DISTRIBUTION:
4.COMMUNICATION OF OFFER:
5.PROMOTION MECHANIC:
6.GENERATION / PRINTING OF CODES:
7.PROMOTION PERIOD:
8.SECURITY & VERIFICATION:
2
The Pin Codes that will be distributed to consumers of the Designated Sponsor Products under the Promotion will be set with parental controls and will not allow any user download content that has been designated by Charity Tunes music providers as containing explicit content.
Upon execution of this Agreement by both parties, Charity Tunes will invoice Sponsor for 435,960 unique codes consisting of a maximum of 277,760 Pin Codes containing three (3) music downloads per Pin Code ; (ii) 130,300 Pin Codes containing five (5) music downloads per Pin Code; and (iii) 27,900 Pin Codes containing seven (7) music downloads per Pin Code, for a total cost of $117,605.60 CDN (plus applicable taxes) (collectively the "Fee"), which Fee is calculated at the rate of $0.07 CND (plus applicable taxes) per potential download. The Fee shall be payable to Charity Tunes in two equal installments of $58,802.80 (plus applicable taxes) due to Charity Tunes on October 1, 2009 and November 1, 2009, respectively payable upon receipt of invoice.
In consideration of the fees paid by Sponsor as set out herein, Charity Tunes agrees that during the period beginning October 1, 2009 and ending March 31, 2010, Charity Tunes shall not enable another program sponsorship for all competitive products/product categories distributed/sold within the total Canadian consumer/retail/wholesale market place, inclusive of: - Total Frozen Handhelds - Total Corporation General Mills Handhelds - Total Pizza Pops Handhelds / total Pillsbury Mini Pizzas - Total Corporation McCain Foods Handhelds - Total Pizza Pockets / total McCain Mini Pizzas - Total Corporation Heinz Handhelds - Total Heinz Hot bites (Bagel Bites and Taco Bites) / total Anchor Poppers - Total Corporation Schneider Foods Handhelds - Total Hot Stuffs / total Lean Stuffs - Total Resers Burritos - Total Corp les Plats du Chef Handhelds - Total Hinsdale Farms Corndogs
9.EXPLICIT CONTENT:
10.FEE:
11.WARRANTY AND INDEMNITY:
11.1Warranty. Charity Tunes warrants that, subject only to any limitation or condition specified in this Agreement, it will provide immediately to any consumer entitled to a music download in connection with a Pin Code the music download selected by that consumer.
11.2Obligations upon any breach. If for any reason Charity Tunes fails to provide a music download to a consumer in accordance with clause 11.1, thereby breaching its warranty thereunder, it shall: (i) forthwith remedy that failure by providing the requested download to that consumer as soon as possible; (ii) forthwith provide notice to Sponsor of the failure to immediately provide the download, including the date, time and other details of the failure, and of the steps being taken forthwith to remedy the failure; and (iii) once the failure has been remedied by Charity Tunes, forthwith provide Sponsor with notice of same.
11.3Indemnity. Furthermore, Charity Tunes will indemnify, save and hold harmless Sponsor, its shareholders, officers, agents and affiliated companies from and against any and all claims, investigations, lawsuits, losses, damages, costs, payments, charges, expenses and attorneys fees, including any amount paid to settle an action or to satisfy a judgment by or for the benefit of any person, that they, or any of them, may at any time incur as a result of any breach of this Agreement by Charity Tunes.
12.EXCLUSIVITY:
3
13.GENERAL:
13.1Relationship between the Parties. Nothing in this Agreement shall be construed as creating any relationship (whether by way of employer/employee, agency, joint venture, association, or partnership). It is expressly understood that the relationship between the parties shall be that of independent contractors, whether for the purposes of the Income Tax Act (Canada), provincial taxation legislation or otherwise.
13.2Time. Time is of the essence of this Agreement.
13.3Presumption. This Agreement or any section thereof shall not be construed against any party due to the fact that said Agreement or any section thereof was drafted by said party.
13.4Titles and Captions. All article, section and paragraph titles or captions contained in this Agreement are for convenience only and shall not be deemed part of the context nor affect the interpretation of this Agreement.
13.5Further Action. The parties hereto shall execute and deliver all documents, provide all information and take or forbear from all such action as may be necessary or appropriate to achieve the purposes of this Agreement.
13.6Good Faith, Cooperation and Due Diligence. The parties hereto covenant, warrant and represent to each other good faith, complete cooperation, due diligence and honesty in fact in the performance of all obligations of the parties pursuant to this Agreement. All promises and covenants are mutual and dependent.
13.7Savings Clause. If any provision of this Agreement, or the application of such provision to any person or circumstance, shall be held invalid, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby.
13.8Assignment. This Agreement may not be assigned by either party hereto without the written consent of the other but shall be binding upon the successors of the parties.
13.9Notices. All notices required or permitted to be given under this Agreement shall be given in writing and shall be delivered, either personally or by express delivery service, to the party to be notified. Notice to each party shall be deemed to have been duly given upon delivery, personally or by courier, addressed to the attention of the officer at the address set forth heretofore, or to such other officer or addresses as either party may designate, upon at least ten days written notice, to the other party.
13.10Entire agreement. This Agreement contains the entire understanding and agreement among the parties. There are no other agreements, conditions or representations, oral or written, express or implied, with regard thereto. This Agreement may be amended only in writing signed by all parties.
13.11Waiver. A delay or failure by any party to exercise a right under this Agreement, or a partial or single exercise of that right, shall not constitute a waiver of that or any other right.
4
IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement:
5
13.12Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. In the event that the document is signed by one party and faxed to another the parties agree that a faxed signature shall be binding upon the parties to this Agreement as though the signature was an original.
13.13Successors. The provisions of this Agreement shall be binding upon all parties, their successors and permitted assigns.
13.14Counsel. The parties expressly acknowledge that each has been advised to seek separate counsel for advice in this matter and has been given a reasonable opportunity to do so.
13.15Law and Jurisdiction. This Agreement shall be governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein. The parties hereby attorn to the exclusive jurisdiction of the provincial and federal courts located in the city of Toronto, Ontario for all matters arising from this Agreement.
Signed in agreement: /s/ Marko Bukovec Marko Bukovec Title: Marketing Director ConAgra Foods Canada Inc. Date:June 25, 2009
Signed in agreement: /s/ Robin Ram Robin Ram President Charity Tunes, Inc. Date: June 29, 2009 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | 925 West Georgia Street Suite 1820 Vancouver, British Columbia Canada V6C 3L2 Facsimile: 604-632-1730 PROMOTION AGREEMENT (the "Agreement") This agreement (the "Agreement") is made between Charity Tunes Inc., a British Columbia corporation with registered office located at Suite 1800, 925 West Georgia Street, Vancouver, British Columbia, Canada V6C 3L2 ("Charity Tunes") and ConAgra Foods Canada Inc. ("Sponsor") a Canada corporation, 5935 Airport Rd, Suite 405, Mississauga, Ontario, Canada L4V 1W5. WHEREAS as a new initiative, Charity Tunes and Sponsor will enter into a promotional partnership, whereby Sponsor will offer Charity Tunes music downloads on Sponsor's Pogo products consistent with the terms and conditions of this Agreement (the "Promotion"). NOW THEREFORE in consideration of the mutual covenants made herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Charity Tunes and Sponsor, the parties agree as follows
A consumer who purchases a specially Designated Sponsor Product (as defined below) will receive exactly one (1) unique pin code (a "Pin Code") in-pack. Such a consumer wil l be entitled to visit a custom interactive landing page at the CharityTunes.com website to enter the unique code and consumer's valid email address to receive downloads up to a maximum of either three (3), five (5), or seven (7) free MP3 song downloads having a retail value of $1.29 per song or less. Charity Tunes shall make its music catalogue available to the purchasers in MP3 file format to the fullest extent that such format is available to Charity Tunes pursuant to any agreements in effect between Charity Tunes and its wholesalers on the date of this Agreement. Accordingly, Charity Tunes shall use its best efforts to update its music catalogue with available MP3 files by June 30, 2009. The custom interactive landing page shall be designed, operated and maintained at the expense of Sponsor, and shall be subject to the mutual approval by Charity Tunes and Sponsor, which approval shall not be unreasonably withheld. The landing page shall feature the Charity Tunes logo in a size and prominence substantially equal to that of Sponsor.
POGO 8 pack, POGO 10 pack, POGO 20 pack and POGO 30 pack products sold at participating retail locations in Canada (individually and collectively the "Designated Sponsor Products") are the only products for which a Pin Code will be distributed and each consumer who purchases a Designated Sponsor Product will receive one and only one Pin Code while supplies last and subject to the limitations detailed herein. A Pin Code for three (3) songs shall be distributed exclusively with POGO 8 or 10 packs. A Pin Code for five (5) songs shall be distributed exclusively with POGO 20 packs. A Pin Code for seven (7) songs shall be distributed exclusively with POGO 30 packs. Designated Sponsor Products sold by Sponsor with the Promotion offer may not be sold at a higher list price than the same (or substantially similar) product(s) that do not contain the Promotion offer. Pin Codes themselves may not be retailed in any way.
1.PROMOTION OFFER:
2.DESIGNATED SPONSOR PRODUCTS:
1
Pin codes will only be distributed in the Designated Sponsor Products during the Promotion Period (defined below). The total number of Pin Codes to be distributed as prizes in the Promotion shall not exceed: (i) 277,760 Pin Codes containing three (3) music downloads per Pin Code ; (ii) 130,300 Pin Codes containing five (5) music downloads per Pin Code; and (iii) 27,900 Pin Codes containing seven (7) music downloads per Pin Code. No Designated Sponsor Product shall contain more than 1 Pin Code per pack. The distribution limits stated above are the maximum number of Pin Codes that may be distributed in the Promotion. No 3- song, 5-song, or 7-song Pin Codes may be subdivided, duplicated or distributed in combination with one another. Charity Tunes agrees to generate the unique Pin Codes for the Promotion. The parties therefore understand and acknowledge the critical need to maintain in absolute secrecy the Pin Codes generated for the Promotion such that they are only disclosed to the appropriate recipient via the authorized distribution method described herein. If the Pin Codes are made available to the public by Sponsor or by any of its employees, officers, directors, consultants, agents, representatives or advisors, except in the manner provided for herein, all parties agree that Pin Code security will be deemed compromised, and Charity Tunes may terminate all subsequent Pin Code redemptions. Sponsor agrees that it will not increase the list price to its customers of Designated Sponsor Products that form part of this promotion as compared to its otherwise identical products that do not form part of the promotion.
The offer shall be communicated to potential consumers only via in-store on-pack advertising, and retailer flyer advertising. Any communication of offer, including but not limited to Sponsor's rules for the Promotion, must indicate that the offer is only available while supplies last.
A consumer who receives a Pin Code for a designated number of music downloads in accordance with paragraph 3 above will be directed to visit the custom interactive landing page in order to redeem his/her free music downloads. Consumer will have to enter the Pin Code in order to complete the transaction. Consumer will be required to enter the Pin Code exactly as it appears in the email and follow the instructions on the web site to download the selected music download. In no case may any Pin Code be redeemed later than March 31, 2010. To assist as required with the redemption process, consumers shall have access to Charity Tunes customer support by emailing at support@charitytunes.com.
Sponsor shall received 435,960 unique Pin Codes for this Promotion and Sponsor is responsible for maintaining a record of all Pin Codes distributed or withheld, such record being subject to the confidentiality terms set forth above.
Designated Sponsor Products with Pin Codes may be distributed from approximately October 1, 2009 to approximately December 31, 2009 (the "Promotion Period"). Eligible Pin Codes may be entered on the www.charitytunes.com website and corresponding music downloaded from October 1, 2009 to March 31, 2010. Pin Codes entered for redemption after 11:59:59 pm PT on March 31, 2010 may be rejected as ineligible. The contents of this section are to be reflected in the Sponsor's rules for the Promotion.
The Charity Tunes system used for redemption of downloads will ensure that (i) downloads are obtained under the Promotion only by way of redemption of eligible Pin Codes and only up to the maximum number of music downloads per Pin Code set out at paragraph 3 above, (ii) otherwise eligible Pin Codes are invalidated once they have been used to download their respective per Pin Code maximum, and (iii) the total maximum download limits described herein are observed.
3.DISTRIBUTION:
4.COMMUNICATION OF OFFER:
5.PROMOTION MECHANIC:
6.GENERATION / PRINTING OF CODES:
7.PROMOTION PERIOD:
8.SECURITY & VERIFICATION:
2
The Pin Codes that will be distributed to consumers of the Designated Sponsor Products under the Promotion will be set with parental controls and will not allow any user download content that has been designated by Charity Tunes music providers as containing explicit content.
Upon execution of this Agreement by both parties, Charity Tunes will invoice Sponsor for 435,960 unique codes consisting of a maximum of 277,760 Pin Codes containing three (3) music downloads per Pin Code ; (ii) 130,300 Pin Codes containing five (5) music downloads per Pin Code; and (iii) 27,900 Pin Codes containing seven (7) music downloads per Pin Code, for a total cost of $117,605.60 CDN (plus applicable taxes) (collectively the "Fee"), which Fee is calculated at the rate of $0.07 CND (plus applicable taxes) per potential download. The Fee shall be payable to Charity Tunes in two equal installments of $58,802.80 (plus applicable taxes) due to Charity Tunes on October 1, 2009 and November 1, 2009, respectively payable upon receipt of invoice.
In consideration of the fees paid by Sponsor as set out herein, Charity Tunes agrees that during the period beginning October 1, 2009 and ending March 31, 2010, Charity Tunes shall not enable another program sponsorship for all competitive products/product categories distributed/sold within the total Canadian consumer/retail/wholesale market place, inclusive of: - Total Frozen Handhelds - Total Corporation General Mills Handhelds - Total Pizza Pops Handhelds / total Pillsbury Mini Pizzas - Total Corporation McCain Foods Handhelds - Total Pizza Pockets / total McCain Mini Pizzas - Total Corporation Heinz Handhelds - Total Heinz Hot bites (Bagel Bites and Taco Bites) / total Anchor Poppers - Total Corporation Schneider Foods Handhelds - Total Hot Stuffs / total Lean Stuffs - Total Resers Burritos - Total Corp les Plats du Chef Handhelds - Total Hinsdale Farms Corndogs
9.EXPLICIT CONTENT:
10.FEE:
11.WARRANTY AND INDEMNITY:
11.1Warranty. Charity Tunes warrants that, subject only to any limitation or condition specified in this Agreement, it will provide immediately to any consumer entitled to a music download in connection with a Pin Code the music download selected by that consumer.
11.2Obligations upon any breach. If for any reason Charity Tunes fails to provide a music download to a consumer in accordance with clause 11.1, thereby breaching its warranty thereunder, it shall: (i) forthwith remedy that failure by providing the requested download to that consumer as soon as possible; (ii) forthwith provide notice to Sponsor of the failure to immediately provide the download, including the date, time and other details of the failure, and of the steps being taken forthwith to remedy the failure; and (iii) once the failure has been remedied by Charity Tunes, forthwith provide Sponsor with notice of same.
11.3Indemnity. Furthermore, Charity Tunes will indemnify, save and hold harmless Sponsor, its shareholders, officers, agents and affiliated companies from and against any and all claims, investigations, lawsuits, losses, damages, costs, payments, charges, expenses and attorneys fees, including any amount paid to settle an action or to satisfy a judgment by or for the benefit of any person, that they, or any of them, may at any time incur as a result of any breach of this Agreement by Charity Tunes.
12.EXCLUSIVITY:
3
13.GENERAL:
13.1Relationship between the Parties. Nothing in this Agreement shall be construed as creating any relationship (whether by way of employer/employee, agency, joint venture, association, or partnership). It is expressly understood that the relationship between the parties shall be that of independent contractors, whether for the purposes of the Income Tax Act (Canada), provincial taxation legislation or otherwise.
13.2Time. Time is of the essence of this Agreement.
13.3Presumption. This Agreement or any section thereof shall not be construed against any party due to the fact that said Agreement or any section thereof was drafted by said party.
13.4Titles and Captions. All article, section and paragraph titles or captions contained in this Agreement are for convenience only and shall not be deemed part of the context nor affect the interpretation of this Agreement.
13.5Further Action. The parties hereto shall execute and deliver all documents, provide all information and take or forbear from all such action as may be necessary or appropriate to achieve the purposes of this Agreement.
13.6Good Faith, Cooperation and Due Diligence. The parties hereto covenant, warrant and represent to each other good faith, complete cooperation, due diligence and honesty in fact in the performance of all obligations of the parties pursuant to this Agreement. All promises and covenants are mutual and dependent.
13.7Savings Clause. If any provision of this Agreement, or the application of such provision to any person or circumstance, shall be held invalid, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby.
13.8Assignment. This Agreement may not be assigned by either party hereto without the written consent of the other but shall be binding upon the successors of the parties.
13.9Notices. All notices required or permitted to be given under this Agreement shall be given in writing and shall be delivered, either personally or by express delivery service, to the party to be notified. Notice to each party shall be deemed to have been duly given upon delivery, personally or by courier, addressed to the attention of the officer at the address set forth heretofore, or to such other officer or addresses as either party may designate, upon at least ten days written notice, to the other party.
13.10Entire agreement. This Agreement contains the entire understanding and agreement among the parties. There are no other agreements, conditions or representations, oral or written, express or implied, with regard thereto. This Agreement may be amended only in writing signed by all parties.
13.11Waiver. A delay or failure by any party to exercise a right under this Agreement, or a partial or single exercise of that right, shall not constitute a waiver of that or any other right.
4
IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement:
5
13.12Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. In the event that the document is signed by one party and faxed to another the parties agree that a faxed signature shall be binding upon the parties to this Agreement as though the signature was an original.
13.13Successors. The provisions of this Agreement shall be binding upon all parties, their successors and permitted assigns.
13.14Counsel. The parties expressly acknowledge that each has been advised to seek separate counsel for advice in this matter and has been given a reasonable opportunity to do so.
13.15Law and Jurisdiction. This Agreement shall be governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein. The parties hereby attorn to the exclusive jurisdiction of the provincial and federal courts located in the city of Toronto, Ontario for all matters arising from this Agreement.
Signed in agreement: /s/ Marko Bukovec Marko Bukovec Title: Marketing Director ConAgra Foods Canada Inc. Date:June 25, 2009
Signed in agreement: /s/ Robin Ram Robin Ram President Charity Tunes, Inc. Date: June 29, 2009 | Highlight the parts (if any) of this contract related to "Most Favored Nation" that should be reviewed by a lawyer. Details: Is there a clause that if a third party gets better terms on the licensing or sale of technology/goods/services described in the contract, the buyer of such technology/goods/services under the contract shall be entitled to those better terms? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Agreement Date" that should be reviewed by a lawyer. Details: The date of the contract
Context: EXHIBIT 10.3 Execution Copy MARKETING AGREEMENT This Marketing Agreement (this "Agreement") is made and entered into as of September __, 2018 (the "Effective Date"), between Loop Industries, Inc., a Nevada corporation with a principal place of business at 480 Fernand-Poitras, Terrebonne, Quebec, Canada ("Loop"), and Indorama Loop Technologies, LLC, a Delaware limited liability company with a principal place of business at [***] ("Joint Venture Company") (each of Loop and Joint Venture Company is a "Party"; together they are the "Parties"). BACKGROUND A. Loop and its Subsidiaries (collectively, "Loop Parties") have developed a proprietary depolymerization process that decouples plastic from fossil fuels, producing dimethylterepthalate ("DMT") and monoethylene glycol ("MEG") for the production of polyethylene terephthalate ("PET") plastic that can be used for a variety of polyester applications. B. Concurrently with the execution of this Agreement, Loop Innovations, LLC, a Delaware limited liability company and a subsidiary of Loop ("Loop Innovations"), and Indorama Ventures Holdings LP, a Delaware limited partnership ("IVH"), have formed Joint Venture Company to develop, construct, own and operate chemical upcycling polyester resin ("CUPET") plants through SPVs (as defined below), the initial of which will be at the facility of [***], a Delaware corporation and a subsidiary of IVH, located in [***], the United States of America (such facility, the "[***] Facility"), and to, among other things, manufacture Licensed Products (as defined below) at the [***] Facility, and potentially other facilities, for sale throughout the world (such contemplated venture, the "CUPET Project"). C. Concurrently herewith, Loop has entered into the License Agreement (as defined below) with Joint Venture Company to provide it and SPVs a license to use proprietary technology for the production of DMT and MEG to enable the production of Licensed Product. D. Loop retains its sole and exclusive right to enter into Loop Sales Contracts (as defined below) for the supply of Licensed Products to Authorized Customers (as defined below), subject to Joint Venture Company's rights in this Agreement. E. Loop desires to assign rights and obligations with respect to the fulfillment of a specific volume and delivery of Product (as defined below) under Loop Sales Contracts to Joint Venture Company, and Joint Venture Company desires to manufacture and fulfill such Product supply requirements, either directly or through an SPV, as determined by the Parties, all in accordance with the terms and conditions set forth in this Agreement. Now, therefore, in consideration of the mutual covenants and premises contained in this Agreement, and other good and valuable consideration, the Parties agree as follows. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.
ARTICLE 1 DEFINITIONS 1.1 [***] 1.2 "Acceptance Notice" has the meaning set forth in Section 2.3. 1.3 "Affiliate" means, with respect to a Party, any corporation or other entity that is directly or indirectly controlling, controlled by or under the common control with such Party. For the purpose of this definition, "control" means the direct or indirect ownership of at least fifty percent (50%) of the outstanding shares or other voting rights of the subject entity to elect directors (or, in the case of an entity that is not a corporation, for the election of the corresponding managing authority), or if not meeting the preceding, any entity owned or controlled by or owning or controlling at the maximum control or ownership right permitted in the country where such entity exists. 1.4 "Alternate Producer" has the meaning set forth in Section 2.3. 1.5 "Assignment" has the meaning set forth in Section 2.4. 1.6 "Assignment Date" has the meaning set forth in Section 2.4. 1.7 "Authorized Customer" means a Loop Party customer that is a party to a Transferred Contract, solely with respect to the Product quantities covered by the Transferred Contract. 1.8 "Business Day" means any day, other than a Saturday, Sunday or legal holiday, on which banks in Montreal or South Carolina are open for the conduct of their commercial banking business. 1.9 "Considered Contract" has the meaning set forth in Section 2.2. 1.10 "Contract Eligibility Framework" means, with respect to any Proposed Contract, those criteria set forth Exhibit B. 1.11 "Eligible Contract" has the meaning set forth in Section 2.2. 1.12 "Joint Venture Company" has the meaning set forth in the Recitals. 1.13 "Joint Venture Party" means each of Joint Venture Company and each SPV. 1.14 "License Agreement" means that certain License Agreement between Loop and Joint Venture Company dated as of the Effective Date, as amended, modified or supplemented from time to time (including, for the avoidance of doubt, any changes to the list of Licensed Facilities therein). 1.15 "Licensed Facilities" has the meaning set forth in the License Agreement. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -2-
1.16 "Licensed Products" has the meaning set forth in the License Agreement. 1.17 "Licensed Subject Matter" has the meaning set forth in the License Agreement. 1.18 "LLC Agreement" means the Limited Liability Company Agreement of the Joint Venture Company between Loop Innovations and IVH, as amended, modified or supplemented from time to time. 1.19 "Loop Sales Contract" means a contract between a Loop Party and a third-party customer for the Loop Party's sale to the customer, and the customer's purchase from the Loop Party, of a specified quantity of Loop-branded Products produced using Licensed Subject Matter. 1.20 "Marketing and Sale Restriction" has the meaning set forth in Section 2.7. 1.21 "Products" means recycled or upcycled PET resins. 1.22 "Proposed Contract" has the meaning set forth in Section 2.2. 1.23 "Proposed Contract Notice" has the meaning set forth in Section 2.2. 1.24 "Rejection Notice" has the meaning set forth in Section 2.3. 1.25 "Review Period" has the meaning set forth in Section 2.3. 1.26 "SPV" means each Subsidiary of Joint Venture Company which operates a Licensed Facility. 1.27 "Subsidiary" means, with respect to a Party, any Affiliate of the Party that is directly or indirectly controlled by the Party (with "control" having the meaning provided in Section 2). 1.28 "Transferred Contract" means any Proposed Contract that is accepted or deemed accepted as a Transferred Contract pursuant to Section 2.3. ARTICLE 2 PRODUCT SALES 2.1 Loop Sales Contracts. As between the Parties, subject to Section 2.7, Loop shall have the sole and exclusive right to enter into agreements for the sale of Loop-branded Products or any Products produced using Licensed Subject Matter, and the exclusive right to set the price and quantity to be supplied under each Loop Sales Contract and other terms and conditions as determined by Loop in its commercially reasonable discretion. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -3-
2.2 Proposed Contracts and Proposed Contract Notice. Loop shall give Joint Venture Company prompt written notice, in the form of Exhibit A attached to this Agreement, [***] and (b) pursuant to which Loop offers to assign all of its rights and obligations under such Loop Sales Contract to Joint Venture Company (each such notice, a "Proposed Contract Notice"). Along with each Proposed Contract Notice, Loop shall deliver to Joint Venture Company a complete copy of the executed Loop Sales Contract (the "Proposed Contract"). The Proposed Contract Notice shall contain information necessary to establish whether the Proposed Contract meets the criteria set forth in the Contract Eligibility Framework. Each such Proposed Contract that (i) meets the criteria set forth in the Contract Eligibility Framework and (ii) contains no other terms or conditions other than those set forth in the Contract Eligibility Framework or any form of Loop Sales Contract mutually agreed in writing to be acceptable by the Parties, shall be an "Eligible Contract." Each such Proposed Contract that does not qualify as an Eligible Contract shall be a "Considered Contract." 2.3 Acceptance of Proposed Contracts. All Eligible Contracts shall be deemed accepted by the Joint Venture Company and become a Transferred Contract on the date Loop delivers the Proposed Contract Notice for such Eligible Contract to the Joint Venture Company. In the event that the Proposed Contract Notice is a Considered Contract, the Joint Venture Company will have the right to review and determine whether to accept or reject the Considered Contract within ten (10) days following Joint Venture Company's receipt of the Proposed Contract Notice (the "Review Period"). Joint Venture Company shall provide Loop with a written acceptance or rejection of each Considered Contract ("Acceptance Notice" or "Rejection Notice," as applicable) within the Review Period, which acceptance or rejection shall be in Joint Venture Company's sole discretion. If Joint Venture Company does not provide an Acceptance Notice or Rejection Notice to Loop within the Review Period, the Considered Contract will be deemed rejected by Joint Venture Company. Loop shall be entitled to present any rejected Considered Contract (whether deemed rejected or by receipt of a Rejection Notice) to an Alternate Producer on the same terms and conditions as those presented to Joint Venture Company. If Joint Venture Company provides an Acceptance Notice to Loop with respect to a Considered Contract during the Review Period, that Considered Contract shall become a Transferred Contract on the date Joint Venture Company provides that Acceptance Notice. 2.4 Assignment of Transferred Contracts. Promptly after the date a Proposed Contract becomes a Transferred Contract (the "Assignment Date"), Loop and Joint Venture Company shall execute and deliver an assignment and assumption agreement substantially in the form of Exhibit C attached to this Agreement ("Assignment") pursuant to which Loop shall assign to Joint Venture Company all of Loop's right, title, and interest in the Transferred Contract and Joint Venture Company shall assume all such rights and obligations. Without diminishing Joint Venture Company's obligations to perform under a Transferred Contract pursuant to the assignment and assumption agreement, Joint Venture Company shall cause any applicable SPV to perform all of its assumed obligations under such Transferred Contract. 2.5 Customer Interface. Joint Venture Company shall fulfill all sales of Products under all Transferred Contracts, shall invoice Authorized Customers for all sales of Products under all Transferred Contracts, and shall use commercially reasonable efforts to collect the amounts due under such invoices. At Joint Venture Company's request from time to time, Loop shall provide reasonable assistance to Joint Venture Company in such invoicing and collection process at Joint Venture Company's expense. 2.6 Product Branding. Joint Venture Company shall, and shall cause each SPV to, mark and brand all containers, packaging and related collateral for the Licensed Products in accordance with the License Agreement. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -4-
2.7 Exclusivity. Joint Venture Company shall not, and shall cause each SPV and each of their Affiliates not to, directly or indirectly, market or sell any Loop-branded Products or any Products produced using Licensed Subject Matter to any person or entity except to Authorized Customers pursuant to a Transferred Contract (the "Marketing and Sale Restriction"); provided that if at any time during the term of this Agreement, Loop has delivered Proposed Contract Notices that result in Transferred Contracts having binding purchase and supply obligations for less than [***] of the then existing actual production capacity of a Licensed Facility (taking into account Joint Venture Company's reasonable forecasts based on customer requirements, seasonal variations, and other factors) in the subsequent three months (the "[***]"), Joint Venture Company may market and solicit orders for Licensed Products produced in such Licensed Facility directly to customers and potential customers and enter into supply contracts for the sale of Loop-branded Products or any Products produced using Licensed Subject Matter produced in such Licensed Facility with customers without being restricted by the Marketing and Sale Restriction. If at any subsequent time during the term of this Agreement Loop gives Joint Venture Party written notice that Loop is then capable of meeting, and is prepared to meet, the [***] and provides reasonable supporting information and documentation to Joint Venture Party with such notice, then at a date selected by Joint Venture Company that is within ninety (90) days after Joint Venture Company receives such written notice, the Market and Sale Restriction and the other provisions of this Section 2.7 shall go back into force. Nothing in this Section 2.7 shall relieve Loop of any of its obligations under this Agreement. ARTICLE 3 LIMITATION OF LIABILITY 3.1 LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER UNDER THIS AGREEMENT OR OTHERWISE FOR CONSEQUENTIAL, SPECIAL, INCIDENTAL, EXEMPLARY, STATUTORY, OR PUNITIVE DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT. JOINT VENTURE COMPANY'S TOTAL CUMULATIVE LIABILITY TO THE LOOP PARTIES WITH RESPECT TO A TRANSFERRED CONTRACT, IN ALL CIRCUMSTANCES AND REGARDLESS OF THE THEORY OF RECOVERY, SHALL BE LIMITED TO THE AMOUNT OF ACTUAL, DIRECT, AND DOCUMENTED DAMAGES THE APPLICABLE AUTHORIZED CUSTOMER ACTUALLY RECOVERS FROM THE LOOP PARTIES UNDER THE TRANSFERRED CONTRACT BASED SOLELY ON JOINT VENTURE COMPANY'S BREACH OF SUCH TRANSFERRED CONTRACT. JOINT VENTURE COMPANY SHALL NOT HAVE ANY LIABILITY TO ANY LOOP PARTY WITH RESPECT TO ANY ELIGIBLE CONTRACT THAT DOES NOT BECOME A TRANSFERRED CONTRACT AS PROVIDED IN SECTION 2.3. NOTWITHSTANDING THE FOREGOING, NONE OF THE FOREGOING LIMITATIONS OF LIABILITY SET FORTH IN THIS SECTION 3.1 SHALL BE AVAILABLE TO EITHER PARTY WITH RESPECT TO A BREACH OF SECTION 4, CONFIDENTIAL INFORMATION, OR FOR CLAIMS TO THE EXTENT THEY ARISE OUT OF A PARTY'S GROSS NEGLIGENCE, FRAUD, OR WILLFUL MISCONDUCT. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -5-
ARTICLE 4 CONFIDENTIAL INFORMATION 4.1 Confidential Information. The term "Confidential Information" means any information disclosed by one Party to the other (i) prior to the date of this Agreement but with respect to the subject matter of this Agreement, or (ii) pursuant to this Agreement, in each case which is in written, graphic, machine readable or other tangible form and is marked "Confidential," "Proprietary" or in some other manner to indicate its confidential nature. Confidential Information may also include oral information disclosed by one Party to the other pursuant to this Agreement, pro-vided that such information is designated as confidential at the time of disclosure and reduced to a written summary by the disclosing Party, within thirty (30) days after its oral disclosure, which is marked in a manner to indicate its confidential nature and delivered to the receiving party. 4.2 Obligation. Each Party shall treat as confidential (as set forth herein) all Confidential Information of the other Party, and shall not use such Confidential Information except as contemplated in this Agreement or as otherwise authorized in writing. Each Party shall implement reasonable procedures to prohibit the unauthorized disclo-sure or misuse of the other Party's Confidential Information and shall not intentionally disclose such Confidential Information to any third party except as may be necessary or useful in connection with the rights and obligations of such Party under this Agreement, and subject to confidentiality obligations similar to those set forth in this Article 4. Each of the Parties shall use at least the same procedures and degree of care that it uses to prevent the disclosure of its own confidential information of like importance to prevent the disclosure of Confidential Information disclosed to it by the other Party under this Agreement, but in no event less than reasonable care. 4.3 Exclusions. Notwithstanding the foregoing, Confidential Information excludes information that: (a) was publicly available at the time it was disclosed or becomes publicly available through no fault of the receiving Party; (b) was known to the receiving Party, without similar confidentiality restriction, at the time of disclosure; (c) is disclosed with the prior written approval of the disclosing Party; (d) was independently developed by the receiving Party without any use of the Confidential Information of the disclosing Party; or (e) becomes known to the receiving Party, without similar confidentiality restriction, from a source other than the disclosing Party without breach of this Agreement by the receiving Party. 4.4 Compelled Disclosure. The receiving Party may disclose the Confidential Information of disclosing Party if compelled to do so by law, a court or other authority; provided that the receiving Party shall give the disclosing Party prompt written notice so that the disclosing Party may take steps to oppose such disclosure. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -6-
4.5 Confidentiality of Agreement. Each Party agrees that the terms and conditions, but not the existence, of this Agreement shall be treated as the other's Confidential Information and that no public reference to the terms and conditions of this Agreement or to activities pertaining to this Agreement can be made without the prior written consent of the other Party; provided, however, that each Party may disclose the terms and conditions of this Agreement: (i) as required by any court or other governmental body; (ii) as otherwise required by law; (iii) to legal counsel of the Parties; (iv) in public documents, in connection with the requirements of an initial public offering, secondary offering, or debt offering or any securities filing of the Parties; (v) in confidence, to accountants, banks, and financing sources and their advisors; (vi) in confidence, in connection with the enforcement of this Agreement or rights under this Agreement; or (vii) in confidence, in connection with a merger or acquisition or proposed merger or acquisition, or the like. ARTICLE 5 TERM AND TERMINATION 5.1 Term. This Agreement begins on the Effective Date and shall continue indefinitely unless sooner terminated as provided in this Article 5. 5.2 Termination for Breach. If a Party commits a material breach of this Agreement, the non-breaching Party shall be entitled to terminate this Agreement if the breaching party does not cure the breach within thirty (30) days after the non- breaching party gives the breaching party written notice of the specific breach. 5.3 Other Termination. Either Party shall be entitled to terminate this Agreement by written notice to the other Party and IVH upon the dissolution of Joint Venture Company or upon termination of the License Agreement in accordance with its terms. 5.4 Effect of Termination; Survival. The rights and obligations of the Parties under the following Articles and Sections shall survive any expiration or termination of this Agreement: Article 1, Article 3, Article 4, Article 6 and Article 7, and this Section 5.4. ARTICLE 6 REPRESENTATIONS AND WARRANTIES 6.1 Mutual Representations and Warranties. Each Party hereby represents and warrants to the other Party that: (a) Organization. It is a corporation (or limited liability company) duly organized (or formed), validly existing and in good standing under the laws of its state of organization (or formation); (b) Authority; Enforceability. It has full corporate (or limited liability company) power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby; its execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all its requisite entity action; and it has duly executed and delivered this Agreement, and (assuming due authorization, execution and delivery by the other Party) this Agreement constitutes its legal, valid and binding obligations, enforceable against it in accordance with their respective terms; and [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -7-
(c) No Conflicts; Consents. Its execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not (i) violate or conflict with its organizational documents or (ii) violate or conflict with any provision of law or governmental order applicable to it; and no consent, approval, waiver or authorization is required to be obtained by it from any person (including any governmental authority) in connection with its execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby. 6.2 NO OTHER REPRESENTATIONS. THE EXPRESS REPRESENTATIONS AND WARRANTIES STATED IN THIS AGREEMENT ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, REGARDING THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT. ARTICLE 7 GENERAL PROVISIONS 7.1 Independent Contractors. The Parties are independent contractors. Nothing contained in this Agreement or done pursuant to this Agreement shall constitute either Party as the agent of the other Party for any purpose or in any sense whatsoever, or constitute the Parties as partners or joint venturers. 7.2 Amendment. No alteration, amendment, waiver, cancellation or any other change in any term or condition of this Agreement shall be valid or binding on either Party unless mutually assented to in writing by both Parties. 7.3 Notices. All notices required or permitted to be given under this Agreement shall be in writing and shall be delivered by electronic transmission (email or fax) or prepaid air express or registered airmail, postage prepaid, to the following: If to Loop: Loop Industries, Inc. 480 rue Fernand-Poitras Terrebonne, Quebec J6Y 1Y4 Canada E-mail: apenta@loopindustries.com Attention: Antonella Penta [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -8-
With a copy to: Wilson Sonsini Goodrich & Rosati 1700 K Street NW, 5TH Floor Washington, DC 20006 United States of America E-mail: jclessuras@wsgr.com Attention: James Clessuras If to Joint Venture Company: Indorama Loop Technologies, LLC [***] [***] Email: ________________________________ Attention: _____________________________ With copies to: Loop Innovations, LLC c/o Loop Industries, Inc. 480 rue Fernand-Poitras Terrebonne, Quebec J6Y 1Y4 Canada E-mail: apenta@loopindustries.com Attention: Antonella Penta Indorama Ventures Holdings LP 4235 South Stream Boulevard, Charlotte, NC 28217 Email: hunter.stamey@us.indorama.net Attention: Hunter Stamey Wilson Sonsini Goodrich & Rosati 1700 K Street NW, 5TH Floor Washington, DC 20006 United States of America E-mail: jclessuras@wsgr.com Attention: James Clessuras [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -9-
and Parker Poe Adams & Bernstein 401 S. Tryon Street Suite 3000 Charlotte, NC 28202 E-mail: stevehunting@parkerpoe.com Attention: Stephen R. Hunting Each Party may change its address set forth above by written notice to the other. 7.4 Choice of Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware, United States of America, without reference to conflict-of-laws principles. 7.5 Disputes. All disputes arising out of or in connection with this Agreement shall be finally settled in accordance with Section 13.11 of the LLC Agreement and such provisions shall be incorporated herein mutatis mutandis; provided that each reference to "Party" shall be deemed a Party hereunder notwithstanding them being different entities. 7.6 Waiver. Any failure by either Party to enforce at any time any terms and conditions of this Agreement shall not be considered a waiver of that Party's right thereafter to enforce such terms and conditions or any other terms and conditions of this Agreement. 7.7 Severability. Should any clause, sentence, section, article or paragraph of this Agreement judicially be declared to be invalid, unenforceable, or void, such decision shall not have the effect of invalidating or voiding the remainder of this Agreement. 7.8 Assignment. This Agreement shall inure to the benefit of, and shall be binding upon, the Parties and their respective successors and assigns, but neither Party may assign this Agreement without the prior written consent of the other except to a person into which it has merged or who has otherwise succeeded to all or substantially all of the business and assets of the assignor, and who has assumed in writing or by operation of law its obligations under this Agreement. 7.9 Entire Agreement. This Agreement (including its Exhibits) sets forth the entire agreement between the Parties as to the subject matter hereof and supersedes all previous negotiations, agreements and writings in respect thereto and any usage of trade, and shall not be extended, supplemented or amended except by an instrument in writing duly executed by an authorized officer or representative of each Party. 7.10 Counterparts. This Agreement may be executed in counterparts or duplicate originals, both of which shall be regarded as one and the same instrument, and which shall be the official and governing version in the interpretation of this Agreement. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -10-
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in duplicate, as of the Effective Date, by their duly authorized officers or representatives. Loop Industries, Inc. Indorama Loop Technologies, LLC
By: By: Name: Name: Title: Title: [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -11-
EXHIBIT A PROPOSED CONTRACT NOTICE Loop Sales Contract: Authorized Customer: Licensed Facility/SPV: Contract Eligibility Framework Criteria: ¨ Eligible Contract ¨ Considered Contract [***] Special terms and conditions of Considered Contract (i.e., terms and conditions materially affecting the above Commercial or Technical Aspects): [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.
EXHIBIT B CONTRACT ELIGIBILITY FRAMEWORK [***] * The specific values for the criteria will be agreed by the Parties after the Effective Date, and may be revised from time to time upon the mutual written agreement of the Parties. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.
EXHIBIT C FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT This Assignment and Assumption Agreement (this "Assignment"), dated as of __, 2018 (the "Assignment and Assumption Date"), is made by and between Loop Industries, Inc., a Nevada corporation with a principal place of business at 480 Fernand-Poitras, Terrebonne, Quebec, Canada (the "Assignor"), and Indorama Loop Technologies, LLC, a Delaware limited liability company with a principal place of business at [***] (the "Assignee") (each of Assignor and Assignee is a "Party;" together they are the "Parties"). RECITALS A. On August __, 2018, the Parties entered into a Marketing Agreement (the "Marketing Agreement") pursuant to which the Assignor may assign its rights and obligations under certain Loop Sales Contracts to the Assignee (capitalized terms used herein but not defined herein shall have the respective meanings ascribed to them in the Marketing Agreement). B. Thereafter, the Assignor and [name of other party to sales contract] (the "Buyer") entered into the Loop Sales Contract attached as Exhibit A pursuant to which, inter alia, the Assignor agreed to manufacture and deliver Loop-branded Product to the Buyer. C. Pursuant to Section 2.4 of the Marketing Agreement, the Assignor desires to assign all rights and obligations under the Loop Sales Contract (the "Transferred Contract") to the Assignee, and the Assignee desires to accept such assignment and assume such obligations on the terms and conditions of this Assignment. In consideration of the mutual covenants in this Assignment, and other good and valuable consideration, the Parties agree as follows: AGREEMENT 1. Assignment and Assumption. a. The Assignor hereby assigns, transfers, and conveys to and in favor of the Assignee all of the Assignor's right, title, and interest in, to, and under the Transferred Contract, together with its related rights, warranties, remedies, powers, and privileges (collectively, the "Assigned Rights"). The Assignee hereby accepts the Assigned Rights. b. The Assignor hereby delegates and transfers to the Assignee all obligations of the Assignor under the Transferred Contract that accrue during the term of this Assignment (collectively, the "Assumed Obligations"). The Assignee hereby agrees to perform the Assumed Obligations in accordance with their terms. 2. Assignor Representations and Warranties. The Assignor represents and warrants that: a. The Transferred Contract is in full force and effect and is enforceable in accordance with its terms; [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.
b. Exhibit A contains the entire agreement of the Assignor and Buyer relating to the Transferred Contract, and the Transferred Contract has not been amended or modified in any way; c. There are no disputes, pending or threatened, related to the Transferred Contract; d. No event or condition has occurred that is, or with the passage of time would be, a default under the Transferred Contract; and e. Buyer has consented in writing to this Assignment, either in the express terms of the Transferred Contract or in a separate signed consent the Assignor has delivered to the Assignee. 3. SPV. The Assignee may assign the Assigned Rights and may delegate the Assumed Obligations to an SPV in accordance with the terms of the Marketing Agreement. 4. Counterparts. This Assignment may be executed in counterparts or duplicate originals, all of which shall be regarded as one and the same instrument. 5. Governing Law. This Assignment shall be governed by and interpreted in accordance with the laws of the State of Delaware, United States of America, without reference to conflict-of-laws principles. 6. Further Assurances. Each Party shall, at its own expense, execute and deliver such other documents and perform such other acts as may be reasonably necessary to effect this Assignment. 7. Amendments. No alteration, amendment, waiver, cancellation, or any other change in any term or condition of this Assignment shall be valid or binding on either Party unless both Parties agree in writing. 8. Successors and Assigns. This Assignment shall inure to the benefit of, and shall be binding upon, the Parties and their respective successors and assigns, but, except as provided in Section 3 above, neither Party may assign this Assignment without the prior written consent of the other Party. 9. Severability. Should any clause, sentence, section, article or paragraph of this Assignment judicially be declared to be invalid, unenforceable, or void, such decision shall not have the effect of invalidating or voiding the remainder of this Assignment. 10. No Third Party Beneficiaries. This Assignment is solely for the benefit of the Assignor and the Assignee and their successors and permitted assigns, and no right or cause of action shall accrue by reason hereof for the benefit of any third party. (Signatures on next page) [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. 2
The Parties have caused this Assignment and Assumption Agreement to be executed in duplicate, as of the Assignment and Assumption Date, by their duly authorized officers or representatives. Loop Industries, Inc. Indorama Loop Technologies, LLC By: By: Name: Name:
Title: Title: [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. 3
EXHIBIT A TO ASSIGNMENT AND ASSUMPTION AGREEMENT LOOP SALES CONTRACT [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. [/INST] ```json
{<answer_start>
"answer": "September __, 2018"
<answer_end>
}
``` </s> | EXHIBIT 10.3 Execution Copy MARKETING AGREEMENT This Marketing Agreement (this "Agreement") is made and entered into as of September __, 2018 (the "Effective Date"), between Loop Industries, Inc., a Nevada corporation with a principal place of business at 480 Fernand-Poitras, Terrebonne, Quebec, Canada ("Loop"), and Indorama Loop Technologies, LLC, a Delaware limited liability company with a principal place of business at [***] ("Joint Venture Company") (each of Loop and Joint Venture Company is a "Party"; together they are the "Parties"). BACKGROUND A. Loop and its Subsidiaries (collectively, "Loop Parties") have developed a proprietary depolymerization process that decouples plastic from fossil fuels, producing dimethylterepthalate ("DMT") and monoethylene glycol ("MEG") for the production of polyethylene terephthalate ("PET") plastic that can be used for a variety of polyester applications. B. Concurrently with the execution of this Agreement, Loop Innovations, LLC, a Delaware limited liability company and a subsidiary of Loop ("Loop Innovations"), and Indorama Ventures Holdings LP, a Delaware limited partnership ("IVH"), have formed Joint Venture Company to develop, construct, own and operate chemical upcycling polyester resin ("CUPET") plants through SPVs (as defined below), the initial of which will be at the facility of [***], a Delaware corporation and a subsidiary of IVH, located in [***], the United States of America (such facility, the "[***] Facility"), and to, among other things, manufacture Licensed Products (as defined below) at the [***] Facility, and potentially other facilities, for sale throughout the world (such contemplated venture, the "CUPET Project"). C. Concurrently herewith, Loop has entered into the License Agreement (as defined below) with Joint Venture Company to provide it and SPVs a license to use proprietary technology for the production of DMT and MEG to enable the production of Licensed Product. D. Loop retains its sole and exclusive right to enter into Loop Sales Contracts (as defined below) for the supply of Licensed Products to Authorized Customers (as defined below), subject to Joint Venture Company's rights in this Agreement. E. Loop desires to assign rights and obligations with respect to the fulfillment of a specific volume and delivery of Product (as defined below) under Loop Sales Contracts to Joint Venture Company, and Joint Venture Company desires to manufacture and fulfill such Product supply requirements, either directly or through an SPV, as determined by the Parties, all in accordance with the terms and conditions set forth in this Agreement. Now, therefore, in consideration of the mutual covenants and premises contained in this Agreement, and other good and valuable consideration, the Parties agree as follows. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.
ARTICLE 1 DEFINITIONS 1.1 [***] 1.2 "Acceptance Notice" has the meaning set forth in Section 2.3. 1.3 "Affiliate" means, with respect to a Party, any corporation or other entity that is directly or indirectly controlling, controlled by or under the common control with such Party. For the purpose of this definition, "control" means the direct or indirect ownership of at least fifty percent (50%) of the outstanding shares or other voting rights of the subject entity to elect directors (or, in the case of an entity that is not a corporation, for the election of the corresponding managing authority), or if not meeting the preceding, any entity owned or controlled by or owning or controlling at the maximum control or ownership right permitted in the country where such entity exists. 1.4 "Alternate Producer" has the meaning set forth in Section 2.3. 1.5 "Assignment" has the meaning set forth in Section 2.4. 1.6 "Assignment Date" has the meaning set forth in Section 2.4. 1.7 "Authorized Customer" means a Loop Party customer that is a party to a Transferred Contract, solely with respect to the Product quantities covered by the Transferred Contract. 1.8 "Business Day" means any day, other than a Saturday, Sunday or legal holiday, on which banks in Montreal or South Carolina are open for the conduct of their commercial banking business. 1.9 "Considered Contract" has the meaning set forth in Section 2.2. 1.10 "Contract Eligibility Framework" means, with respect to any Proposed Contract, those criteria set forth Exhibit B. 1.11 "Eligible Contract" has the meaning set forth in Section 2.2. 1.12 "Joint Venture Company" has the meaning set forth in the Recitals. 1.13 "Joint Venture Party" means each of Joint Venture Company and each SPV. 1.14 "License Agreement" means that certain License Agreement between Loop and Joint Venture Company dated as of the Effective Date, as amended, modified or supplemented from time to time (including, for the avoidance of doubt, any changes to the list of Licensed Facilities therein). 1.15 "Licensed Facilities" has the meaning set forth in the License Agreement. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -2-
1.16 "Licensed Products" has the meaning set forth in the License Agreement. 1.17 "Licensed Subject Matter" has the meaning set forth in the License Agreement. 1.18 "LLC Agreement" means the Limited Liability Company Agreement of the Joint Venture Company between Loop Innovations and IVH, as amended, modified or supplemented from time to time. 1.19 "Loop Sales Contract" means a contract between a Loop Party and a third-party customer for the Loop Party's sale to the customer, and the customer's purchase from the Loop Party, of a specified quantity of Loop-branded Products produced using Licensed Subject Matter. 1.20 "Marketing and Sale Restriction" has the meaning set forth in Section 2.7. 1.21 "Products" means recycled or upcycled PET resins. 1.22 "Proposed Contract" has the meaning set forth in Section 2.2. 1.23 "Proposed Contract Notice" has the meaning set forth in Section 2.2. 1.24 "Rejection Notice" has the meaning set forth in Section 2.3. 1.25 "Review Period" has the meaning set forth in Section 2.3. 1.26 "SPV" means each Subsidiary of Joint Venture Company which operates a Licensed Facility. 1.27 "Subsidiary" means, with respect to a Party, any Affiliate of the Party that is directly or indirectly controlled by the Party (with "control" having the meaning provided in Section 2). 1.28 "Transferred Contract" means any Proposed Contract that is accepted or deemed accepted as a Transferred Contract pursuant to Section 2.3. ARTICLE 2 PRODUCT SALES 2.1 Loop Sales Contracts. As between the Parties, subject to Section 2.7, Loop shall have the sole and exclusive right to enter into agreements for the sale of Loop-branded Products or any Products produced using Licensed Subject Matter, and the exclusive right to set the price and quantity to be supplied under each Loop Sales Contract and other terms and conditions as determined by Loop in its commercially reasonable discretion. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -3-
2.2 Proposed Contracts and Proposed Contract Notice. Loop shall give Joint Venture Company prompt written notice, in the form of Exhibit A attached to this Agreement, [***] and (b) pursuant to which Loop offers to assign all of its rights and obligations under such Loop Sales Contract to Joint Venture Company (each such notice, a "Proposed Contract Notice"). Along with each Proposed Contract Notice, Loop shall deliver to Joint Venture Company a complete copy of the executed Loop Sales Contract (the "Proposed Contract"). The Proposed Contract Notice shall contain information necessary to establish whether the Proposed Contract meets the criteria set forth in the Contract Eligibility Framework. Each such Proposed Contract that (i) meets the criteria set forth in the Contract Eligibility Framework and (ii) contains no other terms or conditions other than those set forth in the Contract Eligibility Framework or any form of Loop Sales Contract mutually agreed in writing to be acceptable by the Parties, shall be an "Eligible Contract." Each such Proposed Contract that does not qualify as an Eligible Contract shall be a "Considered Contract." 2.3 Acceptance of Proposed Contracts. All Eligible Contracts shall be deemed accepted by the Joint Venture Company and become a Transferred Contract on the date Loop delivers the Proposed Contract Notice for such Eligible Contract to the Joint Venture Company. In the event that the Proposed Contract Notice is a Considered Contract, the Joint Venture Company will have the right to review and determine whether to accept or reject the Considered Contract within ten (10) days following Joint Venture Company's receipt of the Proposed Contract Notice (the "Review Period"). Joint Venture Company shall provide Loop with a written acceptance or rejection of each Considered Contract ("Acceptance Notice" or "Rejection Notice," as applicable) within the Review Period, which acceptance or rejection shall be in Joint Venture Company's sole discretion. If Joint Venture Company does not provide an Acceptance Notice or Rejection Notice to Loop within the Review Period, the Considered Contract will be deemed rejected by Joint Venture Company. Loop shall be entitled to present any rejected Considered Contract (whether deemed rejected or by receipt of a Rejection Notice) to an Alternate Producer on the same terms and conditions as those presented to Joint Venture Company. If Joint Venture Company provides an Acceptance Notice to Loop with respect to a Considered Contract during the Review Period, that Considered Contract shall become a Transferred Contract on the date Joint Venture Company provides that Acceptance Notice. 2.4 Assignment of Transferred Contracts. Promptly after the date a Proposed Contract becomes a Transferred Contract (the "Assignment Date"), Loop and Joint Venture Company shall execute and deliver an assignment and assumption agreement substantially in the form of Exhibit C attached to this Agreement ("Assignment") pursuant to which Loop shall assign to Joint Venture Company all of Loop's right, title, and interest in the Transferred Contract and Joint Venture Company shall assume all such rights and obligations. Without diminishing Joint Venture Company's obligations to perform under a Transferred Contract pursuant to the assignment and assumption agreement, Joint Venture Company shall cause any applicable SPV to perform all of its assumed obligations under such Transferred Contract. 2.5 Customer Interface. Joint Venture Company shall fulfill all sales of Products under all Transferred Contracts, shall invoice Authorized Customers for all sales of Products under all Transferred Contracts, and shall use commercially reasonable efforts to collect the amounts due under such invoices. At Joint Venture Company's request from time to time, Loop shall provide reasonable assistance to Joint Venture Company in such invoicing and collection process at Joint Venture Company's expense. 2.6 Product Branding. Joint Venture Company shall, and shall cause each SPV to, mark and brand all containers, packaging and related collateral for the Licensed Products in accordance with the License Agreement. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -4-
2.7 Exclusivity. Joint Venture Company shall not, and shall cause each SPV and each of their Affiliates not to, directly or indirectly, market or sell any Loop-branded Products or any Products produced using Licensed Subject Matter to any person or entity except to Authorized Customers pursuant to a Transferred Contract (the "Marketing and Sale Restriction"); provided that if at any time during the term of this Agreement, Loop has delivered Proposed Contract Notices that result in Transferred Contracts having binding purchase and supply obligations for less than [***] of the then existing actual production capacity of a Licensed Facility (taking into account Joint Venture Company's reasonable forecasts based on customer requirements, seasonal variations, and other factors) in the subsequent three months (the "[***]"), Joint Venture Company may market and solicit orders for Licensed Products produced in such Licensed Facility directly to customers and potential customers and enter into supply contracts for the sale of Loop-branded Products or any Products produced using Licensed Subject Matter produced in such Licensed Facility with customers without being restricted by the Marketing and Sale Restriction. If at any subsequent time during the term of this Agreement Loop gives Joint Venture Party written notice that Loop is then capable of meeting, and is prepared to meet, the [***] and provides reasonable supporting information and documentation to Joint Venture Party with such notice, then at a date selected by Joint Venture Company that is within ninety (90) days after Joint Venture Company receives such written notice, the Market and Sale Restriction and the other provisions of this Section 2.7 shall go back into force. Nothing in this Section 2.7 shall relieve Loop of any of its obligations under this Agreement. ARTICLE 3 LIMITATION OF LIABILITY 3.1 LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER UNDER THIS AGREEMENT OR OTHERWISE FOR CONSEQUENTIAL, SPECIAL, INCIDENTAL, EXEMPLARY, STATUTORY, OR PUNITIVE DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT. JOINT VENTURE COMPANY'S TOTAL CUMULATIVE LIABILITY TO THE LOOP PARTIES WITH RESPECT TO A TRANSFERRED CONTRACT, IN ALL CIRCUMSTANCES AND REGARDLESS OF THE THEORY OF RECOVERY, SHALL BE LIMITED TO THE AMOUNT OF ACTUAL, DIRECT, AND DOCUMENTED DAMAGES THE APPLICABLE AUTHORIZED CUSTOMER ACTUALLY RECOVERS FROM THE LOOP PARTIES UNDER THE TRANSFERRED CONTRACT BASED SOLELY ON JOINT VENTURE COMPANY'S BREACH OF SUCH TRANSFERRED CONTRACT. JOINT VENTURE COMPANY SHALL NOT HAVE ANY LIABILITY TO ANY LOOP PARTY WITH RESPECT TO ANY ELIGIBLE CONTRACT THAT DOES NOT BECOME A TRANSFERRED CONTRACT AS PROVIDED IN SECTION 2.3. NOTWITHSTANDING THE FOREGOING, NONE OF THE FOREGOING LIMITATIONS OF LIABILITY SET FORTH IN THIS SECTION 3.1 SHALL BE AVAILABLE TO EITHER PARTY WITH RESPECT TO A BREACH OF SECTION 4, CONFIDENTIAL INFORMATION, OR FOR CLAIMS TO THE EXTENT THEY ARISE OUT OF A PARTY'S GROSS NEGLIGENCE, FRAUD, OR WILLFUL MISCONDUCT. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -5-
ARTICLE 4 CONFIDENTIAL INFORMATION 4.1 Confidential Information. The term "Confidential Information" means any information disclosed by one Party to the other (i) prior to the date of this Agreement but with respect to the subject matter of this Agreement, or (ii) pursuant to this Agreement, in each case which is in written, graphic, machine readable or other tangible form and is marked "Confidential," "Proprietary" or in some other manner to indicate its confidential nature. Confidential Information may also include oral information disclosed by one Party to the other pursuant to this Agreement, pro-vided that such information is designated as confidential at the time of disclosure and reduced to a written summary by the disclosing Party, within thirty (30) days after its oral disclosure, which is marked in a manner to indicate its confidential nature and delivered to the receiving party. 4.2 Obligation. Each Party shall treat as confidential (as set forth herein) all Confidential Information of the other Party, and shall not use such Confidential Information except as contemplated in this Agreement or as otherwise authorized in writing. Each Party shall implement reasonable procedures to prohibit the unauthorized disclo-sure or misuse of the other Party's Confidential Information and shall not intentionally disclose such Confidential Information to any third party except as may be necessary or useful in connection with the rights and obligations of such Party under this Agreement, and subject to confidentiality obligations similar to those set forth in this Article 4. Each of the Parties shall use at least the same procedures and degree of care that it uses to prevent the disclosure of its own confidential information of like importance to prevent the disclosure of Confidential Information disclosed to it by the other Party under this Agreement, but in no event less than reasonable care. 4.3 Exclusions. Notwithstanding the foregoing, Confidential Information excludes information that: (a) was publicly available at the time it was disclosed or becomes publicly available through no fault of the receiving Party; (b) was known to the receiving Party, without similar confidentiality restriction, at the time of disclosure; (c) is disclosed with the prior written approval of the disclosing Party; (d) was independently developed by the receiving Party without any use of the Confidential Information of the disclosing Party; or (e) becomes known to the receiving Party, without similar confidentiality restriction, from a source other than the disclosing Party without breach of this Agreement by the receiving Party. 4.4 Compelled Disclosure. The receiving Party may disclose the Confidential Information of disclosing Party if compelled to do so by law, a court or other authority; provided that the receiving Party shall give the disclosing Party prompt written notice so that the disclosing Party may take steps to oppose such disclosure. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -6-
4.5 Confidentiality of Agreement. Each Party agrees that the terms and conditions, but not the existence, of this Agreement shall be treated as the other's Confidential Information and that no public reference to the terms and conditions of this Agreement or to activities pertaining to this Agreement can be made without the prior written consent of the other Party; provided, however, that each Party may disclose the terms and conditions of this Agreement: (i) as required by any court or other governmental body; (ii) as otherwise required by law; (iii) to legal counsel of the Parties; (iv) in public documents, in connection with the requirements of an initial public offering, secondary offering, or debt offering or any securities filing of the Parties; (v) in confidence, to accountants, banks, and financing sources and their advisors; (vi) in confidence, in connection with the enforcement of this Agreement or rights under this Agreement; or (vii) in confidence, in connection with a merger or acquisition or proposed merger or acquisition, or the like. ARTICLE 5 TERM AND TERMINATION 5.1 Term. This Agreement begins on the Effective Date and shall continue indefinitely unless sooner terminated as provided in this Article 5. 5.2 Termination for Breach. If a Party commits a material breach of this Agreement, the non-breaching Party shall be entitled to terminate this Agreement if the breaching party does not cure the breach within thirty (30) days after the non- breaching party gives the breaching party written notice of the specific breach. 5.3 Other Termination. Either Party shall be entitled to terminate this Agreement by written notice to the other Party and IVH upon the dissolution of Joint Venture Company or upon termination of the License Agreement in accordance with its terms. 5.4 Effect of Termination; Survival. The rights and obligations of the Parties under the following Articles and Sections shall survive any expiration or termination of this Agreement: Article 1, Article 3, Article 4, Article 6 and Article 7, and this Section 5.4. ARTICLE 6 REPRESENTATIONS AND WARRANTIES 6.1 Mutual Representations and Warranties. Each Party hereby represents and warrants to the other Party that: (a) Organization. It is a corporation (or limited liability company) duly organized (or formed), validly existing and in good standing under the laws of its state of organization (or formation); (b) Authority; Enforceability. It has full corporate (or limited liability company) power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby; its execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all its requisite entity action; and it has duly executed and delivered this Agreement, and (assuming due authorization, execution and delivery by the other Party) this Agreement constitutes its legal, valid and binding obligations, enforceable against it in accordance with their respective terms; and [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -7-
(c) No Conflicts; Consents. Its execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not (i) violate or conflict with its organizational documents or (ii) violate or conflict with any provision of law or governmental order applicable to it; and no consent, approval, waiver or authorization is required to be obtained by it from any person (including any governmental authority) in connection with its execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby. 6.2 NO OTHER REPRESENTATIONS. THE EXPRESS REPRESENTATIONS AND WARRANTIES STATED IN THIS AGREEMENT ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, REGARDING THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT. ARTICLE 7 GENERAL PROVISIONS 7.1 Independent Contractors. The Parties are independent contractors. Nothing contained in this Agreement or done pursuant to this Agreement shall constitute either Party as the agent of the other Party for any purpose or in any sense whatsoever, or constitute the Parties as partners or joint venturers. 7.2 Amendment. No alteration, amendment, waiver, cancellation or any other change in any term or condition of this Agreement shall be valid or binding on either Party unless mutually assented to in writing by both Parties. 7.3 Notices. All notices required or permitted to be given under this Agreement shall be in writing and shall be delivered by electronic transmission (email or fax) or prepaid air express or registered airmail, postage prepaid, to the following: If to Loop: Loop Industries, Inc. 480 rue Fernand-Poitras Terrebonne, Quebec J6Y 1Y4 Canada E-mail: apenta@loopindustries.com Attention: Antonella Penta [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -8-
With a copy to: Wilson Sonsini Goodrich & Rosati 1700 K Street NW, 5TH Floor Washington, DC 20006 United States of America E-mail: jclessuras@wsgr.com Attention: James Clessuras If to Joint Venture Company: Indorama Loop Technologies, LLC [***] [***] Email: ________________________________ Attention: _____________________________ With copies to: Loop Innovations, LLC c/o Loop Industries, Inc. 480 rue Fernand-Poitras Terrebonne, Quebec J6Y 1Y4 Canada E-mail: apenta@loopindustries.com Attention: Antonella Penta Indorama Ventures Holdings LP 4235 South Stream Boulevard, Charlotte, NC 28217 Email: hunter.stamey@us.indorama.net Attention: Hunter Stamey Wilson Sonsini Goodrich & Rosati 1700 K Street NW, 5TH Floor Washington, DC 20006 United States of America E-mail: jclessuras@wsgr.com Attention: James Clessuras [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -9-
and Parker Poe Adams & Bernstein 401 S. Tryon Street Suite 3000 Charlotte, NC 28202 E-mail: stevehunting@parkerpoe.com Attention: Stephen R. Hunting Each Party may change its address set forth above by written notice to the other. 7.4 Choice of Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware, United States of America, without reference to conflict-of-laws principles. 7.5 Disputes. All disputes arising out of or in connection with this Agreement shall be finally settled in accordance with Section 13.11 of the LLC Agreement and such provisions shall be incorporated herein mutatis mutandis; provided that each reference to "Party" shall be deemed a Party hereunder notwithstanding them being different entities. 7.6 Waiver. Any failure by either Party to enforce at any time any terms and conditions of this Agreement shall not be considered a waiver of that Party's right thereafter to enforce such terms and conditions or any other terms and conditions of this Agreement. 7.7 Severability. Should any clause, sentence, section, article or paragraph of this Agreement judicially be declared to be invalid, unenforceable, or void, such decision shall not have the effect of invalidating or voiding the remainder of this Agreement. 7.8 Assignment. This Agreement shall inure to the benefit of, and shall be binding upon, the Parties and their respective successors and assigns, but neither Party may assign this Agreement without the prior written consent of the other except to a person into which it has merged or who has otherwise succeeded to all or substantially all of the business and assets of the assignor, and who has assumed in writing or by operation of law its obligations under this Agreement. 7.9 Entire Agreement. This Agreement (including its Exhibits) sets forth the entire agreement between the Parties as to the subject matter hereof and supersedes all previous negotiations, agreements and writings in respect thereto and any usage of trade, and shall not be extended, supplemented or amended except by an instrument in writing duly executed by an authorized officer or representative of each Party. 7.10 Counterparts. This Agreement may be executed in counterparts or duplicate originals, both of which shall be regarded as one and the same instrument, and which shall be the official and governing version in the interpretation of this Agreement. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -10-
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in duplicate, as of the Effective Date, by their duly authorized officers or representatives. Loop Industries, Inc. Indorama Loop Technologies, LLC
By: By: Name: Name: Title: Title: [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -11-
EXHIBIT A PROPOSED CONTRACT NOTICE Loop Sales Contract: Authorized Customer: Licensed Facility/SPV: Contract Eligibility Framework Criteria: ¨ Eligible Contract ¨ Considered Contract [***] Special terms and conditions of Considered Contract (i.e., terms and conditions materially affecting the above Commercial or Technical Aspects): [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.
EXHIBIT B CONTRACT ELIGIBILITY FRAMEWORK [***] * The specific values for the criteria will be agreed by the Parties after the Effective Date, and may be revised from time to time upon the mutual written agreement of the Parties. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.
EXHIBIT C FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT This Assignment and Assumption Agreement (this "Assignment"), dated as of __, 2018 (the "Assignment and Assumption Date"), is made by and between Loop Industries, Inc., a Nevada corporation with a principal place of business at 480 Fernand-Poitras, Terrebonne, Quebec, Canada (the "Assignor"), and Indorama Loop Technologies, LLC, a Delaware limited liability company with a principal place of business at [***] (the "Assignee") (each of Assignor and Assignee is a "Party;" together they are the "Parties"). RECITALS A. On August __, 2018, the Parties entered into a Marketing Agreement (the "Marketing Agreement") pursuant to which the Assignor may assign its rights and obligations under certain Loop Sales Contracts to the Assignee (capitalized terms used herein but not defined herein shall have the respective meanings ascribed to them in the Marketing Agreement). B. Thereafter, the Assignor and [name of other party to sales contract] (the "Buyer") entered into the Loop Sales Contract attached as Exhibit A pursuant to which, inter alia, the Assignor agreed to manufacture and deliver Loop-branded Product to the Buyer. C. Pursuant to Section 2.4 of the Marketing Agreement, the Assignor desires to assign all rights and obligations under the Loop Sales Contract (the "Transferred Contract") to the Assignee, and the Assignee desires to accept such assignment and assume such obligations on the terms and conditions of this Assignment. In consideration of the mutual covenants in this Assignment, and other good and valuable consideration, the Parties agree as follows: AGREEMENT 1. Assignment and Assumption. a. The Assignor hereby assigns, transfers, and conveys to and in favor of the Assignee all of the Assignor's right, title, and interest in, to, and under the Transferred Contract, together with its related rights, warranties, remedies, powers, and privileges (collectively, the "Assigned Rights"). The Assignee hereby accepts the Assigned Rights. b. The Assignor hereby delegates and transfers to the Assignee all obligations of the Assignor under the Transferred Contract that accrue during the term of this Assignment (collectively, the "Assumed Obligations"). The Assignee hereby agrees to perform the Assumed Obligations in accordance with their terms. 2. Assignor Representations and Warranties. The Assignor represents and warrants that: a. The Transferred Contract is in full force and effect and is enforceable in accordance with its terms; [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.
b. Exhibit A contains the entire agreement of the Assignor and Buyer relating to the Transferred Contract, and the Transferred Contract has not been amended or modified in any way; c. There are no disputes, pending or threatened, related to the Transferred Contract; d. No event or condition has occurred that is, or with the passage of time would be, a default under the Transferred Contract; and e. Buyer has consented in writing to this Assignment, either in the express terms of the Transferred Contract or in a separate signed consent the Assignor has delivered to the Assignee. 3. SPV. The Assignee may assign the Assigned Rights and may delegate the Assumed Obligations to an SPV in accordance with the terms of the Marketing Agreement. 4. Counterparts. This Assignment may be executed in counterparts or duplicate originals, all of which shall be regarded as one and the same instrument. 5. Governing Law. This Assignment shall be governed by and interpreted in accordance with the laws of the State of Delaware, United States of America, without reference to conflict-of-laws principles. 6. Further Assurances. Each Party shall, at its own expense, execute and deliver such other documents and perform such other acts as may be reasonably necessary to effect this Assignment. 7. Amendments. No alteration, amendment, waiver, cancellation, or any other change in any term or condition of this Assignment shall be valid or binding on either Party unless both Parties agree in writing. 8. Successors and Assigns. This Assignment shall inure to the benefit of, and shall be binding upon, the Parties and their respective successors and assigns, but, except as provided in Section 3 above, neither Party may assign this Assignment without the prior written consent of the other Party. 9. Severability. Should any clause, sentence, section, article or paragraph of this Assignment judicially be declared to be invalid, unenforceable, or void, such decision shall not have the effect of invalidating or voiding the remainder of this Assignment. 10. No Third Party Beneficiaries. This Assignment is solely for the benefit of the Assignor and the Assignee and their successors and permitted assigns, and no right or cause of action shall accrue by reason hereof for the benefit of any third party. (Signatures on next page) [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. 2
The Parties have caused this Assignment and Assumption Agreement to be executed in duplicate, as of the Assignment and Assumption Date, by their duly authorized officers or representatives. Loop Industries, Inc. Indorama Loop Technologies, LLC By: By: Name: Name:
Title: Title: [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. 3
EXHIBIT A TO ASSIGNMENT AND ASSUMPTION AGREEMENT LOOP SALES CONTRACT [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. | Highlight the parts (if any) of this contract related to "Agreement Date" that should be reviewed by a lawyer. Details: The date of the contract | {
"answer_start": [
123
],
"text": [
"September __, 2018"
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Ip Ownership Assignment" that should be reviewed by a lawyer. Details: Does intellectual property created by one party become the property of the counterparty, either per the terms of the contract or upon the occurrence of certain events?
Context: Exhibit 10.24 [***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. EXECUTION VERSION STRATEGIC ALLIANCE AGREEMENT
THIS STRATEGIC ALLIANCE AGREEMENT ("Agreement") is made and entered into as of November 6, 2016 (the "Effective Date") by and between Dialog Semiconductor (UK) Ltd., a corporation organized under the laws of England and Wales, having its principal office at 100 Longwater Avenue, Green Park, Reading, RG2 6GP, United Kingdom ("DIALOG") and Energous Corporation, a Delaware corporation, having its principal office at 3590 North First Street, Suite 210, San Jose, CA 95134 ("ENERGOUS"). WHEREAS DIALOG is a supplier of mixed-signal semiconductor products; WHEREAS ENERGOUS is a supplier of uncoupled wirefree charging systems, including antennas, semiconductors, firmware, software, algorithms, and sensors; WHEREAS concurrently with their execution of this Agreement, DIALOG and ENERGOUS are entering into a separate Securities Purchase Agreement, pursuant to which DIALOG will make an investment in ENERGOUS, and ENERGOUS will issue to DIALOG shares of its common stock and a warrant to purchase its common stock on the terms set forth therein. WHEREAS DIALOG and ENERGOUS desire to enter into a strategic relationship to distribute to the marketplace certain ENERGOUS products and technology and to potentially collaborate on further initiatives pursuant to the terms and conditions of this Agreement. NOW, THEREFORE, in consideration for the premises and mutual covenants contained herein, DIALOG and ENERGOUS hereby agree as follows: 1. DEFINITIONS. All capitalized terms used in this Agreement will have the meaning set out below, or if not defined below, the meaning as defined elsewhere in the Agreement. 1.1 "Affiliate" means any person or entity that controls, is controlled by or is under common control with the specified person or entity, but only so long as such control exists. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through ownership of voting securities, by contract or otherwise. 1.2 "Approved Production Specifications" means those materials, processes and workmanship specifications of Manufacturing Subcontractors as approved by ENERGOUS for the manufacture and production of the Products. 1.3 "Change of Control" means any transaction or series of transactions that results in (i) the consolidation or merger of the specified party ("Target") into or with any other corporation or corporations, (ii) the sale, conveyance or disposition of all or substantially all of the assets of the Target, (iii) the transfer of more than fifty percent (50%) of the voting power of the Target to any entity or entities not controlled by the Target, or (iv) any similar form of acquisition or any liquidation, dissolution or winding up of the Target or other transaction that results in the discontinuance of the Target's business; provided, however, that Change of Control will not include any transaction or series of transactions entered into primarily for equity financing purposes (including, without limitation, any private equity investment or any public offering of securities).
1.4 "Deposit Materials" means all chip level design databases, circuit schematics, test and characterization programs and associated documentation reasonably required to have Products manufactured, or to allow design bugs or Epidemic Defects to be fixed in the Product. 1.5 "Design-In Phase" means the phase in the sales cycle with a prospective customer for a Product that follows the customer's decision to move forward with the potential Product, during which chip samples are delivered to customer and the parties work together to design the evaluation board for in-system evaluation. 1.6 "Documentation" means all information that is necessary or useful to support DIALOG's authorized manufacture, testing, sale and support of the Products, including but not limited to Product Specifications, data sheets, application notes, application board gerber files/BOM, sales and marketing collateral, Product errata, test reports, characterization reports, software (e.g., firmware, GUI), test plans and yield data in connection with the manufacture and sale of Products, Approved Production Specifications, test and characterization programs and associated documentation reasonably required to have Products manufactured, assembled and tested, designs of all Tooling and all other items reasonably required for the manufacture of the Products. 1.7 "Epidemic Defects" means material defects of any Product resulting from a common root cause solely attributable to the Product Specifications or Approved Production Specifications and which results in returns (in accordance with the returns procedure mutually agreed between the parties in the Commercialization Plan) of more than [***] percent ([***]%) of the quantity of such Product manufactured in any [***] day period. Any number of material defects affecting any number of Products which result from a single common root cause or combination of causes and result in returns of more than [***] ([***]%) of such Products manufactured in any [***] day period will be treated as the occurrence of a single Epidemic Defect for purposes of this Agreement. 1.8 "Insolvency Event" means (a) without a successor, the specified party fails to function as a going concern or to operate in the ordinary course, or (b) other than in the case when the specified party is a debtor-in-possession and continuing to fulfill all its obligations under this Agreement, a receiver or trustee in bankruptcy is appointed for such party or its property, or such party makes a general assignment for the benefit of its creditors, or such party commences, or has commenced against it, proceedings under any bankruptcy, insolvency or debtor's relief law, in each case which proceedings are not dismissed within ninety (90) days. 1.9 "Intellectual Property Rights" means any and all Patent Rights, copyright rights, Marks rights (including all associated goodwill), mask work rights, trade secret rights and all other intellectual and industrial property rights of any sort throughout the world (including any application therefor). * Confidential Treatment Requested
Page 2
1.10 "Invention" means any idea, concept, discovery, invention, development, technology, work of authorship, trade secret, software, firmware, library, component, tool, mask work, process, method, technique, know-how, show-how, data, plan, formula, device, apparatus, specification, design, documentation or other material or information, tangible or intangible, whether or not it may be patented, copyrighted or otherwise protected (including all versions, modifications, enhancements and derivative works thereof). 1.11 "Manufacturing Subcontractors" means (a) [***] and/or its Affiliate that is the wafer foundry for the Products ("[***]"), (b) [***] and/or its Affiliate that is responsible for the assembly, packaging and testing of the Products, and (c) and other third party contractors DIALOG or ENERGOUS use, or may from time to time use, for the manufacturing, assembly, testing, or packaging of the Licensed Products or Licensed Product components. 1.12 "Marks" means trademarks, service marks, trade dress and trade names. 1.13 "Mask Set" means the mask set for fabrication of wafers at a foundry supplier. 1.14 "Mass Production Qualified Product" means a fully qualified Product which has completed 500 hour high temperature over lifetime (HTOL) testing and has been shipped in excess of [***] units for purposes of incorporation in customer products. 1.15 MCM means a multichip module, being a single package that includes multiple integrated circuit dies, including a Product die. 1.16 "Net Sales" means the invoiced amounts for the Sale of Products less: (a) amounts credited for return of any such Products; (b) amounts separately stated with respect to shipment of such Products for insurance, handling, duty, freight, and taxes; and (c) any discounts, credits or rebates in the relevant royalty or service fee period. 1.17 "New Product" means a product developed by or on behalf of ENERGOUS after the Effective Date that is not a Product Update; provided, however, that "New Products" exclude any product developed by a successor or acquirer of ENERGOUS. 1.18 "Patent" means any United States or foreign patent or patent application, including any provisional application, continuation, continuation-in-part, divisional, registration, confirmation, revalidation, reissue, PCT application, patent term extension, supplementary protection certificate, and utility model, as well as all foreign counterparts of any of the foregoing, and related extensions or restorations of terms thereof. 1.19 "Patent Rights" means rights under any Patent. 1.20 "Person" a human being or group of human beings, a company, corporation, a partnership or other legal entity (artificial or juristic person) recognized by law as having rights and duties. * Confidential Treatment Requested
Page 3
1.21 "Products" means the ENERGOUS products set forth in Exhibit A, as such Exhibit may be amended from time to time by mutual agreement between the parties, that have been released by ENERGOUS to production, including all Product Updates, which will be deemed to have been added to Exhibit A automatically, without any further action required by the parties, immediately following the release to production date. 1.22 "Product Die" means the silicon die incorporated within Products. 1.23 "Product IP" means (a) all Intellectual Property Rights in and to the Products, including all Product Updates, (b) any other Inventions and work products created or developed in connection with research and development or manufacturing efforts relating to the Products, including all Intellectual Property Rights therein and (c) all Intellectual Property Rights in and to the Mask Sets and Tooling, in each of the foregoing cases, that are owned or controlled by ENERGOUS, its Affiliates or any successor or assign. 1.24 "Product Specifications" means ENERGOUS' written technical specifications for the Products as referenced in datasheets and related documentation such as errata sheets. All Product Specifications are subject to change with at least one (1) months prior written notice to DIALOG, provided that with respect to any warranty for Products covered by this Agreement, the Product Specification in effect at the time of shipment of the relevant Product will apply for warranty purposes notwithstanding any subsequent change to the Product Specifications as provided herein. 1.25 "Product Updates" means any updates, improvements and other modifications to the Products made by or for ENERGOUS, including, without limitation: (a) any updates or modifications to the software (DSP code, firmware, GUI (graphical user interface) code); (b) modifications of silicon, including, without limitation; such modifications made solely for cost reduction purposes, and including only metal layer as well as all layer mask changes; (c) modifications which increase the distance over which wireless power is transmitted or received, subject to the limitations set out in Exhibit A; (d) modifications which increase the amount of power which is transmitted or received; (e) modifications to improve functionality or efficiency or add or improve features; and (f) modifications required to attain regulatory approvals, including, but not limited to, FCC approval; provided, however, that "Product Updates" will only include any of the foregoing developed by an acquirer or successor of ENERGOUS for a period of [***] after a Change of Control of ENERGOUS, and provided further that any Products incorporating Product Updates will be subject to separate terms and conditions to be agreed in good faith by the Parties, which terms and conditions will be no less favourable to DIALOG than those with respect to the Product to which the Product Update corresponds. 1.26 "Sale," "Sell" or "Sold" mean the sale, transfer, exchange or other disposition of Products, by DIALOG or any of its Affiliates to any customer or other third party, directly or indirectly through one or more tiers of distribution, for consideration that is recognized as revenue by DIALOG or its Affiliates according to applicable generally accepted accounting principles. 1.27 "Semiconductor Supplier" means any Person, other than DIALOG or its Affiliates, which primarily, or in its ordinary course of business, sells or distributes integrated circuits in packaged, die, multichip module or similar form. * Confidential Treatment Requested
Page 4
1.28 "Term" means the Initial Term and any and all Renewal Term(s) as set forth in Section 15.1 hereof. 1.29 "Third Party IP" means Intellectual Property Rights licensed from a third party relating to the Products. 1.30 "Tooling" means the physical Mask Sets, packaging fixtures, test fixtures, test programs, processes, software source code and any other physical tooling or program source code required for the manufacture, packaging, assembly and testing of the Products. 1.31 "Uncoupled Power Transfer Technology" means a family of wire-free technology defined by the AirFuel Alliance that provides power to devices at a distance, and that currently includes (i) RF, (ii) ultrasonic transduction, and (iii) Laser power beaming. Notwithstanding the foregoing, the meaning of Uncoupled Power Transfer Technology excludes technology which functions primarily for data transmission or direct- current-to-direct-current (DC-to-DC) power conversion. 2. LICENSE. 2.1 License Grant. Subject to the restrictions set out in Section 2.2, ENERGOUS hereby grants to DIALOG a non-exclusive (subject to Section 2.5), irrevocable, worldwide, sub-licensable (solely in accordance with Section 2.4), royalty-bearing license during the Term under all Product IP to: (a) repackage or have repackaged the Product Die into various package formats or layouts, and to integrate the Product Die into MCMs, which may incorporate DIALOG or third party intellectual property (such repackaged Product Die, MCMs and Products, are individually and/or collectively referred to as the "Licensed Products"); (b) have the Licensed Products manufactured, tested and packaged by Manufacturing Subcontractors; (c) Sell, offer for Sale, import, export and support the Licensed Products, including without limitation, providing system design, troubleshooting and failure analysis support for DIALOG's customers and their customers; (d) use and modify the Tooling and Documentation for the purposes of paragraphs (a) to (d) of this Section 2.1. 2.2 Excluded Applications. Until the earlier of (i) termination of ENERGOUS' exclusivity obligations to the Key Customer set forth in Exhibit F (the "Key Customer") existing as of the Effective Date with respect to the following applications, or (ii) [***] that incorporates ENERGOUS wireless charging technology, or (iii) [***] and subject to the exceptions set out in Section 2.3, DIALOG will not be permitted to Sell Licensed Products for use in the following applications (the "Excluded Applications"): (a) [***]; * Confidential Treatment Requested
Page 5
(b) [***]; (c) [***]; (d) [***]; and (e) [***] designed for use with any of the applications in paragraphs (a) to (d) of this Section 2.2. For the avoidance of doubt, DIALOG will be permitted to Sell Licensed Products for use in any or all of the Excluded Applications (A) at any time on or after [***] or, if earlier, (B) [***] that incorporates ENERGOUS wireless charging technology, or (C) upon the termination of ENERGOUS' exclusivity obligations to the Key Customer existing as of the Effective Date with respect to the above applications. 2.3 Exceptions to Excluded Applications. The following applications are exceptions to and excluded from the Excluded Applications (the "Permitted Applications"): (a) [***]; (b) [***]; (c) [***]; (d) [***]; (e) [***]; (f) [***]; (g) [***]; (h) [***]; (i) [***]; and (j) [***]. The fact that a [***] has [***] does not automatically preclude such device from falling under paragraphs (b), (c) and (d) of this Section 2.3 2.4 Sublicenses. DIALOG may sublicense the foregoing license rights to any of its Affiliates. DIALOG will be responsible for the observance and performance by all such Affiliates of all of DIALOG's obligations pursuant to this Agreement. DIALOG may sublicense the foregoing license rights to Manufacturing Subcontractors solely to the extent necessary and appropriate for them to manufacture, assemble, test and provide support for the Products. DIALOG may not sublicense the foregoing license rights to any other third party without ENERGOUS' prior written consent. * Confidential Treatment Requested
Page 6
2.5 Exclusivity. (a) Subject to paragraph (b) of this Section 2.5, ENERGOUS will not, and will not enable any Semiconductor Supplier, to manufacture, have manufactured, offer for sale, sell, import or export the Products or Product Die in commercial volumes, except a Semiconductor Supplier to the Key Customer for use in the Excluded Applications. (b) ENERGOUS will use its diligent, good faith efforts to promote DIALOG as the preferred supplier of Products and Product Die. However, ENERGOUS is allowed to engage with a Semiconductor Supplier to supply comparable products or product die to a customer if either (i) the customer which has not been engaged with DIALOG with respect to such product or product die notifies ENERGOUS or DIALOG in writing by an authorized officer of the customer that it does not want to use DIALOG or a DIALOG Affiliate as a supplier of such product or product die; or (ii) if DIALOG has been engaged with the customer, the customer notifies ENERGOUS or DIALOG in writing prior to commencement of the Design-In Phase that it does not want to use DIALOG or a DIALOG Affiliate as a supplier of such product or product die. For clarity, ENERGOUS shall not intentionally supply Products, Product Die or comparable products or product die to customers directly or through distribution channels. 2.6 Branding. (a) Products Sold by DIALOG or its Affiliates may be branded as DIALOG products. All sales and marketing collateral, software tools and material for promotional activities relating to the Products will utilize ENERGOUS branding in a prominent basis as an equivalent partner with respect to such Products. (b) To the extent the parties engage in any co-branding activities, then, subject to the terms and conditions of this Agreement and during the Term, each party (in such capacity, "Licensor") hereby grants to the other party (in such capacity, "Licensee") a non-exclusive, non- transferable, worldwide right and license (without the right to sublicense), under Licensor's Intellectual Property Rights in Licensor's Marks, to use those Marks of Licensor set forth in Exhibit D solely in connection with the marketing, sale and distribution of such co-branded Products in accordance with this Agreement. (c) Use of Licensor's Marks will be subject to the following terms and conditions: (i) all goodwill generated by use of Licensor's Marks by Licensee will inure to the benefit of Licensor; (ii) Licensee will use Licensor's Marks only in such forms and with such graphics as authorized by Licensor; and (iii) Licensee will identify Licensor's Marks as being owned by Licensor and will (A) cause the symbol "®" to appear adjacent to and slightly above any registered Licensor Mark, or (B) alternatively, for any Licensor Marks that are not registered, the symbol "TM" or "SM", as applicable. 2.7 No Other Rights. Except for the rights and licenses expressly granted in this Agreement, no other right is granted, no other use is permitted and all other rights are expressly reserved.
Page 7
3. SOURCING. 3.1 Product Manufacture. Concurrent with or before execution of this Agreement, and substantially in the form attached as Exhibit C, ENERGOUS will provide written authorization to its Manufacturing Subcontractors to confirm DIALOG's and, if applicable, DIALOG's Affiliates' rights to procure the Licensed Products and related services directly from such Manufacturing Subcontractors utilizing ENERGOUS' Tooling and any associated manufacturing resources. DIALOG and its sublicensed Affiliates may directly contract with the Manufacturing Subcontractors for the manufacture and supply of Licensed Products under terms and conditions that DIALOG or such Affiliates may directly negotiate with such third parties. 3.2 Additional Manufacturing Subcontractors. DIALOG at its sole discretion may qualify and establish an alternative source to some or all of ENERGOUS' Manufacturing Subcontractors for the manufacturing of the Licensed Products and ENERGOUS will provide its written authorization thereof if requested by DIALOG. 3.3 Tooling. Subject to ENERGOUS' rights in the Product IP and any Third Party IP (including, without limitation, that of any Manufacturing Subcontractors), each party will own all right, title and interest in the physical Tooling procured or generated by that party for the manufacturing, testing and packaging of the Licensed Products. For the avoidance of doubt, as between the parties, ENERGOUS will also continue to own all right, title and interest in and to the firmware, DSP code and GUI software embedded in the Products, including all Intellectual Property Rights embodied therein. Upon the termination of DIALOG's right to manufacture the Licensed Products following any expiration or termination of the Agreement or any Wind Down Period or Continuing Obligation period, as applicable, then all right, title and interest in the Tooling will automatically transfer to ENERGOUS subject to any Third Party IP, and DIALOG will, at ENERGOUS' option, either sell any Tooling in its possession to ENERGOUS at cost or destroy the Tooling and certify in writing as to same. 4. PRODUCT COMMERCIALIZATION. 4.1 Commercialization Plan. (a) Exhibit E hereto sets out the plan for the commercialization of the Licensed Products (the "Commercialization Plan"). The Commercialization Plan sets forth the parties' respective rights and obligations with respect to commercial and technical activities to be performed to maximize potential Sales of Licensed Products. The Commercialization Plan will be reviewed and (if necessary) updated by the parties on a quarterly basis during the Term. (b) Each party will appoint (and notify the other party of the name of) a member of their management team who will serve as that party's primary contact for all matters related to this Agreement (each, a "Liaison"), including resolution of issues that may arise under this Agreement. Each party may replace its Liaison at any time by notice in writing to the other party. (c) The Commercialization Plan includes a go-to-market plan. ENERGOUS will provide commercially reasonable sales training, material and support to DIALOG's global application, sales and marketing teams and customers, including the support set out in Section 4.3.
Page 8
(d) ENERGOUS will also support DIALOG with an operations and quality plan, which will set forth information relating to quality matters, including, but not limited to, testing, yield management, RMA process, failure analysis/corrective action procedure, ECN/PCN process and detailed agreement on mutual rights and responsibilities with respect to any quality issues or warranty claims (hereinafter "Quality Plan"). Both parties will work in good faith to finalize and implement the Quality Plan within 90 days after the Effective Date of this Agreement. DIALOG will be responsible for its own frontline quality function and corrective actions, with technical input from ENERGOUS as required. (e) The parties may promote the relationship with marketing initiatives and also agree to engage in joint marketing communication activities related to the relationship described in this Agreement or to the promotion of the Licensed Products, as set forth in the Commercialization Plan or otherwise mutually agreed between the parties from time to time. 4.2 Commercialization Meetings. The parties will meet regularly, but at least once each month during the Term, either in person or by telephone, video or internet conference call, to share technical and commercial information as reasonably required to facilitate the parties' exercise of their respective rights and performance of their respective obligations under this Agreement. The information shared by the parties will include, but is not limited to (a) market and competitive dynamic updates, (b) activities and progress updates at DIALOG's customers, (c) technical review and feedback from customers, (d) non-binding 12 month rolling Sales and Royalty and Service Fee forecasts for the Licensed Products, (e) initiatives to boost sales potential for the Licensed Products. Customer information shared will be within the limits allowed by any non-disclosure agreements DIALOG may have entered into with such customers. 4.3 Technical Support. ENERGOUS will support DIALOG's or its Affiliates' engineers and, in some cases and at DIALOG's request, the customer directly in providing standard design-in support (including antenna design support) for customers' products. If the customer requires unique or custom engineering services (i.e., support and services not limited to those with general application to Product customers), then ENERGOUS will contract directly with such customer for the provision of such services. ENERGOUS will provide DIALOG with any and all information that is necessary or useful to support its authorized manufacture, testing, marketing, Sale, troubleshooting, compatibility analysis, performance tuning, failure analysis, and other support of the Licensed Products, including the Documentation and any updates thereto or revisions thereof which are reasonably necessary or appropriate to provide technical support for the Products to DIALOG customers. ENERGOUS receives the Service Fee for providing the support described in this Section 4.3 to DIALOG and its customers during the Term. In the event the Technical Support provided by ENERGOUS falls below a mutually-agreed upon service level that is common to the semiconductor industry or reasonably requested by DIALOG's customers, and after failure by ENERGOUS to address such deficiency within a twenty (20) day notice period, DIALOG may suspend the payment of Service Fees until such service level is provided. Furthermore, in the event ENERGOUS fails to meet its obligations as set forth in the Quality Plan, and after failure by ENERGOUS to address such deficiency within a thirty (30) day notice period, DIALOG may suspend the payment of Service Fees until such obligations are met.
Page 9
5. PRODUCT DEVELOPMENT AND PRODUCT UPDATES. ENERGOUS will have control and authority over the design and development of the Products, including without limitation, developing and implementing all Product Updates. ENERGOUS reserves the right to implement Product Updates at any time in its sole discretion. The parties will consult each other on the perceived product needs of the market and DIALOG's customers and how best to respond to such needs. DIALOG may suggest Product Updates to ENERGOUS provided, but all the development of Product Updates will be at ENERGOUS' sole discretion. ENERGOUS will share its relevant product roadmaps from time to time to maximize collaboration opportunities. 6. INTELLECTUAL PROPERTY OWNERSHIP. 6.1 Product IP. ENERGOUS retains right, title and interest in and to the Product IP, ENERGOUS' Marks and ENERGOUS' Confidential Information, including all Intellectual Property Rights embodied therein. No transfer or grant is made hereunder by ENERGOUS of any of these rights or any of its other rights, whether by implication, estoppel or otherwise, other than the limited rights and licenses expressly granted by ENERGOUS in this Agreement, and all such other rights are hereby reserved. 6.2 DIALOG Intellectual Property. DIALOG retains rights, title and interest in and to DIALOG's Marks and DIALOG's Confidential Information, including all Intellectual Property Rights embodied therein. No transfer or grant is made hereunder by DIALOG of any of these rights or any of its other rights, whether by implication, estoppel or otherwise, other than the limited rights and licenses expressly granted by DIALOG in this Agreement and all such other rights are hereby reserved. 7. PRODUCT SALES. 7.1 Sales. Subject to the terms and conditions of this Agreement, and except as set forth in the Commercialization Plan or otherwise agreed in writing between the parties, DIALOG will market and Sell the Licensed Products as authorized under this Agreement. DIALOG will independently manage and process its own forecasting, operations and order management. 7.2 Discontinuation of Sale of Products. If DIALOG decides to discontinue Sales of any Product, it will notify ENERGOUS at least [***] prior to such discontinuance, and following such notification, the exclusivity rights, if any, associated with that Product will cease; provided, however, this provision will not apply in the event that DIALOG continues Sales of Product Updates, repackaged Product Dies or MCMs. 7.3 Supply of Products to ENERGOUS. DIALOG will provide 1000 samples of each Product free of charge to ENERGOUS for the purposes of evaluation and demonstration. For additional volumes required by ENERGOUS, DIALOG will sell to ENERGOUS on a reasonable cost plus basis for the purposes of evaluation and demonstration. These samples are provided as is, are not intended for resale by ENERGOUS, and no indemnification or other warranties from DIALOG will apply. * Confidential Treatment Requested
Page 10
8. OTHER PRODUCTS. 8.1 New Products. In the event that ENERGOUS develops New Product, ENERGOUS will provide DIALOG with written notice describing the New Product before marketing, selling or distributing the New Product with or to any third party. Upon receipt of such notice, DIALOG will have [***] to notify ENERGOUS in writing that it desires to add such New Product as Product under this Agreement. If DIALOG provides such a notice, for a period of [***] following ENERGOUS' receipt of such notice, ENERGOUS and DIALOG will negotiate in good faith the terms pursuant to which such New Product will be added as a Product to this Agreement. ENERGOUS may not negotiate with any third party the rights to market, sell or distribute any New Product until the earliest to occur of the following (a) DIALOG does not provide ENERGOUS with notice that it desires to add such New Product to this Agreement within the above-described [***] period, (b) ENERGOUS and DIALOG do not reach mutually agreeable terms for adding such New Product to this Agreement during the [***] negotiation period or (c) DIALOG provides ENERGOUS with written notice that it does not wish to negotiate with respect to such New Product. For clarity, after any of the events described in the foregoing subsections (a), (b) or (c) occurs, the New Product will not be covered under this Agreement, and ENERGOUS will be free to manufacture, market, sell, distribute and otherwise exploit such New Product as it deems fit in its sole discretion, including in collaboration with or through one or more third parties. 8.2 No Competing Products. (a) Until expiration or earlier termination of the Agreement, DIALOG agrees that it and its Affiliates will not, without ENERGOUS' written approval, intentionally sell, distribute or work with any third party to develop products incorporating any Uncoupled Power Transfer Technology other than Licensed Products; provided, however, that DIALOG shall not be under any such restrictions in relation to services or products it provides to the Key Customer in the event the Key Customer terminates its agreement with ENERGOUS. (b) In the event that ENERGOUS does not receive Federal Communications Commission approval of any Licensed Product for power transmission [***] by the [***], (i) ENERGOUS may provide written notice to DIALOG which references this Section 8.2(b) and indicates ENERGOUS' intention to enable one or more Semiconductor Suppliers to supply Products for [***]; and (ii) DIALOG may provide written notice to ENERGOUS which references this Section 8.2(b) and indicates DIALOG's intention to sell, distribute or work with one or more third parties to develop products incorporating Uncoupled Power Transfer Technology for [***]. [***] following the date such notice is given pursuant to Section 20.1, the restrictions in Section 8.2(a) shall no longer apply to DIALOG for Uncoupled Power Transfer Technology in [***] and the restrictions relating to enabling a Semiconductor Supplier in Section 2.5(a) shall no longer apply to ENERGOUS for Products or Product Die in [***]. (c) In the event that ENERGOUS does not receive Federal Communications Commission approval of any Licensed Product for power transmission in [***] by the [***], (i) ENERGOUS may provide written notice to DIALOG which references this Section 8.2(c) and indicates ENERGOUS' intention to enable one or more Semiconductor Suppliers to supply Products for [***]; and (ii) DIALOG may provide written notice to ENERGOUS which references this Section 8.2(c) and indicates DIALOG's intention to sell, distribute or work with one or more third parties to develop products incorporating Uncoupled Power Transfer Technology for [***]. [***] following the date such notice is given pursuant to Section 20.1, the restrictions in Section 8.2(a) shall no longer apply to DIALOG for Uncoupled Power Transfer Technology in [***] and the restrictions relating to enabling a Semiconductor Supplier in Section 2.5(a) shall no longer apply to ENERGOUS for Products or Product Die in [***]. * Confidential Treatment Requested
Page 11
9. ROYALTIES AND SERVICE FEES. 9.1 Royalties. DIALOG will pay ENERGOUS the Royalties set forth in Exhibit B. For clarity, DIALOG will be responsible for paying to ENERGOUS any Royalties payable hereunder as a result of its Affiliates' Licensed Product Sales. 9.2 Service Fee. Subject to Section 4.3, DIALOG will pay ENERGOUS the Service Fees set forth in Exhibit B. For clarity, subject to Section 4.3, DIALOG will be responsible for paying to ENERGOUS any Service Fees payable hereunder for services provided by ENERGOUS hereunder to DIALOG's Affiliates or any of DIALOG's or its Affiliates' customers. 9.3 Payment. Payments of Royalties and Service Fees will be due on a calendar quarterly basis, within [***] days after the end of the calendar quarter in which the applicable Licensed Products were Sold or services were rendered. From the date a payment is due, unless otherwise agreed, any late payment will accrue a late payment fee of [***] per month, or the highest interest rate permitted by law, whichever is less. 9.4 Reports. Each payment made hereunder will be accompanied by a report detailing (a) the total number of units, on a product-by- product basis, of the Licensed Products Sold during the previous calendar quarter, (b) DIALOG's and its Affiliates' Net Sales attributable to such Licensed Product units during such calendar quarter, and (c) reasonable details regarding the calculation of the quarterly Royalty payment and Service Fee. Such information will be maintained in strict confidence by ENERGOUS under Section 10 of this Agreement. 9.5 Books. With respect to its exercise of the rights and licenses granted in, and payment obligations under, this Agreement, DIALOG and its Affiliates will keep accurate books and other records, including but not limited to supporting documentation for the Royalties and Service Fees paid hereunder (the "Records"). These Records will be maintained for a period of at least three (3) years from the date of the related payment ("Record Retention Period"), notwithstanding any termination of expiration of this Agreement. 9.6 Audit Rights. During the Record Retention Period, ENERGOUS may appoint a mutually agreed independent, internationally recognized third-party certified auditor who will have the right to inspect and copy the Records upon reasonable prior notice, and DIALOG will (and will cause its Affiliates to) allow necessary access including, as applicable, to its premises where such Records are located. ENERGOUS may exercise such right to this independent-third party audit no more than one time per calendar year and each such audit will be conducted during normal business hours. Such audit may also not interfere with DIALOG's or its Affliates' quarterly closing of its books. In the event that such audit reveals an underpayment of Royalties or Service Fees owed by DIALOG, DIALOG will promptly pay ENERGOUS the amount of the underpayment. If such underpayment is in excess of [***] of the Royalties or Service Fee due for the period audited, DIALOG will also reimburse ENERGOUS for its reasonable, out-of-pocket cost of such audit. In the event that such audit reveals an overpayment of Royalties or Service Fees owed by DIALOG, ENERGOUS will promptly pay DIALOG the amount of the overpayment. * Confidential Treatment Requested
Page 12
9.7 Taxes. Each party will be responsible to collect, bear and pay any and all taxes levied or based upon the party's sale of the Products, Product Die or Licensed Products, including, all sales, use, value added, withholding or similar taxes. In the event that the government of a country imposes any income taxes on payments made by a party to the other hereunder and requires a party to withhold such tax from such payments, such party may deduct such tax from such payments. Each party will be responsible for its own banking costs relating to the receipt of payments of Royalties and Service Fees and any other monies payable to it in connection with this Agreement. 9.8 Payment Currency. All payments due under this Agreement will be payable in U.S. Dollars. With respect to Net Sales invoiced in a currency other than U.S. Dollars, the Net Sales will be expressed in the domestic currency of the entity making the Sale, together with the U.S. Dollar equivalent, calculated using the conversion rate existing in the United States (as reported in the Wall Street Journal) on the last working day of each month of the calendar quarter in which the Net Sales were made. Such payments will be without deduction of exchange, collection or other charges. 10. CONFIDENTIALITY. 10.1 Scope. The term "Confidential Information" means all financial, business and technical information disclosed by or on behalf of a party in relation to this Agreement (whether tangible or intangible, and including all copies, analyses and derivatives thereof), that is marked or otherwise identified as proprietary or confidential at the time of disclosure, or which by its nature would be understood by a reasonable person to be proprietary or confidential, including all copies, abstracts, summaries, analyses and derivatives thereof. Confidential Information does not include information the receiving party can demonstrate (a) was rightfully furnished to it without restriction by a third party without breach of any obligation to the disclosing party, (b) is generally available to the public without breach of this Agreement, (c) was available to or already in the possession or control of the receiving party on a non-confidential basis before receipt from the disclosing party or (d) is independently developed by it or its employees without reliance on such information. Information associated with DIALOG's quarterly Royalty or Service Fee disclosures is Confidential Information of DIALOG. 10.2 Non-Disclosure. The receiving party agrees (a) not to copy or use the disclosing party's Confidential Information except and only for the purposes contemplated by this Agreement, (b) to maintain it as confidential, and exercise reasonable precautions to prevent unauthorized access, use and disclosure, (c) not to disclose it to any third party other than the receiving party's employees and contractors who have a need to know for the permitted purpose and who are bound by obligations that are at least as protective as the restrictions in this Agreement and (d) not to export or re-export in violation of U.S. or other export control laws or regulations any such Confidential Information or product thereof. Each party will bear the responsibility for any breach of this Section 10 by its and its Affiliates' employees and contractors. Upon any termination of this Agreement or, in the event of any Wind Down Period or Continuing Obligation period, upon the expiration of such period, and within fifteen (15) days after request by the disclosing party, each receiving party will return the Confidential Information of the other or destroy such Confidential Information and all copies of it and all information, records and materials developed therefrom, except that the recipient may retain one copy for archival purposes to ensure compliance with the provisions of this Agreement, and nothing contained herein will require the erasure, deletion, alteration or destruction of any Confidential Information required to be retained for legal or regulatory purposes or stored on back-up tapes or other back-up media or archiving systems made in the ordinary course of business, subject in each case to the confidentiality obligations set forth herein. Each party may only disclose the general nature, but not the specific terms, of this Agreement without the prior consent of the other party; provided, however, either party may provide a copy of this Agreement or otherwise disclose its terms on a confidential basis in connection with any legal or regulatory requirement, financing transaction or due diligence inquiry. For clarity, in the event that use, disclosure or retention of any Confidential Information is required in order for DIALOG to exercise the license granted in Section 2, this Section 10 will not be deemed to prevent such use, disclosure or retention.
Page 13
10.3 Required Disclosure. Nothing herein will prevent a receiving party from disclosing all or part of the other's Confidential Information as necessary pursuant to court order, the lawful requirement of a governmental agency or when disclosure is required by operation of law (including disclosures pursuant to applicable securities laws or regulations thereunder); provided, that prior to any such disclosure, the receiving party will use reasonable efforts to (a) promptly notify the disclosing party in writing of such requirement to disclose, and (b) cooperate fully with the disclosing party in protecting against or minimizing any such disclosure or obtaining a protective order. 11. REPRESENTATIONS AND WARRANTIES; DISCLAIMERS. 11.1 Mutual Representations and Warranties. ENERGOUS and DIALOG hereby each represent and warrant to the other that as of the Effective Date: (a) it is a duly and validly organized and existing corporation in good standing under the laws of the state or country of its incorporation, as applicable, and that it is legally qualified to do business in each jurisdiction in which this Agreement may be performed and the performance of its activities hereunder requires such qualification; (b) the performance of this Agreement and the consummation of the transactions contemplated herein will not result in any breach or violation of any terms or provisions of, or constitute a default under, its certificate of incorporation or by-laws or other organizational documents, or any material agreement or instrument to which it is a party, by which it is bound, or to which any of its property is subject; (c) all requisite corporate action has been taken for the due authorization, execution, delivery and performance of this Agreement by it, and this Agreement constitutes a legally binding obligation, enforceable against such party in accordance with its terms, except insofar as enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally; and
Page 14
(d) it is not a party to any litigation relating to, or that could reasonably be expected to affect, its ability to perform its obligations under this Agreement. 11.2 Product Warranty. (a) ENERGOUS warrants that (i) when manufactured in accordance with the Approved Production Specifications, and as implemented in a suitable circuit application in accordance with the Product Specifications, the Products and Product Die will conform to the Product Specifications and will be free from defects that could have been avoided in their design; (ii) the Products, any constituent parts or functionality thereof, the Documentation and the Deposit Materials do not infringe any third party's Intellectual Property Rights; (iii) it did not misappropriate any third party's trade secrets in the development of the Products, any constituent parts or functionality thereof, the Documentation or the Deposit Materials; and (iv) when delivered (including any software updates if any), no Product will contain any viruses, "Trojan horses" or other harmful code. The above warranties are valid for a period of [***] from the date of shipment of any Licensed Product to any customer. (b) The warranty contained in Section 11.2(a) does not apply to the extent any Product is operated in a manner other than that specified by the Product Specifications, is treated with abuse, negligence or other improper treatment (including, without limitation, use outside the device maximum ratings, package MSL (moisture sensitivity level) guidelines or environmental limits as may be set forth in the Product Specifications), or is defective as a result of any materials or workmanship of the Manufacturing Subcontractors or failure of the Manufacturing Subcontractors to manufacture the Product according to Approved Production Specifications. As such, any warranty claims due to defects in build, materials or workmanship will be directed to the Manufacturing Subcontractors as part of that contract between DIALOG or, if applicable, its Affiliate and such parties. (c) With the exception of the warranties in Section 11.2(a)(ii) (third party IP infringement) and Section 11.2(a)(iii) (misappropriation of third party trade secrets) related to any Product Die, the warranties in this Section 11.2 do not apply to MCMs or repackaged Product Die developed by or for DIALOG or its Affiliates. (d) In the event any warranty claim is due to or arises from an Epidemic Defect, ENERGOUS will be responsible for all costs and expenses directly incurred by DIALOG or its Affiliates or their respective customers as a result of reasonable inspection, servicing, repairs, replacements, recall notices, recalls and responses with respect thereto, provided that ENERGOUS' aggregate liability to DIALOG and its Affiliates and their respective customers under this paragraph (d) will not exceed [***] per occurrence of an Epidemic Defect. Each party will immediately notify the other upon becoming aware of the circumstance that could reasonably be construed to be an indication of an Epidemic Defect, and, in any event, will notify the other party immediately upon becoming aware of the existence of an Epidemic Defect. ENERGOUS and DIALOG will expeditiously work together in good faith to determine a technical resolution of the Epidemic Failure. ENERGOUS agrees to make all commercially reasonable efforts to promptly diagnose the Epidemic Failure's root cause, provide DIALOG a report detailing the results of ENERGOUS' investigation and plan an effective workaround and a permanent solution. ENERGOUS will consult with DIALOG on any proposed workarounds and other solutions. * Confidential Treatment Requested
Page 15
11.3 Infringement of Intellectual Property Rights. If any of the Products, Product Die, Documentation or Deposit Materials is, or in ENERGOUS' or DIALOG's opinion is likely to become, the subject of an Intellectual Property Rights infringement claim, and as a result DIALOG or any of its Affiliates or their respective customers are enjoined, or in ENERGOUS' or DIALOG's opinion are likely to be enjoined, from using the Products, Product Die, Documentation or Deposit Materials, ENERGOUS will use its best efforts to: (a) procure for DIALOG and its Affiliates and their respective customers the right to continue to use the Products, Product Die, Documentation or Deposit Materials, as applicable; or, but only in the event that, despite ENERGOUS' best efforts to do so, ENERGOUS is unable to so procure such right, (b) replace or modify the Products, Product Die, Documentation or Deposit Materials, as applicable, to make them non-infringing, provided that the replaced or modified Products, Product Die, Documentation and Deposit Materials remain substantially similar in performance to the infringing Products, Product Die, Documentation and Deposit Materials. If none of the foregoing alternatives is available within a commercially reasonable time period, DIALOG may terminate this Agreement with immediate effect, provided that it will give ENERGOUS prompt prior written notice thereof. Nothing in this Section 11.3 is intended to limit DIALOG's rights to indemnification under Section 12 in connection with any such infringement claim. 11.4 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 11, THE PRODUCTS, THE PRODUCT IP, TOOLING, DOCUMENTATION, DEPOSIT MATERIALS, CONFIDENTIAL INFORMATION AND ALL LICENSES, SERVICES AND OTHER ITEMS PROVIDED BY A PARTY TO THE OTHER PARTY HEREUNDER ARE PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND. EXCEPT FOR THOSE WARRANTIES EXPRESSLY PROVIDED HEREIN, EACH PARTY SPECIFICALLY DISCLAIMS ALL WARRANTIES, WHETHER ORAL OR WRITTEN, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND ALL WARRANTIES ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE IN TRADE. 12. INDEMNIFICATION. 12.1 Indemnification by Energous. Subject to Section 12.2, ENERGOUS agrees to indemnify, hold harmless and, in the case of any third party claims, defend DIALOG and its Affiliates and each of their respective directors, officers, employees, contractors, agents, distributors and customers (collectively, "DIALOG Indemnitees") from and against and in respect of any and all alleged or actual demands, claims, actions, causes of action, suits or proceedings, assessments, awarded damages (including punitive damages), liabilities, interest and penalties, costs and expenses (including, without limitation, court costs and reasonable legal fees and disbursements in connection therewith) (each, a "Claim") to the extent resulting from, arising out of, relating to, or imposed upon or incurred by any DIALOG Indemnitees by reason of (a) death or bodily injury caused by or resulting from use of the Products, (b) any breach of any representation or warranty made by ENERGOUS hereunder or to any third party in relation to the Products or Product Die, (c) the infringement or misappropriation of any third party Intellectual Property Rights in relation to the Products or Product Die, (d) the infringement or misappropriation of any third party Intellectual Property Rights as a result of DIALOG's or its Affiliates' exercise of rights in accordance with the terms of this Agreement, including, but not limited to, the Manufacturing Subcontractors' manufacture of the Products on their behalf, provided that the Products are manufactured in strict compliance with the Product Specifications and Approved Production Specifications and only to the extent such Claims arise due to compliance with the Product Specifications and/or the Approved Production Specifications or use of the Tooling provided by ENERGOUS hereunder, (e) the infringement by DIALOG of any third party Marks rights as a result of its authorized use of the ENERGOUS Marks, (f) any failure by ENERGOUS to comply with applicable laws, regulations and standards, or (g) ENERGOUS' negligence, intentional misconduct or fraud.
Page 16
12.2 Exclusion. Notwithstanding the provisions of Section 12.1, ENERGOUS will not be liable to the extent any Claim results from (a) modification of the Products by DIALOG, its Affiliates and/or any third party (including the Manufacturing Subcontractors), or combination of the Products with other products, offered by DIALOG, its Affiliates and/or any third party, (b) acts or omissions of any Manufacturing Subcontractor (except to the extent such Claims are due to the infringement or misappropriation of third party Intellectual Property Rights arising from such Manufacturing Subcontractor's manufacturing of the Products on behalf of DIALOG in strict compliance with the Product Specifications, Approved Production Specifications and Tooling provided by ENERGOUS), (c) failure of any DIALOG Indemnitee to comply with applicable laws, regulations and standards, or (d) negligence, intentional misconduct or fraud of any DIALOG Indemnitee. For clarification, if any of the foregoing is not the cause, in whole or in part of the Claim, ENERGOUS is not relieved of its obligations under Section 12.1. 12.3 Conditions. DIALOG must notify ENERGOUS within thirty (30) business days after receipt of actual notice of any Claim by a third party for which it seeks indemnification; provided, however, any failure or delay in notice will not relieve ENERGOUS of its obligations hereunder except to the extent that ENERGOUS is actually prejudiced by such failure to notify. ENERGOUS will have control and authority with respect to the defense, litigation, compromise or settlement of such third party Claim (except to the extent that any settlement involves any commitments, responsibilities or obligations on the part of DIALOG, in which case such settlement will require the prior written consent of DIALOG, which consent will not be unreasonably delayed, conditioned or withheld). DIALOG will cooperate and provide assistance and information as may reasonably be required by ENERGOUS (but at ENERGOUS' expense) in connection therewith. DIALOG reserves the right to participate at its own cost in any third party proceedings with counsel of its own choosing. In the event that ENERGOUS does not respond to any third party Claim or does not sufficiently defend such third party Claim, DIALOG, acting reasonably, may step in and take over the defense of such Claim. Costs incurred in the settlement of any Claim, including, but not limited to, reasonable legal expenses, may be off set against future Royalties and Service Fees payable.
Page 17
12.4 Insurance. Each party will maintain, during the Term and for three (3) years thereafter, such comprehensive general liability insurance (including without limitation, products liability) as will adequately protect it against its potential liabilities under this Agreement, in amounts customary in the semiconductor industry for similar services and products. Each party will, at the other party's request, provide to the other party a certificate of insurance evidencing the foregoing insurance coverage. 13. LIMITATION OF LIABILITY. 13.1 EXCEPT IN THE CASE OF (a) ANY BREACH OF SECTION 10 (CONFIDENTIALITY), (b) THE PARTIES' OBLIGATIONS UNDER SECTION 12 (INDEMNIFICATION), (c) A PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (d) LIABILITY ARISING FROM EPIDEMIC DEFECTS (WHICH WILL BE SUBJECT TO THE LIMITATION SET FORTH IN SECTION 11.2(d)), IN NO EVENT WILL EITHER PARTY BE LIABLE UNDER THIS AGREEMENT, REGARDLESS OF THE FORM OF ANY CLAIM OR ACTION (WHETHER IN CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE), FOR ANY (i) INDIRECT, PUNITIVE, INCIDENTAL, RELIANCE, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF BUSINESS, REVENUES, PROFITS OR GOODWILL, OR (ii) AGGREGATE DAMAGES IN EXCESS OF [***]. IN ADDITION, ENERGOUS' LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER SECTION 12.1(b) SHALL IN NO EVENT EXCEED [***]. THESE LIMITATIONS ARE INDEPENDENT FROM ALL OTHER PROVISIONS OF THIS AGREEMENT AND WILL APPLY NOTWITHSTANDING THE FAILURE OF ANY REMEDY PROVIDED HEREIN. 14. COMPLIANCE WITH LAWS. Each party will comply with all law and regulations applicable such party's performance under this Agreement, including but not limited to U.S. Export Administration laws and regulations and any other export, import and re-export control laws applicable to such party. The parties will refrain from exporting or re-exporting the Products or Product IP or any technical data or other materials received from each other, or the direct product of any of these, to any country, individual or organization proscribed by the United States government, unless properly authorized by the appropriate agencies of the United States government. Each party will provide all information under its control which is necessary or useful for the other party to ship or receive the Products, including, but not limited to, U.S. Export Control Classification Numbers (ECCNs), U.S. Customs Certificates of Delivery, Certificates of Origin and U.S. Federal Communications Commission identifier, if applicable. Each party agrees that it will not act in any fashion or take any action in violation of any applicable anti-bribery or anti-corruption legislation in any jurisdiction in which it does business, which prohibits the offering, giving or promising to offer or give, directly or indirectly, money or anything of value to any official of a government, political party or instrumentality to assist it in obtaining or retaining business, including the U.S. Foreign Corrupt Practices Act or any comparable legislation in another country. * Confidential Treatment Requested
Page 18
15. TERM AND TERMINATION. 15.1 Term. This Agreement is effective on the Effective Date. Unless earlier terminated as provided herein, this Agreement continues in effect for an initial term of seven (7) years ("Initial Term") and will automatically renew for one or more annual periods after the Initial Term (each a "Renewal Term") unless either party gives notice of non-renewal at least one hundred eighty (180) days prior to the beginning of any Renewal Term. 15.2 Termination. (a) Mutual Termination Rights. Either party may, in addition to any other remedies available to it under this Agreement or at law or in equity, terminate this Agreement (or, in the event this Agreement has been previously terminated, the Wind Down Period, if any) immediately upon the issuance of written notice to the other party in the event that (i) the other party materially breaches a material provision of this Agreement, and fails to cure such breach within thirty (30) days, or (ii) the other party undergoes an Insolvency Event. (b) Termination By ENERGOUS. (i) If ENERGOUS is acquired by a third party, ENERGOUS' acquirer will have the right, for a period of [***] following closing of such acquisition, to terminate this Agreement upon written notice to DIALOG. (ii) ENERGOUS will have the right to terminate this Agreement immediately upon the issuance of written notice to DIALOG (A) if DIALOG undergoes a Change of Control involving a competitor of ENERGOUS (as reasonably determined by ENERGOUS), or (B) if DIALOG or any of its Affiliates acquires, whether directly or indirectly through a sale of assets or a Change of Control transaction or otherwise, any competitor of ENERGOUS. DIALOG will provide ENERGOUS with notice of any such Change of Control or acquisition within [***] after the closing thereof and ENERGOUS' right to terminate the Agreement will expire [***] after receipt of such notice. (iii) ENERGOUS may, at any time after the third anniversary of the Effective Date, terminate this Agreement with or without cause upon not less than one hundred and eighty (180) days prior written notice to DIALOG. (iv) ENERGOUS will have the right to terminate this Agreement, upon not less than [***] prior written notice to DIALOG, in the event that, following termination by the [***] of its agreement with ENERGOUS, DIALOG participates in or indicates its intention to participate in the development, design or manufacture of products incorporating Uncoupled Power Transfer Technology not provided by ENERGOUS to [***]. (c) Termination by DIALOG. (i) If DIALOG is acquired by a third party, DIALOG's acquirer will have the right, for a period of [***] following closing of such acquisition, to terminate this Agreement upon written notice to ENERGOUS. * Confidential Treatment Requested
Page 19
(ii) DIALOG may terminate this Agreement, immediately upon issuance of written notice to ENERGOUS in the event that: (A) DIALOG or its Affiliates fail to achieve a design-win pipeline with an annual projected sales value to DIALOG of at least [***] in the [***] after the availability of a Mass Production Qualified Product; or (B) the aggregate annual Net Sales of Products are below [***] by the [***] of the availability of a Mass Production Qualified Product, or below [***] by the [***] of the availability of a Mass Production Qualified Product, or below [***] by each [***] of the availability of a Mass Production Qualified Product during the remainder of the Term. (iii) DIALOG will have the right to terminate this Agreement immediately upon the issuance of written notice to ENERGOUS (A) if ENERGOUS undergoes a Change of Control involving a competitor of DIALOG, or (B) if ENERGOUS acquires, whether directly through a sale of assets or through a Change of Control transaction, any competitor of DIALOG (as reasonably determined by DIALOG). ENERGOUS will provide DIALOG with notice of any such Change of Control or acquisition within [***] after the closing thereof and DIALOG's right to terminate the Agreement will expire [***] after receipt of such notice. 15.3 Effect of Termination. Upon any termination or expiration of this Agreement, all rights, licenses (including any sublicenses granted by DIALOG) and obligations hereunder will cease, except that the provisions of Sections 6 (Intellectual Property Ownership), 9 (Royalties and Service Fees), 10 (Confidentiality), 11 (Representations and Warranties; Disclaimers), 12 (Indemnification), 13 (Limitation of Liability), 15.3 (Effect of Termination), 15.4 (Wind Down Period), 16 (Escrow), 18 (Non-Solicitation), 19 (Choice of Law and Dispute Resolution) and any provisions to give effect thereto, will survive such termination or expiration and remain in full force and effect in accordance with their terms. 15.4 Wind Down Period. (a) Notwithstanding any statement in Section 15.3 to the contrary, upon any termination or expiration of this Agreement and until the later to occur of (i) [***] from the Effective Date or (ii) [***] following the effective date of termination or expiration of this Agreement (the "Wind Down Period"), the parties' respective rights and obligations under Sections 2 (License), 3 (Sourcing), 7 (Product Sales), 9 (Royalties and Service Fees), 11 (Representations and Warranties; Disclaimers), 12 (Indemnification), 13 (Limitation of Liability), 14 (Compliance with Laws), 15.2 (Termination), 16 (Escrow) and all Exhibits hereto which are associated with any of the foregoing listed sections will remain in full force and effect as to (A) any Products or repackaged Product Die with respect to which DIALOG or any of its Affiliates has secured a design win at a customer prior to or within one (1) month after the start of the Wind Down Period, or (B) the sale of any MCMs which have been released for production at a foundry, provided, however, that DIALOG's license rights under Section 2.1 (including any sublicenses granted by DIALOG pursuant to Section 2.4) will be non-exclusive during the Wind Down Period. (b) If, at the time of notice of any termination of this Agreement, DIALOG or any of its Affiliates has a written supply contract with a customer that extends beyond the end of the Wind Down Period (a "Continuing Obligation"), DIALOG and/or its Affiliates may continue to Sell Licensed Products to such customer through the term of the Wind Down Period and for the remainder of the term of such Continuing Obligation, provided that in no event may DIALOG or its Affiliates Sell Licensed Products to such customer pursuant to this Section 15.4(b) for a period longer than [***] after the effective date of termination of this Agreement. In such event, the provisions of this Agreement that survive during the Wind Down Period will continue to survive for the remainder of the period of time that DIALOG is authorized to Sell Licensed Products to any customer in accordance with the foregoing sentence. The rights granted under this Section 15.4(b) will be conditioned upon DIALOG providing ENERGOUS a complete or redacted copy of the applicable supply contract demonstrating the existence of the Continuing Obligation as of the date of notice of termination or, if DIALOG or its Affiliate is prohibited from providing a copy of the contract by the confidentiality obligations set forth therein, a written certification from an officer of DIALOG attesting to the existence of the Continuing Obligation. * Confidential Treatment Requested
Page 20
16. ESCROW. 16.1 Escrow. ENERGOUS will at its expense, at DIALOG's written request during the Term and any Wind Down Period, enter into a three- party escrow deposit arrangement, in accordance with this Section 16, with a recognized escrow agent (the "Escrow Agent") of mutual agreement. ENERGOUS will keep the Deposit Materials in escrow and ensure on a quarterly basis that all the information relating to the Deposit Materials in escrow is current, including deposit of any Product Updates. 16.2 Release of Deposit Materials. In the event of any Insolvency Event and where the design files need to be accessed by DIALOG to fix an Epidemic Defect or other Product design or production issue impacting yield or quality ("Release Condition"), the Escrow Agent will, in accordance with the terms of the escrow agreement between the parties and the Escrow Agent (the "Escrow Agreement"), release the Deposit Materials to DIALOG. 16.3 License. ENERGOUS hereby grants DIALOG a non-exclusive, non-transferable (except as set forth in Section 2) license under the Product IP to use any of the Deposit Materials released from escrow for the purpose of fixing an Epidemic Defect or other Product design or production issue impacting yield or quality during the Term and, if applicable, any Wind Down Period or Continuing Obligation period, including, but not limited to, authorizing any third party subcontractor to manufacture and supply Products, provided, however, that DIALOG continues to make all Royalty payment owed to ENERGOUS (or the then-current owner of the Product IP) as provided in this Agreement. No Service Fees will be payable under this license. DIALOG agrees not to exercise such license until occurrence of a Release Condition, subject to the other restrictions set forth in this Section 16. Such license may be exercised by DIALOG only during the Term and any Wind Down Period or Continuing Obligation period and is subject to DIALOG's continued compliance with all of the other applicable terms and conditions of this Agreement during any such applicable period. All Deposit Materials will be deemed ENERGOUS' Confidential Information hereunder. DIALOG's license to possess and use the Deposit Materials does not include any right to disclose, market, sublicense or distribute the Deposit Materials to any third party other than its Affiliates and Manufacturing Subcontractors. 16.4 Rights in Bankruptcy. The licenses granted pursuant to this Agreement are license to rights in "intellectual property" (as that term is defined in Section 101 of the United States Bankruptcy Code) and governed by 11 USC Section 365(n). Accordingly, if a trustee in bankruptcy rejects the Escrow Agreement and/or this Agreement as executory contracts, then Company may elect to retain its rights under this Agreement in accordance with and subject to the provisions of 11 USC Section 365(n).
Page 21
17. PUBLICITY. 17.1 Publicity. Within 30 days of the Effective Date each party will issue a mutually agreed joint press release regarding the strategic cooperation for the supply of Products and the strategic cooperation between the parties. 18. NON-SOLICITATION. 18.1 Non-Solicitation. During the Term and for a [***], neither party will without the written consent of the other party (which may be granted or denied in its sole discretion) (a) directly or indirectly recruit or solicit for employment or for the provision of services any employee of the other party, (b) otherwise solicit, induce or influence any employee to leave their employment with the other party, or (c) attempt to do any of the foregoing; provided, however, that the foregoing will not apply to (y) any employee of the other party that responds to a public advertisement of employment opportunities or (z) any employee that was terminated without cause by the other party. ENERGOUS and DIALOG acknowledge and agree that the covenants in this Section 18 are reasonable and necessary to protect each of their trade secrets, Confidential Information and stable workforces. 19. CHOICE OF LAW AND DISPUTE RESOLUTION. 19.1 Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of California, exclusive of conflict of laws principles. 19.2 Dispute Resolution; Jurisdiction. Any dispute or claim arising out of or relating to this Agreement (including any matters regarding its existence, scope, validity, breach or termination, or any non-contractual obligations arising out of or related to it) that is not able to be resolved through negotiations will be submitted to arbitration in San Francisco, California, administered by the International Chamber of Commerce under its Rules of Arbitration. There will be one arbitrator. The language of the arbitration will be English. The award will be in writing, state the reasons for the award and be final and binding. Judgment on the award may be enforced in any court of competent jurisdiction. Except as may be required by law, the parties will preserve the confidentiality of all aspects of the arbitration. The arbitration will be the sole and exclusive forum for final resolution of any such dispute or claim, provided, however, that, because each party will have access to and become acquainted with Confidential Information of the other party, the unauthorized use or disclosure of which may cause irreparable harm and significant injury which may be difficult to ascertain and which may not be compensable by damages alone, the parties agree that the damaged party will have the right to seek an injunction, specific performance or other equitable relief without prejudice to any other rights and remedies that it may have for such unauthorized use or disclosure. Each party irrevocably waives all rights to a jury trial in any judicial proceeding permitted hereunder. For the avoidance of doubt, the validity, construction, and enforceability of this Agreement and the resolution of disputes arising out of and relating to this Agreement, will be governed solely by this Section 19. * Confidential Treatment Requested
Page 22
20. MISCELLANEOUS PROVISIONS. 20.1 Notices. All notices required or permitted under this Agreement will be in writing, reference this Agreement and be deemed given: (a) when delivered personally; or (b) when sent by electronic mail with electronic confirmation of receipt, provided that such notice is immediately confirmed as provided in (c) or (d) below; or (c) seven (7) days after having been sent by registered or certified mail,; or (d) two (2) days after deposit with a commercial courier service, with written verification of receipt. All communications will be sent to the addresses set forth below. Either party may change its address by giving notice pursuant to, and specifically referring to, this Section 20. If to ENERGOUS: Energous Corporation 3590 North First Street Suite 210 San Jose, California 95134 U.S.A. Attn: Brian Sereda, CFO
If to DIALOG: Dialog Semiconductor (UK) Ltd 100 Longwater Avenue Green Park Reading, RG2 6GP United Kingdom Attn: Legal Department 20.2 Relationship of Parties. ENERGOUS and DIALOG are independent business entities. Neither party nor its employees, consultants, contractors or agents are agents, employees, partners or joint venturers of the other party, nor do they have any authority to bind the other party by contract or otherwise to any obligation. The parties will not represent to the contrary, either expressly, implicitly, by appearance or otherwise. 20.3 Force Majeure. Except for obligations to pay amounts due under this Agreement, neither party will be liable for any failure or delay in its performance under this Agreement due to causes which are beyond its reasonable control, including, but not limited to, acts of God, acts of civil or military authority, fires, epidemics, floods, earthquakes, riots, wars, sabotage, labor shortages or disputes, and governmental actions; provided, however, that the affected party: (a) gives the other party written notice of such cause promptly, and in any event within fifteen (15) days of discovery thereof; and (b) uses its reasonable efforts to correct such failure or delay in its performance as soon as possible. The affected party's time for performance or cure under this Section 20.3 will be extended for a period equal to the duration of the cause. 20.4 Severability. If any provision of this Agreement is held to be invalid or unenforceable in any jurisdiction in which this Agreement is being performed, then: (a) such provision will be deleted from this Agreement in that jurisdiction to the extent of such invalidity or unenforceability without invalidating the remaining provisions of this Agreement, and any such unenforceability in that jurisdiction will not make that provision unenforceable in any other jurisdiction; and (b) the parties will agree on an alternative provision that best accomplishes the objectives of such provision, to the extent legally permissible in such jurisdiction.
Page 23
20.5 No Waiver. No waiver or consent in connection with or relating to this Agreement will bind either party unless in writing and signed by the party against which enforcement is sought. Waiver by either party of any default will not be deemed a waiver by such party of the same or any other default that may thereafter occur. 20.6 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be an original, but taken together constituting one and the same instrument. Execution of a facsimile copy (including PDF) will have the same force and effect as execution of an original, and a facsimile/electronic signature will be deemed an original and valid signature. 20.7 Headings and References. The headings and captions used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 20.8 Construction. The parties and their respective counsel have negotiated this Agreement. This Agreement will be fairly interpreted in accordance with its terms and without any strict construction in favor of or against either party. 20.9 Complete Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes and replaces all prior or contemporaneous understandings or agreements, written or oral, regarding such subject matter. No amendment to or modification of this Agreement will be binding unless in writing and signed by a duly authorized representative of both parties. 20.10 Assignment. This Agreement may not be assigned by either party without the express written consent of the other party, which approval will not be unreasonably withheld or delayed, except that either party may (without consent but with notice to the other party) assign this Agreement in its entirety to any successor in the event of a Change of Control of such party. 20.11 Notice of Merger or Acquisition. Until the date that this Agreement terminates or is terminated in accordance with Section 15 hereof, ENERGOUS agrees that, [***]. * Confidential Treatment Requested
Page 24
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date. ENERGOUS CORPORATION DIALOG SEMICONDUCTOR (UK) LTD By: /s/ Stephen R. Rizzore By: /s Mark Tyndall Name: Stephen R. Rizzore Name: Mark Tyndall Title: President and Chief Executive Officer Title: SVP Corporate Development and Strategy
Page 25
EXHIBIT A PRODUCTS Any ENERGOUS integrated circuit (IC) designed to receive power wirelessly and any ENERGOUS IC used in a wireless transmitter, including, but not limited to, the following Products (and any related Product Updates): [***] * Confidential Treatment Requested
Page 26
EXHIBIT B ROYALTIES AND SERVICE FEES Royalties and Service Fees payable by DIALOG and/or its Affiliates to ENERGOUS hereunder will be calculated on a Product by Product basis as defined herein. Margin Split: Combined Royalties and Service Fees shall equal [***]. Dialog will retain the remaining [***]. [***]. [***]. Notwithstanding any provision of the Agreement, no Royalties or Service Fees will be payable to ENERGOUS hereunder in connection with any Sale to any customer of prototype or sample Licensed Products [***]. * Confidential Treatment Requested
Page 27
EXHIBIT C Example of Letter of Authorization: Mask Set(s) Authorization for Third Party's Product(s) To whom it may concern Pursuant to a STRATEGIC ALLIANCE Agreement between Dialog Semiconductor (UK) Ltd and Energous Corporation dated November 6, 2016 (to which [Manufacturing Subcontractor] is not a party), we, Energous Corporation (Energous), hereby agree and authorize [Manufacturing Subcontractor], under the terms of this Letter of Authorization, to use the Mask Set(s) specified below for manufacturing products for the supply to the Third Party specified in paragraph 2 below only: 1. Mask Set(s) details: Mask Set(s) Product Type: Foundry Code: 2. Third Party details: Third Party's Name: Dialog Semiconductor [purchasing entity to be determined] Third Party's Address: Contact name of Third Party: 3. Volume of products The number of products to be manufactured with the Mask Set(s) will be unlimited, unless otherwise instructed by us below: Authorized Amount: [UNLIMITED] 4. Duration of Authorization The duration of this Letter of Authorization will be unlimited, unless otherwise instructed by us below: Duration of Authorization: [UNLIMITED] 5. Confidential Information Other than wafers for products specified under paragraph 1 above (which contain Energous designs), [Manufacturing Subcontractor] will not disclose to the Third Party any information which is proprietary or confidential to Energous.
Page 28
6. Reporting Upon Energous' request (but not more frequently than once per calendar year), [Manufacturing Subcontractor] will provide Energous with the accumulated wafer volumes ordered (and shipped) to the Third Party under this Letter of Authorization. By signing this Letter of Authorization, the Third Party authorizes [Manufacturing Subcontractor] to report to Energous accordingly. 8. Governing Law This Letter of Authorization will be governed by and construed in accordance with the laws of California, excluding its conflict of laws provisions, and be subject to the non-exclusive jurisdiction of the California courts. Very truly yours, Energous Incorporated Name: Title: Date: Agreed by Dialog Semiconductor (UK) Ltd Name: Title: Date: This Letter of Authorization is subject to the approval of the Manufacturing Subcontractors.
Page 29
EXHIBIT D LICENSED MARKS DIALOG LICENSED MARKS: Dialog Dialog Semiconductor ENERGOUS LICENSED MARKS: Energous WattUp Unleash your power Pending: [***] * Confidential Treatment Requested
Page 30
EXHIBIT E Commercialization plan Objective The Commercialization Plan sets forth the parties' respective rights and obligations with respect to commercial and technical activities to be performed to maximize potential Sales of Licensed Products. [***] Review O The Commercialization Plan will be reviewed and (if necessary) updated by the parties on a quarterly basis throughout the Term of the agreement. * Confidential Treatment Requested
Page 31
EXHIBIT F CUSTOMER: [***] * Confidential Treatment Requested
Page 32 [/INST] ```json
{<answer_start>
"answer": "Upon the termination of DIALOG's right to manufacture the Licensed Products following any expiration or termination of the Agreement or any Wind Down Period or Continuing Obligation period, as applicable, then all right, title and interest in the Tooling will automatically transfer to ENERGOUS subject to any Third Party IP, and DIALOG will, at ENERGOUS' option, either sell any Tooling in its possession to ENERGOUS at cost or destroy the Tooling and certify in writing as to same."
<answer_end>
}
``` </s> | Exhibit 10.24 [***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. EXECUTION VERSION STRATEGIC ALLIANCE AGREEMENT
THIS STRATEGIC ALLIANCE AGREEMENT ("Agreement") is made and entered into as of November 6, 2016 (the "Effective Date") by and between Dialog Semiconductor (UK) Ltd., a corporation organized under the laws of England and Wales, having its principal office at 100 Longwater Avenue, Green Park, Reading, RG2 6GP, United Kingdom ("DIALOG") and Energous Corporation, a Delaware corporation, having its principal office at 3590 North First Street, Suite 210, San Jose, CA 95134 ("ENERGOUS"). WHEREAS DIALOG is a supplier of mixed-signal semiconductor products; WHEREAS ENERGOUS is a supplier of uncoupled wirefree charging systems, including antennas, semiconductors, firmware, software, algorithms, and sensors; WHEREAS concurrently with their execution of this Agreement, DIALOG and ENERGOUS are entering into a separate Securities Purchase Agreement, pursuant to which DIALOG will make an investment in ENERGOUS, and ENERGOUS will issue to DIALOG shares of its common stock and a warrant to purchase its common stock on the terms set forth therein. WHEREAS DIALOG and ENERGOUS desire to enter into a strategic relationship to distribute to the marketplace certain ENERGOUS products and technology and to potentially collaborate on further initiatives pursuant to the terms and conditions of this Agreement. NOW, THEREFORE, in consideration for the premises and mutual covenants contained herein, DIALOG and ENERGOUS hereby agree as follows: 1. DEFINITIONS. All capitalized terms used in this Agreement will have the meaning set out below, or if not defined below, the meaning as defined elsewhere in the Agreement. 1.1 "Affiliate" means any person or entity that controls, is controlled by or is under common control with the specified person or entity, but only so long as such control exists. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through ownership of voting securities, by contract or otherwise. 1.2 "Approved Production Specifications" means those materials, processes and workmanship specifications of Manufacturing Subcontractors as approved by ENERGOUS for the manufacture and production of the Products. 1.3 "Change of Control" means any transaction or series of transactions that results in (i) the consolidation or merger of the specified party ("Target") into or with any other corporation or corporations, (ii) the sale, conveyance or disposition of all or substantially all of the assets of the Target, (iii) the transfer of more than fifty percent (50%) of the voting power of the Target to any entity or entities not controlled by the Target, or (iv) any similar form of acquisition or any liquidation, dissolution or winding up of the Target or other transaction that results in the discontinuance of the Target's business; provided, however, that Change of Control will not include any transaction or series of transactions entered into primarily for equity financing purposes (including, without limitation, any private equity investment or any public offering of securities).
1.4 "Deposit Materials" means all chip level design databases, circuit schematics, test and characterization programs and associated documentation reasonably required to have Products manufactured, or to allow design bugs or Epidemic Defects to be fixed in the Product. 1.5 "Design-In Phase" means the phase in the sales cycle with a prospective customer for a Product that follows the customer's decision to move forward with the potential Product, during which chip samples are delivered to customer and the parties work together to design the evaluation board for in-system evaluation. 1.6 "Documentation" means all information that is necessary or useful to support DIALOG's authorized manufacture, testing, sale and support of the Products, including but not limited to Product Specifications, data sheets, application notes, application board gerber files/BOM, sales and marketing collateral, Product errata, test reports, characterization reports, software (e.g., firmware, GUI), test plans and yield data in connection with the manufacture and sale of Products, Approved Production Specifications, test and characterization programs and associated documentation reasonably required to have Products manufactured, assembled and tested, designs of all Tooling and all other items reasonably required for the manufacture of the Products. 1.7 "Epidemic Defects" means material defects of any Product resulting from a common root cause solely attributable to the Product Specifications or Approved Production Specifications and which results in returns (in accordance with the returns procedure mutually agreed between the parties in the Commercialization Plan) of more than [***] percent ([***]%) of the quantity of such Product manufactured in any [***] day period. Any number of material defects affecting any number of Products which result from a single common root cause or combination of causes and result in returns of more than [***] ([***]%) of such Products manufactured in any [***] day period will be treated as the occurrence of a single Epidemic Defect for purposes of this Agreement. 1.8 "Insolvency Event" means (a) without a successor, the specified party fails to function as a going concern or to operate in the ordinary course, or (b) other than in the case when the specified party is a debtor-in-possession and continuing to fulfill all its obligations under this Agreement, a receiver or trustee in bankruptcy is appointed for such party or its property, or such party makes a general assignment for the benefit of its creditors, or such party commences, or has commenced against it, proceedings under any bankruptcy, insolvency or debtor's relief law, in each case which proceedings are not dismissed within ninety (90) days. 1.9 "Intellectual Property Rights" means any and all Patent Rights, copyright rights, Marks rights (including all associated goodwill), mask work rights, trade secret rights and all other intellectual and industrial property rights of any sort throughout the world (including any application therefor). * Confidential Treatment Requested
Page 2
1.10 "Invention" means any idea, concept, discovery, invention, development, technology, work of authorship, trade secret, software, firmware, library, component, tool, mask work, process, method, technique, know-how, show-how, data, plan, formula, device, apparatus, specification, design, documentation or other material or information, tangible or intangible, whether or not it may be patented, copyrighted or otherwise protected (including all versions, modifications, enhancements and derivative works thereof). 1.11 "Manufacturing Subcontractors" means (a) [***] and/or its Affiliate that is the wafer foundry for the Products ("[***]"), (b) [***] and/or its Affiliate that is responsible for the assembly, packaging and testing of the Products, and (c) and other third party contractors DIALOG or ENERGOUS use, or may from time to time use, for the manufacturing, assembly, testing, or packaging of the Licensed Products or Licensed Product components. 1.12 "Marks" means trademarks, service marks, trade dress and trade names. 1.13 "Mask Set" means the mask set for fabrication of wafers at a foundry supplier. 1.14 "Mass Production Qualified Product" means a fully qualified Product which has completed 500 hour high temperature over lifetime (HTOL) testing and has been shipped in excess of [***] units for purposes of incorporation in customer products. 1.15 MCM means a multichip module, being a single package that includes multiple integrated circuit dies, including a Product die. 1.16 "Net Sales" means the invoiced amounts for the Sale of Products less: (a) amounts credited for return of any such Products; (b) amounts separately stated with respect to shipment of such Products for insurance, handling, duty, freight, and taxes; and (c) any discounts, credits or rebates in the relevant royalty or service fee period. 1.17 "New Product" means a product developed by or on behalf of ENERGOUS after the Effective Date that is not a Product Update; provided, however, that "New Products" exclude any product developed by a successor or acquirer of ENERGOUS. 1.18 "Patent" means any United States or foreign patent or patent application, including any provisional application, continuation, continuation-in-part, divisional, registration, confirmation, revalidation, reissue, PCT application, patent term extension, supplementary protection certificate, and utility model, as well as all foreign counterparts of any of the foregoing, and related extensions or restorations of terms thereof. 1.19 "Patent Rights" means rights under any Patent. 1.20 "Person" a human being or group of human beings, a company, corporation, a partnership or other legal entity (artificial or juristic person) recognized by law as having rights and duties. * Confidential Treatment Requested
Page 3
1.21 "Products" means the ENERGOUS products set forth in Exhibit A, as such Exhibit may be amended from time to time by mutual agreement between the parties, that have been released by ENERGOUS to production, including all Product Updates, which will be deemed to have been added to Exhibit A automatically, without any further action required by the parties, immediately following the release to production date. 1.22 "Product Die" means the silicon die incorporated within Products. 1.23 "Product IP" means (a) all Intellectual Property Rights in and to the Products, including all Product Updates, (b) any other Inventions and work products created or developed in connection with research and development or manufacturing efforts relating to the Products, including all Intellectual Property Rights therein and (c) all Intellectual Property Rights in and to the Mask Sets and Tooling, in each of the foregoing cases, that are owned or controlled by ENERGOUS, its Affiliates or any successor or assign. 1.24 "Product Specifications" means ENERGOUS' written technical specifications for the Products as referenced in datasheets and related documentation such as errata sheets. All Product Specifications are subject to change with at least one (1) months prior written notice to DIALOG, provided that with respect to any warranty for Products covered by this Agreement, the Product Specification in effect at the time of shipment of the relevant Product will apply for warranty purposes notwithstanding any subsequent change to the Product Specifications as provided herein. 1.25 "Product Updates" means any updates, improvements and other modifications to the Products made by or for ENERGOUS, including, without limitation: (a) any updates or modifications to the software (DSP code, firmware, GUI (graphical user interface) code); (b) modifications of silicon, including, without limitation; such modifications made solely for cost reduction purposes, and including only metal layer as well as all layer mask changes; (c) modifications which increase the distance over which wireless power is transmitted or received, subject to the limitations set out in Exhibit A; (d) modifications which increase the amount of power which is transmitted or received; (e) modifications to improve functionality or efficiency or add or improve features; and (f) modifications required to attain regulatory approvals, including, but not limited to, FCC approval; provided, however, that "Product Updates" will only include any of the foregoing developed by an acquirer or successor of ENERGOUS for a period of [***] after a Change of Control of ENERGOUS, and provided further that any Products incorporating Product Updates will be subject to separate terms and conditions to be agreed in good faith by the Parties, which terms and conditions will be no less favourable to DIALOG than those with respect to the Product to which the Product Update corresponds. 1.26 "Sale," "Sell" or "Sold" mean the sale, transfer, exchange or other disposition of Products, by DIALOG or any of its Affiliates to any customer or other third party, directly or indirectly through one or more tiers of distribution, for consideration that is recognized as revenue by DIALOG or its Affiliates according to applicable generally accepted accounting principles. 1.27 "Semiconductor Supplier" means any Person, other than DIALOG or its Affiliates, which primarily, or in its ordinary course of business, sells or distributes integrated circuits in packaged, die, multichip module or similar form. * Confidential Treatment Requested
Page 4
1.28 "Term" means the Initial Term and any and all Renewal Term(s) as set forth in Section 15.1 hereof. 1.29 "Third Party IP" means Intellectual Property Rights licensed from a third party relating to the Products. 1.30 "Tooling" means the physical Mask Sets, packaging fixtures, test fixtures, test programs, processes, software source code and any other physical tooling or program source code required for the manufacture, packaging, assembly and testing of the Products. 1.31 "Uncoupled Power Transfer Technology" means a family of wire-free technology defined by the AirFuel Alliance that provides power to devices at a distance, and that currently includes (i) RF, (ii) ultrasonic transduction, and (iii) Laser power beaming. Notwithstanding the foregoing, the meaning of Uncoupled Power Transfer Technology excludes technology which functions primarily for data transmission or direct- current-to-direct-current (DC-to-DC) power conversion. 2. LICENSE. 2.1 License Grant. Subject to the restrictions set out in Section 2.2, ENERGOUS hereby grants to DIALOG a non-exclusive (subject to Section 2.5), irrevocable, worldwide, sub-licensable (solely in accordance with Section 2.4), royalty-bearing license during the Term under all Product IP to: (a) repackage or have repackaged the Product Die into various package formats or layouts, and to integrate the Product Die into MCMs, which may incorporate DIALOG or third party intellectual property (such repackaged Product Die, MCMs and Products, are individually and/or collectively referred to as the "Licensed Products"); (b) have the Licensed Products manufactured, tested and packaged by Manufacturing Subcontractors; (c) Sell, offer for Sale, import, export and support the Licensed Products, including without limitation, providing system design, troubleshooting and failure analysis support for DIALOG's customers and their customers; (d) use and modify the Tooling and Documentation for the purposes of paragraphs (a) to (d) of this Section 2.1. 2.2 Excluded Applications. Until the earlier of (i) termination of ENERGOUS' exclusivity obligations to the Key Customer set forth in Exhibit F (the "Key Customer") existing as of the Effective Date with respect to the following applications, or (ii) [***] that incorporates ENERGOUS wireless charging technology, or (iii) [***] and subject to the exceptions set out in Section 2.3, DIALOG will not be permitted to Sell Licensed Products for use in the following applications (the "Excluded Applications"): (a) [***]; * Confidential Treatment Requested
Page 5
(b) [***]; (c) [***]; (d) [***]; and (e) [***] designed for use with any of the applications in paragraphs (a) to (d) of this Section 2.2. For the avoidance of doubt, DIALOG will be permitted to Sell Licensed Products for use in any or all of the Excluded Applications (A) at any time on or after [***] or, if earlier, (B) [***] that incorporates ENERGOUS wireless charging technology, or (C) upon the termination of ENERGOUS' exclusivity obligations to the Key Customer existing as of the Effective Date with respect to the above applications. 2.3 Exceptions to Excluded Applications. The following applications are exceptions to and excluded from the Excluded Applications (the "Permitted Applications"): (a) [***]; (b) [***]; (c) [***]; (d) [***]; (e) [***]; (f) [***]; (g) [***]; (h) [***]; (i) [***]; and (j) [***]. The fact that a [***] has [***] does not automatically preclude such device from falling under paragraphs (b), (c) and (d) of this Section 2.3 2.4 Sublicenses. DIALOG may sublicense the foregoing license rights to any of its Affiliates. DIALOG will be responsible for the observance and performance by all such Affiliates of all of DIALOG's obligations pursuant to this Agreement. DIALOG may sublicense the foregoing license rights to Manufacturing Subcontractors solely to the extent necessary and appropriate for them to manufacture, assemble, test and provide support for the Products. DIALOG may not sublicense the foregoing license rights to any other third party without ENERGOUS' prior written consent. * Confidential Treatment Requested
Page 6
2.5 Exclusivity. (a) Subject to paragraph (b) of this Section 2.5, ENERGOUS will not, and will not enable any Semiconductor Supplier, to manufacture, have manufactured, offer for sale, sell, import or export the Products or Product Die in commercial volumes, except a Semiconductor Supplier to the Key Customer for use in the Excluded Applications. (b) ENERGOUS will use its diligent, good faith efforts to promote DIALOG as the preferred supplier of Products and Product Die. However, ENERGOUS is allowed to engage with a Semiconductor Supplier to supply comparable products or product die to a customer if either (i) the customer which has not been engaged with DIALOG with respect to such product or product die notifies ENERGOUS or DIALOG in writing by an authorized officer of the customer that it does not want to use DIALOG or a DIALOG Affiliate as a supplier of such product or product die; or (ii) if DIALOG has been engaged with the customer, the customer notifies ENERGOUS or DIALOG in writing prior to commencement of the Design-In Phase that it does not want to use DIALOG or a DIALOG Affiliate as a supplier of such product or product die. For clarity, ENERGOUS shall not intentionally supply Products, Product Die or comparable products or product die to customers directly or through distribution channels. 2.6 Branding. (a) Products Sold by DIALOG or its Affiliates may be branded as DIALOG products. All sales and marketing collateral, software tools and material for promotional activities relating to the Products will utilize ENERGOUS branding in a prominent basis as an equivalent partner with respect to such Products. (b) To the extent the parties engage in any co-branding activities, then, subject to the terms and conditions of this Agreement and during the Term, each party (in such capacity, "Licensor") hereby grants to the other party (in such capacity, "Licensee") a non-exclusive, non- transferable, worldwide right and license (without the right to sublicense), under Licensor's Intellectual Property Rights in Licensor's Marks, to use those Marks of Licensor set forth in Exhibit D solely in connection with the marketing, sale and distribution of such co-branded Products in accordance with this Agreement. (c) Use of Licensor's Marks will be subject to the following terms and conditions: (i) all goodwill generated by use of Licensor's Marks by Licensee will inure to the benefit of Licensor; (ii) Licensee will use Licensor's Marks only in such forms and with such graphics as authorized by Licensor; and (iii) Licensee will identify Licensor's Marks as being owned by Licensor and will (A) cause the symbol "®" to appear adjacent to and slightly above any registered Licensor Mark, or (B) alternatively, for any Licensor Marks that are not registered, the symbol "TM" or "SM", as applicable. 2.7 No Other Rights. Except for the rights and licenses expressly granted in this Agreement, no other right is granted, no other use is permitted and all other rights are expressly reserved.
Page 7
3. SOURCING. 3.1 Product Manufacture. Concurrent with or before execution of this Agreement, and substantially in the form attached as Exhibit C, ENERGOUS will provide written authorization to its Manufacturing Subcontractors to confirm DIALOG's and, if applicable, DIALOG's Affiliates' rights to procure the Licensed Products and related services directly from such Manufacturing Subcontractors utilizing ENERGOUS' Tooling and any associated manufacturing resources. DIALOG and its sublicensed Affiliates may directly contract with the Manufacturing Subcontractors for the manufacture and supply of Licensed Products under terms and conditions that DIALOG or such Affiliates may directly negotiate with such third parties. 3.2 Additional Manufacturing Subcontractors. DIALOG at its sole discretion may qualify and establish an alternative source to some or all of ENERGOUS' Manufacturing Subcontractors for the manufacturing of the Licensed Products and ENERGOUS will provide its written authorization thereof if requested by DIALOG. 3.3 Tooling. Subject to ENERGOUS' rights in the Product IP and any Third Party IP (including, without limitation, that of any Manufacturing Subcontractors), each party will own all right, title and interest in the physical Tooling procured or generated by that party for the manufacturing, testing and packaging of the Licensed Products. For the avoidance of doubt, as between the parties, ENERGOUS will also continue to own all right, title and interest in and to the firmware, DSP code and GUI software embedded in the Products, including all Intellectual Property Rights embodied therein. Upon the termination of DIALOG's right to manufacture the Licensed Products following any expiration or termination of the Agreement or any Wind Down Period or Continuing Obligation period, as applicable, then all right, title and interest in the Tooling will automatically transfer to ENERGOUS subject to any Third Party IP, and DIALOG will, at ENERGOUS' option, either sell any Tooling in its possession to ENERGOUS at cost or destroy the Tooling and certify in writing as to same. 4. PRODUCT COMMERCIALIZATION. 4.1 Commercialization Plan. (a) Exhibit E hereto sets out the plan for the commercialization of the Licensed Products (the "Commercialization Plan"). The Commercialization Plan sets forth the parties' respective rights and obligations with respect to commercial and technical activities to be performed to maximize potential Sales of Licensed Products. The Commercialization Plan will be reviewed and (if necessary) updated by the parties on a quarterly basis during the Term. (b) Each party will appoint (and notify the other party of the name of) a member of their management team who will serve as that party's primary contact for all matters related to this Agreement (each, a "Liaison"), including resolution of issues that may arise under this Agreement. Each party may replace its Liaison at any time by notice in writing to the other party. (c) The Commercialization Plan includes a go-to-market plan. ENERGOUS will provide commercially reasonable sales training, material and support to DIALOG's global application, sales and marketing teams and customers, including the support set out in Section 4.3.
Page 8
(d) ENERGOUS will also support DIALOG with an operations and quality plan, which will set forth information relating to quality matters, including, but not limited to, testing, yield management, RMA process, failure analysis/corrective action procedure, ECN/PCN process and detailed agreement on mutual rights and responsibilities with respect to any quality issues or warranty claims (hereinafter "Quality Plan"). Both parties will work in good faith to finalize and implement the Quality Plan within 90 days after the Effective Date of this Agreement. DIALOG will be responsible for its own frontline quality function and corrective actions, with technical input from ENERGOUS as required. (e) The parties may promote the relationship with marketing initiatives and also agree to engage in joint marketing communication activities related to the relationship described in this Agreement or to the promotion of the Licensed Products, as set forth in the Commercialization Plan or otherwise mutually agreed between the parties from time to time. 4.2 Commercialization Meetings. The parties will meet regularly, but at least once each month during the Term, either in person or by telephone, video or internet conference call, to share technical and commercial information as reasonably required to facilitate the parties' exercise of their respective rights and performance of their respective obligations under this Agreement. The information shared by the parties will include, but is not limited to (a) market and competitive dynamic updates, (b) activities and progress updates at DIALOG's customers, (c) technical review and feedback from customers, (d) non-binding 12 month rolling Sales and Royalty and Service Fee forecasts for the Licensed Products, (e) initiatives to boost sales potential for the Licensed Products. Customer information shared will be within the limits allowed by any non-disclosure agreements DIALOG may have entered into with such customers. 4.3 Technical Support. ENERGOUS will support DIALOG's or its Affiliates' engineers and, in some cases and at DIALOG's request, the customer directly in providing standard design-in support (including antenna design support) for customers' products. If the customer requires unique or custom engineering services (i.e., support and services not limited to those with general application to Product customers), then ENERGOUS will contract directly with such customer for the provision of such services. ENERGOUS will provide DIALOG with any and all information that is necessary or useful to support its authorized manufacture, testing, marketing, Sale, troubleshooting, compatibility analysis, performance tuning, failure analysis, and other support of the Licensed Products, including the Documentation and any updates thereto or revisions thereof which are reasonably necessary or appropriate to provide technical support for the Products to DIALOG customers. ENERGOUS receives the Service Fee for providing the support described in this Section 4.3 to DIALOG and its customers during the Term. In the event the Technical Support provided by ENERGOUS falls below a mutually-agreed upon service level that is common to the semiconductor industry or reasonably requested by DIALOG's customers, and after failure by ENERGOUS to address such deficiency within a twenty (20) day notice period, DIALOG may suspend the payment of Service Fees until such service level is provided. Furthermore, in the event ENERGOUS fails to meet its obligations as set forth in the Quality Plan, and after failure by ENERGOUS to address such deficiency within a thirty (30) day notice period, DIALOG may suspend the payment of Service Fees until such obligations are met.
Page 9
5. PRODUCT DEVELOPMENT AND PRODUCT UPDATES. ENERGOUS will have control and authority over the design and development of the Products, including without limitation, developing and implementing all Product Updates. ENERGOUS reserves the right to implement Product Updates at any time in its sole discretion. The parties will consult each other on the perceived product needs of the market and DIALOG's customers and how best to respond to such needs. DIALOG may suggest Product Updates to ENERGOUS provided, but all the development of Product Updates will be at ENERGOUS' sole discretion. ENERGOUS will share its relevant product roadmaps from time to time to maximize collaboration opportunities. 6. INTELLECTUAL PROPERTY OWNERSHIP. 6.1 Product IP. ENERGOUS retains right, title and interest in and to the Product IP, ENERGOUS' Marks and ENERGOUS' Confidential Information, including all Intellectual Property Rights embodied therein. No transfer or grant is made hereunder by ENERGOUS of any of these rights or any of its other rights, whether by implication, estoppel or otherwise, other than the limited rights and licenses expressly granted by ENERGOUS in this Agreement, and all such other rights are hereby reserved. 6.2 DIALOG Intellectual Property. DIALOG retains rights, title and interest in and to DIALOG's Marks and DIALOG's Confidential Information, including all Intellectual Property Rights embodied therein. No transfer or grant is made hereunder by DIALOG of any of these rights or any of its other rights, whether by implication, estoppel or otherwise, other than the limited rights and licenses expressly granted by DIALOG in this Agreement and all such other rights are hereby reserved. 7. PRODUCT SALES. 7.1 Sales. Subject to the terms and conditions of this Agreement, and except as set forth in the Commercialization Plan or otherwise agreed in writing between the parties, DIALOG will market and Sell the Licensed Products as authorized under this Agreement. DIALOG will independently manage and process its own forecasting, operations and order management. 7.2 Discontinuation of Sale of Products. If DIALOG decides to discontinue Sales of any Product, it will notify ENERGOUS at least [***] prior to such discontinuance, and following such notification, the exclusivity rights, if any, associated with that Product will cease; provided, however, this provision will not apply in the event that DIALOG continues Sales of Product Updates, repackaged Product Dies or MCMs. 7.3 Supply of Products to ENERGOUS. DIALOG will provide 1000 samples of each Product free of charge to ENERGOUS for the purposes of evaluation and demonstration. For additional volumes required by ENERGOUS, DIALOG will sell to ENERGOUS on a reasonable cost plus basis for the purposes of evaluation and demonstration. These samples are provided as is, are not intended for resale by ENERGOUS, and no indemnification or other warranties from DIALOG will apply. * Confidential Treatment Requested
Page 10
8. OTHER PRODUCTS. 8.1 New Products. In the event that ENERGOUS develops New Product, ENERGOUS will provide DIALOG with written notice describing the New Product before marketing, selling or distributing the New Product with or to any third party. Upon receipt of such notice, DIALOG will have [***] to notify ENERGOUS in writing that it desires to add such New Product as Product under this Agreement. If DIALOG provides such a notice, for a period of [***] following ENERGOUS' receipt of such notice, ENERGOUS and DIALOG will negotiate in good faith the terms pursuant to which such New Product will be added as a Product to this Agreement. ENERGOUS may not negotiate with any third party the rights to market, sell or distribute any New Product until the earliest to occur of the following (a) DIALOG does not provide ENERGOUS with notice that it desires to add such New Product to this Agreement within the above-described [***] period, (b) ENERGOUS and DIALOG do not reach mutually agreeable terms for adding such New Product to this Agreement during the [***] negotiation period or (c) DIALOG provides ENERGOUS with written notice that it does not wish to negotiate with respect to such New Product. For clarity, after any of the events described in the foregoing subsections (a), (b) or (c) occurs, the New Product will not be covered under this Agreement, and ENERGOUS will be free to manufacture, market, sell, distribute and otherwise exploit such New Product as it deems fit in its sole discretion, including in collaboration with or through one or more third parties. 8.2 No Competing Products. (a) Until expiration or earlier termination of the Agreement, DIALOG agrees that it and its Affiliates will not, without ENERGOUS' written approval, intentionally sell, distribute or work with any third party to develop products incorporating any Uncoupled Power Transfer Technology other than Licensed Products; provided, however, that DIALOG shall not be under any such restrictions in relation to services or products it provides to the Key Customer in the event the Key Customer terminates its agreement with ENERGOUS. (b) In the event that ENERGOUS does not receive Federal Communications Commission approval of any Licensed Product for power transmission [***] by the [***], (i) ENERGOUS may provide written notice to DIALOG which references this Section 8.2(b) and indicates ENERGOUS' intention to enable one or more Semiconductor Suppliers to supply Products for [***]; and (ii) DIALOG may provide written notice to ENERGOUS which references this Section 8.2(b) and indicates DIALOG's intention to sell, distribute or work with one or more third parties to develop products incorporating Uncoupled Power Transfer Technology for [***]. [***] following the date such notice is given pursuant to Section 20.1, the restrictions in Section 8.2(a) shall no longer apply to DIALOG for Uncoupled Power Transfer Technology in [***] and the restrictions relating to enabling a Semiconductor Supplier in Section 2.5(a) shall no longer apply to ENERGOUS for Products or Product Die in [***]. (c) In the event that ENERGOUS does not receive Federal Communications Commission approval of any Licensed Product for power transmission in [***] by the [***], (i) ENERGOUS may provide written notice to DIALOG which references this Section 8.2(c) and indicates ENERGOUS' intention to enable one or more Semiconductor Suppliers to supply Products for [***]; and (ii) DIALOG may provide written notice to ENERGOUS which references this Section 8.2(c) and indicates DIALOG's intention to sell, distribute or work with one or more third parties to develop products incorporating Uncoupled Power Transfer Technology for [***]. [***] following the date such notice is given pursuant to Section 20.1, the restrictions in Section 8.2(a) shall no longer apply to DIALOG for Uncoupled Power Transfer Technology in [***] and the restrictions relating to enabling a Semiconductor Supplier in Section 2.5(a) shall no longer apply to ENERGOUS for Products or Product Die in [***]. * Confidential Treatment Requested
Page 11
9. ROYALTIES AND SERVICE FEES. 9.1 Royalties. DIALOG will pay ENERGOUS the Royalties set forth in Exhibit B. For clarity, DIALOG will be responsible for paying to ENERGOUS any Royalties payable hereunder as a result of its Affiliates' Licensed Product Sales. 9.2 Service Fee. Subject to Section 4.3, DIALOG will pay ENERGOUS the Service Fees set forth in Exhibit B. For clarity, subject to Section 4.3, DIALOG will be responsible for paying to ENERGOUS any Service Fees payable hereunder for services provided by ENERGOUS hereunder to DIALOG's Affiliates or any of DIALOG's or its Affiliates' customers. 9.3 Payment. Payments of Royalties and Service Fees will be due on a calendar quarterly basis, within [***] days after the end of the calendar quarter in which the applicable Licensed Products were Sold or services were rendered. From the date a payment is due, unless otherwise agreed, any late payment will accrue a late payment fee of [***] per month, or the highest interest rate permitted by law, whichever is less. 9.4 Reports. Each payment made hereunder will be accompanied by a report detailing (a) the total number of units, on a product-by- product basis, of the Licensed Products Sold during the previous calendar quarter, (b) DIALOG's and its Affiliates' Net Sales attributable to such Licensed Product units during such calendar quarter, and (c) reasonable details regarding the calculation of the quarterly Royalty payment and Service Fee. Such information will be maintained in strict confidence by ENERGOUS under Section 10 of this Agreement. 9.5 Books. With respect to its exercise of the rights and licenses granted in, and payment obligations under, this Agreement, DIALOG and its Affiliates will keep accurate books and other records, including but not limited to supporting documentation for the Royalties and Service Fees paid hereunder (the "Records"). These Records will be maintained for a period of at least three (3) years from the date of the related payment ("Record Retention Period"), notwithstanding any termination of expiration of this Agreement. 9.6 Audit Rights. During the Record Retention Period, ENERGOUS may appoint a mutually agreed independent, internationally recognized third-party certified auditor who will have the right to inspect and copy the Records upon reasonable prior notice, and DIALOG will (and will cause its Affiliates to) allow necessary access including, as applicable, to its premises where such Records are located. ENERGOUS may exercise such right to this independent-third party audit no more than one time per calendar year and each such audit will be conducted during normal business hours. Such audit may also not interfere with DIALOG's or its Affliates' quarterly closing of its books. In the event that such audit reveals an underpayment of Royalties or Service Fees owed by DIALOG, DIALOG will promptly pay ENERGOUS the amount of the underpayment. If such underpayment is in excess of [***] of the Royalties or Service Fee due for the period audited, DIALOG will also reimburse ENERGOUS for its reasonable, out-of-pocket cost of such audit. In the event that such audit reveals an overpayment of Royalties or Service Fees owed by DIALOG, ENERGOUS will promptly pay DIALOG the amount of the overpayment. * Confidential Treatment Requested
Page 12
9.7 Taxes. Each party will be responsible to collect, bear and pay any and all taxes levied or based upon the party's sale of the Products, Product Die or Licensed Products, including, all sales, use, value added, withholding or similar taxes. In the event that the government of a country imposes any income taxes on payments made by a party to the other hereunder and requires a party to withhold such tax from such payments, such party may deduct such tax from such payments. Each party will be responsible for its own banking costs relating to the receipt of payments of Royalties and Service Fees and any other monies payable to it in connection with this Agreement. 9.8 Payment Currency. All payments due under this Agreement will be payable in U.S. Dollars. With respect to Net Sales invoiced in a currency other than U.S. Dollars, the Net Sales will be expressed in the domestic currency of the entity making the Sale, together with the U.S. Dollar equivalent, calculated using the conversion rate existing in the United States (as reported in the Wall Street Journal) on the last working day of each month of the calendar quarter in which the Net Sales were made. Such payments will be without deduction of exchange, collection or other charges. 10. CONFIDENTIALITY. 10.1 Scope. The term "Confidential Information" means all financial, business and technical information disclosed by or on behalf of a party in relation to this Agreement (whether tangible or intangible, and including all copies, analyses and derivatives thereof), that is marked or otherwise identified as proprietary or confidential at the time of disclosure, or which by its nature would be understood by a reasonable person to be proprietary or confidential, including all copies, abstracts, summaries, analyses and derivatives thereof. Confidential Information does not include information the receiving party can demonstrate (a) was rightfully furnished to it without restriction by a third party without breach of any obligation to the disclosing party, (b) is generally available to the public without breach of this Agreement, (c) was available to or already in the possession or control of the receiving party on a non-confidential basis before receipt from the disclosing party or (d) is independently developed by it or its employees without reliance on such information. Information associated with DIALOG's quarterly Royalty or Service Fee disclosures is Confidential Information of DIALOG. 10.2 Non-Disclosure. The receiving party agrees (a) not to copy or use the disclosing party's Confidential Information except and only for the purposes contemplated by this Agreement, (b) to maintain it as confidential, and exercise reasonable precautions to prevent unauthorized access, use and disclosure, (c) not to disclose it to any third party other than the receiving party's employees and contractors who have a need to know for the permitted purpose and who are bound by obligations that are at least as protective as the restrictions in this Agreement and (d) not to export or re-export in violation of U.S. or other export control laws or regulations any such Confidential Information or product thereof. Each party will bear the responsibility for any breach of this Section 10 by its and its Affiliates' employees and contractors. Upon any termination of this Agreement or, in the event of any Wind Down Period or Continuing Obligation period, upon the expiration of such period, and within fifteen (15) days after request by the disclosing party, each receiving party will return the Confidential Information of the other or destroy such Confidential Information and all copies of it and all information, records and materials developed therefrom, except that the recipient may retain one copy for archival purposes to ensure compliance with the provisions of this Agreement, and nothing contained herein will require the erasure, deletion, alteration or destruction of any Confidential Information required to be retained for legal or regulatory purposes or stored on back-up tapes or other back-up media or archiving systems made in the ordinary course of business, subject in each case to the confidentiality obligations set forth herein. Each party may only disclose the general nature, but not the specific terms, of this Agreement without the prior consent of the other party; provided, however, either party may provide a copy of this Agreement or otherwise disclose its terms on a confidential basis in connection with any legal or regulatory requirement, financing transaction or due diligence inquiry. For clarity, in the event that use, disclosure or retention of any Confidential Information is required in order for DIALOG to exercise the license granted in Section 2, this Section 10 will not be deemed to prevent such use, disclosure or retention.
Page 13
10.3 Required Disclosure. Nothing herein will prevent a receiving party from disclosing all or part of the other's Confidential Information as necessary pursuant to court order, the lawful requirement of a governmental agency or when disclosure is required by operation of law (including disclosures pursuant to applicable securities laws or regulations thereunder); provided, that prior to any such disclosure, the receiving party will use reasonable efforts to (a) promptly notify the disclosing party in writing of such requirement to disclose, and (b) cooperate fully with the disclosing party in protecting against or minimizing any such disclosure or obtaining a protective order. 11. REPRESENTATIONS AND WARRANTIES; DISCLAIMERS. 11.1 Mutual Representations and Warranties. ENERGOUS and DIALOG hereby each represent and warrant to the other that as of the Effective Date: (a) it is a duly and validly organized and existing corporation in good standing under the laws of the state or country of its incorporation, as applicable, and that it is legally qualified to do business in each jurisdiction in which this Agreement may be performed and the performance of its activities hereunder requires such qualification; (b) the performance of this Agreement and the consummation of the transactions contemplated herein will not result in any breach or violation of any terms or provisions of, or constitute a default under, its certificate of incorporation or by-laws or other organizational documents, or any material agreement or instrument to which it is a party, by which it is bound, or to which any of its property is subject; (c) all requisite corporate action has been taken for the due authorization, execution, delivery and performance of this Agreement by it, and this Agreement constitutes a legally binding obligation, enforceable against such party in accordance with its terms, except insofar as enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally; and
Page 14
(d) it is not a party to any litigation relating to, or that could reasonably be expected to affect, its ability to perform its obligations under this Agreement. 11.2 Product Warranty. (a) ENERGOUS warrants that (i) when manufactured in accordance with the Approved Production Specifications, and as implemented in a suitable circuit application in accordance with the Product Specifications, the Products and Product Die will conform to the Product Specifications and will be free from defects that could have been avoided in their design; (ii) the Products, any constituent parts or functionality thereof, the Documentation and the Deposit Materials do not infringe any third party's Intellectual Property Rights; (iii) it did not misappropriate any third party's trade secrets in the development of the Products, any constituent parts or functionality thereof, the Documentation or the Deposit Materials; and (iv) when delivered (including any software updates if any), no Product will contain any viruses, "Trojan horses" or other harmful code. The above warranties are valid for a period of [***] from the date of shipment of any Licensed Product to any customer. (b) The warranty contained in Section 11.2(a) does not apply to the extent any Product is operated in a manner other than that specified by the Product Specifications, is treated with abuse, negligence or other improper treatment (including, without limitation, use outside the device maximum ratings, package MSL (moisture sensitivity level) guidelines or environmental limits as may be set forth in the Product Specifications), or is defective as a result of any materials or workmanship of the Manufacturing Subcontractors or failure of the Manufacturing Subcontractors to manufacture the Product according to Approved Production Specifications. As such, any warranty claims due to defects in build, materials or workmanship will be directed to the Manufacturing Subcontractors as part of that contract between DIALOG or, if applicable, its Affiliate and such parties. (c) With the exception of the warranties in Section 11.2(a)(ii) (third party IP infringement) and Section 11.2(a)(iii) (misappropriation of third party trade secrets) related to any Product Die, the warranties in this Section 11.2 do not apply to MCMs or repackaged Product Die developed by or for DIALOG or its Affiliates. (d) In the event any warranty claim is due to or arises from an Epidemic Defect, ENERGOUS will be responsible for all costs and expenses directly incurred by DIALOG or its Affiliates or their respective customers as a result of reasonable inspection, servicing, repairs, replacements, recall notices, recalls and responses with respect thereto, provided that ENERGOUS' aggregate liability to DIALOG and its Affiliates and their respective customers under this paragraph (d) will not exceed [***] per occurrence of an Epidemic Defect. Each party will immediately notify the other upon becoming aware of the circumstance that could reasonably be construed to be an indication of an Epidemic Defect, and, in any event, will notify the other party immediately upon becoming aware of the existence of an Epidemic Defect. ENERGOUS and DIALOG will expeditiously work together in good faith to determine a technical resolution of the Epidemic Failure. ENERGOUS agrees to make all commercially reasonable efforts to promptly diagnose the Epidemic Failure's root cause, provide DIALOG a report detailing the results of ENERGOUS' investigation and plan an effective workaround and a permanent solution. ENERGOUS will consult with DIALOG on any proposed workarounds and other solutions. * Confidential Treatment Requested
Page 15
11.3 Infringement of Intellectual Property Rights. If any of the Products, Product Die, Documentation or Deposit Materials is, or in ENERGOUS' or DIALOG's opinion is likely to become, the subject of an Intellectual Property Rights infringement claim, and as a result DIALOG or any of its Affiliates or their respective customers are enjoined, or in ENERGOUS' or DIALOG's opinion are likely to be enjoined, from using the Products, Product Die, Documentation or Deposit Materials, ENERGOUS will use its best efforts to: (a) procure for DIALOG and its Affiliates and their respective customers the right to continue to use the Products, Product Die, Documentation or Deposit Materials, as applicable; or, but only in the event that, despite ENERGOUS' best efforts to do so, ENERGOUS is unable to so procure such right, (b) replace or modify the Products, Product Die, Documentation or Deposit Materials, as applicable, to make them non-infringing, provided that the replaced or modified Products, Product Die, Documentation and Deposit Materials remain substantially similar in performance to the infringing Products, Product Die, Documentation and Deposit Materials. If none of the foregoing alternatives is available within a commercially reasonable time period, DIALOG may terminate this Agreement with immediate effect, provided that it will give ENERGOUS prompt prior written notice thereof. Nothing in this Section 11.3 is intended to limit DIALOG's rights to indemnification under Section 12 in connection with any such infringement claim. 11.4 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 11, THE PRODUCTS, THE PRODUCT IP, TOOLING, DOCUMENTATION, DEPOSIT MATERIALS, CONFIDENTIAL INFORMATION AND ALL LICENSES, SERVICES AND OTHER ITEMS PROVIDED BY A PARTY TO THE OTHER PARTY HEREUNDER ARE PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND. EXCEPT FOR THOSE WARRANTIES EXPRESSLY PROVIDED HEREIN, EACH PARTY SPECIFICALLY DISCLAIMS ALL WARRANTIES, WHETHER ORAL OR WRITTEN, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND ALL WARRANTIES ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE IN TRADE. 12. INDEMNIFICATION. 12.1 Indemnification by Energous. Subject to Section 12.2, ENERGOUS agrees to indemnify, hold harmless and, in the case of any third party claims, defend DIALOG and its Affiliates and each of their respective directors, officers, employees, contractors, agents, distributors and customers (collectively, "DIALOG Indemnitees") from and against and in respect of any and all alleged or actual demands, claims, actions, causes of action, suits or proceedings, assessments, awarded damages (including punitive damages), liabilities, interest and penalties, costs and expenses (including, without limitation, court costs and reasonable legal fees and disbursements in connection therewith) (each, a "Claim") to the extent resulting from, arising out of, relating to, or imposed upon or incurred by any DIALOG Indemnitees by reason of (a) death or bodily injury caused by or resulting from use of the Products, (b) any breach of any representation or warranty made by ENERGOUS hereunder or to any third party in relation to the Products or Product Die, (c) the infringement or misappropriation of any third party Intellectual Property Rights in relation to the Products or Product Die, (d) the infringement or misappropriation of any third party Intellectual Property Rights as a result of DIALOG's or its Affiliates' exercise of rights in accordance with the terms of this Agreement, including, but not limited to, the Manufacturing Subcontractors' manufacture of the Products on their behalf, provided that the Products are manufactured in strict compliance with the Product Specifications and Approved Production Specifications and only to the extent such Claims arise due to compliance with the Product Specifications and/or the Approved Production Specifications or use of the Tooling provided by ENERGOUS hereunder, (e) the infringement by DIALOG of any third party Marks rights as a result of its authorized use of the ENERGOUS Marks, (f) any failure by ENERGOUS to comply with applicable laws, regulations and standards, or (g) ENERGOUS' negligence, intentional misconduct or fraud.
Page 16
12.2 Exclusion. Notwithstanding the provisions of Section 12.1, ENERGOUS will not be liable to the extent any Claim results from (a) modification of the Products by DIALOG, its Affiliates and/or any third party (including the Manufacturing Subcontractors), or combination of the Products with other products, offered by DIALOG, its Affiliates and/or any third party, (b) acts or omissions of any Manufacturing Subcontractor (except to the extent such Claims are due to the infringement or misappropriation of third party Intellectual Property Rights arising from such Manufacturing Subcontractor's manufacturing of the Products on behalf of DIALOG in strict compliance with the Product Specifications, Approved Production Specifications and Tooling provided by ENERGOUS), (c) failure of any DIALOG Indemnitee to comply with applicable laws, regulations and standards, or (d) negligence, intentional misconduct or fraud of any DIALOG Indemnitee. For clarification, if any of the foregoing is not the cause, in whole or in part of the Claim, ENERGOUS is not relieved of its obligations under Section 12.1. 12.3 Conditions. DIALOG must notify ENERGOUS within thirty (30) business days after receipt of actual notice of any Claim by a third party for which it seeks indemnification; provided, however, any failure or delay in notice will not relieve ENERGOUS of its obligations hereunder except to the extent that ENERGOUS is actually prejudiced by such failure to notify. ENERGOUS will have control and authority with respect to the defense, litigation, compromise or settlement of such third party Claim (except to the extent that any settlement involves any commitments, responsibilities or obligations on the part of DIALOG, in which case such settlement will require the prior written consent of DIALOG, which consent will not be unreasonably delayed, conditioned or withheld). DIALOG will cooperate and provide assistance and information as may reasonably be required by ENERGOUS (but at ENERGOUS' expense) in connection therewith. DIALOG reserves the right to participate at its own cost in any third party proceedings with counsel of its own choosing. In the event that ENERGOUS does not respond to any third party Claim or does not sufficiently defend such third party Claim, DIALOG, acting reasonably, may step in and take over the defense of such Claim. Costs incurred in the settlement of any Claim, including, but not limited to, reasonable legal expenses, may be off set against future Royalties and Service Fees payable.
Page 17
12.4 Insurance. Each party will maintain, during the Term and for three (3) years thereafter, such comprehensive general liability insurance (including without limitation, products liability) as will adequately protect it against its potential liabilities under this Agreement, in amounts customary in the semiconductor industry for similar services and products. Each party will, at the other party's request, provide to the other party a certificate of insurance evidencing the foregoing insurance coverage. 13. LIMITATION OF LIABILITY. 13.1 EXCEPT IN THE CASE OF (a) ANY BREACH OF SECTION 10 (CONFIDENTIALITY), (b) THE PARTIES' OBLIGATIONS UNDER SECTION 12 (INDEMNIFICATION), (c) A PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (d) LIABILITY ARISING FROM EPIDEMIC DEFECTS (WHICH WILL BE SUBJECT TO THE LIMITATION SET FORTH IN SECTION 11.2(d)), IN NO EVENT WILL EITHER PARTY BE LIABLE UNDER THIS AGREEMENT, REGARDLESS OF THE FORM OF ANY CLAIM OR ACTION (WHETHER IN CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE), FOR ANY (i) INDIRECT, PUNITIVE, INCIDENTAL, RELIANCE, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF BUSINESS, REVENUES, PROFITS OR GOODWILL, OR (ii) AGGREGATE DAMAGES IN EXCESS OF [***]. IN ADDITION, ENERGOUS' LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER SECTION 12.1(b) SHALL IN NO EVENT EXCEED [***]. THESE LIMITATIONS ARE INDEPENDENT FROM ALL OTHER PROVISIONS OF THIS AGREEMENT AND WILL APPLY NOTWITHSTANDING THE FAILURE OF ANY REMEDY PROVIDED HEREIN. 14. COMPLIANCE WITH LAWS. Each party will comply with all law and regulations applicable such party's performance under this Agreement, including but not limited to U.S. Export Administration laws and regulations and any other export, import and re-export control laws applicable to such party. The parties will refrain from exporting or re-exporting the Products or Product IP or any technical data or other materials received from each other, or the direct product of any of these, to any country, individual or organization proscribed by the United States government, unless properly authorized by the appropriate agencies of the United States government. Each party will provide all information under its control which is necessary or useful for the other party to ship or receive the Products, including, but not limited to, U.S. Export Control Classification Numbers (ECCNs), U.S. Customs Certificates of Delivery, Certificates of Origin and U.S. Federal Communications Commission identifier, if applicable. Each party agrees that it will not act in any fashion or take any action in violation of any applicable anti-bribery or anti-corruption legislation in any jurisdiction in which it does business, which prohibits the offering, giving or promising to offer or give, directly or indirectly, money or anything of value to any official of a government, political party or instrumentality to assist it in obtaining or retaining business, including the U.S. Foreign Corrupt Practices Act or any comparable legislation in another country. * Confidential Treatment Requested
Page 18
15. TERM AND TERMINATION. 15.1 Term. This Agreement is effective on the Effective Date. Unless earlier terminated as provided herein, this Agreement continues in effect for an initial term of seven (7) years ("Initial Term") and will automatically renew for one or more annual periods after the Initial Term (each a "Renewal Term") unless either party gives notice of non-renewal at least one hundred eighty (180) days prior to the beginning of any Renewal Term. 15.2 Termination. (a) Mutual Termination Rights. Either party may, in addition to any other remedies available to it under this Agreement or at law or in equity, terminate this Agreement (or, in the event this Agreement has been previously terminated, the Wind Down Period, if any) immediately upon the issuance of written notice to the other party in the event that (i) the other party materially breaches a material provision of this Agreement, and fails to cure such breach within thirty (30) days, or (ii) the other party undergoes an Insolvency Event. (b) Termination By ENERGOUS. (i) If ENERGOUS is acquired by a third party, ENERGOUS' acquirer will have the right, for a period of [***] following closing of such acquisition, to terminate this Agreement upon written notice to DIALOG. (ii) ENERGOUS will have the right to terminate this Agreement immediately upon the issuance of written notice to DIALOG (A) if DIALOG undergoes a Change of Control involving a competitor of ENERGOUS (as reasonably determined by ENERGOUS), or (B) if DIALOG or any of its Affiliates acquires, whether directly or indirectly through a sale of assets or a Change of Control transaction or otherwise, any competitor of ENERGOUS. DIALOG will provide ENERGOUS with notice of any such Change of Control or acquisition within [***] after the closing thereof and ENERGOUS' right to terminate the Agreement will expire [***] after receipt of such notice. (iii) ENERGOUS may, at any time after the third anniversary of the Effective Date, terminate this Agreement with or without cause upon not less than one hundred and eighty (180) days prior written notice to DIALOG. (iv) ENERGOUS will have the right to terminate this Agreement, upon not less than [***] prior written notice to DIALOG, in the event that, following termination by the [***] of its agreement with ENERGOUS, DIALOG participates in or indicates its intention to participate in the development, design or manufacture of products incorporating Uncoupled Power Transfer Technology not provided by ENERGOUS to [***]. (c) Termination by DIALOG. (i) If DIALOG is acquired by a third party, DIALOG's acquirer will have the right, for a period of [***] following closing of such acquisition, to terminate this Agreement upon written notice to ENERGOUS. * Confidential Treatment Requested
Page 19
(ii) DIALOG may terminate this Agreement, immediately upon issuance of written notice to ENERGOUS in the event that: (A) DIALOG or its Affiliates fail to achieve a design-win pipeline with an annual projected sales value to DIALOG of at least [***] in the [***] after the availability of a Mass Production Qualified Product; or (B) the aggregate annual Net Sales of Products are below [***] by the [***] of the availability of a Mass Production Qualified Product, or below [***] by the [***] of the availability of a Mass Production Qualified Product, or below [***] by each [***] of the availability of a Mass Production Qualified Product during the remainder of the Term. (iii) DIALOG will have the right to terminate this Agreement immediately upon the issuance of written notice to ENERGOUS (A) if ENERGOUS undergoes a Change of Control involving a competitor of DIALOG, or (B) if ENERGOUS acquires, whether directly through a sale of assets or through a Change of Control transaction, any competitor of DIALOG (as reasonably determined by DIALOG). ENERGOUS will provide DIALOG with notice of any such Change of Control or acquisition within [***] after the closing thereof and DIALOG's right to terminate the Agreement will expire [***] after receipt of such notice. 15.3 Effect of Termination. Upon any termination or expiration of this Agreement, all rights, licenses (including any sublicenses granted by DIALOG) and obligations hereunder will cease, except that the provisions of Sections 6 (Intellectual Property Ownership), 9 (Royalties and Service Fees), 10 (Confidentiality), 11 (Representations and Warranties; Disclaimers), 12 (Indemnification), 13 (Limitation of Liability), 15.3 (Effect of Termination), 15.4 (Wind Down Period), 16 (Escrow), 18 (Non-Solicitation), 19 (Choice of Law and Dispute Resolution) and any provisions to give effect thereto, will survive such termination or expiration and remain in full force and effect in accordance with their terms. 15.4 Wind Down Period. (a) Notwithstanding any statement in Section 15.3 to the contrary, upon any termination or expiration of this Agreement and until the later to occur of (i) [***] from the Effective Date or (ii) [***] following the effective date of termination or expiration of this Agreement (the "Wind Down Period"), the parties' respective rights and obligations under Sections 2 (License), 3 (Sourcing), 7 (Product Sales), 9 (Royalties and Service Fees), 11 (Representations and Warranties; Disclaimers), 12 (Indemnification), 13 (Limitation of Liability), 14 (Compliance with Laws), 15.2 (Termination), 16 (Escrow) and all Exhibits hereto which are associated with any of the foregoing listed sections will remain in full force and effect as to (A) any Products or repackaged Product Die with respect to which DIALOG or any of its Affiliates has secured a design win at a customer prior to or within one (1) month after the start of the Wind Down Period, or (B) the sale of any MCMs which have been released for production at a foundry, provided, however, that DIALOG's license rights under Section 2.1 (including any sublicenses granted by DIALOG pursuant to Section 2.4) will be non-exclusive during the Wind Down Period. (b) If, at the time of notice of any termination of this Agreement, DIALOG or any of its Affiliates has a written supply contract with a customer that extends beyond the end of the Wind Down Period (a "Continuing Obligation"), DIALOG and/or its Affiliates may continue to Sell Licensed Products to such customer through the term of the Wind Down Period and for the remainder of the term of such Continuing Obligation, provided that in no event may DIALOG or its Affiliates Sell Licensed Products to such customer pursuant to this Section 15.4(b) for a period longer than [***] after the effective date of termination of this Agreement. In such event, the provisions of this Agreement that survive during the Wind Down Period will continue to survive for the remainder of the period of time that DIALOG is authorized to Sell Licensed Products to any customer in accordance with the foregoing sentence. The rights granted under this Section 15.4(b) will be conditioned upon DIALOG providing ENERGOUS a complete or redacted copy of the applicable supply contract demonstrating the existence of the Continuing Obligation as of the date of notice of termination or, if DIALOG or its Affiliate is prohibited from providing a copy of the contract by the confidentiality obligations set forth therein, a written certification from an officer of DIALOG attesting to the existence of the Continuing Obligation. * Confidential Treatment Requested
Page 20
16. ESCROW. 16.1 Escrow. ENERGOUS will at its expense, at DIALOG's written request during the Term and any Wind Down Period, enter into a three- party escrow deposit arrangement, in accordance with this Section 16, with a recognized escrow agent (the "Escrow Agent") of mutual agreement. ENERGOUS will keep the Deposit Materials in escrow and ensure on a quarterly basis that all the information relating to the Deposit Materials in escrow is current, including deposit of any Product Updates. 16.2 Release of Deposit Materials. In the event of any Insolvency Event and where the design files need to be accessed by DIALOG to fix an Epidemic Defect or other Product design or production issue impacting yield or quality ("Release Condition"), the Escrow Agent will, in accordance with the terms of the escrow agreement between the parties and the Escrow Agent (the "Escrow Agreement"), release the Deposit Materials to DIALOG. 16.3 License. ENERGOUS hereby grants DIALOG a non-exclusive, non-transferable (except as set forth in Section 2) license under the Product IP to use any of the Deposit Materials released from escrow for the purpose of fixing an Epidemic Defect or other Product design or production issue impacting yield or quality during the Term and, if applicable, any Wind Down Period or Continuing Obligation period, including, but not limited to, authorizing any third party subcontractor to manufacture and supply Products, provided, however, that DIALOG continues to make all Royalty payment owed to ENERGOUS (or the then-current owner of the Product IP) as provided in this Agreement. No Service Fees will be payable under this license. DIALOG agrees not to exercise such license until occurrence of a Release Condition, subject to the other restrictions set forth in this Section 16. Such license may be exercised by DIALOG only during the Term and any Wind Down Period or Continuing Obligation period and is subject to DIALOG's continued compliance with all of the other applicable terms and conditions of this Agreement during any such applicable period. All Deposit Materials will be deemed ENERGOUS' Confidential Information hereunder. DIALOG's license to possess and use the Deposit Materials does not include any right to disclose, market, sublicense or distribute the Deposit Materials to any third party other than its Affiliates and Manufacturing Subcontractors. 16.4 Rights in Bankruptcy. The licenses granted pursuant to this Agreement are license to rights in "intellectual property" (as that term is defined in Section 101 of the United States Bankruptcy Code) and governed by 11 USC Section 365(n). Accordingly, if a trustee in bankruptcy rejects the Escrow Agreement and/or this Agreement as executory contracts, then Company may elect to retain its rights under this Agreement in accordance with and subject to the provisions of 11 USC Section 365(n).
Page 21
17. PUBLICITY. 17.1 Publicity. Within 30 days of the Effective Date each party will issue a mutually agreed joint press release regarding the strategic cooperation for the supply of Products and the strategic cooperation between the parties. 18. NON-SOLICITATION. 18.1 Non-Solicitation. During the Term and for a [***], neither party will without the written consent of the other party (which may be granted or denied in its sole discretion) (a) directly or indirectly recruit or solicit for employment or for the provision of services any employee of the other party, (b) otherwise solicit, induce or influence any employee to leave their employment with the other party, or (c) attempt to do any of the foregoing; provided, however, that the foregoing will not apply to (y) any employee of the other party that responds to a public advertisement of employment opportunities or (z) any employee that was terminated without cause by the other party. ENERGOUS and DIALOG acknowledge and agree that the covenants in this Section 18 are reasonable and necessary to protect each of their trade secrets, Confidential Information and stable workforces. 19. CHOICE OF LAW AND DISPUTE RESOLUTION. 19.1 Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of California, exclusive of conflict of laws principles. 19.2 Dispute Resolution; Jurisdiction. Any dispute or claim arising out of or relating to this Agreement (including any matters regarding its existence, scope, validity, breach or termination, or any non-contractual obligations arising out of or related to it) that is not able to be resolved through negotiations will be submitted to arbitration in San Francisco, California, administered by the International Chamber of Commerce under its Rules of Arbitration. There will be one arbitrator. The language of the arbitration will be English. The award will be in writing, state the reasons for the award and be final and binding. Judgment on the award may be enforced in any court of competent jurisdiction. Except as may be required by law, the parties will preserve the confidentiality of all aspects of the arbitration. The arbitration will be the sole and exclusive forum for final resolution of any such dispute or claim, provided, however, that, because each party will have access to and become acquainted with Confidential Information of the other party, the unauthorized use or disclosure of which may cause irreparable harm and significant injury which may be difficult to ascertain and which may not be compensable by damages alone, the parties agree that the damaged party will have the right to seek an injunction, specific performance or other equitable relief without prejudice to any other rights and remedies that it may have for such unauthorized use or disclosure. Each party irrevocably waives all rights to a jury trial in any judicial proceeding permitted hereunder. For the avoidance of doubt, the validity, construction, and enforceability of this Agreement and the resolution of disputes arising out of and relating to this Agreement, will be governed solely by this Section 19. * Confidential Treatment Requested
Page 22
20. MISCELLANEOUS PROVISIONS. 20.1 Notices. All notices required or permitted under this Agreement will be in writing, reference this Agreement and be deemed given: (a) when delivered personally; or (b) when sent by electronic mail with electronic confirmation of receipt, provided that such notice is immediately confirmed as provided in (c) or (d) below; or (c) seven (7) days after having been sent by registered or certified mail,; or (d) two (2) days after deposit with a commercial courier service, with written verification of receipt. All communications will be sent to the addresses set forth below. Either party may change its address by giving notice pursuant to, and specifically referring to, this Section 20. If to ENERGOUS: Energous Corporation 3590 North First Street Suite 210 San Jose, California 95134 U.S.A. Attn: Brian Sereda, CFO
If to DIALOG: Dialog Semiconductor (UK) Ltd 100 Longwater Avenue Green Park Reading, RG2 6GP United Kingdom Attn: Legal Department 20.2 Relationship of Parties. ENERGOUS and DIALOG are independent business entities. Neither party nor its employees, consultants, contractors or agents are agents, employees, partners or joint venturers of the other party, nor do they have any authority to bind the other party by contract or otherwise to any obligation. The parties will not represent to the contrary, either expressly, implicitly, by appearance or otherwise. 20.3 Force Majeure. Except for obligations to pay amounts due under this Agreement, neither party will be liable for any failure or delay in its performance under this Agreement due to causes which are beyond its reasonable control, including, but not limited to, acts of God, acts of civil or military authority, fires, epidemics, floods, earthquakes, riots, wars, sabotage, labor shortages or disputes, and governmental actions; provided, however, that the affected party: (a) gives the other party written notice of such cause promptly, and in any event within fifteen (15) days of discovery thereof; and (b) uses its reasonable efforts to correct such failure or delay in its performance as soon as possible. The affected party's time for performance or cure under this Section 20.3 will be extended for a period equal to the duration of the cause. 20.4 Severability. If any provision of this Agreement is held to be invalid or unenforceable in any jurisdiction in which this Agreement is being performed, then: (a) such provision will be deleted from this Agreement in that jurisdiction to the extent of such invalidity or unenforceability without invalidating the remaining provisions of this Agreement, and any such unenforceability in that jurisdiction will not make that provision unenforceable in any other jurisdiction; and (b) the parties will agree on an alternative provision that best accomplishes the objectives of such provision, to the extent legally permissible in such jurisdiction.
Page 23
20.5 No Waiver. No waiver or consent in connection with or relating to this Agreement will bind either party unless in writing and signed by the party against which enforcement is sought. Waiver by either party of any default will not be deemed a waiver by such party of the same or any other default that may thereafter occur. 20.6 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be an original, but taken together constituting one and the same instrument. Execution of a facsimile copy (including PDF) will have the same force and effect as execution of an original, and a facsimile/electronic signature will be deemed an original and valid signature. 20.7 Headings and References. The headings and captions used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 20.8 Construction. The parties and their respective counsel have negotiated this Agreement. This Agreement will be fairly interpreted in accordance with its terms and without any strict construction in favor of or against either party. 20.9 Complete Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes and replaces all prior or contemporaneous understandings or agreements, written or oral, regarding such subject matter. No amendment to or modification of this Agreement will be binding unless in writing and signed by a duly authorized representative of both parties. 20.10 Assignment. This Agreement may not be assigned by either party without the express written consent of the other party, which approval will not be unreasonably withheld or delayed, except that either party may (without consent but with notice to the other party) assign this Agreement in its entirety to any successor in the event of a Change of Control of such party. 20.11 Notice of Merger or Acquisition. Until the date that this Agreement terminates or is terminated in accordance with Section 15 hereof, ENERGOUS agrees that, [***]. * Confidential Treatment Requested
Page 24
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date. ENERGOUS CORPORATION DIALOG SEMICONDUCTOR (UK) LTD By: /s/ Stephen R. Rizzore By: /s Mark Tyndall Name: Stephen R. Rizzore Name: Mark Tyndall Title: President and Chief Executive Officer Title: SVP Corporate Development and Strategy
Page 25
EXHIBIT A PRODUCTS Any ENERGOUS integrated circuit (IC) designed to receive power wirelessly and any ENERGOUS IC used in a wireless transmitter, including, but not limited to, the following Products (and any related Product Updates): [***] * Confidential Treatment Requested
Page 26
EXHIBIT B ROYALTIES AND SERVICE FEES Royalties and Service Fees payable by DIALOG and/or its Affiliates to ENERGOUS hereunder will be calculated on a Product by Product basis as defined herein. Margin Split: Combined Royalties and Service Fees shall equal [***]. Dialog will retain the remaining [***]. [***]. [***]. Notwithstanding any provision of the Agreement, no Royalties or Service Fees will be payable to ENERGOUS hereunder in connection with any Sale to any customer of prototype or sample Licensed Products [***]. * Confidential Treatment Requested
Page 27
EXHIBIT C Example of Letter of Authorization: Mask Set(s) Authorization for Third Party's Product(s) To whom it may concern Pursuant to a STRATEGIC ALLIANCE Agreement between Dialog Semiconductor (UK) Ltd and Energous Corporation dated November 6, 2016 (to which [Manufacturing Subcontractor] is not a party), we, Energous Corporation (Energous), hereby agree and authorize [Manufacturing Subcontractor], under the terms of this Letter of Authorization, to use the Mask Set(s) specified below for manufacturing products for the supply to the Third Party specified in paragraph 2 below only: 1. Mask Set(s) details: Mask Set(s) Product Type: Foundry Code: 2. Third Party details: Third Party's Name: Dialog Semiconductor [purchasing entity to be determined] Third Party's Address: Contact name of Third Party: 3. Volume of products The number of products to be manufactured with the Mask Set(s) will be unlimited, unless otherwise instructed by us below: Authorized Amount: [UNLIMITED] 4. Duration of Authorization The duration of this Letter of Authorization will be unlimited, unless otherwise instructed by us below: Duration of Authorization: [UNLIMITED] 5. Confidential Information Other than wafers for products specified under paragraph 1 above (which contain Energous designs), [Manufacturing Subcontractor] will not disclose to the Third Party any information which is proprietary or confidential to Energous.
Page 28
6. Reporting Upon Energous' request (but not more frequently than once per calendar year), [Manufacturing Subcontractor] will provide Energous with the accumulated wafer volumes ordered (and shipped) to the Third Party under this Letter of Authorization. By signing this Letter of Authorization, the Third Party authorizes [Manufacturing Subcontractor] to report to Energous accordingly. 8. Governing Law This Letter of Authorization will be governed by and construed in accordance with the laws of California, excluding its conflict of laws provisions, and be subject to the non-exclusive jurisdiction of the California courts. Very truly yours, Energous Incorporated Name: Title: Date: Agreed by Dialog Semiconductor (UK) Ltd Name: Title: Date: This Letter of Authorization is subject to the approval of the Manufacturing Subcontractors.
Page 29
EXHIBIT D LICENSED MARKS DIALOG LICENSED MARKS: Dialog Dialog Semiconductor ENERGOUS LICENSED MARKS: Energous WattUp Unleash your power Pending: [***] * Confidential Treatment Requested
Page 30
EXHIBIT E Commercialization plan Objective The Commercialization Plan sets forth the parties' respective rights and obligations with respect to commercial and technical activities to be performed to maximize potential Sales of Licensed Products. [***] Review O The Commercialization Plan will be reviewed and (if necessary) updated by the parties on a quarterly basis throughout the Term of the agreement. * Confidential Treatment Requested
Page 31
EXHIBIT F CUSTOMER: [***] * Confidential Treatment Requested
Page 32 | Highlight the parts (if any) of this contract related to "Ip Ownership Assignment" that should be reviewed by a lawyer. Details: Does intellectual property created by one party become the property of the counterparty, either per the terms of the contract or upon the occurrence of certain events? | {
"answer_start": [
21975
],
"text": [
"Upon the termination of DIALOG's right to manufacture the Licensed Products following any expiration or termination of the Agreement or any Wind Down Period or Continuing Obligation period, as applicable, then all right, title and interest in the Tooling will automatically transfer to ENERGOUS subject to any Third Party IP, and DIALOG will, at ENERGOUS' option, either sell any Tooling in its possession to ENERGOUS at cost or destroy the Tooling and certify in writing as to same."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Covenant Not To Sue" that should be reviewed by a lawyer. Details: Is a party restricted from contesting the validity of the counterparty’s ownership of intellectual property or otherwise bringing a claim against the counterparty for matters unrelated to the contract?
Context: EXHIBIT 10.3
Yield Maintenance Agreement
[LOGO UBS]
Date: 27 April 2006
To: Wells Fargo Bank, N.A., not individually, but solely as Master Servicer on behalf of Wells Fargo Mortgage Backed Securities 2006-6 Trust ("Counterparty")
Attention: Swaps Administration
From: UBS AG, London Branch ("UBS AG")
Subject: Interest Rate Cap Transaction UBS AG Ref: 37346733
Dear Sirs
The purpose of this communication is to confirm the terms and conditions of the Transaction entered into between us on the Trade Date specified below. This Confirmation constitutes a "Confirmation" as referred to in the Master Agreement or Agreement specified below.
The definitions contained in the 2000 ISDA Definitions as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation. In the event of any inconsistency between any of the definitions listed above and this Confirmation, this Confirmation will govern.
If you and we are parties to a master agreement that governs transactions of this type (whether in the form of the 1992 ISDA Master Agreement (Multicurrency-Cross Border)(the "ISDA Form") or any other form (a "Master Agreement"), then this Confirmation will supplement, form a part of, and be subject to that Master Agreement. If you and we are not parties to such a Master Agreement, then you and we agree to use all reasonable efforts promptly to negotiate, execute and deliver an agreement in the form of the ISDA Form, with such modifications as you and we will in good faith agree. Upon the execution by you and us of such an agreement, this Confirmation will supplement, form a part of and be subject to and governed by that agreement, except as expressly modified below. Until we execute and deliver that agreement, this Confirmation, together with all other documents referring to the ISDA Form (each a "Confirmation") confirming transactions (each a "Transaction") entered into between us (notwithstanding anything to the contrary in a confirmation), shall supplement, form a part of, and be subject to an agreement in the form of the ISDA Form as if we had executed an agreement in such form (but without any Schedule except for the election of the laws of New York as the Governing Law and U.S. Dollars as the Termination Currency) on the Trade Date of the first Transaction between us (hereinafter the "Agreement"). In the event of any inconsistency between the provisions of any such Agreement and this Confirmation, this Confirmation will prevail for the purposes of this Transaction.
The terms of the particular Swap Transaction to which this Confirmation relates are as follows:
General Terms
Trade Date: 27 April 2006
Effective Date 01 April 2006
Termination Date: 1 April 2009
Calculation Amount: The lesser of (a) USD 20,000,000.00 and (b) the aggregate Principal Balance (as defined in the Pooling and Servicing Agreement) of the Class I-A-22 Certificates as of the last day of the relevant Calculation Period.
Seller of the Cap: UBS AG
Buyer of the Cap: Counterparty
Calculation Agent: UBS AG
Business Days: New York
Broker: None
Fixed Amounts
Fixed Rate Payer: Counterparty
Fixed Amount: USD[ ]
Fixed Rate Payer Payment Date: 27 April 2006
Business Day Convention: Not Applicable
Floating Amounts
Floating Rate Payer: UBS AG
Cap Rate: 5.0 percent per annum
Floating Amount: To be determined in accordance with the following formula: Greater of (1)Calculation Amount * Floating Rate Day Count Fraction * (Floating Rate Option - Cap Rate) and (2) 0
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One Month
Spread: None
Floating Rate Day Count 30/360 Fraction:
Floating Rate Payer Period 01 January, 01 February, 01 March, 01 April, End Dates: 01 May, 01 June, 01 July, 01 August, 01 September, 01 October, 01 November and 01 December, in each year, from and including 01 May 2006, up to and including the Termination Date, subject to adjustment in accordance with the Business DayConvention specified immediately below, and thereshall be No Adjustment to the Period End Dates.
Floating Rate Payer Payment Delayed Payment shall be applicable. The Dates: FloatingRate Payer Payment Dates shall be two Business Days prior to 25 January, 25 February, 25 March, 25 April, 25 May, 25 June, 25 July, 25 August, 25 September, 25 October, 25 November and 25 December, in each year, from and including 25 May 2006, up to and including 25 April 2009, notwithstanding the specified &bbsp; Termination Date, subject to adjustment in accordance with the Business Day Convention specified immediately below.
Reset Dates: First day of each Calculation Period.
Business Day Convention: Modified Following
Additional Provisions
(i) "Specified Transaction" shall have the meaning specified in Section 14 of the ISDA Form.
(ii) The "Breach of Agreement" provisions of Section 5(a)(ii) of the ISDA Form will be applicable to UBS AG and inapplicable to the Counterparty.
(iii) The "Credit Support Default" provisions of Section 5(a)(iii) of the ISDA Form will be inapplicable to UBS AG and the Counterparty.
(iv) The "Misrepresentation" provisions of Section 5(a)(iv) of the ISDA Form will be inapplicable to UBS AG and the Counterparty.
(v) The "Default Under Specified Transaction" provisions of Section 5(a)(v) of the ISDA Form will be inapplicable to UBS AG and the Counterparty.
(vi) The "Cross Default" provisions of Section 5(a)(vi) of the ISDA Form will be inapplicable to UBS AG and the Counterparty.
(vii) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of the ISDA Form will be inapplicable to UBS AG and the Counterparty.
(viii) The "Automatic Early Termination" provision of Section 6(a) of the ISDA Form will be inapplicable to UBS AG and the Counterparty.
(ix) Severability. If any term, provision, covenant, or condition of this Agreement, or the application thereof to any party or circumstance, shall be held to be invalid or unenforceable (in whole or in part) for any reason, the remaining terms, provisions, covenants, and conditions hereof shall continue in full force and effect as if this Agreement had been executed with the invalid or unenforceable portion eliminated, so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter of this Agreement and the deletion of such portion of this Agreement will not substantially impair the respective benefits or expectations of the parties; provided, however, that this severability provision will not be applicable if any provision of Section 2, 5, 6 or 13 (or any definition or provision in Section 14 to the extent it relates to, or is used in or in connection with, such section) is held to be invalid or unenforceable, provided, further, that the parties agree to first use reasonable efforts to amend the affected provisions of Section 2, 5, 6 or 13 (or any definition or provision in Section 14 to the extent it relates to, or is used in or in connection with, such section) so as to preserve the original intention of the parties.
The parties shall endeavor to engage in good faith negotiations to replace any invalid or unenforceable term, provision, covenant or condition with a valid or enforceable term, provision, covenant or condition, the economic effect of which comes as close as possible to
that of the invalid or unenforceable term, provision, covenant or condition.
(x) Consent to Recording. Each party hereto consents to the monitoring or recording, at any time and from time to time, by the other party of any and all communications between officers or employees of the parties, waives any further notice of such monitoring or recording, and agrees to notify its officers and employees of such monitoring or recording.
(xi) Waiver of Jury Trial. EACH PARTY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING IN CONNECTION WITH THIS AGREEMENT, ANY CREDIT SUPPORT DOCUMENT TO WHICH IT IS A PARTY, OR ANY TRANSACTION. EACH PARTY ALSO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO THE OTHER PARTY'S ENTERING INTO THIS AGREEMENT.
(xii) Fully Paid Transaction. Notwithstanding the terms of Sections 5 and 6 of the Agreement, if Counterparty has satisfied all of its payment obligations under Section 2(a)(i) of the Agreement with respect to this Transaction, and unless UBS AG is required to return (whether pursuant to an order of a court with due authority to cause UBS AG to be required to return any such payment to Counterparty (or any duly authorized representative thereof) or whether otherwise pursuant to appropriate proceedings to return to Counterparty (or any duly authorized representative thereof)) or UBS AG otherwise returns to Counterparty (or any duly authorized representative thereof) upon demand of Counterparty (or any duly authorized representative thereof) any portion of such payment, then: (a) the occurrence of an event described in Section 5(a) of the Agreement with respect to Counterparty shall not constitute an Event of Default or Potential Event of Default with respect to Counterparty as the Defaulting Party in respect of this Transaction and (b) UBS AG shall be entitled to designate an Early Termination Date pursuant to Section 6 of the Agreement in respect of this Transaction only as a result of a Termination Event set forth in either Section 5(b)(i) or Section 5(b)(ii) of the Agreement with respect to UBS AG as the Affected Party or Section 5(b)(iii) of the Agreement with respect to UBS AG as the Burdened Party. For purposes of the Transaction to which this Confirmation relates, Counterparty's only obligation under Section 2(a)(i) of the Agreement is to pay the Fixed Amount on the Fixed Rate Payer Payment Date, each as defined in this Confirmation.
(xiii) Governing Law. The parties to this Agreement hereby agree that the law of the State of New York shall govern their rights and duties in whole without regard to the conflict of law provisions thereof (other than New York General Obligations Law Sections 5-1401 and 5-1402).
(xiv) Non-Recourse. Notwithstanding any provision herein or in the ISDA Form to the contrary, the obligations of Counterparty hereunder are limited recourse obligations of Counterparty, payable solely from the Trust Estate (as defined in the Pooling and Servicing Agreement) and the proceeds thereof to satisfy Counterparty's obligations hereunder. In the event that the Trust Estate and proceeds thereof should be insufficient to satisfy all claims outstanding and following the realization of the Trust Estate and the distribution of the proceeds thereof in accordance with the Pooling and Servicing Agreement, any claims against or obligations of Counterparty under the ISDA Form or any other confirmation thereunder, still outstanding shall be extinguished and thereafter not revive.
(xv) Set-Off. Notwithstanding any provision of this Agreement or any other existing or future agreement, each party irrevocably waives any and all rights it may have to set off, net, recoup or otherwise withhold or suspend or condition payment or performance of any obligation between it and the other party hereunder against any obligation between it and the other party under any other agreements. The provisions for Set-off set forth in Section 6(e) of the Agreement shall not apply for purposes of this Transaction; provided, however, that upon the designation of any Early Termination Date, in addition to, and not in limitation of any other right or remedy under applicable law, UBS AG may, by notice to Counterparty require Counterparty to set off any sum or obligation that UBS AG owed to Counterparty against any collateral currently held by Counterparty that UBS AG has posted to Counterparty, and Counterparty shall effect such setoff promptly, if and to the extent permitted to do so under applicable law, provided that Counterparty's exercise of this setoff is not stayed or otherwise delayed by order of any court, regulatory authority or other governmental agency or any receiver other person appointed in respect of UBS AG or any of its property.
(xvi) Proceedings. UBS AG covenants and agrees that it will not institute against or join any other person in instituting against the Counterparty any bankruptcy, reorganization, arrangement, insolvency, winding up or liquidation proceedings, or other proceedings under any United States federal or state law, or other bankruptcy, insolvency, liquidation, or similar law, in connection with any obligations relating to this Transaction or otherwise prior to the date that is one year and one day or, if longer, the applicable preference period after all the Certificates (as defined below) have been paid in full; provided, that this paragraph shall not restrict or prohibit UBS AG, after the filing of any proceeding filed independently of UBS AG, from joining any other person, including without limitation the Master Servicer, in any bankruptcy, reorganization, arrangement, insolvency, moratorium, liquidation or other analogous proceedings relating to Counterparty under any bankruptcy or similar law.
(xvii) The ISDA Form is hereby amended as follows: for the purposes of this Transaction, the word "third" shall be replaced by he word "first" in the third line of Section 5(a)(i) of the ISDA Form; provided, however, that notwithstanding the foregoing, an Event of Default shall not occur under either if, as demonstrated to the reasonable satisfaction of the other party, (a) the failure to pay or deliver is caused by an error or omission of an administrative or operational nature; and (b) funds or the relevant instrument were available to such party to enable it to make the relevant payment or delivery when due; and (c) such relevant payment is made within the earlier of (a) three Business Days following receipt of written notice from an the other party of such failure to pay or (b) 12:00 p.m. Eastern Standard Time on the Distribution Date (as defined in the Pooling and Servicing Agreement) immediately following the failure to pay.
(xviii) Multibranch Party. For the purpose of Section 10(c) of the Agreement:
(i) UBS AG is a Multibranch Party and may act through its branches in any of the following territories or countries: England and Wales, France, Hong Kong, United States of America, Singapore, Sweden and Switzerland.
(ii) Counterparty is not a Multibranch Party.
(xix) Offices. Section 10(a) of the ISDA Form shall apply with respect to UBS AG.
(xx) Payments on Early Termination. For the purpose of Section 6(e) of this Agreement:
(i) Market Quotation will apply. (ii) The Second Method will apply.
(xxi) Event of Default relating to Bankruptcy. Clause (2) of Section 5(a)(vii) shall not apply to Counterparty.
(xxii) "Affiliate" will have the meaning specified in Section 14 of the ISDA Form Master Agreement, provided that the Counterparty shall be deemed to not have any Affiliates for purposes of this Agreement, including for purposes of Section 6(b)(ii).
(xxiii) Compliance with Regulation AB.
(i) UBS AG agrees and acknowledges that Wells Fargo Asset Securities Corporation (the "Depositor") is required under Regulation AB under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the "Exchange Act") ("Regulation AB"), to disclose certain financial information regarding UBS AG, depending on the aggregate "Significance Percentage" (as defined in Item 1115 of Regulation AB) of all Transactions under this Agreement, together with any other transactions that fall within the meaning of "derivative contracts" for the purposes of Item 1115 of Regulation AB between UBS AG and Counterparty, as calculated from time to time in accordance with the Calculation Methodology (as defined below).
(ii) It shall be a swap disclosure event ("Swap Disclosure Event") if, on any Business Day after the date hereof, the Depositor notifies UBS AG the Significance Percentage has reached one of the thresholds for significance of derivative contracts set forth in Item 1115 of Regulation AB (based on a reasonable determination by the Depositor, in good faith and using the Calculation Methodology, of such Significance Percentage).
(iii) Upon the occurrence of a Swap Disclosure Event, UBS AG, at its own expense, shall (a) provide to the Depositor the applicable Swap Financial Disclosure (as defined below), (b) secure another entity to replace UBS AG as party to this Agreement on terms substantially similar to this Agreement and subject to prior notification to the Swap Rating Agencies, which entity (or a guarantor therefor) meets or exceeds the Approved Rating Thresholds (or which satisfies the Rating Agency Condition) and which entity is able to provide the appropriate Swap Financial Disclosure or (c) obtain a guaranty of UBS AG's obligations under this Agreement from an affiliate of UBS AG that is able to comply with the financial information disclosure requirements of Item 1115 of Regulation AB, such that disclosure provided in respect of the affiliate will, in the judgment of counsel to the Depositor, satisfy any disclosure requirements applicable to the Swap Provider, cause such affiliate to provide Swap Financial Disclosure and cause such affiliate to provide indemnity for the Swap Financial Disclosure that is reasonably acceptable to the Depositor. If permitted by Regulation AB, any required Swap Financial Disclosure may be provided by reference to or incorporation by reference from reports filed pursuant to the Exchange Act.
(iv) UBS AG agrees that, in the event that UBS AG provides Swap Financial Disclosure to the Depositor in accordance with paragraph (iii)(a) above, or causes its affiliate to provide Swap Financial Disclosure to the Depositor in accordance with paragraph (iii)(c) above, it will indemnify and hold harmless the Depositor, its respective directors or officers and any person controlling the Depositor, from and against any and all losses, claims, damages and liabilities (any "Damage") caused by any untrue statement or alleged untrue statement of a material fact contained in such Swap Financial Disclosure or caused by any omission or alleged omission to state in such Swap Financial Disclosure a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however that the foregoing shall not apply to any Damage caused by the negligence or any willful action of the Depositor or any other party (other than UBS AG or any of its affiliates or any of their respective agents), including without limitation any failure to calculate the Significance Percentage according to the terms of this Agreement or to make any
filing as and when required under Regulation AB.
(v) In the event that UBS AG provides the information referred to above, such information shall be provided not later than five (5) business days prior to the date in which the Master Servicer is required to file a Form 10-D for such Distribution Date.
For the purposes hereof:
"Calculation Methodology" means such method for determining maximum probable exposure of a derivative contract as reasonably determined by the Depositor.
"Swap Financial Disclosure" means the financial information specified in Item 1115 of Regulation AB relating to the applicable Significance Percentage and any necessary auditors consents relating to such financial information.
Additional Termination Events:
The following Additional Termination Events will apply to UBS AG:
1. Ratings Event. If a Ratings Event (as defined below) has occurred and UBS AG has not complied with the requirements set forth in the succeeding paragraph within the 30 day time period specified therein, then an Additional Termination Event shall have occurred with respect to UBS AG and UBS AG shall be the sole Affected Party with respect to such an Additional Termination Event.
Rating Agency Downgrade:
If a Ratings Event occurs with respect to UBS AG, then UBS AG shall, at its own expense, (i) assign this Transaction hereunder to a third party within thirty (30) days of such Ratings Event that meets or exceeds, or as to which any applicable credit support provider meets or exceeds, the Approved Rating Threshold (as defined below) on terms substantially similar to this Confirmation or (ii) deliver collateral acceptable in a form and amount acceptable to Fitch Ratings ("Fitch") and Moody's Investors Service Inc. ("Moody's) within thirty (30) days of such Ratings Event and subject to written confirmation from Fitch and Moody's that delivery of such collateral in the context of such downgrade will not result in a withdrawal, qualification or downgrade of the then current ratings assigned to the Certificates. For the avoidance of doubt, a downgrade of the rating on Wells Fargo Mortgage Backed Securities 2006-6 Trust, Mortgage Pass-Through Certificates, Series 2006-6, Class I-A-22 (the "Certificates") could occur in the event that UBS AG does not post sufficient collateral.
For purposes of this Transaction, a "Ratings Event" shall occur with respect to UBS AG if its long term unsecured debt rating (the "Long Term Rating") ceases to be rated at least "A1" by Moody's Investors Service, Inc. or at least "A+ by Fitch Ratings (such ratings being referred to as the "Approved Ratings Threshold"), (unless, within 30 days after such withdrawal or downgrade Fitch and Moody's have reconfirmed the rating of the Certificates which were in effect immediately prior to such withdrawal or downgrade).
2. Swap Disclosure Event. If upon the occurrence of a Swap Disclosure Event (as defined in paragraph (xxiii) above), UBS AG has not, within 5 business days after such Swap Disclosure Event complied with any of the provisions set forth in paragraph (xxiii) above, then an Additional Termination Event shall have occurred with respect to UBS AG with UBS AG as the sole Affected Party with respect to such Additional Termination Event.
Transfer, Amendment and Assignment:
No transfer, amendment, waiver, supplement, assignment or other modification of this Transaction (other than the pledge of this Transaction to the Master Servicer pursuant to the Pooling and Servicing Agreement) shall be permitted by either party unless Moody's and Fitch have been provided notice of the same and confirm in writing (including by facsimile transmission) that they will not downgrade, qualify, withdraw or otherwise modify its then-current rating of the Certificates; provided however that except with respect to a transfer at the direction of UBS, nothing in this provision shall impose any obligation on UBS to give notice to any rating agency.
Permitted Security Interest:
For purposes of Section 7 of the Agreement, UBS AG hereby consents to the Permitted Security Interest.
"Permitted Security Interest" means the collateral assignment by the Counterparty of the Cap Collateral to the Master Servicer pursuant to the Pooling and Servicing Agreement, and the granting to the Master Servicer of a security interest in the Cap Collateral pursuant to the Pooling and Servicing Agreement.
"Cap Collateral" means all right, title and interest of the Counterparty in this Agreement, each Transaction hereunder, and all present and future amounts payable by UBS AG to the Counterparty under or in connection with the Agreement or any Transaction governed by the Agreement, whether or not evidenced by a Confirmation, including, without limitation, any transfer or termination of any such Transaction.
Payer Tax Representations
For the purposes of Section 3(e) of the Master Agreement, UBS AG will make the
following representation and Counterparty will not make the following representation: it is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of the Master Agreement) to be made by it to the other party under this Agreement. In making this representation, it may rely on (i) the accuracy of any representations made by the other party pursuant to Section 3(f) of the Master Agreement, (ii) the satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of the Master Agreement and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of the other party contained in Section 4(d) of this Agreement, provided that it shall not be a breach of this representation where reliance is placed on clause (ii) and the other party does not deliver a form or document under Section 4(a)(iii) of this Agreement by reason of material prejudice to its legal or commercial position.
Payee Tax Representations
For the purpose of Section 3(f) of the ISDA Form, UBS AG makes the following representation:
It is a non-U.S. branch of a foreign person as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations (the "Regulations") for United States federal income tax purposes.
For the purpose of Section 3(f) of the ISDA Form, the Counterparty makes the following representations:
1. The Counterparty is a New York common law trust and is regarded as a Real Estate Mortgage Investment Conduit for federal income tax purposes.
2. It is a "U.S. person" (as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations for United States federal income tax purposes.
Agreement to Deliver Documents
For purposes of Section 4(a)(i) and (ii) of the ISDA Form, the parties agree to deliver the following documents as applicable.
Party required Form/Document/ Date by which to deliver Certificate to be delivered document
UBS AG and Any form or document Promptly upon Counterparty required or reasonably reasonable requested to allow the demand by the other party to make other party. payments without any deduction or withholding for or on account of any Tax, or with such deduction or withholding at a reduced rate. Counterparty One duly executed and Promptly upon completed U.S. Internal reasonable Revenue Service Form demand by the W-9 (or successor other party thereto)
Party required to Form/Document/ Date by which to Covered by Section deliver document Certificate be delivered 3(d) Representation UBS AG Any documents required Upon the Yes by the receiving party execution and to evidence the delivery of authority of the this Agreement delivering party for it and such to execute and deliver Confirmation this Confirmation and to evidence the authority of the delivering party to perform its obligations under this Agreement or the Transaction governed by this Confirmation
UBS AG A certificate of an Upon the Yes authorized officer of the execution and party, as to the delivery of incumbency and authority this of the respective Confirmation officers of the party signing this Confirmation
UBS AG Opinion of Counsel for No later than No UBS AG 15 days after
closing
Relationship Between Parties Each party will be deemed to represent to the other party on the date on which it enters into this Transaction that (in the absence of a written agreement between the parties which expressly imposes affirmative obligations to the contrary for this Transaction):
(a) Non-Reliance. Each party is acting for its own account, and has made its own independent decisions to enter into this Transaction and this Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. Each party is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into this Transaction; it being understood that information and explanation relating to the terms and conditions of this Transaction shall not be considered investment advice or a recommendation to enter into this Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of this Transaction.
(b) Assessment and Understanding. Each party is capable of assessing the merits of and understands (on its own behalf or through independent professional advice), and accepts, the terms, conditions and risks of this Transaction. Each party is also capable of assuming and assumes, the risks of this Transaction.
(c) Status of the Parties. Neither party is acting as a fiduciary for or as an adviser to the other in respect of this Transaction.
(d) Eligible Contract Participant. Each party constitutes an "eligible contract participant" as such term is defined in Section 1(a)12 of the Commodity Exchange Act, as amended.
Master Servicer Capacity. It is expressly understood and agreed by the parties hereto that insofar as this Confirmation is executed by the Master Servicer (i) this Confirmation is executed and delivered by Wells Fargo Bank, N.A., not in its individual capacity, but solely as Master Servicer with respect to Wells Fargo Mortgage Backed Securities 2006-6 Trust (the "Trust") under the Pooling and Servicing Agreement, dated as of April 27, 2006 (the "Pooling and Servicing Agreement") in the exercise of the powers and authority conferred upon and vested in it thereunder and pursuant to instruction set forth therein, (ii) each of the representations, undertakings and agreements herein made on the part of the Trust is made and intended not as a personal representation, undertaking or agreement by Wells Fargo Bank, N.A., but is made and intended for the purpose of binding only the Trust, (iii) nothing herein contained shall be construed as imposing any liability on Wells Fargo Bank, N.A. individually or personally, to perform any covenant either express or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto, and (iv) under no circumstances shall Wells Fargo Bank, N.A. in its individual capacity be personally liable for the payment of any indebtedness or expenses or be personally liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Trust under this Confirmation or any other related documents (other than the Master Servicer's express obligations under the Pooling and Servicing Agreement).
References in this clause to "a party" shall, in the case of UBS AG and where the context so allows, include references to any affiliate of UBS AG.
Account Details for UBS AG: Currency: USD Correspondent Bank: UBS AG, STAMFORD BRANCH Swift Address: UBSWUS33XXX Favour: UBS AG LONDON BRANCH Swift Address: UBSWGB2LXXX Account No: 101-wa-140007-000
Offices (a) The office of UBS AG for the Interest Rate Cap Transaction is London; and The office of Counterparty for the Interest Rate Cap Transaction is:
9062 Annapolis Road Columbia, Maryland 21045 Attn: Client Manager - WFMBS 2006-6 Telephone: 410.884.2000 Fax: 410.715.2380
Contact Names at UBS AG: Payment Inquiries Elisa Doctor Email: &bbsp; DL-USOTCRATES-SETTS@ubs.com
Phone: 203.719.1110 Pre Value Payments: Pre Value Payment 203.719.1110 Investigations: Post Value Payments: Post Value Payment 203.719.1110 Investigations: Confirmation Queries: Confirmation Control: 203.719.3373 ISDA Documentation: Credit Risk Management: 212.713.1170 Swift: UBSWGB2L Fax: 203.719.0274 Address: UBS AG
100 Liverpool Street London EC2M 2RH
Address for notices or communications to the Counterparty:
9062 Old Annapolis Road Columbia, MD 21045 Attn: Corporate Trust Services - WFMBS 2006-6
Payments to Counterparty: Wells Fargo Bank, NA San Francisco, CA ABA #: 121-000-248 Acct #: 3970771416 Acct Name: SAS Clearing For Further Credit: Interest Rate Cap, Account # 50915701
(For all purposes)
Please confirm that the foregoing correctly sets forth the terms and conditions of our agreement by executing a copy of this Confirmation and returning it to us or by sending to us a letter or facsimile substantially similar to this letter, which letter or facsimile sets forth the material terms of the Transaction to which this Confirmation relates and indicates your agreement to those terms or by sending to us a return letter or facsimile in the form attached.
This Confirmation may be executed in several counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
Yours Faithfully For and on Behalf of UBS AG, London Branch
By: /s/ Todd Harper By: /s/ Mark J. Evans II
Name : Todd Harper Name : Mark J. Evans II Title : Associate Director Title: Director UBS Operations Operations
Acknowledged and Agreed by Wells Fargo Bank N.A., not individually, but solely as Master Servicer on behalf of Wells Fargo Mortgage Backed Securities 2006-6 Trust By: /s/ Jennifer L. Richardson
Name : Jennifer L. Richardson Title : Assistant Vice President
UBS AG London Branch, 1 Finsbury Avenue, London, EC2M 2PP UBS AG is a member of the London Stock Exchange and is regulated in the UK by the Financial Services Authority. Representatives of UBS Limited introduce trades to UBS AG via UBS Limited. [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | EXHIBIT 10.3
Yield Maintenance Agreement
[LOGO UBS]
Date: 27 April 2006
To: Wells Fargo Bank, N.A., not individually, but solely as Master Servicer on behalf of Wells Fargo Mortgage Backed Securities 2006-6 Trust ("Counterparty")
Attention: Swaps Administration
From: UBS AG, London Branch ("UBS AG")
Subject: Interest Rate Cap Transaction UBS AG Ref: 37346733
Dear Sirs
The purpose of this communication is to confirm the terms and conditions of the Transaction entered into between us on the Trade Date specified below. This Confirmation constitutes a "Confirmation" as referred to in the Master Agreement or Agreement specified below.
The definitions contained in the 2000 ISDA Definitions as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation. In the event of any inconsistency between any of the definitions listed above and this Confirmation, this Confirmation will govern.
If you and we are parties to a master agreement that governs transactions of this type (whether in the form of the 1992 ISDA Master Agreement (Multicurrency-Cross Border)(the "ISDA Form") or any other form (a "Master Agreement"), then this Confirmation will supplement, form a part of, and be subject to that Master Agreement. If you and we are not parties to such a Master Agreement, then you and we agree to use all reasonable efforts promptly to negotiate, execute and deliver an agreement in the form of the ISDA Form, with such modifications as you and we will in good faith agree. Upon the execution by you and us of such an agreement, this Confirmation will supplement, form a part of and be subject to and governed by that agreement, except as expressly modified below. Until we execute and deliver that agreement, this Confirmation, together with all other documents referring to the ISDA Form (each a "Confirmation") confirming transactions (each a "Transaction") entered into between us (notwithstanding anything to the contrary in a confirmation), shall supplement, form a part of, and be subject to an agreement in the form of the ISDA Form as if we had executed an agreement in such form (but without any Schedule except for the election of the laws of New York as the Governing Law and U.S. Dollars as the Termination Currency) on the Trade Date of the first Transaction between us (hereinafter the "Agreement"). In the event of any inconsistency between the provisions of any such Agreement and this Confirmation, this Confirmation will prevail for the purposes of this Transaction.
The terms of the particular Swap Transaction to which this Confirmation relates are as follows:
General Terms
Trade Date: 27 April 2006
Effective Date 01 April 2006
Termination Date: 1 April 2009
Calculation Amount: The lesser of (a) USD 20,000,000.00 and (b) the aggregate Principal Balance (as defined in the Pooling and Servicing Agreement) of the Class I-A-22 Certificates as of the last day of the relevant Calculation Period.
Seller of the Cap: UBS AG
Buyer of the Cap: Counterparty
Calculation Agent: UBS AG
Business Days: New York
Broker: None
Fixed Amounts
Fixed Rate Payer: Counterparty
Fixed Amount: USD[ ]
Fixed Rate Payer Payment Date: 27 April 2006
Business Day Convention: Not Applicable
Floating Amounts
Floating Rate Payer: UBS AG
Cap Rate: 5.0 percent per annum
Floating Amount: To be determined in accordance with the following formula: Greater of (1)Calculation Amount * Floating Rate Day Count Fraction * (Floating Rate Option - Cap Rate) and (2) 0
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One Month
Spread: None
Floating Rate Day Count 30/360 Fraction:
Floating Rate Payer Period 01 January, 01 February, 01 March, 01 April, End Dates: 01 May, 01 June, 01 July, 01 August, 01 September, 01 October, 01 November and 01 December, in each year, from and including 01 May 2006, up to and including the Termination Date, subject to adjustment in accordance with the Business DayConvention specified immediately below, and thereshall be No Adjustment to the Period End Dates.
Floating Rate Payer Payment Delayed Payment shall be applicable. The Dates: FloatingRate Payer Payment Dates shall be two Business Days prior to 25 January, 25 February, 25 March, 25 April, 25 May, 25 June, 25 July, 25 August, 25 September, 25 October, 25 November and 25 December, in each year, from and including 25 May 2006, up to and including 25 April 2009, notwithstanding the specified &bbsp; Termination Date, subject to adjustment in accordance with the Business Day Convention specified immediately below.
Reset Dates: First day of each Calculation Period.
Business Day Convention: Modified Following
Additional Provisions
(i) "Specified Transaction" shall have the meaning specified in Section 14 of the ISDA Form.
(ii) The "Breach of Agreement" provisions of Section 5(a)(ii) of the ISDA Form will be applicable to UBS AG and inapplicable to the Counterparty.
(iii) The "Credit Support Default" provisions of Section 5(a)(iii) of the ISDA Form will be inapplicable to UBS AG and the Counterparty.
(iv) The "Misrepresentation" provisions of Section 5(a)(iv) of the ISDA Form will be inapplicable to UBS AG and the Counterparty.
(v) The "Default Under Specified Transaction" provisions of Section 5(a)(v) of the ISDA Form will be inapplicable to UBS AG and the Counterparty.
(vi) The "Cross Default" provisions of Section 5(a)(vi) of the ISDA Form will be inapplicable to UBS AG and the Counterparty.
(vii) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of the ISDA Form will be inapplicable to UBS AG and the Counterparty.
(viii) The "Automatic Early Termination" provision of Section 6(a) of the ISDA Form will be inapplicable to UBS AG and the Counterparty.
(ix) Severability. If any term, provision, covenant, or condition of this Agreement, or the application thereof to any party or circumstance, shall be held to be invalid or unenforceable (in whole or in part) for any reason, the remaining terms, provisions, covenants, and conditions hereof shall continue in full force and effect as if this Agreement had been executed with the invalid or unenforceable portion eliminated, so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter of this Agreement and the deletion of such portion of this Agreement will not substantially impair the respective benefits or expectations of the parties; provided, however, that this severability provision will not be applicable if any provision of Section 2, 5, 6 or 13 (or any definition or provision in Section 14 to the extent it relates to, or is used in or in connection with, such section) is held to be invalid or unenforceable, provided, further, that the parties agree to first use reasonable efforts to amend the affected provisions of Section 2, 5, 6 or 13 (or any definition or provision in Section 14 to the extent it relates to, or is used in or in connection with, such section) so as to preserve the original intention of the parties.
The parties shall endeavor to engage in good faith negotiations to replace any invalid or unenforceable term, provision, covenant or condition with a valid or enforceable term, provision, covenant or condition, the economic effect of which comes as close as possible to
that of the invalid or unenforceable term, provision, covenant or condition.
(x) Consent to Recording. Each party hereto consents to the monitoring or recording, at any time and from time to time, by the other party of any and all communications between officers or employees of the parties, waives any further notice of such monitoring or recording, and agrees to notify its officers and employees of such monitoring or recording.
(xi) Waiver of Jury Trial. EACH PARTY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING IN CONNECTION WITH THIS AGREEMENT, ANY CREDIT SUPPORT DOCUMENT TO WHICH IT IS A PARTY, OR ANY TRANSACTION. EACH PARTY ALSO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO THE OTHER PARTY'S ENTERING INTO THIS AGREEMENT.
(xii) Fully Paid Transaction. Notwithstanding the terms of Sections 5 and 6 of the Agreement, if Counterparty has satisfied all of its payment obligations under Section 2(a)(i) of the Agreement with respect to this Transaction, and unless UBS AG is required to return (whether pursuant to an order of a court with due authority to cause UBS AG to be required to return any such payment to Counterparty (or any duly authorized representative thereof) or whether otherwise pursuant to appropriate proceedings to return to Counterparty (or any duly authorized representative thereof)) or UBS AG otherwise returns to Counterparty (or any duly authorized representative thereof) upon demand of Counterparty (or any duly authorized representative thereof) any portion of such payment, then: (a) the occurrence of an event described in Section 5(a) of the Agreement with respect to Counterparty shall not constitute an Event of Default or Potential Event of Default with respect to Counterparty as the Defaulting Party in respect of this Transaction and (b) UBS AG shall be entitled to designate an Early Termination Date pursuant to Section 6 of the Agreement in respect of this Transaction only as a result of a Termination Event set forth in either Section 5(b)(i) or Section 5(b)(ii) of the Agreement with respect to UBS AG as the Affected Party or Section 5(b)(iii) of the Agreement with respect to UBS AG as the Burdened Party. For purposes of the Transaction to which this Confirmation relates, Counterparty's only obligation under Section 2(a)(i) of the Agreement is to pay the Fixed Amount on the Fixed Rate Payer Payment Date, each as defined in this Confirmation.
(xiii) Governing Law. The parties to this Agreement hereby agree that the law of the State of New York shall govern their rights and duties in whole without regard to the conflict of law provisions thereof (other than New York General Obligations Law Sections 5-1401 and 5-1402).
(xiv) Non-Recourse. Notwithstanding any provision herein or in the ISDA Form to the contrary, the obligations of Counterparty hereunder are limited recourse obligations of Counterparty, payable solely from the Trust Estate (as defined in the Pooling and Servicing Agreement) and the proceeds thereof to satisfy Counterparty's obligations hereunder. In the event that the Trust Estate and proceeds thereof should be insufficient to satisfy all claims outstanding and following the realization of the Trust Estate and the distribution of the proceeds thereof in accordance with the Pooling and Servicing Agreement, any claims against or obligations of Counterparty under the ISDA Form or any other confirmation thereunder, still outstanding shall be extinguished and thereafter not revive.
(xv) Set-Off. Notwithstanding any provision of this Agreement or any other existing or future agreement, each party irrevocably waives any and all rights it may have to set off, net, recoup or otherwise withhold or suspend or condition payment or performance of any obligation between it and the other party hereunder against any obligation between it and the other party under any other agreements. The provisions for Set-off set forth in Section 6(e) of the Agreement shall not apply for purposes of this Transaction; provided, however, that upon the designation of any Early Termination Date, in addition to, and not in limitation of any other right or remedy under applicable law, UBS AG may, by notice to Counterparty require Counterparty to set off any sum or obligation that UBS AG owed to Counterparty against any collateral currently held by Counterparty that UBS AG has posted to Counterparty, and Counterparty shall effect such setoff promptly, if and to the extent permitted to do so under applicable law, provided that Counterparty's exercise of this setoff is not stayed or otherwise delayed by order of any court, regulatory authority or other governmental agency or any receiver other person appointed in respect of UBS AG or any of its property.
(xvi) Proceedings. UBS AG covenants and agrees that it will not institute against or join any other person in instituting against the Counterparty any bankruptcy, reorganization, arrangement, insolvency, winding up or liquidation proceedings, or other proceedings under any United States federal or state law, or other bankruptcy, insolvency, liquidation, or similar law, in connection with any obligations relating to this Transaction or otherwise prior to the date that is one year and one day or, if longer, the applicable preference period after all the Certificates (as defined below) have been paid in full; provided, that this paragraph shall not restrict or prohibit UBS AG, after the filing of any proceeding filed independently of UBS AG, from joining any other person, including without limitation the Master Servicer, in any bankruptcy, reorganization, arrangement, insolvency, moratorium, liquidation or other analogous proceedings relating to Counterparty under any bankruptcy or similar law.
(xvii) The ISDA Form is hereby amended as follows: for the purposes of this Transaction, the word "third" shall be replaced by he word "first" in the third line of Section 5(a)(i) of the ISDA Form; provided, however, that notwithstanding the foregoing, an Event of Default shall not occur under either if, as demonstrated to the reasonable satisfaction of the other party, (a) the failure to pay or deliver is caused by an error or omission of an administrative or operational nature; and (b) funds or the relevant instrument were available to such party to enable it to make the relevant payment or delivery when due; and (c) such relevant payment is made within the earlier of (a) three Business Days following receipt of written notice from an the other party of such failure to pay or (b) 12:00 p.m. Eastern Standard Time on the Distribution Date (as defined in the Pooling and Servicing Agreement) immediately following the failure to pay.
(xviii) Multibranch Party. For the purpose of Section 10(c) of the Agreement:
(i) UBS AG is a Multibranch Party and may act through its branches in any of the following territories or countries: England and Wales, France, Hong Kong, United States of America, Singapore, Sweden and Switzerland.
(ii) Counterparty is not a Multibranch Party.
(xix) Offices. Section 10(a) of the ISDA Form shall apply with respect to UBS AG.
(xx) Payments on Early Termination. For the purpose of Section 6(e) of this Agreement:
(i) Market Quotation will apply. (ii) The Second Method will apply.
(xxi) Event of Default relating to Bankruptcy. Clause (2) of Section 5(a)(vii) shall not apply to Counterparty.
(xxii) "Affiliate" will have the meaning specified in Section 14 of the ISDA Form Master Agreement, provided that the Counterparty shall be deemed to not have any Affiliates for purposes of this Agreement, including for purposes of Section 6(b)(ii).
(xxiii) Compliance with Regulation AB.
(i) UBS AG agrees and acknowledges that Wells Fargo Asset Securities Corporation (the "Depositor") is required under Regulation AB under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the "Exchange Act") ("Regulation AB"), to disclose certain financial information regarding UBS AG, depending on the aggregate "Significance Percentage" (as defined in Item 1115 of Regulation AB) of all Transactions under this Agreement, together with any other transactions that fall within the meaning of "derivative contracts" for the purposes of Item 1115 of Regulation AB between UBS AG and Counterparty, as calculated from time to time in accordance with the Calculation Methodology (as defined below).
(ii) It shall be a swap disclosure event ("Swap Disclosure Event") if, on any Business Day after the date hereof, the Depositor notifies UBS AG the Significance Percentage has reached one of the thresholds for significance of derivative contracts set forth in Item 1115 of Regulation AB (based on a reasonable determination by the Depositor, in good faith and using the Calculation Methodology, of such Significance Percentage).
(iii) Upon the occurrence of a Swap Disclosure Event, UBS AG, at its own expense, shall (a) provide to the Depositor the applicable Swap Financial Disclosure (as defined below), (b) secure another entity to replace UBS AG as party to this Agreement on terms substantially similar to this Agreement and subject to prior notification to the Swap Rating Agencies, which entity (or a guarantor therefor) meets or exceeds the Approved Rating Thresholds (or which satisfies the Rating Agency Condition) and which entity is able to provide the appropriate Swap Financial Disclosure or (c) obtain a guaranty of UBS AG's obligations under this Agreement from an affiliate of UBS AG that is able to comply with the financial information disclosure requirements of Item 1115 of Regulation AB, such that disclosure provided in respect of the affiliate will, in the judgment of counsel to the Depositor, satisfy any disclosure requirements applicable to the Swap Provider, cause such affiliate to provide Swap Financial Disclosure and cause such affiliate to provide indemnity for the Swap Financial Disclosure that is reasonably acceptable to the Depositor. If permitted by Regulation AB, any required Swap Financial Disclosure may be provided by reference to or incorporation by reference from reports filed pursuant to the Exchange Act.
(iv) UBS AG agrees that, in the event that UBS AG provides Swap Financial Disclosure to the Depositor in accordance with paragraph (iii)(a) above, or causes its affiliate to provide Swap Financial Disclosure to the Depositor in accordance with paragraph (iii)(c) above, it will indemnify and hold harmless the Depositor, its respective directors or officers and any person controlling the Depositor, from and against any and all losses, claims, damages and liabilities (any "Damage") caused by any untrue statement or alleged untrue statement of a material fact contained in such Swap Financial Disclosure or caused by any omission or alleged omission to state in such Swap Financial Disclosure a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however that the foregoing shall not apply to any Damage caused by the negligence or any willful action of the Depositor or any other party (other than UBS AG or any of its affiliates or any of their respective agents), including without limitation any failure to calculate the Significance Percentage according to the terms of this Agreement or to make any
filing as and when required under Regulation AB.
(v) In the event that UBS AG provides the information referred to above, such information shall be provided not later than five (5) business days prior to the date in which the Master Servicer is required to file a Form 10-D for such Distribution Date.
For the purposes hereof:
"Calculation Methodology" means such method for determining maximum probable exposure of a derivative contract as reasonably determined by the Depositor.
"Swap Financial Disclosure" means the financial information specified in Item 1115 of Regulation AB relating to the applicable Significance Percentage and any necessary auditors consents relating to such financial information.
Additional Termination Events:
The following Additional Termination Events will apply to UBS AG:
1. Ratings Event. If a Ratings Event (as defined below) has occurred and UBS AG has not complied with the requirements set forth in the succeeding paragraph within the 30 day time period specified therein, then an Additional Termination Event shall have occurred with respect to UBS AG and UBS AG shall be the sole Affected Party with respect to such an Additional Termination Event.
Rating Agency Downgrade:
If a Ratings Event occurs with respect to UBS AG, then UBS AG shall, at its own expense, (i) assign this Transaction hereunder to a third party within thirty (30) days of such Ratings Event that meets or exceeds, or as to which any applicable credit support provider meets or exceeds, the Approved Rating Threshold (as defined below) on terms substantially similar to this Confirmation or (ii) deliver collateral acceptable in a form and amount acceptable to Fitch Ratings ("Fitch") and Moody's Investors Service Inc. ("Moody's) within thirty (30) days of such Ratings Event and subject to written confirmation from Fitch and Moody's that delivery of such collateral in the context of such downgrade will not result in a withdrawal, qualification or downgrade of the then current ratings assigned to the Certificates. For the avoidance of doubt, a downgrade of the rating on Wells Fargo Mortgage Backed Securities 2006-6 Trust, Mortgage Pass-Through Certificates, Series 2006-6, Class I-A-22 (the "Certificates") could occur in the event that UBS AG does not post sufficient collateral.
For purposes of this Transaction, a "Ratings Event" shall occur with respect to UBS AG if its long term unsecured debt rating (the "Long Term Rating") ceases to be rated at least "A1" by Moody's Investors Service, Inc. or at least "A+ by Fitch Ratings (such ratings being referred to as the "Approved Ratings Threshold"), (unless, within 30 days after such withdrawal or downgrade Fitch and Moody's have reconfirmed the rating of the Certificates which were in effect immediately prior to such withdrawal or downgrade).
2. Swap Disclosure Event. If upon the occurrence of a Swap Disclosure Event (as defined in paragraph (xxiii) above), UBS AG has not, within 5 business days after such Swap Disclosure Event complied with any of the provisions set forth in paragraph (xxiii) above, then an Additional Termination Event shall have occurred with respect to UBS AG with UBS AG as the sole Affected Party with respect to such Additional Termination Event.
Transfer, Amendment and Assignment:
No transfer, amendment, waiver, supplement, assignment or other modification of this Transaction (other than the pledge of this Transaction to the Master Servicer pursuant to the Pooling and Servicing Agreement) shall be permitted by either party unless Moody's and Fitch have been provided notice of the same and confirm in writing (including by facsimile transmission) that they will not downgrade, qualify, withdraw or otherwise modify its then-current rating of the Certificates; provided however that except with respect to a transfer at the direction of UBS, nothing in this provision shall impose any obligation on UBS to give notice to any rating agency.
Permitted Security Interest:
For purposes of Section 7 of the Agreement, UBS AG hereby consents to the Permitted Security Interest.
"Permitted Security Interest" means the collateral assignment by the Counterparty of the Cap Collateral to the Master Servicer pursuant to the Pooling and Servicing Agreement, and the granting to the Master Servicer of a security interest in the Cap Collateral pursuant to the Pooling and Servicing Agreement.
"Cap Collateral" means all right, title and interest of the Counterparty in this Agreement, each Transaction hereunder, and all present and future amounts payable by UBS AG to the Counterparty under or in connection with the Agreement or any Transaction governed by the Agreement, whether or not evidenced by a Confirmation, including, without limitation, any transfer or termination of any such Transaction.
Payer Tax Representations
For the purposes of Section 3(e) of the Master Agreement, UBS AG will make the
following representation and Counterparty will not make the following representation: it is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of the Master Agreement) to be made by it to the other party under this Agreement. In making this representation, it may rely on (i) the accuracy of any representations made by the other party pursuant to Section 3(f) of the Master Agreement, (ii) the satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of the Master Agreement and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of the other party contained in Section 4(d) of this Agreement, provided that it shall not be a breach of this representation where reliance is placed on clause (ii) and the other party does not deliver a form or document under Section 4(a)(iii) of this Agreement by reason of material prejudice to its legal or commercial position.
Payee Tax Representations
For the purpose of Section 3(f) of the ISDA Form, UBS AG makes the following representation:
It is a non-U.S. branch of a foreign person as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations (the "Regulations") for United States federal income tax purposes.
For the purpose of Section 3(f) of the ISDA Form, the Counterparty makes the following representations:
1. The Counterparty is a New York common law trust and is regarded as a Real Estate Mortgage Investment Conduit for federal income tax purposes.
2. It is a "U.S. person" (as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations for United States federal income tax purposes.
Agreement to Deliver Documents
For purposes of Section 4(a)(i) and (ii) of the ISDA Form, the parties agree to deliver the following documents as applicable.
Party required Form/Document/ Date by which to deliver Certificate to be delivered document
UBS AG and Any form or document Promptly upon Counterparty required or reasonably reasonable requested to allow the demand by the other party to make other party. payments without any deduction or withholding for or on account of any Tax, or with such deduction or withholding at a reduced rate. Counterparty One duly executed and Promptly upon completed U.S. Internal reasonable Revenue Service Form demand by the W-9 (or successor other party thereto)
Party required to Form/Document/ Date by which to Covered by Section deliver document Certificate be delivered 3(d) Representation UBS AG Any documents required Upon the Yes by the receiving party execution and to evidence the delivery of authority of the this Agreement delivering party for it and such to execute and deliver Confirmation this Confirmation and to evidence the authority of the delivering party to perform its obligations under this Agreement or the Transaction governed by this Confirmation
UBS AG A certificate of an Upon the Yes authorized officer of the execution and party, as to the delivery of incumbency and authority this of the respective Confirmation officers of the party signing this Confirmation
UBS AG Opinion of Counsel for No later than No UBS AG 15 days after
closing
Relationship Between Parties Each party will be deemed to represent to the other party on the date on which it enters into this Transaction that (in the absence of a written agreement between the parties which expressly imposes affirmative obligations to the contrary for this Transaction):
(a) Non-Reliance. Each party is acting for its own account, and has made its own independent decisions to enter into this Transaction and this Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. Each party is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into this Transaction; it being understood that information and explanation relating to the terms and conditions of this Transaction shall not be considered investment advice or a recommendation to enter into this Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of this Transaction.
(b) Assessment and Understanding. Each party is capable of assessing the merits of and understands (on its own behalf or through independent professional advice), and accepts, the terms, conditions and risks of this Transaction. Each party is also capable of assuming and assumes, the risks of this Transaction.
(c) Status of the Parties. Neither party is acting as a fiduciary for or as an adviser to the other in respect of this Transaction.
(d) Eligible Contract Participant. Each party constitutes an "eligible contract participant" as such term is defined in Section 1(a)12 of the Commodity Exchange Act, as amended.
Master Servicer Capacity. It is expressly understood and agreed by the parties hereto that insofar as this Confirmation is executed by the Master Servicer (i) this Confirmation is executed and delivered by Wells Fargo Bank, N.A., not in its individual capacity, but solely as Master Servicer with respect to Wells Fargo Mortgage Backed Securities 2006-6 Trust (the "Trust") under the Pooling and Servicing Agreement, dated as of April 27, 2006 (the "Pooling and Servicing Agreement") in the exercise of the powers and authority conferred upon and vested in it thereunder and pursuant to instruction set forth therein, (ii) each of the representations, undertakings and agreements herein made on the part of the Trust is made and intended not as a personal representation, undertaking or agreement by Wells Fargo Bank, N.A., but is made and intended for the purpose of binding only the Trust, (iii) nothing herein contained shall be construed as imposing any liability on Wells Fargo Bank, N.A. individually or personally, to perform any covenant either express or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto, and (iv) under no circumstances shall Wells Fargo Bank, N.A. in its individual capacity be personally liable for the payment of any indebtedness or expenses or be personally liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Trust under this Confirmation or any other related documents (other than the Master Servicer's express obligations under the Pooling and Servicing Agreement).
References in this clause to "a party" shall, in the case of UBS AG and where the context so allows, include references to any affiliate of UBS AG.
Account Details for UBS AG: Currency: USD Correspondent Bank: UBS AG, STAMFORD BRANCH Swift Address: UBSWUS33XXX Favour: UBS AG LONDON BRANCH Swift Address: UBSWGB2LXXX Account No: 101-wa-140007-000
Offices (a) The office of UBS AG for the Interest Rate Cap Transaction is London; and The office of Counterparty for the Interest Rate Cap Transaction is:
9062 Annapolis Road Columbia, Maryland 21045 Attn: Client Manager - WFMBS 2006-6 Telephone: 410.884.2000 Fax: 410.715.2380
Contact Names at UBS AG: Payment Inquiries Elisa Doctor Email: &bbsp; DL-USOTCRATES-SETTS@ubs.com
Phone: 203.719.1110 Pre Value Payments: Pre Value Payment 203.719.1110 Investigations: Post Value Payments: Post Value Payment 203.719.1110 Investigations: Confirmation Queries: Confirmation Control: 203.719.3373 ISDA Documentation: Credit Risk Management: 212.713.1170 Swift: UBSWGB2L Fax: 203.719.0274 Address: UBS AG
100 Liverpool Street London EC2M 2RH
Address for notices or communications to the Counterparty:
9062 Old Annapolis Road Columbia, MD 21045 Attn: Corporate Trust Services - WFMBS 2006-6
Payments to Counterparty: Wells Fargo Bank, NA San Francisco, CA ABA #: 121-000-248 Acct #: 3970771416 Acct Name: SAS Clearing For Further Credit: Interest Rate Cap, Account # 50915701
(For all purposes)
Please confirm that the foregoing correctly sets forth the terms and conditions of our agreement by executing a copy of this Confirmation and returning it to us or by sending to us a letter or facsimile substantially similar to this letter, which letter or facsimile sets forth the material terms of the Transaction to which this Confirmation relates and indicates your agreement to those terms or by sending to us a return letter or facsimile in the form attached.
This Confirmation may be executed in several counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
Yours Faithfully For and on Behalf of UBS AG, London Branch
By: /s/ Todd Harper By: /s/ Mark J. Evans II
Name : Todd Harper Name : Mark J. Evans II Title : Associate Director Title: Director UBS Operations Operations
Acknowledged and Agreed by Wells Fargo Bank N.A., not individually, but solely as Master Servicer on behalf of Wells Fargo Mortgage Backed Securities 2006-6 Trust By: /s/ Jennifer L. Richardson
Name : Jennifer L. Richardson Title : Assistant Vice President
UBS AG London Branch, 1 Finsbury Avenue, London, EC2M 2PP UBS AG is a member of the London Stock Exchange and is regulated in the UK by the Financial Services Authority. Representatives of UBS Limited introduce trades to UBS AG via UBS Limited. | Highlight the parts (if any) of this contract related to "Covenant Not To Sue" that should be reviewed by a lawyer. Details: Is a party restricted from contesting the validity of the counterparty’s ownership of intellectual property or otherwise bringing a claim against the counterparty for matters unrelated to the contract? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Parties" that should be reviewed by a lawyer. Details: The two or more parties who signed the contract
Context: 1 Exhibit 10.17
Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions.
OUTSOURCING AGREEMENT
BETWEEN:
MODUS MEDIA INTERNATIONAL LANDDROSTLAAN 51 7327 GM APELDOORN THE NETHERLANDS (HEREINAFTER "MMI")
AND
DRAGON SYSTEMS, INC. 320 NEVADA STREET NEWTON, MA 02160 U.S.A. (HEREAFTER "DRAGON SYSTEMS")
EFFECTIVE AS OF (EFFECTIVE DATE)
1. PURPOSE OF AGREEMENT Formalize the agreements made regarding services and products between Dragon Systems and MMI.
2. SERVICES MMI will produce products for Dragon Systems on a Turnkey basis. Initially, services will cover 3 products, as per the attached price sheets. However, this may be extended.
Specific services will be:
- - Receipt and Management of master materials
- - Supply base management
- - Production (both components & finished goods)
- - Delivery
- - Inventory Management
- - Financial Services
Quality and Services Level Agreements will be based on mutual agreement.
3. DELIVERY
MMI shall deliver the Services in line with the agreed service levels to Dragon Systems.
2 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions.
4. ACCEPTANCE OF SERVICES
Dragon Systems may reject the Services if they do not comply with the specification set out by Dragon \s\ JB. The Services are deemed to be accepted if MMI does not receive a notification within 60 days after delivery to Dragon Systems or its customers.
5. PAYMENT AND PRICING
Dragon Systems will compensate MMI for all Services rendered in accordance with the rates specified in the Annex "Prices." Unless otherwise agreed, prices shall exclude transport, insurance, VAT and Import duties (outside EC countries) to Dragon Systems' designated delivery address.
For all materials in stock, older than 90 days, MMI will charge Dragon Systems with an Inventory Carriage Charge of [**] of its value per month.
MMI will invoice Dragon Systems based on actual shipments that have been performed.
Payments will be due in US dollars within 30 days after delivery, or when agreed after delivery of installments or the receipt of invoice by Dragon Systems, which ever is later. MMI shall invoice Dragon Systems indicating the performed services in US$ with reference to this Agreement.
Dragon Systems shall be entitled to deduct from or set off against any sums which Dragon Systems may be liable to pay to MMI any amounts owed by MMI, its affiliated entities, subsidiaries or successors in interest.
6. WARRANTY
MMI warrants providing the Services with due diligence and care in accordance
with the specifications set by Dragon Systems. Should MMI not supply the Services as agreed or should the Services become defective within 6 months from their delivery to Dragon Systems, Dragon Systems may at its option require MMI to complete or re-perform the Services within a reasonable period of time, rescind the contract or refuse payment of the compensation in part or in total, notwithstanding any damage claims.
7. INDEMNITY
MMI shall reimburse Dragon Systems and hold Dragon Systems harmless from any liabilities or obligations imposed upon Dragon Systems resulting directly or indirectly from MMI's or its employees or agents activities under this Agreement.
-2- 3 8. LIABILITY
Either party shall be liable for failure or delay in performance of its duties under this Agreement except for reasons beyond such party's reasonable control. MMI shall not be liable for indirect or consequential damages unless caused by intention or gross negligence.
9. CONFIDENTIALITY
Both parties shall take reasonable precautions to preserve in strict confidence any confidential or proprietary information obtained by them, their agents or employees concerning the business, products, equipment or services of the other party, including without limitation, trade secrets. Such reasonable precautions shall include exercising precautionary measures designed to preserve the secrecy of such information and to prevent its disclosure to third parties, except following prior consent of the other party, with such precautions being at least equivalent to those taken by each party with respect to its own confidential information.
10. PATENTS AND COPYRIGHT
MMI warrants that the Services supplied to Dragon Systems will not infringe any third parties' intellectual property rights. MMI will defend and indemnity Dragon Systems against a claim that the Services supplied hereunder infringe a patent or copyright and will pay resulting costs and damages provided that Dragon Systems (i) promptly informs MMI in writing of the claim and (ii) gives MMI sole control of the defense and all related settlement negotiations. MMI will either procure the right for Dragon Systems to continue using the Services or replace or modify them so that they become non-infringing or accept return of the Services for a credit equal to the price paid by Dragon Systems.
11. COPYRIGHT AND COPYRIGHT LICENSE
Dragon Systems hereby grants MMI the rights to copy in printed or electronic form the master materials according to the forecasted numbers given to MMI by Dragon Systems.
12. TERM AND TERMINATION
This Agreement shall be valid for an indefinite period.
Both parties may terminate the Agreement with immediate effect
- - of either party breaches a material term of the Agreement
- - in case of a merger or change of key management or control
- - in case of bankruptcy or similar.
Dragon may terminate this agreement without cause by giving sixty (60) days written notice to MMI.
-3- 4 13. GOVERNING LAW
Any lawsuit relating to any matter arising under this Agreement may be initiated in a State or Federal Court located in the Commonwealth of Massachusetts or in any court in the Netherlands having jurisdiction over the matter.
14. INSURANCE
MMI shall at its own expense obtain and maintain with an insurer adequate insurance coverage in respect of any Dragon Systems property under the care, custody or control of MMI. MMI shall immediately notify Dragon Systems in writing of any theft, loss or damage to any Dragon Systems property and shall indemnify Dragon Systems in respect of the same.
MMI
\s\ John Dick General Manager - ------------------------------------------------------- 19 Jan. 1998
DRAGON SYSTEMS, INC.
\s\ Janet M. Baker, President - ----------------------------------------------------- 12 Jan. 1998
-4- 5 NaturallySpeaking
Part Number Description 1,000 units 2,500 units 5,000 units 10,000 units 25,000 units 50,000 units - ---------------------- ------------------- ------------- ------------ ------------ ------------- ------------ -------------
[**]
-5- 6 Dictate Power
Part Number Description 1,000 units 2,500 units 5,000 units 10,000 units 25,000 units 50,000 units - ---------------------- ------------------- ------------- ------------ ------------ ------------- ------------ -------------
[**]
-6- 7 Dictate Classic
Part Number Description 1,000 units 2,500 units 5,000 units 10,000 units 25,000 units 50,000 units - ---------------------- ------------------- ------------- ------------ ------------ ------------- ------------ -------------
[**]
-7- [/INST] ```json
{<answer_start>
"answer": "MMI"
<answer_end>
}
``` </s> | 1 Exhibit 10.17
Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions.
OUTSOURCING AGREEMENT
BETWEEN:
MODUS MEDIA INTERNATIONAL LANDDROSTLAAN 51 7327 GM APELDOORN THE NETHERLANDS (HEREINAFTER "MMI")
AND
DRAGON SYSTEMS, INC. 320 NEVADA STREET NEWTON, MA 02160 U.S.A. (HEREAFTER "DRAGON SYSTEMS")
EFFECTIVE AS OF (EFFECTIVE DATE)
1. PURPOSE OF AGREEMENT Formalize the agreements made regarding services and products between Dragon Systems and MMI.
2. SERVICES MMI will produce products for Dragon Systems on a Turnkey basis. Initially, services will cover 3 products, as per the attached price sheets. However, this may be extended.
Specific services will be:
- - Receipt and Management of master materials
- - Supply base management
- - Production (both components & finished goods)
- - Delivery
- - Inventory Management
- - Financial Services
Quality and Services Level Agreements will be based on mutual agreement.
3. DELIVERY
MMI shall deliver the Services in line with the agreed service levels to Dragon Systems.
2 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions.
4. ACCEPTANCE OF SERVICES
Dragon Systems may reject the Services if they do not comply with the specification set out by Dragon \s\ JB. The Services are deemed to be accepted if MMI does not receive a notification within 60 days after delivery to Dragon Systems or its customers.
5. PAYMENT AND PRICING
Dragon Systems will compensate MMI for all Services rendered in accordance with the rates specified in the Annex "Prices." Unless otherwise agreed, prices shall exclude transport, insurance, VAT and Import duties (outside EC countries) to Dragon Systems' designated delivery address.
For all materials in stock, older than 90 days, MMI will charge Dragon Systems with an Inventory Carriage Charge of [**] of its value per month.
MMI will invoice Dragon Systems based on actual shipments that have been performed.
Payments will be due in US dollars within 30 days after delivery, or when agreed after delivery of installments or the receipt of invoice by Dragon Systems, which ever is later. MMI shall invoice Dragon Systems indicating the performed services in US$ with reference to this Agreement.
Dragon Systems shall be entitled to deduct from or set off against any sums which Dragon Systems may be liable to pay to MMI any amounts owed by MMI, its affiliated entities, subsidiaries or successors in interest.
6. WARRANTY
MMI warrants providing the Services with due diligence and care in accordance
with the specifications set by Dragon Systems. Should MMI not supply the Services as agreed or should the Services become defective within 6 months from their delivery to Dragon Systems, Dragon Systems may at its option require MMI to complete or re-perform the Services within a reasonable period of time, rescind the contract or refuse payment of the compensation in part or in total, notwithstanding any damage claims.
7. INDEMNITY
MMI shall reimburse Dragon Systems and hold Dragon Systems harmless from any liabilities or obligations imposed upon Dragon Systems resulting directly or indirectly from MMI's or its employees or agents activities under this Agreement.
-2- 3 8. LIABILITY
Either party shall be liable for failure or delay in performance of its duties under this Agreement except for reasons beyond such party's reasonable control. MMI shall not be liable for indirect or consequential damages unless caused by intention or gross negligence.
9. CONFIDENTIALITY
Both parties shall take reasonable precautions to preserve in strict confidence any confidential or proprietary information obtained by them, their agents or employees concerning the business, products, equipment or services of the other party, including without limitation, trade secrets. Such reasonable precautions shall include exercising precautionary measures designed to preserve the secrecy of such information and to prevent its disclosure to third parties, except following prior consent of the other party, with such precautions being at least equivalent to those taken by each party with respect to its own confidential information.
10. PATENTS AND COPYRIGHT
MMI warrants that the Services supplied to Dragon Systems will not infringe any third parties' intellectual property rights. MMI will defend and indemnity Dragon Systems against a claim that the Services supplied hereunder infringe a patent or copyright and will pay resulting costs and damages provided that Dragon Systems (i) promptly informs MMI in writing of the claim and (ii) gives MMI sole control of the defense and all related settlement negotiations. MMI will either procure the right for Dragon Systems to continue using the Services or replace or modify them so that they become non-infringing or accept return of the Services for a credit equal to the price paid by Dragon Systems.
11. COPYRIGHT AND COPYRIGHT LICENSE
Dragon Systems hereby grants MMI the rights to copy in printed or electronic form the master materials according to the forecasted numbers given to MMI by Dragon Systems.
12. TERM AND TERMINATION
This Agreement shall be valid for an indefinite period.
Both parties may terminate the Agreement with immediate effect
- - of either party breaches a material term of the Agreement
- - in case of a merger or change of key management or control
- - in case of bankruptcy or similar.
Dragon may terminate this agreement without cause by giving sixty (60) days written notice to MMI.
-3- 4 13. GOVERNING LAW
Any lawsuit relating to any matter arising under this Agreement may be initiated in a State or Federal Court located in the Commonwealth of Massachusetts or in any court in the Netherlands having jurisdiction over the matter.
14. INSURANCE
MMI shall at its own expense obtain and maintain with an insurer adequate insurance coverage in respect of any Dragon Systems property under the care, custody or control of MMI. MMI shall immediately notify Dragon Systems in writing of any theft, loss or damage to any Dragon Systems property and shall indemnify Dragon Systems in respect of the same.
MMI
\s\ John Dick General Manager - ------------------------------------------------------- 19 Jan. 1998
DRAGON SYSTEMS, INC.
\s\ Janet M. Baker, President - ----------------------------------------------------- 12 Jan. 1998
-4- 5 NaturallySpeaking
Part Number Description 1,000 units 2,500 units 5,000 units 10,000 units 25,000 units 50,000 units - ---------------------- ------------------- ------------- ------------ ------------ ------------- ------------ -------------
[**]
-5- 6 Dictate Power
Part Number Description 1,000 units 2,500 units 5,000 units 10,000 units 25,000 units 50,000 units - ---------------------- ------------------- ------------- ------------ ------------ ------------- ------------ -------------
[**]
-6- 7 Dictate Classic
Part Number Description 1,000 units 2,500 units 5,000 units 10,000 units 25,000 units 50,000 units - ---------------------- ------------------- ------------- ------------ ------------ ------------- ------------ -------------
[**]
-7- | Highlight the parts (if any) of this contract related to "Parties" that should be reviewed by a lawyer. Details: The two or more parties who signed the contract | {
"answer_start": [
562
],
"text": [
"MMI"
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Affiliate License-Licensee" that should be reviewed by a lawyer. Details: Does the contract contain a license grant to a licensee (incl. sublicensor) and the affiliates of such licensee/sublicensor?
Context: Exhibit 7.3
STRATEGIC ALLIANCE AGREEMENT
This Strategic Alliance Agreement is made and entered into this 9th day of September 2005, by and between UTEK Corporation ("UTK"), 202 South Wheeler Street, Plant City, Florida 33566 a Delaware corporation, and World Energy Solutions, ("AVDU"), 3900A 31st Street North, St. Petersburg, Florida, a Florida corporation.
WITNESSETH:
WHEREAS, AVDU desires to engage UTK to provide the services as set forth in this Agreement, and
WHEREAS, UTK is agreeable to provide these services.
NOW THEREFORE, in consideration of the mutual promise made in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
I. ENGAGEMENT
AVDU hereby retains UTK to provide those services as defined herein and UTK hereby agrees to the appointment on the terms and conditions hereinafter set forth and agrees to use commercially reasonable efforts in providing said services.
II. INDEPENDENT CONTRACTOR
UTK shall be, and in all respects be deemed to be, an independent contractor in the performance of its duties hereunder.
A. AVDU shall be solely responsible for making all payments to and on behalf of its employees and UTK shall in no event be liable for any debts or other liabilities of AVDU.
B. UTK shall not have or be deemed to have, fiduciary obligations or duties to AVDU, and shall be able to pursue, conduct and carry on for its own account (or for the account of others) such activities, ventures, businesses and other pursuits as UTK in its sole, absolute and unfettered discretion, may elect.
C. Notwithstanding the above, no activity, venture, business or other pursuit of UTK, during the term of this Agreement shall conflict with UTK's obligations under this Agreement.
III. SERVICES
UTK agrees to provide the following services, hereinafter collectively referred to as "Services":
SEE "CONFIDENTIAL TERM SHEET" (EXHIBIT A) ATTACHED AND MADE A PART HEREOF.
A. UTK shall devote such time and efforts, as it deems commercially reasonable, under the circumstances to the affairs of the AVDU, as is reasonable and adequate to render the Services contemplated by this Agreement.
B. UTK cannot guarantee results on behalf of AVDU, but shall pursue all reasonable avenues available through its network of contacts. The acceptance and consumption of any transaction is subject to acceptance of the terms and conditions by its sole discretion.
C. In conjunction with the Services, UTK agrees to:
1. Make itself available at the offices of AVDU or at another mutually agreed upon place, during normal business hours, for reasonable periods of time, subject to reasonable advance notice and mutually convenient scheduling.
2. Make itself available for telephone conferences with the principal officer(s) of AVDU during normal business hours.
IV. EXPENSES
It is expressly agreed and understood that each party shall be responsible for its own normal and reasonable out-of-pocket expenses.
V. COMPENSATION
A. In consideration for the services to be provided, AVDU agrees that it will remit the agreed upon stock certificate within five (5) days of both parties executing this Agreement.
B. AVDU agrees that UTK shall be entitled to compensation as follows:
SEE STRATEGIC ALLIANCE CONFIDENTIAL TERM SHEET (EXHIBIT A) ATTACHED AND MADE A PART HEREOF.
VI. TERM AND TERMINATION
The term of the Agreement will be for 12 months unless terminated sooner. This agreement may be renewed upon mutual, written agreement of the parties. Either party may terminate this Agreement at any time with 30 days written notice. - 2 -
VII. LEGAL COMPLIANCE
AVDU agrees that it will put in place, if it has not already done so, policies and procedures relating to and addressing, with the commercially reasonable intent to ensure compliance with, applicable securities laws, rules and regulations, including, but not limited to:
A. The use, release or other publication of forward-looking statements.
B. Disclosure requirements regarding the required disclosure of the nature and terms of UTK's relationship with, including, but not limited to press releases, publications on its web site, letters to investors and telephone or other personal communication with potential or current investors.
C. No press releases or any other forms of communication to third parties which mention both UTK CORPORATION and AVDU, shall be released without the prior written consent and approval of both UTK and AVDU.
D. EXECUTION. The execution, delivery and performance of this Agreement, in the time and manner herein specified will not conflict with, result in a breach of, or constitute a default under any existing agreement, indenture, or other instrument to which either AVDU OR UTK is a party or by which either entity may be bound or affected.
E. TIMELY APPRISALS. AVDU shall use its commercially reasonable efforts to keep UTK up to date and apprised of all business, market and legal developments related to and its relationship to UTK.
F. CORPORATE AUTHORITY. Both AVDU and UTK have full legal authority to enter into this Agreement and perform the same in the time and manner contemplated.
G. The individuals whose signatures appear below are authorized to sign this Agreement on behalf of their respective corporations.
H. AVDU will cooperate with UTK and will promptly provide UTK with all pertinent materials and requested information in order for UTK to perform its Services pursuant to this Agreement.
I. When delivered, the shares of AVDU Common Stock shall be duly and validly issued, fully paid and non-assessable.
J. UTK represents to AVDU that a) it has the experience as may be necessary to perform all the required, b) all Services will be performed in a professional manner, and c) all individuals it provides to perform the Services will be appropriately qualified and subject to appropriate agreements concerning the protection of trade secrets and confidential information of which such persons may have access to over the term of this Agreement.
K. Until termination of the engagement, AVDU will notify UTK promptly of the occurrence of any event, which might materially affect the condition (financial or otherwise), or prospects of AVDU. - 3 -
VIII. CONFIDENTIAL DATA
A. UTK shall not divulge to others, any trade secret or confidential information, knowledge, or data concerning or pertaining to the business and affairs of AVDU, obtained by UTK as a result of its engagement hereunder, unless authorized, in writing by AVDU. UTK represents and warrants that it has established appropriate internal procedures for protecting the trade secrets and confidential information of AVDU, including, without limitation, restrictions on disclosure of such information to employees and other persons who may be engaged in such information to employees and other persons who may be engaged in rendering services to any person, firm or entity which may be a competitor of AVDU.
B. AVDU shall not divulge to others, any trade secret or confidential information, knowledge, or data concerning or pertaining to the business and affairs of UTK or confidential information revealed by UTK obtained as a result of its engagement hereunder, unless authorized, in writing, by UTK.
C. UTK shall not be required in the performance of its duties to divulge to AVDU, or any officer, director, agent or employee of AVDU, any secret or confidential information, knowledge, or data concerning any other person, firm or entity (including, but not limited to, any such person, firm or entity which may be a competitor or potential competitor of) which UTK may have or be able to obtain other than as a result of the relationship established by this Agreement.
IX. OTHER MATERIAL TERMS AND CONDITIONS
A. INDEMNITY.
1. UTK shall indemnify, defend and hold harmless AVDU from and against any and all losses incurred by AVDU which arise out of or result from misrepresentation, breach of warranty or breach or non- fulfillment of any covenant contained herein or Schedules annexed hereto or in any other documents or instruments furnished by UTK pursuant hereto or in connection with this Agreement.
2. AVDU shall indemnify, defend and hold harmless UTK from and against any and all losses incurred by UTK which arise out of or result from misrepresentation, breach of warranty or breach or non-fulfillment of any covenant contained herein or Schedules annexed hereto or in any other documents or instruments furnished by AVDU pursuant hereto or in connection with this Agreement.
B. PROVISIONS. Neither termination nor completion of the assignment shall affect the provisions of this Agreement, and the Indemnification Provisions that are incorporated herein, which shall remain operative and in full force and effect.
C. AVDU agrees that for a twenty four months (24) following the execution of this Agreement, AVDU shall not, without UTEK's prior written consent, directly or indirectly solicit for employment any present employee of UTEK, or request induce or advise any employee of UTEK to leave the employ of UTEK. In turn, UTEK agrees that it will not directly or indirectly solicit any present employee of AVDU. - 4 -
D. ADDITIONAL INSTRUMENTS. Each of the parties shall from time to time, at the request of others, execute, acknowledge and deliver to the other party any and all further instruments that may be reasonably required to give full effect and force to the provisions of this Agreement.
E. ENTIRE AGREEMENT. Each of the parties hereby covenants that this Agreement, is intended to and does contain and embody herein all of the understandings and agreements, both written or oral, of the parties hereby with respect to the subject matter of this Agreement, and that there exists no oral agreement or understanding expressed or implied liability, whereby the absolute, final and unconditional character and nature of this Agreement shall be in any way invalidated, empowered or affected. There are no representations, warranties or covenants other than those set forth herein.
F. ASSIGNMENTS. The benefits of the Agreement shall inure to the respective successors and assignees of the parties and assigns and representatives, and the obligations and liabilities assumed in this Agreement by the parties hereto shall be binding upon their respective successors and assigns; provided that the rights and obligations of UTK under this Agreement may not be assigned or delegated without the prior written consent of AVDU and any such purported assignment shall be null and void. Notwithstanding the foregoing, UTK may assign this Agreement or any portion of its Compensation as outlined herein to its subsidiaries in its sole discretion.
G. ORIGINALS. This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed an original and constitute one and the same agreement.
H. ADDRESSES OF PARTIES. Each party shall at all times keep the other informed of its principal place of business if different from that stated herein, and shall promptly notify the other of any change, giving the address of the new place of business or residence.
I. NOTICES. All notices that are required to be or may be sent pursuant to the provision of this Agreement shall be sent by certified mail, return receipt requested, or by overnight package delivery service to each of the parties at the addresses appearing herein, and shall count from the date of mailing or the validated air bill.
J. MODIFICATION AND WAVIER. A modification or waiver of any of the provisions of this Agreement shall be effective only if made in writing and executed with the same formality as this Agreement. The failure of any party to insist upon strict performance of any of the provisions of this Agreement shall not be construed as a waiver of any subsequent default of the same or similar nature or of any other nature.
K. INJUNCTIVE RELIEF. Solely by virtue of their respective execution of this Agreement and in consideration for the mutual covenants of each other, AVDU and UTK hereby agree, consent and acknowledge that, in the event of a breach of any material term of this Agreement, the non-breaching party will be without adequate remedy-at-law and shall therefore, be entitled to immediately redress any material breach of this Agreement by temporary or permanent injunctive or mandatory relief obtained in an action or proceeding instituted in any court of competent jurisdiction without the necessity of proving damages and without prejudice to any other remedies which the non-breaching party may have at law or in equity. - 5 -
L. ATTORNEY'S FEES. If any arbitration, litigation, action, suit, or other proceeding is instituted to remedy, prevent or obtain relief from a breach of this Agreement, in relation to a breach of this Agreement or pertaining to a declaration of rights under this Agreement, the prevailing party will recover all such party's attorneys' fees incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions there from. As used in this Agreement, attorneys' fees will be deemed to be the full and actual cost of any legal services actually performed in connection with the matters involved, including those related to any appeal to the enforcement of any judgment calculated on the basis of the usual fee charged by attorneys performing such services.
APPROVED AND AGREED: UTEK CORPORATION WORLD ENERGY SOLUTIONS
By: /s/ Clifford M. Gross By: /s/ Benjamin C. Croxton Clifford M. Gross, Ph.D. Benjamin C. Croxton Chief Executive Officer Chief Executive Officer - 6 -
Exhibit A
CONFIDENTIAL TERM SHEET
PROPOSED STRATEGIC ALLIANCE BETWEEN UTEK CORPORATION (UTK) & WORLD ENERGY SOLUTIONS (AVDU)
Statement of Work: To identify technology acquisition opportunities for AVDU from research universities and government laboratories. A first step in this process is the development of a Technology Acquisition Profile. Once completed, we will identify and present technologies that meet this profile. While conducting our search we will maintain the confidentiality of AVDU.
Term: The term of the Agreement will be for 12 months unless terminated sooner. This Agreement may be renewed upon mutual, written agreement of the parties. Either party may terminate this agreement at any time with 30 days written notice.
Services: UTK agrees to provide the following distinct services to AVDU:
i. Identify synergistic new technologies from universities and government laboratories to help provide AVDU with an enhanced new product pipeline.
ii. Review technology acquisition opportunities for AVDU while maintaining AVDU's confidentiality.
iii. Present technology acquisition opportunities for AVDU. AVDU will have 30-days to determine if they want to go forward with the technology license.
a. UTK after 30 days shall have the right to present the technology to other clients.
iv. AVDU acknowledges that the sources of technologies represented by UTEK are 3rd party research institutions for which UTEK does not control whether the technology will be shown to other parties by the licensor.
v. At AVDU's request, UTK will prepare, and compile additional information regarding the technology acquisition opportunities for AVDU.
vi. At AVDU's request and upon mutual agreement between AVDU and UTK, UTK will negotiate and seek to acquire a license to the requested technology for subsequent sale to and acquisition by AVDU.
vii. On a case-by-case basis, at AVDU's request and UTK's sole discretion, UTK will propose an equity-financing plan for AVDU's consideration, to finance select technology acquisition opportunities for AVDU.
viii. AVDU will not seek to acquire any technologies presented to AVDU by UTK directly from the technology developer for a period of 24 months following the termination of this Strategic Alliance agreement.
ix. The compensation quotation is valid for projects authorized and initiated within 30 days of the date of this term sheet.
a. In arms length negotiation with the technology developer, UTK will seek to acquire the license to the technology through one of its subsidiaries. UTEK will then negotiate with AVDU to acquire this subsidiary in a stock for stock exchange under an "Agreement and Plan of Acquisition". The consideration to be paid by AVDU to UTK will be based upon a markup to the value of the license and other assets in the subsidiary as determined by UTK and agreed to by both parties.
b. Should AVDU decide not to proceed in the acquisition of the technology/company as described above, then AVDU shall be prohibited from acquiring the technology/company either directly or indirectly, from the technology/company developer for a period of 24 months following the termination of this Strategic Alliance Agreement.
Technology Transfer: When a technology is shown to AVDU that AVDU wants to acquire, UTK will seek to acquire the license to a technology through one of its subsidiaries. UTK will then seek to provide a term sheet to AVDU outlining the consideration to be paid by AVDU for the acquisition of this technology. UTK shall transfer this subsidiary to AVDU in a stock for stock exchange under an "Agreement and Plan of Acquisition." The consideration to be paid by AVDU to UTK will be based upon a markup to the value of the license and other assets in the subsidiary as determined by UTK and agreed to by both parties.
Compensation:
In consideration for providing these Services, AVDU shall pay UTK $120,000 worth of unregistered shares of common stock (31,413 shares) upon the execution of this Strategic Alliance Agreement. 1/12th of the shares (2,617) shall vest each month during the term of this Agreement. If this Agreement is terminated any unvested shares will be returned to AVDU. Both AVDU and UTK will cover their own out-of-pocket expenses incurred during the performance of this Strategic Alliance Agreement.
Approved by: /s/ Clifford M. Gross /s/ Benjamin C. Croxton UTEK Corporation World Energy Solutions Clifford M. Gross, Ph.D. Benjamin C. Croxton Chief Executive Officer Chief Executive Officer
Date: September 9, 2005 Date: September 9, 2005 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 7.3
STRATEGIC ALLIANCE AGREEMENT
This Strategic Alliance Agreement is made and entered into this 9th day of September 2005, by and between UTEK Corporation ("UTK"), 202 South Wheeler Street, Plant City, Florida 33566 a Delaware corporation, and World Energy Solutions, ("AVDU"), 3900A 31st Street North, St. Petersburg, Florida, a Florida corporation.
WITNESSETH:
WHEREAS, AVDU desires to engage UTK to provide the services as set forth in this Agreement, and
WHEREAS, UTK is agreeable to provide these services.
NOW THEREFORE, in consideration of the mutual promise made in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
I. ENGAGEMENT
AVDU hereby retains UTK to provide those services as defined herein and UTK hereby agrees to the appointment on the terms and conditions hereinafter set forth and agrees to use commercially reasonable efforts in providing said services.
II. INDEPENDENT CONTRACTOR
UTK shall be, and in all respects be deemed to be, an independent contractor in the performance of its duties hereunder.
A. AVDU shall be solely responsible for making all payments to and on behalf of its employees and UTK shall in no event be liable for any debts or other liabilities of AVDU.
B. UTK shall not have or be deemed to have, fiduciary obligations or duties to AVDU, and shall be able to pursue, conduct and carry on for its own account (or for the account of others) such activities, ventures, businesses and other pursuits as UTK in its sole, absolute and unfettered discretion, may elect.
C. Notwithstanding the above, no activity, venture, business or other pursuit of UTK, during the term of this Agreement shall conflict with UTK's obligations under this Agreement.
III. SERVICES
UTK agrees to provide the following services, hereinafter collectively referred to as "Services":
SEE "CONFIDENTIAL TERM SHEET" (EXHIBIT A) ATTACHED AND MADE A PART HEREOF.
A. UTK shall devote such time and efforts, as it deems commercially reasonable, under the circumstances to the affairs of the AVDU, as is reasonable and adequate to render the Services contemplated by this Agreement.
B. UTK cannot guarantee results on behalf of AVDU, but shall pursue all reasonable avenues available through its network of contacts. The acceptance and consumption of any transaction is subject to acceptance of the terms and conditions by its sole discretion.
C. In conjunction with the Services, UTK agrees to:
1. Make itself available at the offices of AVDU or at another mutually agreed upon place, during normal business hours, for reasonable periods of time, subject to reasonable advance notice and mutually convenient scheduling.
2. Make itself available for telephone conferences with the principal officer(s) of AVDU during normal business hours.
IV. EXPENSES
It is expressly agreed and understood that each party shall be responsible for its own normal and reasonable out-of-pocket expenses.
V. COMPENSATION
A. In consideration for the services to be provided, AVDU agrees that it will remit the agreed upon stock certificate within five (5) days of both parties executing this Agreement.
B. AVDU agrees that UTK shall be entitled to compensation as follows:
SEE STRATEGIC ALLIANCE CONFIDENTIAL TERM SHEET (EXHIBIT A) ATTACHED AND MADE A PART HEREOF.
VI. TERM AND TERMINATION
The term of the Agreement will be for 12 months unless terminated sooner. This agreement may be renewed upon mutual, written agreement of the parties. Either party may terminate this Agreement at any time with 30 days written notice. - 2 -
VII. LEGAL COMPLIANCE
AVDU agrees that it will put in place, if it has not already done so, policies and procedures relating to and addressing, with the commercially reasonable intent to ensure compliance with, applicable securities laws, rules and regulations, including, but not limited to:
A. The use, release or other publication of forward-looking statements.
B. Disclosure requirements regarding the required disclosure of the nature and terms of UTK's relationship with, including, but not limited to press releases, publications on its web site, letters to investors and telephone or other personal communication with potential or current investors.
C. No press releases or any other forms of communication to third parties which mention both UTK CORPORATION and AVDU, shall be released without the prior written consent and approval of both UTK and AVDU.
D. EXECUTION. The execution, delivery and performance of this Agreement, in the time and manner herein specified will not conflict with, result in a breach of, or constitute a default under any existing agreement, indenture, or other instrument to which either AVDU OR UTK is a party or by which either entity may be bound or affected.
E. TIMELY APPRISALS. AVDU shall use its commercially reasonable efforts to keep UTK up to date and apprised of all business, market and legal developments related to and its relationship to UTK.
F. CORPORATE AUTHORITY. Both AVDU and UTK have full legal authority to enter into this Agreement and perform the same in the time and manner contemplated.
G. The individuals whose signatures appear below are authorized to sign this Agreement on behalf of their respective corporations.
H. AVDU will cooperate with UTK and will promptly provide UTK with all pertinent materials and requested information in order for UTK to perform its Services pursuant to this Agreement.
I. When delivered, the shares of AVDU Common Stock shall be duly and validly issued, fully paid and non-assessable.
J. UTK represents to AVDU that a) it has the experience as may be necessary to perform all the required, b) all Services will be performed in a professional manner, and c) all individuals it provides to perform the Services will be appropriately qualified and subject to appropriate agreements concerning the protection of trade secrets and confidential information of which such persons may have access to over the term of this Agreement.
K. Until termination of the engagement, AVDU will notify UTK promptly of the occurrence of any event, which might materially affect the condition (financial or otherwise), or prospects of AVDU. - 3 -
VIII. CONFIDENTIAL DATA
A. UTK shall not divulge to others, any trade secret or confidential information, knowledge, or data concerning or pertaining to the business and affairs of AVDU, obtained by UTK as a result of its engagement hereunder, unless authorized, in writing by AVDU. UTK represents and warrants that it has established appropriate internal procedures for protecting the trade secrets and confidential information of AVDU, including, without limitation, restrictions on disclosure of such information to employees and other persons who may be engaged in such information to employees and other persons who may be engaged in rendering services to any person, firm or entity which may be a competitor of AVDU.
B. AVDU shall not divulge to others, any trade secret or confidential information, knowledge, or data concerning or pertaining to the business and affairs of UTK or confidential information revealed by UTK obtained as a result of its engagement hereunder, unless authorized, in writing, by UTK.
C. UTK shall not be required in the performance of its duties to divulge to AVDU, or any officer, director, agent or employee of AVDU, any secret or confidential information, knowledge, or data concerning any other person, firm or entity (including, but not limited to, any such person, firm or entity which may be a competitor or potential competitor of) which UTK may have or be able to obtain other than as a result of the relationship established by this Agreement.
IX. OTHER MATERIAL TERMS AND CONDITIONS
A. INDEMNITY.
1. UTK shall indemnify, defend and hold harmless AVDU from and against any and all losses incurred by AVDU which arise out of or result from misrepresentation, breach of warranty or breach or non- fulfillment of any covenant contained herein or Schedules annexed hereto or in any other documents or instruments furnished by UTK pursuant hereto or in connection with this Agreement.
2. AVDU shall indemnify, defend and hold harmless UTK from and against any and all losses incurred by UTK which arise out of or result from misrepresentation, breach of warranty or breach or non-fulfillment of any covenant contained herein or Schedules annexed hereto or in any other documents or instruments furnished by AVDU pursuant hereto or in connection with this Agreement.
B. PROVISIONS. Neither termination nor completion of the assignment shall affect the provisions of this Agreement, and the Indemnification Provisions that are incorporated herein, which shall remain operative and in full force and effect.
C. AVDU agrees that for a twenty four months (24) following the execution of this Agreement, AVDU shall not, without UTEK's prior written consent, directly or indirectly solicit for employment any present employee of UTEK, or request induce or advise any employee of UTEK to leave the employ of UTEK. In turn, UTEK agrees that it will not directly or indirectly solicit any present employee of AVDU. - 4 -
D. ADDITIONAL INSTRUMENTS. Each of the parties shall from time to time, at the request of others, execute, acknowledge and deliver to the other party any and all further instruments that may be reasonably required to give full effect and force to the provisions of this Agreement.
E. ENTIRE AGREEMENT. Each of the parties hereby covenants that this Agreement, is intended to and does contain and embody herein all of the understandings and agreements, both written or oral, of the parties hereby with respect to the subject matter of this Agreement, and that there exists no oral agreement or understanding expressed or implied liability, whereby the absolute, final and unconditional character and nature of this Agreement shall be in any way invalidated, empowered or affected. There are no representations, warranties or covenants other than those set forth herein.
F. ASSIGNMENTS. The benefits of the Agreement shall inure to the respective successors and assignees of the parties and assigns and representatives, and the obligations and liabilities assumed in this Agreement by the parties hereto shall be binding upon their respective successors and assigns; provided that the rights and obligations of UTK under this Agreement may not be assigned or delegated without the prior written consent of AVDU and any such purported assignment shall be null and void. Notwithstanding the foregoing, UTK may assign this Agreement or any portion of its Compensation as outlined herein to its subsidiaries in its sole discretion.
G. ORIGINALS. This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed an original and constitute one and the same agreement.
H. ADDRESSES OF PARTIES. Each party shall at all times keep the other informed of its principal place of business if different from that stated herein, and shall promptly notify the other of any change, giving the address of the new place of business or residence.
I. NOTICES. All notices that are required to be or may be sent pursuant to the provision of this Agreement shall be sent by certified mail, return receipt requested, or by overnight package delivery service to each of the parties at the addresses appearing herein, and shall count from the date of mailing or the validated air bill.
J. MODIFICATION AND WAVIER. A modification or waiver of any of the provisions of this Agreement shall be effective only if made in writing and executed with the same formality as this Agreement. The failure of any party to insist upon strict performance of any of the provisions of this Agreement shall not be construed as a waiver of any subsequent default of the same or similar nature or of any other nature.
K. INJUNCTIVE RELIEF. Solely by virtue of their respective execution of this Agreement and in consideration for the mutual covenants of each other, AVDU and UTK hereby agree, consent and acknowledge that, in the event of a breach of any material term of this Agreement, the non-breaching party will be without adequate remedy-at-law and shall therefore, be entitled to immediately redress any material breach of this Agreement by temporary or permanent injunctive or mandatory relief obtained in an action or proceeding instituted in any court of competent jurisdiction without the necessity of proving damages and without prejudice to any other remedies which the non-breaching party may have at law or in equity. - 5 -
L. ATTORNEY'S FEES. If any arbitration, litigation, action, suit, or other proceeding is instituted to remedy, prevent or obtain relief from a breach of this Agreement, in relation to a breach of this Agreement or pertaining to a declaration of rights under this Agreement, the prevailing party will recover all such party's attorneys' fees incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions there from. As used in this Agreement, attorneys' fees will be deemed to be the full and actual cost of any legal services actually performed in connection with the matters involved, including those related to any appeal to the enforcement of any judgment calculated on the basis of the usual fee charged by attorneys performing such services.
APPROVED AND AGREED: UTEK CORPORATION WORLD ENERGY SOLUTIONS
By: /s/ Clifford M. Gross By: /s/ Benjamin C. Croxton Clifford M. Gross, Ph.D. Benjamin C. Croxton Chief Executive Officer Chief Executive Officer - 6 -
Exhibit A
CONFIDENTIAL TERM SHEET
PROPOSED STRATEGIC ALLIANCE BETWEEN UTEK CORPORATION (UTK) & WORLD ENERGY SOLUTIONS (AVDU)
Statement of Work: To identify technology acquisition opportunities for AVDU from research universities and government laboratories. A first step in this process is the development of a Technology Acquisition Profile. Once completed, we will identify and present technologies that meet this profile. While conducting our search we will maintain the confidentiality of AVDU.
Term: The term of the Agreement will be for 12 months unless terminated sooner. This Agreement may be renewed upon mutual, written agreement of the parties. Either party may terminate this agreement at any time with 30 days written notice.
Services: UTK agrees to provide the following distinct services to AVDU:
i. Identify synergistic new technologies from universities and government laboratories to help provide AVDU with an enhanced new product pipeline.
ii. Review technology acquisition opportunities for AVDU while maintaining AVDU's confidentiality.
iii. Present technology acquisition opportunities for AVDU. AVDU will have 30-days to determine if they want to go forward with the technology license.
a. UTK after 30 days shall have the right to present the technology to other clients.
iv. AVDU acknowledges that the sources of technologies represented by UTEK are 3rd party research institutions for which UTEK does not control whether the technology will be shown to other parties by the licensor.
v. At AVDU's request, UTK will prepare, and compile additional information regarding the technology acquisition opportunities for AVDU.
vi. At AVDU's request and upon mutual agreement between AVDU and UTK, UTK will negotiate and seek to acquire a license to the requested technology for subsequent sale to and acquisition by AVDU.
vii. On a case-by-case basis, at AVDU's request and UTK's sole discretion, UTK will propose an equity-financing plan for AVDU's consideration, to finance select technology acquisition opportunities for AVDU.
viii. AVDU will not seek to acquire any technologies presented to AVDU by UTK directly from the technology developer for a period of 24 months following the termination of this Strategic Alliance agreement.
ix. The compensation quotation is valid for projects authorized and initiated within 30 days of the date of this term sheet.
a. In arms length negotiation with the technology developer, UTK will seek to acquire the license to the technology through one of its subsidiaries. UTEK will then negotiate with AVDU to acquire this subsidiary in a stock for stock exchange under an "Agreement and Plan of Acquisition". The consideration to be paid by AVDU to UTK will be based upon a markup to the value of the license and other assets in the subsidiary as determined by UTK and agreed to by both parties.
b. Should AVDU decide not to proceed in the acquisition of the technology/company as described above, then AVDU shall be prohibited from acquiring the technology/company either directly or indirectly, from the technology/company developer for a period of 24 months following the termination of this Strategic Alliance Agreement.
Technology Transfer: When a technology is shown to AVDU that AVDU wants to acquire, UTK will seek to acquire the license to a technology through one of its subsidiaries. UTK will then seek to provide a term sheet to AVDU outlining the consideration to be paid by AVDU for the acquisition of this technology. UTK shall transfer this subsidiary to AVDU in a stock for stock exchange under an "Agreement and Plan of Acquisition." The consideration to be paid by AVDU to UTK will be based upon a markup to the value of the license and other assets in the subsidiary as determined by UTK and agreed to by both parties.
Compensation:
In consideration for providing these Services, AVDU shall pay UTK $120,000 worth of unregistered shares of common stock (31,413 shares) upon the execution of this Strategic Alliance Agreement. 1/12th of the shares (2,617) shall vest each month during the term of this Agreement. If this Agreement is terminated any unvested shares will be returned to AVDU. Both AVDU and UTK will cover their own out-of-pocket expenses incurred during the performance of this Strategic Alliance Agreement.
Approved by: /s/ Clifford M. Gross /s/ Benjamin C. Croxton UTEK Corporation World Energy Solutions Clifford M. Gross, Ph.D. Benjamin C. Croxton Chief Executive Officer Chief Executive Officer
Date: September 9, 2005 Date: September 9, 2005 | Highlight the parts (if any) of this contract related to "Affiliate License-Licensee" that should be reviewed by a lawyer. Details: Does the contract contain a license grant to a licensee (incl. sublicensor) and the affiliates of such licensee/sublicensor? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Expiration Date" that should be reviewed by a lawyer. Details: On what date will the contract's initial term expire?
Context: Exhibit 99.1
EXECUTION VERSION
METLIFE, INC.
Series E Senior Component Debentures, Tranche 1, due 2018 Series E Senior Component Debentures, Tranche 2, due 2045
REMARKETING AGREEMENT
August 26, 2014
Deutsche Bank Securities Inc. 60 Wall Street New York, New York 10005
Ladies and Gentlemen:
This Remarketing Agreement is dated as of August 26, 2014 (this "Remarketing Agreement"), among MetLife, Inc., a Delaware corporation (the "Company"), and Deutsche Bank Securities Inc. ("Deutsche Bank") (the "Remarketing Agents," which expression shall include any institution appointed as a Remarketing Agent in accordance with Section 8 hereof), and Deutsche Bank Trust Company Americas, not individually but solely as Stock Purchase Contract Agent (as defined below) and as attorney-in-fact of the holders of Stock Purchase Contracts (as defined below). The Company and the Remarketing Agents will enter into a Pricing Agreement, to be dated the Remarketing Date (as defined below) (the "Pricing Agreement"), which will set forth, inter alia, the final terms of the Remarketed Securities (as defined below) and the Remarketing Fee (as defined below). The Remarketing Agents are undertaking to remarket Series E Senior Component Debentures, Tranche 1, due 2018 (principal amount $1,000 per Series E Senior Component Debenture) (the "First Tranche Series E Debt Securities") and Series E Senior Component Debentures, Tranche 2, due 2045 (principal amount $1,000 per Series E Senior Component Debenture) (the "Second Tranche Series E Debt Securities"), whose terms will each be modified in the event of a Successful Remarketing (as defined below), as provided in the notice of remarketing from the Company, dated August 26, 2014 (the "Notice") pursuant to Section 3.3(a) of the Twenty-Second Supplemental Indenture (as defined below) and Section 5.2(a)(iv) of the Stock Purchase Contract Agreement (as defined below) (such securities, as so modified from and after a Successful Remarketing (whether or not such securities were remarketed by the Remarketing Agents), the "Securities"). Upon a Successful Remarketing, the Stated Maturity (as defined in the Indenture (as defined below)) of the First Tranche Series E Debt Securities will, effective October 8, 2014, automatically be adjusted to December 15, 2017 and the Stated Maturity of the Second Tranche Series E Debt Securities will, effective October 8, 2014, automatically be adjusted to December 15, 2044.
The First Tranche Series E Debt Securities and Second Tranche Series E Debt Securities will be component securities of the Series E Senior Debentures due 2045 ("Series E Debt Securities") issued by the Company, pursuant to an Indenture, dated as of November 9, 2001 (the "Base Indenture"), between the Company and The Bank of New York Mellon Trust Company, N.A. (as successor in interest to J.P. Morgan Trust Company, National Association (as successor to Bank One Trust Company, N.A.)), as trustee (the "Trustee"), as supplemented by the Twenty- Second Supplemental Indenture, dated as of November 1, 2010 (the "Twenty-Second Supplemental Indenture" and, together with the Base Indenture, the "Indenture"), between the Company and the Trustee. Effective on September 15, 2014, the Series E Debt Securities will automatically convert, without any act of any holder, into units consisting of two tranches, with each $2,000 principal amount of Series E Debt Securities thereafter consisting of $1,000 principal amount of First Tranche Series E Debt Securities and $1,000 principal amount of Second Tranche Series E Debt Securities.
A 1/40t h or 2.50% undivided beneficial ownership interest in each Series E Debt Security having a principal amount of $1,000 is part of a common equity unit (each, a "Unit"), which currently includes one stock purchase contract (the "Stock Purchase Contract") which was issued pursuant to the Stock Purchase Contract Agreement, dated as of November 1, 2010, as amended and supplemented by Supplemental Agreement No. 1, dated June 26, 2013, between the Company and the Stock Purchase Contract Agent (as so amended and supplemented, the "Stock Purchase Contract Agreement"), between the Company and Deutsche Bank Trust Company Americas, as stock purchase contract agent (the "Stock Purchase Contract Agent"), and under which the holder of the Unit is obligated to purchase from the Company on the Third Stock Purchase Date (as defined in the Stock Purchase Contract Agreement), for $25.00 per Stock Purchase Contract, a number of shares of common stock, par value $0.01 per share, of the Company (the "Common Stock"), equal to the applicable Settlement Rate as set forth in the Stock Purchase Contract Agreement. The ownership interests in the Series E Debt Securities or, if the holder has stripped such Unit, designated zero-coupon U.S. Treasury Securities, have been pledged to secure the obligations to purchase Common Stock on the Third Stock Purchase Date (as defined in the Stock Purchase Contract Agreement) pursuant to the Stock Purchase Contract. The terms and conditions of such pledge are set forth in the Pledge Agreement, dated as of November 1, 2010 (the "Pledge Agreement"), among the Company, Deutsche Bank Trust Company Americas, as collateral agent (the "Collateral Agent"), custodial agent (the "Custodial Agent") and securities intermediary (the "Securities Intermediary"), and the Stock Purchase Contract Agent.
The Units were initially issued in a private placement to AM Holdings LLC (f/k/a ALICO Holdings LLC), a Delaware limited liability company (the "Selling Securityholder"), as part of the consideration paid by the Company to the Selling Securityholder in connection with the Company's acquisition of American Life Insurance Company and Delaware American Life Insurance Company from the Selling 2
Securityholder and American International Group, Inc. (the "Acquisition"). The Acquisition was completed on November 1, 2010. The Units were offered and sold by the Selling Securityholder in a registered public offering completed on March 8, 2011.
Capitalized terms used and not defined in this Remarketing Agreement shall have the meanings set forth in the Stock Purchase Contract Agreement, the Pledge Agreement or the Indenture, as the case may be.
The Remarketing (as defined below) of the First Tranche Series E Debt Securities and Second Tranche Series E Debt Securities is provided for in Article III of the Twenty-Second Supplemental Indenture. As used in this Remarketing Agreement, "Transaction Documents" shall mean, collectively, the Stock Purchase Contract Agreement, the Indenture, the Pledge Agreement, this Remarketing Agreement and the Pricing Agreement; the term "Remarketed Securities" means the First Tranche Series E Debt Securities and Second Tranche Series E Debt Securities subject to the Remarketing as notified to the Remarketing Agents by the Collateral Agent and the Custodial Agent, on or prior to the Remarketing Date; the term "Remarketing Procedures" means the procedures in connection with the Remarketing, described in the Stock Purchase Contract Agreement, the Pledge Agreement and the Twenty-Second Supplemental Indenture, as the case may be; the term "Remarketing" means the remarketing, offering, sale and delivery of the Remarketed Securities pursuant to the Remarketing Procedures; the term "Remarketing Date" means the date on which the Remarketing Agents price the Remarketed Securities in connection with the Remarketing, such date to occur on a Business Day (as defined below) during the period that begins on, and includes, September 25, 2014 and ends on, and includes, October 7, 2014; the term "Remarketing Settlement Date" means the date on which the purchase and sale of the Remarketed Securities closes and the delivery of such Remarketed Securities is made against payment therefor, such date to occur on a Business Day during the period that begins on, and includes, October 1, 2014 and ends on, and includes, October 8, 2014; and the term "Successful Remarketing" means a Remarketing that (i) was conducted in accordance with Article III of the Twenty-Second Supplemental Indenture; and (ii) results in (a) the sale of each Remarketed Security that is subject to such Remarketing by the Remarketing Agents by no later than 4:00 P.M., New York City time, on the Remarketing Settlement Date of such Remarketing; (b) the delivery of the aggregate cash gross proceeds from such sale to such Remarketing Agents no later than 4:00 P.M., New York City time, on such Remarketing Settlement Date; and (c) aggregate cash gross proceeds of not less than the Remarketing Price (as defined below) for such Remarketing.
As used herein, "Business Day" means any day other than a Saturday, Sunday or other day on which banking institutions in New York, New York are authorized or required by law or executive order to remain closed.
1. Appointment and Obligations of the Remarketing Agents. (a) The Company hereby appoints Deutsche Bank as the initial Remarketing Agent, and Deutsche 3
Bank hereby accepts appointment as Remarketing Agent, for the purpose of (i) Remarketing the Remarketed Securities on behalf of the holders thereof, (ii) establishing the Reset Rates (as defined below) for the Securities in connection with the Remarketing and (iii) performing such other duties as are assigned to the Remarketing Agents in the Remarketing Procedures, all in accordance with and pursuant to the Remarketing Procedures.
(b) The Remarketing Agents agree (i) to use commercially reasonable efforts to remarket the Remarketed Securities tendered or deemed tendered to the Remarketing Agents in the Remarketing, (ii) to establish the Reset Rates in accordance with the Remarketing Procedures and to notify the Company, the Trustee and the Stock Purchase Contract Agent promptly of the Reset Rates and (iii) to carry out such other duties as are assigned to the Remarketing Agents in the Remarketing Procedures, all in accordance with the provisions of the Remarketing Procedures.
(c) On the Remarketing Date, the Remarketing Agents shall use their commercially reasonable efforts to remarket the Remarketed Securities tendered or deemed tendered for purchase, at a price which results in cash proceeds equal to at least the sum of (i) the remarketing fee to be paid to the Remarketing Agents in connection with the Remarketing in an amount to be specified in the Pricing Agreement (such fee, the "Remarketing Fee"), (ii) 100% of the aggregate principal amount of such Remarketed Securities, (iii) the accrued and unpaid interest to, but not including, the Initial Scheduled Third Stock Purchase Date on such Remarketed Securities and (iv) the product of five basis points (0.05%) and the aggregate principal amount of such Remarketed Securities (such sum, the "Remarketing Price").
(d) On the Remarketing Date, the Remarketing Agents shall determine the rate per annum, rounded to the nearest one-thousandth of one percent (0.001%), that each tranche of Securities should bear (which rate will apply to all Securities of the applicable tranche whether or not such Securities were included in the Remarketing) (the "Reset Rate") in order for each tranche of the Remarketed Securities to generate cash proceeds from the Remarketing equal to at least the Remarketing Price allocable to that tranche and that in the sole reasonable discretion of the Remarketing Agents will enable them to remarket all Remarketed Securities of such tranche tendered or deemed tendered for purchase in such Remarketing at no less than the Remarketing Price allocable to that tranche; provided, that, each such Reset Rate need not, but may, be the same for each tranche of Securities; provided, however, that, unless such requirement has been validly waived by the Company, the Reset Rate may not exceed the prevailing market yield, as determined by the Remarketing Agents, of the benchmark U.S. treasury security having a remaining maturity that most closely corresponds to the period from the Remarketing Settlement Date until the Stated Maturity of the applicable tranche of the Securities (after giving effect to the change in the Stated Maturity of each tranche of the Securities on the Remarketing Settlement Date pursuant to the Indenture), plus 750 basis points per annum; provided, further, that neither Reset Rate may be less than 0% per annum. 4
(e) In the event of a Remarketing that is not a Successful Remarketing, the Remarketing Agents shall promptly remit (i) to the Custodial Agent the Remarketed Securities, if any, that are no longer a component of the Units ("Separate Securities"), and (ii) to the Collateral Agent the balance of the Remarketed Securities.
(f) By no later than 4:30 P.M., New York City time, on the Remarketing Settlement Date, provided that there has been a Successful Remarketing, the Remarketing Agents shall advise, by telephone, the Company, the Stock Purchase Contract Agent and the Trustee that the Remarketing was a Successful Remarketing and of the Reset Rates determined in the Remarketing and the aggregate principal amount of Remarketed Securities sold in the Remarketing.
(g) In accordance with The Depository Trust Company's (the "Depositary") normal procedures, on the Remarketing Settlement Date, the transactions described above with respect to each Remarketed Security tendered for purchase and sold in the Remarketing shall be executed through the Depositary, and the accounts of the respective Depositary participants shall be debited and credited and such Remarketed Securities delivered by book-entry as necessary to effect purchases and sales of such Remarketed Securities.
(h) On the Remarketing Settlement Date, the tender and settlement procedures set forth in this Section 1, including provisions for payment by purchasers of the Remarketed Securities in the Remarketing, shall be subject to modification to the extent required by the Depositary or, if the book- entry system is no longer available for the Remarketed Securities at the time of the Remarketing, to facilitate the tendering and remarketing of the Remarketed Securities in certificated form. In addition, the Remarketing Agents may modify the settlement procedures set forth herein in order to facilitate the settlement process.
(i) On the Remarketing Settlement Date, the Remarketing Agents shall deduct the Remarketing Fee from the gross proceeds of the Remarketing and shall remit any proceeds remaining after such deduction as follows: (i) to the extent such net proceeds relate to Remarketed Securities that form part of any Normal Common Equity Unit (as defined in the Stock Purchase Contract Agreement), to the Securities Intermediary and (ii) to the extent such net proceeds relate to the Separate Securities that were included in the Remarketing as Remarketed Securities to, or at the direction of, the Custodial Agent for payment to the holders of such Separate Securities. Holders whose First Tranche Series E Debt Securities and Second Tranche Series E Debt Securities are remarketed pursuant to this Remarketing Agreement will not otherwise be responsible for the payment of any Remarketing Fee in connection therewith. 5
(j) If fewer than all of the Remarketed Securities are remarketed in accordance with the terms hereof, the Remarketing shall be deemed to have failed as to all Remarketed Securities.
(k) If at any time during the term of this Remarketing Agreement, any Event of Default (as defined in the Indenture) or event that with the passage of time or the giving of notice or both would become such an Event of Default has occurred and is continuing under the Indenture, then the obligations and duties of the Remarketing Agents under this Remarketing Agreement shall be suspended until such default or event has been cured. The Company will promptly cause the Trustee, the Stock Purchase Contract Agent and the Collateral Agent to give the Remarketing Agents notice of all such defaults and events of which such trustee or agent is aware.
2. Representations and Warranties of the Company. The Company hereby represents and warrants that, unless otherwise specified (i) on and as of the Applicable Time (as defined below) (to the extent such representations and warranties are applicable as of such date), (ii) on and as of the Remarketing Date and (iii) on and as of the Remarketing Settlement Date that:
(a) The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 333-192366) under the Securities Act of 1933, as amended (the "Act"), which has become effective covering, inter alia, the Remarketing of the Remarketed Securities. The Company meets the requirements for use of Form S-3 under the Act. The Company proposes to file with the Commission pursuant to Rule 424 under the Act a supplement or supplements to the form of prospectus included in such registration statement relating to the Remarketed Securities and the plan of distribution thereof. Such registration statement, including the exhibits thereto, as amended at the Remarketing Date, is hereinafter called the "Registration Statement"; the Registration Statement at the time it originally became effective is herein called the "Original Registration Statement"; such prospectus in the form in which it appears in the Original Registration Statement is hereinafter called the "Base Prospectus"; and such supplemented form of prospectus, in the form in which it shall first be filed with the Commission pursuant to Rule 424 (including the Base Prospectus as so supplemented), is hereinafter called the "Final Prospectus." Any preliminary form of the Final Prospectus in the form in which it shall first be filed with the Commission pursuant to Rule 424 is hereinafter called a "Preliminary Prospectus." Any reference herein to the Registration Statement, the Base Prospectus, any Preliminary Prospectus, the Pricing Prospectus (as defined below) or the Final Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), on or before the Remarketing Date, or the issue date of the Base 6
Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Final Prospectus, as the case may be; and any reference herein to the terms "amend," "amendment" or "supplement" with respect to the Registration Statement, the Base Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Final Prospectus shall be deemed to refer to and include any document filed under the Exchange Act after the date of this Remarketing Agreement, or the issue date of the Base Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Final Prospectus, as the case may be, deemed to be incorporated therein by reference; each Preliminary Prospectus, the Pricing Prospectus and the prospectuses filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Act, complied or will comply, as applicable, when so filed in all material respects with the Act and the rules thereunder and each Preliminary Prospectus, the Pricing Prospectus and the Final Prospectus delivered to the Remarketing Agents for use in connection with this offering will be identical to the electronically transmitted copies thereof filed with the Commission via the Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system, except to the extent permitted by Regulation S-T.
(b) (i) The Registration Statement, as amended as of any such time, and the Final Prospectus, as amended or supplemented as of any such time, and, in the case of Securities issued pursuant to the Indenture, such Indenture, will comply in all material respects with the applicable requirements of the Act, the Exchange Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), as applicable, and the respective rules thereunder;
(ii) (A) The Registration Statement does not and will not, as of the applicable effective date as to each part of the Registration Statement, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading and (B) the Final Prospectus does not and will not, as of its date and as of its filing date, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that for each of (A) and (B), the Company makes no representations or warranties as to (i) that part of the Registration Statement which shall constitute the trustee's Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture Act or (ii) the information contained in or omitted from the Registration Statement or the Final Prospectus in reliance upon and in conformity with information relating to any Remarketing Agent furnished in writing to the Company by such Remarketing Agent expressly for use in the Registration Statement and the Final Prospectus; 7
(iii) As of the Applicable Time, the Issuer Free Writing Prospectus(es) (as defined below) listed on Schedule 1 hereto, if any, the Pricing Prospectus (as defined below), and the final term sheet relating to the Remarketed Securities set forth as Annex A to the Pricing Agreement (the "Final Term Sheet"), all considered together (collectively, the "Disclosure Package"), will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and
(iv) As of the Applicable Time, each Issuer Free Writing Prospectus listed on Schedule 1 hereto, if any, will not conflict with the information contained or incorporated by reference in the Registration Statement or the Disclosure Package, and each such Issuer Free Writing Prospectus, as supplemented by and taken together with the Disclosure Package and any other such Issuer Free Writing Prospectus, in each case as of the Applicable Time, will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, it is understood and agreed that in no event shall any such Issuer Free Writing Prospectus, including but not limited to any electronic roadshow, be listed on Schedule 1 hereto unless the Company (i) has consented to the use thereof and (ii) shall have approved its contents before any such use, in each case in accordance with the provisions of this Remarketing Agreement.
As used in this subsection and elsewhere in this Remarketing Agreement:
"Applicable Time" means such time as is specified as the "Applicable Time" in the Pricing Agreement or such other time as agreed by the Company and the Remarketing Agents.
"Issuer Free Writing Prospectus" means any "issuer free writing prospectus," as defined in Rule 433 under the Act ("Rule 433"), relating to the Remarketed Securities.
"Pricing Prospectus" means the Base Prospectus, as amended or supplemented (including by any Preliminary Prospectus) immediately prior to the Applicable Time. 8
(c) At the time the Company or another offering participant first made a bona fide offer (within the meaning of Rule 164(h)(2) under the Act) of the Securities, the Company was not an "ineligible issuer" as defined in Rule 405 under the Act.
(d) The Company has not distributed and will not distribute, prior to the later of the Remarketing Settlement Date and the completion of the Remarketing Agents' distribution of the Remarketed Securities, any offering material in connection with the Remarketing of the Remarketed Securities other than the Preliminary Prospectus, the Final Prospectus or any Issuer Free Writing Prospectus reviewed and consented to by the Remarketing Agents as provided in Section 3(j) of this Remarketing Agreement.
(e) (i) At the time of filing the Registration Statement, (ii) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), (iii) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) under the Act) relied on the exemption of Rule 163 under the Act, and (iv) as of the date and time that the Pricing Agreement is executed (the "Execution Time"), the Company was and will be a "well known seasoned issuer" as defined in Rule 405 under the Act. The Registration Statement is an "automatic shelf registration statement," as defined in Rule 405 under the Act, that automatically became effective not more than three years prior to the Execution Time; the Company has not received from the Commission any notice pursuant to Rule 401(g)(2) under the Act objecting to use of the automatic shelf registration statement and the Company has not otherwise ceased to be eligible to use the automatic shelf registration statement. The Company has paid or shall pay the required Commission filing fees relating to the Remarketed Securities within the time required by Rule 456(b)(1) under the Act and otherwise in accordance with Rules 456(b) and 457(r) under the Act.
(f) Each document incorporated or deemed to be incorporated by reference in the Registration Statement, the Disclosure Package and the Final Prospectus, when they became effective or at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the Act or the Exchange Act, as applicable.
(g) Neither the Company nor any Significant Subsidiary (as defined below) of the Company has sustained since the date of the latest audited financial statements included or incorporated by reference in the Disclosure Package any loss or interference material to the business of the Company and its subsidiaries considered as a whole, other than as described in or contemplated by 9
the Disclosure Package, from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree; and, since the respective dates as of which information is given in the Disclosure Package, other than as described or contemplated in the Disclosure Package, there has not been any (i) material addition, or development involving a prospective material addition, to the liability of any Significant Subsidiary for future policy benefits, policyholder account balances and other claims, other than in the ordinary course of business, (ii) material decrease in the surplus of any Significant Subsidiary or material change in the capital stock or other ownership interests (other than issuances of common stock upon the exercise of outstanding employee stock options or pursuant to existing employee compensation plans or on the conversion or exchange of convertible or exchangeable securities outstanding on the date of this Remarketing Agreement) of the Company or any Significant Subsidiary or any material increase in the long- term debt of the Company or its subsidiaries, considered as a whole, or (iii) material adverse change, or development involving a prospective material adverse change, in or affecting the business, financial position, reserves, surplus, equity or results of operations (in each case considered either on a statutory accounting or U.S. generally accepted accounting principles ("GAAP") basis, as applicable) of the Company and its subsidiaries considered as a whole. As of December 31, 2013, the subsidiaries of the Company that would qualify as a "Significant Subsidiary" of the Company under Regulation S-X were Metropolitan Life Insurance Company ("MLIC"), MetLife Insurance Company of Connecticut, MetLife Investors USA Insurance Company, Exeter Reassurance Company, Ltd., MetLife Insurance K.K., American Life Insurance Company, MetLife Mexico S.A. and MetLife Reinsurance Company of Charleston, and each of such subsidiaries will be considered a "Significant Subsidiary" for purposes of this Agreement.
(h) The Company and each Significant Subsidiary has good and marketable title in fee simple to all material real property and good and marketable title to all material personal property owned by it, in each case free and clear of all liens, encumbrances and defects that materially interfere with the use made and proposed to be made of such property by the Company or any Significant Subsidiary, except such as are described in the Disclosure Package or such as would not have a material adverse effect on the business, financial position, equity, reserves, surplus or results of operations of the Company and its subsidiaries, considered as a whole ("Material Adverse Effect"), and any material real property and material buildings held under lease by the Company or any of its subsidiaries are held under valid, subsisting and enforceable leases with such exceptions that do not materially interfere with the use made and currently proposed to be made of such property and buildings by the Company or any Significant Subsidiary. 10
(i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with power and authority (corporate and other) to own its properties and conduct its business as described in the Disclosure Package and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification and good standing, except to the extent that the failure to be so qualified and in good standing would not have a Material Adverse Effect; MLIC was duly converted from a mutual life insurance company to a stock life insurance company on April 7, 2000 in accordance with the Plan of Reorganization of MLIC under Section 7312 of the New York Insurance Law; each Significant Subsidiary is validly existing as a corporation and is in good standing under the laws of its jurisdiction of incorporation, with power and authority (corporate and other) to own its properties and conduct its business as described in the Disclosure Package; and each Significant Subsidiary is duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification and good standing, except to the extent that the failure to be so qualified and in good standing would not have a Material Adverse Effect.
(j) The Company had or has, as applicable, the corporate power and authority to execute and deliver each Transaction Document and the Securities and to consummate the transactions contemplated hereby and thereby.
(k) The Company has an authorized capitalization as set forth and described in the Disclosure Package, and all of the issued shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and nonassessable; none of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any securityholder of the Company; except as disclosed in the Disclosure Package, there are no outstanding options or warrants to purchase, or any preemptive rights or other rights to subscribe for or to purchase, any securities or obligations convertible into or any contracts or commitments to sell shares of the Company's capital stock or any such options, rights, warrants, convertible securities or obligations; the description of the Company's stock option plans and the options or other rights granted and exercised thereunder set forth in the Disclosure Package accurately and fairly describe the information required to be shown with respect to such plans, arrangements, options and rights; except as disclosed in the Disclosure Package, there are no rights of any person, corporation or other entity to require registration of any shares of common stock or any other securities of the Company in connection with the filing of the Registration Statement and the 11
Remarketing of the Remarketed Securities by the Remarketing Agents pursuant to this Remarketing Agreement and the Pricing Agreement; all of the issued shares of capital stock or other ownership interests of MLIC have been duly and validly authorized and issued, are fully paid and nonassessable and are owned directly or indirectly by the Company free and clear of all liens, encumbrances, equities or claims.
(l) Each Transaction Document has been duly authorized by the Company and has been or, at the Remarketing Settlement Date, will have been duly executed and delivered, will conform in all material respects to the description thereof in the Disclosure Package and the Final Prospectus, and each Transaction Document other than this Remarketing Agreement and the Pricing Agreement constitutes or, at the Remarketing Settlement Date, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer, moratorium and other similar laws relating to or affecting creditors' rights generally and to general principles of equity; and the Indenture has been duly qualified under the Trust Indenture Act.
(m) The Series E Debt Securities have been duly authorized, executed, authenticated, issued and delivered and constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer, moratorium and other similar laws relating to or affecting creditors' rights generally and to general principles of equity, and are entitled to the benefits provided by the Indenture; the Series E Debt Securities are, and the First Tranche Series E Debt Securities and the Second Tranche Series E Debt Securities will be, substantially in the form contemplated by the Indenture.
(n) The Securities have been duly authorized and will, on the Remarketing Settlement Date, have been duly executed, authenticated, issued and delivered (assuming their due authentication by the trustee) and constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer, moratorium and other similar laws relating to or affecting creditors' rights generally and to general principles of equity, and will be entitled to the benefits provided by the Indenture; and the Securities will be substantially in the form contemplated by the Indenture and will conform in all material respects to the description thereof contained in the Disclosure Package and the Final Prospectus.
(o) Each Significant Subsidiary that is required to be organized or licensed as an insurance company in its jurisdiction of incorporation (each, an "Insurance Subsidiary" and collectively, the "Insurance Subsidiaries") is licensed 12
as an insurance company in its respective jurisdiction of incorporation and is duly licensed or authorized as an insurer in each other jurisdiction where it is required to be so licensed or authorized to conduct its business, in each case with such exceptions as would not have, individually or in the aggregate, a Material Adverse Effect; except as otherwise described in the Disclosure Package, each Insurance Subsidiary has all other approvals, orders, consents, authorizations, licenses, certificates, permits, registrations and qualifications (collectively, the "Approvals") of and from all insurance regulatory authorities to conduct its business, with such exceptions as would not have, individually or in the aggregate, a Material Adverse Effect; there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or investigation that could reasonably be expected to lead to any revocation, termination or suspension of any such Approval, the revocation, termination or suspension of which would have, individually or in the aggregate, a Material Adverse Effect; and, to the knowledge of the Company, no insurance regulatory agency or body has issued any order or decree impairing, restricting or prohibiting the payment of dividends by any Insurance Subsidiary to its parent which would have, individually or in the aggregate, a Material Adverse Effect.
(p) The Company and each Significant Subsidiary has all necessary Approvals of and from, and has made all filings, registrations and declarations (collectively, the "Filings") with, all insurance regulatory authorities, all Federal, state, local and other governmental authorities, all self-regulatory organizations and all courts and other tribunals, which are necessary to own, lease, license and use its properties and assets and to conduct its business in the manner described in the Disclosure Package, except where the failure to have such Approvals or to make such Filings would not have, individually or in the aggregate, a Material Adverse Effect; to the knowledge of the Company, the Company and each Significant Subsidiary is in compliance with all applicable laws, rules, regulations, orders, by-laws and similar requirements, including in connection with registrations or memberships in self-regulatory organizations, and all such Approvals and Filings are in full force and effect and neither the Company nor any Significant Subsidiary has received any notice of any event, inquiry, investigation or proceeding that would reasonably be expected to result in the suspension, revocation or limitation of any such Approval or otherwise impose any limitation on the conduct of the business of the Company or any Significant Subsidiary, except as described in the Disclosure Package or except for any such non-compliance, suspension, revocation or limitation which would not have, individually or in the aggregate, a Material Adverse Effect.
(q) Each Insurance Subsidiary is in compliance with and conducts its businesses in conformity with all applicable insurance laws and regulations of its respective jurisdiction of incorporation and the insurance laws and regulations of other jurisdictions which are applicable to it, in each case with such exceptions as would not have, individually or in the aggregate, a Material Adverse Effect. 13
(r) Each Significant Subsidiary which is engaged in the business of acting as a broker-dealer or an investment advisor (respectively, a "Broker-Dealer Subsidiary" and an "Investment Advisor Subsidiary") is duly licensed or registered as a broker-dealer or investment advisor, as the case may be, in each jurisdiction where it is required to be so licensed or registered to conduct its business, in each case, with such exceptions as would not have, individually or in the aggregate, a Material Adverse Effect; each Broker-Dealer Subsidiary and each Investment Advisor Subsidiary has all other necessary Approvals of and from all applicable regulatory authorities, including any self- regulatory organization, to conduct its businesses, in each case with such exceptions, as would not have, individually or in the aggregate, a Material Adverse Effect; except as otherwise described in the Disclosure Package, none of the Broker-Dealer Subsidiaries or Investment Advisor Subsidiaries has received any notification from any applicable regulatory authority to the effect that any additional Approvals from such regulatory authority are needed to be obtained by such subsidiary in any case where it could be reasonably expected that (x) any of the Broker-Dealer Subsidiaries or Investment Advisor Subsidiaries would in fact be required either to obtain any such additional Approvals or cease or otherwise limit engaging in a certain business and (y) the failure to have such Approvals or limiting such business would have a Material Adverse Effect; and each Broker-Dealer Subsidiary and each Investment Advisor Subsidiary is in compliance with the requirements of the broker-dealer and investment advisor laws and regulations of each jurisdiction which are applicable to such subsidiary, and has filed all notices, reports, documents or other information required to be filed thereunder, in each case with such exceptions as would not have, individually or in the aggregate, a Material Adverse Effect.
(s) The Remarketing of the Remarketed Securities pursuant to this Remarketing Agreement and the Pricing Agreement, and compliance by the Company with all of the provisions of the Securities and the Transaction Documents, and the consummation of the transactions herein and therein contemplated, will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement, or other written agreement or similar instrument to which the Company or any Significant Subsidiary is a party or by which the Company or any Significant Subsidiary is bound or to which any of the property or assets of the Company or any Significant Subsidiary is subject, or which affects the validity, performance or consummation of the transactions contemplated by this Remarketing Agreement, nor will such action result in any violation of any statute or any order, rule or regulation of any court or insurance regulatory 14
authority or other governmental agency or body having jurisdiction over the Company or any Significant Subsidiary or any of their properties, in each case other than such breaches, conflicts, violations, or defaults which individually or in the aggregate, would not have a Material Adverse Effect and would not adversely affect the validity or performance of the Company's obligations, as applicable, under or with respect to the Remarketed Securities or any Transaction Document (in each case as to which the Company is or is to become a party); nor will such action result in any violation of the provisions of the certificate of incorporation or by-laws or other charter documents of the Company or any Significant Subsidiary; and no Approval of or Filing with any such court or insurance regulatory authority or other governmental agency or body is required for the execution, delivery and performance by the Company of any Transaction Document or for the issue or sale of the Securities, except, assuming the accuracy of the Remarketing Agents' representation in Section 9 of this Remarketing Agreement, (i) the registration under the Act of the Securities which registration has become effective and (ii) such Approvals or Filings as may be required under the Trust Indenture Act or state securities or Blue Sky laws in connection with the Remarketing of the Remarketed Securities by the Remarketing Agents.
(t) Other than as set forth in the Disclosure Package, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or to which any property of the Company or any of its subsidiaries is subject, challenging the transactions contemplated by the Transaction Documents or which, if determined adversely to the Company or its subsidiaries, could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or would materially and adversely affect the ability of the Company to perform its obligations under the Transaction Documents; and, to the knowledge of the Company, no such proceedings are threatened or contemplated by governmental authorities or threatened by others other than as set forth in the Disclosure Package.
(u) Neither the Company nor any Significant Subsidiary is in violation of any of its certificate of incorporation or by-laws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it is bound or to which any of its property or assets is subject, which violation or default would have, individually or in the aggregate, a Material Adverse Effect.
(v) The statements set forth in each of the Disclosure Package and the Final Prospectus under the captions "Description of Debt Securities" and "Description of Remarketed Series E Debentures" insofar as they purport to constitute a summary of the terms of the Transaction Documents and other 15
documents referred to therein, under the caption "Plan of Distribution," insofar as they purport to describe the documents referred to therein, and under the caption "Certain Material U.S. Federal Income Tax Considerations" (subject to the limitations and qualifications set forth therein), insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate and complete in all material respects.
(w) Other than as disclosed in the Disclosure Package, the financial statements of the Company and its consolidated subsidiaries included or incorporated by reference in the Disclosure Package, together with the related schedules and notes, comply in all material respects with the requirements of the Act and the Exchange Act, as applicable, and present fairly in all material respects the financial position, the results of operations and the changes in cash flows of such entities in conformity with GAAP at the respective dates or for the respective periods to which they apply; and such financial statements and related notes and schedules, if any, have been prepared in accordance with GAAP consistently applied throughout the periods involved.
(x) Deloitte & Touche LLP, which has audited certain consolidated financial statements of the Company and its subsidiaries, is an Independent Registered Public Accounting Firm as required by the Act and the rules and regulations of the Commission thereunder.
(y) Neither the Company nor any Significant Subsidiary is, or after giving effect to the offer and sale of the Securities pursuant to the Pricing Agreement will be, an "investment company", as such term is defined in the Investment Company Act of 1940, as amended (the "Investment Company Act"), and the rules and regulations thereunder, although certain separate accounts of MLIC and of certain Insurance Subsidiaries are required to register as investment companies under the Investment Company Act.
(z) None of the Company or its subsidiaries or, to the best of their knowledge, any of their directors, officers or affiliates, has taken or will take, directly or indirectly, any action designed to, or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Remarketed Securities in violation of Regulation M under the Exchange Act.
(aa) The Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that complies with the requirements of the Exchange Act and has been designed by the Company's principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. As disclosed in the Company's 16
Annual Report on Form 10-K for the year ended December 31, 2013, the Company's internal control over financial reporting was effective as of December 31, 2013 and the Company is not aware of any material weaknesses in its internal control over financial reporting.
(bb) The Company and its consolidated subsidiaries employ disclosure controls and procedures (as such term is defined in Rule 13a- 15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms, and is accumulated and communicated to the Company's management, including its principal executive officer or officers and principal financial officer or officers, as appropriate, to allow timely decisions regarding disclosure. As disclosed in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, the Company's disclosure controls and procedures were effective as of June 30, 2014.
(cc) No stop order suspending the effectiveness of the Registration Statement has been issued under the Act and the Registration Statement is not the subject of a pending proceeding or examination under Section 8(d) or 8(e) of the Act, the Company is not the subject of a pending proceedings under Section 8A of the Act in connection with the Remarketing of the Remarketed Securities and any request on the part of the Commission for additional information has been complied with.
(dd) Except as would not individually or in the aggregate, reasonably be expected to have a Material Adverse Effect: (1) all tax returns required to be filed by the Company or any of its subsidiaries have been timely filed, (2) (x) all taxes (whether imposed directly or through withholding) including any interest, fine, sales and use taxes, all taxes which the Company and each of its subsidiaries is obligated to withhold from amounts owing to employees, creditors and third parties with respect to the period covered by such tax returns, additions to tax, or penalties applicable thereto due or claimed to be due from such entities have been timely paid, and (y) no deficiency assessment with respect to a proposed adjustment of the Company or its subsidiaries' federal, state, local or foreign taxes is pending or, to the best of the Company or its subsidiaries' knowledge, threatened, in each case of (x) and (y), other than such taxes or adjustments that are being contested in good faith or for which adequate reserves have been provided, and (3) to the Company and its subsidiaries' knowledge, there is no tax lien, whether imposed by any federal, state, foreign or other taxing authority, outstanding against the assets, properties or business of the Company or its subsidiaries. 17
3. Company Covenants. The Company agrees with each of the Remarketing Agents:
(a) To prepare the Final Prospectus as amended and supplemented in relation to the Remarketed Securities in a form approved by the Remarketing Agents and to file timely such Final Prospectus pursuant to Rule 424(b) under the Act; to make no further amendment or any supplement to the Registration Statement or Final Prospectus as amended or supplemented after the Applicable Time and prior to the Remarketing Settlement Date for the Remarketed Securities unless the Remarketing Agents for such Remarketed Securities shall have had a reasonable opportunity to review and comment upon any such amendment or supplement prior to any filing thereof; to advise the Remarketing Agents, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Final Prospectus or any amended Final Prospectus has been filed and to furnish the Remarketing Agents with copies thereof; to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus is required in connection with the Remarketing of such Remarketed Securities and, during such same period, to advise the Remarketing Agents, promptly after it receives notice thereof, of (i) the issuance by the Commission of any stop order or of any order preventing or suspending the use of the Final Prospectus, (ii) the suspension of the qualification of such Remarketed Securities for Remarketing in any jurisdiction or of the initiation or threatening of any proceeding for any such purpose, or (iii) any request by the Commission for the amending or supplementing of the Registration Statement or Final Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of the Final Prospectus or suspending any such qualification, promptly to use its best efforts to obtain the withdrawal of such order;
(b) To give the Remarketing Agents notice of any filings made pursuant to the Exchange Act or the regulations of the Commission thereunder within forty-eight hours prior to the Applicable Time; to give the Remarketing Agents notice of its intention to make any such filing from the Applicable Time to the Remarketing Settlement Date and to furnish the Remarketing Agents with copies of any such documents a reasonable amount of time prior to such proposed filing. The Company shall prepare the Final Term Sheet and file such Final Term Sheet as an Issuer Free Writing Prospectus within two Business Days after the Remarketing Date; provided that the Company shall furnish the Remarketing Agents with copies of any such Final Term Sheet a reasonable amount of time prior to such proposed filing and will not use or file any such document to which the Remarketing Agents or counsel to the Remarketing Agents shall object; 18
(c) Promptly from time to time to take such action as the Remarketing Agents may reasonably request to qualify the Remarketed Securities for offering and sale under the securities laws of such jurisdictions as the Remarketing Agents may reasonably request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for so long as may be necessary to complete the distribution of such Remarketed Securities, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation, to file a general consent to service of process in any jurisdiction or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise subject;
(d) To furnish to the Remarketing Agents a copy of each proposed Issuer Free Writing Prospectus prepared by or on behalf of, used by, or referred to by the Company and not to use or refer to any proposed Issuer Free Writing Prospectus to which the Remarketing Agents reasonably object; if at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement, the Disclosure Package, the Final Prospectus or any Preliminary Prospectus or, when taken together with the Disclosure Package and any other such Issuer Free Writing Prospectus, included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, to promptly notify the Remarketing Agents and, if requested by the Remarketing Agents, to promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission; provided, however, that this covenant shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished in writing to the Company by any Remarketing Agent expressly for use therein;
(e) To furnish the Remarketing Agents with copies of any Issuer Free Writing Prospectus or the Final Prospectus in such quantities as the Remarketing Agents may from time to time reasonably request, and if, at any time prior to the earlier of (i) the completion of the distribution of the Remarketed Securities and (ii) the expiration of nine months after the date of the Final Prospectus, any event shall have occurred as a result of which any Issuer Free Writing Prospectus or the Final Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Issuer Free Writing Prospectus or the Final Prospectus were delivered, not misleading, or, if for any 19
other reason it shall be necessary during such period to amend or supplement any Issuer Free Writing Prospectus or the Final Prospectus or to file under the Exchange Act any document incorporated by reference in any Issuer Free Writing Prospectus or the Final Prospectus in order to comply with the Act or the Exchange Act, (i) to notify the Remarketing Agents and (ii) upon their request to prepare and furnish without charge to each Remarketing Agent and to any dealer in securities as many copies as such Remarketing Agent may from time to time reasonably request of an amended Issuer Free Writing Prospectus or a supplement to the Final Prospectus or an amended Final Prospectus which will correct such statement or omission or effect such compliance; and any Issuer Free Writing Prospectus and the Final Prospectus and any amendments or supplements thereto furnished to the Remarketing Agents shall be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T;
(f) To make generally available to securityholders of the Company as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations thereunder (including, at the option of the Company, Rule 158);
(g) During the period beginning from the Applicable Time and continuing to and including the Remarketing Settlement Date for the Remarketed Securities, not to offer, sell, contract to offer or sell or otherwise dispose of any debt securities of the Company having pricing characteristics similar to the Securities exceeding an aggregate principal amount of $3 billion, except, for the avoidance of doubt, debt securities issued under the Global Medium Term Note Program of Metropolitan Life Global Funding I, Global Medium Term Note Program of MetLife Institutional Funding II, or any commercial paper program of, or sponsored by, the Company or any subsidiaries, without the prior written consent of the Remarketing Agents, which consent shall not be unreasonably withheld;
(h) During a period of five years from the effective date of the Registration Statement, to furnish to the Remarketing Agents copies of all reports or other communications (financial or other) furnished to stockholders of the Company, and to furnish to the Remarketing Agents as soon as they are available, copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange on which the Securities or any class of securities of the Company is listed (such financial statements to be on a consolidated basis to the extent the accounts of the Company and its subsidiaries are consolidated in reports furnished to its stockholders generally or to the 20
Commission), provided that reports and financial statements furnished to or filed with the Commission, and publicly available on EDGAR, or furnished on the Company's website, shall be deemed to have been furnished to the Remarketing Agents under this Section 3(h);
(i) The Company agrees that, unless it obtains the prior consent of the Remarketing Agents, and each Remarketing Agent represents and agrees that, unless it obtains the prior consent of the Company, it has not made and will not make any offer relating to the Remarketed Securities that would constitute an Issuer Free Writing Prospectus (other than, for the avoidance of doubt, any Bloomberg L.P. or other electronic communication regarding any preliminary term sheets or comparable bond prices and the Final Term Sheet filed pursuant to Section 3(b) hereto). Each Remarketing Agent agrees, unless it obtains the prior consent of the Company, not to take any action that would result in the Company being required to file with the Commission under Rule 433(d) under the Act a free writing prospectus prepared by or on behalf of each Remarketing Agent that otherwise would not be required to be filed by the Company thereunder but for the action of such Remarketing Agent (other than, for the avoidance of doubt, the Final Term Sheet filed pursuant to Section 3(b) hereto); and
(j) The Company agrees to promptly notify the Remarketing Agents if A.M. Best & Co., Fitch Ratings, Ltd., Moody's Investors Service, Inc. or Standard & Poor's Ratings Services has given notice of any intended or potential downgrading or any review for a possible change of its rating of any debt security or the financial strength or the claims paying ability of the Company or any Significant Subsidiary.
4. Fees and Expenses. The Company covenants and agrees with the Remarketing Agents that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of counsel and accountants to the Company in connection with the registration of the Securities under the Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus and the Final Prospectus and any amendments and supplements thereto and the mailing and delivering of copies thereof to the Remarketing Agents and dealers; (ii) the cost of printing or producing the Transaction Documents, any Blue Sky Survey and any other documents in connection with the Remarketing of the Remarketed Securities; (iii) all expenses in connection with the qualification of the Remarketed Securities for offering and sale under state securities laws and insurance securities laws as provided in Section 3(b) hereof, including the reasonable fees and disbursements of counsel for the Remarketing Agents in connection with such qualification and in connection with the Blue Sky Survey; (iv) the filing fees incident to, and the fees and disbursements of counsel for the Remarketing Agents in connection with, securing any required review by the Financial Industry Regulatory 21
Authority of the terms of the sale of the Remarketed Securities; (v) any fees charged by securities rating services for rating the Remarketed Securities; (vi) the cost of preparing the Remarketed Securities; (vii) the fees and expenses of any trustee, paying agent or transfer agent and the fees and disbursements of counsel for any such trustee, paying agent or transfer agent in connection with the Remarketing; (viii) any travel expenses of the Company's officers and employees and any other expenses of the Company in connection with attending or hosting meetings with respect to this Remarketing; and (ix) all other costs and expenses incident to the performance of the obligations of the Company hereunder which are not otherwise specifically provided for in this Section. Except as provided in this Section, and Sections 6 and 13 hereof, the Remarketing Agents will pay all of their own costs and expenses, including the fees of their counsel, stock transfer taxes on resale of any of the Remarketed Securities by them and any advertising expenses connected with Remarketing of the Remarketed Securities that they may make.
5. Conditions to Remarketing Agents' Obligations. The obligations of the Remarketing Agents shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the Company herein or in certificates of any officer of the Company or any subsidiary of the Company delivered pursuant to the provisions hereof are, at the Applicable Time, the Remarketing Date and the Remarketing Settlement Date (in each case, to the extent such representations and warranties are applicable as of such date), true and correct, the condition that the Company shall have performed all of its covenants and other obligations included hereunder and in the other Transaction Documents to be performed at or before the date hereof, the Applicable Time, the Remarketing Date and the Remarketing Settlement Date, and the following additional conditions:
(a) The Final Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the Act within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 3(a) hereof; the Final Term Sheet shall have been filed with the Commission pursuant to Rule 433(d); no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to the Remarketing Agents' reasonable satisfaction;
(b) All corporate proceedings and other legal matters incident to the authorization, form and validity of the Transaction Documents, the Remarketed Securities, the Securities, the Final Prospectus, the Registration Statement and all other legal matters relating to this Remarketing Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all material respects to counsel to the Remarketing Agents, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters; 22
(c) Debevoise & Plimpton LLP, counsel for the Remarketing Agents, shall have furnished to the Remarketing Agents such written opinion, dated the Remarketing Settlement Date, as the Remarketing Agents may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters;
(d) Willkie Farr & Gallagher LLP, counsel for the Company, shall have furnished to the Remarketing Agents their written opinions, each opinion dated the Remarketing Settlement Date, substantially in the form attached hereto as Annex I-A with respect to certain corporate and tax matters, and Annex I-B with respect to the Registration Statement, Disclosure Package and the Final Prospectus;
(e) Matthew Ricciardi, Chief Counsel -General Corporate of MetLife Group, Inc., an affiliate of the Company, shall have furnished to the Remarketing Agents his written opinion, dated the Remarketing Settlement Date, substantially in the form attached hereto as Annex II;
(f) The Company will furnish the Remarketing Agents with such conformed copies of such opinions, certificates, letters and documents as the Remarketing Agents reasonably request;
(g) (i) On the Remarketing Date, Deloitte & Touche LLP shall have furnished to the Remarketing Agents a letter, dated the Remarketing Date, in form and substance reasonably satisfactory to the Remarketing Agents, confirming that they are independent registered public accountants with respect to the Company and the Company's subsidiaries within the meaning of the Act and the Exchange Act and the respective applicable published rules and regulations thereunder, and (ii) on the Remarketing Settlement Date, Deloitte & Touche LLP shall have furnished to the Remarketing Agents a letter, dated the Remarketing Settlement Date, in form and substance reasonably satisfactory to the Remarketing Agents, that reaffirms the statements made in the letter furnished pursuant to subclause (i) of this Section 5(g), except that the specified date referred to shall be a date not more than three Business Days prior to the Remarketing Settlement Date;
(h) On or after the Remarketing Date, (i) neither the Company nor any Significant Subsidiary shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Disclosure Package any loss or interference with its business from fire, explosion, flood or 23
other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Disclosure Package, and (ii) since the respective dates as of which information is given in the Disclosure Package, there shall not have been any change in the surplus of any Significant Subsidiary or the capital stock of the Company or any increase in the long-term debt of the Company and its subsidiaries considered as a whole, or any change, or any development involving a prospective change, in or affecting the business, financial position, reserves, surplus, equity or results of operations of the Company and the Significant Subsidiaries considered as a whole, otherwise than as set forth or contemplated in the Disclosure Package, the effect of which, in any such case described in clause (i) or (ii), is in the judgment of the Remarketing Agents so material and adverse as to make it impracticable or inadvisable to proceed with the Remarketing of the Remarketed Securities on the terms and in the manner contemplated in the Final Prospectus;
(i) On or after the Remarketing Date (i) no downgrading shall have occurred in the rating accorded the debt securities of the Company or any Significant Subsidiary or the financial strength or claims paying ability of any Significant Subsidiary by A.M. Best & Co., Fitch Ratings, Ltd., Moody's Investors Service, Inc. or Standard & Poor's Ratings Services, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, or shall have given notice of its intended or potential downgrading of, its rating of any debt security or the financial strength or the claims paying ability of any Significant Subsidiary, the effect of which, in any such case described in clause (i) or (ii), is in the judgment of the Remarketing Agents so material and adverse as to make it impracticable or inadvisable to proceed with the Remarketing of the Remarketed Securities on the terms and in the manner contemplated in the Final Prospectus;
(j) On or after the Remarketing Date, there shall not have occurred any of the following: (i) a change in U.S. or international financial, political or economic conditions or currency exchange rates or exchange controls as would, in the reasonable judgment of the Remarketing Agents, be likely to prejudice materially the success of the Remarketing of the Remarketed Securities, whether in the primary market or in respect of dealings in the secondary market; (ii) a suspension or material limitation in trading in securities generally on the New York Stock Exchange; (iii) a suspension or material limitation in trading in the Company's securities on the New York Stock Exchange; (iv) a suspension or material limitation in clearing and/or settlement in securities generally; (v) a general moratorium on commercial banking activities declared by either Federal or New York State authorities; or (vi) the material outbreak or escalation of hostilities involving the United States or the declaration by the United States of a 24
national emergency or war or any other national or international calamity or emergency (including without limitation as a result of an act of terrorism) if the effect of any such event specified in this clause (vi) in the judgment of the Remarketing Agents makes it impracticable or inadvisable to proceed with the Remarketing of the Remarketed Securities on the terms and in the manner contemplated in the Final Prospectus;
(k) The Company shall have complied with any request by the Remarketing Agents with respect to the furnishing of copies of the Final Prospectus in compliance with the provisions of Section 3(e), as the case may be; and
(l) At the Remarketing Settlement Date, the Remarketing Agents shall have received a certificate of the Chief Accounting Officer of the Company, dated as of the Remarketing Settlement Date, substantially in the form of Annex IV hereto.
6. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Remarketing Agent, its partners, directors and officers and each person, if any, who controls such Remarketing Agent within the meaning of either Section 15 of the Act or Section 20 of the Exchange Act, against any losses, claims, damages or liabilities, joint or several, to which such Remarketing Agent may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in (i) the Registration Statement or any amendment or supplement (when considered together with the document to which such supplement relates) thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) any Preliminary Prospectus, Pricing Prospectus, any Issuer Free Writing Prospectus or the Final Prospectus or any amendment or supplement (when considered together with the document to which such supplement relates) thereto, or any "issuer information" filed or required to be filed pursuant to Rule 433(d) under the Act, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and will reimburse each Remarketing Agent for any legal or other expenses reasonably incurred by such Remarketing Agent in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability (or action in respect thereof) arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, any Issuer Free Writing Prospectus, Pricing Prospectus, the Registration Statement or the 25
Final Prospectus, or any such amendment or supplement(s) in reliance upon and in conformity with written information furnished to the Company by any Remarketing Agent expressly for use therein.
(b) Each Remarketing Agent will, severally and not jointly, indemnify and hold harmless the Company, its directors and officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act against any losses, claims, damages or liabilities (or actions in respect thereof) to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any Issuer Free Writing Prospectus, Pricing Prospectus, the Registration Statement, or the Final Prospectus, or any amendment or supplement (when considered together with the document to which such supplement relates) thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, any Issuer Free Writing Prospectus, Pricing Prospectus, the Registration Statement, the Final Prospectus or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such Remarketing Agent expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; the omission so to notify the indemnifying party shall relieve it from any liability which it may have to any indemnified party under such subsection, to the extent the indemnifying party is actually materially prejudiced by such omission. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party or any other indemnified party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof 26
other than reasonable costs of investigation, unless (i) the indemnifying party and such indemnified party shall have mutually agreed to the contrary, (ii) the indemnifying party has failed within a reasonable time to retain counsel reasonably satisfactory to such indemnified party or (iii) the named parties in any such proceeding (including any impleaded parties) include both the indemnifying party and such indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. No indemnifying party shall, without the prior written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party. In no event shall the indemnifying party be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same allegations or circumstances.
(d) If the indemnification provided for in this Section 6 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, other than due to the express provisions thereof, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Remarketing Agents on the other from the Remarketing of the Remarketed Securities to which any such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Remarketing Agents of the applicable Securities on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Remarketing Agents on the other shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Company bear to the total Remarketing Fee received by the Remarketing Agents, as set forth in the table on the cover page of the Final Prospectus. 27
The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Remarketing Agents on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Remarketing Agents agree that it would not be just and equitable if contributions pursuant to this subsection (d) were determined by pro rata allocation (even if the Remarketing Agents were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Remarketing Agent shall be required to contribute any amount in excess of the amount by which the total price at which the applicable Securities remarketed by it and distributed to the public were offered to the public exceeds the amount of any damages which such Remarketing Agent has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Remarketing Agents in this subsection (d) to contribute are several in proportion to their respective obligations with respect to such Remarketed Securities and not joint.
(e) The obligations of the Company under this Section 6 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Remarketing Agent within the meaning of the Act. The obligations of the Remarketing Agents under this Section 6 shall be in addition to any liability which the respective Remarketing Agent may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company (including any person who, with his consent, is named in the Registration Statement as about to become a director of the Company) and to each person, if any, who controls the Company within the meaning of the Act.
7. Resignation and Removal of the Remarketing Agents. A Remarketing Agent may resign and be discharged from its duties and obligations hereunder, and the Company may remove any or all of the Remarketing Agents, by giving five (5) Business Days' prior written notice to the Stock Purchase Contract Agent and, in the case of a removal, to the Remarketing Agents; provided that no such resignation nor any removal of all the Remarketing Agents shall become effective until the Company shall have appointed at least one nationally recognized broker-dealer as successor to the Remarketing Agents, and such successor Remarketing Agent shall have entered into a 28
letter substantially in the form of Annex III hereof with the Company and the Stock Purchase Contract Agent in which it shall have agreed to conduct the Remarketing in accordance with the Remarketing Procedures. The provisions of this Section 7 shall survive the resignation or removal of the Remarketing Agents pursuant to this Remarketing Agreement.
8. New Remarketing Agents. The Company may appoint any institution or institutions as new Remarketing Agent(s) hereunder (each a "New Remarketing Agent") in respect of the Remarketing in which event, upon the confirmation by such institution through a letter to the Company and the Stock Purchase Contract Agent confirming acceptance of such nomination by the New Remarketing Agent substantially in the form of Annex III hereof, such New Remarketing Agent shall become a party hereto, unless otherwise provided for herein, with all the authority, rights, powers, duties and obligations as if originally named as Remarketing Agent hereunder. The Company will notify the Remarketing Agent(s) appointed in respect of the Remarketing of the Remarketed Securities and the Stock Purchase Contract Agent of a change in the identity of other Remarketing Agents appointed or who have resigned in respect of the Remarketing of the Remarketed Securities generally as soon as reasonably practicable.
9. Offering Restrictions. Each Remarketing Agent acknowledges, represents and agrees and each additional Remarketing Agent appointed pursuant to Section 8 of this Remarketing Agreement will be required to acknowledge, represent and agree that it has not remarketed or delivered and it will not remarket or deliver, any of the Remarketed Securities, in or from any jurisdiction except under circumstances that are reasonably designed to result in compliance with the applicable securities laws and regulations thereof. In particular, each Remarketing Agent acknowledges, represents and agrees and each additional Remarketing Agent appointed pursuant to Section 8 of this Remarketing Agreement will be required to acknowledge, represent and agree as set forth in Annex V to this Remarketing Agreement.
10. Dealing in the Remarketed Securities. Each Remarketing Agent, when acting hereunder, or when acting in its individual or any other capacity, may, to the extent permitted by law, buy, sell, hold or deal in any of the Remarketed Securities. The Remarketing Agents may exercise any vote or join in any action which any beneficial owner of Remarketed Securities may be entitled to exercise or take pursuant to the Indenture with like effect as if they did not act in any capacity hereunder. The Remarketing Agents, in their individual capacities, either as principal or agent, may also engage in or have an interest in any financial or other transaction with the Company as freely as if they did not act in any capacity hereunder.
11. Termination of Remarketing Agreement. This Remarketing Agreement shall terminate (i) in the event of a Remarketing that is not a Successful Remarketing or (ii) as to any Remarketing Agent who resigns or is removed, on the effective date of the resignation or removal of such Remarketing Agent pursuant to Section 7. In addition, the 29
obligations of the Remarketing Agents may be terminated by them by notice given to the Company prior to 12:00 noon, New York City time on the Remarketing Settlement Date if, prior to that time, any of the applicable conditions precedent to the obligations of the Remarketing Agents described in Section 5 hereof shall have failed to occur.
12. Survival. Notwithstanding any such termination set forth in Section 11 hereof, the obligations set forth in Section 4 hereof shall survive and remain in full force and effect until all amounts payable under said Section 4 shall have been paid in full. In addition, the former Remarketing Agents shall be entitled to the rights and benefits under Section 6 of this Remarketing Agreement notwithstanding the replacement or resignation of the Remarketing Agents. The respective indemnities, agreements, representations, warranties and other statements of the Company and the several Remarketing Agents, as set forth in this Remarketing Agreement or made by or on behalf of them, respectively, pursuant to this Remarketing Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Remarketing Agent or any controlling person of any Remarketing Agent, the Company or any officer or director or controlling person of the Company and shall survive delivery of and payment for the Securities.
13. Notices. All statements, requests, notices and agreements hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication; notices to the Remarketing Agents shall be directed to Deutsche Bank Securities Inc., 60 Wall Street, New York, NY 10005, with a copy to Debevoise & Plimpton LLP, 919 Third Avenue, New York, New York 10022, attention of Peter J. Loughran, Esq.; notices to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: General Counsel, with a copy to Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, NY 10019, attention John M. Schwolsky, Esq. and Vladimir Nicenko, Esq.; notices to the Trustee shall be delivered or sent by mail or facsimile transmission to The Bank of New York Mellon Trust Company, N.A., 2 North LaSalle Street, Suite 1020, Chicago, Illinois 60602, telecopy: (312) 827-8542; notices to the Stock Purchase Contract Agent shall be delivered or sent by mail or facsimile transmission to Deutsche Bank Trust Company Americas, Trust and Securities Services, 60 Wall Street, 16th Floor, MS: NYC60-2710, New York, NY 10005, telecopy: (732) 578-4635; and notices to the Collateral Agent or the Custodial Agent shall be delivered or sent by mail or facsimile transmission to Deutsche Bank Trust Company Americas, Trust and Securities Services, 60 Wall Street, 16th Floor, MS: NYC60-2710, New York, NY 10005, telecopy: (732) 578-4635. Any such statements, requests, notices or agreements shall take effect at the time of receipt thereof.
14. Successors and Assigns. This Remarketing Agreement and the Pricing Agreement shall be binding upon, and inure solely to the benefit of, the Remarketing Agents and the Company, and, to the extent provided in Sections 6 and 12 hereof, the 30
officers and directors of the Company and each person who controls the Company or any Remarketing Agent, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Remarketing Agreement or the Pricing Agreement. No purchaser of any of the Securities pursuant to this Remarketing Agreement shall be deemed a successor or assign by reason merely of such purchase.
15. GOVERNING LAW. THIS REMARKETING AGREEMENT AND THE PRICING AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT SUCH PRINCIPLES WOULD REQUIRE OR PERMIT THE APPLICATION OF LAWS OF ANOTHER JURISDICTION.
16. Consent to Jurisdiction. The Company agrees that any legal suit, action or proceeding against the Company brought by the Remarketing Agents or by any person, if any, who controls the Remarketing Agents within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, arising out of or based upon this Remarketing Agreement or the transactions contemplated hereby may be instituted in any state or Federal court in the Borough of Manhattan, The City of New York, New York, and, to the fullest extent permitted by applicable law, waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the non-exclusive jurisdiction of such courts in any suit, action or proceeding.
17. Amendment. This Remarketing Agreement may not be amended or modified except by an instrument in writing signed by, or on behalf of, each of the parties hereto; provided, however, that in the event that the Securities to be remarketed, or any portion thereof, are modified in such a way so that they no longer require registration under the Act, the Company, the Remarketing Agents and the Stock Purchase Contract Agent hereby agree to promptly enter into an amendment to this Remarketing Agreement containing such representations, warranties and covenants as would normally be required to more accurately reflect an offering of unregistered securities.
18. Counterparts. This Remarketing Agreement and the Pricing Agreement may be executed by any one or more of the parties hereto and thereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.
19. No Advisory or Fiduciary Relationship. The Company acknowledges and agrees that (a) the Remarketing of the Remarketed Securities pursuant to this Remarketing Agreement is an arm's-length commercial transaction between the Company, on the one hand, and the several Remarketing Agents, on the other hand, (b) in connection with any Remarketing contemplated by this Remarketing Agreement and the Pricing Agreement and the process leading to any such transaction, each Remarketing 31
Agent is and has been acting solely as a principal and is not the agent or fiduciary of the Company, or its stockholders, creditors, employees or any other party, (c) no Remarketing Agent has assumed or will assume an advisory or fiduciary responsibility in favor of the Company with respect to any such Remarketing contemplated hereby or the process leading thereto (irrespective of whether such Remarketing Agent has advised or is currently advising the Company on other matters) and no Remarketing Agent has any obligation to the Company with respect to such Remarketing contemplated hereby except the obligations expressly set forth in this Remarketing Agreement and the Pricing Agreement, (d) the Remarketing Agents and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company, (e) the Company agrees that it will not claim that the Remarketing Agents, or any of them, have rendered advisory services of any nature or respect, or owe a fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto and (f) the Remarketing Agents have not provided any legal, accounting, regulatory or tax advice with respect to the offering contemplated hereby and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.
20. Entire Agreement. This Remarketing Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Remarketing Agents, or any of them, with respect to the subject matter hereof.
21. Waiver of Jury Trial. The Company and each of the Remarketing Agents hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Remarketing Agreement or the transactions contemplated hereby.
22. Rights of the Stock Purchase Contract Agent. Notwithstanding any other provision of this Remarketing Agreement, the Stock Purchase Contract Agent, in connection with its rights and duties hereunder, shall be entitled to all the rights, protections and privileges granted to the Stock Purchase Contract Agent in the Stock Purchase Contract Agreement.
[Signature pages follow] 32
Very truly yours,
METLIFE, INC.
By: /s/ Marlene B. Debel Name: Marlene B. Debel Title: Senior Vice President and Treasurer
[Signature page to the Remarketing Agreement]
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Stock Purchase Contract Agent
By: /s/ Carol Ng Name: Carol Ng Title: Vice President
By: /s/ Anthony D'Amato Name: Anthony D'Amato Title: Associate
[Signature page to the Remarketing Agreement]
Accepted as of the date hereof on behalf of the Remarketing Agents: DEUTSCHE BANK SECURITIES INC.
By: /s/ Edward J. Sunoo Name: Edward J. Sunoo Title: Managing Director
By: /s/ Adam Raucher Name: Adam Raucher Title: Director
[Signature page to the Remarketing Agreement]
SCHEDULE 1 TO REMARKETING AGREEMENT
None.
ANNEX I(a)
FORM OF WILLKIE FARR & GALLAGHER LLP OPINION I(a)-1
ANNEX I(b)
FORM OF WILLKIE FARR & GALLAGHER LLP NEGATIVE ASSURANCE LETTER I(b)-1
ANNEX II
FORM OF MATTHEW RICCIARDI'S OPINION II-1
ANNEX III
FORM OF ACCESSION LETTER
METLIFE, INC.
[Date]
[New Remarketing Agent] [Address]
Dear Sirs,
Remarketing of Series E Senior Component Debentures, Tranche 1, due 2018 and Series E Senior Component Debentures, Tranche 2, due 2045 of MetLife, Inc. (the "Remarketed Securities")
The undersigned refers to the Remarketing Agreement, dated as of August 26, 2014 (the "Remarketing Agreement") among ourselves as the Company, Deutsche Bank Trust Company Americas, as Stock Purchase Contract Agent (the "Stock Purchase Contract Agent"), and the Remarketing Agents from time to time party thereto, and have the pleasure of inviting you to become a Remarketing Agent subject to and in accordance with the terms of the Remarketing Agreement, a copy of which has been supplied to you by us. Please return to the Company a copy of this letter signed by an authorized signatory whereupon you will become a Remarketing Agent for the purposes of the Remarketing Agreement with all the authority, rights, powers, duties and obligations of a Remarketing Agent under the Remarketing Agreement.
This letter is governed by, and shall be construed in accordance with, the laws of the State of New York. The provisions of Sections 14 and 15 of the Remarketing Agreement shall apply to this letter as if set out herein in full. III-1
Yours faithfully, METLIFE, INC.
By: Name: Title:
Acknowledged as of the date hereof:
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Stock Purchase Contract Agent By: Name: Title: By: Name: Title: III-2
CONFIRMATION
We hereby accept the appointment as a Remarketing Agent and accept all of the duties and obligations under, and the terms and conditions of the Remarketing Agreement upon the terms of this letter.
We confirm that we are in receipt of all the documents which we have requested and have found them to be satisfactory.
For the purposes of the Remarketing Agreement our communications details are as set out below. [NEW REMARKETING AGENT]
By: Name: Title: Date: [ ]
Address: [ ]
Telex: [ ]
Facsimile: [ ]
Attention: [ ]
Copies to:
(i) All existing Remarketing Agents who have been appointed in respect of the Remarketing of the Remarketed Securities.
(ii) The Stock Purchase Contract Agent. III-3
ANNEX IV
METLIFE, INC. CHIEF ACCOUNTING OFFICER CERTIFICATE
METLIFE, INC. CHIEF ACCOUNTING OFFICER'S CERTIFICATE
MetLife, Inc. a Delaware corporation (the "Company"), does hereby certify, pursuant to Section 5(l) of the Remarketing Agreement, dated August 26, 2014 (the "Remarketing Agreement"), by and among the Company, Deutsche Bank Trust Company Americas, as Stock Purchase Contract Agent, and Deutsche Bank Securities Inc. (together with the institutions appointed as Remarketing Agents pursuant to Section 8 of the Remarketing Agreement), that:
(i) the representations and warranties of the Company contained in Section 2 of the Remarketing Agreement are true and correct in allrespects, as if made at and as of the date hereof; and
(ii) the Company has complied in all respects with all agreements and all conditions on its part to be performed under the RemarketingAgreement and the other Transaction Documents at or prior to the date hereof.
Willkie Farr & Gallagher LLP, counsel to the Company, may rely upon this certificate in delivering its opinion pursuant to Section 5(d) of the Remarketing Agreement. Debevoise & Plimpton LLP, counsel to the Remarketing Agents, may rely upon this certificate in delivering its opinion pursuant to Section 5(c) of the Remarketing Agreement.
[Remainder of page intentionally left blank.] IV-1
IN WITNESS WHEREOF, the undersigned has hereunto signed his name as of , 2014. METLIFE, INC.
By: Name: Peter M. Carlson
Title: Executive Vice President, Finance Operations and Chief Accounting Officer IV-1
ANNEX V
OFFERING RESTRICTIONS
European Economic Area
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State"), each Remarketing Agent has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State it has not made and will not make an offer of Series E Debentures which are the subject of the offering contemplated by this prospectus supplement and accompanying prospectus to the public in that Relevant Member State other than:
(a) to any legal entity which is a qualified investor as defined in the Prospectus Directive;
(b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the other Remarketing Agents for any such offer; or
(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided that no such offer of Series E Debentures shall require MetLife, Inc. or any Remarketing Agent to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.
For the purposes of the above, (i) the expression an "offer of Series E Debentures to the public" in relation to any Series E Debentures in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Series E Debentures to be offered so as to enable an investor to decide to purchase or subscribe for the Series E Debentures, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, (ii) the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and (iii) the expression "2010 PD Amending Directive" means Directive 2010/73/EU. V-1
United Kingdom
Each Remarketing Agent has represented and agreed that it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 ("FSMA")) received by it in connection with the issue or sale of the Series E Debentures which are the subject of the offering contemplated by this prospectus supplement and the accompanying prospectus in circumstances in which Section 21(1) of such Act does not apply to MetLife, Inc., and that it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to any Series E Debentures in, from or otherwise involving the United Kingdom.
Hong Kong
The Series E Debentures may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii) to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a "prospectus" within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the Series E Debentures may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to Series E Debentures which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.
Japan
The Series E Debentures have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended; the "Financial Instruments and Exchange Act") and each Remarketing Agent has represented and agreed that it has not offered or sold and will not offer or sell any Series E Debentures, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re- offering or resale, directly or indirectly, in Japan or to, or for the benefit of, a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Act and any other applicable laws, regulations and ministerial guidelines of Japan. V-2
Singapore
This prospectus supplement and the accompanying prospectus have not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus supplement, the accompanying prospectus, any free writing prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Series E Debentures may not be circulated or distributed, nor may the Series E Debentures be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where the Series E Debentures are subscribed or purchased under Section 275 of the SFA by a relevant person which is: (a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor); or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries' rights and interest (howsoever described) in that trust shall not be transferred within 6 months after that corporation or that trust has acquired the Series E Debentures pursuant to an offer made under Section 275 of the SFA except: (1) to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA; (2) where no consideration is or will be given for the transfer; (3) where the transfer is by operation of law; (4) as specified in Section 276(7) of the SFA; or (5) as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore.
South Korea
The Series E Debentures may not be offered, sold and delivered directly or indirectly, or offered or sold to any person for re-offering or resale, directly or indirectly, in South Korea or to any resident of South Korea except pursuant to the applicable laws and regulations of South Korea, including the Financial Investment Services and Capital Markets Act and the Foreign Exchange Transaction Law and the decrees and regulations thereunder. The Series E Debentures have not been registered with the Financial Services Commission of South Korea for public offering in South Korea. Furthermore, the Series E Debentures may not be re-sold to South Korean residents unless the purchaser of the Series E Debentures complies with all applicable regulatory V-3
requirements (including but not limited to government approval requirements under the Foreign Exchange Transaction Law and its subordinate decrees and regulations) in connection with their purchase. V-4 [/INST] ```json
{<answer_start>
"answer": "In addition, the"
<answer_end>
}
``` </s> | Exhibit 99.1
EXECUTION VERSION
METLIFE, INC.
Series E Senior Component Debentures, Tranche 1, due 2018 Series E Senior Component Debentures, Tranche 2, due 2045
REMARKETING AGREEMENT
August 26, 2014
Deutsche Bank Securities Inc. 60 Wall Street New York, New York 10005
Ladies and Gentlemen:
This Remarketing Agreement is dated as of August 26, 2014 (this "Remarketing Agreement"), among MetLife, Inc., a Delaware corporation (the "Company"), and Deutsche Bank Securities Inc. ("Deutsche Bank") (the "Remarketing Agents," which expression shall include any institution appointed as a Remarketing Agent in accordance with Section 8 hereof), and Deutsche Bank Trust Company Americas, not individually but solely as Stock Purchase Contract Agent (as defined below) and as attorney-in-fact of the holders of Stock Purchase Contracts (as defined below). The Company and the Remarketing Agents will enter into a Pricing Agreement, to be dated the Remarketing Date (as defined below) (the "Pricing Agreement"), which will set forth, inter alia, the final terms of the Remarketed Securities (as defined below) and the Remarketing Fee (as defined below). The Remarketing Agents are undertaking to remarket Series E Senior Component Debentures, Tranche 1, due 2018 (principal amount $1,000 per Series E Senior Component Debenture) (the "First Tranche Series E Debt Securities") and Series E Senior Component Debentures, Tranche 2, due 2045 (principal amount $1,000 per Series E Senior Component Debenture) (the "Second Tranche Series E Debt Securities"), whose terms will each be modified in the event of a Successful Remarketing (as defined below), as provided in the notice of remarketing from the Company, dated August 26, 2014 (the "Notice") pursuant to Section 3.3(a) of the Twenty-Second Supplemental Indenture (as defined below) and Section 5.2(a)(iv) of the Stock Purchase Contract Agreement (as defined below) (such securities, as so modified from and after a Successful Remarketing (whether or not such securities were remarketed by the Remarketing Agents), the "Securities"). Upon a Successful Remarketing, the Stated Maturity (as defined in the Indenture (as defined below)) of the First Tranche Series E Debt Securities will, effective October 8, 2014, automatically be adjusted to December 15, 2017 and the Stated Maturity of the Second Tranche Series E Debt Securities will, effective October 8, 2014, automatically be adjusted to December 15, 2044.
The First Tranche Series E Debt Securities and Second Tranche Series E Debt Securities will be component securities of the Series E Senior Debentures due 2045 ("Series E Debt Securities") issued by the Company, pursuant to an Indenture, dated as of November 9, 2001 (the "Base Indenture"), between the Company and The Bank of New York Mellon Trust Company, N.A. (as successor in interest to J.P. Morgan Trust Company, National Association (as successor to Bank One Trust Company, N.A.)), as trustee (the "Trustee"), as supplemented by the Twenty- Second Supplemental Indenture, dated as of November 1, 2010 (the "Twenty-Second Supplemental Indenture" and, together with the Base Indenture, the "Indenture"), between the Company and the Trustee. Effective on September 15, 2014, the Series E Debt Securities will automatically convert, without any act of any holder, into units consisting of two tranches, with each $2,000 principal amount of Series E Debt Securities thereafter consisting of $1,000 principal amount of First Tranche Series E Debt Securities and $1,000 principal amount of Second Tranche Series E Debt Securities.
A 1/40t h or 2.50% undivided beneficial ownership interest in each Series E Debt Security having a principal amount of $1,000 is part of a common equity unit (each, a "Unit"), which currently includes one stock purchase contract (the "Stock Purchase Contract") which was issued pursuant to the Stock Purchase Contract Agreement, dated as of November 1, 2010, as amended and supplemented by Supplemental Agreement No. 1, dated June 26, 2013, between the Company and the Stock Purchase Contract Agent (as so amended and supplemented, the "Stock Purchase Contract Agreement"), between the Company and Deutsche Bank Trust Company Americas, as stock purchase contract agent (the "Stock Purchase Contract Agent"), and under which the holder of the Unit is obligated to purchase from the Company on the Third Stock Purchase Date (as defined in the Stock Purchase Contract Agreement), for $25.00 per Stock Purchase Contract, a number of shares of common stock, par value $0.01 per share, of the Company (the "Common Stock"), equal to the applicable Settlement Rate as set forth in the Stock Purchase Contract Agreement. The ownership interests in the Series E Debt Securities or, if the holder has stripped such Unit, designated zero-coupon U.S. Treasury Securities, have been pledged to secure the obligations to purchase Common Stock on the Third Stock Purchase Date (as defined in the Stock Purchase Contract Agreement) pursuant to the Stock Purchase Contract. The terms and conditions of such pledge are set forth in the Pledge Agreement, dated as of November 1, 2010 (the "Pledge Agreement"), among the Company, Deutsche Bank Trust Company Americas, as collateral agent (the "Collateral Agent"), custodial agent (the "Custodial Agent") and securities intermediary (the "Securities Intermediary"), and the Stock Purchase Contract Agent.
The Units were initially issued in a private placement to AM Holdings LLC (f/k/a ALICO Holdings LLC), a Delaware limited liability company (the "Selling Securityholder"), as part of the consideration paid by the Company to the Selling Securityholder in connection with the Company's acquisition of American Life Insurance Company and Delaware American Life Insurance Company from the Selling 2
Securityholder and American International Group, Inc. (the "Acquisition"). The Acquisition was completed on November 1, 2010. The Units were offered and sold by the Selling Securityholder in a registered public offering completed on March 8, 2011.
Capitalized terms used and not defined in this Remarketing Agreement shall have the meanings set forth in the Stock Purchase Contract Agreement, the Pledge Agreement or the Indenture, as the case may be.
The Remarketing (as defined below) of the First Tranche Series E Debt Securities and Second Tranche Series E Debt Securities is provided for in Article III of the Twenty-Second Supplemental Indenture. As used in this Remarketing Agreement, "Transaction Documents" shall mean, collectively, the Stock Purchase Contract Agreement, the Indenture, the Pledge Agreement, this Remarketing Agreement and the Pricing Agreement; the term "Remarketed Securities" means the First Tranche Series E Debt Securities and Second Tranche Series E Debt Securities subject to the Remarketing as notified to the Remarketing Agents by the Collateral Agent and the Custodial Agent, on or prior to the Remarketing Date; the term "Remarketing Procedures" means the procedures in connection with the Remarketing, described in the Stock Purchase Contract Agreement, the Pledge Agreement and the Twenty-Second Supplemental Indenture, as the case may be; the term "Remarketing" means the remarketing, offering, sale and delivery of the Remarketed Securities pursuant to the Remarketing Procedures; the term "Remarketing Date" means the date on which the Remarketing Agents price the Remarketed Securities in connection with the Remarketing, such date to occur on a Business Day (as defined below) during the period that begins on, and includes, September 25, 2014 and ends on, and includes, October 7, 2014; the term "Remarketing Settlement Date" means the date on which the purchase and sale of the Remarketed Securities closes and the delivery of such Remarketed Securities is made against payment therefor, such date to occur on a Business Day during the period that begins on, and includes, October 1, 2014 and ends on, and includes, October 8, 2014; and the term "Successful Remarketing" means a Remarketing that (i) was conducted in accordance with Article III of the Twenty-Second Supplemental Indenture; and (ii) results in (a) the sale of each Remarketed Security that is subject to such Remarketing by the Remarketing Agents by no later than 4:00 P.M., New York City time, on the Remarketing Settlement Date of such Remarketing; (b) the delivery of the aggregate cash gross proceeds from such sale to such Remarketing Agents no later than 4:00 P.M., New York City time, on such Remarketing Settlement Date; and (c) aggregate cash gross proceeds of not less than the Remarketing Price (as defined below) for such Remarketing.
As used herein, "Business Day" means any day other than a Saturday, Sunday or other day on which banking institutions in New York, New York are authorized or required by law or executive order to remain closed.
1. Appointment and Obligations of the Remarketing Agents. (a) The Company hereby appoints Deutsche Bank as the initial Remarketing Agent, and Deutsche 3
Bank hereby accepts appointment as Remarketing Agent, for the purpose of (i) Remarketing the Remarketed Securities on behalf of the holders thereof, (ii) establishing the Reset Rates (as defined below) for the Securities in connection with the Remarketing and (iii) performing such other duties as are assigned to the Remarketing Agents in the Remarketing Procedures, all in accordance with and pursuant to the Remarketing Procedures.
(b) The Remarketing Agents agree (i) to use commercially reasonable efforts to remarket the Remarketed Securities tendered or deemed tendered to the Remarketing Agents in the Remarketing, (ii) to establish the Reset Rates in accordance with the Remarketing Procedures and to notify the Company, the Trustee and the Stock Purchase Contract Agent promptly of the Reset Rates and (iii) to carry out such other duties as are assigned to the Remarketing Agents in the Remarketing Procedures, all in accordance with the provisions of the Remarketing Procedures.
(c) On the Remarketing Date, the Remarketing Agents shall use their commercially reasonable efforts to remarket the Remarketed Securities tendered or deemed tendered for purchase, at a price which results in cash proceeds equal to at least the sum of (i) the remarketing fee to be paid to the Remarketing Agents in connection with the Remarketing in an amount to be specified in the Pricing Agreement (such fee, the "Remarketing Fee"), (ii) 100% of the aggregate principal amount of such Remarketed Securities, (iii) the accrued and unpaid interest to, but not including, the Initial Scheduled Third Stock Purchase Date on such Remarketed Securities and (iv) the product of five basis points (0.05%) and the aggregate principal amount of such Remarketed Securities (such sum, the "Remarketing Price").
(d) On the Remarketing Date, the Remarketing Agents shall determine the rate per annum, rounded to the nearest one-thousandth of one percent (0.001%), that each tranche of Securities should bear (which rate will apply to all Securities of the applicable tranche whether or not such Securities were included in the Remarketing) (the "Reset Rate") in order for each tranche of the Remarketed Securities to generate cash proceeds from the Remarketing equal to at least the Remarketing Price allocable to that tranche and that in the sole reasonable discretion of the Remarketing Agents will enable them to remarket all Remarketed Securities of such tranche tendered or deemed tendered for purchase in such Remarketing at no less than the Remarketing Price allocable to that tranche; provided, that, each such Reset Rate need not, but may, be the same for each tranche of Securities; provided, however, that, unless such requirement has been validly waived by the Company, the Reset Rate may not exceed the prevailing market yield, as determined by the Remarketing Agents, of the benchmark U.S. treasury security having a remaining maturity that most closely corresponds to the period from the Remarketing Settlement Date until the Stated Maturity of the applicable tranche of the Securities (after giving effect to the change in the Stated Maturity of each tranche of the Securities on the Remarketing Settlement Date pursuant to the Indenture), plus 750 basis points per annum; provided, further, that neither Reset Rate may be less than 0% per annum. 4
(e) In the event of a Remarketing that is not a Successful Remarketing, the Remarketing Agents shall promptly remit (i) to the Custodial Agent the Remarketed Securities, if any, that are no longer a component of the Units ("Separate Securities"), and (ii) to the Collateral Agent the balance of the Remarketed Securities.
(f) By no later than 4:30 P.M., New York City time, on the Remarketing Settlement Date, provided that there has been a Successful Remarketing, the Remarketing Agents shall advise, by telephone, the Company, the Stock Purchase Contract Agent and the Trustee that the Remarketing was a Successful Remarketing and of the Reset Rates determined in the Remarketing and the aggregate principal amount of Remarketed Securities sold in the Remarketing.
(g) In accordance with The Depository Trust Company's (the "Depositary") normal procedures, on the Remarketing Settlement Date, the transactions described above with respect to each Remarketed Security tendered for purchase and sold in the Remarketing shall be executed through the Depositary, and the accounts of the respective Depositary participants shall be debited and credited and such Remarketed Securities delivered by book-entry as necessary to effect purchases and sales of such Remarketed Securities.
(h) On the Remarketing Settlement Date, the tender and settlement procedures set forth in this Section 1, including provisions for payment by purchasers of the Remarketed Securities in the Remarketing, shall be subject to modification to the extent required by the Depositary or, if the book- entry system is no longer available for the Remarketed Securities at the time of the Remarketing, to facilitate the tendering and remarketing of the Remarketed Securities in certificated form. In addition, the Remarketing Agents may modify the settlement procedures set forth herein in order to facilitate the settlement process.
(i) On the Remarketing Settlement Date, the Remarketing Agents shall deduct the Remarketing Fee from the gross proceeds of the Remarketing and shall remit any proceeds remaining after such deduction as follows: (i) to the extent such net proceeds relate to Remarketed Securities that form part of any Normal Common Equity Unit (as defined in the Stock Purchase Contract Agreement), to the Securities Intermediary and (ii) to the extent such net proceeds relate to the Separate Securities that were included in the Remarketing as Remarketed Securities to, or at the direction of, the Custodial Agent for payment to the holders of such Separate Securities. Holders whose First Tranche Series E Debt Securities and Second Tranche Series E Debt Securities are remarketed pursuant to this Remarketing Agreement will not otherwise be responsible for the payment of any Remarketing Fee in connection therewith. 5
(j) If fewer than all of the Remarketed Securities are remarketed in accordance with the terms hereof, the Remarketing shall be deemed to have failed as to all Remarketed Securities.
(k) If at any time during the term of this Remarketing Agreement, any Event of Default (as defined in the Indenture) or event that with the passage of time or the giving of notice or both would become such an Event of Default has occurred and is continuing under the Indenture, then the obligations and duties of the Remarketing Agents under this Remarketing Agreement shall be suspended until such default or event has been cured. The Company will promptly cause the Trustee, the Stock Purchase Contract Agent and the Collateral Agent to give the Remarketing Agents notice of all such defaults and events of which such trustee or agent is aware.
2. Representations and Warranties of the Company. The Company hereby represents and warrants that, unless otherwise specified (i) on and as of the Applicable Time (as defined below) (to the extent such representations and warranties are applicable as of such date), (ii) on and as of the Remarketing Date and (iii) on and as of the Remarketing Settlement Date that:
(a) The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 333-192366) under the Securities Act of 1933, as amended (the "Act"), which has become effective covering, inter alia, the Remarketing of the Remarketed Securities. The Company meets the requirements for use of Form S-3 under the Act. The Company proposes to file with the Commission pursuant to Rule 424 under the Act a supplement or supplements to the form of prospectus included in such registration statement relating to the Remarketed Securities and the plan of distribution thereof. Such registration statement, including the exhibits thereto, as amended at the Remarketing Date, is hereinafter called the "Registration Statement"; the Registration Statement at the time it originally became effective is herein called the "Original Registration Statement"; such prospectus in the form in which it appears in the Original Registration Statement is hereinafter called the "Base Prospectus"; and such supplemented form of prospectus, in the form in which it shall first be filed with the Commission pursuant to Rule 424 (including the Base Prospectus as so supplemented), is hereinafter called the "Final Prospectus." Any preliminary form of the Final Prospectus in the form in which it shall first be filed with the Commission pursuant to Rule 424 is hereinafter called a "Preliminary Prospectus." Any reference herein to the Registration Statement, the Base Prospectus, any Preliminary Prospectus, the Pricing Prospectus (as defined below) or the Final Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), on or before the Remarketing Date, or the issue date of the Base 6
Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Final Prospectus, as the case may be; and any reference herein to the terms "amend," "amendment" or "supplement" with respect to the Registration Statement, the Base Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Final Prospectus shall be deemed to refer to and include any document filed under the Exchange Act after the date of this Remarketing Agreement, or the issue date of the Base Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Final Prospectus, as the case may be, deemed to be incorporated therein by reference; each Preliminary Prospectus, the Pricing Prospectus and the prospectuses filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Act, complied or will comply, as applicable, when so filed in all material respects with the Act and the rules thereunder and each Preliminary Prospectus, the Pricing Prospectus and the Final Prospectus delivered to the Remarketing Agents for use in connection with this offering will be identical to the electronically transmitted copies thereof filed with the Commission via the Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system, except to the extent permitted by Regulation S-T.
(b) (i) The Registration Statement, as amended as of any such time, and the Final Prospectus, as amended or supplemented as of any such time, and, in the case of Securities issued pursuant to the Indenture, such Indenture, will comply in all material respects with the applicable requirements of the Act, the Exchange Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), as applicable, and the respective rules thereunder;
(ii) (A) The Registration Statement does not and will not, as of the applicable effective date as to each part of the Registration Statement, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading and (B) the Final Prospectus does not and will not, as of its date and as of its filing date, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that for each of (A) and (B), the Company makes no representations or warranties as to (i) that part of the Registration Statement which shall constitute the trustee's Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture Act or (ii) the information contained in or omitted from the Registration Statement or the Final Prospectus in reliance upon and in conformity with information relating to any Remarketing Agent furnished in writing to the Company by such Remarketing Agent expressly for use in the Registration Statement and the Final Prospectus; 7
(iii) As of the Applicable Time, the Issuer Free Writing Prospectus(es) (as defined below) listed on Schedule 1 hereto, if any, the Pricing Prospectus (as defined below), and the final term sheet relating to the Remarketed Securities set forth as Annex A to the Pricing Agreement (the "Final Term Sheet"), all considered together (collectively, the "Disclosure Package"), will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and
(iv) As of the Applicable Time, each Issuer Free Writing Prospectus listed on Schedule 1 hereto, if any, will not conflict with the information contained or incorporated by reference in the Registration Statement or the Disclosure Package, and each such Issuer Free Writing Prospectus, as supplemented by and taken together with the Disclosure Package and any other such Issuer Free Writing Prospectus, in each case as of the Applicable Time, will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, it is understood and agreed that in no event shall any such Issuer Free Writing Prospectus, including but not limited to any electronic roadshow, be listed on Schedule 1 hereto unless the Company (i) has consented to the use thereof and (ii) shall have approved its contents before any such use, in each case in accordance with the provisions of this Remarketing Agreement.
As used in this subsection and elsewhere in this Remarketing Agreement:
"Applicable Time" means such time as is specified as the "Applicable Time" in the Pricing Agreement or such other time as agreed by the Company and the Remarketing Agents.
"Issuer Free Writing Prospectus" means any "issuer free writing prospectus," as defined in Rule 433 under the Act ("Rule 433"), relating to the Remarketed Securities.
"Pricing Prospectus" means the Base Prospectus, as amended or supplemented (including by any Preliminary Prospectus) immediately prior to the Applicable Time. 8
(c) At the time the Company or another offering participant first made a bona fide offer (within the meaning of Rule 164(h)(2) under the Act) of the Securities, the Company was not an "ineligible issuer" as defined in Rule 405 under the Act.
(d) The Company has not distributed and will not distribute, prior to the later of the Remarketing Settlement Date and the completion of the Remarketing Agents' distribution of the Remarketed Securities, any offering material in connection with the Remarketing of the Remarketed Securities other than the Preliminary Prospectus, the Final Prospectus or any Issuer Free Writing Prospectus reviewed and consented to by the Remarketing Agents as provided in Section 3(j) of this Remarketing Agreement.
(e) (i) At the time of filing the Registration Statement, (ii) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), (iii) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) under the Act) relied on the exemption of Rule 163 under the Act, and (iv) as of the date and time that the Pricing Agreement is executed (the "Execution Time"), the Company was and will be a "well known seasoned issuer" as defined in Rule 405 under the Act. The Registration Statement is an "automatic shelf registration statement," as defined in Rule 405 under the Act, that automatically became effective not more than three years prior to the Execution Time; the Company has not received from the Commission any notice pursuant to Rule 401(g)(2) under the Act objecting to use of the automatic shelf registration statement and the Company has not otherwise ceased to be eligible to use the automatic shelf registration statement. The Company has paid or shall pay the required Commission filing fees relating to the Remarketed Securities within the time required by Rule 456(b)(1) under the Act and otherwise in accordance with Rules 456(b) and 457(r) under the Act.
(f) Each document incorporated or deemed to be incorporated by reference in the Registration Statement, the Disclosure Package and the Final Prospectus, when they became effective or at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the Act or the Exchange Act, as applicable.
(g) Neither the Company nor any Significant Subsidiary (as defined below) of the Company has sustained since the date of the latest audited financial statements included or incorporated by reference in the Disclosure Package any loss or interference material to the business of the Company and its subsidiaries considered as a whole, other than as described in or contemplated by 9
the Disclosure Package, from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree; and, since the respective dates as of which information is given in the Disclosure Package, other than as described or contemplated in the Disclosure Package, there has not been any (i) material addition, or development involving a prospective material addition, to the liability of any Significant Subsidiary for future policy benefits, policyholder account balances and other claims, other than in the ordinary course of business, (ii) material decrease in the surplus of any Significant Subsidiary or material change in the capital stock or other ownership interests (other than issuances of common stock upon the exercise of outstanding employee stock options or pursuant to existing employee compensation plans or on the conversion or exchange of convertible or exchangeable securities outstanding on the date of this Remarketing Agreement) of the Company or any Significant Subsidiary or any material increase in the long- term debt of the Company or its subsidiaries, considered as a whole, or (iii) material adverse change, or development involving a prospective material adverse change, in or affecting the business, financial position, reserves, surplus, equity or results of operations (in each case considered either on a statutory accounting or U.S. generally accepted accounting principles ("GAAP") basis, as applicable) of the Company and its subsidiaries considered as a whole. As of December 31, 2013, the subsidiaries of the Company that would qualify as a "Significant Subsidiary" of the Company under Regulation S-X were Metropolitan Life Insurance Company ("MLIC"), MetLife Insurance Company of Connecticut, MetLife Investors USA Insurance Company, Exeter Reassurance Company, Ltd., MetLife Insurance K.K., American Life Insurance Company, MetLife Mexico S.A. and MetLife Reinsurance Company of Charleston, and each of such subsidiaries will be considered a "Significant Subsidiary" for purposes of this Agreement.
(h) The Company and each Significant Subsidiary has good and marketable title in fee simple to all material real property and good and marketable title to all material personal property owned by it, in each case free and clear of all liens, encumbrances and defects that materially interfere with the use made and proposed to be made of such property by the Company or any Significant Subsidiary, except such as are described in the Disclosure Package or such as would not have a material adverse effect on the business, financial position, equity, reserves, surplus or results of operations of the Company and its subsidiaries, considered as a whole ("Material Adverse Effect"), and any material real property and material buildings held under lease by the Company or any of its subsidiaries are held under valid, subsisting and enforceable leases with such exceptions that do not materially interfere with the use made and currently proposed to be made of such property and buildings by the Company or any Significant Subsidiary. 10
(i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with power and authority (corporate and other) to own its properties and conduct its business as described in the Disclosure Package and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification and good standing, except to the extent that the failure to be so qualified and in good standing would not have a Material Adverse Effect; MLIC was duly converted from a mutual life insurance company to a stock life insurance company on April 7, 2000 in accordance with the Plan of Reorganization of MLIC under Section 7312 of the New York Insurance Law; each Significant Subsidiary is validly existing as a corporation and is in good standing under the laws of its jurisdiction of incorporation, with power and authority (corporate and other) to own its properties and conduct its business as described in the Disclosure Package; and each Significant Subsidiary is duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification and good standing, except to the extent that the failure to be so qualified and in good standing would not have a Material Adverse Effect.
(j) The Company had or has, as applicable, the corporate power and authority to execute and deliver each Transaction Document and the Securities and to consummate the transactions contemplated hereby and thereby.
(k) The Company has an authorized capitalization as set forth and described in the Disclosure Package, and all of the issued shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and nonassessable; none of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any securityholder of the Company; except as disclosed in the Disclosure Package, there are no outstanding options or warrants to purchase, or any preemptive rights or other rights to subscribe for or to purchase, any securities or obligations convertible into or any contracts or commitments to sell shares of the Company's capital stock or any such options, rights, warrants, convertible securities or obligations; the description of the Company's stock option plans and the options or other rights granted and exercised thereunder set forth in the Disclosure Package accurately and fairly describe the information required to be shown with respect to such plans, arrangements, options and rights; except as disclosed in the Disclosure Package, there are no rights of any person, corporation or other entity to require registration of any shares of common stock or any other securities of the Company in connection with the filing of the Registration Statement and the 11
Remarketing of the Remarketed Securities by the Remarketing Agents pursuant to this Remarketing Agreement and the Pricing Agreement; all of the issued shares of capital stock or other ownership interests of MLIC have been duly and validly authorized and issued, are fully paid and nonassessable and are owned directly or indirectly by the Company free and clear of all liens, encumbrances, equities or claims.
(l) Each Transaction Document has been duly authorized by the Company and has been or, at the Remarketing Settlement Date, will have been duly executed and delivered, will conform in all material respects to the description thereof in the Disclosure Package and the Final Prospectus, and each Transaction Document other than this Remarketing Agreement and the Pricing Agreement constitutes or, at the Remarketing Settlement Date, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer, moratorium and other similar laws relating to or affecting creditors' rights generally and to general principles of equity; and the Indenture has been duly qualified under the Trust Indenture Act.
(m) The Series E Debt Securities have been duly authorized, executed, authenticated, issued and delivered and constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer, moratorium and other similar laws relating to or affecting creditors' rights generally and to general principles of equity, and are entitled to the benefits provided by the Indenture; the Series E Debt Securities are, and the First Tranche Series E Debt Securities and the Second Tranche Series E Debt Securities will be, substantially in the form contemplated by the Indenture.
(n) The Securities have been duly authorized and will, on the Remarketing Settlement Date, have been duly executed, authenticated, issued and delivered (assuming their due authentication by the trustee) and constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer, moratorium and other similar laws relating to or affecting creditors' rights generally and to general principles of equity, and will be entitled to the benefits provided by the Indenture; and the Securities will be substantially in the form contemplated by the Indenture and will conform in all material respects to the description thereof contained in the Disclosure Package and the Final Prospectus.
(o) Each Significant Subsidiary that is required to be organized or licensed as an insurance company in its jurisdiction of incorporation (each, an "Insurance Subsidiary" and collectively, the "Insurance Subsidiaries") is licensed 12
as an insurance company in its respective jurisdiction of incorporation and is duly licensed or authorized as an insurer in each other jurisdiction where it is required to be so licensed or authorized to conduct its business, in each case with such exceptions as would not have, individually or in the aggregate, a Material Adverse Effect; except as otherwise described in the Disclosure Package, each Insurance Subsidiary has all other approvals, orders, consents, authorizations, licenses, certificates, permits, registrations and qualifications (collectively, the "Approvals") of and from all insurance regulatory authorities to conduct its business, with such exceptions as would not have, individually or in the aggregate, a Material Adverse Effect; there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or investigation that could reasonably be expected to lead to any revocation, termination or suspension of any such Approval, the revocation, termination or suspension of which would have, individually or in the aggregate, a Material Adverse Effect; and, to the knowledge of the Company, no insurance regulatory agency or body has issued any order or decree impairing, restricting or prohibiting the payment of dividends by any Insurance Subsidiary to its parent which would have, individually or in the aggregate, a Material Adverse Effect.
(p) The Company and each Significant Subsidiary has all necessary Approvals of and from, and has made all filings, registrations and declarations (collectively, the "Filings") with, all insurance regulatory authorities, all Federal, state, local and other governmental authorities, all self-regulatory organizations and all courts and other tribunals, which are necessary to own, lease, license and use its properties and assets and to conduct its business in the manner described in the Disclosure Package, except where the failure to have such Approvals or to make such Filings would not have, individually or in the aggregate, a Material Adverse Effect; to the knowledge of the Company, the Company and each Significant Subsidiary is in compliance with all applicable laws, rules, regulations, orders, by-laws and similar requirements, including in connection with registrations or memberships in self-regulatory organizations, and all such Approvals and Filings are in full force and effect and neither the Company nor any Significant Subsidiary has received any notice of any event, inquiry, investigation or proceeding that would reasonably be expected to result in the suspension, revocation or limitation of any such Approval or otherwise impose any limitation on the conduct of the business of the Company or any Significant Subsidiary, except as described in the Disclosure Package or except for any such non-compliance, suspension, revocation or limitation which would not have, individually or in the aggregate, a Material Adverse Effect.
(q) Each Insurance Subsidiary is in compliance with and conducts its businesses in conformity with all applicable insurance laws and regulations of its respective jurisdiction of incorporation and the insurance laws and regulations of other jurisdictions which are applicable to it, in each case with such exceptions as would not have, individually or in the aggregate, a Material Adverse Effect. 13
(r) Each Significant Subsidiary which is engaged in the business of acting as a broker-dealer or an investment advisor (respectively, a "Broker-Dealer Subsidiary" and an "Investment Advisor Subsidiary") is duly licensed or registered as a broker-dealer or investment advisor, as the case may be, in each jurisdiction where it is required to be so licensed or registered to conduct its business, in each case, with such exceptions as would not have, individually or in the aggregate, a Material Adverse Effect; each Broker-Dealer Subsidiary and each Investment Advisor Subsidiary has all other necessary Approvals of and from all applicable regulatory authorities, including any self- regulatory organization, to conduct its businesses, in each case with such exceptions, as would not have, individually or in the aggregate, a Material Adverse Effect; except as otherwise described in the Disclosure Package, none of the Broker-Dealer Subsidiaries or Investment Advisor Subsidiaries has received any notification from any applicable regulatory authority to the effect that any additional Approvals from such regulatory authority are needed to be obtained by such subsidiary in any case where it could be reasonably expected that (x) any of the Broker-Dealer Subsidiaries or Investment Advisor Subsidiaries would in fact be required either to obtain any such additional Approvals or cease or otherwise limit engaging in a certain business and (y) the failure to have such Approvals or limiting such business would have a Material Adverse Effect; and each Broker-Dealer Subsidiary and each Investment Advisor Subsidiary is in compliance with the requirements of the broker-dealer and investment advisor laws and regulations of each jurisdiction which are applicable to such subsidiary, and has filed all notices, reports, documents or other information required to be filed thereunder, in each case with such exceptions as would not have, individually or in the aggregate, a Material Adverse Effect.
(s) The Remarketing of the Remarketed Securities pursuant to this Remarketing Agreement and the Pricing Agreement, and compliance by the Company with all of the provisions of the Securities and the Transaction Documents, and the consummation of the transactions herein and therein contemplated, will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement, or other written agreement or similar instrument to which the Company or any Significant Subsidiary is a party or by which the Company or any Significant Subsidiary is bound or to which any of the property or assets of the Company or any Significant Subsidiary is subject, or which affects the validity, performance or consummation of the transactions contemplated by this Remarketing Agreement, nor will such action result in any violation of any statute or any order, rule or regulation of any court or insurance regulatory 14
authority or other governmental agency or body having jurisdiction over the Company or any Significant Subsidiary or any of their properties, in each case other than such breaches, conflicts, violations, or defaults which individually or in the aggregate, would not have a Material Adverse Effect and would not adversely affect the validity or performance of the Company's obligations, as applicable, under or with respect to the Remarketed Securities or any Transaction Document (in each case as to which the Company is or is to become a party); nor will such action result in any violation of the provisions of the certificate of incorporation or by-laws or other charter documents of the Company or any Significant Subsidiary; and no Approval of or Filing with any such court or insurance regulatory authority or other governmental agency or body is required for the execution, delivery and performance by the Company of any Transaction Document or for the issue or sale of the Securities, except, assuming the accuracy of the Remarketing Agents' representation in Section 9 of this Remarketing Agreement, (i) the registration under the Act of the Securities which registration has become effective and (ii) such Approvals or Filings as may be required under the Trust Indenture Act or state securities or Blue Sky laws in connection with the Remarketing of the Remarketed Securities by the Remarketing Agents.
(t) Other than as set forth in the Disclosure Package, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or to which any property of the Company or any of its subsidiaries is subject, challenging the transactions contemplated by the Transaction Documents or which, if determined adversely to the Company or its subsidiaries, could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or would materially and adversely affect the ability of the Company to perform its obligations under the Transaction Documents; and, to the knowledge of the Company, no such proceedings are threatened or contemplated by governmental authorities or threatened by others other than as set forth in the Disclosure Package.
(u) Neither the Company nor any Significant Subsidiary is in violation of any of its certificate of incorporation or by-laws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it is bound or to which any of its property or assets is subject, which violation or default would have, individually or in the aggregate, a Material Adverse Effect.
(v) The statements set forth in each of the Disclosure Package and the Final Prospectus under the captions "Description of Debt Securities" and "Description of Remarketed Series E Debentures" insofar as they purport to constitute a summary of the terms of the Transaction Documents and other 15
documents referred to therein, under the caption "Plan of Distribution," insofar as they purport to describe the documents referred to therein, and under the caption "Certain Material U.S. Federal Income Tax Considerations" (subject to the limitations and qualifications set forth therein), insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate and complete in all material respects.
(w) Other than as disclosed in the Disclosure Package, the financial statements of the Company and its consolidated subsidiaries included or incorporated by reference in the Disclosure Package, together with the related schedules and notes, comply in all material respects with the requirements of the Act and the Exchange Act, as applicable, and present fairly in all material respects the financial position, the results of operations and the changes in cash flows of such entities in conformity with GAAP at the respective dates or for the respective periods to which they apply; and such financial statements and related notes and schedules, if any, have been prepared in accordance with GAAP consistently applied throughout the periods involved.
(x) Deloitte & Touche LLP, which has audited certain consolidated financial statements of the Company and its subsidiaries, is an Independent Registered Public Accounting Firm as required by the Act and the rules and regulations of the Commission thereunder.
(y) Neither the Company nor any Significant Subsidiary is, or after giving effect to the offer and sale of the Securities pursuant to the Pricing Agreement will be, an "investment company", as such term is defined in the Investment Company Act of 1940, as amended (the "Investment Company Act"), and the rules and regulations thereunder, although certain separate accounts of MLIC and of certain Insurance Subsidiaries are required to register as investment companies under the Investment Company Act.
(z) None of the Company or its subsidiaries or, to the best of their knowledge, any of their directors, officers or affiliates, has taken or will take, directly or indirectly, any action designed to, or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Remarketed Securities in violation of Regulation M under the Exchange Act.
(aa) The Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that complies with the requirements of the Exchange Act and has been designed by the Company's principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. As disclosed in the Company's 16
Annual Report on Form 10-K for the year ended December 31, 2013, the Company's internal control over financial reporting was effective as of December 31, 2013 and the Company is not aware of any material weaknesses in its internal control over financial reporting.
(bb) The Company and its consolidated subsidiaries employ disclosure controls and procedures (as such term is defined in Rule 13a- 15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms, and is accumulated and communicated to the Company's management, including its principal executive officer or officers and principal financial officer or officers, as appropriate, to allow timely decisions regarding disclosure. As disclosed in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, the Company's disclosure controls and procedures were effective as of June 30, 2014.
(cc) No stop order suspending the effectiveness of the Registration Statement has been issued under the Act and the Registration Statement is not the subject of a pending proceeding or examination under Section 8(d) or 8(e) of the Act, the Company is not the subject of a pending proceedings under Section 8A of the Act in connection with the Remarketing of the Remarketed Securities and any request on the part of the Commission for additional information has been complied with.
(dd) Except as would not individually or in the aggregate, reasonably be expected to have a Material Adverse Effect: (1) all tax returns required to be filed by the Company or any of its subsidiaries have been timely filed, (2) (x) all taxes (whether imposed directly or through withholding) including any interest, fine, sales and use taxes, all taxes which the Company and each of its subsidiaries is obligated to withhold from amounts owing to employees, creditors and third parties with respect to the period covered by such tax returns, additions to tax, or penalties applicable thereto due or claimed to be due from such entities have been timely paid, and (y) no deficiency assessment with respect to a proposed adjustment of the Company or its subsidiaries' federal, state, local or foreign taxes is pending or, to the best of the Company or its subsidiaries' knowledge, threatened, in each case of (x) and (y), other than such taxes or adjustments that are being contested in good faith or for which adequate reserves have been provided, and (3) to the Company and its subsidiaries' knowledge, there is no tax lien, whether imposed by any federal, state, foreign or other taxing authority, outstanding against the assets, properties or business of the Company or its subsidiaries. 17
3. Company Covenants. The Company agrees with each of the Remarketing Agents:
(a) To prepare the Final Prospectus as amended and supplemented in relation to the Remarketed Securities in a form approved by the Remarketing Agents and to file timely such Final Prospectus pursuant to Rule 424(b) under the Act; to make no further amendment or any supplement to the Registration Statement or Final Prospectus as amended or supplemented after the Applicable Time and prior to the Remarketing Settlement Date for the Remarketed Securities unless the Remarketing Agents for such Remarketed Securities shall have had a reasonable opportunity to review and comment upon any such amendment or supplement prior to any filing thereof; to advise the Remarketing Agents, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Final Prospectus or any amended Final Prospectus has been filed and to furnish the Remarketing Agents with copies thereof; to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus is required in connection with the Remarketing of such Remarketed Securities and, during such same period, to advise the Remarketing Agents, promptly after it receives notice thereof, of (i) the issuance by the Commission of any stop order or of any order preventing or suspending the use of the Final Prospectus, (ii) the suspension of the qualification of such Remarketed Securities for Remarketing in any jurisdiction or of the initiation or threatening of any proceeding for any such purpose, or (iii) any request by the Commission for the amending or supplementing of the Registration Statement or Final Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of the Final Prospectus or suspending any such qualification, promptly to use its best efforts to obtain the withdrawal of such order;
(b) To give the Remarketing Agents notice of any filings made pursuant to the Exchange Act or the regulations of the Commission thereunder within forty-eight hours prior to the Applicable Time; to give the Remarketing Agents notice of its intention to make any such filing from the Applicable Time to the Remarketing Settlement Date and to furnish the Remarketing Agents with copies of any such documents a reasonable amount of time prior to such proposed filing. The Company shall prepare the Final Term Sheet and file such Final Term Sheet as an Issuer Free Writing Prospectus within two Business Days after the Remarketing Date; provided that the Company shall furnish the Remarketing Agents with copies of any such Final Term Sheet a reasonable amount of time prior to such proposed filing and will not use or file any such document to which the Remarketing Agents or counsel to the Remarketing Agents shall object; 18
(c) Promptly from time to time to take such action as the Remarketing Agents may reasonably request to qualify the Remarketed Securities for offering and sale under the securities laws of such jurisdictions as the Remarketing Agents may reasonably request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for so long as may be necessary to complete the distribution of such Remarketed Securities, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation, to file a general consent to service of process in any jurisdiction or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise subject;
(d) To furnish to the Remarketing Agents a copy of each proposed Issuer Free Writing Prospectus prepared by or on behalf of, used by, or referred to by the Company and not to use or refer to any proposed Issuer Free Writing Prospectus to which the Remarketing Agents reasonably object; if at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement, the Disclosure Package, the Final Prospectus or any Preliminary Prospectus or, when taken together with the Disclosure Package and any other such Issuer Free Writing Prospectus, included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, to promptly notify the Remarketing Agents and, if requested by the Remarketing Agents, to promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission; provided, however, that this covenant shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished in writing to the Company by any Remarketing Agent expressly for use therein;
(e) To furnish the Remarketing Agents with copies of any Issuer Free Writing Prospectus or the Final Prospectus in such quantities as the Remarketing Agents may from time to time reasonably request, and if, at any time prior to the earlier of (i) the completion of the distribution of the Remarketed Securities and (ii) the expiration of nine months after the date of the Final Prospectus, any event shall have occurred as a result of which any Issuer Free Writing Prospectus or the Final Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Issuer Free Writing Prospectus or the Final Prospectus were delivered, not misleading, or, if for any 19
other reason it shall be necessary during such period to amend or supplement any Issuer Free Writing Prospectus or the Final Prospectus or to file under the Exchange Act any document incorporated by reference in any Issuer Free Writing Prospectus or the Final Prospectus in order to comply with the Act or the Exchange Act, (i) to notify the Remarketing Agents and (ii) upon their request to prepare and furnish without charge to each Remarketing Agent and to any dealer in securities as many copies as such Remarketing Agent may from time to time reasonably request of an amended Issuer Free Writing Prospectus or a supplement to the Final Prospectus or an amended Final Prospectus which will correct such statement or omission or effect such compliance; and any Issuer Free Writing Prospectus and the Final Prospectus and any amendments or supplements thereto furnished to the Remarketing Agents shall be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T;
(f) To make generally available to securityholders of the Company as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations thereunder (including, at the option of the Company, Rule 158);
(g) During the period beginning from the Applicable Time and continuing to and including the Remarketing Settlement Date for the Remarketed Securities, not to offer, sell, contract to offer or sell or otherwise dispose of any debt securities of the Company having pricing characteristics similar to the Securities exceeding an aggregate principal amount of $3 billion, except, for the avoidance of doubt, debt securities issued under the Global Medium Term Note Program of Metropolitan Life Global Funding I, Global Medium Term Note Program of MetLife Institutional Funding II, or any commercial paper program of, or sponsored by, the Company or any subsidiaries, without the prior written consent of the Remarketing Agents, which consent shall not be unreasonably withheld;
(h) During a period of five years from the effective date of the Registration Statement, to furnish to the Remarketing Agents copies of all reports or other communications (financial or other) furnished to stockholders of the Company, and to furnish to the Remarketing Agents as soon as they are available, copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange on which the Securities or any class of securities of the Company is listed (such financial statements to be on a consolidated basis to the extent the accounts of the Company and its subsidiaries are consolidated in reports furnished to its stockholders generally or to the 20
Commission), provided that reports and financial statements furnished to or filed with the Commission, and publicly available on EDGAR, or furnished on the Company's website, shall be deemed to have been furnished to the Remarketing Agents under this Section 3(h);
(i) The Company agrees that, unless it obtains the prior consent of the Remarketing Agents, and each Remarketing Agent represents and agrees that, unless it obtains the prior consent of the Company, it has not made and will not make any offer relating to the Remarketed Securities that would constitute an Issuer Free Writing Prospectus (other than, for the avoidance of doubt, any Bloomberg L.P. or other electronic communication regarding any preliminary term sheets or comparable bond prices and the Final Term Sheet filed pursuant to Section 3(b) hereto). Each Remarketing Agent agrees, unless it obtains the prior consent of the Company, not to take any action that would result in the Company being required to file with the Commission under Rule 433(d) under the Act a free writing prospectus prepared by or on behalf of each Remarketing Agent that otherwise would not be required to be filed by the Company thereunder but for the action of such Remarketing Agent (other than, for the avoidance of doubt, the Final Term Sheet filed pursuant to Section 3(b) hereto); and
(j) The Company agrees to promptly notify the Remarketing Agents if A.M. Best & Co., Fitch Ratings, Ltd., Moody's Investors Service, Inc. or Standard & Poor's Ratings Services has given notice of any intended or potential downgrading or any review for a possible change of its rating of any debt security or the financial strength or the claims paying ability of the Company or any Significant Subsidiary.
4. Fees and Expenses. The Company covenants and agrees with the Remarketing Agents that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of counsel and accountants to the Company in connection with the registration of the Securities under the Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus and the Final Prospectus and any amendments and supplements thereto and the mailing and delivering of copies thereof to the Remarketing Agents and dealers; (ii) the cost of printing or producing the Transaction Documents, any Blue Sky Survey and any other documents in connection with the Remarketing of the Remarketed Securities; (iii) all expenses in connection with the qualification of the Remarketed Securities for offering and sale under state securities laws and insurance securities laws as provided in Section 3(b) hereof, including the reasonable fees and disbursements of counsel for the Remarketing Agents in connection with such qualification and in connection with the Blue Sky Survey; (iv) the filing fees incident to, and the fees and disbursements of counsel for the Remarketing Agents in connection with, securing any required review by the Financial Industry Regulatory 21
Authority of the terms of the sale of the Remarketed Securities; (v) any fees charged by securities rating services for rating the Remarketed Securities; (vi) the cost of preparing the Remarketed Securities; (vii) the fees and expenses of any trustee, paying agent or transfer agent and the fees and disbursements of counsel for any such trustee, paying agent or transfer agent in connection with the Remarketing; (viii) any travel expenses of the Company's officers and employees and any other expenses of the Company in connection with attending or hosting meetings with respect to this Remarketing; and (ix) all other costs and expenses incident to the performance of the obligations of the Company hereunder which are not otherwise specifically provided for in this Section. Except as provided in this Section, and Sections 6 and 13 hereof, the Remarketing Agents will pay all of their own costs and expenses, including the fees of their counsel, stock transfer taxes on resale of any of the Remarketed Securities by them and any advertising expenses connected with Remarketing of the Remarketed Securities that they may make.
5. Conditions to Remarketing Agents' Obligations. The obligations of the Remarketing Agents shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the Company herein or in certificates of any officer of the Company or any subsidiary of the Company delivered pursuant to the provisions hereof are, at the Applicable Time, the Remarketing Date and the Remarketing Settlement Date (in each case, to the extent such representations and warranties are applicable as of such date), true and correct, the condition that the Company shall have performed all of its covenants and other obligations included hereunder and in the other Transaction Documents to be performed at or before the date hereof, the Applicable Time, the Remarketing Date and the Remarketing Settlement Date, and the following additional conditions:
(a) The Final Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the Act within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 3(a) hereof; the Final Term Sheet shall have been filed with the Commission pursuant to Rule 433(d); no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to the Remarketing Agents' reasonable satisfaction;
(b) All corporate proceedings and other legal matters incident to the authorization, form and validity of the Transaction Documents, the Remarketed Securities, the Securities, the Final Prospectus, the Registration Statement and all other legal matters relating to this Remarketing Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all material respects to counsel to the Remarketing Agents, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters; 22
(c) Debevoise & Plimpton LLP, counsel for the Remarketing Agents, shall have furnished to the Remarketing Agents such written opinion, dated the Remarketing Settlement Date, as the Remarketing Agents may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters;
(d) Willkie Farr & Gallagher LLP, counsel for the Company, shall have furnished to the Remarketing Agents their written opinions, each opinion dated the Remarketing Settlement Date, substantially in the form attached hereto as Annex I-A with respect to certain corporate and tax matters, and Annex I-B with respect to the Registration Statement, Disclosure Package and the Final Prospectus;
(e) Matthew Ricciardi, Chief Counsel -General Corporate of MetLife Group, Inc., an affiliate of the Company, shall have furnished to the Remarketing Agents his written opinion, dated the Remarketing Settlement Date, substantially in the form attached hereto as Annex II;
(f) The Company will furnish the Remarketing Agents with such conformed copies of such opinions, certificates, letters and documents as the Remarketing Agents reasonably request;
(g) (i) On the Remarketing Date, Deloitte & Touche LLP shall have furnished to the Remarketing Agents a letter, dated the Remarketing Date, in form and substance reasonably satisfactory to the Remarketing Agents, confirming that they are independent registered public accountants with respect to the Company and the Company's subsidiaries within the meaning of the Act and the Exchange Act and the respective applicable published rules and regulations thereunder, and (ii) on the Remarketing Settlement Date, Deloitte & Touche LLP shall have furnished to the Remarketing Agents a letter, dated the Remarketing Settlement Date, in form and substance reasonably satisfactory to the Remarketing Agents, that reaffirms the statements made in the letter furnished pursuant to subclause (i) of this Section 5(g), except that the specified date referred to shall be a date not more than three Business Days prior to the Remarketing Settlement Date;
(h) On or after the Remarketing Date, (i) neither the Company nor any Significant Subsidiary shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Disclosure Package any loss or interference with its business from fire, explosion, flood or 23
other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Disclosure Package, and (ii) since the respective dates as of which information is given in the Disclosure Package, there shall not have been any change in the surplus of any Significant Subsidiary or the capital stock of the Company or any increase in the long-term debt of the Company and its subsidiaries considered as a whole, or any change, or any development involving a prospective change, in or affecting the business, financial position, reserves, surplus, equity or results of operations of the Company and the Significant Subsidiaries considered as a whole, otherwise than as set forth or contemplated in the Disclosure Package, the effect of which, in any such case described in clause (i) or (ii), is in the judgment of the Remarketing Agents so material and adverse as to make it impracticable or inadvisable to proceed with the Remarketing of the Remarketed Securities on the terms and in the manner contemplated in the Final Prospectus;
(i) On or after the Remarketing Date (i) no downgrading shall have occurred in the rating accorded the debt securities of the Company or any Significant Subsidiary or the financial strength or claims paying ability of any Significant Subsidiary by A.M. Best & Co., Fitch Ratings, Ltd., Moody's Investors Service, Inc. or Standard & Poor's Ratings Services, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, or shall have given notice of its intended or potential downgrading of, its rating of any debt security or the financial strength or the claims paying ability of any Significant Subsidiary, the effect of which, in any such case described in clause (i) or (ii), is in the judgment of the Remarketing Agents so material and adverse as to make it impracticable or inadvisable to proceed with the Remarketing of the Remarketed Securities on the terms and in the manner contemplated in the Final Prospectus;
(j) On or after the Remarketing Date, there shall not have occurred any of the following: (i) a change in U.S. or international financial, political or economic conditions or currency exchange rates or exchange controls as would, in the reasonable judgment of the Remarketing Agents, be likely to prejudice materially the success of the Remarketing of the Remarketed Securities, whether in the primary market or in respect of dealings in the secondary market; (ii) a suspension or material limitation in trading in securities generally on the New York Stock Exchange; (iii) a suspension or material limitation in trading in the Company's securities on the New York Stock Exchange; (iv) a suspension or material limitation in clearing and/or settlement in securities generally; (v) a general moratorium on commercial banking activities declared by either Federal or New York State authorities; or (vi) the material outbreak or escalation of hostilities involving the United States or the declaration by the United States of a 24
national emergency or war or any other national or international calamity or emergency (including without limitation as a result of an act of terrorism) if the effect of any such event specified in this clause (vi) in the judgment of the Remarketing Agents makes it impracticable or inadvisable to proceed with the Remarketing of the Remarketed Securities on the terms and in the manner contemplated in the Final Prospectus;
(k) The Company shall have complied with any request by the Remarketing Agents with respect to the furnishing of copies of the Final Prospectus in compliance with the provisions of Section 3(e), as the case may be; and
(l) At the Remarketing Settlement Date, the Remarketing Agents shall have received a certificate of the Chief Accounting Officer of the Company, dated as of the Remarketing Settlement Date, substantially in the form of Annex IV hereto.
6. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Remarketing Agent, its partners, directors and officers and each person, if any, who controls such Remarketing Agent within the meaning of either Section 15 of the Act or Section 20 of the Exchange Act, against any losses, claims, damages or liabilities, joint or several, to which such Remarketing Agent may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in (i) the Registration Statement or any amendment or supplement (when considered together with the document to which such supplement relates) thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) any Preliminary Prospectus, Pricing Prospectus, any Issuer Free Writing Prospectus or the Final Prospectus or any amendment or supplement (when considered together with the document to which such supplement relates) thereto, or any "issuer information" filed or required to be filed pursuant to Rule 433(d) under the Act, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and will reimburse each Remarketing Agent for any legal or other expenses reasonably incurred by such Remarketing Agent in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability (or action in respect thereof) arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, any Issuer Free Writing Prospectus, Pricing Prospectus, the Registration Statement or the 25
Final Prospectus, or any such amendment or supplement(s) in reliance upon and in conformity with written information furnished to the Company by any Remarketing Agent expressly for use therein.
(b) Each Remarketing Agent will, severally and not jointly, indemnify and hold harmless the Company, its directors and officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act against any losses, claims, damages or liabilities (or actions in respect thereof) to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any Issuer Free Writing Prospectus, Pricing Prospectus, the Registration Statement, or the Final Prospectus, or any amendment or supplement (when considered together with the document to which such supplement relates) thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, any Issuer Free Writing Prospectus, Pricing Prospectus, the Registration Statement, the Final Prospectus or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such Remarketing Agent expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; the omission so to notify the indemnifying party shall relieve it from any liability which it may have to any indemnified party under such subsection, to the extent the indemnifying party is actually materially prejudiced by such omission. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party or any other indemnified party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof 26
other than reasonable costs of investigation, unless (i) the indemnifying party and such indemnified party shall have mutually agreed to the contrary, (ii) the indemnifying party has failed within a reasonable time to retain counsel reasonably satisfactory to such indemnified party or (iii) the named parties in any such proceeding (including any impleaded parties) include both the indemnifying party and such indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. No indemnifying party shall, without the prior written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party. In no event shall the indemnifying party be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same allegations or circumstances.
(d) If the indemnification provided for in this Section 6 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, other than due to the express provisions thereof, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Remarketing Agents on the other from the Remarketing of the Remarketed Securities to which any such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Remarketing Agents of the applicable Securities on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Remarketing Agents on the other shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Company bear to the total Remarketing Fee received by the Remarketing Agents, as set forth in the table on the cover page of the Final Prospectus. 27
The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Remarketing Agents on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Remarketing Agents agree that it would not be just and equitable if contributions pursuant to this subsection (d) were determined by pro rata allocation (even if the Remarketing Agents were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Remarketing Agent shall be required to contribute any amount in excess of the amount by which the total price at which the applicable Securities remarketed by it and distributed to the public were offered to the public exceeds the amount of any damages which such Remarketing Agent has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Remarketing Agents in this subsection (d) to contribute are several in proportion to their respective obligations with respect to such Remarketed Securities and not joint.
(e) The obligations of the Company under this Section 6 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Remarketing Agent within the meaning of the Act. The obligations of the Remarketing Agents under this Section 6 shall be in addition to any liability which the respective Remarketing Agent may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company (including any person who, with his consent, is named in the Registration Statement as about to become a director of the Company) and to each person, if any, who controls the Company within the meaning of the Act.
7. Resignation and Removal of the Remarketing Agents. A Remarketing Agent may resign and be discharged from its duties and obligations hereunder, and the Company may remove any or all of the Remarketing Agents, by giving five (5) Business Days' prior written notice to the Stock Purchase Contract Agent and, in the case of a removal, to the Remarketing Agents; provided that no such resignation nor any removal of all the Remarketing Agents shall become effective until the Company shall have appointed at least one nationally recognized broker-dealer as successor to the Remarketing Agents, and such successor Remarketing Agent shall have entered into a 28
letter substantially in the form of Annex III hereof with the Company and the Stock Purchase Contract Agent in which it shall have agreed to conduct the Remarketing in accordance with the Remarketing Procedures. The provisions of this Section 7 shall survive the resignation or removal of the Remarketing Agents pursuant to this Remarketing Agreement.
8. New Remarketing Agents. The Company may appoint any institution or institutions as new Remarketing Agent(s) hereunder (each a "New Remarketing Agent") in respect of the Remarketing in which event, upon the confirmation by such institution through a letter to the Company and the Stock Purchase Contract Agent confirming acceptance of such nomination by the New Remarketing Agent substantially in the form of Annex III hereof, such New Remarketing Agent shall become a party hereto, unless otherwise provided for herein, with all the authority, rights, powers, duties and obligations as if originally named as Remarketing Agent hereunder. The Company will notify the Remarketing Agent(s) appointed in respect of the Remarketing of the Remarketed Securities and the Stock Purchase Contract Agent of a change in the identity of other Remarketing Agents appointed or who have resigned in respect of the Remarketing of the Remarketed Securities generally as soon as reasonably practicable.
9. Offering Restrictions. Each Remarketing Agent acknowledges, represents and agrees and each additional Remarketing Agent appointed pursuant to Section 8 of this Remarketing Agreement will be required to acknowledge, represent and agree that it has not remarketed or delivered and it will not remarket or deliver, any of the Remarketed Securities, in or from any jurisdiction except under circumstances that are reasonably designed to result in compliance with the applicable securities laws and regulations thereof. In particular, each Remarketing Agent acknowledges, represents and agrees and each additional Remarketing Agent appointed pursuant to Section 8 of this Remarketing Agreement will be required to acknowledge, represent and agree as set forth in Annex V to this Remarketing Agreement.
10. Dealing in the Remarketed Securities. Each Remarketing Agent, when acting hereunder, or when acting in its individual or any other capacity, may, to the extent permitted by law, buy, sell, hold or deal in any of the Remarketed Securities. The Remarketing Agents may exercise any vote or join in any action which any beneficial owner of Remarketed Securities may be entitled to exercise or take pursuant to the Indenture with like effect as if they did not act in any capacity hereunder. The Remarketing Agents, in their individual capacities, either as principal or agent, may also engage in or have an interest in any financial or other transaction with the Company as freely as if they did not act in any capacity hereunder.
11. Termination of Remarketing Agreement. This Remarketing Agreement shall terminate (i) in the event of a Remarketing that is not a Successful Remarketing or (ii) as to any Remarketing Agent who resigns or is removed, on the effective date of the resignation or removal of such Remarketing Agent pursuant to Section 7. In addition, the 29
obligations of the Remarketing Agents may be terminated by them by notice given to the Company prior to 12:00 noon, New York City time on the Remarketing Settlement Date if, prior to that time, any of the applicable conditions precedent to the obligations of the Remarketing Agents described in Section 5 hereof shall have failed to occur.
12. Survival. Notwithstanding any such termination set forth in Section 11 hereof, the obligations set forth in Section 4 hereof shall survive and remain in full force and effect until all amounts payable under said Section 4 shall have been paid in full. In addition, the former Remarketing Agents shall be entitled to the rights and benefits under Section 6 of this Remarketing Agreement notwithstanding the replacement or resignation of the Remarketing Agents. The respective indemnities, agreements, representations, warranties and other statements of the Company and the several Remarketing Agents, as set forth in this Remarketing Agreement or made by or on behalf of them, respectively, pursuant to this Remarketing Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Remarketing Agent or any controlling person of any Remarketing Agent, the Company or any officer or director or controlling person of the Company and shall survive delivery of and payment for the Securities.
13. Notices. All statements, requests, notices and agreements hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication; notices to the Remarketing Agents shall be directed to Deutsche Bank Securities Inc., 60 Wall Street, New York, NY 10005, with a copy to Debevoise & Plimpton LLP, 919 Third Avenue, New York, New York 10022, attention of Peter J. Loughran, Esq.; notices to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: General Counsel, with a copy to Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, NY 10019, attention John M. Schwolsky, Esq. and Vladimir Nicenko, Esq.; notices to the Trustee shall be delivered or sent by mail or facsimile transmission to The Bank of New York Mellon Trust Company, N.A., 2 North LaSalle Street, Suite 1020, Chicago, Illinois 60602, telecopy: (312) 827-8542; notices to the Stock Purchase Contract Agent shall be delivered or sent by mail or facsimile transmission to Deutsche Bank Trust Company Americas, Trust and Securities Services, 60 Wall Street, 16th Floor, MS: NYC60-2710, New York, NY 10005, telecopy: (732) 578-4635; and notices to the Collateral Agent or the Custodial Agent shall be delivered or sent by mail or facsimile transmission to Deutsche Bank Trust Company Americas, Trust and Securities Services, 60 Wall Street, 16th Floor, MS: NYC60-2710, New York, NY 10005, telecopy: (732) 578-4635. Any such statements, requests, notices or agreements shall take effect at the time of receipt thereof.
14. Successors and Assigns. This Remarketing Agreement and the Pricing Agreement shall be binding upon, and inure solely to the benefit of, the Remarketing Agents and the Company, and, to the extent provided in Sections 6 and 12 hereof, the 30
officers and directors of the Company and each person who controls the Company or any Remarketing Agent, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Remarketing Agreement or the Pricing Agreement. No purchaser of any of the Securities pursuant to this Remarketing Agreement shall be deemed a successor or assign by reason merely of such purchase.
15. GOVERNING LAW. THIS REMARKETING AGREEMENT AND THE PRICING AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT SUCH PRINCIPLES WOULD REQUIRE OR PERMIT THE APPLICATION OF LAWS OF ANOTHER JURISDICTION.
16. Consent to Jurisdiction. The Company agrees that any legal suit, action or proceeding against the Company brought by the Remarketing Agents or by any person, if any, who controls the Remarketing Agents within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, arising out of or based upon this Remarketing Agreement or the transactions contemplated hereby may be instituted in any state or Federal court in the Borough of Manhattan, The City of New York, New York, and, to the fullest extent permitted by applicable law, waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the non-exclusive jurisdiction of such courts in any suit, action or proceeding.
17. Amendment. This Remarketing Agreement may not be amended or modified except by an instrument in writing signed by, or on behalf of, each of the parties hereto; provided, however, that in the event that the Securities to be remarketed, or any portion thereof, are modified in such a way so that they no longer require registration under the Act, the Company, the Remarketing Agents and the Stock Purchase Contract Agent hereby agree to promptly enter into an amendment to this Remarketing Agreement containing such representations, warranties and covenants as would normally be required to more accurately reflect an offering of unregistered securities.
18. Counterparts. This Remarketing Agreement and the Pricing Agreement may be executed by any one or more of the parties hereto and thereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.
19. No Advisory or Fiduciary Relationship. The Company acknowledges and agrees that (a) the Remarketing of the Remarketed Securities pursuant to this Remarketing Agreement is an arm's-length commercial transaction between the Company, on the one hand, and the several Remarketing Agents, on the other hand, (b) in connection with any Remarketing contemplated by this Remarketing Agreement and the Pricing Agreement and the process leading to any such transaction, each Remarketing 31
Agent is and has been acting solely as a principal and is not the agent or fiduciary of the Company, or its stockholders, creditors, employees or any other party, (c) no Remarketing Agent has assumed or will assume an advisory or fiduciary responsibility in favor of the Company with respect to any such Remarketing contemplated hereby or the process leading thereto (irrespective of whether such Remarketing Agent has advised or is currently advising the Company on other matters) and no Remarketing Agent has any obligation to the Company with respect to such Remarketing contemplated hereby except the obligations expressly set forth in this Remarketing Agreement and the Pricing Agreement, (d) the Remarketing Agents and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company, (e) the Company agrees that it will not claim that the Remarketing Agents, or any of them, have rendered advisory services of any nature or respect, or owe a fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto and (f) the Remarketing Agents have not provided any legal, accounting, regulatory or tax advice with respect to the offering contemplated hereby and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.
20. Entire Agreement. This Remarketing Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Remarketing Agents, or any of them, with respect to the subject matter hereof.
21. Waiver of Jury Trial. The Company and each of the Remarketing Agents hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Remarketing Agreement or the transactions contemplated hereby.
22. Rights of the Stock Purchase Contract Agent. Notwithstanding any other provision of this Remarketing Agreement, the Stock Purchase Contract Agent, in connection with its rights and duties hereunder, shall be entitled to all the rights, protections and privileges granted to the Stock Purchase Contract Agent in the Stock Purchase Contract Agreement.
[Signature pages follow] 32
Very truly yours,
METLIFE, INC.
By: /s/ Marlene B. Debel Name: Marlene B. Debel Title: Senior Vice President and Treasurer
[Signature page to the Remarketing Agreement]
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Stock Purchase Contract Agent
By: /s/ Carol Ng Name: Carol Ng Title: Vice President
By: /s/ Anthony D'Amato Name: Anthony D'Amato Title: Associate
[Signature page to the Remarketing Agreement]
Accepted as of the date hereof on behalf of the Remarketing Agents: DEUTSCHE BANK SECURITIES INC.
By: /s/ Edward J. Sunoo Name: Edward J. Sunoo Title: Managing Director
By: /s/ Adam Raucher Name: Adam Raucher Title: Director
[Signature page to the Remarketing Agreement]
SCHEDULE 1 TO REMARKETING AGREEMENT
None.
ANNEX I(a)
FORM OF WILLKIE FARR & GALLAGHER LLP OPINION I(a)-1
ANNEX I(b)
FORM OF WILLKIE FARR & GALLAGHER LLP NEGATIVE ASSURANCE LETTER I(b)-1
ANNEX II
FORM OF MATTHEW RICCIARDI'S OPINION II-1
ANNEX III
FORM OF ACCESSION LETTER
METLIFE, INC.
[Date]
[New Remarketing Agent] [Address]
Dear Sirs,
Remarketing of Series E Senior Component Debentures, Tranche 1, due 2018 and Series E Senior Component Debentures, Tranche 2, due 2045 of MetLife, Inc. (the "Remarketed Securities")
The undersigned refers to the Remarketing Agreement, dated as of August 26, 2014 (the "Remarketing Agreement") among ourselves as the Company, Deutsche Bank Trust Company Americas, as Stock Purchase Contract Agent (the "Stock Purchase Contract Agent"), and the Remarketing Agents from time to time party thereto, and have the pleasure of inviting you to become a Remarketing Agent subject to and in accordance with the terms of the Remarketing Agreement, a copy of which has been supplied to you by us. Please return to the Company a copy of this letter signed by an authorized signatory whereupon you will become a Remarketing Agent for the purposes of the Remarketing Agreement with all the authority, rights, powers, duties and obligations of a Remarketing Agent under the Remarketing Agreement.
This letter is governed by, and shall be construed in accordance with, the laws of the State of New York. The provisions of Sections 14 and 15 of the Remarketing Agreement shall apply to this letter as if set out herein in full. III-1
Yours faithfully, METLIFE, INC.
By: Name: Title:
Acknowledged as of the date hereof:
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Stock Purchase Contract Agent By: Name: Title: By: Name: Title: III-2
CONFIRMATION
We hereby accept the appointment as a Remarketing Agent and accept all of the duties and obligations under, and the terms and conditions of the Remarketing Agreement upon the terms of this letter.
We confirm that we are in receipt of all the documents which we have requested and have found them to be satisfactory.
For the purposes of the Remarketing Agreement our communications details are as set out below. [NEW REMARKETING AGENT]
By: Name: Title: Date: [ ]
Address: [ ]
Telex: [ ]
Facsimile: [ ]
Attention: [ ]
Copies to:
(i) All existing Remarketing Agents who have been appointed in respect of the Remarketing of the Remarketed Securities.
(ii) The Stock Purchase Contract Agent. III-3
ANNEX IV
METLIFE, INC. CHIEF ACCOUNTING OFFICER CERTIFICATE
METLIFE, INC. CHIEF ACCOUNTING OFFICER'S CERTIFICATE
MetLife, Inc. a Delaware corporation (the "Company"), does hereby certify, pursuant to Section 5(l) of the Remarketing Agreement, dated August 26, 2014 (the "Remarketing Agreement"), by and among the Company, Deutsche Bank Trust Company Americas, as Stock Purchase Contract Agent, and Deutsche Bank Securities Inc. (together with the institutions appointed as Remarketing Agents pursuant to Section 8 of the Remarketing Agreement), that:
(i) the representations and warranties of the Company contained in Section 2 of the Remarketing Agreement are true and correct in allrespects, as if made at and as of the date hereof; and
(ii) the Company has complied in all respects with all agreements and all conditions on its part to be performed under the RemarketingAgreement and the other Transaction Documents at or prior to the date hereof.
Willkie Farr & Gallagher LLP, counsel to the Company, may rely upon this certificate in delivering its opinion pursuant to Section 5(d) of the Remarketing Agreement. Debevoise & Plimpton LLP, counsel to the Remarketing Agents, may rely upon this certificate in delivering its opinion pursuant to Section 5(c) of the Remarketing Agreement.
[Remainder of page intentionally left blank.] IV-1
IN WITNESS WHEREOF, the undersigned has hereunto signed his name as of , 2014. METLIFE, INC.
By: Name: Peter M. Carlson
Title: Executive Vice President, Finance Operations and Chief Accounting Officer IV-1
ANNEX V
OFFERING RESTRICTIONS
European Economic Area
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State"), each Remarketing Agent has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State it has not made and will not make an offer of Series E Debentures which are the subject of the offering contemplated by this prospectus supplement and accompanying prospectus to the public in that Relevant Member State other than:
(a) to any legal entity which is a qualified investor as defined in the Prospectus Directive;
(b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the other Remarketing Agents for any such offer; or
(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided that no such offer of Series E Debentures shall require MetLife, Inc. or any Remarketing Agent to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.
For the purposes of the above, (i) the expression an "offer of Series E Debentures to the public" in relation to any Series E Debentures in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Series E Debentures to be offered so as to enable an investor to decide to purchase or subscribe for the Series E Debentures, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, (ii) the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and (iii) the expression "2010 PD Amending Directive" means Directive 2010/73/EU. V-1
United Kingdom
Each Remarketing Agent has represented and agreed that it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 ("FSMA")) received by it in connection with the issue or sale of the Series E Debentures which are the subject of the offering contemplated by this prospectus supplement and the accompanying prospectus in circumstances in which Section 21(1) of such Act does not apply to MetLife, Inc., and that it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to any Series E Debentures in, from or otherwise involving the United Kingdom.
Hong Kong
The Series E Debentures may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii) to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a "prospectus" within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the Series E Debentures may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to Series E Debentures which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.
Japan
The Series E Debentures have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended; the "Financial Instruments and Exchange Act") and each Remarketing Agent has represented and agreed that it has not offered or sold and will not offer or sell any Series E Debentures, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re- offering or resale, directly or indirectly, in Japan or to, or for the benefit of, a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Act and any other applicable laws, regulations and ministerial guidelines of Japan. V-2
Singapore
This prospectus supplement and the accompanying prospectus have not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus supplement, the accompanying prospectus, any free writing prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Series E Debentures may not be circulated or distributed, nor may the Series E Debentures be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where the Series E Debentures are subscribed or purchased under Section 275 of the SFA by a relevant person which is: (a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor); or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries' rights and interest (howsoever described) in that trust shall not be transferred within 6 months after that corporation or that trust has acquired the Series E Debentures pursuant to an offer made under Section 275 of the SFA except: (1) to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA; (2) where no consideration is or will be given for the transfer; (3) where the transfer is by operation of law; (4) as specified in Section 276(7) of the SFA; or (5) as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore.
South Korea
The Series E Debentures may not be offered, sold and delivered directly or indirectly, or offered or sold to any person for re-offering or resale, directly or indirectly, in South Korea or to any resident of South Korea except pursuant to the applicable laws and regulations of South Korea, including the Financial Investment Services and Capital Markets Act and the Foreign Exchange Transaction Law and the decrees and regulations thereunder. The Series E Debentures have not been registered with the Financial Services Commission of South Korea for public offering in South Korea. Furthermore, the Series E Debentures may not be re-sold to South Korean residents unless the purchaser of the Series E Debentures complies with all applicable regulatory V-3
requirements (including but not limited to government approval requirements under the Foreign Exchange Transaction Law and its subordinate decrees and regulations) in connection with their purchase. V-4 | Highlight the parts (if any) of this contract related to "Expiration Date" that should be reviewed by a lawyer. Details: On what date will the contract's initial term expire? | {
"answer_start": [
14190
],
"text": [
"In addition, the"
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Agreement Date" that should be reviewed by a lawyer. Details: The date of the contract
Context: Exhibit 10.4
EXECUTION VERSION
INTELLECTUAL PROPERTY AGREEMENT
by and among
UNITED TECHNOLOGIES CORPORATION,
OTIS WORLDWIDE CORPORATION
and
CARRIER GLOBAL CORPORATION
Dated as of April 2, 2020
TABLE OF CONTENTS ARTICLE I DEFINITIONS 2 1.1 Defined Terms 2 ARTICLE II ASSIGNMENT OF SOLELY OWNED INTELLECTUAL PROPERTY RIGHTS 7 2.1 Assigned Intellectual Property Rights 7 ARTICLE III LICENSING OF INTELLECTUAL PROPERTY RIGHTS 8 3.1 Licensed Intellectual Property Rights 8 3.2 Reserved Intellectual Property Rights 10 3.3 No Rescission 10 ARTICLE IV TRADEMARKS 10 4.1 Ownership of United Technologies Trademarks 10 4.2 Use of United Technologies Trademarks 11 4.3 Special Trademark Provisions. 12 ARTICLE V EXCLUDED AGREEMENTS 12 5.1 No Change to Excluded Agreements 12 ARTICLE VI CONFIDENTIALITY 12 6.1 Received Information and Materials 12 6.2 Confidential Information 12 6.3 Obligations 13 6.4 Termination of UTC NDA 13 ARTICLE VII LIMITATIONS AND DISCLAIMERS 13 7.1 Subsequent Delivery of Intellectual Property Rights 13 7.2 No Additional Obligations 14 7.3 DISCLAIMER 14 7.4 Limitations of Liability 14 ARTICLE VIII GOVERNING LAW AND DISPUTE RESOLUTION 15 8.1 Governing Law 15 8.2 Alternative Dispute Resolution 15 8.3 Confidentiality 13 8.4 Equitable Relief 13
i
ARTICLE IX GENERAL PROVISIONS 16 9.1 Entire Agreement; Conflict Among Agreements 16 9.2 Assignment and Change of Control; Successor and Assigns 16 9.3 Bankruptcy 17 9.4 Amendments and Waivers 17 9.5 Notice 18 9.6 Severability 18 9.7 Counterparts 18 9.8 Further Assurances 18 9.9 Interpretation 19
ii
INTELLECTUAL PROPERTY AGREEMENT This INTELLECTUAL PROPERTY AGREEMENT (this "Agreement"), dated as of April 2, 2020, is by and among United Technologies Corporation, a Delaware corporation ("UTC"), Otis Worldwide Corporation, a Delaware corporation ("Otis"), and Carrier Global Corporation, a Delaware corporation ("Carrier") (each, a "Party" and together, the "Parties"). RECITALS WHEREAS, UTC, Otis and Carrier have entered into that certain Separation and Distribution Agreement, of even date herewith (the "SDA"), pursuant to which UTC and its subsidiaries will undertake a series of transactions following which UTC will separate into three independent, publicly traded companies: (i) UTC, comprising Collins Aerospace and Pratt & Whitney, a systems supplier to the commercial aerospace and defense industry, (ii) Otis, a manufacturer of people-moving products, such as elevators, escalators and moving walkways, and (iii) Carrier, a provider of HVAC, refrigeration, fire, security and building automation technologies; WHEREAS, pursuant to Section 2.10 of the SDA, UTC, Otis and Carrier agreed to enter into this Agreement; WHEREAS, each of the Parties and their respective affiliates are currently owners of, and in possession of, certain Intellectual Property Rights (as defined herein), which Intellectual Property Rights may have been developed or acquired by such Party independently, or jointly with either or both the other Parties, or assigned to it by either or both of the other Parties prior to the date hereof; WHEREAS, a result of the corporate relationship between each of the Parties, and not necessarily pursuant to a written agreement, prior to the date hereof, each Party has had access to, and the right to use certain Intellectual Property Rights of one or both of the other Parties as required for its business; WHEREAS, in connection with the transactions contemplated by the SDA, the Parties wish to confirm their respective ownership of certain Intellectual Property Rights (as defined herein), and with respect to certain other Intellectual Property Rights transfer ownership thereof from an Assignor Party (as defined herein) to an Assignee Party (as defined herein), and each Assignee Party wishes to receive ownership of such Intellectual Property Rights; and WHEREAS, in connection with the transactions contemplated by the SDA, the Parties wish to either grant, or confirm the prior grants of, certain rights and licenses with respect to certain Intellectual Property Rights from each Licensor Party (as defined herein) to a Licensee Party (as defined herein), and each Licensee Party wishes to receive such license grants on the terms set forth herein. NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth and in the SDA (and other agreements entered into in connection with the SDA), and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. For the purposes of this Agreement, the following terms shall have the following meanings. Capitalized terms used but not otherwise defined in this Article I or elsewhere in this Agreement shall have the meaning ascribed to such terms in the SDA. For the avoidance of doubt, for purposes of Section 2.1, Section 3.1, and Section 4.1, respectively, (a) any reference to an Assignor Party, a Licensor Party, or a Party, respectively, shall be deemed to refer to other relevant members of such Assignor Group, such Licensor Group, or such Party's Group, respectively and (b) any obligation of an Assignor Party, a Licensor Party, or a Party, respectively, shall include an obligation to cause such relevant members of such Assignor Group, such Licensor Group, or such Party's Group, respectively, to satisfy such obligation; in each case, as the context requires. "AAA Rules" shall have the meaning defined in Section 8.2.2. "Affiliate" shall mean, for the purpose of this Agreement and notwithstanding its meaning in the SDA, with respect to a Party, another member of the Party Group to which the Party belongs. "Agreement" shall have the meaning defined in the preamble. "Assigned Intellectual Property Rights" shall have the meaning defined in Section 2.1.1. "Assignee Group" shall mean one of the UTC Group, the Otis Group, or the Carrier Group of which an Assignee Party is a member. "Assignee Party" shall mean the Party, as the context requires, other than the Assignor Party, to whom Intellectual Property Rights are assigned from the Assignor Party pursuant to the terms hereof. "Assignor Group" shall mean one of the UTC Group, the Otis Group, or the Carrier Group of which the Assignor Party is a member. "Assignor Party" shall mean one of the Parties, as the context requires, in its capacity as an assignor of Intellectual Property Rights to another Party pursuant to the terms hereof. "Carrier" shall have the meaning defined in the preamble. "Confidential Information" shall have the meaning defined in Section 6.2. "Contemplated to be Used" shall mean that there are contemporaneous books or records, whether in hard copy or electronic or digital format (including emails, databases and other file formats) evidencing a specific, good faith intention of future use, created in the ordinary course of business consistent with past practice.
2
"Copyrights" shall mean copyrights and other equivalent rights in copyrightable subject matter in works of authorship (including software), and including all registrations and applications therefor, and all renewals, extensions, restorations and reversions thereof. "Dispute" shall have the meaning defined in Section 8.2. "Excluded Agreement" shall mean (a) each Negotiated Agreement and (b) each Third Party Agreement; provided that, notwithstanding the foregoing, and without limitation, for the purposes of this Agreement, an Excluded Agreement shall not include any IWA or any work performed, without an express written agreement, by a member of an Assignor Group or a Licensor Group as Performer for a member of an Assignee Group or a Licensee Group as Requester, respectively, or vice versa. A non-inclusive (and not necessarily representative) listing of Excluded Agreements is provided in Schedule 5.0. "Exploit" shall mean, with respect to a particular item of Intellectual Property Rights, to do all things with such Intellectual Property Rights (subject to Article VI), including (a) to make, have made, use (including for development), import, offer for sale, and sell any product or service under any Patents within such Intellectual Property Rights; (b) to copy, display, perform, create derivative works based upon, and distribute any works under, any Copyrights within such Intellectual Property Rights; and (c) to use Trade Secrets and other confidential or proprietary information within such Intellectual Property Rights. For the avoidance of doubt, a right to Exploit in any manner a particular item of Intellectual Property Rights does not include the right to Exploit in any manner any other Intellectual Property Rights, including any separate background Intellectual Property Rights from or with which the item was created or derived, or which is necessary or desirable for a particular use of the item. "Funded" or "Funding" by an entity shall mean paid for by that entity through one or more cash contributions. For the purposes of this definition, U.S. Government funds or the funds of any other third party or entity shall not be considered. "Future Affiliate Provision" shall mean a term or provision of any agreement governing Intellectual Property Rights as between or among the Parties that was negotiated and entered into on arm's-length terms at any time prior to the Effective Time between or among members of different Party Groups (a) pursuant to which a licensor Party grants or purports to grant to the Party or Parties licensed under such agreement a license to the Intellectual Property Rights of any future Affiliate (including in the case of UTC, Raytheon Company) of the licensor Party, (b) imposing or purporting to impose any non-compete or other similar limitation on the business of any future Affiliate (including in the case of UTC, the business of Raytheon Company) of a Party, in favor of another Party or Parties, or (c) requiring or purporting to require the payment to a licensor Party of any incremental royalty or other charge on the business or products of any future Affiliate (including in the case of UTC, Raytheon Company) of the Party that is the licensee under such agreement, except to the extent that such future Affiliate avails itself of the license to which such royalty pertains. Each Party agrees that to the extent such Party is the beneficiary of a Future Affiliate Provision, such Party hereby waives and disclaims, and will not seek to enforce or claim the benefit of, such Future Affiliate Provision, such waiver, disclaimer and covenant being for the sole benefit of the other Parties, their Party Groups, and their future Affiliates.
3
"Intellectual Property Rights" shall mean any and all intellectual property and industrial property rights throughout the world, whether registered or unregistered, including intellectual property and industrial property rights protected or represented by, arising under, or associated with (a) Patents; (b) Copyrights; (c) Trade Secrets; and (d) any other similar or equivalent intellectual property or proprietary rights anywhere in the world; provided, however, that Trademarks are expressly excluded from the definition of Intellectual Property Rights. "Invention Disclosure" shall mean a written description of an invention, or potential invention, submitted to any member of a Party Group for review for patenting. "IWA" shall mean, as of a relevant date, the contractual terms and conditions prescribed for inter-entity work authorizations by Section 43 of the United Technologies Corporate Policy Manual or a predecessor thereof as of the relevant date, including the terms and conditions governing Intellectual Property Rights therein. "Licensed Intellectual Property Rights" shall have the meaning defined in Section 3.1.1. "Licensed Patents" shall mean with respect to a particular Licensor Group and Licensee Group, the Patents owned or freely licensable by the Licensor Group, that absent a license of the scope granted to the Licensee Group pursuant to Section 3.1 hereof, would be infringed by the operation of the business of the Licensee Group (including the making, selling, offering for sale, using or importing of the products or services of the Licensee Group). In addition, for the purpose of the forgoing determination as to whether a Patent is infringed as of the Effective Time, a Patent that issues after the Effective Time to the extent based upon a Patent Application or Invention Disclosure in existence before the Effective Time, shall be deemed to have been in existence from the date immediately prior to the Effective Time. "Licensee Group" shall mean one of the UTC Group, the Otis Group, or the Carrier Group of which the Licensee Party is a member. "Licensee Group Field" shall mean the field of the business of the applicable Licensee Group, including the manufacture, sale, support and service of products, and the provision of services, of one or more members of the applicable Licensee Group, as of the Effective Time and the natural extension thereof. "Licensee Party" shall mean one of the Parties, as the context requires, other than the Licensor Party, to whom Licensed Intellectual Property Rights are granted from the Licensor Party pursuant to the terms hereof. "Licensor Group" shall mean one of the UTC Group, the Otis Group, or the Carrier Group of which the Licensor Party is a member. "Licensor Party" shall mean one of the Parties, as the context requires, in its capacity as a grantor of Licensed Intellectual Property Rights to another Party pursuant to the terms hereof. "Negotiated Agreement" shall mean any agreement governing Intellectual Property Rights as between or among the Parties that was negotiated and entered into on arm's-length terms at any time prior to the Effective Time between or among members of different Party
4
Groups, including any and all such agreements identified in Schedule 5.0; provided that, notwithstanding the foregoing, and without limitation, for the purposes of this Agreement, a Negotiated Agreement shall not include any (i) IWA, (ii) work performed, without an express written agreement, by any member of a Party Group as Performer for another member or members of a Party Group as Requester or (iii) agreement between or among members of different Party Groups to the extent including a Future Affiliate Provision. "Otis" shall have the meaning defined in the preamble. "Party" and "Parties" shall have the meaning defined in the preamble to this Agreement. "Party Group" shall mean each of the UTC Group, the Otis Group, and the Carrier Group. "Patent" shall means any issued patent, including any utility patent, design patent, utility model, and inventor's certificate, or any like governmental grant or registration for the protection of inventions, including any patent granted by the United States Patent and Trademark Office (the "USPTO"), the European Patent Office (the "EPO") or any foreign equivalent thereof, including any issued patent that is continuation, divisional, continuation-in-part, extension, confirmation, reissue, reexamination, renewal, correction or substitution of an issued patent. In addition, unless the context otherwise requires, the term Patent shall include any Patent Application. "Patent Application" means any application for a Patent, including any provisional or PCT or similar application, before an applicable governmental office anywhere in the world, including the USPTO and the EPO. "Performer" shall mean, with respect to services, an entity meeting at least one of the following two conditions: (a) the entity is a "Performer," as defined in an IWA issued to the entity by the "Requester" defined in the IWA, with respect to the services, and/or (b) the entity performed the services at the request of a Requester as part of a joint project with the Requester, with respect to which no IWA was expressly issued nor any Negotiated Agreement entered with the Requester, and the entity received Funding from the Requester for the services (which Funded the services in full, or in full jointly with the Performer but with no contribution from any other entity) and delivered results of the services to the Requester. "Performer Background IPR" shall mean, with respect to services performed by the Performer at the request of the Requester, all Intellectual Property Rights held by Performer at the time of such services, other than Performer Foreground-Delivered IPR and Performer Foreground-Undelivered IPR, that would be necessary to Exploit Performer Foreground-Delivered IPR. "Performer Foreground-Delivered IPR" shall mean, with respect to services performed by the Performer at the request of the Requester, all Intellectual Property Rights that were conceived or created by the Performer in the course of such performance, directly or by a Performer Service Provider, and delivered to the Requester.
5
"Performer Foreground-Undelivered IPR" shall mean, with respect to services performed by the Performer at the request of the Requester, all Intellectual Property Rights that were conceived or created by the Performer in the course of such performance, directly or by a Performer Service Provider, and not delivered to the Requester. "Performer Service Provider" shall mean, with respect to services performed by the Performer at the request of the Requester, any Affiliate (other than the Requester), supplier, service provider, or other Person performing any aspect of the services on behalf of the Performer. "Person" shall mean an individual, partnership, corporation, limited liability company, joint venture, association or other form of business organization (whether or not regarded as a legal entity under applicable law), trust or other entity or organization. "Received Information and Materials" shall have the meaning defined in Section 6.1. "Requester" shall mean, with respect to services, an entity meeting at least one of the following two conditions: (a) the entity is a "Requester," as defined in an IWA issued by the entity to the "Performer" defined in such IWA, with respect to the services, and/or (b) the entity requested the services from the Performer as part of a joint project with the Performer, with respect to which no IWA was expressly issued nor any Negotiated Agreement entered with the Performer, and the entity Funded the services (in full independently, or in full jointly with the Performer but with no contribution from any other entity) and received delivery of results of the services from the Performer. "Requester Foreground IPR" shall mean, with respect to services requested by the Requester from the Performer, all Intellectual Property Rights conceived or created by the Requester, directly or by a Requester Service Provider, in connection with such services. "Requester Service Provider" shall mean, with respect to services performed by the Performer at the request of the Requester, any Affiliate (other than the Performer), supplier, service provider, or other Person performing any aspect of the Requester's obligations in connection with such services. "SDA" shall have the meaning defined in the recitals. "Third Party Agreement" shall mean any Agreement, entered into at any time prior to the Effective Time, between or among (a) a third party, on the one hand, and (b) any member or members of the Party Groups, including any and all such agreements identified in Schedule 5.0; provided that, notwithstanding the foregoing, and without limitation, for the purposes of this Agreement, a Third Party Agreement shall not include any agreement between or among members of different Party Groups to the extent including a Future Affiliate Provision. "Trade Secrets" shall mean rights in information or know how, regardless of form, including ideas, inventions, designs, drawings, specifications, product configurations, prototypes, models, improvements, technical data and other data, databases, formulae, algorithms and mathematical embodiments, laboratory notebooks, pricing and cost information, plans, proposals, processes, procedures, schematics, manufacturing techniques, business methods,
6
customer lists and supplier lists, and Invention Disclosures, that (a) derives economic value, actual or potential, from not being, and is not, generally known or readily ascertainable by proper means and (b) is the subject of efforts that are reasonable under the circumstances to maintain the confidentiality or secrecy thereof. "Trademarks" shall mean trademark rights, whether registered or unregistered, including in trademarks, service marks, trade names, brand names, certification marks, collective marks, Internet domain names and registrations, logos, slogans, symbols, trade dress and designs, and including all registrations, renewals, and applications for registration of the foregoing. "United Technologies Trademarks" shall mean all Trademarks to the extent consisting of or containing "UTC," "United Technologies Corporation," "United Technologies," "UTX," the UTC Icon, "ACE," "Achieving Competitive Excellence," all ACE logos, "ESP," "Employee Scholar Program," all ESP logos, "ITC360," all ITC360 logos, and any variations or derivatives of any of the foregoing, and any Trademarks that are confusingly similar thereto. "UTC" shall have the meaning defined in the preamble. "UTC Icon" shall mean the symbol, also known as the UTC gear logo, identified as the "UTC Icon" in the UTC "Corporate Identity Guidelines - Brand Basics" document attached as Schedule 4.1.1, regardless of color or size, and any variant thereof. "UTC NDA" shall have the meaning defined in Section 6.4. ARTICLE II
ASSIGNMENT OF SOLELY OWNED INTELLECTUAL PROPERTY RIGHTS
2.1 Assigned Intellectual Property Rights
2.1.1 Assignments by an Assignor Party. Subject to Section 3.2, each Assignor Party, on behalf of itself and the other members of the Assignor Group, hereby irrevocably assigns to the applicable Assignee Party, and agrees to irrevocably assign to the applicable Assignee Party, all of its and the other members of the Assignor Group's rights, title and interest in and to any and all Intellectual Property Rights owned by the Assignor Party or another member of the Assignor Group that meets one or more of the following descriptions: (a) the Intellectual Property Rights are Requester Foreground IPR conceived or created in the course of services concerning which the Assignee Party or another member of the Assignee Group was the Requester, and the Assignor Party or another member of the Assignor Group was the Performer; or (b) the Intellectual Property Rights are Performer Foreground-Delivered IPR conceived or created in the course of services concerning which the Assignee Party or another member of the Assignee Group was the Requester, and the Assignor Party or another member of the Assignor Group was the Performer; or
7
(c) the Intellectual Property Rights are Performer Foreground-Undelivered IPR conceived or created in the course of services concerning which the Assignor Party or another member of the Assignor Group was the Requester, and the Assignee Party or another member of the Assignee Group was the Performer (collectively, "Assigned Intellectual Property Rights"). ARTICLE III
LICENSING OF INTELLECTUAL PROPERTY RIGHTS
3.1 Licensed Intellectual Property Rights 3.1.1 License Grants by a Licensor Party. Subject to Section 3.2, a Licensor Party, on behalf of itself and the other members of the Licensor Group, and solely to the extent the Licensor Party or another member of the Licensor Group has the right to do so, hereby grants and agrees to grant to the applicable Licensee Party and the other members of the Licensee Group, subject to the field restriction of Section 3.1.2, a royalty-free, nonexclusive, perpetual, irrevocable, fully paid-up, worldwide right and license, with the right to sublicense as provided in Section 3.1.3, to Exploit Intellectual Property Rights that are owned by the Licensor Party or another member of the Licensor Group immediately following the assignments pursuant to Article II and meet one or more of the following descriptions with respect to the relevant Licensee Party: (a) the Intellectual Property Rights are rights under Licensed Patents or other Intellectual Property Rights that, in each case, as of the Effective Time, are either (A) used in connection with, or necessary for the ongoing conduct of, the current business of the Licensee Party or another member of the Licensee Group, or (B) Contemplated to be Used in the business of the Licensee Party, or another member of the Licensee Group, in the Licensee Group Field; provided, however, that the license granted in this Section 3.1.1(a) does not apply to the Intellectual Property Rights received under or otherwise governed by an Excluded Agreement; and/or (b) the Intellectual Property Rights are embodied in an invention, or proposed invention, that is both (i) described in a Patent or Invention Disclosure held by the Licensor Party or another member of the Licensor Group and (ii) conceived by at least one inventor who, at the time of conception, was employed by a member of the Licensee Group, a non-inclusive list of which inventions and proposed inventions are provided in Schedule 3.1.1(b), provided, however, that the license granted in this Section 3.1.1(b) does not apply to an invention conceived under or otherwise governed by an Excluded Agreement; and/or (c) the Intellectual Property Rights are subject to an assignment to the Licensor Party in Section 2.1.1(b) concerning Performer Foreground-Delivered IPR conceived or created in the course of services concerning which the Licensor Party or another member of the Licensor Group was the Requester and the Licensee Party or another member of the Licensee Group was the Performer; and/or
8
(d) the Intellectual Property Rights are Performer Background IPR or Patent rights of the Licensor Party or another member of the Licensor Group and is necessary for the Licensee Party or another member of the Licensee Party to Exploit the Performer Foreground-Delivered IPR in the Licensee Group Field, provided, however, that the license granted in this Section 3.1.1(d) applies only to the extent necessary for the Licensee Party or another member of the Licensee Group to Exploit the Performer Foreground-Delivered IPR in the Licensee Group Field. (collectively, "Licensed Intellectual Property Rights"). 3.1.2 Field Restriction. The licenses granted in Section 3.1.1 are limited to, and a Licensee Party and the other members of the Licensee Group will have the right to Exploit, only the Licensed Intellectual Property Rights within the Licensee Group Field, except for the purposes of research and development at a stage encompassed within U.S. Department of Defense Technology Readiness Levels 1-6 or NASA Technology Readiness Levels 1-6; provided that (a) such research is not intended for use outside the Licensee Group Field, and (b) in the course of research conducted for a third party outside the Licensee Group Field, neither the Licensee Party nor any member of the Licensee Group (nor any of their respective officers, directors, employees, contractors, agents or sublicensees) shall disclose such Intellectual Property Rights to the third party. 3.1.3 Sublicense of Licensed Intellectual Property Rights. A Licensee Party or another member of the Licensee Group may sublicense its rights in Licensed Intellectual Property Rights hereunder, solely in support of its respective businesses (and not independent of its current or future products and related services). In all cases in which the exercise of sublicense rights hereunder reasonably requires disclosure of Licensed Intellectual Property Rights to a third party, the applicable member of the Licensee Group will disclose such Licensed Intellectual Property Rights (a) solely on a "need to know" basis, (b) provided that the Person to receive Licensed Intellectual Property Rights first agrees in writing to terms of confidentiality and non-use at least as restrictive as those provided in this Agreement, and (c) provided that the Licensee Party ensures the performance of, and accepts joint and several responsibility for the performance by each of the sublicensees of, the obligations of the Licensee Party and the other members of the Licensee Group under this Agreement. 3.1.4 Improvements. Each of the licenses granted in Section 3.1.1, subject to the restrictions of Section 3.1.2 and Section 3.1.3, includes the right of a Licensee Party and other members of the Licensee Group to make improvements to such Licensed Intellectual Property Rights. Neither a Licensor Party nor any member of the Licensor Group will have any rights to any such improvements, and as between a Licensee Party and a Licensor Party, the Licensee Party or applicable member of the Licensee Group will own all such improvements made by the Licensee Party or such member of the Licensee Group to Licensed Intellectual Property Rights. 3.1.5 No Implied Licenses. To the extent Intellectual Property Rights of a Party or member of a Party Group are not expressly granted in this Agreement, they are hereby expressly reserved to the Party or member of the Party Group. Without limiting the generality of the immediately preceding sentence, no express grant by a Licensor Party in this Agreement of
9
license rights in certain Intellectual Property Rights shall be construed as implying the grant of any rights by the Licensor Party or another member of the Licensor Group in any other Intellectual Property Rights held by the Licensor Party or another member of the Licensor Group. 3.2 Reserved Intellectual Property Rights. Specific reservations shall apply to certain Intellectual Property Rights as set forth in Schedule 3.2. 3.3 No Rescission. The provisions of this Agreement, including the license rights provided in this Article III, shall not be terminable or revocable for any reason. In the event of any breach of this Agreement, the sole remedy of the non-breaching Party will be to seek monetary damages or equitable relief, including specific performance, as provided in Article VII, that does not involve a rescission or termination of any of the provisions of this Agreement (including the license rights provided in this Article III), and each Party irrevocably waives the right to seek any termination or rescission of any such provisions or rights. ARTICLE IV
TRADEMARKS
4.1 Ownership of United Technologies Trademarks. 4.1.1 Notwithstanding any other provision of this Agreement to the contrary, as between UTC, on the one hand, and Otis, Carrier and other members of the Otis Group and the Carrier Group, on the other, all rights in and to the United Technologies Trademarks, including all goodwill appurtenant thereto, are owned and shall be owned solely and exclusively by UTC. Without limiting the foregoing, and subject to Section 4.2, Otis and Carrier, on behalf of themselves and the other members of, respectively, the Otis Group and the Carrier Group, hereby irrevocably assign to UTC, and agree and promise to assign to UTC, (a) any and all rights, title and interest in and to the United Technologies Trademarks, including all goodwill appurtenant thereto held by them and the other members of the Otis Group and the Carrier Group, and (b) any and all registrations and applications for registration of Trademarks consisting of or containing any of the United Technologies Trademarks, anywhere in the world, to which Otis, Carrier or another member of the Otis Group or the Carrier Group holds a legal or equitable interest as of the Effective Time. Without limitation, the foregoing assignment and promise of assignment includes the right to sue and recover damages for past and future infringements of the United Technologies Trademarks and to bring any proceeding in the United States Patent and Trademark Office or any equivalent agency or governing body in any other country for cancellation, opposition, or other proceeding in connection with the United Technologies Trademarks. Except as expressly stated in Section 4.2, none of Otis, Carrier or any other member of the Otis Group or the Carrier Group shall have any right, title or interest in or to any of the United Technologies Trademarks, and any and all use of the United Technologies Trademarks, whether or not authorized pursuant to Section 4.2, shall inure solely and exclusively to UTC for all purposes.
10
4.1.2 Otis and Carrier, on behalf of themselves and the other members of, respectively, the Otis Group and the Carrier Group, agree and promise to assist UTC and the other members of the UTC Group, at UTC's request, in UTC's discretion and at UTC's cost, in applying for, registering, maintaining, renewing, demonstrating use of, recording UTC's and the other members of the UTC Group's rights in, and otherwise perfecting, and defending and enforcing against third party infringers, the rights of UTC and the other members of the UTC Group in the United Technologies Trademarks and all goodwill associated therewith, including executing, verifying, acknowledging and delivering any and all documents, including any instruments of transfer and recordable assignments, and confirmations of use, and performing such other acts deemed necessary in the reasonable opinion of UTC. 4.1.3 Otis and Carrier, on behalf of themselves and the other members of, respectively, the Otis Group and the Carrier Group, agree and promise not to (a) challenge in any jurisdiction or venue the right or title of UTC or any other members of the UTC Group in and to any United Technologies Trademark, or the validity or enforceability of any United Technologies Trademark or any registration thereof, or (b) register or renew, attempt to register or renew, or assist a Person other than UTC or a member of the UTC Group in registering or renewing, any United Technologies Trademark. 4.2 Use of United Technologies Trademarks 4.2.1 Except as expressly provided in this Section 4.2, after the Effective Time, none of Otis, Carrier or any other members of the Otis Group or the Carrier Group shall use, or have the right to use, any of the United Technologies Trademarks. 4.2.2 Without limitation, Otis and Carrier as promptly as reasonably practicable (but in any case within six (6) months of the Effective Time) shall cause each member of, respectively, the Otis Group and the Carrier Group having a corporate name that includes any of the United Technologies Trademarks to apply to change its corporate name to a name that does not include any of the United Technologies Trademarks, including, within six (6) months of the Effective Time, by making any legal filings in each relevant jurisdiction necessary to effect such change worldwide. 4.2.3 UTC, on behalf of itself and the other members of the UTC Group, hereby grants to Otis, Carrier and the other members of the Otis Group and the Carrier Group a limited, non-exclusive, non-transferable, personal and nonsublicensable right to continue temporarily to use, following the Effective Time, any United Technologies Trademark it is using immediately prior to the Effective Time, solely to the extent of such pre- Separation use and in accordance with product quality standards and programs in place at the respective member of the Otis Group or the Carrier Group immediately prior to the Effective Time, and strictly in accordance with this Section 4.2.3; provided that Otis and Carrier shall, and shall cause each of its respective Affiliates (including, after the Effective Time, the members of, respectively, the Otis Group and the Carrier Group) (a) not to hold itself out as having any affiliation with UTC or any member of the UTC Group (except to the extent a third party may infer such affiliation merely due to the limited use of the United Technologies Trademarks as contemplated herein), and (b) to use diligent efforts to eliminate use of the United Technologies Trademarks. In any event, as soon as practicable after the Effective Time, and in any event within three (3) years thereafter, Otis and
11
Carrier shall, and shall cause each of its respective Affiliates (including, after the Effective Time, the members of, respectively, the Otis Group and the Carrier Group), and any of its licensees or its respective Affiliates' licensees, to (a) cease and discontinue use of all United Technologies Trademarks, and (b) complete the removal of the United Technologies Trademarks from all of their respective products, signage, vehicles, properties, technical information, stationery and promotional or other marketing materials and other assets of Otis, Carrier and the other members of the Otis Group and the Carrier Group. Except for the limited, temporary license granted in this Section 4.2.3, neither UTC nor any other member of the UTC Group grants any right or license hereunder, express or implied, to use any United Technologies Trademarks. 4.3 Special Trademark Provisions. Special provisions concerning Trademarks are provided in Schedule 4.3. ARTICLE V
EXCLUDED AGREEMENTS
5.1 No Change to Excluded Agreements. The Parties do not intend by this Agreement to amend or otherwise change the Intellectual Property Rights or other provisions of any Excluded Agreement. Intellectual Property Rights provided, received or created pursuant to an Excluded Agreement will not constitute Licensed Intellectual Property Rights, and, with respect to the applicable parties thereto, will continue to be subject to any licenses, permissions or restrictions granted or imposed in the respective Excluded Agreement in accordance with its terms. ARTICLE VI
CONFIDENTIALITY
6.1 Received Information and Materials. The Parties acknowledge that members of each Party Group currently are in possession of information and materials f members of the other two Party Groups, which may include designs, drawings, specifications, technical data and other data, databases, formulae, algorithms and mathematical embodiments, plans, software, proposals, processes, procedures, manufacturing techniques, and business methods, and some of which may be included in the Licensed Intellectual Property Rights. With respect to a receiving Party, such information will be referred to individually or collectively as "Received Information and Materials," provided that Received Information and Materials will not include information disclosed under any Excluded Agreement. 6.2 Confidential Information. All Received Information and Materials that are identified as or are of the type generally considered as confidential or proprietary or that have historically been subject to reasonable confidentiality and proprietary protections, and any communications or information provided after the Effective Time pursuant to this Agreement among members of the different Party Groups, will be deemed confidential and proprietary information of the Person that provided it, unless the information (a) is or becomes generally available to the public other than as a result of a disclosure in breach of this Agreement; (b) is rightfully available to or known by the receiving Party prior to receipt by the receiving Party
12
without any obligation of confidentiality; (c) is received by the receiving Party from a third party, provided that the third party is not known by the receiving Party, after reasonable inquiry, to be in breach of any obligation of confidentiality; or (d) was independently developed by the receiving Party, without violating any contractual or legal obligation ("Confidential Information"). 6.3 Obligations. With respect to Confidential Information in its possession, custody or control, a receiving member of a Party Group will: (a) hold all Confidential Information in confidence, using the same degree of care such receiving member uses to protect its own confidential information of a similar nature, but in no event less than a reasonable degree of care, including sharing Confidential Information internally only on a "need to know" basis, (b) not disclose Confidential Information to any third party, other than as permitted with respect to Licensed Intellectual Property Rights pursuant to Section 3.1.3, and (c) use Confidential Information only to the extent authorized. 6.4 Termination of UTC NDA. Upon the Effective Time, (a) the Amended and Restated Nondisclosure Agreement, by and between United Technologies Companies, dated July 26, 2012 (the "UTC NDA"), will terminate as among UTC and the other members of the UTC Group, Otis and the other members of the Otis Group, and Carrier and the other members of the Carrier Group, (b) the information disclosed under the UTC NDA (i) will be deemed Received Information and Materials and Confidential Information under this Agreement, and (ii) will be licensed hereunder for use by UTC and the other members of the UTC Group, Otis and the other members of the Otis Group, Carrier and the other members of the Carrier Group, solely to the extent it is Licensed Intellectual Property Rights granted to UTC and the other members of the UTC Group, Otis and the other members of the Otis Group or Carrier and the other members of the Carrier Group, respectively, and (c) notwithstanding paragraph 3 of the UTC NDA, such information disclosed thereunder will continue to be protected for as long as it remains Confidential Information. ARTICLE VII
LIMITATIONS AND DISCLAIMERS
7.1 Subsequent Delivery of Intellectual Property Rights. 7.1.1 For a period of six (6) months after the Effective Time, upon written request by an Assignee Party or a Licensee Party, and solely to the extent the Assignor Party or another member of the Assignor Group or the Licensor Party or another member of the Licensor Group, respectively, has the right to do so, the Assignor Party or the Licensor Party, respectively, shall use commercially reasonable efforts to provide (and to cause other members of the Assignor Group or the Licensor Group, respectively, to provide) to the requesting Assignee Party or the Licensee Party, respectively, copies of tangible embodiments of the Assigned Intellectual Property Rights and the Licensed Intellectual Property Rights, respectively, in the possession of a member of the Assignor Group or the Licensor Group, respectively, and not in the possession of a member of the Assignee Group or the Licensee Group, respectively, upon the Effective Time, to the extent that both (a) such Assigned Intellectual Property Rights or such Licensed Intellectual Property Rights, respectively, are necessary for the ongoing conduct of the current
13
business of the requesting Assignee Party or another member of the Assignee Group or the requesting Licensee Party or another member of the Licensee Group, respectively, or was in use in such business as of the Effective Time, and (b) such tangible embodiments are reasonably necessary for the use of such Assigned Intellectual Property Rights or such Licensed Intellectual Property Rights, respectively, identified in Section 7.1.1(a). 7.2 No Additional Obligations. Except as expressly provided in this Agreement, this Agreement does not create any obligation on the part of any of the Parties to provide or create any of the following with respect to the Intellectual Property Rights owned, transferred, granted or licensed under this Agreement: (a) explanations, corrections, revisions, improvements, upgrades, technical assistance, maintenance, installation, debugging, or any other support; or (b) tangible embodiments, documents, information, software, data or any other items, deliverables or services. 7.3 DISCLAIMER. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE SDA OR ANY OTHER ANCILLARY AGREEMENT, (A) EACH OF THE PARTIES CONVEYS INTELLECTUAL PROPERTY RIGHTS UNDER THIS AGREEMENT SOLELY ON AN "AS IS," "WHERE IS" AND "WITH ALL FAULTS" BASIS, AND (B) NONE OF THE PARTIES MAKES, AND EACH HEREBY EXPRESSLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WITH RESPECT TO SUCH INTELLECTUAL PROPERTY RIGHTS, WHETHER EXPRESS OR IMPLIED, INCLUDING ANY REPRESENTATION OR WARRANTY WITH RESPECT TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, COMPLETENESS OR SUFFICIENCY, OR EXPORTABILITY, OR WITH RESPECT TO THE VALIDITY, SCOPE, ENFORCEABILITY OR NONINFRINGEMENT OF ANY OF SUCH INTELLECTUAL PROPERTY RIGHTS. FOR AVOIDANCE OF DOUBT, THE REPRESENTATIONS AND WARRANTIES PROVIDED IN THE SDA ARE NOT AFFECTED BY THIS DISCLAIMER. 7.4 Limitations of Liability. Except in connection with a Party's willful and intentional breach of this Agreement or fraud, in no event shall any Party or its Affiliates, under any circumstances, be liable or obligated in any manner to another Party or its Affiliates for any consequential, special, incidental, exemplary, indirect, punitive or similar damages, or for any loss of future revenue, profits or income, or for any diminution in value damages measured as a multiple of earnings, revenue or any other performance metric arising out of or relating to this Agreement or the transactions contemplated in this Agreement, even if such Party or its Affiliate is informed in advance of the possibility of such damages occurring and regardless of whether or not the damages were foreseeable and regardless of the theory or cause of action upon which any damages might be based. This limitation is separate and independent of any other remedy limitations and shall not fail if any such other limitation fails. The foregoing shall not be deemed to modify or limit any rights or remedies to the extent arising under the SDA, any other Ancillary Agreement or any Excluded Agreement.
14
ARTICLE VIII
GOVERNING LAW AND DISPUTE RESOLUTION
8.1 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to any conflict or choice-of-law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. 8.2 Alternative Dispute Resolution. Any dispute, controversy or claim between or among the Parties (whether sounding in contract, tort, or otherwise) arising out of or resulting from this Agreement, including the meaning of its provisions or the performance of any such provisions by a Party, its breach, termination, invalidity or otherwise (each, a "Dispute") will be resolved in accordance with the procedures specified in this Article VIII, which will be the sole and exclusive procedure for the resolution of any such Dispute. 8.2.1 Negotiations. The Parties will attempt in good faith to resolve any Dispute promptly by negotiations among executives of the Parties who have authority to settle the Dispute. The disputing Party will give the other Party or Parties, as applicable, written notice of the Dispute. Within twenty (20) days after receipt of said notice, the receiving Party or Parties will submit to the other a written response. The notice and response will include: (a) a statement of each Party's position and a summary of the evidence and arguments supporting that position, and (b) the name and title of the executive who will represent that Party. The executives will meet at a mutually acceptable time and place within thirty (30) days of the date of the disputing Party's notice and thereafter as often as they reasonably deem necessary to exchange relevant information and to attempt to resolve the Dispute. 8.2.2 Arbitration. If a Dispute has not been resolved within sixty (60) days of the date of the disputing Party's notice, any Party desiring a non-negotiated resolution shall refer the Dispute to binding arbitration pursuant to the then-current commercial arbitration rules and supplementary procedures of commercial arbitration of the American Arbitration Association (the "AAA Rules"). The arbitral tribunal shall be composed of a single arbitrator appointed in accordance with the AAA Rules in any matter in which an injunction, specific performance or other equitable relief is not requested and the value of the relief any Party seeks (whether by claim or counterclaim) does not exceed three million United States dollars (US $3,000,000). In all other matters, including any matter in which an injunction, specific performance or other equitable relief is requested, the arbitral tribunal shall be composed of a panel of three (3) arbitrators appointed in accordance with the AAA Rules. The arbitration shall take place in New York, New York. Each Party will bear its own expenses (including attorneys' fees), and the Parties will share equally the compensation and expenses of the arbitrators and the arbitration. Any arbitration award will be final and shall be enforceable in any court of competent jurisdiction. 8.3 Confidentiality. All negotiations, and all statements made and documents provided or exchanged in connection with an arbitration under Section 8.2.2 will be confidential. Except with the prior written consent of the other Party or Parties in the Dispute, as applicable, none of the Parties will disclose the existence or content of the Dispute, or the results of any
15
dispute resolution process, to third parties other than (a) as may be required by law or legal process after having provided the other Party or Parties with notice thereof and the opportunity to seek a protective order over such information, or (b) to outside counsel and tax, financial, and accounting professionals in connection with the Dispute. 8.4 Equitable Relief. The Parties acknowledge and agree that monetary damages (even if available) may not be an adequate remedy in the event that a Party does not perform the provisions of this Agreement in accordance with their specified terms or otherwise breaches any provisions of this Agreement. Accordingly, and notwithstanding any other provision of this Agreement, any Party will be entitled to seek from the arbitrator or arbitration tribunal, and the arbitrator or arbitration tribunal will be empowered to grant, an injunction, specific performance or other equitable relief (whether preliminary, permanent, temporary, conservatory or otherwise, and including temporary restraining orders) to prevent such breaches of this Agreement and to enforce specifically the terms hereof, in addition to any other remedy to which such Party is entitled at law or in equity. The Party alleging the breach shall not be required to provide any bond or other security in connection with any such award, but the Parties reserve all rights to otherwise contest the propriety of any award of injunctive relief. In addition, and notwithstanding any other provision of this Agreement, any Party will be entitled to seek in a court of competent jurisdiction an injunction, specific performance or other equitable relief to prevent breaches of this Agreement pending an arbitration under Section 8.2.2. ARTICLE IX
GENERAL PROVISIONS
9.1 Entire Agreement; Conflict Among Agreements. This Agreement, together with the SDA, the other Ancillary Agreements and the Exhibits and Schedules hereto and thereto, constitute the entire agreement among the Parties with respect to the subject matter of this Agreement and supersede any prior discussion, correspondence, negotiation, proposed term sheet, agreement, understanding or arrangement with respect to such subject matter, and there are no agreements, understandings, representations or warranties among the Parties other than those set forth or referred to in this Agreement with respect to such subject matter. In the event of any conflict between the provisions of this Agreement and the provisions of the SDA or any other Ancillary Agreement, the provisions of this Agreement shall control, provided, however, that (a) in the event of a conflict between the provisions of this Agreement and the provisions of the Transition Services Agreement, the conflicting provisions of the Transition Services Agreement shall control over the conflicting provisions of this Agreement, and (b) nothing in this Agreement limits any of the representations, warranties or indemnity obligations under the SDA or any other Ancillary Agreement. In the event of any conflict between the provisions of this Agreement and any agreement that was entered into at any time prior to the Effective Time between or among members of different Party Groups that is not an Excluded Agreement, the conflicting provisions of this Agreement shall control. 9.2 Assignment and Change of Control; Successor and Assigns 9.2.1 No Party may directly or indirectly sell, assign or otherwise transfer (whether by asset or stock sale, merger, reorganization or otherwise) any or all of its rights or
16
delegate any or all of its obligations under this Agreement without the express prior written consent of the other Parties, except as follows: (a) Otis or Carrier may (i) freely sell, assign or otherwise transfer, in whole or from time to time in part, Assigned Intellectual Property Rights assigned to it hereunder; and (ii) sell, assign or otherwise transfer, in whole or from time to time in part, its rights and obligations under this Agreement (A) to any Affiliate of Otis or Carrier, respectively, (B) to any financing entity, in connection with the grant of a revocable security interest necessary for financing, or (C) to a Person acquiring (whether by asset or stock sale, merger, reorganization or otherwise) all or substantially all of the relevant business of Otis or Carrier, respectively, that agrees to be bound by the terms and conditions of this Agreement; but any such transfer or assignment will not relieve Otis or Carrier, respectively, of any of its obligations hereunder. (b) UTC may (i) freely sell, assign or otherwise transfer, in whole or from time to time in part, Assigned Intellectual Property Rights assigned to it hereunder; and (ii) sell, assign or otherwise transfer, in whole or from time to time in part, its rights under this Agreement (A) to any member of the UTC Group, (B) to any financing entity, in connection with the grant of a revocable security interest necessary for financing, or (C) to a Person acquiring (whether by asset or stock sale, merger, reorganization or otherwise) all or substantially all of the relevant business of UTC that agrees to be bound by the terms and conditions of this Agreement; but any such transfer or assignment will not relieve UTC of any of its obligations hereunder. 9.2.2 Any purported sale, assignment or other transfer in contravention of this Section 9.2 shall be null and void. 9.2.3 Subject to Section 9.2.1 and Section 9.2.2, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, assigns and transferees. 9.3 Bankruptcy. All licenses granted under this Agreement will be deemed licenses of rights to intellectual property for purposes of Section 365(n) of the United States Bankruptcy Code and a licensee under this Agreement will retain and may fully exercise all of its rights and elections under the United States Bankruptcy Code. 9.4 Amendments and Waivers. This Agreement may not be modified or amended, except by an instrument or instruments in writing signed by the Party against whom enforcement of any such modification or amendment is sought. Any Party to this Agreement may, only by an instrument in writing, waive compliance by the other Parties with any term or provision of this Agreement on the part of such other Parties to this Agreement to be performed or complied with. The waiver by any Party to this Agreement of a breach of any term or provision of this Agreement shall not be construed as a waiver of any subsequent breach. No failure or delay by any Party in exercising any right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Subject to Section 3.3, the rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
17
9.5 Notice. All notices or other communications required or permitted hereunder by a Party shall be in writing to the other Parties at the address provided below (or at such other address as such Party may designate by notice pursuant to this Section 9.5), and shall be deemed given or delivered (a) when delivered personally against written receipt, (b) if sent by registered or certified mail, return receipt requested, postage prepaid, when received, and (c) when delivered by a nationally recognized overnight courier service, prepaid: To UTC: United Technologies Corporation 10 Farm Springs Farmington, CT 06302 Attention: Chief Intellectual Property Counsel To Otis: Otis Worldwide Corporation One Carrier Place Farmington, CT 06032 Attention: Chief Intellectual Property Counsel To Carrier: Carrier Global Corporation 13995 Pasteur Boulevard Palm Beach Gardens, FL 33418 Attention: Chief Intellectual Property Counsel
9.6 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party hereto. Upon such a determination, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible. 9.7 Counterparts. This Agreement may be executed in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by electronic means shall be as effective as delivery of a manually executed counterpart of this Agreement. 9.8 Further Assurances. Each Party agrees, upon written request of another Party, to do all acts and execute, deliver and perform all additional documents, instruments and agreements, which may be reasonably required to implement the provisions and purposes of this
18
Agreement; provided, however, that, except as expressly set forth in this Agreement, nothing in this Agreement shall be construed as obligating a Party or its Affiliates to deliver any additional Intellectual Property Rights, or any tangible embodiments of any Intellectual Property Rights, to another Party or its Affiliates. 9.9 Interpretation. For the purposes of this Agreement, (a) words in the singular shall be held to include the plural and vice versa, and words of one gender shall be held to include the other gender as the context requires; (b) references to the terms Article, Section, paragraph, Exhibit and Schedule are references to the Articles, Sections, paragraphs, Exhibits and Schedules to this Agreement, unless otherwise specified; (c) any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein shall have the meaning as defined in this Agreement; (d) the terms "hereof," "herein," "hereby," "hereto" and derivative or similar words refer to this entire Agreement, including the Schedules and Exhibits hereto, and not to any particular provision thereof; (e) references to "$" shall mean U.S. dollars; (f) the word "including" and words of similar import when used in this Agreement shall mean "including without limitation," unless otherwise specified; (g) the word "or" shall not be exclusive; (h) references to "written" or "in writing" include in electronic form; (i) provisions shall apply, when appropriate, to successive events and transactions; (j) the Parties have each participated in the negotiation and drafting of this Agreement and if an ambiguity or question of interpretation should arise, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or burdening any Party by virtue of the authorship of any of the provisions in this Agreement; (k) references to any statute shall be deemed to refer to such statute as amended through the date hereof; (l) references to any Contract are to that Contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; (m) references to an Affiliate of a Party mean current and future Affiliates of such Party; (n) a reference to any Person includes such Person's successors and permitted assigns; (o) any reference to "days" shall mean calendar days, unless Business Days are expressly specified; and (p) when calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded and if the last day of such period is not a Business Day, the period shall end on the next succeeding Business Day. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] [SIGNATURE PAGE FOLLOWS]
19
IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of each of the Parties as of the day first above written. UNITED TECHNOLOGIES CORPORATION By: /s/ Michael R. Dumais Name: Michael R. Dumais Title: Executive Vice President, Operations & Strategy OTIS WORLDWIDE CORPORATION
By: /s/ Michael P. Ryan Name: Michael P. Ryan Title: Vice President, Controller CARRIER GLOBAL CORPORATION By: /s/ Kyle Crockett Name: Kyle Crockett Title: Vice President, Controller
20 [/INST] ```json
{<answer_start>
"answer": "April 2, 2020"
<answer_end>
}
``` </s> | Exhibit 10.4
EXECUTION VERSION
INTELLECTUAL PROPERTY AGREEMENT
by and among
UNITED TECHNOLOGIES CORPORATION,
OTIS WORLDWIDE CORPORATION
and
CARRIER GLOBAL CORPORATION
Dated as of April 2, 2020
TABLE OF CONTENTS ARTICLE I DEFINITIONS 2 1.1 Defined Terms 2 ARTICLE II ASSIGNMENT OF SOLELY OWNED INTELLECTUAL PROPERTY RIGHTS 7 2.1 Assigned Intellectual Property Rights 7 ARTICLE III LICENSING OF INTELLECTUAL PROPERTY RIGHTS 8 3.1 Licensed Intellectual Property Rights 8 3.2 Reserved Intellectual Property Rights 10 3.3 No Rescission 10 ARTICLE IV TRADEMARKS 10 4.1 Ownership of United Technologies Trademarks 10 4.2 Use of United Technologies Trademarks 11 4.3 Special Trademark Provisions. 12 ARTICLE V EXCLUDED AGREEMENTS 12 5.1 No Change to Excluded Agreements 12 ARTICLE VI CONFIDENTIALITY 12 6.1 Received Information and Materials 12 6.2 Confidential Information 12 6.3 Obligations 13 6.4 Termination of UTC NDA 13 ARTICLE VII LIMITATIONS AND DISCLAIMERS 13 7.1 Subsequent Delivery of Intellectual Property Rights 13 7.2 No Additional Obligations 14 7.3 DISCLAIMER 14 7.4 Limitations of Liability 14 ARTICLE VIII GOVERNING LAW AND DISPUTE RESOLUTION 15 8.1 Governing Law 15 8.2 Alternative Dispute Resolution 15 8.3 Confidentiality 13 8.4 Equitable Relief 13
i
ARTICLE IX GENERAL PROVISIONS 16 9.1 Entire Agreement; Conflict Among Agreements 16 9.2 Assignment and Change of Control; Successor and Assigns 16 9.3 Bankruptcy 17 9.4 Amendments and Waivers 17 9.5 Notice 18 9.6 Severability 18 9.7 Counterparts 18 9.8 Further Assurances 18 9.9 Interpretation 19
ii
INTELLECTUAL PROPERTY AGREEMENT This INTELLECTUAL PROPERTY AGREEMENT (this "Agreement"), dated as of April 2, 2020, is by and among United Technologies Corporation, a Delaware corporation ("UTC"), Otis Worldwide Corporation, a Delaware corporation ("Otis"), and Carrier Global Corporation, a Delaware corporation ("Carrier") (each, a "Party" and together, the "Parties"). RECITALS WHEREAS, UTC, Otis and Carrier have entered into that certain Separation and Distribution Agreement, of even date herewith (the "SDA"), pursuant to which UTC and its subsidiaries will undertake a series of transactions following which UTC will separate into three independent, publicly traded companies: (i) UTC, comprising Collins Aerospace and Pratt & Whitney, a systems supplier to the commercial aerospace and defense industry, (ii) Otis, a manufacturer of people-moving products, such as elevators, escalators and moving walkways, and (iii) Carrier, a provider of HVAC, refrigeration, fire, security and building automation technologies; WHEREAS, pursuant to Section 2.10 of the SDA, UTC, Otis and Carrier agreed to enter into this Agreement; WHEREAS, each of the Parties and their respective affiliates are currently owners of, and in possession of, certain Intellectual Property Rights (as defined herein), which Intellectual Property Rights may have been developed or acquired by such Party independently, or jointly with either or both the other Parties, or assigned to it by either or both of the other Parties prior to the date hereof; WHEREAS, a result of the corporate relationship between each of the Parties, and not necessarily pursuant to a written agreement, prior to the date hereof, each Party has had access to, and the right to use certain Intellectual Property Rights of one or both of the other Parties as required for its business; WHEREAS, in connection with the transactions contemplated by the SDA, the Parties wish to confirm their respective ownership of certain Intellectual Property Rights (as defined herein), and with respect to certain other Intellectual Property Rights transfer ownership thereof from an Assignor Party (as defined herein) to an Assignee Party (as defined herein), and each Assignee Party wishes to receive ownership of such Intellectual Property Rights; and WHEREAS, in connection with the transactions contemplated by the SDA, the Parties wish to either grant, or confirm the prior grants of, certain rights and licenses with respect to certain Intellectual Property Rights from each Licensor Party (as defined herein) to a Licensee Party (as defined herein), and each Licensee Party wishes to receive such license grants on the terms set forth herein. NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth and in the SDA (and other agreements entered into in connection with the SDA), and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. For the purposes of this Agreement, the following terms shall have the following meanings. Capitalized terms used but not otherwise defined in this Article I or elsewhere in this Agreement shall have the meaning ascribed to such terms in the SDA. For the avoidance of doubt, for purposes of Section 2.1, Section 3.1, and Section 4.1, respectively, (a) any reference to an Assignor Party, a Licensor Party, or a Party, respectively, shall be deemed to refer to other relevant members of such Assignor Group, such Licensor Group, or such Party's Group, respectively and (b) any obligation of an Assignor Party, a Licensor Party, or a Party, respectively, shall include an obligation to cause such relevant members of such Assignor Group, such Licensor Group, or such Party's Group, respectively, to satisfy such obligation; in each case, as the context requires. "AAA Rules" shall have the meaning defined in Section 8.2.2. "Affiliate" shall mean, for the purpose of this Agreement and notwithstanding its meaning in the SDA, with respect to a Party, another member of the Party Group to which the Party belongs. "Agreement" shall have the meaning defined in the preamble. "Assigned Intellectual Property Rights" shall have the meaning defined in Section 2.1.1. "Assignee Group" shall mean one of the UTC Group, the Otis Group, or the Carrier Group of which an Assignee Party is a member. "Assignee Party" shall mean the Party, as the context requires, other than the Assignor Party, to whom Intellectual Property Rights are assigned from the Assignor Party pursuant to the terms hereof. "Assignor Group" shall mean one of the UTC Group, the Otis Group, or the Carrier Group of which the Assignor Party is a member. "Assignor Party" shall mean one of the Parties, as the context requires, in its capacity as an assignor of Intellectual Property Rights to another Party pursuant to the terms hereof. "Carrier" shall have the meaning defined in the preamble. "Confidential Information" shall have the meaning defined in Section 6.2. "Contemplated to be Used" shall mean that there are contemporaneous books or records, whether in hard copy or electronic or digital format (including emails, databases and other file formats) evidencing a specific, good faith intention of future use, created in the ordinary course of business consistent with past practice.
2
"Copyrights" shall mean copyrights and other equivalent rights in copyrightable subject matter in works of authorship (including software), and including all registrations and applications therefor, and all renewals, extensions, restorations and reversions thereof. "Dispute" shall have the meaning defined in Section 8.2. "Excluded Agreement" shall mean (a) each Negotiated Agreement and (b) each Third Party Agreement; provided that, notwithstanding the foregoing, and without limitation, for the purposes of this Agreement, an Excluded Agreement shall not include any IWA or any work performed, without an express written agreement, by a member of an Assignor Group or a Licensor Group as Performer for a member of an Assignee Group or a Licensee Group as Requester, respectively, or vice versa. A non-inclusive (and not necessarily representative) listing of Excluded Agreements is provided in Schedule 5.0. "Exploit" shall mean, with respect to a particular item of Intellectual Property Rights, to do all things with such Intellectual Property Rights (subject to Article VI), including (a) to make, have made, use (including for development), import, offer for sale, and sell any product or service under any Patents within such Intellectual Property Rights; (b) to copy, display, perform, create derivative works based upon, and distribute any works under, any Copyrights within such Intellectual Property Rights; and (c) to use Trade Secrets and other confidential or proprietary information within such Intellectual Property Rights. For the avoidance of doubt, a right to Exploit in any manner a particular item of Intellectual Property Rights does not include the right to Exploit in any manner any other Intellectual Property Rights, including any separate background Intellectual Property Rights from or with which the item was created or derived, or which is necessary or desirable for a particular use of the item. "Funded" or "Funding" by an entity shall mean paid for by that entity through one or more cash contributions. For the purposes of this definition, U.S. Government funds or the funds of any other third party or entity shall not be considered. "Future Affiliate Provision" shall mean a term or provision of any agreement governing Intellectual Property Rights as between or among the Parties that was negotiated and entered into on arm's-length terms at any time prior to the Effective Time between or among members of different Party Groups (a) pursuant to which a licensor Party grants or purports to grant to the Party or Parties licensed under such agreement a license to the Intellectual Property Rights of any future Affiliate (including in the case of UTC, Raytheon Company) of the licensor Party, (b) imposing or purporting to impose any non-compete or other similar limitation on the business of any future Affiliate (including in the case of UTC, the business of Raytheon Company) of a Party, in favor of another Party or Parties, or (c) requiring or purporting to require the payment to a licensor Party of any incremental royalty or other charge on the business or products of any future Affiliate (including in the case of UTC, Raytheon Company) of the Party that is the licensee under such agreement, except to the extent that such future Affiliate avails itself of the license to which such royalty pertains. Each Party agrees that to the extent such Party is the beneficiary of a Future Affiliate Provision, such Party hereby waives and disclaims, and will not seek to enforce or claim the benefit of, such Future Affiliate Provision, such waiver, disclaimer and covenant being for the sole benefit of the other Parties, their Party Groups, and their future Affiliates.
3
"Intellectual Property Rights" shall mean any and all intellectual property and industrial property rights throughout the world, whether registered or unregistered, including intellectual property and industrial property rights protected or represented by, arising under, or associated with (a) Patents; (b) Copyrights; (c) Trade Secrets; and (d) any other similar or equivalent intellectual property or proprietary rights anywhere in the world; provided, however, that Trademarks are expressly excluded from the definition of Intellectual Property Rights. "Invention Disclosure" shall mean a written description of an invention, or potential invention, submitted to any member of a Party Group for review for patenting. "IWA" shall mean, as of a relevant date, the contractual terms and conditions prescribed for inter-entity work authorizations by Section 43 of the United Technologies Corporate Policy Manual or a predecessor thereof as of the relevant date, including the terms and conditions governing Intellectual Property Rights therein. "Licensed Intellectual Property Rights" shall have the meaning defined in Section 3.1.1. "Licensed Patents" shall mean with respect to a particular Licensor Group and Licensee Group, the Patents owned or freely licensable by the Licensor Group, that absent a license of the scope granted to the Licensee Group pursuant to Section 3.1 hereof, would be infringed by the operation of the business of the Licensee Group (including the making, selling, offering for sale, using or importing of the products or services of the Licensee Group). In addition, for the purpose of the forgoing determination as to whether a Patent is infringed as of the Effective Time, a Patent that issues after the Effective Time to the extent based upon a Patent Application or Invention Disclosure in existence before the Effective Time, shall be deemed to have been in existence from the date immediately prior to the Effective Time. "Licensee Group" shall mean one of the UTC Group, the Otis Group, or the Carrier Group of which the Licensee Party is a member. "Licensee Group Field" shall mean the field of the business of the applicable Licensee Group, including the manufacture, sale, support and service of products, and the provision of services, of one or more members of the applicable Licensee Group, as of the Effective Time and the natural extension thereof. "Licensee Party" shall mean one of the Parties, as the context requires, other than the Licensor Party, to whom Licensed Intellectual Property Rights are granted from the Licensor Party pursuant to the terms hereof. "Licensor Group" shall mean one of the UTC Group, the Otis Group, or the Carrier Group of which the Licensor Party is a member. "Licensor Party" shall mean one of the Parties, as the context requires, in its capacity as a grantor of Licensed Intellectual Property Rights to another Party pursuant to the terms hereof. "Negotiated Agreement" shall mean any agreement governing Intellectual Property Rights as between or among the Parties that was negotiated and entered into on arm's-length terms at any time prior to the Effective Time between or among members of different Party
4
Groups, including any and all such agreements identified in Schedule 5.0; provided that, notwithstanding the foregoing, and without limitation, for the purposes of this Agreement, a Negotiated Agreement shall not include any (i) IWA, (ii) work performed, without an express written agreement, by any member of a Party Group as Performer for another member or members of a Party Group as Requester or (iii) agreement between or among members of different Party Groups to the extent including a Future Affiliate Provision. "Otis" shall have the meaning defined in the preamble. "Party" and "Parties" shall have the meaning defined in the preamble to this Agreement. "Party Group" shall mean each of the UTC Group, the Otis Group, and the Carrier Group. "Patent" shall means any issued patent, including any utility patent, design patent, utility model, and inventor's certificate, or any like governmental grant or registration for the protection of inventions, including any patent granted by the United States Patent and Trademark Office (the "USPTO"), the European Patent Office (the "EPO") or any foreign equivalent thereof, including any issued patent that is continuation, divisional, continuation-in-part, extension, confirmation, reissue, reexamination, renewal, correction or substitution of an issued patent. In addition, unless the context otherwise requires, the term Patent shall include any Patent Application. "Patent Application" means any application for a Patent, including any provisional or PCT or similar application, before an applicable governmental office anywhere in the world, including the USPTO and the EPO. "Performer" shall mean, with respect to services, an entity meeting at least one of the following two conditions: (a) the entity is a "Performer," as defined in an IWA issued to the entity by the "Requester" defined in the IWA, with respect to the services, and/or (b) the entity performed the services at the request of a Requester as part of a joint project with the Requester, with respect to which no IWA was expressly issued nor any Negotiated Agreement entered with the Requester, and the entity received Funding from the Requester for the services (which Funded the services in full, or in full jointly with the Performer but with no contribution from any other entity) and delivered results of the services to the Requester. "Performer Background IPR" shall mean, with respect to services performed by the Performer at the request of the Requester, all Intellectual Property Rights held by Performer at the time of such services, other than Performer Foreground-Delivered IPR and Performer Foreground-Undelivered IPR, that would be necessary to Exploit Performer Foreground-Delivered IPR. "Performer Foreground-Delivered IPR" shall mean, with respect to services performed by the Performer at the request of the Requester, all Intellectual Property Rights that were conceived or created by the Performer in the course of such performance, directly or by a Performer Service Provider, and delivered to the Requester.
5
"Performer Foreground-Undelivered IPR" shall mean, with respect to services performed by the Performer at the request of the Requester, all Intellectual Property Rights that were conceived or created by the Performer in the course of such performance, directly or by a Performer Service Provider, and not delivered to the Requester. "Performer Service Provider" shall mean, with respect to services performed by the Performer at the request of the Requester, any Affiliate (other than the Requester), supplier, service provider, or other Person performing any aspect of the services on behalf of the Performer. "Person" shall mean an individual, partnership, corporation, limited liability company, joint venture, association or other form of business organization (whether or not regarded as a legal entity under applicable law), trust or other entity or organization. "Received Information and Materials" shall have the meaning defined in Section 6.1. "Requester" shall mean, with respect to services, an entity meeting at least one of the following two conditions: (a) the entity is a "Requester," as defined in an IWA issued by the entity to the "Performer" defined in such IWA, with respect to the services, and/or (b) the entity requested the services from the Performer as part of a joint project with the Performer, with respect to which no IWA was expressly issued nor any Negotiated Agreement entered with the Performer, and the entity Funded the services (in full independently, or in full jointly with the Performer but with no contribution from any other entity) and received delivery of results of the services from the Performer. "Requester Foreground IPR" shall mean, with respect to services requested by the Requester from the Performer, all Intellectual Property Rights conceived or created by the Requester, directly or by a Requester Service Provider, in connection with such services. "Requester Service Provider" shall mean, with respect to services performed by the Performer at the request of the Requester, any Affiliate (other than the Performer), supplier, service provider, or other Person performing any aspect of the Requester's obligations in connection with such services. "SDA" shall have the meaning defined in the recitals. "Third Party Agreement" shall mean any Agreement, entered into at any time prior to the Effective Time, between or among (a) a third party, on the one hand, and (b) any member or members of the Party Groups, including any and all such agreements identified in Schedule 5.0; provided that, notwithstanding the foregoing, and without limitation, for the purposes of this Agreement, a Third Party Agreement shall not include any agreement between or among members of different Party Groups to the extent including a Future Affiliate Provision. "Trade Secrets" shall mean rights in information or know how, regardless of form, including ideas, inventions, designs, drawings, specifications, product configurations, prototypes, models, improvements, technical data and other data, databases, formulae, algorithms and mathematical embodiments, laboratory notebooks, pricing and cost information, plans, proposals, processes, procedures, schematics, manufacturing techniques, business methods,
6
customer lists and supplier lists, and Invention Disclosures, that (a) derives economic value, actual or potential, from not being, and is not, generally known or readily ascertainable by proper means and (b) is the subject of efforts that are reasonable under the circumstances to maintain the confidentiality or secrecy thereof. "Trademarks" shall mean trademark rights, whether registered or unregistered, including in trademarks, service marks, trade names, brand names, certification marks, collective marks, Internet domain names and registrations, logos, slogans, symbols, trade dress and designs, and including all registrations, renewals, and applications for registration of the foregoing. "United Technologies Trademarks" shall mean all Trademarks to the extent consisting of or containing "UTC," "United Technologies Corporation," "United Technologies," "UTX," the UTC Icon, "ACE," "Achieving Competitive Excellence," all ACE logos, "ESP," "Employee Scholar Program," all ESP logos, "ITC360," all ITC360 logos, and any variations or derivatives of any of the foregoing, and any Trademarks that are confusingly similar thereto. "UTC" shall have the meaning defined in the preamble. "UTC Icon" shall mean the symbol, also known as the UTC gear logo, identified as the "UTC Icon" in the UTC "Corporate Identity Guidelines - Brand Basics" document attached as Schedule 4.1.1, regardless of color or size, and any variant thereof. "UTC NDA" shall have the meaning defined in Section 6.4. ARTICLE II
ASSIGNMENT OF SOLELY OWNED INTELLECTUAL PROPERTY RIGHTS
2.1 Assigned Intellectual Property Rights
2.1.1 Assignments by an Assignor Party. Subject to Section 3.2, each Assignor Party, on behalf of itself and the other members of the Assignor Group, hereby irrevocably assigns to the applicable Assignee Party, and agrees to irrevocably assign to the applicable Assignee Party, all of its and the other members of the Assignor Group's rights, title and interest in and to any and all Intellectual Property Rights owned by the Assignor Party or another member of the Assignor Group that meets one or more of the following descriptions: (a) the Intellectual Property Rights are Requester Foreground IPR conceived or created in the course of services concerning which the Assignee Party or another member of the Assignee Group was the Requester, and the Assignor Party or another member of the Assignor Group was the Performer; or (b) the Intellectual Property Rights are Performer Foreground-Delivered IPR conceived or created in the course of services concerning which the Assignee Party or another member of the Assignee Group was the Requester, and the Assignor Party or another member of the Assignor Group was the Performer; or
7
(c) the Intellectual Property Rights are Performer Foreground-Undelivered IPR conceived or created in the course of services concerning which the Assignor Party or another member of the Assignor Group was the Requester, and the Assignee Party or another member of the Assignee Group was the Performer (collectively, "Assigned Intellectual Property Rights"). ARTICLE III
LICENSING OF INTELLECTUAL PROPERTY RIGHTS
3.1 Licensed Intellectual Property Rights 3.1.1 License Grants by a Licensor Party. Subject to Section 3.2, a Licensor Party, on behalf of itself and the other members of the Licensor Group, and solely to the extent the Licensor Party or another member of the Licensor Group has the right to do so, hereby grants and agrees to grant to the applicable Licensee Party and the other members of the Licensee Group, subject to the field restriction of Section 3.1.2, a royalty-free, nonexclusive, perpetual, irrevocable, fully paid-up, worldwide right and license, with the right to sublicense as provided in Section 3.1.3, to Exploit Intellectual Property Rights that are owned by the Licensor Party or another member of the Licensor Group immediately following the assignments pursuant to Article II and meet one or more of the following descriptions with respect to the relevant Licensee Party: (a) the Intellectual Property Rights are rights under Licensed Patents or other Intellectual Property Rights that, in each case, as of the Effective Time, are either (A) used in connection with, or necessary for the ongoing conduct of, the current business of the Licensee Party or another member of the Licensee Group, or (B) Contemplated to be Used in the business of the Licensee Party, or another member of the Licensee Group, in the Licensee Group Field; provided, however, that the license granted in this Section 3.1.1(a) does not apply to the Intellectual Property Rights received under or otherwise governed by an Excluded Agreement; and/or (b) the Intellectual Property Rights are embodied in an invention, or proposed invention, that is both (i) described in a Patent or Invention Disclosure held by the Licensor Party or another member of the Licensor Group and (ii) conceived by at least one inventor who, at the time of conception, was employed by a member of the Licensee Group, a non-inclusive list of which inventions and proposed inventions are provided in Schedule 3.1.1(b), provided, however, that the license granted in this Section 3.1.1(b) does not apply to an invention conceived under or otherwise governed by an Excluded Agreement; and/or (c) the Intellectual Property Rights are subject to an assignment to the Licensor Party in Section 2.1.1(b) concerning Performer Foreground-Delivered IPR conceived or created in the course of services concerning which the Licensor Party or another member of the Licensor Group was the Requester and the Licensee Party or another member of the Licensee Group was the Performer; and/or
8
(d) the Intellectual Property Rights are Performer Background IPR or Patent rights of the Licensor Party or another member of the Licensor Group and is necessary for the Licensee Party or another member of the Licensee Party to Exploit the Performer Foreground-Delivered IPR in the Licensee Group Field, provided, however, that the license granted in this Section 3.1.1(d) applies only to the extent necessary for the Licensee Party or another member of the Licensee Group to Exploit the Performer Foreground-Delivered IPR in the Licensee Group Field. (collectively, "Licensed Intellectual Property Rights"). 3.1.2 Field Restriction. The licenses granted in Section 3.1.1 are limited to, and a Licensee Party and the other members of the Licensee Group will have the right to Exploit, only the Licensed Intellectual Property Rights within the Licensee Group Field, except for the purposes of research and development at a stage encompassed within U.S. Department of Defense Technology Readiness Levels 1-6 or NASA Technology Readiness Levels 1-6; provided that (a) such research is not intended for use outside the Licensee Group Field, and (b) in the course of research conducted for a third party outside the Licensee Group Field, neither the Licensee Party nor any member of the Licensee Group (nor any of their respective officers, directors, employees, contractors, agents or sublicensees) shall disclose such Intellectual Property Rights to the third party. 3.1.3 Sublicense of Licensed Intellectual Property Rights. A Licensee Party or another member of the Licensee Group may sublicense its rights in Licensed Intellectual Property Rights hereunder, solely in support of its respective businesses (and not independent of its current or future products and related services). In all cases in which the exercise of sublicense rights hereunder reasonably requires disclosure of Licensed Intellectual Property Rights to a third party, the applicable member of the Licensee Group will disclose such Licensed Intellectual Property Rights (a) solely on a "need to know" basis, (b) provided that the Person to receive Licensed Intellectual Property Rights first agrees in writing to terms of confidentiality and non-use at least as restrictive as those provided in this Agreement, and (c) provided that the Licensee Party ensures the performance of, and accepts joint and several responsibility for the performance by each of the sublicensees of, the obligations of the Licensee Party and the other members of the Licensee Group under this Agreement. 3.1.4 Improvements. Each of the licenses granted in Section 3.1.1, subject to the restrictions of Section 3.1.2 and Section 3.1.3, includes the right of a Licensee Party and other members of the Licensee Group to make improvements to such Licensed Intellectual Property Rights. Neither a Licensor Party nor any member of the Licensor Group will have any rights to any such improvements, and as between a Licensee Party and a Licensor Party, the Licensee Party or applicable member of the Licensee Group will own all such improvements made by the Licensee Party or such member of the Licensee Group to Licensed Intellectual Property Rights. 3.1.5 No Implied Licenses. To the extent Intellectual Property Rights of a Party or member of a Party Group are not expressly granted in this Agreement, they are hereby expressly reserved to the Party or member of the Party Group. Without limiting the generality of the immediately preceding sentence, no express grant by a Licensor Party in this Agreement of
9
license rights in certain Intellectual Property Rights shall be construed as implying the grant of any rights by the Licensor Party or another member of the Licensor Group in any other Intellectual Property Rights held by the Licensor Party or another member of the Licensor Group. 3.2 Reserved Intellectual Property Rights. Specific reservations shall apply to certain Intellectual Property Rights as set forth in Schedule 3.2. 3.3 No Rescission. The provisions of this Agreement, including the license rights provided in this Article III, shall not be terminable or revocable for any reason. In the event of any breach of this Agreement, the sole remedy of the non-breaching Party will be to seek monetary damages or equitable relief, including specific performance, as provided in Article VII, that does not involve a rescission or termination of any of the provisions of this Agreement (including the license rights provided in this Article III), and each Party irrevocably waives the right to seek any termination or rescission of any such provisions or rights. ARTICLE IV
TRADEMARKS
4.1 Ownership of United Technologies Trademarks. 4.1.1 Notwithstanding any other provision of this Agreement to the contrary, as between UTC, on the one hand, and Otis, Carrier and other members of the Otis Group and the Carrier Group, on the other, all rights in and to the United Technologies Trademarks, including all goodwill appurtenant thereto, are owned and shall be owned solely and exclusively by UTC. Without limiting the foregoing, and subject to Section 4.2, Otis and Carrier, on behalf of themselves and the other members of, respectively, the Otis Group and the Carrier Group, hereby irrevocably assign to UTC, and agree and promise to assign to UTC, (a) any and all rights, title and interest in and to the United Technologies Trademarks, including all goodwill appurtenant thereto held by them and the other members of the Otis Group and the Carrier Group, and (b) any and all registrations and applications for registration of Trademarks consisting of or containing any of the United Technologies Trademarks, anywhere in the world, to which Otis, Carrier or another member of the Otis Group or the Carrier Group holds a legal or equitable interest as of the Effective Time. Without limitation, the foregoing assignment and promise of assignment includes the right to sue and recover damages for past and future infringements of the United Technologies Trademarks and to bring any proceeding in the United States Patent and Trademark Office or any equivalent agency or governing body in any other country for cancellation, opposition, or other proceeding in connection with the United Technologies Trademarks. Except as expressly stated in Section 4.2, none of Otis, Carrier or any other member of the Otis Group or the Carrier Group shall have any right, title or interest in or to any of the United Technologies Trademarks, and any and all use of the United Technologies Trademarks, whether or not authorized pursuant to Section 4.2, shall inure solely and exclusively to UTC for all purposes.
10
4.1.2 Otis and Carrier, on behalf of themselves and the other members of, respectively, the Otis Group and the Carrier Group, agree and promise to assist UTC and the other members of the UTC Group, at UTC's request, in UTC's discretion and at UTC's cost, in applying for, registering, maintaining, renewing, demonstrating use of, recording UTC's and the other members of the UTC Group's rights in, and otherwise perfecting, and defending and enforcing against third party infringers, the rights of UTC and the other members of the UTC Group in the United Technologies Trademarks and all goodwill associated therewith, including executing, verifying, acknowledging and delivering any and all documents, including any instruments of transfer and recordable assignments, and confirmations of use, and performing such other acts deemed necessary in the reasonable opinion of UTC. 4.1.3 Otis and Carrier, on behalf of themselves and the other members of, respectively, the Otis Group and the Carrier Group, agree and promise not to (a) challenge in any jurisdiction or venue the right or title of UTC or any other members of the UTC Group in and to any United Technologies Trademark, or the validity or enforceability of any United Technologies Trademark or any registration thereof, or (b) register or renew, attempt to register or renew, or assist a Person other than UTC or a member of the UTC Group in registering or renewing, any United Technologies Trademark. 4.2 Use of United Technologies Trademarks 4.2.1 Except as expressly provided in this Section 4.2, after the Effective Time, none of Otis, Carrier or any other members of the Otis Group or the Carrier Group shall use, or have the right to use, any of the United Technologies Trademarks. 4.2.2 Without limitation, Otis and Carrier as promptly as reasonably practicable (but in any case within six (6) months of the Effective Time) shall cause each member of, respectively, the Otis Group and the Carrier Group having a corporate name that includes any of the United Technologies Trademarks to apply to change its corporate name to a name that does not include any of the United Technologies Trademarks, including, within six (6) months of the Effective Time, by making any legal filings in each relevant jurisdiction necessary to effect such change worldwide. 4.2.3 UTC, on behalf of itself and the other members of the UTC Group, hereby grants to Otis, Carrier and the other members of the Otis Group and the Carrier Group a limited, non-exclusive, non-transferable, personal and nonsublicensable right to continue temporarily to use, following the Effective Time, any United Technologies Trademark it is using immediately prior to the Effective Time, solely to the extent of such pre- Separation use and in accordance with product quality standards and programs in place at the respective member of the Otis Group or the Carrier Group immediately prior to the Effective Time, and strictly in accordance with this Section 4.2.3; provided that Otis and Carrier shall, and shall cause each of its respective Affiliates (including, after the Effective Time, the members of, respectively, the Otis Group and the Carrier Group) (a) not to hold itself out as having any affiliation with UTC or any member of the UTC Group (except to the extent a third party may infer such affiliation merely due to the limited use of the United Technologies Trademarks as contemplated herein), and (b) to use diligent efforts to eliminate use of the United Technologies Trademarks. In any event, as soon as practicable after the Effective Time, and in any event within three (3) years thereafter, Otis and
11
Carrier shall, and shall cause each of its respective Affiliates (including, after the Effective Time, the members of, respectively, the Otis Group and the Carrier Group), and any of its licensees or its respective Affiliates' licensees, to (a) cease and discontinue use of all United Technologies Trademarks, and (b) complete the removal of the United Technologies Trademarks from all of their respective products, signage, vehicles, properties, technical information, stationery and promotional or other marketing materials and other assets of Otis, Carrier and the other members of the Otis Group and the Carrier Group. Except for the limited, temporary license granted in this Section 4.2.3, neither UTC nor any other member of the UTC Group grants any right or license hereunder, express or implied, to use any United Technologies Trademarks. 4.3 Special Trademark Provisions. Special provisions concerning Trademarks are provided in Schedule 4.3. ARTICLE V
EXCLUDED AGREEMENTS
5.1 No Change to Excluded Agreements. The Parties do not intend by this Agreement to amend or otherwise change the Intellectual Property Rights or other provisions of any Excluded Agreement. Intellectual Property Rights provided, received or created pursuant to an Excluded Agreement will not constitute Licensed Intellectual Property Rights, and, with respect to the applicable parties thereto, will continue to be subject to any licenses, permissions or restrictions granted or imposed in the respective Excluded Agreement in accordance with its terms. ARTICLE VI
CONFIDENTIALITY
6.1 Received Information and Materials. The Parties acknowledge that members of each Party Group currently are in possession of information and materials f members of the other two Party Groups, which may include designs, drawings, specifications, technical data and other data, databases, formulae, algorithms and mathematical embodiments, plans, software, proposals, processes, procedures, manufacturing techniques, and business methods, and some of which may be included in the Licensed Intellectual Property Rights. With respect to a receiving Party, such information will be referred to individually or collectively as "Received Information and Materials," provided that Received Information and Materials will not include information disclosed under any Excluded Agreement. 6.2 Confidential Information. All Received Information and Materials that are identified as or are of the type generally considered as confidential or proprietary or that have historically been subject to reasonable confidentiality and proprietary protections, and any communications or information provided after the Effective Time pursuant to this Agreement among members of the different Party Groups, will be deemed confidential and proprietary information of the Person that provided it, unless the information (a) is or becomes generally available to the public other than as a result of a disclosure in breach of this Agreement; (b) is rightfully available to or known by the receiving Party prior to receipt by the receiving Party
12
without any obligation of confidentiality; (c) is received by the receiving Party from a third party, provided that the third party is not known by the receiving Party, after reasonable inquiry, to be in breach of any obligation of confidentiality; or (d) was independently developed by the receiving Party, without violating any contractual or legal obligation ("Confidential Information"). 6.3 Obligations. With respect to Confidential Information in its possession, custody or control, a receiving member of a Party Group will: (a) hold all Confidential Information in confidence, using the same degree of care such receiving member uses to protect its own confidential information of a similar nature, but in no event less than a reasonable degree of care, including sharing Confidential Information internally only on a "need to know" basis, (b) not disclose Confidential Information to any third party, other than as permitted with respect to Licensed Intellectual Property Rights pursuant to Section 3.1.3, and (c) use Confidential Information only to the extent authorized. 6.4 Termination of UTC NDA. Upon the Effective Time, (a) the Amended and Restated Nondisclosure Agreement, by and between United Technologies Companies, dated July 26, 2012 (the "UTC NDA"), will terminate as among UTC and the other members of the UTC Group, Otis and the other members of the Otis Group, and Carrier and the other members of the Carrier Group, (b) the information disclosed under the UTC NDA (i) will be deemed Received Information and Materials and Confidential Information under this Agreement, and (ii) will be licensed hereunder for use by UTC and the other members of the UTC Group, Otis and the other members of the Otis Group, Carrier and the other members of the Carrier Group, solely to the extent it is Licensed Intellectual Property Rights granted to UTC and the other members of the UTC Group, Otis and the other members of the Otis Group or Carrier and the other members of the Carrier Group, respectively, and (c) notwithstanding paragraph 3 of the UTC NDA, such information disclosed thereunder will continue to be protected for as long as it remains Confidential Information. ARTICLE VII
LIMITATIONS AND DISCLAIMERS
7.1 Subsequent Delivery of Intellectual Property Rights. 7.1.1 For a period of six (6) months after the Effective Time, upon written request by an Assignee Party or a Licensee Party, and solely to the extent the Assignor Party or another member of the Assignor Group or the Licensor Party or another member of the Licensor Group, respectively, has the right to do so, the Assignor Party or the Licensor Party, respectively, shall use commercially reasonable efforts to provide (and to cause other members of the Assignor Group or the Licensor Group, respectively, to provide) to the requesting Assignee Party or the Licensee Party, respectively, copies of tangible embodiments of the Assigned Intellectual Property Rights and the Licensed Intellectual Property Rights, respectively, in the possession of a member of the Assignor Group or the Licensor Group, respectively, and not in the possession of a member of the Assignee Group or the Licensee Group, respectively, upon the Effective Time, to the extent that both (a) such Assigned Intellectual Property Rights or such Licensed Intellectual Property Rights, respectively, are necessary for the ongoing conduct of the current
13
business of the requesting Assignee Party or another member of the Assignee Group or the requesting Licensee Party or another member of the Licensee Group, respectively, or was in use in such business as of the Effective Time, and (b) such tangible embodiments are reasonably necessary for the use of such Assigned Intellectual Property Rights or such Licensed Intellectual Property Rights, respectively, identified in Section 7.1.1(a). 7.2 No Additional Obligations. Except as expressly provided in this Agreement, this Agreement does not create any obligation on the part of any of the Parties to provide or create any of the following with respect to the Intellectual Property Rights owned, transferred, granted or licensed under this Agreement: (a) explanations, corrections, revisions, improvements, upgrades, technical assistance, maintenance, installation, debugging, or any other support; or (b) tangible embodiments, documents, information, software, data or any other items, deliverables or services. 7.3 DISCLAIMER. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE SDA OR ANY OTHER ANCILLARY AGREEMENT, (A) EACH OF THE PARTIES CONVEYS INTELLECTUAL PROPERTY RIGHTS UNDER THIS AGREEMENT SOLELY ON AN "AS IS," "WHERE IS" AND "WITH ALL FAULTS" BASIS, AND (B) NONE OF THE PARTIES MAKES, AND EACH HEREBY EXPRESSLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WITH RESPECT TO SUCH INTELLECTUAL PROPERTY RIGHTS, WHETHER EXPRESS OR IMPLIED, INCLUDING ANY REPRESENTATION OR WARRANTY WITH RESPECT TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, COMPLETENESS OR SUFFICIENCY, OR EXPORTABILITY, OR WITH RESPECT TO THE VALIDITY, SCOPE, ENFORCEABILITY OR NONINFRINGEMENT OF ANY OF SUCH INTELLECTUAL PROPERTY RIGHTS. FOR AVOIDANCE OF DOUBT, THE REPRESENTATIONS AND WARRANTIES PROVIDED IN THE SDA ARE NOT AFFECTED BY THIS DISCLAIMER. 7.4 Limitations of Liability. Except in connection with a Party's willful and intentional breach of this Agreement or fraud, in no event shall any Party or its Affiliates, under any circumstances, be liable or obligated in any manner to another Party or its Affiliates for any consequential, special, incidental, exemplary, indirect, punitive or similar damages, or for any loss of future revenue, profits or income, or for any diminution in value damages measured as a multiple of earnings, revenue or any other performance metric arising out of or relating to this Agreement or the transactions contemplated in this Agreement, even if such Party or its Affiliate is informed in advance of the possibility of such damages occurring and regardless of whether or not the damages were foreseeable and regardless of the theory or cause of action upon which any damages might be based. This limitation is separate and independent of any other remedy limitations and shall not fail if any such other limitation fails. The foregoing shall not be deemed to modify or limit any rights or remedies to the extent arising under the SDA, any other Ancillary Agreement or any Excluded Agreement.
14
ARTICLE VIII
GOVERNING LAW AND DISPUTE RESOLUTION
8.1 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to any conflict or choice-of-law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. 8.2 Alternative Dispute Resolution. Any dispute, controversy or claim between or among the Parties (whether sounding in contract, tort, or otherwise) arising out of or resulting from this Agreement, including the meaning of its provisions or the performance of any such provisions by a Party, its breach, termination, invalidity or otherwise (each, a "Dispute") will be resolved in accordance with the procedures specified in this Article VIII, which will be the sole and exclusive procedure for the resolution of any such Dispute. 8.2.1 Negotiations. The Parties will attempt in good faith to resolve any Dispute promptly by negotiations among executives of the Parties who have authority to settle the Dispute. The disputing Party will give the other Party or Parties, as applicable, written notice of the Dispute. Within twenty (20) days after receipt of said notice, the receiving Party or Parties will submit to the other a written response. The notice and response will include: (a) a statement of each Party's position and a summary of the evidence and arguments supporting that position, and (b) the name and title of the executive who will represent that Party. The executives will meet at a mutually acceptable time and place within thirty (30) days of the date of the disputing Party's notice and thereafter as often as they reasonably deem necessary to exchange relevant information and to attempt to resolve the Dispute. 8.2.2 Arbitration. If a Dispute has not been resolved within sixty (60) days of the date of the disputing Party's notice, any Party desiring a non-negotiated resolution shall refer the Dispute to binding arbitration pursuant to the then-current commercial arbitration rules and supplementary procedures of commercial arbitration of the American Arbitration Association (the "AAA Rules"). The arbitral tribunal shall be composed of a single arbitrator appointed in accordance with the AAA Rules in any matter in which an injunction, specific performance or other equitable relief is not requested and the value of the relief any Party seeks (whether by claim or counterclaim) does not exceed three million United States dollars (US $3,000,000). In all other matters, including any matter in which an injunction, specific performance or other equitable relief is requested, the arbitral tribunal shall be composed of a panel of three (3) arbitrators appointed in accordance with the AAA Rules. The arbitration shall take place in New York, New York. Each Party will bear its own expenses (including attorneys' fees), and the Parties will share equally the compensation and expenses of the arbitrators and the arbitration. Any arbitration award will be final and shall be enforceable in any court of competent jurisdiction. 8.3 Confidentiality. All negotiations, and all statements made and documents provided or exchanged in connection with an arbitration under Section 8.2.2 will be confidential. Except with the prior written consent of the other Party or Parties in the Dispute, as applicable, none of the Parties will disclose the existence or content of the Dispute, or the results of any
15
dispute resolution process, to third parties other than (a) as may be required by law or legal process after having provided the other Party or Parties with notice thereof and the opportunity to seek a protective order over such information, or (b) to outside counsel and tax, financial, and accounting professionals in connection with the Dispute. 8.4 Equitable Relief. The Parties acknowledge and agree that monetary damages (even if available) may not be an adequate remedy in the event that a Party does not perform the provisions of this Agreement in accordance with their specified terms or otherwise breaches any provisions of this Agreement. Accordingly, and notwithstanding any other provision of this Agreement, any Party will be entitled to seek from the arbitrator or arbitration tribunal, and the arbitrator or arbitration tribunal will be empowered to grant, an injunction, specific performance or other equitable relief (whether preliminary, permanent, temporary, conservatory or otherwise, and including temporary restraining orders) to prevent such breaches of this Agreement and to enforce specifically the terms hereof, in addition to any other remedy to which such Party is entitled at law or in equity. The Party alleging the breach shall not be required to provide any bond or other security in connection with any such award, but the Parties reserve all rights to otherwise contest the propriety of any award of injunctive relief. In addition, and notwithstanding any other provision of this Agreement, any Party will be entitled to seek in a court of competent jurisdiction an injunction, specific performance or other equitable relief to prevent breaches of this Agreement pending an arbitration under Section 8.2.2. ARTICLE IX
GENERAL PROVISIONS
9.1 Entire Agreement; Conflict Among Agreements. This Agreement, together with the SDA, the other Ancillary Agreements and the Exhibits and Schedules hereto and thereto, constitute the entire agreement among the Parties with respect to the subject matter of this Agreement and supersede any prior discussion, correspondence, negotiation, proposed term sheet, agreement, understanding or arrangement with respect to such subject matter, and there are no agreements, understandings, representations or warranties among the Parties other than those set forth or referred to in this Agreement with respect to such subject matter. In the event of any conflict between the provisions of this Agreement and the provisions of the SDA or any other Ancillary Agreement, the provisions of this Agreement shall control, provided, however, that (a) in the event of a conflict between the provisions of this Agreement and the provisions of the Transition Services Agreement, the conflicting provisions of the Transition Services Agreement shall control over the conflicting provisions of this Agreement, and (b) nothing in this Agreement limits any of the representations, warranties or indemnity obligations under the SDA or any other Ancillary Agreement. In the event of any conflict between the provisions of this Agreement and any agreement that was entered into at any time prior to the Effective Time between or among members of different Party Groups that is not an Excluded Agreement, the conflicting provisions of this Agreement shall control. 9.2 Assignment and Change of Control; Successor and Assigns 9.2.1 No Party may directly or indirectly sell, assign or otherwise transfer (whether by asset or stock sale, merger, reorganization or otherwise) any or all of its rights or
16
delegate any or all of its obligations under this Agreement without the express prior written consent of the other Parties, except as follows: (a) Otis or Carrier may (i) freely sell, assign or otherwise transfer, in whole or from time to time in part, Assigned Intellectual Property Rights assigned to it hereunder; and (ii) sell, assign or otherwise transfer, in whole or from time to time in part, its rights and obligations under this Agreement (A) to any Affiliate of Otis or Carrier, respectively, (B) to any financing entity, in connection with the grant of a revocable security interest necessary for financing, or (C) to a Person acquiring (whether by asset or stock sale, merger, reorganization or otherwise) all or substantially all of the relevant business of Otis or Carrier, respectively, that agrees to be bound by the terms and conditions of this Agreement; but any such transfer or assignment will not relieve Otis or Carrier, respectively, of any of its obligations hereunder. (b) UTC may (i) freely sell, assign or otherwise transfer, in whole or from time to time in part, Assigned Intellectual Property Rights assigned to it hereunder; and (ii) sell, assign or otherwise transfer, in whole or from time to time in part, its rights under this Agreement (A) to any member of the UTC Group, (B) to any financing entity, in connection with the grant of a revocable security interest necessary for financing, or (C) to a Person acquiring (whether by asset or stock sale, merger, reorganization or otherwise) all or substantially all of the relevant business of UTC that agrees to be bound by the terms and conditions of this Agreement; but any such transfer or assignment will not relieve UTC of any of its obligations hereunder. 9.2.2 Any purported sale, assignment or other transfer in contravention of this Section 9.2 shall be null and void. 9.2.3 Subject to Section 9.2.1 and Section 9.2.2, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, assigns and transferees. 9.3 Bankruptcy. All licenses granted under this Agreement will be deemed licenses of rights to intellectual property for purposes of Section 365(n) of the United States Bankruptcy Code and a licensee under this Agreement will retain and may fully exercise all of its rights and elections under the United States Bankruptcy Code. 9.4 Amendments and Waivers. This Agreement may not be modified or amended, except by an instrument or instruments in writing signed by the Party against whom enforcement of any such modification or amendment is sought. Any Party to this Agreement may, only by an instrument in writing, waive compliance by the other Parties with any term or provision of this Agreement on the part of such other Parties to this Agreement to be performed or complied with. The waiver by any Party to this Agreement of a breach of any term or provision of this Agreement shall not be construed as a waiver of any subsequent breach. No failure or delay by any Party in exercising any right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Subject to Section 3.3, the rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
17
9.5 Notice. All notices or other communications required or permitted hereunder by a Party shall be in writing to the other Parties at the address provided below (or at such other address as such Party may designate by notice pursuant to this Section 9.5), and shall be deemed given or delivered (a) when delivered personally against written receipt, (b) if sent by registered or certified mail, return receipt requested, postage prepaid, when received, and (c) when delivered by a nationally recognized overnight courier service, prepaid: To UTC: United Technologies Corporation 10 Farm Springs Farmington, CT 06302 Attention: Chief Intellectual Property Counsel To Otis: Otis Worldwide Corporation One Carrier Place Farmington, CT 06032 Attention: Chief Intellectual Property Counsel To Carrier: Carrier Global Corporation 13995 Pasteur Boulevard Palm Beach Gardens, FL 33418 Attention: Chief Intellectual Property Counsel
9.6 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party hereto. Upon such a determination, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible. 9.7 Counterparts. This Agreement may be executed in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by electronic means shall be as effective as delivery of a manually executed counterpart of this Agreement. 9.8 Further Assurances. Each Party agrees, upon written request of another Party, to do all acts and execute, deliver and perform all additional documents, instruments and agreements, which may be reasonably required to implement the provisions and purposes of this
18
Agreement; provided, however, that, except as expressly set forth in this Agreement, nothing in this Agreement shall be construed as obligating a Party or its Affiliates to deliver any additional Intellectual Property Rights, or any tangible embodiments of any Intellectual Property Rights, to another Party or its Affiliates. 9.9 Interpretation. For the purposes of this Agreement, (a) words in the singular shall be held to include the plural and vice versa, and words of one gender shall be held to include the other gender as the context requires; (b) references to the terms Article, Section, paragraph, Exhibit and Schedule are references to the Articles, Sections, paragraphs, Exhibits and Schedules to this Agreement, unless otherwise specified; (c) any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein shall have the meaning as defined in this Agreement; (d) the terms "hereof," "herein," "hereby," "hereto" and derivative or similar words refer to this entire Agreement, including the Schedules and Exhibits hereto, and not to any particular provision thereof; (e) references to "$" shall mean U.S. dollars; (f) the word "including" and words of similar import when used in this Agreement shall mean "including without limitation," unless otherwise specified; (g) the word "or" shall not be exclusive; (h) references to "written" or "in writing" include in electronic form; (i) provisions shall apply, when appropriate, to successive events and transactions; (j) the Parties have each participated in the negotiation and drafting of this Agreement and if an ambiguity or question of interpretation should arise, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or burdening any Party by virtue of the authorship of any of the provisions in this Agreement; (k) references to any statute shall be deemed to refer to such statute as amended through the date hereof; (l) references to any Contract are to that Contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; (m) references to an Affiliate of a Party mean current and future Affiliates of such Party; (n) a reference to any Person includes such Person's successors and permitted assigns; (o) any reference to "days" shall mean calendar days, unless Business Days are expressly specified; and (p) when calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded and if the last day of such period is not a Business Day, the period shall end on the next succeeding Business Day. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] [SIGNATURE PAGE FOLLOWS]
19
IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of each of the Parties as of the day first above written. UNITED TECHNOLOGIES CORPORATION By: /s/ Michael R. Dumais Name: Michael R. Dumais Title: Executive Vice President, Operations & Strategy OTIS WORLDWIDE CORPORATION
By: /s/ Michael P. Ryan Name: Michael P. Ryan Title: Vice President, Controller CARRIER GLOBAL CORPORATION By: /s/ Kyle Crockett Name: Kyle Crockett Title: Vice President, Controller
20 | Highlight the parts (if any) of this contract related to "Agreement Date" that should be reviewed by a lawyer. Details: The date of the contract | {
"answer_start": [
187
],
"text": [
"April 2, 2020"
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Anti-Assignment" that should be reviewed by a lawyer. Details: Is consent or notice required of a party if the contract is assigned to a third party?
Context: Exhibit 2.01 Strategic Alliance Agreement This agreement is made and entered into this 30th day of November, 2017 by and between Bravatek Solutions, Inc., a corporation organized under the laws of the State of Colorado, ("Bravatek"), with an address at 2028 E. Ben White Blvd., Unit #240-2835, Austin, Texas, 78741, and Sibannac, Inc. ("COMPANY"), a corporation organized under the laws of Nevada, with an address at 2122 E Highland Avenue, Suite 425, Phoenix, Arizona 85016. Whereas, Bravatek is a corporation, which has technical expertise in security-related software, tools and systems/services (including telecom services) to support, deploy and test its current and potential customers' most critical initiatives. Whereas, COMPANY a corporation engaged in the business of providing a novel, patented Air Cylinder Wheel, to replace the need for conventional rubber tires on a large range of vehicles used in the mining, military, construction and industries, delivering cost savings and reducing adverse environmental impact. Whereas, the parties desire to enter into a business relationship which will designate Bravatek as the project based business partnership channel for governmental and non-governmental departments / agencies / units for the purpose of promoting COMPANY's relevant capabilities, products and/or service solutions. Now therefore, the parties mutually agree to enter into a strategic alliance under the following terms and conditions: 1) Duties of Bravatek Bravatek agrees to serve as a non-exclusive project sales lead finder for COMPANY. In this capacity, Bravatek will use its best efforts to provide the following services to COMPANY. a. Promote, market and introduce the Products to prospective clients in the government space nationwide. b. Provide a quarterly Pipeline or project information leads report to COMPANY on a monthly basis which contains a 3-month rolling forecast of potential sales. c. Follow-up on on-going project leads that COMPANY is actively engaged with or believes is appropriate. d. Provide COMPANY with any promotional materials, technical papers, white papers, proposals, etc. prior to publication or delivery to prospective clients.
1
2) Duties of COMPANY COMPANY agrees to use its best efforts to promote and support project lead finding and after-sales support of Bravatek by: a. Listing Bravatek in all appropriate sales and marketing materials as a non-exclusive alliance partner (with focus of government customers) b. Provide timely responses to both technical and administrative questions posed by Bravatek. c. Promote Bravatek's product and service offerings whenever possible. d. Aid Bravatek in the writing of any technical/marketing/sales documents when requested and participate in mutually-agreed upon sales calls. e. Provide Bravatek with co-branded marketing material that can be emailed or handed to prospective clients. 3) Obligations of the Parties Bravatek and COMPANY agree to jointly: a. Develop and implement a joint Product Solution and Application Strategy whereby targeted markets/potential client- types/applications are mutually agreed upon; b. Support each other in all agreed-upon technical, marketing and promotional efforts; c. Develop a joint strategy for developing new product/services/capabilities to mutually benefit both parties; d. Utilize each other as Preferred Vendors for services whenever possible upon mutual agreement. 4) Compensation When custom Products are designed, developed and to be delivered to Bravatek-identified perspective clients, the parties shall agree to a proposed sales price for use during the project in writing prior to the commencement of each project.
2
For any Product or Solution sold to any perspective clients introduced by Bravatek registered with COMPANY via email to COMPANY's CEO and delivered through Bravatek or a COMPANY-designated distribution affiliate(s) or sales channel(s), Bravatek will receive a lead-finder fee, to be mutually discussed and finally decided by COMPANY at the range of minimum of 10% to maximum of 20% of project revenue, with an exact fee to be depending upon the overall project sales margin and cost of development and delivery of each project, payable NET 30 days after each client payment on delivered products received at COMPANY's bank account. 5) Confidentiality "Confidential information" shall mean any and all technical and non-technical information, documents and materials related to client projects of party and products, services and business of each of the parties. COMPANY and Bravatek agree to maintain in strict confidence and not to disclose or disseminate, or to use for any purposes other than performance of the projects, the Confidential Information disclosed. The obligation of non-disclosure shall not apply to the following: a. Information at or after such time that is publicly available through no fault of either party b. Information at or after such time that is disclosed to either party by a third party entitled to disclose such information c. Information which is required by law to be disclosed to federal, state or local authorities. 6) Term of Confidentiality For a period of five (5) years after termination of this Agreement, the parties shall treat as confidential all information and take every reasonable precaution and use all reasonable efforts to prevent the unauthorized disclosure of the same. The parties agree to take all steps reasonably necessary and appropriate to ensure that their employees, agents, and/or assistants treat all information as confidential and to ensure that such employees, agents, and/or assistants are familiar with and abide by the terms of this Agreement. 7) Term The term of this Agreement is twelve (12) months from the date hereof, and will be automatically renewed for one (1) additional twelve month period unless either party shall notify the other in writing of its intention not to renew. Such notice must be given ninety (90) days prior to expiration of the original term. This Agreement may also be terminated by either party upon ninety (90) days written notice.
3
8) Notices Any notices required under this Agreement shall be delivered to: Bravatek Technologies, Inc. 2028 E. Ben White Blvd., Unit #240-2835 Austin, Texas 78741 Sibannac, Inc. 2122 E Highland Avenue, STE 425 Phoenix, AZ 85016 9) Governing Law This Agreement is entered into in the State of Texas and shall be interpreted according to the laws of the State of Texas. 10) Indemnification COMPANY shall indemnify Bravatek, its directors, officers and employees, for any and all damages, costs, expenses, and other liabilities, including reasonable attorney's fees and court costs incurred in connection with any third-party claim, action or proceeding arising from the negligence or intentional misconduct of COMPANY or breach of COMPANY of any of its obligations under this Agreement. Bravatek shall indemnify COMPANY, its directors, officers and employees, for any and all damages, costs, expenses, and other liabilities, including reasonable attorney's fees and court costs, incurred in connection with any third-party claim, action or proceeding arising from the negligence or intentional misconduct of Bravatek or breach of Bravatek of any of its obligations under this Agreement. 11) Modifications No changes or modifications of this Agreement or any of its terms shall be deemed effective unless in writing and executed by the parties hereto. 12) Assignment This Agreement shall not be assignable by either party without the prior written consent of the other party.
4
13) Entire Agreement This Agreement represents the complete and entire understanding between the parties regarding the subject matter hereof and supersedes all prior negotiations, representations, or agreements, either written or oral, regarding this subject matter. This Agreement shall not be considered accepted, approved or otherwise effective until signed by the appropriate parties. Bravatek Technologies, Inc. Sibannac, Inc. By: /s/ Thomas A.Cellucci By: /s/ David Mersky Name: Thomas A. Cellucci Name: David Mersky Title: Chairman & CEO Chief Executive Officer Date: November 30, 2017 Date: November 30, 2017
5 [/INST] ```json
{<answer_start>
"answer": "This Agreement shall not be assignable by either party without the prior written consent of the other party."
<answer_end>
}
``` </s> | Exhibit 2.01 Strategic Alliance Agreement This agreement is made and entered into this 30th day of November, 2017 by and between Bravatek Solutions, Inc., a corporation organized under the laws of the State of Colorado, ("Bravatek"), with an address at 2028 E. Ben White Blvd., Unit #240-2835, Austin, Texas, 78741, and Sibannac, Inc. ("COMPANY"), a corporation organized under the laws of Nevada, with an address at 2122 E Highland Avenue, Suite 425, Phoenix, Arizona 85016. Whereas, Bravatek is a corporation, which has technical expertise in security-related software, tools and systems/services (including telecom services) to support, deploy and test its current and potential customers' most critical initiatives. Whereas, COMPANY a corporation engaged in the business of providing a novel, patented Air Cylinder Wheel, to replace the need for conventional rubber tires on a large range of vehicles used in the mining, military, construction and industries, delivering cost savings and reducing adverse environmental impact. Whereas, the parties desire to enter into a business relationship which will designate Bravatek as the project based business partnership channel for governmental and non-governmental departments / agencies / units for the purpose of promoting COMPANY's relevant capabilities, products and/or service solutions. Now therefore, the parties mutually agree to enter into a strategic alliance under the following terms and conditions: 1) Duties of Bravatek Bravatek agrees to serve as a non-exclusive project sales lead finder for COMPANY. In this capacity, Bravatek will use its best efforts to provide the following services to COMPANY. a. Promote, market and introduce the Products to prospective clients in the government space nationwide. b. Provide a quarterly Pipeline or project information leads report to COMPANY on a monthly basis which contains a 3-month rolling forecast of potential sales. c. Follow-up on on-going project leads that COMPANY is actively engaged with or believes is appropriate. d. Provide COMPANY with any promotional materials, technical papers, white papers, proposals, etc. prior to publication or delivery to prospective clients.
1
2) Duties of COMPANY COMPANY agrees to use its best efforts to promote and support project lead finding and after-sales support of Bravatek by: a. Listing Bravatek in all appropriate sales and marketing materials as a non-exclusive alliance partner (with focus of government customers) b. Provide timely responses to both technical and administrative questions posed by Bravatek. c. Promote Bravatek's product and service offerings whenever possible. d. Aid Bravatek in the writing of any technical/marketing/sales documents when requested and participate in mutually-agreed upon sales calls. e. Provide Bravatek with co-branded marketing material that can be emailed or handed to prospective clients. 3) Obligations of the Parties Bravatek and COMPANY agree to jointly: a. Develop and implement a joint Product Solution and Application Strategy whereby targeted markets/potential client- types/applications are mutually agreed upon; b. Support each other in all agreed-upon technical, marketing and promotional efforts; c. Develop a joint strategy for developing new product/services/capabilities to mutually benefit both parties; d. Utilize each other as Preferred Vendors for services whenever possible upon mutual agreement. 4) Compensation When custom Products are designed, developed and to be delivered to Bravatek-identified perspective clients, the parties shall agree to a proposed sales price for use during the project in writing prior to the commencement of each project.
2
For any Product or Solution sold to any perspective clients introduced by Bravatek registered with COMPANY via email to COMPANY's CEO and delivered through Bravatek or a COMPANY-designated distribution affiliate(s) or sales channel(s), Bravatek will receive a lead-finder fee, to be mutually discussed and finally decided by COMPANY at the range of minimum of 10% to maximum of 20% of project revenue, with an exact fee to be depending upon the overall project sales margin and cost of development and delivery of each project, payable NET 30 days after each client payment on delivered products received at COMPANY's bank account. 5) Confidentiality "Confidential information" shall mean any and all technical and non-technical information, documents and materials related to client projects of party and products, services and business of each of the parties. COMPANY and Bravatek agree to maintain in strict confidence and not to disclose or disseminate, or to use for any purposes other than performance of the projects, the Confidential Information disclosed. The obligation of non-disclosure shall not apply to the following: a. Information at or after such time that is publicly available through no fault of either party b. Information at or after such time that is disclosed to either party by a third party entitled to disclose such information c. Information which is required by law to be disclosed to federal, state or local authorities. 6) Term of Confidentiality For a period of five (5) years after termination of this Agreement, the parties shall treat as confidential all information and take every reasonable precaution and use all reasonable efforts to prevent the unauthorized disclosure of the same. The parties agree to take all steps reasonably necessary and appropriate to ensure that their employees, agents, and/or assistants treat all information as confidential and to ensure that such employees, agents, and/or assistants are familiar with and abide by the terms of this Agreement. 7) Term The term of this Agreement is twelve (12) months from the date hereof, and will be automatically renewed for one (1) additional twelve month period unless either party shall notify the other in writing of its intention not to renew. Such notice must be given ninety (90) days prior to expiration of the original term. This Agreement may also be terminated by either party upon ninety (90) days written notice.
3
8) Notices Any notices required under this Agreement shall be delivered to: Bravatek Technologies, Inc. 2028 E. Ben White Blvd., Unit #240-2835 Austin, Texas 78741 Sibannac, Inc. 2122 E Highland Avenue, STE 425 Phoenix, AZ 85016 9) Governing Law This Agreement is entered into in the State of Texas and shall be interpreted according to the laws of the State of Texas. 10) Indemnification COMPANY shall indemnify Bravatek, its directors, officers and employees, for any and all damages, costs, expenses, and other liabilities, including reasonable attorney's fees and court costs incurred in connection with any third-party claim, action or proceeding arising from the negligence or intentional misconduct of COMPANY or breach of COMPANY of any of its obligations under this Agreement. Bravatek shall indemnify COMPANY, its directors, officers and employees, for any and all damages, costs, expenses, and other liabilities, including reasonable attorney's fees and court costs, incurred in connection with any third-party claim, action or proceeding arising from the negligence or intentional misconduct of Bravatek or breach of Bravatek of any of its obligations under this Agreement. 11) Modifications No changes or modifications of this Agreement or any of its terms shall be deemed effective unless in writing and executed by the parties hereto. 12) Assignment This Agreement shall not be assignable by either party without the prior written consent of the other party.
4
13) Entire Agreement This Agreement represents the complete and entire understanding between the parties regarding the subject matter hereof and supersedes all prior negotiations, representations, or agreements, either written or oral, regarding this subject matter. This Agreement shall not be considered accepted, approved or otherwise effective until signed by the appropriate parties. Bravatek Technologies, Inc. Sibannac, Inc. By: /s/ Thomas A.Cellucci By: /s/ David Mersky Name: Thomas A. Cellucci Name: David Mersky Title: Chairman & CEO Chief Executive Officer Date: November 30, 2017 Date: November 30, 2017
5 | Highlight the parts (if any) of this contract related to "Anti-Assignment" that should be reviewed by a lawyer. Details: Is consent or notice required of a party if the contract is assigned to a third party? | {
"answer_start": [
7605
],
"text": [
"This Agreement shall not be assignable by either party without the prior written consent of the other party."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Source Code Escrow" that should be reviewed by a lawyer. Details: Is one party required to deposit its source code into escrow with a third party, which can be released to the counterparty upon the occurrence of certain events (bankruptcy, insolvency, etc.)?
Context: EXHIBIT 10.2
DISTRIBUTOR AGREEMENT
EXHIBIT 10.2
EXCLUSIVE DISTRIBUTOR AGREEMENT
THIS EXCLUSIVE DISTRIBUTOR AGREEMENT (the "Agreement") shall be effective as of _Dec. 8, 2005 (hereinafter "Effective Date"), by and between LifeUSA/ Envision Health, Inc., a corporation (hereinafter collectively "ENVISION"), and Sierra Mountain Minerals, Inc., a Canadian company (hereinafter "SIERRA"), is made with reference to the following facts:
Recitals
A. SIERRA is the manufacture and producer of a joint health product called "SierraSil" (hereinafter "the Product") for human use.
B. ENVISION is the manufacturer of certain nutritional supplements and is desirous of becoming an exclusive distributor for the Product in any blend with Krill Oil (hereinafter "the Finished Product") in all distribution channels in the Territory on the terms and conditions set forth herein.
C. SIERRA is desirous of having ENVISION act as its exclusive distributor for the Product in any blend with Krill Oil in all distribution channels in the Territory on the terms and conditions set forth herein.
NOW, THEREFORE, it is hereby agreed as follows:
1. Incorporation of Recitals. The Recitals set forth in Paragraphs A through C, above, are incorporated herein as though set forth in full.
2. Appointment. SIERRA hereby appoints ENVISION as its exclusive distributor for the Product in any blend with Krill Oil within the Territory subject to ENVISION fulfilling the terms and conditions of the best efforts marketing requirements set forth herein in Sections 4, 5, and 9. SIERRA shall cease making sales to any customer or distributor who, during the term of this Agreement, violates ENVISION's exclusivity.
3. Territory. The Territory shall be the entire world.
4. Prices and Terms. The price for the Product as set forth in Section 9 herein, sold by SIERRA to ENVISION, shall be subject to change due to changes in manufacturing costs and so as to maximize profits; any changes in price for the Product shall not be applicable to previously accepted orders and shall be made with at least ninety (90) days advance notice in writing and in good faith by conference of the parties. ENVISION shall not resell the Product alone. Terms of payment will be 1/3 upon placement of order and 2/3 balance net thirty (30) days or as mutually agreed upon in writing between the parties. Delivery will be F.O.B. ENVISION shall be responsible for all costs of shipping from SIERRA to ENVISION.
5. Product Support. ENVISION will use its best efforts to market and sell the Finished Product throughout the Territory. The parties also agree that:
o If SIERRA customers are interested in purchasing the Product in any blend with Krill Oil, SIERRA will refer them to ENVISION.
o ENVISION will be responsible for all costs associated with developing and manufacturing the Finished Product.
6. Sales Disclosures. ENVISION will provide SIERRA with demand projections for the Product and SIERRA will produce enough Product to meet such demand projections. ENVISION will inform SIERRA of committed sales and SIERRA will increase or scale up its production of the Product accordingly. SIERRA will not unreasonably withhold the Product, but shall not be liable for unfulfilled or partially fulfilled orders given just cause for such action.
7. Term. The term of this Agreement shall be two (2) years from the Effective Date with automatic annual renewals thereafter provided either party does not provide sixty (60) days notice of termination prior to the renewal date or the Agreement is not otherwise terminated as set forth in Section 8.
8. Termination. (a) Upon the occurrence of a material breach or default as to any obligation, term or provision contained herein by either party and the failure of the breaching party to promptly pursue (within thirty (30) days after receiving written notice thereof from the non-breaching party) a reasonable remedy designed to cure (in the reasonable judgment of the non-breaching party) such material breach or default, this Agreement may be terminated by the non-breaching party by giving written notice of termination to the breaching party, such termination
being immediately effective upon the giving of such notice of termination.
(b) Upon the occurrence of bankruptcy of the other party, breach of confidentiality, government legislative interference, or force majeure extending beyond sixty (60) days, either party may immediately terminate the Agreement.
9. Purchase Requirements. During the term of this Agreement, ENVISION will exclusively purchase the Product from SIERRA. The parties mutually agree to the Purchase Price of:
Product Purchase Price ----------------------------------------------- A. SierraSil Per Sierra Sil's wholesale price list.
10. Intellectual Property. SIERRA is responsible for all Patent costs for the Product. SIERRA warrants it owns pending patents for the Product in the U.S. and internationally. SIERRA hereby grants ENVISION an exclusive, royalty-free sub-license of the Product's future patents, and patent applications to distribute, sell and market the Finished Product. SIERRA hereby agrees to indemnify, defend and hold ENVISION harmless from any claims that the Product infringes upon any other patent.
11. Trademarks SIERRA is the owner of the trademark&sbsp; "SierraSil". This Agreement grants ENVISION a non-exclusive and non-royalty bearing license to use the mark "SierraSil". SIERRA shall at all times be the owner of the trademark and ENVISION shall acquire no rights thereto. Upon termination, ENVISION shall have eighteen (18) months to exhaust any inventories, packaging and advertising materials bearing the "SierraSil" trademark and SIERRA shall have first option to buy back any inventory at ENVISION's net purchase price.
12. Independent Contractor Status. The parties acknowledge that ENVISION is an independent contractor and shall not be deemed to be an employee, agent, or joint venturer of SIERRA for any purpose, including federal tax purposes.
13. Warranty. SIERRA warrants that the Product shall be free from defects in material and workmanship for the reasonable shelf life of the Product. In the event of any breach of this warranty or in the event any user of Product makes a claim that the Product was the cause of personal injury or property damage (product liability claim), SIERRA shall indemnify, defend and hold ENVISION harmless from any liability occasioned by a breach of warranty or a product liability claim. SIERRA warrants that it carries general liability insurance of not less than $2 million per occurrence and product liability insurance of not less than $5 million per occurrence and that, upon the execution of this Agreement, it will name ENVISION as an additional insured on such policies. SIERRA further warrants that the Product will not be adulterated or misbranded within the meaning of any federal, state, or local law or regulation or other applicable law. SIERRA agrees to promptly notify ENVISION of any problem, anomaly, defect or condition which would reasonably cause ENVISION's concern relative to stability, reliability, form, fit, function or quality of the Product.
ENVISION warrants that the Finished Product will not be adulterated or misbranded within the meaning of any federal, state, or local law or regulation or other applicable law. In the event of any breach of this warranty or in the event any user of the Finished Product makes a claim that the Finished Product was the cause of personal injury or property damage (product liability claim), ENVISION shall indemnify, defend, and hold SIERRA harmless from any liability occasioned by a breach of warranty or a product liability claim. ENVISION warrants that it carries general liability insurance of $1 million per occurrence and product liability insurance of not less than $2 million per occurrence and that, upon execution of this Agreement, it will name SIERRA as an additional insured on such policies.
14. Confidential Information. The parties acknowledge that, during the term of this Agreement, each may receive certain Proprietary Information of the other. Proprietary Information includes, without limitation, formula, scientific studies, processes, plans, formulations, technical information, new product information, methods of product delivery, test procedures, product samples, specifications, scientific, clinical, commercial and other information or data, customer lists, customer contacts, and other distributors within the Territory which are considered confidential in nature whether communicated in writing or orally. The parties agree that each will treat such information as confidential. Neither party shall have the right to disclose the Proprietary Information to any third party without the express written consent of the disclosing party. Neither party may use the proprietary information except in furtherance of the goals of this Agreement and is further prohibited from utilizing the Proprietary Information directly nor indirectly to engage in any business activity which is competitive with the other.
15. Force Majeure. In no event shall any party be responsible for its failure to fulfill any of its obligations under this Agreement when such failure is due to fires, floods, riots, strikes, freight embargoes, acts of God or insurrection. In the event of a force majeure, the party affected thereby shall give immediate written notice to the other. If the event of force majeure continues for longer than
sixty (60) days, the party not so affected shall have the right to terminate this Agreement.
16. Non-Waiver of Default. The failure of either party at any time to require the performance by a party of any provision of this Agreement shall in no way affect the right to require performance at any time after such failure. The waiver of either party of a breach of any provision of this Agreement shall not be taken to be a waiver of any succeeding breach of the provision or as a waiver of the provision itself.
17. Attorney's Fees. In the event either party is required to institute litigation to enforce any provision of this Agreement, the prevailing party in such litigation shall be entitled to recover all costs including without limitation, reasonable attorney's fees and expenses incurred in connection with such enforcement and collection.
18. Venue. This Agreement is deemed to have been entered into in the State of Colorado, and its interpretation, construction, and the remedies for its enforcement or breach are to be applied pursuant to and in accordance with the laws of the State of Colorado.
19. Notices. Any and all notices or other communication required or permitted to be given pursuant to this Agreement shall be in writing and shall be construed as properly given if mailed first class, postage prepaid to the address specified herein. Either party may designate, in writing, a change of address or other place to which notices may be sent.
If to SIERRA: If to LIFEUSA/ENVISION: Mr. Michael Bentley Mr. Michael Schuett Sierra Mountain Minerals Inc. Envision Health, Inc. 1501 West Broadway, Suite 500 2475 Broadway, Suite 202 Vancouver BC V6J4Z6 Boulder, CO 80304 Canada
20. Amendment. This Agreement shall not be modified or amended except by a written agreement executed by both parties.
21. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter thereof and supersedes all prior agreements, whether written or oral.
22. Assignment. The parties shall have the right to assign all, or part, of its rights under this Agreement to any wholly owned subsidiary or affiliate without the consent of the other Party. Any other assignment by the parties, requires the prior written consent of the other Party.
ACKNOWLEDGEMENTS
Each party acknowledges that he or she has had an adequate opportunity to read and study this Agreement. The understanding of the aforesaid articles causes no difficulty whatsoever and each party has retained a copy of this agreement immediately after the signing of it by all parties.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date and year first written above.
SIERRA MOUNTAIN MINERALS LIFEUSA/ENVISION HEALTH
By: /s/ Michael Bentley By: /s/ Michael Schuett ----------------------- ------------------------- Michael Bentley Michael Schuett
December 8, 2005 December 7, 2005 ----------------------- ------------------------------ Date Date [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | EXHIBIT 10.2
DISTRIBUTOR AGREEMENT
EXHIBIT 10.2
EXCLUSIVE DISTRIBUTOR AGREEMENT
THIS EXCLUSIVE DISTRIBUTOR AGREEMENT (the "Agreement") shall be effective as of _Dec. 8, 2005 (hereinafter "Effective Date"), by and between LifeUSA/ Envision Health, Inc., a corporation (hereinafter collectively "ENVISION"), and Sierra Mountain Minerals, Inc., a Canadian company (hereinafter "SIERRA"), is made with reference to the following facts:
Recitals
A. SIERRA is the manufacture and producer of a joint health product called "SierraSil" (hereinafter "the Product") for human use.
B. ENVISION is the manufacturer of certain nutritional supplements and is desirous of becoming an exclusive distributor for the Product in any blend with Krill Oil (hereinafter "the Finished Product") in all distribution channels in the Territory on the terms and conditions set forth herein.
C. SIERRA is desirous of having ENVISION act as its exclusive distributor for the Product in any blend with Krill Oil in all distribution channels in the Territory on the terms and conditions set forth herein.
NOW, THEREFORE, it is hereby agreed as follows:
1. Incorporation of Recitals. The Recitals set forth in Paragraphs A through C, above, are incorporated herein as though set forth in full.
2. Appointment. SIERRA hereby appoints ENVISION as its exclusive distributor for the Product in any blend with Krill Oil within the Territory subject to ENVISION fulfilling the terms and conditions of the best efforts marketing requirements set forth herein in Sections 4, 5, and 9. SIERRA shall cease making sales to any customer or distributor who, during the term of this Agreement, violates ENVISION's exclusivity.
3. Territory. The Territory shall be the entire world.
4. Prices and Terms. The price for the Product as set forth in Section 9 herein, sold by SIERRA to ENVISION, shall be subject to change due to changes in manufacturing costs and so as to maximize profits; any changes in price for the Product shall not be applicable to previously accepted orders and shall be made with at least ninety (90) days advance notice in writing and in good faith by conference of the parties. ENVISION shall not resell the Product alone. Terms of payment will be 1/3 upon placement of order and 2/3 balance net thirty (30) days or as mutually agreed upon in writing between the parties. Delivery will be F.O.B. ENVISION shall be responsible for all costs of shipping from SIERRA to ENVISION.
5. Product Support. ENVISION will use its best efforts to market and sell the Finished Product throughout the Territory. The parties also agree that:
o If SIERRA customers are interested in purchasing the Product in any blend with Krill Oil, SIERRA will refer them to ENVISION.
o ENVISION will be responsible for all costs associated with developing and manufacturing the Finished Product.
6. Sales Disclosures. ENVISION will provide SIERRA with demand projections for the Product and SIERRA will produce enough Product to meet such demand projections. ENVISION will inform SIERRA of committed sales and SIERRA will increase or scale up its production of the Product accordingly. SIERRA will not unreasonably withhold the Product, but shall not be liable for unfulfilled or partially fulfilled orders given just cause for such action.
7. Term. The term of this Agreement shall be two (2) years from the Effective Date with automatic annual renewals thereafter provided either party does not provide sixty (60) days notice of termination prior to the renewal date or the Agreement is not otherwise terminated as set forth in Section 8.
8. Termination. (a) Upon the occurrence of a material breach or default as to any obligation, term or provision contained herein by either party and the failure of the breaching party to promptly pursue (within thirty (30) days after receiving written notice thereof from the non-breaching party) a reasonable remedy designed to cure (in the reasonable judgment of the non-breaching party) such material breach or default, this Agreement may be terminated by the non-breaching party by giving written notice of termination to the breaching party, such termination
being immediately effective upon the giving of such notice of termination.
(b) Upon the occurrence of bankruptcy of the other party, breach of confidentiality, government legislative interference, or force majeure extending beyond sixty (60) days, either party may immediately terminate the Agreement.
9. Purchase Requirements. During the term of this Agreement, ENVISION will exclusively purchase the Product from SIERRA. The parties mutually agree to the Purchase Price of:
Product Purchase Price ----------------------------------------------- A. SierraSil Per Sierra Sil's wholesale price list.
10. Intellectual Property. SIERRA is responsible for all Patent costs for the Product. SIERRA warrants it owns pending patents for the Product in the U.S. and internationally. SIERRA hereby grants ENVISION an exclusive, royalty-free sub-license of the Product's future patents, and patent applications to distribute, sell and market the Finished Product. SIERRA hereby agrees to indemnify, defend and hold ENVISION harmless from any claims that the Product infringes upon any other patent.
11. Trademarks SIERRA is the owner of the trademark&sbsp; "SierraSil". This Agreement grants ENVISION a non-exclusive and non-royalty bearing license to use the mark "SierraSil". SIERRA shall at all times be the owner of the trademark and ENVISION shall acquire no rights thereto. Upon termination, ENVISION shall have eighteen (18) months to exhaust any inventories, packaging and advertising materials bearing the "SierraSil" trademark and SIERRA shall have first option to buy back any inventory at ENVISION's net purchase price.
12. Independent Contractor Status. The parties acknowledge that ENVISION is an independent contractor and shall not be deemed to be an employee, agent, or joint venturer of SIERRA for any purpose, including federal tax purposes.
13. Warranty. SIERRA warrants that the Product shall be free from defects in material and workmanship for the reasonable shelf life of the Product. In the event of any breach of this warranty or in the event any user of Product makes a claim that the Product was the cause of personal injury or property damage (product liability claim), SIERRA shall indemnify, defend and hold ENVISION harmless from any liability occasioned by a breach of warranty or a product liability claim. SIERRA warrants that it carries general liability insurance of not less than $2 million per occurrence and product liability insurance of not less than $5 million per occurrence and that, upon the execution of this Agreement, it will name ENVISION as an additional insured on such policies. SIERRA further warrants that the Product will not be adulterated or misbranded within the meaning of any federal, state, or local law or regulation or other applicable law. SIERRA agrees to promptly notify ENVISION of any problem, anomaly, defect or condition which would reasonably cause ENVISION's concern relative to stability, reliability, form, fit, function or quality of the Product.
ENVISION warrants that the Finished Product will not be adulterated or misbranded within the meaning of any federal, state, or local law or regulation or other applicable law. In the event of any breach of this warranty or in the event any user of the Finished Product makes a claim that the Finished Product was the cause of personal injury or property damage (product liability claim), ENVISION shall indemnify, defend, and hold SIERRA harmless from any liability occasioned by a breach of warranty or a product liability claim. ENVISION warrants that it carries general liability insurance of $1 million per occurrence and product liability insurance of not less than $2 million per occurrence and that, upon execution of this Agreement, it will name SIERRA as an additional insured on such policies.
14. Confidential Information. The parties acknowledge that, during the term of this Agreement, each may receive certain Proprietary Information of the other. Proprietary Information includes, without limitation, formula, scientific studies, processes, plans, formulations, technical information, new product information, methods of product delivery, test procedures, product samples, specifications, scientific, clinical, commercial and other information or data, customer lists, customer contacts, and other distributors within the Territory which are considered confidential in nature whether communicated in writing or orally. The parties agree that each will treat such information as confidential. Neither party shall have the right to disclose the Proprietary Information to any third party without the express written consent of the disclosing party. Neither party may use the proprietary information except in furtherance of the goals of this Agreement and is further prohibited from utilizing the Proprietary Information directly nor indirectly to engage in any business activity which is competitive with the other.
15. Force Majeure. In no event shall any party be responsible for its failure to fulfill any of its obligations under this Agreement when such failure is due to fires, floods, riots, strikes, freight embargoes, acts of God or insurrection. In the event of a force majeure, the party affected thereby shall give immediate written notice to the other. If the event of force majeure continues for longer than
sixty (60) days, the party not so affected shall have the right to terminate this Agreement.
16. Non-Waiver of Default. The failure of either party at any time to require the performance by a party of any provision of this Agreement shall in no way affect the right to require performance at any time after such failure. The waiver of either party of a breach of any provision of this Agreement shall not be taken to be a waiver of any succeeding breach of the provision or as a waiver of the provision itself.
17. Attorney's Fees. In the event either party is required to institute litigation to enforce any provision of this Agreement, the prevailing party in such litigation shall be entitled to recover all costs including without limitation, reasonable attorney's fees and expenses incurred in connection with such enforcement and collection.
18. Venue. This Agreement is deemed to have been entered into in the State of Colorado, and its interpretation, construction, and the remedies for its enforcement or breach are to be applied pursuant to and in accordance with the laws of the State of Colorado.
19. Notices. Any and all notices or other communication required or permitted to be given pursuant to this Agreement shall be in writing and shall be construed as properly given if mailed first class, postage prepaid to the address specified herein. Either party may designate, in writing, a change of address or other place to which notices may be sent.
If to SIERRA: If to LIFEUSA/ENVISION: Mr. Michael Bentley Mr. Michael Schuett Sierra Mountain Minerals Inc. Envision Health, Inc. 1501 West Broadway, Suite 500 2475 Broadway, Suite 202 Vancouver BC V6J4Z6 Boulder, CO 80304 Canada
20. Amendment. This Agreement shall not be modified or amended except by a written agreement executed by both parties.
21. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter thereof and supersedes all prior agreements, whether written or oral.
22. Assignment. The parties shall have the right to assign all, or part, of its rights under this Agreement to any wholly owned subsidiary or affiliate without the consent of the other Party. Any other assignment by the parties, requires the prior written consent of the other Party.
ACKNOWLEDGEMENTS
Each party acknowledges that he or she has had an adequate opportunity to read and study this Agreement. The understanding of the aforesaid articles causes no difficulty whatsoever and each party has retained a copy of this agreement immediately after the signing of it by all parties.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date and year first written above.
SIERRA MOUNTAIN MINERALS LIFEUSA/ENVISION HEALTH
By: /s/ Michael Bentley By: /s/ Michael Schuett ----------------------- ------------------------- Michael Bentley Michael Schuett
December 8, 2005 December 7, 2005 ----------------------- ------------------------------ Date Date | Highlight the parts (if any) of this contract related to "Source Code Escrow" that should be reviewed by a lawyer. Details: Is one party required to deposit its source code into escrow with a third party, which can be released to the counterparty upon the occurrence of certain events (bankruptcy, insolvency, etc.)? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Cap On Liability" that should be reviewed by a lawyer. Details: Does the contract include a cap on liability upon the breach of a party’s obligation? This includes time limitation for the counterparty to bring claims or maximum amount for recovery.
Context: AMENDMENT NO. 2
Dated as of March 27, 2006
Reference is hereby made to that certain fully executed Wireless Content License Agreement Number 12965 dated as of December 16, 2004, as amended November 11, 2005, ("Agreement"), between Fox Mobile Entertainment, Inc. ("Fox"), as Administrator for Twentieth Century Fox Film Corporation ("Trademark Licensor") and Glu Mobile, Inc. f/k/a Sorrent, Inc. ("Licensee").
The parties agree to modify the Agreement as follows:
A. "ICE AGE 2" a/k/a "ICE AGE: THE MELTDOWN" AUDIO AND VIDEO WIRELESS PRODUCTS:
1. Grant of Rights: Fox grants to Licensee a limited, non-exclusive right and license to distribute the following Wireless Products in connection with the Property "ICE AGE: THE MELTDOWN" in the United States: (A) 2 Scrat voicetones; (B) 2 John Leguizamo voicetones; and (C) 3 premium videos. Fox also grants Licensee a limited, non-exclusive right and license to distribute the following Wireless Products in connection with the Property "ICE AGE 2" outside of the United States: (A) 4 Scrat voicetones; (B) 1 John Leguizamo voicetone; and (C) 3 premium videos. (collectively, "IA2 Audio and Video Wireless Products")
B. IA 2 AUDIO AND VIDEO WIRELESS PRODUCTS ROYALTY:
1. Royalty: In consideration of the rights granted to Licensee pursuant to this Amendment 2, Licensee shall pay to Fox, or such other party as Fox may designate in writing, a royalty in the following amount:
(a) From the first unit sold, Fox shall earn a royalty at the rate of ***** percent (*****%) of Licensee's Gross Receipts (as defined in the Agreement) from Licensee's sale and distribution of the IA2 Audio and Video Wireless Products. ("IA2 Audio and Video Royalty"). For the avoidance of doubt, Licensee may not recoup any portion of the Ice Age 2 Guarantee (as defined in Amendment 1) through its sale and distribution of the IA2 Audio and Video Wireless Products.
2. VGSL and other CSP Accounting: All VGSL and other CSP payments remitted directly to Fox pursuant to the VGSL Agreement and other CSP agreements with respect to the IA Audio and Video Wireless Products shall be treated in the same manner as set forth in Paragraphs 7(b)(ii) and 7(b)(iii) of the Agreement.
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
Source: GLU MOBILE INC, S-1/A, 3/19/2007
3. No Direct-to-Consumer Distribution Royalty: Licensee shall not be entitled to receive a share of any revenues and shall have no claim to any revenues earned and collected by Fox, or a third-party Fox designates, for the IA2 Audio and Video Wireless Products which Fox distributes through its and its assigns' direct-to-consumer distribution channels.
Except as herein expressly amended or by necessary implication modified by this Amendment, the Agreement in all other respects is hereby ratified and shall continue in full force and effect.
By signing in the places indicated below, the parties hereto accept and agree to all of the terms and conditions hereof.
Glu Mobile, Inc. f/k/a Sorrent, Inc. ("Licensee") Fox Mobile Entertainment, Inc. ("Fox") By: /s/ PAUL ZUZELO By: /s/ JAMIE SAMSON Jamie Samson Name: Paul Zuzelo Its: Senior Vice President Its: CAO Date: March 28, 2006 Date: 3/28/06
Source: GLU MOBILE INC, S-1/A, 3/19/2007 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | AMENDMENT NO. 2
Dated as of March 27, 2006
Reference is hereby made to that certain fully executed Wireless Content License Agreement Number 12965 dated as of December 16, 2004, as amended November 11, 2005, ("Agreement"), between Fox Mobile Entertainment, Inc. ("Fox"), as Administrator for Twentieth Century Fox Film Corporation ("Trademark Licensor") and Glu Mobile, Inc. f/k/a Sorrent, Inc. ("Licensee").
The parties agree to modify the Agreement as follows:
A. "ICE AGE 2" a/k/a "ICE AGE: THE MELTDOWN" AUDIO AND VIDEO WIRELESS PRODUCTS:
1. Grant of Rights: Fox grants to Licensee a limited, non-exclusive right and license to distribute the following Wireless Products in connection with the Property "ICE AGE: THE MELTDOWN" in the United States: (A) 2 Scrat voicetones; (B) 2 John Leguizamo voicetones; and (C) 3 premium videos. Fox also grants Licensee a limited, non-exclusive right and license to distribute the following Wireless Products in connection with the Property "ICE AGE 2" outside of the United States: (A) 4 Scrat voicetones; (B) 1 John Leguizamo voicetone; and (C) 3 premium videos. (collectively, "IA2 Audio and Video Wireless Products")
B. IA 2 AUDIO AND VIDEO WIRELESS PRODUCTS ROYALTY:
1. Royalty: In consideration of the rights granted to Licensee pursuant to this Amendment 2, Licensee shall pay to Fox, or such other party as Fox may designate in writing, a royalty in the following amount:
(a) From the first unit sold, Fox shall earn a royalty at the rate of ***** percent (*****%) of Licensee's Gross Receipts (as defined in the Agreement) from Licensee's sale and distribution of the IA2 Audio and Video Wireless Products. ("IA2 Audio and Video Royalty"). For the avoidance of doubt, Licensee may not recoup any portion of the Ice Age 2 Guarantee (as defined in Amendment 1) through its sale and distribution of the IA2 Audio and Video Wireless Products.
2. VGSL and other CSP Accounting: All VGSL and other CSP payments remitted directly to Fox pursuant to the VGSL Agreement and other CSP agreements with respect to the IA Audio and Video Wireless Products shall be treated in the same manner as set forth in Paragraphs 7(b)(ii) and 7(b)(iii) of the Agreement.
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
Source: GLU MOBILE INC, S-1/A, 3/19/2007
3. No Direct-to-Consumer Distribution Royalty: Licensee shall not be entitled to receive a share of any revenues and shall have no claim to any revenues earned and collected by Fox, or a third-party Fox designates, for the IA2 Audio and Video Wireless Products which Fox distributes through its and its assigns' direct-to-consumer distribution channels.
Except as herein expressly amended or by necessary implication modified by this Amendment, the Agreement in all other respects is hereby ratified and shall continue in full force and effect.
By signing in the places indicated below, the parties hereto accept and agree to all of the terms and conditions hereof.
Glu Mobile, Inc. f/k/a Sorrent, Inc. ("Licensee") Fox Mobile Entertainment, Inc. ("Fox") By: /s/ PAUL ZUZELO By: /s/ JAMIE SAMSON Jamie Samson Name: Paul Zuzelo Its: Senior Vice President Its: CAO Date: March 28, 2006 Date: 3/28/06
Source: GLU MOBILE INC, S-1/A, 3/19/2007 | Highlight the parts (if any) of this contract related to "Cap On Liability" that should be reviewed by a lawyer. Details: Does the contract include a cap on liability upon the breach of a party’s obligation? This includes time limitation for the counterparty to bring claims or maximum amount for recovery. | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Third Party Beneficiary" that should be reviewed by a lawyer. Details: Is there a non-contracting party who is a beneficiary to some or all of the clauses in the contract and therefore can enforce its rights against a contracting party?
Context: Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
Exhibit 10.75
COLLABORATION & ENDORSEMENT AGREEMENT
THIS COLLABORATION & ENDORSEMENT AGREEMENT (the "Agreement") is dated as of this 15th day of June, 2015 ("Effective Date"), between The Naked Brands Group, Inc., a Delaware corporation ("Naked"), and Wade Enterprises, LLC ("Wade Enterprises"), an Alaska limited liability company f/s/o Dwyane Wade ("Athlete" and together with Wade Enterprises, collectively "Wade"). Wade Enterprises, Athlete and together with Naked, are each referred to herein as a "Party" and collectively, the "Parties".
AGREEMENT
1. Engagement. Naked hereby engages Wade for collaboration in business development for, and his endorsement as set forth herein of, the following items, which shall be known herein as "Innerwear": Briefs, trunks, boxer briefs and boxers, non-athletic undershirts (i.e., t-shirts intended to be worn as innerwear and not intended specifically for athletic purposes), non-athletic lounge apparel (bottoms and tops), sleepwear (including pajama bottoms and tops), and robes (as may be expanded to include other mutually agreed upon innerwear and lounge apparel) which may now or hereafter during the Term be manufactured, distributed, marketed and/or sold by Naked (collectively, the "Naked Products"), and Wade hereby accepts such engagement. The Parties agree that the territory of such engagement shall be worldwide (the "Territory").
2. Term of Agreement. The initial term of this Agreement shall be for a period of four (4) years, commencing on the Effective Date, which term may be extended for up to three (3) years by written agreement of both Parties prior to the expiration date of the initial term or any extension thereof (collectively, the "Term"). Each twelve-month period beginning on the Effective Date shall be known as a "Contract Year." In the event that either Wade or Naked wishes to extend the Term of the Agreement as contemplated above, it shall provide the other Party with written notice at least ninety (90) days prior to the expiration of the Term. The other Party will then have a period of fourteen (14) days from the date of the notice to indicate whether it also desires to extend the Term, on the terms and conditions set forth herein and if no such indication is made, the other Party will be deemed to have declined the offer to extend. Notwithstanding the foregoing, Wade agrees that for a period of ninety (90) days prior to the expiration of the Term (unless the Agreement is terminated by Wade as permitted hereunder), Naked shall have the exclusive right to negotiate for continued endorsement by Athlete of the Naked Products. For a period of six (6) months at the end of the Term (the "Sell-off Period"); provided that the Agreement was not terminated by Wade as permitted herein, Naked will have the right to continue to sell the Wade Products (defined below) for which orders have already been placed at the end of the Term on the terms and conditions herein.
3. Use of Wade Image.
During the Term and subject to the limitations set forth in this Agreement, Naked shall have an exclusive right and license in the Territory to use Athlete's name, nickname, initials, autograph, image, likeness, photographs, biographical details, facsimile signature, voice, videos, electronic media depictions, any words, symbols or other depictions, as well as any other identifying attributes that would identify Athlete to the public, including any trade mark(s), copyrights which Wade has, as set forth on Schedule A attached hereto, and all multimedia assets that Wade owns or has right to use (collectively, the "Wade Image") solely for the advertising, endorsement, promotion, or sale of the Naked Products (including the Wade Products) in the Territory as follows:
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
(1) On Naked's website(s) ("Website");
(2) In social media channels, including, but not limited to Facebook, Instagram, Twitter, YouTube, Google+, Tumblr and other mutually agreeable channels, with reasonable frequency, to promote Naked Products and Wade Products;
(3) In marketing and media opportunities in connection with the Wade Services (as defined below); and
(4) For use on the packaging of the Naked Products and Wade Products and on Wade Products themselves.
All uses of Wade Image in connection with this Agreement shall be subject to the prior written approval of Wade, which Wade shall not unreasonably withhold. Naked agrees to submit to Wade or its authorized agent a copy of all new promotional and/or advertising material using Wade Image at least ten (10) days prior to the release to the general public. Wade and its authorized agent agree that they shall not unreasonably withhold such approval. In the absence of disapproval within three (3) business days of Wade's or authorized agent's receipt of a request for approval, said advertising or promotional material shall be deemed approved. Any such usage featuring Athlete shall be and remain the property of Naked except as otherwise set forth herein; however, Naked shall have the right to such use only during the Term. Wade may use said materials in whole or in part for Wade's personal portfolio, website or otherwise. Such usage may not be sold or transferred. For the avoidance of doubt, that certain logo designed by Athlete prior to the date hereof (the "Logo") shall remain the sole property of Wade and Naked shall have license during the Term to use the Logo for the advertising, endorsement, promotion, or sale of the Naked Products (including the Wade Products) in the Territory in accordance with the terms and conditions of the Agreement. During the Sell-off Period, Naked shall have the license to use the Logo solely on packaging and presentation of Wade Products already offered for sale at retail outlets or on-line in accordance with the terms and conditions of the Agreement.
Wade will allow Naked to use any quotes that are attributed to Wade to promote the Naked Products and Wade Products in any advertising campaign. Wade will allow Naked to use any such attributed quotes that Naked requires to promote the Naked Products and Wade Products, subject to Wade's right to approve such quotes in writing, which approval shall not be unreasonably withheld.
The Parties acknowledge and agree that Athlete's accomplishments and recognition as an outstanding basketball player, individual and fashion icon, as well as his character, fame, likeness, image and reputation are the essence of this Agreement.
Wade hereby warrants that he is not a party to any agreement, contract or understanding which would prevent, limit or hider his performance of any of the obligations under this Agreement, provided that Naked acknowledges that it is aware of Athlete's obligations under his existing endorsement agreement with Li Ning for athletic shoes and athletic apparel and nothing herein shall obligate Athlete to endorse any athletic apparel other than Li Ning's.
2
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
4. Exclusivity. Wade agrees that during the Term of this Agreement, he will not represent or perform as a representative, spokesperson or provide Wade Services for, nor furnish services or materials, or allow the use of the Wade Image to be used for the advertising, endorsement, promotion, or sale of Innerwear in the Territory. Furthermore, Wade will not engage in any business or other transaction or have any financial or personal interest in any entity whose primary or core business is selling or manufacturing Innerwear during the Term. Endorsement of any Innerwear other than the Naked Products or Wade Products without the express written consent of Naked will constitute a material breach of this Agreement.
5. Wade Services. During the Term and subject to the limitations set forth in this Agreement, Wade agrees to provide Naked with the following services (collectively, the "Wade Services"):
A. During the first Contract Year, Wade will be available for (i) one production day for the purpose of creating marketing assets for Naked Products for unlimited use in advertisements and the media and (ii) one production day for creating marketing assets for Wade Products and Naked Products for unlimited use in advertisements and the media, each as permitted herein. Wade shall be available to render services at such production day for a maximum of three (3) consecutive hours, not including scheduled breaks, during each such production day period; provided that, in the event an additional production day is reasonably required for the creation of marketing assets related to the Wade Product packaging, Athlete will be available to render services for up to an additional three (3) hours in either the first Contract Year or the second Contract Year but not both. The scheduling and content of said production days shall be mutually determined by Wade and Naked, subject to Wade's professional availability;
B. Beginning in the second Contract Year, Wade will be available for a maximum of one (1) production day for creating marketing assets for Wade Products and Naked Products for unlimited use in advertisements and the media, for a maximum of three (3) consecutive hours, not including scheduled breaks, during such production day period. The scheduling and content of said production days shall be mutually determined by Wade and Naked, subject to Wade's professional availability;
C. During each Contract Year, Wade will be available for two (2) personal appearances (each, a "Personal Appearance") on behalf of Naked and the Naked Products and Wade Products in the media, including publicity shoots, interviews, print, television, radio and social media channels, each appearance for a maximum of sixty (60) consecutive minutes to be scheduled at a time mutually agreeable to Naked and Wade;
Wade has rights to websites or other social media channels promoting himself or any other promotional activity that is independent of this Agreement ("Independent Promotions"), including Wade's Facebook, Instagram, Twitter and Google+ channels and Wade's YouTube channel. Wade agrees, to generously and positively promote Naked Products and Wade Products in any such Independent Promotions on a mutually agreed upon basis with reasonable frequency and in a manner consistent with drawing attention to the Wade/Naked relationship and promoting the Naked Products and Wade Products. Naked, in its sole and absolute discretion, may preview all references and other such materials referring to Naked in the Independent Promotions prior to the public dissemination of such Independent Promotions. Wade agrees to immediately remove all such materials in his Independent Promotions that Naked, in its sole and absolute discretion requests be removed. Naked has the right to request such removals at any time, even if Naked previously approved the Independent Promotions, and Naked agrees that all social media promotions it requests of Athlete shall comply with all applicable rules and regulations. Naked may also provide material regarding the Naked Products and Wade Products to Wade, and Wade agrees to include such materials in his Independent Promotions; and
3
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
E. Wade is currently engaged in partnerships whereby its partners are selling and distributing other Athlete endorsed products. Wade will use reasonable efforts to facilitate an introduction to Naked to existing sales and distributions channels and accounts.
F. Naked may reasonably request an additional production session(s), or a media tour or personal appearance(s), subject to mutual agreement by the Parties.
At all Personal Appearances, Wade will be available to sign a reasonable number of photographs, autographs, and any other items requested by and provided by Naked at its sole cost and expense, which Naked will have the right to distribute as giveaways but never for sale. If requested, Wade will pass out a reasonable number of samples of the Wade Product. Wade will also permit himself to be reasonably photographed at the Personal Appearances with customers and fans.
6. Commercial Materials. The results of the production days listed in subsections A and B in Section 5 may be used solely for the promotion of the Naked Products (including the Wade Products) and are hereinafter referred to individually and collectively as the "Commercial Materials." Wade shall have the right of prior written approval with respect to his photographs, likeness and statements. During the Term, Naked shall have the right in the Territory to the unlimited broadcast use and re-use of the Commercial Materials in the Territory. During the Term, Naked shall have the right in the Territory to use the Wade Image in the Commercial Materials, for publication and display, as Naked shall in its sole discretion determine, in print magazines, including but not limited to, point-of-sale material, product packaging, Naked's Annual Report, other shareholder communications, internal sales and marketing pieces, as well as the right to use the same at meetings held or attended by Naked or for trade purposes. Naked shall have the right at any time during the term of this Agreement to make any revision or versions of all or any part of the Commercial Materials to conform to the requirements of individual markets as Naked may desire, subject to Wade's reasonable approval as aforesaid. Naked may also propose to use the Commercial Materials as part of cooperative advertising and retail tie in promotions subject to Wade's prior written approval which shall not be unreasonably withheld, provided that withholding approval because a potential tie in conflicts with one of Athlete's existing sponsors shall not be deemed unreasonable. Notwithstanding the foregoing, in no case shall the Commercial Materials feature any commercial tie in or other use that could be perceived as an endorsement by Athlete of any products or services other than the Naked Products. Naked shall comply with all applicable rules and regulations (including the NBA's) in its use of the Commercial Materials hereunder.
7. Design of Wade Products.
Naked and Wade (either Athlete or a team and/or agent and/or designer designated by Athlete, referred to as the "Wade Team") agree to collaborate on the design and manufacture of a new line of Innerwear under the brand "Wade By Naked" or such other brand name as the Parties agree (collectively, the "Wade Products"). Athlete will have the title of "Creative Director" for the Wade Products, which title shall be featured on the Commercial Materials. During the Term and subject to the limitations set forth in this Agreement, the Wade Team and Naked agree that the process for approving designs for Wade Products will be as follows:
4
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
(1) Naked will develop detailed designs for each Wade Product, which shall include rough drawings, to be provided to Wade for review and comment;
(2) The Wade Team will provide Naked with comments on such designs within ten (10) days after they are provided to the Wade Team;
(3) Upon receipt of the Wade Team's comments, Naked will review such comments and work diligently to incorporate them into the design within commercial reason and thereafter, develop and create a prototype for such Wade Product for the Wade Team's approval;
(4) Within ten (10) days after the Wade Team's receipt of the prototype either in hand or via a photograph by email, the Wade Team shall review the prototype and provide any additional comments; and
(5) Upon the Wade Team's written approval of a prototype, such Wade Product will be considered approved for production (the "Production Approval").
(6) In addition to the foregoing Wade Products, Naked shall have the right to produce and distribute, on a non-exclusive basis, printed or branded tee-shirts subject to Wade's existing endorsement agreements.
The Wade Team and Naked will collaborate to establish a mutually acceptable marketing campaign for Wade Products, and will schedule regular phone calls, video conferences, and/or other meetings to timely complete development of Wade Products.
8. Royalties. As consideration for Wade's services under this Agreement, Naked will pay Wade royalties as follows:
A. Royalties. Naked will report, and Wade will be paid, royalty payments at [***]
5
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
B. Payment Terms. Wade Product Royalties described above in Section 8A will be paid on a quarterly basis on the first day of each of the months of July, October, January, and April and shall be accompanied by backup documentation reasonably satisfactory to Wade.
C. [***]
D. Withholding Taxes. Wade will be solely responsible for withholding and paying any and all federal, state and local taxes, including but not limited to payroll, unemployment, social security and income taxes and any other payments which may be owed by Wade as a result of or in connection with payments made by Naked for Wade Services rendered under this Agreement. Wade acknowledges that he is not qualified for and will not receive any Naked employment benefits or other incidents of employment as a result of the Agreement.
E. Equity Ownership. Wade is hereby granted a warrant (the "Grant Warrant") exercisable for a period of seven (7) years from the date of issuance for the number of shares of Common Stock equal to [***] shares of Common Stock (the "Wade Grant"), subject to the following terms:
(1) Exercise Price. The Grant Warrant will have an exercise price equal to the then-fair market value per share of Common Stock as quoted on the OTCQB as of the Effective Date (the "FMV Exercise Price"). The form of the Grant Warrant shall be agreed to by the Parties.
(2) Vesting Schedule. The Grant Warrant will become exercisable for: (a) fifty percent (50%) of the Wade Grant on the one year anniversary of the Effective Date (the "First Installment"); (b) twenty-five percent (25%) of the Wade Grant on the second anniversary of the Effective Date (the "Second Installment"); and (c) the remaining twenty-five percent (25%) of the Wade Grant will vest on the third anniversary of the Effective Date (the "Third Installment" and together with the First Installment and the Second Installment, the "Installments" and each an "Installment"); provided however, that in the event of a change of control of Naked, the entire unvested portion of the Grant Warrant will immediately vest. For purposes hereof, a "change of control" shall mean the sale of at least fifty percent (50%) of the assets of Naked, a merger or consolidation of Naked with, by or into another entity, or a change in the ownership of more than fifty percent (50%) of the voting capital stock of Naked in one or more related transactions.
6
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
(3) Exercise Upon Termination of the Agreement. In the event that the Agreement is terminated in accordance with Section 12A, than the [***] term of the Grant Warrant [***] shall expire ninety (90) days thereafter. [***]
(6) Designee of Wade Grant. Pursuant to the request of Wade, Naked shall issue [***] to Wade's exclusive representative, CAA Sports LLC. This grant shall be issued pursuant to the same terms and conditions as the Wade Grant, with the exception of the terms of [***].
(7) [***]
7
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
(8) Grant Documents. All warrants referenced herein shall be issued pursuant to separate, mutually negotiated grant documents, which shall contain all the terms referenced herein and shall be negotiated and executed promptly after the execution of the Agreement.
9. Board Membership.
A. Advisory Board. Upon entering into this Agreement, Athlete will join the Advisory Board of Naked ("Advisory Board"). As a member of the Advisory Board, Athlete agrees to the following:
(1) Athlete will participate in at least one (1) scheduled Advisory Board meeting by phone or in-person, provided that such meeting is held in Miami on a date acceptable to Wade.
(2) Athlete will provide Naked with access to Wade's contacts and Wade's expertise and breadth of experience as it pertains to the business of Naked;
(3) Wade will provide any reasonable additional assistance as may be mutually agreed upon by Naked and Wade from time to time; and
(4) Wade grants Naked the right to publicly identify Wade as a member of the Advisory Board, Creative Director, Stockholder, and Partner of Naked, and in the event that Wade joins the Board, as Director, and may include his name and biography in materials published by Naked, including any prospectus or offering materials or to publish any other information regarding Wade in any documents required to be filed pursuant to applicable laws and regulations.
B. Board of Directors. Further, Athlete will have the option in his sole discretion of becoming a member of the Board of Directors of Naked (the "Board") (for a period of eighteen (18) months commencing on the Effective Date and provided that the Agreement has not been terminated). If Athlete elects to become a member of the Board, he must satisfy the following requirements on an annual basis:
(1) Wade will participate in at least four (4) scheduled board meetings, two (2) of which Wade must attend in-person, provided that at least one meeting is held in Miami, FL or, if no such meeting is held in Miami, FL then one (1) meeting if all meetings are held in New York, NY or another location. Subject to legal compliance requirements, Wade may designate an individual acceptable to Naked serve as his representative to the meetings of the Board;
(2) Wade will attend, subject to his availability in his sole discretion, fundraising events and meetings with potential investors, placement agents and representatives of the same at the request of Naked to be scheduled at the convenience of each of Naked and Wade;
If, while serving on the Board Wade does not satisfy any of the above-listed requirements on more than one (1) occasion, the other members of the Board may remove Wade from the Board upon written notice to Wade.
8
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
10. Wade Obligations. During the Term of this Agreement, Athlete agrees to comply with the following obligations:
A. Comply with all rules and regulations of the National Basketball Association and its governing bodies rules and regulations;
B. Not do anything which damages Wade's name, reputation, or image in the eyes of a reasonable observer;
C. Exercise reasonable constraints to avoid taking any actions which damages Naked, its name, reputation, image, the Naked Products and Wade Products;
D. When promoting the Naked Products or Wade Products, mention when appropriate the name of Naked and/or the Naked Products and Wade Products in interviews with the press, social media channels and broadcast media;
E. Wear the Naked Products and/or Wade Products when appropriate and refrain from wearing any other Innerwear products that would be visible to the public.
11. Non-compete; Confidentiality. Wade represents and warrants that during the Term and in the Territory, neither Wade nor any of his agents, representatives or employees will solicit, initiate, or encourage any proposal for an endorsement by Wade of any Innerwear to commence during the Term, or participate in any discussions or negotiations for the same. Wade will execute a non-disclosure and confidentiality agreement in a form mutually acceptable to each of Wade and Naked.
12. Termination.
A. Naked shall have the right to terminate this Agreement upon ten (10) days prior written notice to Wade in the event Wade fails to perform the Wade Services or breaches any other covenant or agreement set forth herein (including the essence of this Agreement), and fails to cure same (if curable) within seven (7) days of receipt of written notice. Such termination shall relieve Naked of its obligation to provide any further consideration pursuant to this Agreement provided that Wade shall retain all warrants he has received hereunder that have vested as of the date of such termination. In the event of such termination as a result of a material breach of this Agreement by Wade (i) Wade's contractual liabilities and obligations until the date of termination still exist notwithstanding such termination, (ii) Naked shall be under no obligation to sell any Wade Products but shall nevertheless owe the Royalty on any Wade Products sold; and (iii) notwithstanding anything to the contrary herein, Wade shall forfeit all warrants he has received hereunder. Naked shall not have waived any of its rights at law or in equity by exercising any provision of this section.
B. Wade shall have the right to terminate this Agreement upon ten (10) days prior written notice to Naked in the event of the occurrence of any of the following: (i) Naked is adjudicated as insolvent or declares bankruptcy; or (ii) Naked fails to provide consideration due pursuant to this Agreement, within ten (10) days following the date such consideration is due hereunder (or, if Wade elects to receive stock in lieu of the cash consideration, if Naked fails to instruct its transfer agent to issue the appropriate amount of Common Stock to Wade within ten (10) days following the date such consideration is due in the event such consideration is payable in Common Stock); provided that Naked is notified in writing of such non-payment by Wade and such payment by Naked is not made within three (3) days following such notification; or (iii) Naked breaches any covenant or agreement set forth herein and fails to cure same (if curable) within seven (7) days of receipt of written notice. Furthermore, Naked agrees that such termination shall not relieve it of its obligation to provide consideration as contemplated hereunder. Wade shall not have waived any of his rights at law or in equity by exercising any provision of this section.
9
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
C. The Agreement shall be deemed terminated if neither Naked nor Wade elect to extend the Agreement as set forth in Section 2 hereof.
D. Naked's rights to the use of Wade Image shall end immediately should this Agreement be terminated pursuant to Section 12(A) or Section 12(B) above.
13. Notices. All notices provided for herein shall be given in writing by hand delivery, courier service, or by certified mail return receipt requested to the addresses of the Parties set forth as follows (unless change of address by notice to the other Party is given as provided in this Section 13):
If to Wade: If to Naked: CAA Sports LLC Naked Brand Group, Inc. 405 Lexington Avenue, 19th Floor 10th Floor - 95 Madison Avenue New York, NY 10174 New York, NY 10016 Attn: Lloyd Frischer Attn: Joel Primus With a copy to: With a copy to: Andrew B. Latack, Esq. Duane Morris LLP at the same address 1540 Broadway, 14th Floor New York, NY 10036 Attn: Nanette C. Heide, Esq.
14. Intellectual Property.
All rights to the use of the names, trademarks, service marks, symbols, logos, domain names, trade secrets, confidential know-how, patents, copyrights, any pending applications with respect to any of the foregoing, and any other intellectual property and related proprietary rights, interests and protections ("Intellectual Property Rights") in connection with Wade Products will be jointly owned by Wade and Naked. Wade will retain all ownership of the Intellectual Property Rights in connection with Wade Image including, for the avoidance of doubt, the Logo. For the avoidance of doubt, no rights are being granted hereunder to any intellectual property belonging to the NBA or its member clubs (including but not limited to the Miami Heat).
Subject to Section 14A, Naked will retain all ownership of the Intellectual Property Rights in connection with the Naked Products, the Naked brand and any and all related brands. All advertising material produced hereunder will be and remain the absolute property of Naked. Wade acknowledges that he does not now have and in the future will assert no right, title or interest of any kind or nature whatsoever therein, or in or to any component part or tape, dub or copy or element or character or characterization thereof.
10
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
15. Representations and Warranties of Naked and Wade.
A. Wade relies upon Naked's skill and judgment and also upon the following representations of Naked which shall be in effect throughout the term of this Agreement:
(1) Naked's products will be merchantable and fit for the purpose for which they are intended, and
(2) Naked's products will conform at all times to all applicable federal, state and local laws, rules, regulations, ordinances, and other enactments and industry standards, including, but not limited to, those relating to product safety.
B. Wade Enterprises and Athlete hereby jointly and severally represent to Naked the following:
(1) Authorization. Wade Enterprises is an entity duly organized and validly existing in good standing under the laws of its jurisdiction of organization. Wade Enterprises and Athlete each have the requisite power and authority to enter into, execute and deliver the Agreement to which it is a party and to perform all of the obligations to be performed by each of them hereunder. The Agreement and the obligations and transactions contemplated hereby have been, duly authorized, executed and delivered by each of them, and the Agreement constitutes each of their valid and binding obligation, enforceable against such Party in accordance with its terms.
(2) No Conflicts. Neither the execution and delivery of this Agreement nor the performance or consummation of the transactions contemplated hereby or thereby by either Wade Enterprises or Athlete will conflict with, result in the breach of, constitute a default under or accelerate the performance required by the terms of: (i) any law, rule or regulation of any government or governmental or regulatory agency; (ii) any judgment, order, writ, decree, permit or license of any court or governmental or regulatory agency to which such Party may be subject; (iii) any contract, agreement, commitment or instrument to which Wade Enterprises or Athlete is a party; or (iv) Wade Enterprises' constituent documents or other governing instruments (or constitute an event which, with the passage of time or action by a third party, would result in any of the foregoing). The execution and delivery of this Agreement by Wade Enterprises and Athlete and the performance and consummation of the transactions contemplated hereby do not require any registration, filing, qualification, consent or approval under any material law, rule, regulation, judgment, order, writ, decree, permit or license to which such Party is subject.
16. Indemnity.
Naked shall be solely responsible for all liability arising out of production, distribution and sale of its product. Naked hereby agrees to indemnify, defend and hold harmless Wade Enterprises, Athlete, his agents, representatives and employees (referred to collectively as "Wade Indemnities") from and against any and all claims, actions, causes or action, damages, injuries, expenses, liabilities (joint and several), penalties fines, attorneys' fees, court costs, and any other expenses incurred by Wade Indemnities arising out of (1) breach by Naked of any of the terms, representations or warranties made by Naked in this Agreement; or (2) Naked product liability or trademark patent or other proprietary right infringement; or (3) errors, omissions, fraudulent or negligent acts by Naked, its employees, agents or subcontractors in connection with (i) any advertising featuring Athlete; (ii) the performance of Naked's duties and obligations under this Agreement; (iii) the production, distribution, promotion, marketing and sales of products including related product packaging; and/or (iv) the operation and management of its production and distribution facilities, however caused. Naked shall not be obligated to indemnify Wade with respect to damages which are the result of the gross negligence or willful misconduct of Wade.
11
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
Athlete and Wade Enterprises, jointly and severally, hereby agree to indemnify, defend and hold harmless Naked, its shareholders, directors, officers, employees, agents, and affiliates (referred to collectively as "Naked Indemnities") from and against any and all claims, actions, causes or action, damages, injuries, expenses, liabilities (joint and several), penalties fines, attorneys' fees, court costs, and any other expenses incurred by Naked Indemnities arising out of or are in any way connected directly or indirectly with any and all claims, suits, actions, costs, and other expenses, fines, judgments, investigations, proceedings, demands, liabilities, and obligations of any nature whatsoever, with respect to Wade Enterprises' or Athlete's breach of its respective representations and warranties, uncured breach of this Agreement or Athlete's gross negligence or willful misconduct.
17. Relationship of Parties. Nothing contained in this Agreement shall be deemed or construed to place the Parties in the relationship of partners, joint venturers, principal-agents, or employer-employee, it being understood that the Parties are and will remain independent contractors in all respects and neither Party shall have any right to obligate or bind the other in any manner whatsoever.
18. Assignment. Neither this Agreement nor any of the rights or obligations contained herein may be assigned or transferred by either Party without the prior written consent of the other Party.
19. Expenses. Each Party will bear its own expenses with respect to the execution of this Agreement and the transactions contemplated thereunder, including but not limited to legal fees.
20. Authority to Contract. Each of the Parties represents and warrants that it has full right and power to enter into this Agreement, to perform all obligations to be performed by it hereunder, and to grant all rights hereunder granted without violating the legal or equitable rights of any other person or entity, and that the execution and performance of this Agreement will not conflict with or result in a breach of or default under any of the terms or conditions of any agreement to which either Party has agreed, or is a Party, or may be bound.
21. Construction of Agreement. Each Party acknowledges that it has participated in the negotiation of this Agreement and that no provision of this Agreement shall be construed against or be interpreted to the disadvantage of any Party by any court or other governmental or judicial authority by reason of such Party having or deemed to have structured, dictated or drafted such provision.
12
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
22. Merger; Modification. This Agreement constitutes the entire agreement with respect to the subject matter contained herein and supersedes all previous communications and agreements between the Parties pertaining to the subject matter hereof, whether written or oral. The terms of this Agreement may not be modified, waived, amended, discharged, terminated, or supplemented, or otherwise changed, except by a written document executed by each Party.
23. No Waiver. A waiver by either Party of any of the terms or conditions of this Agreement in any instance shall not be deemed or construed to be a waiver of such term or condition for the future, or of any subsequent breach thereof, or any other term or condition of this Agreement. All remedies, rights, undertakings, obligations, and agreements contained in this Agreement shall be cumulative and none of them shall be in limitation of any other remedy, right, undertaking, obligation or agreement of either Party.
24. Severability. If any provision of this Agreement, as applied to either Party or to any circumstance, shall be adjudged by a court of competent jurisdiction to be void or unenforceable, whether at law or in equity, then such determination shall in no way affect any other provision of this Agreement, or the validity or enforceability of this Agreement.
25. Choice of Law. This Agreement, all amendments hereto, and any and all issues or controversies arising here from or related hereto, shall be governed by and construed exclusively in accordance with the laws of the State of New York.
26. Arbitration of Disputes. The parties agree to use commercially reasonable efforts to settle amicably any controversy, or claim arising out of the Agreement or any breach thereof through a dispute resolution process involving Wade and members from the senior management of Naked. If the parties do not otherwise agree, either party may present any unresolved dispute for arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the "Rules") then in effect. Such arbitration will be held in New York, NY. The arbitration will be by a single arbitrator chosen by the parties, provided that if the parties fail to agree and to appoint a single arbitrator within twenty (20) business days from the date that one of the parties has made a demand for arbitration, then the arbitrator will be chosen in accordance with the Rules. The decision of the arbitrator will be final and binding on the parties and any award of the arbitrator may be entered in any court of competent jurisdiction.
27. Attorneys' Fees. If any action is necessary to enforce the provisions of this Agreement, including any claims or demands, or to interpret this Agreement, the prevailing Party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which it may otherwise be entitled.
28. Captions; Structure. Section headings used in this Agreement are for convenience of reference only and shall not in any way affect the interpretation of any section of this Agreement or of the Agreement itself.
29. Time is of the Essence. Time is of the essence with respect to the performance of the duties and obligations hereunder.
30. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall be construed as a single instrument. This Agreement may be executed by facsimile or other electronic transmissions, and signatures on any facsimile or electronic transmission copy hereof shall be deemed authorized original signatures.
13
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
31. No Third Party Beneficiaries. This Agreement is not for the benefit of any third party and shall be deemed not to give any right or remedy to such third party, whether referred to herein or not.
32. Recitals. The recitals contained in this Agreement are true and correct and are incorporated herein by reference.
[SIGNATURE PAGE TO FOLLOW]
14
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and date first above written.
WITNESS: Naked Brand Group, Inc. ("Naked") By: By: /s/ Carole Hochman Date: Title: WITNESS: Wade Enterprises, LLC ("Wade") By: By: /s/ Dwyane Wade Date:
15
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
Inducement Letter and Guarantee
In order to induce Naked to enter into this Agreement with Wade Enterprises, LLC, I agree to the execution and delivery of this Agreement by Wade Enterprises, LLC, and agree to render all the services herein provided to be rendered by me, to grant all the rights granted herein, and to be bound by and duly perform and observe each and all of the terms and conditions of this Agreement regarding performance or compliance on my part, and I hereby join in all warranties, representations, agreements and indemnities made by Wade Enterprises, LLC, and further confirm the rights granted to Naked under the Agreement. All notices to Wade Enterprises, LLC shall be deemed notices to me with the same effect as if given to me. I certify that my services are rendered as an employee of Wade Enterprises, LLC, and, unless substituted for Wade Enterprises, LLC by law, I agree to look solely to Wade Enterprises, LLC for payment of compensation for my services and the discharge all other obligations of an employer, subject to the terms of the Agreement.
By: /s/ Dwyane Wade Name: Dwyane Wade Date: NAKED BRAND GROUP, INC. By: /s/ Carole Hochman Name: Date:
16
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
SCHEDULE A
WADE TRADEMARKS AND COPYRIGHTS
Wade's Asterisk Logo
17
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
18
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
SCHEDULE B
[***]
19
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
Exhibit 10.75
COLLABORATION & ENDORSEMENT AGREEMENT
THIS COLLABORATION & ENDORSEMENT AGREEMENT (the "Agreement") is dated as of this 15th day of June, 2015 ("Effective Date"), between The Naked Brands Group, Inc., a Delaware corporation ("Naked"), and Wade Enterprises, LLC ("Wade Enterprises"), an Alaska limited liability company f/s/o Dwyane Wade ("Athlete" and together with Wade Enterprises, collectively "Wade"). Wade Enterprises, Athlete and together with Naked, are each referred to herein as a "Party" and collectively, the "Parties".
AGREEMENT
1. Engagement. Naked hereby engages Wade for collaboration in business development for, and his endorsement as set forth herein of, the following items, which shall be known herein as "Innerwear": Briefs, trunks, boxer briefs and boxers, non-athletic undershirts (i.e., t-shirts intended to be worn as innerwear and not intended specifically for athletic purposes), non-athletic lounge apparel (bottoms and tops), sleepwear (including pajama bottoms and tops), and robes (as may be expanded to include other mutually agreed upon innerwear and lounge apparel) which may now or hereafter during the Term be manufactured, distributed, marketed and/or sold by Naked (collectively, the "Naked Products"), and Wade hereby accepts such engagement. The Parties agree that the territory of such engagement shall be worldwide (the "Territory").
2. Term of Agreement. The initial term of this Agreement shall be for a period of four (4) years, commencing on the Effective Date, which term may be extended for up to three (3) years by written agreement of both Parties prior to the expiration date of the initial term or any extension thereof (collectively, the "Term"). Each twelve-month period beginning on the Effective Date shall be known as a "Contract Year." In the event that either Wade or Naked wishes to extend the Term of the Agreement as contemplated above, it shall provide the other Party with written notice at least ninety (90) days prior to the expiration of the Term. The other Party will then have a period of fourteen (14) days from the date of the notice to indicate whether it also desires to extend the Term, on the terms and conditions set forth herein and if no such indication is made, the other Party will be deemed to have declined the offer to extend. Notwithstanding the foregoing, Wade agrees that for a period of ninety (90) days prior to the expiration of the Term (unless the Agreement is terminated by Wade as permitted hereunder), Naked shall have the exclusive right to negotiate for continued endorsement by Athlete of the Naked Products. For a period of six (6) months at the end of the Term (the "Sell-off Period"); provided that the Agreement was not terminated by Wade as permitted herein, Naked will have the right to continue to sell the Wade Products (defined below) for which orders have already been placed at the end of the Term on the terms and conditions herein.
3. Use of Wade Image.
During the Term and subject to the limitations set forth in this Agreement, Naked shall have an exclusive right and license in the Territory to use Athlete's name, nickname, initials, autograph, image, likeness, photographs, biographical details, facsimile signature, voice, videos, electronic media depictions, any words, symbols or other depictions, as well as any other identifying attributes that would identify Athlete to the public, including any trade mark(s), copyrights which Wade has, as set forth on Schedule A attached hereto, and all multimedia assets that Wade owns or has right to use (collectively, the "Wade Image") solely for the advertising, endorsement, promotion, or sale of the Naked Products (including the Wade Products) in the Territory as follows:
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
(1) On Naked's website(s) ("Website");
(2) In social media channels, including, but not limited to Facebook, Instagram, Twitter, YouTube, Google+, Tumblr and other mutually agreeable channels, with reasonable frequency, to promote Naked Products and Wade Products;
(3) In marketing and media opportunities in connection with the Wade Services (as defined below); and
(4) For use on the packaging of the Naked Products and Wade Products and on Wade Products themselves.
All uses of Wade Image in connection with this Agreement shall be subject to the prior written approval of Wade, which Wade shall not unreasonably withhold. Naked agrees to submit to Wade or its authorized agent a copy of all new promotional and/or advertising material using Wade Image at least ten (10) days prior to the release to the general public. Wade and its authorized agent agree that they shall not unreasonably withhold such approval. In the absence of disapproval within three (3) business days of Wade's or authorized agent's receipt of a request for approval, said advertising or promotional material shall be deemed approved. Any such usage featuring Athlete shall be and remain the property of Naked except as otherwise set forth herein; however, Naked shall have the right to such use only during the Term. Wade may use said materials in whole or in part for Wade's personal portfolio, website or otherwise. Such usage may not be sold or transferred. For the avoidance of doubt, that certain logo designed by Athlete prior to the date hereof (the "Logo") shall remain the sole property of Wade and Naked shall have license during the Term to use the Logo for the advertising, endorsement, promotion, or sale of the Naked Products (including the Wade Products) in the Territory in accordance with the terms and conditions of the Agreement. During the Sell-off Period, Naked shall have the license to use the Logo solely on packaging and presentation of Wade Products already offered for sale at retail outlets or on-line in accordance with the terms and conditions of the Agreement.
Wade will allow Naked to use any quotes that are attributed to Wade to promote the Naked Products and Wade Products in any advertising campaign. Wade will allow Naked to use any such attributed quotes that Naked requires to promote the Naked Products and Wade Products, subject to Wade's right to approve such quotes in writing, which approval shall not be unreasonably withheld.
The Parties acknowledge and agree that Athlete's accomplishments and recognition as an outstanding basketball player, individual and fashion icon, as well as his character, fame, likeness, image and reputation are the essence of this Agreement.
Wade hereby warrants that he is not a party to any agreement, contract or understanding which would prevent, limit or hider his performance of any of the obligations under this Agreement, provided that Naked acknowledges that it is aware of Athlete's obligations under his existing endorsement agreement with Li Ning for athletic shoes and athletic apparel and nothing herein shall obligate Athlete to endorse any athletic apparel other than Li Ning's.
2
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
4. Exclusivity. Wade agrees that during the Term of this Agreement, he will not represent or perform as a representative, spokesperson or provide Wade Services for, nor furnish services or materials, or allow the use of the Wade Image to be used for the advertising, endorsement, promotion, or sale of Innerwear in the Territory. Furthermore, Wade will not engage in any business or other transaction or have any financial or personal interest in any entity whose primary or core business is selling or manufacturing Innerwear during the Term. Endorsement of any Innerwear other than the Naked Products or Wade Products without the express written consent of Naked will constitute a material breach of this Agreement.
5. Wade Services. During the Term and subject to the limitations set forth in this Agreement, Wade agrees to provide Naked with the following services (collectively, the "Wade Services"):
A. During the first Contract Year, Wade will be available for (i) one production day for the purpose of creating marketing assets for Naked Products for unlimited use in advertisements and the media and (ii) one production day for creating marketing assets for Wade Products and Naked Products for unlimited use in advertisements and the media, each as permitted herein. Wade shall be available to render services at such production day for a maximum of three (3) consecutive hours, not including scheduled breaks, during each such production day period; provided that, in the event an additional production day is reasonably required for the creation of marketing assets related to the Wade Product packaging, Athlete will be available to render services for up to an additional three (3) hours in either the first Contract Year or the second Contract Year but not both. The scheduling and content of said production days shall be mutually determined by Wade and Naked, subject to Wade's professional availability;
B. Beginning in the second Contract Year, Wade will be available for a maximum of one (1) production day for creating marketing assets for Wade Products and Naked Products for unlimited use in advertisements and the media, for a maximum of three (3) consecutive hours, not including scheduled breaks, during such production day period. The scheduling and content of said production days shall be mutually determined by Wade and Naked, subject to Wade's professional availability;
C. During each Contract Year, Wade will be available for two (2) personal appearances (each, a "Personal Appearance") on behalf of Naked and the Naked Products and Wade Products in the media, including publicity shoots, interviews, print, television, radio and social media channels, each appearance for a maximum of sixty (60) consecutive minutes to be scheduled at a time mutually agreeable to Naked and Wade;
Wade has rights to websites or other social media channels promoting himself or any other promotional activity that is independent of this Agreement ("Independent Promotions"), including Wade's Facebook, Instagram, Twitter and Google+ channels and Wade's YouTube channel. Wade agrees, to generously and positively promote Naked Products and Wade Products in any such Independent Promotions on a mutually agreed upon basis with reasonable frequency and in a manner consistent with drawing attention to the Wade/Naked relationship and promoting the Naked Products and Wade Products. Naked, in its sole and absolute discretion, may preview all references and other such materials referring to Naked in the Independent Promotions prior to the public dissemination of such Independent Promotions. Wade agrees to immediately remove all such materials in his Independent Promotions that Naked, in its sole and absolute discretion requests be removed. Naked has the right to request such removals at any time, even if Naked previously approved the Independent Promotions, and Naked agrees that all social media promotions it requests of Athlete shall comply with all applicable rules and regulations. Naked may also provide material regarding the Naked Products and Wade Products to Wade, and Wade agrees to include such materials in his Independent Promotions; and
3
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
E. Wade is currently engaged in partnerships whereby its partners are selling and distributing other Athlete endorsed products. Wade will use reasonable efforts to facilitate an introduction to Naked to existing sales and distributions channels and accounts.
F. Naked may reasonably request an additional production session(s), or a media tour or personal appearance(s), subject to mutual agreement by the Parties.
At all Personal Appearances, Wade will be available to sign a reasonable number of photographs, autographs, and any other items requested by and provided by Naked at its sole cost and expense, which Naked will have the right to distribute as giveaways but never for sale. If requested, Wade will pass out a reasonable number of samples of the Wade Product. Wade will also permit himself to be reasonably photographed at the Personal Appearances with customers and fans.
6. Commercial Materials. The results of the production days listed in subsections A and B in Section 5 may be used solely for the promotion of the Naked Products (including the Wade Products) and are hereinafter referred to individually and collectively as the "Commercial Materials." Wade shall have the right of prior written approval with respect to his photographs, likeness and statements. During the Term, Naked shall have the right in the Territory to the unlimited broadcast use and re-use of the Commercial Materials in the Territory. During the Term, Naked shall have the right in the Territory to use the Wade Image in the Commercial Materials, for publication and display, as Naked shall in its sole discretion determine, in print magazines, including but not limited to, point-of-sale material, product packaging, Naked's Annual Report, other shareholder communications, internal sales and marketing pieces, as well as the right to use the same at meetings held or attended by Naked or for trade purposes. Naked shall have the right at any time during the term of this Agreement to make any revision or versions of all or any part of the Commercial Materials to conform to the requirements of individual markets as Naked may desire, subject to Wade's reasonable approval as aforesaid. Naked may also propose to use the Commercial Materials as part of cooperative advertising and retail tie in promotions subject to Wade's prior written approval which shall not be unreasonably withheld, provided that withholding approval because a potential tie in conflicts with one of Athlete's existing sponsors shall not be deemed unreasonable. Notwithstanding the foregoing, in no case shall the Commercial Materials feature any commercial tie in or other use that could be perceived as an endorsement by Athlete of any products or services other than the Naked Products. Naked shall comply with all applicable rules and regulations (including the NBA's) in its use of the Commercial Materials hereunder.
7. Design of Wade Products.
Naked and Wade (either Athlete or a team and/or agent and/or designer designated by Athlete, referred to as the "Wade Team") agree to collaborate on the design and manufacture of a new line of Innerwear under the brand "Wade By Naked" or such other brand name as the Parties agree (collectively, the "Wade Products"). Athlete will have the title of "Creative Director" for the Wade Products, which title shall be featured on the Commercial Materials. During the Term and subject to the limitations set forth in this Agreement, the Wade Team and Naked agree that the process for approving designs for Wade Products will be as follows:
4
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
(1) Naked will develop detailed designs for each Wade Product, which shall include rough drawings, to be provided to Wade for review and comment;
(2) The Wade Team will provide Naked with comments on such designs within ten (10) days after they are provided to the Wade Team;
(3) Upon receipt of the Wade Team's comments, Naked will review such comments and work diligently to incorporate them into the design within commercial reason and thereafter, develop and create a prototype for such Wade Product for the Wade Team's approval;
(4) Within ten (10) days after the Wade Team's receipt of the prototype either in hand or via a photograph by email, the Wade Team shall review the prototype and provide any additional comments; and
(5) Upon the Wade Team's written approval of a prototype, such Wade Product will be considered approved for production (the "Production Approval").
(6) In addition to the foregoing Wade Products, Naked shall have the right to produce and distribute, on a non-exclusive basis, printed or branded tee-shirts subject to Wade's existing endorsement agreements.
The Wade Team and Naked will collaborate to establish a mutually acceptable marketing campaign for Wade Products, and will schedule regular phone calls, video conferences, and/or other meetings to timely complete development of Wade Products.
8. Royalties. As consideration for Wade's services under this Agreement, Naked will pay Wade royalties as follows:
A. Royalties. Naked will report, and Wade will be paid, royalty payments at [***]
5
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
B. Payment Terms. Wade Product Royalties described above in Section 8A will be paid on a quarterly basis on the first day of each of the months of July, October, January, and April and shall be accompanied by backup documentation reasonably satisfactory to Wade.
C. [***]
D. Withholding Taxes. Wade will be solely responsible for withholding and paying any and all federal, state and local taxes, including but not limited to payroll, unemployment, social security and income taxes and any other payments which may be owed by Wade as a result of or in connection with payments made by Naked for Wade Services rendered under this Agreement. Wade acknowledges that he is not qualified for and will not receive any Naked employment benefits or other incidents of employment as a result of the Agreement.
E. Equity Ownership. Wade is hereby granted a warrant (the "Grant Warrant") exercisable for a period of seven (7) years from the date of issuance for the number of shares of Common Stock equal to [***] shares of Common Stock (the "Wade Grant"), subject to the following terms:
(1) Exercise Price. The Grant Warrant will have an exercise price equal to the then-fair market value per share of Common Stock as quoted on the OTCQB as of the Effective Date (the "FMV Exercise Price"). The form of the Grant Warrant shall be agreed to by the Parties.
(2) Vesting Schedule. The Grant Warrant will become exercisable for: (a) fifty percent (50%) of the Wade Grant on the one year anniversary of the Effective Date (the "First Installment"); (b) twenty-five percent (25%) of the Wade Grant on the second anniversary of the Effective Date (the "Second Installment"); and (c) the remaining twenty-five percent (25%) of the Wade Grant will vest on the third anniversary of the Effective Date (the "Third Installment" and together with the First Installment and the Second Installment, the "Installments" and each an "Installment"); provided however, that in the event of a change of control of Naked, the entire unvested portion of the Grant Warrant will immediately vest. For purposes hereof, a "change of control" shall mean the sale of at least fifty percent (50%) of the assets of Naked, a merger or consolidation of Naked with, by or into another entity, or a change in the ownership of more than fifty percent (50%) of the voting capital stock of Naked in one or more related transactions.
6
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
(3) Exercise Upon Termination of the Agreement. In the event that the Agreement is terminated in accordance with Section 12A, than the [***] term of the Grant Warrant [***] shall expire ninety (90) days thereafter. [***]
(6) Designee of Wade Grant. Pursuant to the request of Wade, Naked shall issue [***] to Wade's exclusive representative, CAA Sports LLC. This grant shall be issued pursuant to the same terms and conditions as the Wade Grant, with the exception of the terms of [***].
(7) [***]
7
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
(8) Grant Documents. All warrants referenced herein shall be issued pursuant to separate, mutually negotiated grant documents, which shall contain all the terms referenced herein and shall be negotiated and executed promptly after the execution of the Agreement.
9. Board Membership.
A. Advisory Board. Upon entering into this Agreement, Athlete will join the Advisory Board of Naked ("Advisory Board"). As a member of the Advisory Board, Athlete agrees to the following:
(1) Athlete will participate in at least one (1) scheduled Advisory Board meeting by phone or in-person, provided that such meeting is held in Miami on a date acceptable to Wade.
(2) Athlete will provide Naked with access to Wade's contacts and Wade's expertise and breadth of experience as it pertains to the business of Naked;
(3) Wade will provide any reasonable additional assistance as may be mutually agreed upon by Naked and Wade from time to time; and
(4) Wade grants Naked the right to publicly identify Wade as a member of the Advisory Board, Creative Director, Stockholder, and Partner of Naked, and in the event that Wade joins the Board, as Director, and may include his name and biography in materials published by Naked, including any prospectus or offering materials or to publish any other information regarding Wade in any documents required to be filed pursuant to applicable laws and regulations.
B. Board of Directors. Further, Athlete will have the option in his sole discretion of becoming a member of the Board of Directors of Naked (the "Board") (for a period of eighteen (18) months commencing on the Effective Date and provided that the Agreement has not been terminated). If Athlete elects to become a member of the Board, he must satisfy the following requirements on an annual basis:
(1) Wade will participate in at least four (4) scheduled board meetings, two (2) of which Wade must attend in-person, provided that at least one meeting is held in Miami, FL or, if no such meeting is held in Miami, FL then one (1) meeting if all meetings are held in New York, NY or another location. Subject to legal compliance requirements, Wade may designate an individual acceptable to Naked serve as his representative to the meetings of the Board;
(2) Wade will attend, subject to his availability in his sole discretion, fundraising events and meetings with potential investors, placement agents and representatives of the same at the request of Naked to be scheduled at the convenience of each of Naked and Wade;
If, while serving on the Board Wade does not satisfy any of the above-listed requirements on more than one (1) occasion, the other members of the Board may remove Wade from the Board upon written notice to Wade.
8
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
10. Wade Obligations. During the Term of this Agreement, Athlete agrees to comply with the following obligations:
A. Comply with all rules and regulations of the National Basketball Association and its governing bodies rules and regulations;
B. Not do anything which damages Wade's name, reputation, or image in the eyes of a reasonable observer;
C. Exercise reasonable constraints to avoid taking any actions which damages Naked, its name, reputation, image, the Naked Products and Wade Products;
D. When promoting the Naked Products or Wade Products, mention when appropriate the name of Naked and/or the Naked Products and Wade Products in interviews with the press, social media channels and broadcast media;
E. Wear the Naked Products and/or Wade Products when appropriate and refrain from wearing any other Innerwear products that would be visible to the public.
11. Non-compete; Confidentiality. Wade represents and warrants that during the Term and in the Territory, neither Wade nor any of his agents, representatives or employees will solicit, initiate, or encourage any proposal for an endorsement by Wade of any Innerwear to commence during the Term, or participate in any discussions or negotiations for the same. Wade will execute a non-disclosure and confidentiality agreement in a form mutually acceptable to each of Wade and Naked.
12. Termination.
A. Naked shall have the right to terminate this Agreement upon ten (10) days prior written notice to Wade in the event Wade fails to perform the Wade Services or breaches any other covenant or agreement set forth herein (including the essence of this Agreement), and fails to cure same (if curable) within seven (7) days of receipt of written notice. Such termination shall relieve Naked of its obligation to provide any further consideration pursuant to this Agreement provided that Wade shall retain all warrants he has received hereunder that have vested as of the date of such termination. In the event of such termination as a result of a material breach of this Agreement by Wade (i) Wade's contractual liabilities and obligations until the date of termination still exist notwithstanding such termination, (ii) Naked shall be under no obligation to sell any Wade Products but shall nevertheless owe the Royalty on any Wade Products sold; and (iii) notwithstanding anything to the contrary herein, Wade shall forfeit all warrants he has received hereunder. Naked shall not have waived any of its rights at law or in equity by exercising any provision of this section.
B. Wade shall have the right to terminate this Agreement upon ten (10) days prior written notice to Naked in the event of the occurrence of any of the following: (i) Naked is adjudicated as insolvent or declares bankruptcy; or (ii) Naked fails to provide consideration due pursuant to this Agreement, within ten (10) days following the date such consideration is due hereunder (or, if Wade elects to receive stock in lieu of the cash consideration, if Naked fails to instruct its transfer agent to issue the appropriate amount of Common Stock to Wade within ten (10) days following the date such consideration is due in the event such consideration is payable in Common Stock); provided that Naked is notified in writing of such non-payment by Wade and such payment by Naked is not made within three (3) days following such notification; or (iii) Naked breaches any covenant or agreement set forth herein and fails to cure same (if curable) within seven (7) days of receipt of written notice. Furthermore, Naked agrees that such termination shall not relieve it of its obligation to provide consideration as contemplated hereunder. Wade shall not have waived any of his rights at law or in equity by exercising any provision of this section.
9
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
C. The Agreement shall be deemed terminated if neither Naked nor Wade elect to extend the Agreement as set forth in Section 2 hereof.
D. Naked's rights to the use of Wade Image shall end immediately should this Agreement be terminated pursuant to Section 12(A) or Section 12(B) above.
13. Notices. All notices provided for herein shall be given in writing by hand delivery, courier service, or by certified mail return receipt requested to the addresses of the Parties set forth as follows (unless change of address by notice to the other Party is given as provided in this Section 13):
If to Wade: If to Naked: CAA Sports LLC Naked Brand Group, Inc. 405 Lexington Avenue, 19th Floor 10th Floor - 95 Madison Avenue New York, NY 10174 New York, NY 10016 Attn: Lloyd Frischer Attn: Joel Primus With a copy to: With a copy to: Andrew B. Latack, Esq. Duane Morris LLP at the same address 1540 Broadway, 14th Floor New York, NY 10036 Attn: Nanette C. Heide, Esq.
14. Intellectual Property.
All rights to the use of the names, trademarks, service marks, symbols, logos, domain names, trade secrets, confidential know-how, patents, copyrights, any pending applications with respect to any of the foregoing, and any other intellectual property and related proprietary rights, interests and protections ("Intellectual Property Rights") in connection with Wade Products will be jointly owned by Wade and Naked. Wade will retain all ownership of the Intellectual Property Rights in connection with Wade Image including, for the avoidance of doubt, the Logo. For the avoidance of doubt, no rights are being granted hereunder to any intellectual property belonging to the NBA or its member clubs (including but not limited to the Miami Heat).
Subject to Section 14A, Naked will retain all ownership of the Intellectual Property Rights in connection with the Naked Products, the Naked brand and any and all related brands. All advertising material produced hereunder will be and remain the absolute property of Naked. Wade acknowledges that he does not now have and in the future will assert no right, title or interest of any kind or nature whatsoever therein, or in or to any component part or tape, dub or copy or element or character or characterization thereof.
10
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
15. Representations and Warranties of Naked and Wade.
A. Wade relies upon Naked's skill and judgment and also upon the following representations of Naked which shall be in effect throughout the term of this Agreement:
(1) Naked's products will be merchantable and fit for the purpose for which they are intended, and
(2) Naked's products will conform at all times to all applicable federal, state and local laws, rules, regulations, ordinances, and other enactments and industry standards, including, but not limited to, those relating to product safety.
B. Wade Enterprises and Athlete hereby jointly and severally represent to Naked the following:
(1) Authorization. Wade Enterprises is an entity duly organized and validly existing in good standing under the laws of its jurisdiction of organization. Wade Enterprises and Athlete each have the requisite power and authority to enter into, execute and deliver the Agreement to which it is a party and to perform all of the obligations to be performed by each of them hereunder. The Agreement and the obligations and transactions contemplated hereby have been, duly authorized, executed and delivered by each of them, and the Agreement constitutes each of their valid and binding obligation, enforceable against such Party in accordance with its terms.
(2) No Conflicts. Neither the execution and delivery of this Agreement nor the performance or consummation of the transactions contemplated hereby or thereby by either Wade Enterprises or Athlete will conflict with, result in the breach of, constitute a default under or accelerate the performance required by the terms of: (i) any law, rule or regulation of any government or governmental or regulatory agency; (ii) any judgment, order, writ, decree, permit or license of any court or governmental or regulatory agency to which such Party may be subject; (iii) any contract, agreement, commitment or instrument to which Wade Enterprises or Athlete is a party; or (iv) Wade Enterprises' constituent documents or other governing instruments (or constitute an event which, with the passage of time or action by a third party, would result in any of the foregoing). The execution and delivery of this Agreement by Wade Enterprises and Athlete and the performance and consummation of the transactions contemplated hereby do not require any registration, filing, qualification, consent or approval under any material law, rule, regulation, judgment, order, writ, decree, permit or license to which such Party is subject.
16. Indemnity.
Naked shall be solely responsible for all liability arising out of production, distribution and sale of its product. Naked hereby agrees to indemnify, defend and hold harmless Wade Enterprises, Athlete, his agents, representatives and employees (referred to collectively as "Wade Indemnities") from and against any and all claims, actions, causes or action, damages, injuries, expenses, liabilities (joint and several), penalties fines, attorneys' fees, court costs, and any other expenses incurred by Wade Indemnities arising out of (1) breach by Naked of any of the terms, representations or warranties made by Naked in this Agreement; or (2) Naked product liability or trademark patent or other proprietary right infringement; or (3) errors, omissions, fraudulent or negligent acts by Naked, its employees, agents or subcontractors in connection with (i) any advertising featuring Athlete; (ii) the performance of Naked's duties and obligations under this Agreement; (iii) the production, distribution, promotion, marketing and sales of products including related product packaging; and/or (iv) the operation and management of its production and distribution facilities, however caused. Naked shall not be obligated to indemnify Wade with respect to damages which are the result of the gross negligence or willful misconduct of Wade.
11
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
Athlete and Wade Enterprises, jointly and severally, hereby agree to indemnify, defend and hold harmless Naked, its shareholders, directors, officers, employees, agents, and affiliates (referred to collectively as "Naked Indemnities") from and against any and all claims, actions, causes or action, damages, injuries, expenses, liabilities (joint and several), penalties fines, attorneys' fees, court costs, and any other expenses incurred by Naked Indemnities arising out of or are in any way connected directly or indirectly with any and all claims, suits, actions, costs, and other expenses, fines, judgments, investigations, proceedings, demands, liabilities, and obligations of any nature whatsoever, with respect to Wade Enterprises' or Athlete's breach of its respective representations and warranties, uncured breach of this Agreement or Athlete's gross negligence or willful misconduct.
17. Relationship of Parties. Nothing contained in this Agreement shall be deemed or construed to place the Parties in the relationship of partners, joint venturers, principal-agents, or employer-employee, it being understood that the Parties are and will remain independent contractors in all respects and neither Party shall have any right to obligate or bind the other in any manner whatsoever.
18. Assignment. Neither this Agreement nor any of the rights or obligations contained herein may be assigned or transferred by either Party without the prior written consent of the other Party.
19. Expenses. Each Party will bear its own expenses with respect to the execution of this Agreement and the transactions contemplated thereunder, including but not limited to legal fees.
20. Authority to Contract. Each of the Parties represents and warrants that it has full right and power to enter into this Agreement, to perform all obligations to be performed by it hereunder, and to grant all rights hereunder granted without violating the legal or equitable rights of any other person or entity, and that the execution and performance of this Agreement will not conflict with or result in a breach of or default under any of the terms or conditions of any agreement to which either Party has agreed, or is a Party, or may be bound.
21. Construction of Agreement. Each Party acknowledges that it has participated in the negotiation of this Agreement and that no provision of this Agreement shall be construed against or be interpreted to the disadvantage of any Party by any court or other governmental or judicial authority by reason of such Party having or deemed to have structured, dictated or drafted such provision.
12
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
22. Merger; Modification. This Agreement constitutes the entire agreement with respect to the subject matter contained herein and supersedes all previous communications and agreements between the Parties pertaining to the subject matter hereof, whether written or oral. The terms of this Agreement may not be modified, waived, amended, discharged, terminated, or supplemented, or otherwise changed, except by a written document executed by each Party.
23. No Waiver. A waiver by either Party of any of the terms or conditions of this Agreement in any instance shall not be deemed or construed to be a waiver of such term or condition for the future, or of any subsequent breach thereof, or any other term or condition of this Agreement. All remedies, rights, undertakings, obligations, and agreements contained in this Agreement shall be cumulative and none of them shall be in limitation of any other remedy, right, undertaking, obligation or agreement of either Party.
24. Severability. If any provision of this Agreement, as applied to either Party or to any circumstance, shall be adjudged by a court of competent jurisdiction to be void or unenforceable, whether at law or in equity, then such determination shall in no way affect any other provision of this Agreement, or the validity or enforceability of this Agreement.
25. Choice of Law. This Agreement, all amendments hereto, and any and all issues or controversies arising here from or related hereto, shall be governed by and construed exclusively in accordance with the laws of the State of New York.
26. Arbitration of Disputes. The parties agree to use commercially reasonable efforts to settle amicably any controversy, or claim arising out of the Agreement or any breach thereof through a dispute resolution process involving Wade and members from the senior management of Naked. If the parties do not otherwise agree, either party may present any unresolved dispute for arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the "Rules") then in effect. Such arbitration will be held in New York, NY. The arbitration will be by a single arbitrator chosen by the parties, provided that if the parties fail to agree and to appoint a single arbitrator within twenty (20) business days from the date that one of the parties has made a demand for arbitration, then the arbitrator will be chosen in accordance with the Rules. The decision of the arbitrator will be final and binding on the parties and any award of the arbitrator may be entered in any court of competent jurisdiction.
27. Attorneys' Fees. If any action is necessary to enforce the provisions of this Agreement, including any claims or demands, or to interpret this Agreement, the prevailing Party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which it may otherwise be entitled.
28. Captions; Structure. Section headings used in this Agreement are for convenience of reference only and shall not in any way affect the interpretation of any section of this Agreement or of the Agreement itself.
29. Time is of the Essence. Time is of the essence with respect to the performance of the duties and obligations hereunder.
30. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall be construed as a single instrument. This Agreement may be executed by facsimile or other electronic transmissions, and signatures on any facsimile or electronic transmission copy hereof shall be deemed authorized original signatures.
13
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
31. No Third Party Beneficiaries. This Agreement is not for the benefit of any third party and shall be deemed not to give any right or remedy to such third party, whether referred to herein or not.
32. Recitals. The recitals contained in this Agreement are true and correct and are incorporated herein by reference.
[SIGNATURE PAGE TO FOLLOW]
14
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and date first above written.
WITNESS: Naked Brand Group, Inc. ("Naked") By: By: /s/ Carole Hochman Date: Title: WITNESS: Wade Enterprises, LLC ("Wade") By: By: /s/ Dwyane Wade Date:
15
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
Inducement Letter and Guarantee
In order to induce Naked to enter into this Agreement with Wade Enterprises, LLC, I agree to the execution and delivery of this Agreement by Wade Enterprises, LLC, and agree to render all the services herein provided to be rendered by me, to grant all the rights granted herein, and to be bound by and duly perform and observe each and all of the terms and conditions of this Agreement regarding performance or compliance on my part, and I hereby join in all warranties, representations, agreements and indemnities made by Wade Enterprises, LLC, and further confirm the rights granted to Naked under the Agreement. All notices to Wade Enterprises, LLC shall be deemed notices to me with the same effect as if given to me. I certify that my services are rendered as an employee of Wade Enterprises, LLC, and, unless substituted for Wade Enterprises, LLC by law, I agree to look solely to Wade Enterprises, LLC for payment of compensation for my services and the discharge all other obligations of an employer, subject to the terms of the Agreement.
By: /s/ Dwyane Wade Name: Dwyane Wade Date: NAKED BRAND GROUP, INC. By: /s/ Carole Hochman Name: Date:
16
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
SCHEDULE A
WADE TRADEMARKS AND COPYRIGHTS
Wade's Asterisk Logo
17
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
18
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015
Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended.
SCHEDULE B
[***]
19
Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 | Highlight the parts (if any) of this contract related to "Third Party Beneficiary" that should be reviewed by a lawyer. Details: Is there a non-contracting party who is a beneficiary to some or all of the clauses in the contract and therefore can enforce its rights against a contracting party? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Parties" that should be reviewed by a lawyer. Details: The two or more parties who signed the contract
Context: Exhibit 10.2
Execution Version
INTELLECTUAL PROPERTY AGREEMENT
This INTELLECTUAL PROPERTY AGREEMENT (this "Agreement"), dated as of December 31, 2018 (the "Effective Date") is entered into by and between Armstrong Flooring, Inc., a Delaware corporation ("Seller") and AFI Licensing LLC, a Delaware limited liability company ("Licensing" and together with Seller, "Arizona") and AHF Holding, Inc. (formerly known as Tarzan HoldCo, Inc.), a Delaware corporation ("Buyer") and Armstrong Hardwood Flooring Company, a Tennessee corporation (the "Company" and together with Buyer the "Buyer Entities") (each of Arizona on the one hand and the Buyer Entities on the other hand, a "Party" and collectively, the "Parties").
WHEREAS, Seller and Buyer have entered into that certain Stock Purchase Agreement, dated November 14, 2018 (the "Stock Purchase Agreement"); WHEREAS, pursuant to the Stock Purchase Agreement, Seller has agreed to sell and transfer, and Buyer has agreed to purchase and acquire, all of Seller's right, title and interest in and to Armstrong Wood Products, Inc., a Delaware corporation ("AWP") and its Subsidiaries, the Company and HomerWood Hardwood Flooring Company, a Delaware corporation ("HHFC," and together with the Company, the "Company Subsidiaries" and together with AWP, the "Company Entities" and each a "Company Entity") by way of a purchase by Buyer and sale by Seller of the Shares, all upon the terms and condition set forth therein;
WHEREAS, Arizona owns certain Copyrights, Know-How, Patents and Trademarks which may be used in the Company Field, and in connection with the transactions contemplated by the Stock Purchase Agreement the Company desires to acquire all of Arizona's right, title and interest in and to such Intellectual Property used exclusively in the Company Field, and obtain a license from Arizona to use other such Intellectual Property on the terms and subject to the conditions set forth herein;
WHEREAS, Seller is signatory to the Trademark License Agreement pursuant to which Seller obtains a license to the Arizona Licensed Trademarks;
WHEREAS, the Company desires to obtain a sublicense to use the Arizona Licensed Trademarks in the Company Field;
WHEREAS, Arizona has obtained consent from all counterparties to the Trademark License Agreement to grant to the Company the sublicenses to the Arizona Licensed Trademarks included in this Agreement; and
WHEREAS, the Company Entities own certain Copyrights and Know-How which may be used in the Arizona Field, and in connection with the transactions contemplated by the Stock Purchase Agreement, Arizona desires to obtain a license from the Company Entities to use such Intellectual Property on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements, provisions and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
1. DEFINITIONS AND INTERPRETATION 1.1 Certain Definitions. As used herein, capitalized terms have the meaning ascribed to them herein, including the following terms have the meanings set forth below. Capitalized terms that are not defined in this Agreement shall have the meaning set forth in the Stock Purchase Agreement. (a) "Arizona Assigned Copyrights" means all Copyrights, whether registered or unregistered, owned by Licensing or Seller as of the Effective Date and used or held for use exclusively in the Company Field as of November 14, 2018 (the "SPA Signing Date") and/or as of the Effective Date. (b) "Arizona Assigned Internet Domain Names" means the Internet domain names set forth on Schedule 1.1(b) and all other Internet domain names owned by Licensing or Seller as of the Effective Date and used or held for use exclusively in the Company Field as of the SPA Signing Date and/or as of the Effective Date (other than any Internet domain names that include any Arizona Licensed Trademarks). (c) "Arizona Assigned IP" means the Arizona Assigned Copyrights, Arizona Assigned Internet Domain Names, Arizona Assigned Know- How, Arizona Assigned Patents and Arizona Assigned Trademarks. (d) "Arizona Assigned Know-How" means all Know-How owned by Licensing or Seller as of the Effective Date and used or held for use exclusively in the Company Field as of the SPA Signing Date and/or as of the Effective Date. (e) "Arizona Assigned Patents" means the Patents set forth on Schedule 1.1(e) and all other Patents owned by Licensing or Seller and used or held for use exclusively in the Company Field as of the SPA Signing Date and/or as of the Effective Date. (f) "Arizona Assigned Trademarks" means the Trademarks set forth on Schedule 1.1(f) and all other Trademarks owned by Licensing or Seller as of the Effective Date and used or held for use exclusively in the in the Company Field as of the SPA Signing Date and/or as of the Effective Date (other than, for clarity any Arizona Licensed Trademarks). (g) "Arizona Domain Names" means the Internet domain names set forth on Schedule 1.1(g). (h) "Arizona Field" means all activities conducted by Arizona or its Affiliates, other than the Company Field. (i) "Arizona Licensed Copyrights" means all Copyrights owned by Licensing or Seller or their respective Affiliates, as of the Effective Date and used or held for use in the Company Field during the five (5) years prior to the Effective Date (other than the Arizona Assigned Copyrights). 2
(j) "Arizona Licensed IP" means the Arizona Licensed Copyrights, the Arizona Licensed Know-How, the Arizona Licensed Patents, the Arizona Licensed Trademarks, the Diamond Licensed Trademarks and the Phase-Out Marks. (k) "Arizona Licensed Know-How" means all Know-How owned by Licensing or Seller or their respective Affiliates, as of the Effective Date and used or held for use in the Company Field during the five (5) years prior to the Effective Date (other than the Arizona Assigned Know- How). (l) "Arizona Licensed Patents" means the Patents set forth on Schedule 1.1(l) and all other Patents owned by Licensing or Seller or their respective Affiliates as of the Effective Date and used or held for use in the Company Field during the five (5) years prior to the Effective Date (other than the Arizona Assigned Patents). (m) "Arizona Licensed Trademarks" means the Trademarks set forth on Schedule 1.1(m). (n) "Arizona Trademark License Term" means the period commencing on the Effective Date and ending twenty-four (24) months thereafter. (o) "Company Field" means the design, development, manufacture, marketing, promotion, advertising, sourcing, distribution and sale of solid hardwood and engineered wood flooring products by or for any Company Entity. (p) "Company Licensed Copyrights" means all Copyrights and registrations and applications for any of the foregoing owned by any Company Entity as of the Effective Date and used or held for use in the Arizona Field as of the Effective Date. (q) "Company Licensed IP" means the Company Licensed Copyrights, the Company Licensed Know-How and the Company Licensed Patents. (r) "Company Licensed Know-How" means all Know-How owned by any Company Entity as of the Effective Date and used or held for use in the Arizona Field as of the Effective Date. (s) "Company Licensed Patents" means the Patents set forth on Schedule 1.1(s). (t) "Copyrights" means copyrights (whether registered or unregistered) including applications for copyright (excluding, for clarity, Trademarks). (u) "Diamond Licensed Trademarks" means the Trademarks set forth on Schedule 1.1(u). (v) "Diamond Product" means the design, development, manufacture, marketing, promotion, advertising, sourcing, distribution and sale of the solid hardwood flooring product by any Company Entity as conducted under the Diamond Licensed Trademarks by any Company Entity prior to the Effective Date 3
(including the composition of coating used with respect to such solid hardwood flooring product). (w) "Diamond Trademark License Term" means the period commencing on the Effective Date and ending eighteen (18) months thereafter. (x) "Know-How" means trade secrets, and other confidential and proprietary information, inventions, processes, formulas and methodologies. (y) "Licensed IP" means the Arizona Licensed IP and the Company Licensed IP. (z) "Licensed Copyrights" means the Arizona Licensed Copyrights and the Company Licensed Copyrights. (aa) "Licensed Know-How" means the Arizona Licensed Know-How and the Company Licensed Know-How. (bb) "Licensed Trademarks" means the Arizona Licensed Trademarks, the Diamond Licensed Trademarks and the Phase-Out Marks. (cc) "Patents" means patent rights, including patents, patent applications, and all related continuations, continuations-in-part, divisionals, renewals, reissues, re-examinations, substitutions, and extensions thereof, and applications for any of the foregoing. (dd) "Proceeding" means any proceeding, claim, suit or action arising out of, or in connection with, this Agreement or its subject matter (including its validity, formation at issue, effect, interpretation, performance or termination), howsoever arising. (ee) "Seller Licensed Trademarks" means the Arizona Licensed Trademarks and the Diamond Licensed Trademarks. (ff) "Third Party" means any Person other than Arizona, the Company, and their respective Affiliates. (gg) "Trademarks" means any trademarks, service marks, trade names, trade dress, and other similar designations of source or origin, and registrations and applications for any of the foregoing. (hh) "Trademark License Agreement" means the Trademark License Agreement by and between Armstrong World Industries, Inc., AWI Licensing LLC and Armstrong Flooring, Inc, dated as of April 1, 2016 and attached hereto as Exhibit A. 4
1.2 Interpretation. Section 10.5 and 10.14 of the Stock Purchase Agreement shall apply hereto, mutatis mutandis. 1.3 Company Actions. In respect of any action herein required to be undertaken by any of the Company Entities, or to be omitted by any of the Company Entities, the Buyer Entities shall cause the applicable Company Entity to so undertake or omit to undertake, as applicable, such action. 2. ASSIGNMENT OF ARIZONA ASSIGNED IP 2.1 Assignment. Arizona agrees to assign and hereby assigns its entire right, title and interest in and to the Arizona Assigned IP to the Company. 2.2 Recordation of Assignment. Arizona will reasonably cooperate with the Company to obtain, record, and perfect title to, and provide all necessary evidence of the Company's ownership of, the Arizona Assigned IP, including the execution of (i) a Patent Assignment in the form of the attached Exhibit B, and (ii) a Trademark Assignment in the form of the attached Exhibit C. 3. GRANT OF COPYRIGHT LICENSE 3.1 Arizona Copyright Grant. Subject to the terms and conditions of this Agreement, Arizona hereby grants to the Company a perpetual, non- exclusive, royalty-free license in, to and under the Arizona Licensed Copyrights for use in the Company Field throughout the world. 3.2 Company Copyright Grant. Subject to the terms and conditions of this Agreement, the Company hereby grants to Seller a perpetual, non- exclusive, royalty-free license in, to and under the Company Licensed Copyrights for use in the Arizona Field throughout the world. 4. GRANT OF KNOW-HOW LICENSE 4.1 Arizona Know-How Grant. Subject to the terms and conditions of this Agreement, Arizona hereby grants to the Company a perpetual, non- exclusive, royalty-free license in, to and under the Arizona Licensed Know-How for use in the Company Field throughout the world. 4.2 Company Know-How Grant. Subject to the terms and conditions of this Agreement, the Company hereby grants to Seller a perpetual, non- exclusive, royalty-free license in, to and under the Company Licensed Know-How for use in the Arizona Field throughout the world. 5. GRANT OF PATENT LICENSE 5.1 Arizona Patent Grant. Subject to the terms and conditions of this Agreement, Arizona hereby grants to the Company a perpetual, non-exclusive, royalty-free license in, to and under the Arizona Licensed Patents for use in the Company Field throughout the world. 5
5.2 Company Patent Grant. Subject to the terms and conditions of this Agreement, the Company hereby grants to Seller a perpetual, non-exclusive, royalty-free license in, to and under the Company Licensed Patents for use in the Arizona Field throughout the world. 6. GRANT OF TRADEMARK LICENSE 6.1 Arizona Licensed Trademark Grant. Subject to the terms and conditions of this Agreement, Arizona hereby grants to the Company a limited, non- exclusive, royalty-free, non-sublicensable (except as set forth in Section 7.1), non-assignable license in, to and under the Arizona Licensed Trademarks for the Arizona Trademark License Term for use in the Company Field throughout the world only in the form and manner that such Arizona Licensed Trademarks are used in the Business as of the Closing, provided that the Company shall use commercially reasonable efforts to present the Arizona Licensed Trademarks in the form set forth on Schedule 6.1. 6.2 Diamond Licensed Trademark Grant. Subject to the terms and conditions of this Agreement, Arizona hereby grants to the Company a limited, non- exclusive, royalty-free, non-sublicensable (except as set forth in Section 7.1), non-assignable (except as set forth in Section 13.2) license in, to and under the Diamond Licensed Trademarks for the Diamond Trademark License Term for use with respect to the Diamond Product throughout the world only in the form and manner set forth on Schedule 6.2. 6.3 Quality Control. The Buyer Entities acknowledge the importance of Arizona's exercise of quality control over the use of the Seller Licensed Trademarks to preserve the continued integrity and validity of the Seller Licensed Trademarks and to protect the value and goodwill associated with the Seller Licensed Trademarks, and accordingly: (a) The Company shall ensure that all goods and services provided by the Company, under or in association with any of the Seller Licensed Trademarks, shall (i) be substantially the same as or greater than the quality of goods and services provided under such Seller Licensed Trademarks immediately prior to the Effective Date and (ii) not be associated with any goods or services, including any activities, that are reasonably likely to have an adverse effect on (A) the image or reputation of any of the Seller Licensed Trademarks or (B) Seller's right, title or interest in and to, any of the Arizona Licensed Trademarks. (b) The Company shall not tarnish or bring into disrepute the reputation of or goodwill associated with the Seller Licensed Trademarks or Arizona. (c) The Company shall use the Seller Licensed Trademarks at all times in compliance with all applicable Laws. (d) The Company shall include trademark and other notices in connection with the use of the Seller Licensed Trademarks as reasonably requested by Arizona from time to time. 6
(e) The Company shall upon Arizona's reasonable request from time to time, supply to Arizona representative samples and/or written descriptions, as appropriate, of uses made by the Company of the Seller Licensed Trademarks. (f) The Buyer Entities acknowledge that this license grant does not include, and the Company shall receive no rights under this Agreement or the Stock Purchase Agreement, to use any Trademark that is confusingly similar to or derivative of a Seller Licensed Trademark (other than the Seller Licensed Trademarks themselves as expressly authorized hereunder). 6.4 Trademark License Agreement. In addition to the obligations set forth in Section 6.3, and notwithstanding any other provision of this Agreement, the Company shall comply with all obligations applicable to Arizona and its Affiliates under the Trademark License Agreement including, for the avoidance of doubt, any obligations with respect to reporting Complaints (as defined in the Trademark License Agreement), which reports the Company shall provide to Arizona, and quality control and standards, and Licensor Competitors (as defined in the Trademark License Agreement), and neither Party shall undertake any act that would constitute a breach or a basis for termination under the Trademark License Agreement. 6.5 Trade Names. The Company shall not create or use any corporate or trade names that include the Arizona Licensed Trademarks, other than those in existence immediately prior to the Effective Date. No later than thirty (30) days following the Closing, each of AWP and the Company shall change its respective corporate name and trade name and cause its organizational documents to be amended to remove any reference to "Armstrong." 6.6 With respect to any Trademarks notified to the Company in writing after the Effective Date that are used as of the Effective Date in the Company Field and are not (i) owned by any Company Entity, (ii) Arizona Assigned Trademarks, or (iii) Seller Licensed Trademarks (the "Phase-Out Marks") in each case (i)-(iii) the Company shall have a period of twenty-four (24) months from the date of notification to phase out all use. Any use by the Company of any of the Phase-Out Marks as permitted in this Section 6.6, is subject to its use of the Phase-Out Marks in a form and manner and with standards of quality consistent with that in effect for the Phase-Out Marks as of the Effective Date. 6.7 Domain Names. Subject to the terms and conditions of this Agreement, the license set forth in Section 6.1 shall include the right of the Company to use the Arizona Domain Names solely in connection with the applicable Arizona Licensed Trademarks in the Company Field during the Arizona Trademark License Term, in the ordinary course of business in a manner generally consistent with the past practice of Arizona in the Company Field. The Company shall not have the right to register any domain name or social media addresses (or any similar or successor identifiers) containing Arizona Licensed Trademarks. 7
7. INTELLECTUAL PROPERTY RIGHTS 7.1 Sublicenses. Arizona may sublicense the licenses granted herein to its Affiliates and Third Parties in the ordinary course of business in support of its and its Affiliates' business, but not for the independent use of Third Parties, and the Company may sublicense the licenses granted herein to Third Parties, its Subsidiaries, AWP, controlled Affiliates, or any holding company that is a direct or indirect parent of the Company in the ordinary course of business in support of its and its Subsidiaries' or controlled Affiliates' business, but not for the independent use of Third Parties (each such Affiliate, Third Party, AWP or Subsidiary, a "Sublicensee"). Each Party shall ensure that any sublicense that it grants to a Sublicensee does not conflict with this Agreement. For clarity, granting a sublicense shall not relieve the Parties of any obligations hereunder and each Party shall cause each of its Sublicensees to comply, and shall remain responsible for such Sublicensees' compliance, with all terms and conditions hereof applicable to the Parties. At the request of a licensing Party, the other Party shall provide to the licensing Party a list of all Sublicensees and otherwise reasonably cooperate with the licensing Party in connection with Sublicensees' compliance with this Agreement. 7.2 Reservation of Rights. Except as expressly provided in the Stock Purchase Agreement or herein, each Party reserves its and its Affiliates' rights in and to all Intellectual Property (including with respect to the use, registration and licensing thereof). 8. OWNERSHIP 8.1 Ownership of Arizona Licensed IP. The Buyer Entities acknowledge and agree that (a) Arizona and its Affiliates own the Arizona Licensed IP (other than the Arizona Licensed Trademarks), (b) AWI Licensing LLC owns the Arizona Licensed Trademarks, (b) neither the Company, nor its Affiliates or its Sublicensees, will acquire any ownership rights in the Arizona Licensed IP, and (c) the Company shall not represent or make any claim that it has an ownership interest in any Arizona Licensed IP. Without limitation to the foregoing, the Company shall not file applications to register any Arizona Licensed IP or assist any person in doing the same, or contest, challenge, or otherwise take any action adverse to Arizona's and its Affiliates' ownership of or rights in and to the Arizona Licensed IP, or assist any person in doing the same. 8.2 Ownership of Company Licensed IP. Arizona acknowledges and agrees that (a) the Company and its Affiliates own the Company Licensed IP, (b) neither Arizona, nor its Affiliates or its Sublicensees, will acquire any ownership rights in the Company Licensed IP, and (c) Arizona shall not represent or make any claim that it has an ownership interest in any Company Licensed IP. Without limitation to the foregoing, Arizona shall not file applications to register any Company Licensed IP or assist any person in doing the same, or contest, challenge, or otherwise take any action adverse to the Company's and its Affiliates' ownership of or rights in and to the Company Licensed IP, or assist any person in doing the same. 8
9. PROSECUTION, MAINTENANCE AND ENFORCEMENT 9.1 Responsibility and Cooperation. As between the Parties, Arizona, with respect to the Arizona Licensed IP, and the Buyer Entities, with respect to the Company Licensed IP, shall have the right (but not the obligation) for filing, prosecuting, and maintaining all Arizona Licensed IP and Company Licensed IP, respectively, in the licensing Party's name. For the avoidance of doubt, in case either such Party files any new Intellectual Property registration to the extent covering the Licensed IP, such new Intellectual Property registration shall automatically become Licensed IP. However, and for the further avoidance of doubt, the aforementioned shall not apply to new Intellectual Property created by a licensee Party or its Sublicensees separately and independently from the Licensed IP, for example in case of separate and independent technical enhancements or advancements. The Parties shall reasonably consult and coordinate with each other at the other Party's request with respect to the matters set forth in this Section 9.1. 9.2 No Additional Obligations. This Agreement shall not obligate either Party to disclose to the other Party, or maintain, register, prosecute, pay for, enforce, or otherwise manage any Intellectual Property except as expressly set forth herein. 9.3 Enforcement. As between the Parties, Arizona, with respect to the Arizona Licensed IP, and the Company or Buyer, with respect to the Company Licensed IP, shall have the right (but not the obligation) to elect to bring a Proceeding or enter into settlement discussions regarding, or otherwise seek to resolve, any infringement, misappropriation, or other violation, or allegations of invalidity or unenforceability, of the Licensed IP. In the event that Arizona declines to institute any Proceedings against third-party infringers or violators of any Arizona Licensed Patents, regarding activities that would fall within the Company Field if conducted by the Company, within forty-five (45) days after being notified or becoming aware of such infringing conduct, the Company or Buyer shall have the right to institute any Proceedings against such third-party infringers or violators. In the event that the Company or Buyer elects to institute such Proceedings, Arizona will reasonably cooperate with the Company or Buyer in such Proceedings, and the Company or Buyer shall reimburse Arizona for all reasonable costs and fees incurred by Arizona as a result of such cooperation. Such cooperation by Arizona will include joining such Proceeding as a party, if deemed necessary by the Company or Buyer. In the event that Arizona elects to bring a Proceeding against any alleged infringer of the Arizona Licensed Trademarks and seeks the cooperation of the Licensor of the Trademark License Agreement in such Proceeding, Arizona will take reasonable steps to assist the Company or Buyer in requesting the cooperation of the Licensor of the Trademark License Agreement, and pursuing an infringement claim against such alleged infringer. The Company or Buyer, as applicable, shall retain all benefits, recoveries, injunctions or other value derived from such Proceedings instituted by such Party. 10. INDEMNIFICATION 10.1 Indemnification. Each Party (the "Indemnifying Party") agrees to indemnify, defend and hold harmless the other Party and its Affiliates and their respective employees, 9
directors, officers, agents and successors (collectively, the "Indemnified Parties") from and against any and all losses (including all costs, liabilities (including present and future damages), claims and expenses) incurred or suffered by any of the Indemnified Parties, to the extent arising out of, relating to or resulting from (a) a breach by the Indemnifying Party of this Agreement; or (b) any gross negligence or willful misconduct of the Indemnifying Party in connection with this Agreement. 11. DISCLAIMERS 11.1 Disclaimer. Each Party hereby acknowledges that, except to the extent expressly set forth in this Agreement, the Stock Purchase Agreement, the Transition Services Agreement or the Confidentiality Agreement, neither Party nor any of its Affiliates has made any representation or warranty, expressed or implied, including any representation or warranty regarding the validity, enforceability, or scope of the Licensed IP, noninfringement, merchantability or fitness for a particular purpose. 12. TERM 12.1 Term and Termination. (a) Unless earlier terminated pursuant to the provisions hereof, the term of this Agreement and the licenses and other grants of rights (and related obligations) under this Agreement shall (i) with respect to the Arizona Licensed Trademarks, be for the Arizona Trademark License Term, (ii) with respect to the Diamond Licensed Trademarks, be for the Diamond Trademark License Term, (iii) with respect to the Phase- Out Marks, be for the term set forth in Section 6.6, and (iv) with respect to Copyrights, Know-How and Patents, be in perpetuity. (b) Either Party may terminate this Agreement if the other Party materially breaches this Agreement and fails to remedy such breach within thirty (30) days' written notice thereof; provided, however, that if the material breach of this Agreement by the breaching Party is limited to the Licensed Copyrights, Licensed Know-How, the Arizona Licensed Patents, or the Licensed Trademarks, the non-breaching Party shall be entitled to termination solely with respect to the affected part of the license (i.e., in such case, the non-breaching Party may terminate this Agreement with respect to the Licensed Copyrights or the Licensed Know-How or the Arizona Licensed Patents or the Licensed Trademarks, as applicable). 12.2 Effect of Termination. (a) Effect of Termination. Upon termination of this Agreement, each licensee Party shall and shall cause all of its Sublicensees to cease all use of the Licensed IP that is subject to such termination (excluding for clarity (a) any Arizona Licensed Patents, Licensed Copyrights or Licensed Trademarks that are expired, invalid or abandoned or (b) any Licensed Know-How that no longer constitutes confidential information). 10
(b) Survival. The following provisions of this Agreement, together with all other provisions of this Agreement that expressly specify that they survive, shall survive expiration or termination of this Agreement, in part or in its entirety: Sections 8, 10, 11, 12.2(a) and 13. 13. MISCELLANEOUS 13.1 Entire Agreement. This Agreement (together with the Schedules attached hereto), the Stock Purchase Agreement, the Transition Services Agreement and the Confidentiality Agreement constitute the entire agreement of the Parties hereto and supersede all prior negotiations, correspondence, agreements and undertakings, both written and oral, between or among the Parties, or any of them, with respect to the subject matter hereof. It shall be expressly understood that the Stock Purchase Agreement shall govern the transactions contemplated thereby as a whole and that this Agreement shall not be construed as an amendment or variation of the Stock Purchase Agreement but rather shall be complemented by and interpreted in light of the Stock Purchase Agreement. In the event that any provision of this Agreement is inconsistent with, conflicts with or contradicts any term of the Stock Purchase Agreement, the terms of the Stock Purchase Agreement will prevail. 13.2 Assignment. Except as otherwise provided in this Agreement, including under Section 7.1, neither this Agreement nor any of the rights, interests or obligations of any Party under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise, by either Party without the prior written consent of the other Party; provided, however, that (a) either Party may assign any of the foregoing in connection with the sale or other transfer of the applicable business or assets of such Party or its Affiliates to which this Agreement relates (except that neither of the Buyer Entities may assign any such rights, interests or obligations with respect to the Arizona Licensed Trademarks); (b) Arizona may assign any of the foregoing to one or more of its Affiliates and (c) the Company and Buyer may assign any of the foregoing to one or more of its Subsidiaries, controlled Affiliates, AWP, or any holding company that is a direct or indirect parent of the Company; provided that in each case (b) and (c), no assignment shall relieve the assigning Party of any of its obligations under this Agreement unless agreed to by the non-assigning Party. Any assignment or other disposition in violation of the preceding sentence shall be void. 13.3 Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given (i) on the date delivered, if delivered personally, (ii) on the third (3rd) Business Day after being mailed by registered or certified mail (postage prepaid, return receipt requested), or (iii) on the next Business Day after being sent by reputable overnight courier (delivery prepaid), in each case, to the parties at the following addresses, or on the date sent and confirmed by electronic transmission or confirmatory return email to the telecopier number or email address specified below (or at such other address, telecopier number or email address for a Party as shall be specified by notice given in accordance with this Section 13.3):
(a) If to Buyer: 11
c/o American Industrial Partners 450 Lexington Avenue, 40th Floor Attention: General Counsel and Richard Hoffman Email: notices@americanindustrial.com richard@americanindustrial.com
with a copy to:
Baker Botts L.L.P. 1299 Pennsylvania Avenue, NW Washington, D.C. 20004 Attention: Terrance L. Bessey Brendan O. Dignan Email: terrance.bessey@bakerbotts.com brendan.dignan@bakerbotts.com
(b) If to Arizona:
Armstrong Flooring, Inc. 2500 Columbia Avenue, PO Box 3025 Lancaster, PA 17604 Attention: Christopher S. Parisi Email: csparisi@armstrongflooring.com
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP 4 Times Square New York, NY 10036 Attention: Eric L. Cochran Steven J. Daniels Email: eric.cochran@skadden.com steven.daniels@skadden.com 13.4 Specific Performance. Each Party hereto acknowledges that money damages would be both incalculable and an insufficient remedy for any breach of this Agreement by such Party and that any such breach would cause Arizona, on the one hand, and the Buyer Entities, on the other hand, irreparable harm. Accordingly, each Party hereto also agrees that, in the event of any breach or threatened breach of the provisions of this Agreement by such Party, Arizona, on the one hand, and the Buyer Entities, on the other hand, shall be entitled to equitable relief without the requirement of posting a bond or other security, including in the form of injunctions and orders for specific performance. Any and all remedies herein expressly conferred upon a Party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such Party, and the exercise by a Party of any one remedy will not preclude the exercise of any other remedy. Arizona, on the one hand, and Buyer Entities, on the other hand, hereby agree not to raise any objections to the availability of the equitable remedy of specific 12
performance to prevent or restrain breaches or threatened breaches of this Agreement by the Buyer Entities or Arizona, as applicable, and to specifically enforce the terms and provisions of this Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of the Buyer Entities or Arizona, as applicable, under this Agreement. 13.5 Governing Law; Jurisdiction; Waiver of Jury Trial. (a) This Agreement shall be governed by the laws of the State of Delaware, its rules of conflict of laws notwithstanding. Each Party hereby agrees and consents to be subject to the jurisdiction of the Court of Chancery of the State of Delaware in and for New Castle County, or if the Court of Chancery lacks jurisdiction over such dispute, in any state or federal court having jurisdiction over the matter situated in New Castle County, Delaware, in any Action seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby. Each Party hereby irrevocably consents to the service of any and all process in any such Action by the delivery of such process to such Party at the address and in the manner provided in Section 13.3 hereof. Each of the Parties hereto irrevocably and unconditionally waives any objection to the laying of venue of any Proceeding arising out of this Agreement or the transactions contemplated hereby in the Court of Chancery of the State of Delaware in and for New Castle County, or if the Court of Chancery lacks jurisdiction over such dispute, in any state or federal court having jurisdiction over the matter situated in New Castle County, Delaware, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Proceeding brought in any such court has been brought in an inconvenient forum. (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13.5(b). 13
13.6 Severability. If any term or other provision of this Agreement, or any portion thereof, is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms and provisions of this Agreement, or the remaining portion thereof, shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any such term or other provision, or any portion thereof, is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are consummated to the fullest extent possible. 13.7 Counterparts. This Agreement may be executed in any number of counterparts, including by means of email in portable document format (.pdf), each of which when executed shall be deemed to be an original copy of this Agreement and all of which taken together shall constitute one and the same agreement.
[Remainder of page intentionally left blank] 14
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date first written above. ARMSTRONG FLOORING, INC.
By: /s/ Donald R. Maier Name: Donald R. Maier Title: President and Chief Executive Officer
AFI LICENSING LLC
By: /s/ Christina Geerlof Name: Christina Geerlof Title: President
AHF HOLDING, INC. (formerly known as Tarzan Holdco, Inc.)
By: /s/ Stanley Edme Name: Stanley Edme Title: Vice President
ARMSTRONG HARDWOOD FLOORING COMPANY
By: /s/ Jason Braeglemann Name: Jason Braegelmann Title: Vice President [Signature Page to IP Agreement]
Schedule 1.1(b) - Arizona Assigned Internet Domain Names Domain Name Expiration date Owner amish-handscraped.com 13-Apr-2019 Armstrong Flooring, Inc. ("AFI") amishhandscraped.com 13-Apr-2019 AFI bruce.adult 28-Apr-2019 AFI bruce.biz 26-Mar-2019 AFI bruce.com 21-Jan-2019 AFI bruce.dpml.pub 29-Oct-2019 AFI bruce.dpmlblock 29-Oct-2019 AFI bruce.info 10-Aug-2019 AFI bruce.porn 28-Apr-2019 AFI bruce.xxx 01-Dec-2021 AFI brucebuilder.com 02-Mar-2019 AFI brucecontractor.com 02-Mar-2019 AFI brucedealer.com 02-Mar-2019 AFI brucedistributor.com 02-Mar-2019 AFI brucefloors.com 04-Aug-2019 AFI brucehardwoodfloors.com 11-Apr-2019 AFI brucehome.com 02-Mar-2019 AFI brucelaminate.com 30-Dec-2018 AFI bruceremodeler.com 02-Mar-2019 AFI bruceretailer.com 02-Mar-2019 AFI brucesucks.com 25-Oct-2018 AFI brucesucks.info 22-Sep-2019 AFI capellaflooringcompany.com 12-Nov-2018 AFI capellafloors.com 27-Oct-2018 AFI forestglenhardwood.com 13-Sep-2019 AFI handscraped-hardwood.com 13-Apr-2019 AFI handscrapedhardwoodflooring.com 13-Sep-2019 AFI handscrapedwoodfloor.com 05-Sep-2019 AFI handscrapehardwoodfloor.com 05-Sep-2019 AFI handscrapehardwoodflooring.com 05-Sep-2019 AFI handscrapehardwoodfloors.com 05-Sep-2019 AFI handscrapewoodfloor.com 05-Sep-2019 AFI handscrapewoodflooring.com 05-Sep-2019 AFI handscrapewoodfloors.com 05-Sep-2019 AFI hardwood-flooring.asia 26-Mar-2019 AFI hartco.biz 18-Nov-2018 AFI hartco.info 10-Aug-2019 AFI hartcodistributor.com 02-Mar-2019 AFI hartcoflooring.com 24-May-2019 AFI
Domain Name Expiration date Owner hartcoflooringcompany.com 18-Jun-2019 AFI hartcohome.com 02-Mar-2019 AFI homerwood.com 14-Sep-2019 AFI lifetimeluxuryhardwood.com 14-Jun-2019 AFI lockandfold.com 20-Nov-2018 AFI luxuryhardwood.com 20-Dec-2018 AFI mybruce.com 25-Jul-2019 AFI mybruce.net 25-Jul-2019 AFI myhartco.com 25-Jul-2019 AFI myhartco.net 25-Jul-2019 AFI myrobbins.com 25-Jul-2019 AFI myrobbins.net 25-Jul-2019 AFI powerofparagon.com 15-Jun-2019 AFI premium-hardwood.com 13-Apr-2019 AFI robbins-home.com 02-Mar-2019 AFI robbins.biz 26-Mar-2019 AFI robbins.com 13-Sep-2019 AFI robbins.info 10-Aug-2019 AFI robbinsflooring.com 21-Nov-2018 AFI robbinsflooring.info 22-Sep-2019 AFI robbinsfloors.com 14-Sep-2019 AFI robbinsfloors.net 17-Apr-2019 AFI robbinshardwoodflooring.com 26-Sep-2019 AFI robbinshighperformance.com 18-Oct-2018 AFI smokedhardwood.com 30-Apr-2019 AFI smokedhardwoodfloor.com 30-Apr-2019 AFI smokedhardwoodflooring.com 30-Apr-2019 AFI smokedhardwoodfloors.com 30-Apr-2019 AFI softscrapedhardwoodfloor.com 05-Sep-2019 AFI softscrapedhardwoodflooring.com 05-Sep-2019 AFI softscrapedhardwoodfloors.com 05-Sep-2019 AFI softscrapedwoodfloor.com 05-Sep-2019 AFI softscrapedwoodflooring.com 05-Sep-2019 AFI softscrapedwoodfloors.com 05-Sep-2019 AFI softscrapehardwoodfloor.com 05-Sep-2019 AFI softscrapehardwoodflooring.com 05-Sep-2019 AFI softscrapehardwoodfloors.com 05-Sep-2019 AFI softscrapewoodfloor.com 05-Sep-2019 AFI softscrapewoodflooring.com 05-Sep-2019 AFI softscrapewoodfloors.com 05-Sep-2019 AFI
Domain Name Expiration date Owner tmortan.com 07-Sep-2019 AFI tmorten.com 07-Sep-2019 AFI tmortin.com 07-Sep-2019 AFI tmorton-flooring.com 17-Mar-2019 AFI tmorton-floors.com 17-Mar-2019 AFI tmorton-hardwood-flooring.com 17-Mar-2019 AFI tmorton-hardwood-floors.com 17-Mar-2019 AFI tmorton-hardwood.com 17-Mar-2019 AFI tmorton-wood-flooring.com 17-Mar-2019 AFI tmorton-wood-floors.com 17-Mar-2019 AFI tmorton.asia 20-Mar-2019 AFI tmorton.com 17-Mar-2019 AFI tmorton.org 17-Mar-2019 AFI tmortonandco.com 17-Mar-2019 AFI tmortonco.com 17-Mar-2019 AFI wwwbruce.com 01-Mar-2019 AFI wwwhartco.com 17-Jan-2019 AFI wwwrobbins.com 17-Jan-2019 AFI
Schedule 1.1(e) - Arizona Assigned Patents
Country App. Status App. Number Filing Date Patent Number Issue Date US Granted 10/459,977 12-Jun-03 7381474 3-Jun-08 AU Granted 2004304906 22-Nov-04 2004304906 28-Oct-10 CN Granted 200480039516 22-Nov-04 ZL200480039516.1 2-Jan-13 DE Granted 6020040309575 22-Nov-04 1944158 11-Feb-17 EP Granted 8007063.4 22-Nov-04 1944158 5-Jan-11 FR Granted 8007063.4 22-Nov-04 1944158 5-Jan-11 GB Granted 8007063.4 22-Nov-04 1944158 5-Jan-11 US Granted 10/727,749 4-Dec-03 7,261,947 28-Aug-07 US Granted 11/901,361 17-Sep-07 8,287,971 16-Oct-12 US Granted 13/611,028 12-Sep-12 8,399,075 19-Mar-13 US Granted 12/825,448 29-Jun-10 8801505 12-Aug-14 US Granted 14/458,103 12-Aug-14 10,072,427 11-Sep-18 AU Granted 2014240948 28-Mar-14 2014240948 20-Oct-16 EP Published 14722915.7 28-Mar-14 AU Granted 2013246000 10-Apr-13 2013246000 26-Nov-15 CA Granted 2,869,667 10-Apr-13 2869667 19-Dec-17 CN Granted 201380018751 10-Apr-13 2512525 9-Jun-17 EP Published 13718698.7 10-Apr-13 US Granted 13/442,960 10-Apr-13 9434087 6-Sep-16 AU Granted 2013246002 10-Apr-13 2013246002 17-Dec-15 CA Granted 2,869,752 10-Apr-13 2869752 3-Jan-17 CN Granted 201380018754 10-Apr-13 104245258 3-May-17 US Granted 13/442,966 10-Apr-12 9,108,335 18-Aug-15 CN Granted 201410046641 10-Feb-14 103978829 12-Apr-17 EP Granted 14154551.7 10-Feb-14 EP2764965 21-Sep-16 US Granted 14/176,299 10-Feb-14 9701040 11-Jul-17 AU Granted 2014240951 28-Mar-14 2014240951 30-Jun-16 AU Granted 2013270463 10-Dec-13 2013270463 26-Nov-15 CN Granted 201310674310 11-Dec-13 103866947 4-Jan-17 AU Granted 2014274549 10-Dec-14 2014274549 15-Oct-15 CA Granted 2,873,571 8-Dec-14 2873571 27-Mar-18 CN Published 201407560485 10-Dec-14 AU Pending 2016287834 5-Jul-16 CN Published 2016800338922 5-Jul-16
Country App. Status App. Number Filing Date Patent Number Issue Date EP Published 16818951.2 5-Jul-16 TW Published 20160120286 28-Jun-16 WO Published PCT/US16/40942 5-Jul-16 CN Published 201510954585 17-Dec-15 EP Published 15201544.2 21-Dec-15 US Published 14/970,662 16-Dec-15 AU Pending 2016380976 20-Dec-16 CN Published 20168078711 20-Dec-16 EP Pending 16882368 20-Dec-16 US Published 14/980,263 28-Dec-15 WO Published PCT/US2016/067690 20-Dec-16 AU Pending 2016380975 20-Dec-16 CN Published 201680078712 20-Dec-16 EP Pending 16882368 20-Dec-16 US Published 14/980,313 28-Dec-15 WO Published PCT/US2016/067688 20-Dec-16 WO Published PCT/US2017/055068 5-Oct-17 US Published 15902327 22-Feb-18 WO Published PCT/US18/19186 22-Feb-18 US Granted 09/478,016 5-Jan-00 6164351 26-Dec-00 US Granted 11/390,679 28-Mar-06 7537841 26-May-09 US Granted 09/175,661 20-Oct-98 6148884 21-Nov-00 US Granted 09/303,176 30-Apr-99 6156402 5-Dec-00 US Granted 09/241,878 2-Feb-99 6194078 27-Feb-01 US Pending 62/611953 29-Dec-17 US Expired 62/404,413 5-Oct-16 US Expired 62/462,609 23/Feb-17 US Abandoned 09/903,549 13-Jul-01 US Abandoned 14/828,598 18-Aug-15 US Expired 62/187,925 2-Jul-15 US Granted 12/425,560 17-Apr-09 8,357,752 22-Jan-13 US Granted 13/741,770 15-Jan-13 8,617,654 31-Dec-13 AU Granted 2014274559 10-Dec-14 2014274559 24-Mar-16 EP Published 14199378.2 19-Dec-14 CN Published 2015109813242 23-Dec-15 EP Published 15202406.3 23-Dec-15 US Granted 14/580,347 23-Dec-14 9,567,755 14-Feb-17
Country App. Status App. Number Filing Date Patent Number Issue Date US Pending 15/724,391 5-Oct-17
Schedule 1.1(f) - Arizona Assigned Trademarks
Country Trademark Status App. Number App. Date Reg. Number Reg. Date US AMERICAN SCRAPE Registered 85616030 3-May-12 4481771 11-Feb-14
CA ARTISAN COLLECTIVE Pending 1817435 10-Jan-17
US ARTISAN COLLECTIVE CLTM
CA ARTISTIC TIMBERS Registered 1670991 2-Apr-14 TMA967273 31-Mar-17
US ARTISTIC TIMBERS CLTM
US BIRCH RUN Registered 85/931,142 14-May-13 4,524,637 6-May-14
CA BIRCH RUN Registered 1,636,822 25-Jul-13 TMA905398 4-Jun-15
US BRISTOL TRAIL Registered 86919986 25-Feb-16 5423957 13-Mar-18
CA BRISTOL TRAIL Published 1769733 26-Feb-16
Country Trademark Status App. Number App. Date Reg. Number Reg. Date US BRUSHED IMPRESSIONS Registered 86906683 12-Feb-16 5183009 11-Apr-17
CA BRUSHED IMPRESSIONS Published 1768050 16-Feb-16
CA CAPELLA Published 1789784 4-Jul-16
US DUNDEE Registered 86274578 7-May-14 4649247 2-Dec-14
US EVERGUARD Registered 86084365 7-Oct-13 4654066 9-Dec-14
US FARMINGTON Registered 86920079 25-Feb-16 5423958 13-Mar-18
CA FARMINGTON Published 1769729 26-Feb-16
US FOREST GLEN Registered 86084354 7-Oct-13 4633917 4-Nov-14
CA FOREST GLEN Registered 1769732 26-Feb-16 961263 27-Jan-17
Country Trademark Status App. Number App. Date Reg. Number Reg. Date CA FORGED HERITAGE Published 1,752,076 26-Oct-15
CA Hydropel Pending 1917541 30-Aug-18
US Hydropel Pending 88148020 9-Oct-18
US LOCK&FOLD Registered 76656450 13-Mar-06 3200208 23-Jan-07
US MIDTOWN Registered 85736605 24-Sep-12 4401628 10-Sep-13
US MILLWORK SQUARE Registered 86906649 12-Feb-16 5183008 11-Apr-17
CA MILLWORK SQUARE Published 1768051 16-Feb-16
CA ORIGINAL RUSTICS Published 1791791 18-Jul-16
US ORIGINAL RUSTICS CLTM
Country Trademark Status App. Number App. Date Reg. Number Reg. Date US PARAGON CLTM
CA PARAGON CLTM
US PRIME HARVEST Registered 86/285,289 19-May-14 4,742,207 26-May-15
CA PRIME HARVEST Registered 1,677,599 20-May-14 TMA906580 17-Jun-15
US RIGHT EVERY TIME Published 87261852 8-Dec-16
US RUSTIC RESTORATIONS Published 87215879 26-Oct-16 5520272 17-Jul-18
CA RUSTIC RESTORATIONS Pending 1806462 26-Oct-16
US SDF Pending '87947440 4-Jun-18
CA SDF Pending 1902212 1-Jun-18
Country Trademark Status App. Number App. Date Reg. Number Reg. Date US SIGNATURE SCRAPE Registered 86920111 25-Feb-16 5187924 18-Apr-17
CA SIGNATURE SCRAPE Published 1769731 26-Feb-16
CA SIGNATURE SOFT SCRAPE Published 1769730 26-Feb-16
US TimberBlock Published 87839322 19-Mar-18
CA TimberBlock Pending 1889001 20-Mar-18
US TIMBERBRUSHED Registered 87105110 15-Jul-16 5267454 15-Aug-17
US TIMBERCUTS Registered 87295586 10-Jan-17 5371502 2-Jan-18
CA TIMBERCUTS Pending 1817434 10-Jan-17
US TIMBERLAND Registered 76496979 13-Mar-03 2923877 1-Feb-05
Country Trademark Status App. Number App. Date Reg. Number Reg. Date CA TRANQUIL WOODS Published 1790828 11-Jul-16
US TRANQUIL WOODS CLTM
US TruTop Published 87870541 10-Apr-18
CA TruTop Pending 1892873 10-Apr-18
CA VINTAGE FARMHOUSE Published 1790827 11-Jul-16
US WEAR MASTER Registered 74/329383 9-Nov-92 1834641 3-May-94
CN WEAR MASTER Registered 4819937 5-Aug-05 4819937
CA OPAL CREEK Registered 1738695 23-Jul-15 1002365 08-Aug-18
US OPAL CREEK Registered CLTM
Schedule 1.1(g) - Arizona Domain Names
Domain Name Expiration date Owner armstrongwoodproducts.com 19-Dec- 2018 AFI
Schedule 1.1(l) - Arizona Licensed Patents COUNTRY APP NO. FILING DATE PATENT NUMBER ISSUE DATE AU 2009241803 30-Apr-09 2009241803 26-Sep-13 AU 2013231111 19-Sep-13 2013231111 7-Jan-16 CN 200980120494 30-Apr-09 DE 60 2009 024 610.0 30-Apr-09 2 286 018 EP 9739191.6 30-Apr-09 2286018 11-Jun-14 EP 13192693.3 30-Apr-09 2703461 31-Aug-16 FR 9739191.6 30-Apr-09 2 286 018 11-Jun-14 GB 9739191.6 30-Apr-09 2 286 018 11-Jun-14 US 12/432,845 30-Apr-09 8,420,710 16-Apr-13 US 14/700,669 30-Apr-15 BE 10770074.2 29-Nov-11 2 424 911 23-Mar-16 DE DE 60 2010 031 448.0 29-Nov-11 2 424 911 23-Mar-16 EP 10770074.2 29-Nov-11 2 424 911 23-Mar-16 FR 10770074.2 29-Nov-11 2 424 911 23-Mar-16 GB 10770074.2 29-Nov-11 2 424 911 23-Mar-16 NL 10770074.2 29-Nov-11 2 424 911 23-Mar-16 US 12/799,700 30-Apr-10 US 14/140,206 24-Dec-13 AU 2012286867 26-Jul-12 2012286867 4-Feb-16 CN 2012800367594 26-Jul-12 2094039 1-Jun-16 DE 12751639.1 26-Jul-12 EP2736977 20-May-15 EP 12751639.1 26-Jul-12 EP2736977 20-May-15 GB 12751639.1 26-Jul-12 EP2736977 20-May-15 AU 2013222106 25-Feb-13 2013222106 25-Feb-13 EP 13707792.1 25-Feb-13 US 14/380,432 22-Aug-14 9540825 10-Jan-17 AU 2013308554 30-Aug-13 2013308554 28-Apr-16 CN 201380046030 4-Mar-15 2789549 23-Jan-18 EP 13770989.5 30-Mar-15 EP2890749 16-May-18 US 14/423,186 23-Feb-15 AU 2014207438 8-Jul-15 2014207438 9-Feb-17 EP 14702412.9 14-Aug-15 US 14/760,080 9-Jul-15 AU 2014207441 8-Jul-15 2014207441 10-Nov-16 CN 2014800055962 15-Jul-15 2581656 11-Aug-17 EP 14703007.6 14-Aug-15
COUNTRY APP NO. FILING DATE PATENT NUMBER ISSUE DATE US 14/760,060 9-Jul-15 AU 2015227440 16-Sep-15 2015227440 30-Mar-17 CN 2015105859497 23-Dec-14 3045520 24-Aug-18 EP 15198373.1 8-Dec-15 US 14/580,312 23-Dec-14 9650792 16-May-17 EP 1151281 12-Jul-00 1072659 13-Oct-04 US 10/062,616 31-Jan-02 6572932 3-Jun-03 US 10/060,487 30-Jan-02 6911263 28-Jun-05 AU 2016243556 6-Nov-17 CN 2016800223098 16-Oct-17 EP 16719581.7 14-Nov-17 TW 105110285 31-Mar-16 624366 21-May-18 US 14/678,163 3-Apr-15 WO PCT/US16/24457 28-Mar-16 AU 2016243132 6-Nov-17 CN 2016800229978 20-Oct-17 EP 16718052 14-Nov-17 US 15564161 3-Oct-17 WO PCT/US16/24462 28-Mar-16 US 62/142,611 3-Apr-15 AU 2016243552 6-Nov-17 CN 2016800226325 18-Oct-17 EP 16719580.9 14-Nov-17 US 14/678,183 3-Apr-15 WO PCT/US16/24451 28-Mar-16 AU 2016357732 18-Apr-18 CN 2016800648806 7-May-18 EP 16866982.8 14-Jun-18 US 15776637 16-May-18 WO PCT/US2016/062133 16-Nov-16 WO PCT/US2017/055060 5-Oct-17 WO PCT/US2017/055047 4-Oct-17 WO PCT/US2017/055077 4-Oct-17 WO PCT/US2017/055089 5-Oct-17 WO PCT/US2017/055044 5-Oct-17 WO PCT/US2017/055033 4-Oct-17 US 14/721,724 26-May-15 9468314 18-Oct-16
Schedule 1.1(m) - Arizona Licensed Trademarks
ARMSTRONG
Schedule 1.1(s) - Company Licensed Patents
Country App. Status App. Number Filing Date Patent Number Issue Date US Granted 12/425,560 17-Apr-09 8,357,752 22-Jan-13 US Granted 13/741,770 15-Jan-13 8,617,654 31-Dec-13 CN Published 2015109813242 23-Dec-15 EP Published 15202406.3 23-Dec-15 US Granted 14/580,347 23-Dec-14 9,567,755 14-Feb-17 US Pending 15/724,391 5-Oct-17
Schedule 1.1(u) - Diamond Licensed Trademarks
DIAMOND 10
Schedule 6.1 - Presentation of Arizona Licensed Trademarks
Armstrong Logo Usage: 1. Logo Colors: The Armstrong logo can appear only in black, white or 100% Tungsten. If reversed out white, it should be on a dark background color. The entire mark must be the same color. The Armstrong logo cannot be used alone.
2. Logo Size: The minimum logo size is 1" or 25mm. In digital formats, the minimum width is 100 pixels at 72 dpi.
3. Clear Space: If the business unit identifier is used below the logo, the clear space is 1∕2 the diameter of the Armstrong ring on the top, right side and left side and the width of the stem in in the lower case "r" on the bottom.
If the business unit identifier is used above the logo, the clear space is 1∕2 the diameter of the Armstrong ring on the right side, left side and bottom and the width of the stem of the lower case "r" on the top.
a. There is no clear space defined below the business unit identifier if used below the logo and no clear space defined above the business unit identifier if used above the logo. b. If the business unit identifier is two lines, the clear space definition applies to the top most line, if used above, or bottom most line, if used below the Armstrong logo. 4. Font: The Armstrong logo is considered art and the font type, spacing, bold, cannot be modified.
5. Logo Background: The logo should never be used on a busy background or one that does not provide enough contrast.
6. Logo Direction: The logo can be used on an angle or vertically but must read left to right and top to bottom
7. Circle A: The Circle A can never be used as a separate graphic element.
Notice: 1. The trademark should always be distinguishable from surrounding text - at a minimum, the trademark notice (TM or ®) should be used at least the first time in the text. After first instance, mark should appear with some other distinguishing feature (e.g., different font, all caps, and/or different color) from the surrounding text. 2. Must include notice of AWI Licensing LLC's ownership of the trademark within the credit notice of the product, product documentation, or other product communication. (E.g., Armstrong and the Armstrong Logo are registered trademarks of AWI Licensing LLC.
Schedule 6.2 - Presentation of Diamond Licensed Trademarks
Diamond 10® Technology trademark and logo usage: 1. When using Diamond 10® Technology in sentences to identify goods or services: a. Always mark with ® (required for first usage on page) b. Always add a space between Diamond and 10. c. Always keep the entire mark together. 2. Use of Diamond 10® or the Diamond 10® logo must include notice of AFI Licensing LLC's ownership of the trademark within the credit notice of the product, product documentation, or other product communication. (E.g., Diamond 10 and the Diamond 10 Technology logo are registered trademarks of AFI Licensing LLC.) 3. Logo Colors: Can appear only in White or 4 Color Process comprised of Morado, Tungsten and Black. If reversed out White, use only on dark background color for contrast.
COLORS
4. Logo Size: A general guideline for the maximum width of the logo in any application should be the equivalent to 20% of the width of the shortest side. Exceptions may be made for signage and promotional materials. The minimum logo size is 1" or 25mm. In digital formats, the minimum width is 100 pixels at 72 dpi.
5. Clear Space: The size of the clear space around the logo is determined by the size of the circle of the capital height of the word diamond.
6. Font: The Diamond 10 Technology logo is considered art and the font type, spacing, bold, cannot be modified.
7. Logo Background: The logo should never be used on a busy background or one that does not provide enough contrast.
Exhibit A - Trademark License Agreement
Attached.
Exhibit B - Form of Patent Assignment
FORM OF PATENT ASSIGNMENT
This PATENT ASSIGNMENT (the "Assignment"), dated as of December 31, 2018 (the "Effective Date"), is by and between Armstrong Flooring, Inc., a Delaware corporation ("Seller") and AFI Licensing LLC, a Delaware limited liability company ("Licensing" and together with Seller, "Assignor") and Armstrong Hardwood Flooring Company, a Tennessee corporation (the "Company" or "Assignee") (each of Assignor and Assignee, a "Party" and collectively, the "Parties"). All capitalized terms used, but not defined herein, shall have the meanings ascribed to such terms in the Intellectual Property Agreement (defined herein below).
WHEREAS, Seller and AHF Holding, Inc. (formerly known as Tarzan Holdco, Inc.), a Delaware corporation ("Buyer") have entered into that certain Stock Purchase Agreement, dated November 14, 2018 (the "SPA") and Seller, Buyer and the Company have entered into that certain Intellectual Property Agreement, dated December 31, 2018 (the "Intellectual Property Agreement");
WHEREAS, pursuant to the SPA, the Seller has agreed to sell and transfer, and the Buyer has agreed to purchase and acquire, all of Seller's right, title and interest in and to Armstrong Wood Products, Inc. and the Company Subsidiaries (including the Company) by way of a purchase by Buyer and sale by Seller of the Shares, all upon the terms and condition set forth therein; and
WHEREAS, pursuant to the Intellectual Property Agreement, Assignor has agreed to sell, convey, assign, and transfer to Assignee all of Assignor's right, title, and interest in and to the patent applications and registrations set forth on Schedule A hereto (collectively, the "Assigned Patents").
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:
1. Conveyance. Assignor does hereby irrevocably sell, convey, grant, set over, assign and transfer to Assignee, without reservation of any rights, title or interest, all of Assignor's right, title and interest in and to the Assigned Patents, all rights corresponding to the Assigned Patents throughout the world, and all continuations, continuations-in-part, divisions or renewals thereof, all patents that may be granted therefrom, all reissues, re-exams, or extensions of such patents, and in and to any applications that have been or shall be filed in any country, and all patents or utility models of countries that may be granted therefrom, for its own use and enjoyment, and for the use and enjoyment of any of Assignee's successors and assigns, as the
same would have been held and enjoyed by Assignor if this Assignment had not been made, together with any and all claims or causes of infringement thereof that may have accrued prior to the effective date of this Assignment, together with the right to bring suit for and/or initiate any proceeding to collect any and all damages arising from said claims or causes of action. Assignee hereby accepts such assignment, transfer and conveyance.
2. Recordation. Assignor hereby authorizes and requests the Commissioner of Patents and Trademarks and any other applicable governmental entity or registrar (including any applicable foreign or international office or registrar), to record Assignee as the owner of the Assigned Patents, and to issue any and all Assigned Patents to Assignee, as assignee of Assignor's entire right, title and interest in, to, and under the same. Assignee shall have the right to record this Assignment with all applicable governmental authorities and registrars so as to perfect its ownership of the Assigned Patents.
3. Further Assistance. Upon Assignee's reasonable request and at Assignee's sole cost and expense, Assignor shall (i) provide any further assistance reasonably necessary to effect the assignment of all rights, title and interest in and to the Assigned Patents to Assignee, including, but not limited to, the execution of any further documents and instruments, and (ii) take such other actions as are reasonably necessary to document the aforesaid assignment and transfer to Assignee.
4. No Modification. Nothing contained in this Assignment is intended to or shall be deemed to modify, alter, amend or otherwise change any of the rights or obligations of Assignor and Assignee and their respective Affiliates under the SPA or the Intellectual Property Agreement.
5. Successors and Assigns. This Assignment shall inure to the benefit of and be binding upon the Parties hereto and their respective successors and permitted assigns.
6. Counterparts. This Assignment may be executed in any number of counterparts, including by means of email in portable document format (.pdf), each of which when executed shall be deemed to be an original copy of this Assignment and all of which taken together shall constitute one and the same agreement.
7. Descriptive Headings. The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Assignment.
8. Governing Law. This Assignment shall be governed by the laws of the State of Delaware, its rules of conflict of laws notwithstanding. Each Party hereby agrees and consents to be subject to the jurisdiction of the Court of Chancery of the State of Delaware in and for New Castle County, or if the Court of Chancery lacks jurisdiction over such dispute, in any
state or federal court having jurisdiction over the matter situated in New Castle County, Delaware, in any Action seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Assignment or the transactions contemplated hereby.
9. Severability. If any term or other provision of this Assignment, or any portion thereof, is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms and provisions of this Assignment, or the remaining portion thereof, shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any such term or other provision, or any portion thereof, is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Assignment so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are consummated to the fullest extent possible.
10. Authority. Each Party hereby represents that its undersigned representative is authorized and legally competent to execute this Assignment as a binding and enforceable agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the Parties have caused this Assignment to be executed as of the date above first written by their duly authorized representatives. SELLER:
By: Name: Title:
LICENSING
By: Name: Title:
Acknowledged and Accepted:
ASSIGNEE:
By: Name: Title:
SCHEDULE A TO PATENT ASSIGNMENT
Exhibit C - Form of Trademark Assignment
FORM OF TRADEMARK ASSIGNMENT
This TRADEMARK ASSIGNMENT (the "Assignment"), dated as of December 31, 2018 (the "Effective Date"), is by and between Armstrong Flooring, Inc., a Delaware corporation ("Seller") and AFI Licensing LLC, a Delaware limited liability company ("Licensing" and together with Seller, "Assignor") and Armstrong Hardwood Flooring Company, a Tennessee corporation (the "Company" or "Assignee") (each of Assignor and Assignee, a "Party" and collectively, the "Parties"). All capitalized terms used, but not defined herein, shall have the meanings ascribed to such terms in the Intellectual Property Agreement (defined herein below).
WHEREAS, Seller and AHF Holding, Inc. (formerly known as Tarzan Holdco, Inc.), a Delaware corporation ("Buyer") have entered into that certain Stock Purchase Agreement, dated November 14, 2018 (the "SPA") and Seller, Buyer and the Company have entered into that certain Intellectual Property Agreement, dated December 31, 2018 (the "Intellectual Property Agreement");
WHEREAS, pursuant to the SPA, the Seller has agreed to sell and transfer, and the Buyer has agreed to purchase and acquire, all of Seller's right, title and interest in and to the Company and the Company Subsidiaries (including the Company) by way of a purchase by Buyer and sale by Seller of the Shares, all upon the terms and condition set forth therein; and
WHEREAS, pursuant to the Intellectual Property Agreement, Assignor has agreed to sell, convey, assign, and transfer to Assignee all of Assignor's right, title, and interest in and to the trademarks applications and registrations set forth on Schedule A hereto (collectively, the "Assigned Marks").
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:
11. Conveyance. Assignor does hereby irrevocably sell, convey, grant, set over, assign and transfer to Assignee, without reservation of any rights, title or interest, all of Assignor's worldwide and universal rights, title and interest in and to the Assigned Marks, including, but not limited to, the applications and registrations therefor which are identified in Schedule A attached hereto, together with the goodwill of the business symbolized by such Assigned Marks, the same to be held and enjoyed by Assignee, for its own use and enjoyment, and for the use and enjoyment of any of Assignee's successors and assigns, as the same would have been held and enjoyed by Assignor if this Assignment had not been made, including, but not limited to, all common-law rights of Assignor in and/or to the Assigned Marks, and
Assignor's right to sue for all claims, demands and/or causes of action, both at law and in equity, that Assignor may have on account of any infringement, claim of unfair competitions, likelihood of confusion or dilution of the Assigned Marks or any other claim or cause of action related to the Assigned Marks prior to and following the effective date of this Assignment. Assignor further assigns to Assignee the right to sue and recover damages and/or profits for claims of past, present and/or future infringement, unfair competition, dilution, or any other violation or unlawful act relating to the Assigned Marks, if any. Assignee hereby accepts such grant, assignment, transfer and conveyance.
12. Recordation. Assignor hereby authorizes and requests the Commissioner of Patents and Trademarks and any other applicable governmental entity or registrar (including any applicable foreign or international office or registrar), to record Assignee as the owner of the Assigned Marks, and to issue any and all Assigned Marks to Assignee, as assignee of Assignor's entire right, title and interest in, to, and under the same. Assignee shall have the right to record this Assignment with all applicable governmental authorities and registrars so as to perfect its ownership of the Assigned Marks.
13. Further Assistance. Upon Assignee's reasonable request and at Assignee's sole cost and expense, Assignor shall (i) provide any further assistance reasonably necessary to effect the assignment of all rights, title and interest in and to the Assigned Marks to Assignee, including, but not limited to, the execution of any further documents and instruments, and (ii) take such other actions as are reasonably necessary to document the aforesaid assignment and transfer to Assignee.
14. No Modification. Nothing contained in this Assignment is intended to or shall be deemed to modify, alter, amend or otherwise change any of the rights or obligations of Assignor and Assignee and their respective Affiliates under the SPA or the Intellectual Property Agreement.
15. Successors and Assigns. This Assignment shall inure to the benefit of and be binding upon the Parties hereto and their respective successors and permitted assigns.
16. Counterparts. This Assignment may be executed in any number of counterparts, including by means of email in portable document format (.pdf), each of which when executed shall be deemed to be an original copy of this Assignment and all of which taken together shall constitute one and the same agreement.
17. Descriptive Headings. The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Assignment.
18. Governing Law. This Assignment shall be governed by the laws of the State of Delaware, its rules of conflict of laws notwithstanding. Each Party hereby agrees and consents to be subject to the jurisdiction of the Court of Chancery of the State of Delaware in and for New Castle County, or if the Court of Chancery lacks jurisdiction over such dispute, in any state or federal court having jurisdiction over the matter situated in New Castle County, Delaware, in any Action seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Assignment or the transactions contemplated hereby.
19. Authority. Each Party hereby represents that its undersigned representative is authorized and legally competent to execute this Assignment as a binding and enforceable agreement.
20. Severability. If any term or other provision of this Assignment, or any portion thereof, is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms and provisions of this Assignment, or the remaining portion thereof, shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any such term or other provision, or any portion thereof, is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Assignment so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are consummated to the fullest extent possible.
[Signature Page Follows]
IN WITNESS WHEREOF, the Parties have caused this Assignment to be executed as of the date above first written by their duly authorized representatives. SELLER:
By: Name: Title:
LICENSING:
By: Name: Title:
Acknowledged and Accepted:
ASSIGNEE:
By: Name: Title:
SCHEDULE A TO TRADEMARK ASSIGNMENT [/INST] ```json
{<answer_start>
"answer": "Armstrong Flooring, Inc."
<answer_end>
}
``` </s> | Exhibit 10.2
Execution Version
INTELLECTUAL PROPERTY AGREEMENT
This INTELLECTUAL PROPERTY AGREEMENT (this "Agreement"), dated as of December 31, 2018 (the "Effective Date") is entered into by and between Armstrong Flooring, Inc., a Delaware corporation ("Seller") and AFI Licensing LLC, a Delaware limited liability company ("Licensing" and together with Seller, "Arizona") and AHF Holding, Inc. (formerly known as Tarzan HoldCo, Inc.), a Delaware corporation ("Buyer") and Armstrong Hardwood Flooring Company, a Tennessee corporation (the "Company" and together with Buyer the "Buyer Entities") (each of Arizona on the one hand and the Buyer Entities on the other hand, a "Party" and collectively, the "Parties").
WHEREAS, Seller and Buyer have entered into that certain Stock Purchase Agreement, dated November 14, 2018 (the "Stock Purchase Agreement"); WHEREAS, pursuant to the Stock Purchase Agreement, Seller has agreed to sell and transfer, and Buyer has agreed to purchase and acquire, all of Seller's right, title and interest in and to Armstrong Wood Products, Inc., a Delaware corporation ("AWP") and its Subsidiaries, the Company and HomerWood Hardwood Flooring Company, a Delaware corporation ("HHFC," and together with the Company, the "Company Subsidiaries" and together with AWP, the "Company Entities" and each a "Company Entity") by way of a purchase by Buyer and sale by Seller of the Shares, all upon the terms and condition set forth therein;
WHEREAS, Arizona owns certain Copyrights, Know-How, Patents and Trademarks which may be used in the Company Field, and in connection with the transactions contemplated by the Stock Purchase Agreement the Company desires to acquire all of Arizona's right, title and interest in and to such Intellectual Property used exclusively in the Company Field, and obtain a license from Arizona to use other such Intellectual Property on the terms and subject to the conditions set forth herein;
WHEREAS, Seller is signatory to the Trademark License Agreement pursuant to which Seller obtains a license to the Arizona Licensed Trademarks;
WHEREAS, the Company desires to obtain a sublicense to use the Arizona Licensed Trademarks in the Company Field;
WHEREAS, Arizona has obtained consent from all counterparties to the Trademark License Agreement to grant to the Company the sublicenses to the Arizona Licensed Trademarks included in this Agreement; and
WHEREAS, the Company Entities own certain Copyrights and Know-How which may be used in the Arizona Field, and in connection with the transactions contemplated by the Stock Purchase Agreement, Arizona desires to obtain a license from the Company Entities to use such Intellectual Property on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements, provisions and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
1. DEFINITIONS AND INTERPRETATION 1.1 Certain Definitions. As used herein, capitalized terms have the meaning ascribed to them herein, including the following terms have the meanings set forth below. Capitalized terms that are not defined in this Agreement shall have the meaning set forth in the Stock Purchase Agreement. (a) "Arizona Assigned Copyrights" means all Copyrights, whether registered or unregistered, owned by Licensing or Seller as of the Effective Date and used or held for use exclusively in the Company Field as of November 14, 2018 (the "SPA Signing Date") and/or as of the Effective Date. (b) "Arizona Assigned Internet Domain Names" means the Internet domain names set forth on Schedule 1.1(b) and all other Internet domain names owned by Licensing or Seller as of the Effective Date and used or held for use exclusively in the Company Field as of the SPA Signing Date and/or as of the Effective Date (other than any Internet domain names that include any Arizona Licensed Trademarks). (c) "Arizona Assigned IP" means the Arizona Assigned Copyrights, Arizona Assigned Internet Domain Names, Arizona Assigned Know- How, Arizona Assigned Patents and Arizona Assigned Trademarks. (d) "Arizona Assigned Know-How" means all Know-How owned by Licensing or Seller as of the Effective Date and used or held for use exclusively in the Company Field as of the SPA Signing Date and/or as of the Effective Date. (e) "Arizona Assigned Patents" means the Patents set forth on Schedule 1.1(e) and all other Patents owned by Licensing or Seller and used or held for use exclusively in the Company Field as of the SPA Signing Date and/or as of the Effective Date. (f) "Arizona Assigned Trademarks" means the Trademarks set forth on Schedule 1.1(f) and all other Trademarks owned by Licensing or Seller as of the Effective Date and used or held for use exclusively in the in the Company Field as of the SPA Signing Date and/or as of the Effective Date (other than, for clarity any Arizona Licensed Trademarks). (g) "Arizona Domain Names" means the Internet domain names set forth on Schedule 1.1(g). (h) "Arizona Field" means all activities conducted by Arizona or its Affiliates, other than the Company Field. (i) "Arizona Licensed Copyrights" means all Copyrights owned by Licensing or Seller or their respective Affiliates, as of the Effective Date and used or held for use in the Company Field during the five (5) years prior to the Effective Date (other than the Arizona Assigned Copyrights). 2
(j) "Arizona Licensed IP" means the Arizona Licensed Copyrights, the Arizona Licensed Know-How, the Arizona Licensed Patents, the Arizona Licensed Trademarks, the Diamond Licensed Trademarks and the Phase-Out Marks. (k) "Arizona Licensed Know-How" means all Know-How owned by Licensing or Seller or their respective Affiliates, as of the Effective Date and used or held for use in the Company Field during the five (5) years prior to the Effective Date (other than the Arizona Assigned Know- How). (l) "Arizona Licensed Patents" means the Patents set forth on Schedule 1.1(l) and all other Patents owned by Licensing or Seller or their respective Affiliates as of the Effective Date and used or held for use in the Company Field during the five (5) years prior to the Effective Date (other than the Arizona Assigned Patents). (m) "Arizona Licensed Trademarks" means the Trademarks set forth on Schedule 1.1(m). (n) "Arizona Trademark License Term" means the period commencing on the Effective Date and ending twenty-four (24) months thereafter. (o) "Company Field" means the design, development, manufacture, marketing, promotion, advertising, sourcing, distribution and sale of solid hardwood and engineered wood flooring products by or for any Company Entity. (p) "Company Licensed Copyrights" means all Copyrights and registrations and applications for any of the foregoing owned by any Company Entity as of the Effective Date and used or held for use in the Arizona Field as of the Effective Date. (q) "Company Licensed IP" means the Company Licensed Copyrights, the Company Licensed Know-How and the Company Licensed Patents. (r) "Company Licensed Know-How" means all Know-How owned by any Company Entity as of the Effective Date and used or held for use in the Arizona Field as of the Effective Date. (s) "Company Licensed Patents" means the Patents set forth on Schedule 1.1(s). (t) "Copyrights" means copyrights (whether registered or unregistered) including applications for copyright (excluding, for clarity, Trademarks). (u) "Diamond Licensed Trademarks" means the Trademarks set forth on Schedule 1.1(u). (v) "Diamond Product" means the design, development, manufacture, marketing, promotion, advertising, sourcing, distribution and sale of the solid hardwood flooring product by any Company Entity as conducted under the Diamond Licensed Trademarks by any Company Entity prior to the Effective Date 3
(including the composition of coating used with respect to such solid hardwood flooring product). (w) "Diamond Trademark License Term" means the period commencing on the Effective Date and ending eighteen (18) months thereafter. (x) "Know-How" means trade secrets, and other confidential and proprietary information, inventions, processes, formulas and methodologies. (y) "Licensed IP" means the Arizona Licensed IP and the Company Licensed IP. (z) "Licensed Copyrights" means the Arizona Licensed Copyrights and the Company Licensed Copyrights. (aa) "Licensed Know-How" means the Arizona Licensed Know-How and the Company Licensed Know-How. (bb) "Licensed Trademarks" means the Arizona Licensed Trademarks, the Diamond Licensed Trademarks and the Phase-Out Marks. (cc) "Patents" means patent rights, including patents, patent applications, and all related continuations, continuations-in-part, divisionals, renewals, reissues, re-examinations, substitutions, and extensions thereof, and applications for any of the foregoing. (dd) "Proceeding" means any proceeding, claim, suit or action arising out of, or in connection with, this Agreement or its subject matter (including its validity, formation at issue, effect, interpretation, performance or termination), howsoever arising. (ee) "Seller Licensed Trademarks" means the Arizona Licensed Trademarks and the Diamond Licensed Trademarks. (ff) "Third Party" means any Person other than Arizona, the Company, and their respective Affiliates. (gg) "Trademarks" means any trademarks, service marks, trade names, trade dress, and other similar designations of source or origin, and registrations and applications for any of the foregoing. (hh) "Trademark License Agreement" means the Trademark License Agreement by and between Armstrong World Industries, Inc., AWI Licensing LLC and Armstrong Flooring, Inc, dated as of April 1, 2016 and attached hereto as Exhibit A. 4
1.2 Interpretation. Section 10.5 and 10.14 of the Stock Purchase Agreement shall apply hereto, mutatis mutandis. 1.3 Company Actions. In respect of any action herein required to be undertaken by any of the Company Entities, or to be omitted by any of the Company Entities, the Buyer Entities shall cause the applicable Company Entity to so undertake or omit to undertake, as applicable, such action. 2. ASSIGNMENT OF ARIZONA ASSIGNED IP 2.1 Assignment. Arizona agrees to assign and hereby assigns its entire right, title and interest in and to the Arizona Assigned IP to the Company. 2.2 Recordation of Assignment. Arizona will reasonably cooperate with the Company to obtain, record, and perfect title to, and provide all necessary evidence of the Company's ownership of, the Arizona Assigned IP, including the execution of (i) a Patent Assignment in the form of the attached Exhibit B, and (ii) a Trademark Assignment in the form of the attached Exhibit C. 3. GRANT OF COPYRIGHT LICENSE 3.1 Arizona Copyright Grant. Subject to the terms and conditions of this Agreement, Arizona hereby grants to the Company a perpetual, non- exclusive, royalty-free license in, to and under the Arizona Licensed Copyrights for use in the Company Field throughout the world. 3.2 Company Copyright Grant. Subject to the terms and conditions of this Agreement, the Company hereby grants to Seller a perpetual, non- exclusive, royalty-free license in, to and under the Company Licensed Copyrights for use in the Arizona Field throughout the world. 4. GRANT OF KNOW-HOW LICENSE 4.1 Arizona Know-How Grant. Subject to the terms and conditions of this Agreement, Arizona hereby grants to the Company a perpetual, non- exclusive, royalty-free license in, to and under the Arizona Licensed Know-How for use in the Company Field throughout the world. 4.2 Company Know-How Grant. Subject to the terms and conditions of this Agreement, the Company hereby grants to Seller a perpetual, non- exclusive, royalty-free license in, to and under the Company Licensed Know-How for use in the Arizona Field throughout the world. 5. GRANT OF PATENT LICENSE 5.1 Arizona Patent Grant. Subject to the terms and conditions of this Agreement, Arizona hereby grants to the Company a perpetual, non-exclusive, royalty-free license in, to and under the Arizona Licensed Patents for use in the Company Field throughout the world. 5
5.2 Company Patent Grant. Subject to the terms and conditions of this Agreement, the Company hereby grants to Seller a perpetual, non-exclusive, royalty-free license in, to and under the Company Licensed Patents for use in the Arizona Field throughout the world. 6. GRANT OF TRADEMARK LICENSE 6.1 Arizona Licensed Trademark Grant. Subject to the terms and conditions of this Agreement, Arizona hereby grants to the Company a limited, non- exclusive, royalty-free, non-sublicensable (except as set forth in Section 7.1), non-assignable license in, to and under the Arizona Licensed Trademarks for the Arizona Trademark License Term for use in the Company Field throughout the world only in the form and manner that such Arizona Licensed Trademarks are used in the Business as of the Closing, provided that the Company shall use commercially reasonable efforts to present the Arizona Licensed Trademarks in the form set forth on Schedule 6.1. 6.2 Diamond Licensed Trademark Grant. Subject to the terms and conditions of this Agreement, Arizona hereby grants to the Company a limited, non- exclusive, royalty-free, non-sublicensable (except as set forth in Section 7.1), non-assignable (except as set forth in Section 13.2) license in, to and under the Diamond Licensed Trademarks for the Diamond Trademark License Term for use with respect to the Diamond Product throughout the world only in the form and manner set forth on Schedule 6.2. 6.3 Quality Control. The Buyer Entities acknowledge the importance of Arizona's exercise of quality control over the use of the Seller Licensed Trademarks to preserve the continued integrity and validity of the Seller Licensed Trademarks and to protect the value and goodwill associated with the Seller Licensed Trademarks, and accordingly: (a) The Company shall ensure that all goods and services provided by the Company, under or in association with any of the Seller Licensed Trademarks, shall (i) be substantially the same as or greater than the quality of goods and services provided under such Seller Licensed Trademarks immediately prior to the Effective Date and (ii) not be associated with any goods or services, including any activities, that are reasonably likely to have an adverse effect on (A) the image or reputation of any of the Seller Licensed Trademarks or (B) Seller's right, title or interest in and to, any of the Arizona Licensed Trademarks. (b) The Company shall not tarnish or bring into disrepute the reputation of or goodwill associated with the Seller Licensed Trademarks or Arizona. (c) The Company shall use the Seller Licensed Trademarks at all times in compliance with all applicable Laws. (d) The Company shall include trademark and other notices in connection with the use of the Seller Licensed Trademarks as reasonably requested by Arizona from time to time. 6
(e) The Company shall upon Arizona's reasonable request from time to time, supply to Arizona representative samples and/or written descriptions, as appropriate, of uses made by the Company of the Seller Licensed Trademarks. (f) The Buyer Entities acknowledge that this license grant does not include, and the Company shall receive no rights under this Agreement or the Stock Purchase Agreement, to use any Trademark that is confusingly similar to or derivative of a Seller Licensed Trademark (other than the Seller Licensed Trademarks themselves as expressly authorized hereunder). 6.4 Trademark License Agreement. In addition to the obligations set forth in Section 6.3, and notwithstanding any other provision of this Agreement, the Company shall comply with all obligations applicable to Arizona and its Affiliates under the Trademark License Agreement including, for the avoidance of doubt, any obligations with respect to reporting Complaints (as defined in the Trademark License Agreement), which reports the Company shall provide to Arizona, and quality control and standards, and Licensor Competitors (as defined in the Trademark License Agreement), and neither Party shall undertake any act that would constitute a breach or a basis for termination under the Trademark License Agreement. 6.5 Trade Names. The Company shall not create or use any corporate or trade names that include the Arizona Licensed Trademarks, other than those in existence immediately prior to the Effective Date. No later than thirty (30) days following the Closing, each of AWP and the Company shall change its respective corporate name and trade name and cause its organizational documents to be amended to remove any reference to "Armstrong." 6.6 With respect to any Trademarks notified to the Company in writing after the Effective Date that are used as of the Effective Date in the Company Field and are not (i) owned by any Company Entity, (ii) Arizona Assigned Trademarks, or (iii) Seller Licensed Trademarks (the "Phase-Out Marks") in each case (i)-(iii) the Company shall have a period of twenty-four (24) months from the date of notification to phase out all use. Any use by the Company of any of the Phase-Out Marks as permitted in this Section 6.6, is subject to its use of the Phase-Out Marks in a form and manner and with standards of quality consistent with that in effect for the Phase-Out Marks as of the Effective Date. 6.7 Domain Names. Subject to the terms and conditions of this Agreement, the license set forth in Section 6.1 shall include the right of the Company to use the Arizona Domain Names solely in connection with the applicable Arizona Licensed Trademarks in the Company Field during the Arizona Trademark License Term, in the ordinary course of business in a manner generally consistent with the past practice of Arizona in the Company Field. The Company shall not have the right to register any domain name or social media addresses (or any similar or successor identifiers) containing Arizona Licensed Trademarks. 7
7. INTELLECTUAL PROPERTY RIGHTS 7.1 Sublicenses. Arizona may sublicense the licenses granted herein to its Affiliates and Third Parties in the ordinary course of business in support of its and its Affiliates' business, but not for the independent use of Third Parties, and the Company may sublicense the licenses granted herein to Third Parties, its Subsidiaries, AWP, controlled Affiliates, or any holding company that is a direct or indirect parent of the Company in the ordinary course of business in support of its and its Subsidiaries' or controlled Affiliates' business, but not for the independent use of Third Parties (each such Affiliate, Third Party, AWP or Subsidiary, a "Sublicensee"). Each Party shall ensure that any sublicense that it grants to a Sublicensee does not conflict with this Agreement. For clarity, granting a sublicense shall not relieve the Parties of any obligations hereunder and each Party shall cause each of its Sublicensees to comply, and shall remain responsible for such Sublicensees' compliance, with all terms and conditions hereof applicable to the Parties. At the request of a licensing Party, the other Party shall provide to the licensing Party a list of all Sublicensees and otherwise reasonably cooperate with the licensing Party in connection with Sublicensees' compliance with this Agreement. 7.2 Reservation of Rights. Except as expressly provided in the Stock Purchase Agreement or herein, each Party reserves its and its Affiliates' rights in and to all Intellectual Property (including with respect to the use, registration and licensing thereof). 8. OWNERSHIP 8.1 Ownership of Arizona Licensed IP. The Buyer Entities acknowledge and agree that (a) Arizona and its Affiliates own the Arizona Licensed IP (other than the Arizona Licensed Trademarks), (b) AWI Licensing LLC owns the Arizona Licensed Trademarks, (b) neither the Company, nor its Affiliates or its Sublicensees, will acquire any ownership rights in the Arizona Licensed IP, and (c) the Company shall not represent or make any claim that it has an ownership interest in any Arizona Licensed IP. Without limitation to the foregoing, the Company shall not file applications to register any Arizona Licensed IP or assist any person in doing the same, or contest, challenge, or otherwise take any action adverse to Arizona's and its Affiliates' ownership of or rights in and to the Arizona Licensed IP, or assist any person in doing the same. 8.2 Ownership of Company Licensed IP. Arizona acknowledges and agrees that (a) the Company and its Affiliates own the Company Licensed IP, (b) neither Arizona, nor its Affiliates or its Sublicensees, will acquire any ownership rights in the Company Licensed IP, and (c) Arizona shall not represent or make any claim that it has an ownership interest in any Company Licensed IP. Without limitation to the foregoing, Arizona shall not file applications to register any Company Licensed IP or assist any person in doing the same, or contest, challenge, or otherwise take any action adverse to the Company's and its Affiliates' ownership of or rights in and to the Company Licensed IP, or assist any person in doing the same. 8
9. PROSECUTION, MAINTENANCE AND ENFORCEMENT 9.1 Responsibility and Cooperation. As between the Parties, Arizona, with respect to the Arizona Licensed IP, and the Buyer Entities, with respect to the Company Licensed IP, shall have the right (but not the obligation) for filing, prosecuting, and maintaining all Arizona Licensed IP and Company Licensed IP, respectively, in the licensing Party's name. For the avoidance of doubt, in case either such Party files any new Intellectual Property registration to the extent covering the Licensed IP, such new Intellectual Property registration shall automatically become Licensed IP. However, and for the further avoidance of doubt, the aforementioned shall not apply to new Intellectual Property created by a licensee Party or its Sublicensees separately and independently from the Licensed IP, for example in case of separate and independent technical enhancements or advancements. The Parties shall reasonably consult and coordinate with each other at the other Party's request with respect to the matters set forth in this Section 9.1. 9.2 No Additional Obligations. This Agreement shall not obligate either Party to disclose to the other Party, or maintain, register, prosecute, pay for, enforce, or otherwise manage any Intellectual Property except as expressly set forth herein. 9.3 Enforcement. As between the Parties, Arizona, with respect to the Arizona Licensed IP, and the Company or Buyer, with respect to the Company Licensed IP, shall have the right (but not the obligation) to elect to bring a Proceeding or enter into settlement discussions regarding, or otherwise seek to resolve, any infringement, misappropriation, or other violation, or allegations of invalidity or unenforceability, of the Licensed IP. In the event that Arizona declines to institute any Proceedings against third-party infringers or violators of any Arizona Licensed Patents, regarding activities that would fall within the Company Field if conducted by the Company, within forty-five (45) days after being notified or becoming aware of such infringing conduct, the Company or Buyer shall have the right to institute any Proceedings against such third-party infringers or violators. In the event that the Company or Buyer elects to institute such Proceedings, Arizona will reasonably cooperate with the Company or Buyer in such Proceedings, and the Company or Buyer shall reimburse Arizona for all reasonable costs and fees incurred by Arizona as a result of such cooperation. Such cooperation by Arizona will include joining such Proceeding as a party, if deemed necessary by the Company or Buyer. In the event that Arizona elects to bring a Proceeding against any alleged infringer of the Arizona Licensed Trademarks and seeks the cooperation of the Licensor of the Trademark License Agreement in such Proceeding, Arizona will take reasonable steps to assist the Company or Buyer in requesting the cooperation of the Licensor of the Trademark License Agreement, and pursuing an infringement claim against such alleged infringer. The Company or Buyer, as applicable, shall retain all benefits, recoveries, injunctions or other value derived from such Proceedings instituted by such Party. 10. INDEMNIFICATION 10.1 Indemnification. Each Party (the "Indemnifying Party") agrees to indemnify, defend and hold harmless the other Party and its Affiliates and their respective employees, 9
directors, officers, agents and successors (collectively, the "Indemnified Parties") from and against any and all losses (including all costs, liabilities (including present and future damages), claims and expenses) incurred or suffered by any of the Indemnified Parties, to the extent arising out of, relating to or resulting from (a) a breach by the Indemnifying Party of this Agreement; or (b) any gross negligence or willful misconduct of the Indemnifying Party in connection with this Agreement. 11. DISCLAIMERS 11.1 Disclaimer. Each Party hereby acknowledges that, except to the extent expressly set forth in this Agreement, the Stock Purchase Agreement, the Transition Services Agreement or the Confidentiality Agreement, neither Party nor any of its Affiliates has made any representation or warranty, expressed or implied, including any representation or warranty regarding the validity, enforceability, or scope of the Licensed IP, noninfringement, merchantability or fitness for a particular purpose. 12. TERM 12.1 Term and Termination. (a) Unless earlier terminated pursuant to the provisions hereof, the term of this Agreement and the licenses and other grants of rights (and related obligations) under this Agreement shall (i) with respect to the Arizona Licensed Trademarks, be for the Arizona Trademark License Term, (ii) with respect to the Diamond Licensed Trademarks, be for the Diamond Trademark License Term, (iii) with respect to the Phase- Out Marks, be for the term set forth in Section 6.6, and (iv) with respect to Copyrights, Know-How and Patents, be in perpetuity. (b) Either Party may terminate this Agreement if the other Party materially breaches this Agreement and fails to remedy such breach within thirty (30) days' written notice thereof; provided, however, that if the material breach of this Agreement by the breaching Party is limited to the Licensed Copyrights, Licensed Know-How, the Arizona Licensed Patents, or the Licensed Trademarks, the non-breaching Party shall be entitled to termination solely with respect to the affected part of the license (i.e., in such case, the non-breaching Party may terminate this Agreement with respect to the Licensed Copyrights or the Licensed Know-How or the Arizona Licensed Patents or the Licensed Trademarks, as applicable). 12.2 Effect of Termination. (a) Effect of Termination. Upon termination of this Agreement, each licensee Party shall and shall cause all of its Sublicensees to cease all use of the Licensed IP that is subject to such termination (excluding for clarity (a) any Arizona Licensed Patents, Licensed Copyrights or Licensed Trademarks that are expired, invalid or abandoned or (b) any Licensed Know-How that no longer constitutes confidential information). 10
(b) Survival. The following provisions of this Agreement, together with all other provisions of this Agreement that expressly specify that they survive, shall survive expiration or termination of this Agreement, in part or in its entirety: Sections 8, 10, 11, 12.2(a) and 13. 13. MISCELLANEOUS 13.1 Entire Agreement. This Agreement (together with the Schedules attached hereto), the Stock Purchase Agreement, the Transition Services Agreement and the Confidentiality Agreement constitute the entire agreement of the Parties hereto and supersede all prior negotiations, correspondence, agreements and undertakings, both written and oral, between or among the Parties, or any of them, with respect to the subject matter hereof. It shall be expressly understood that the Stock Purchase Agreement shall govern the transactions contemplated thereby as a whole and that this Agreement shall not be construed as an amendment or variation of the Stock Purchase Agreement but rather shall be complemented by and interpreted in light of the Stock Purchase Agreement. In the event that any provision of this Agreement is inconsistent with, conflicts with or contradicts any term of the Stock Purchase Agreement, the terms of the Stock Purchase Agreement will prevail. 13.2 Assignment. Except as otherwise provided in this Agreement, including under Section 7.1, neither this Agreement nor any of the rights, interests or obligations of any Party under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise, by either Party without the prior written consent of the other Party; provided, however, that (a) either Party may assign any of the foregoing in connection with the sale or other transfer of the applicable business or assets of such Party or its Affiliates to which this Agreement relates (except that neither of the Buyer Entities may assign any such rights, interests or obligations with respect to the Arizona Licensed Trademarks); (b) Arizona may assign any of the foregoing to one or more of its Affiliates and (c) the Company and Buyer may assign any of the foregoing to one or more of its Subsidiaries, controlled Affiliates, AWP, or any holding company that is a direct or indirect parent of the Company; provided that in each case (b) and (c), no assignment shall relieve the assigning Party of any of its obligations under this Agreement unless agreed to by the non-assigning Party. Any assignment or other disposition in violation of the preceding sentence shall be void. 13.3 Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given (i) on the date delivered, if delivered personally, (ii) on the third (3rd) Business Day after being mailed by registered or certified mail (postage prepaid, return receipt requested), or (iii) on the next Business Day after being sent by reputable overnight courier (delivery prepaid), in each case, to the parties at the following addresses, or on the date sent and confirmed by electronic transmission or confirmatory return email to the telecopier number or email address specified below (or at such other address, telecopier number or email address for a Party as shall be specified by notice given in accordance with this Section 13.3):
(a) If to Buyer: 11
c/o American Industrial Partners 450 Lexington Avenue, 40th Floor Attention: General Counsel and Richard Hoffman Email: notices@americanindustrial.com richard@americanindustrial.com
with a copy to:
Baker Botts L.L.P. 1299 Pennsylvania Avenue, NW Washington, D.C. 20004 Attention: Terrance L. Bessey Brendan O. Dignan Email: terrance.bessey@bakerbotts.com brendan.dignan@bakerbotts.com
(b) If to Arizona:
Armstrong Flooring, Inc. 2500 Columbia Avenue, PO Box 3025 Lancaster, PA 17604 Attention: Christopher S. Parisi Email: csparisi@armstrongflooring.com
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP 4 Times Square New York, NY 10036 Attention: Eric L. Cochran Steven J. Daniels Email: eric.cochran@skadden.com steven.daniels@skadden.com 13.4 Specific Performance. Each Party hereto acknowledges that money damages would be both incalculable and an insufficient remedy for any breach of this Agreement by such Party and that any such breach would cause Arizona, on the one hand, and the Buyer Entities, on the other hand, irreparable harm. Accordingly, each Party hereto also agrees that, in the event of any breach or threatened breach of the provisions of this Agreement by such Party, Arizona, on the one hand, and the Buyer Entities, on the other hand, shall be entitled to equitable relief without the requirement of posting a bond or other security, including in the form of injunctions and orders for specific performance. Any and all remedies herein expressly conferred upon a Party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such Party, and the exercise by a Party of any one remedy will not preclude the exercise of any other remedy. Arizona, on the one hand, and Buyer Entities, on the other hand, hereby agree not to raise any objections to the availability of the equitable remedy of specific 12
performance to prevent or restrain breaches or threatened breaches of this Agreement by the Buyer Entities or Arizona, as applicable, and to specifically enforce the terms and provisions of this Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of the Buyer Entities or Arizona, as applicable, under this Agreement. 13.5 Governing Law; Jurisdiction; Waiver of Jury Trial. (a) This Agreement shall be governed by the laws of the State of Delaware, its rules of conflict of laws notwithstanding. Each Party hereby agrees and consents to be subject to the jurisdiction of the Court of Chancery of the State of Delaware in and for New Castle County, or if the Court of Chancery lacks jurisdiction over such dispute, in any state or federal court having jurisdiction over the matter situated in New Castle County, Delaware, in any Action seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby. Each Party hereby irrevocably consents to the service of any and all process in any such Action by the delivery of such process to such Party at the address and in the manner provided in Section 13.3 hereof. Each of the Parties hereto irrevocably and unconditionally waives any objection to the laying of venue of any Proceeding arising out of this Agreement or the transactions contemplated hereby in the Court of Chancery of the State of Delaware in and for New Castle County, or if the Court of Chancery lacks jurisdiction over such dispute, in any state or federal court having jurisdiction over the matter situated in New Castle County, Delaware, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Proceeding brought in any such court has been brought in an inconvenient forum. (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13.5(b). 13
13.6 Severability. If any term or other provision of this Agreement, or any portion thereof, is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms and provisions of this Agreement, or the remaining portion thereof, shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any such term or other provision, or any portion thereof, is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are consummated to the fullest extent possible. 13.7 Counterparts. This Agreement may be executed in any number of counterparts, including by means of email in portable document format (.pdf), each of which when executed shall be deemed to be an original copy of this Agreement and all of which taken together shall constitute one and the same agreement.
[Remainder of page intentionally left blank] 14
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date first written above. ARMSTRONG FLOORING, INC.
By: /s/ Donald R. Maier Name: Donald R. Maier Title: President and Chief Executive Officer
AFI LICENSING LLC
By: /s/ Christina Geerlof Name: Christina Geerlof Title: President
AHF HOLDING, INC. (formerly known as Tarzan Holdco, Inc.)
By: /s/ Stanley Edme Name: Stanley Edme Title: Vice President
ARMSTRONG HARDWOOD FLOORING COMPANY
By: /s/ Jason Braeglemann Name: Jason Braegelmann Title: Vice President [Signature Page to IP Agreement]
Schedule 1.1(b) - Arizona Assigned Internet Domain Names Domain Name Expiration date Owner amish-handscraped.com 13-Apr-2019 Armstrong Flooring, Inc. ("AFI") amishhandscraped.com 13-Apr-2019 AFI bruce.adult 28-Apr-2019 AFI bruce.biz 26-Mar-2019 AFI bruce.com 21-Jan-2019 AFI bruce.dpml.pub 29-Oct-2019 AFI bruce.dpmlblock 29-Oct-2019 AFI bruce.info 10-Aug-2019 AFI bruce.porn 28-Apr-2019 AFI bruce.xxx 01-Dec-2021 AFI brucebuilder.com 02-Mar-2019 AFI brucecontractor.com 02-Mar-2019 AFI brucedealer.com 02-Mar-2019 AFI brucedistributor.com 02-Mar-2019 AFI brucefloors.com 04-Aug-2019 AFI brucehardwoodfloors.com 11-Apr-2019 AFI brucehome.com 02-Mar-2019 AFI brucelaminate.com 30-Dec-2018 AFI bruceremodeler.com 02-Mar-2019 AFI bruceretailer.com 02-Mar-2019 AFI brucesucks.com 25-Oct-2018 AFI brucesucks.info 22-Sep-2019 AFI capellaflooringcompany.com 12-Nov-2018 AFI capellafloors.com 27-Oct-2018 AFI forestglenhardwood.com 13-Sep-2019 AFI handscraped-hardwood.com 13-Apr-2019 AFI handscrapedhardwoodflooring.com 13-Sep-2019 AFI handscrapedwoodfloor.com 05-Sep-2019 AFI handscrapehardwoodfloor.com 05-Sep-2019 AFI handscrapehardwoodflooring.com 05-Sep-2019 AFI handscrapehardwoodfloors.com 05-Sep-2019 AFI handscrapewoodfloor.com 05-Sep-2019 AFI handscrapewoodflooring.com 05-Sep-2019 AFI handscrapewoodfloors.com 05-Sep-2019 AFI hardwood-flooring.asia 26-Mar-2019 AFI hartco.biz 18-Nov-2018 AFI hartco.info 10-Aug-2019 AFI hartcodistributor.com 02-Mar-2019 AFI hartcoflooring.com 24-May-2019 AFI
Domain Name Expiration date Owner hartcoflooringcompany.com 18-Jun-2019 AFI hartcohome.com 02-Mar-2019 AFI homerwood.com 14-Sep-2019 AFI lifetimeluxuryhardwood.com 14-Jun-2019 AFI lockandfold.com 20-Nov-2018 AFI luxuryhardwood.com 20-Dec-2018 AFI mybruce.com 25-Jul-2019 AFI mybruce.net 25-Jul-2019 AFI myhartco.com 25-Jul-2019 AFI myhartco.net 25-Jul-2019 AFI myrobbins.com 25-Jul-2019 AFI myrobbins.net 25-Jul-2019 AFI powerofparagon.com 15-Jun-2019 AFI premium-hardwood.com 13-Apr-2019 AFI robbins-home.com 02-Mar-2019 AFI robbins.biz 26-Mar-2019 AFI robbins.com 13-Sep-2019 AFI robbins.info 10-Aug-2019 AFI robbinsflooring.com 21-Nov-2018 AFI robbinsflooring.info 22-Sep-2019 AFI robbinsfloors.com 14-Sep-2019 AFI robbinsfloors.net 17-Apr-2019 AFI robbinshardwoodflooring.com 26-Sep-2019 AFI robbinshighperformance.com 18-Oct-2018 AFI smokedhardwood.com 30-Apr-2019 AFI smokedhardwoodfloor.com 30-Apr-2019 AFI smokedhardwoodflooring.com 30-Apr-2019 AFI smokedhardwoodfloors.com 30-Apr-2019 AFI softscrapedhardwoodfloor.com 05-Sep-2019 AFI softscrapedhardwoodflooring.com 05-Sep-2019 AFI softscrapedhardwoodfloors.com 05-Sep-2019 AFI softscrapedwoodfloor.com 05-Sep-2019 AFI softscrapedwoodflooring.com 05-Sep-2019 AFI softscrapedwoodfloors.com 05-Sep-2019 AFI softscrapehardwoodfloor.com 05-Sep-2019 AFI softscrapehardwoodflooring.com 05-Sep-2019 AFI softscrapehardwoodfloors.com 05-Sep-2019 AFI softscrapewoodfloor.com 05-Sep-2019 AFI softscrapewoodflooring.com 05-Sep-2019 AFI softscrapewoodfloors.com 05-Sep-2019 AFI
Domain Name Expiration date Owner tmortan.com 07-Sep-2019 AFI tmorten.com 07-Sep-2019 AFI tmortin.com 07-Sep-2019 AFI tmorton-flooring.com 17-Mar-2019 AFI tmorton-floors.com 17-Mar-2019 AFI tmorton-hardwood-flooring.com 17-Mar-2019 AFI tmorton-hardwood-floors.com 17-Mar-2019 AFI tmorton-hardwood.com 17-Mar-2019 AFI tmorton-wood-flooring.com 17-Mar-2019 AFI tmorton-wood-floors.com 17-Mar-2019 AFI tmorton.asia 20-Mar-2019 AFI tmorton.com 17-Mar-2019 AFI tmorton.org 17-Mar-2019 AFI tmortonandco.com 17-Mar-2019 AFI tmortonco.com 17-Mar-2019 AFI wwwbruce.com 01-Mar-2019 AFI wwwhartco.com 17-Jan-2019 AFI wwwrobbins.com 17-Jan-2019 AFI
Schedule 1.1(e) - Arizona Assigned Patents
Country App. Status App. Number Filing Date Patent Number Issue Date US Granted 10/459,977 12-Jun-03 7381474 3-Jun-08 AU Granted 2004304906 22-Nov-04 2004304906 28-Oct-10 CN Granted 200480039516 22-Nov-04 ZL200480039516.1 2-Jan-13 DE Granted 6020040309575 22-Nov-04 1944158 11-Feb-17 EP Granted 8007063.4 22-Nov-04 1944158 5-Jan-11 FR Granted 8007063.4 22-Nov-04 1944158 5-Jan-11 GB Granted 8007063.4 22-Nov-04 1944158 5-Jan-11 US Granted 10/727,749 4-Dec-03 7,261,947 28-Aug-07 US Granted 11/901,361 17-Sep-07 8,287,971 16-Oct-12 US Granted 13/611,028 12-Sep-12 8,399,075 19-Mar-13 US Granted 12/825,448 29-Jun-10 8801505 12-Aug-14 US Granted 14/458,103 12-Aug-14 10,072,427 11-Sep-18 AU Granted 2014240948 28-Mar-14 2014240948 20-Oct-16 EP Published 14722915.7 28-Mar-14 AU Granted 2013246000 10-Apr-13 2013246000 26-Nov-15 CA Granted 2,869,667 10-Apr-13 2869667 19-Dec-17 CN Granted 201380018751 10-Apr-13 2512525 9-Jun-17 EP Published 13718698.7 10-Apr-13 US Granted 13/442,960 10-Apr-13 9434087 6-Sep-16 AU Granted 2013246002 10-Apr-13 2013246002 17-Dec-15 CA Granted 2,869,752 10-Apr-13 2869752 3-Jan-17 CN Granted 201380018754 10-Apr-13 104245258 3-May-17 US Granted 13/442,966 10-Apr-12 9,108,335 18-Aug-15 CN Granted 201410046641 10-Feb-14 103978829 12-Apr-17 EP Granted 14154551.7 10-Feb-14 EP2764965 21-Sep-16 US Granted 14/176,299 10-Feb-14 9701040 11-Jul-17 AU Granted 2014240951 28-Mar-14 2014240951 30-Jun-16 AU Granted 2013270463 10-Dec-13 2013270463 26-Nov-15 CN Granted 201310674310 11-Dec-13 103866947 4-Jan-17 AU Granted 2014274549 10-Dec-14 2014274549 15-Oct-15 CA Granted 2,873,571 8-Dec-14 2873571 27-Mar-18 CN Published 201407560485 10-Dec-14 AU Pending 2016287834 5-Jul-16 CN Published 2016800338922 5-Jul-16
Country App. Status App. Number Filing Date Patent Number Issue Date EP Published 16818951.2 5-Jul-16 TW Published 20160120286 28-Jun-16 WO Published PCT/US16/40942 5-Jul-16 CN Published 201510954585 17-Dec-15 EP Published 15201544.2 21-Dec-15 US Published 14/970,662 16-Dec-15 AU Pending 2016380976 20-Dec-16 CN Published 20168078711 20-Dec-16 EP Pending 16882368 20-Dec-16 US Published 14/980,263 28-Dec-15 WO Published PCT/US2016/067690 20-Dec-16 AU Pending 2016380975 20-Dec-16 CN Published 201680078712 20-Dec-16 EP Pending 16882368 20-Dec-16 US Published 14/980,313 28-Dec-15 WO Published PCT/US2016/067688 20-Dec-16 WO Published PCT/US2017/055068 5-Oct-17 US Published 15902327 22-Feb-18 WO Published PCT/US18/19186 22-Feb-18 US Granted 09/478,016 5-Jan-00 6164351 26-Dec-00 US Granted 11/390,679 28-Mar-06 7537841 26-May-09 US Granted 09/175,661 20-Oct-98 6148884 21-Nov-00 US Granted 09/303,176 30-Apr-99 6156402 5-Dec-00 US Granted 09/241,878 2-Feb-99 6194078 27-Feb-01 US Pending 62/611953 29-Dec-17 US Expired 62/404,413 5-Oct-16 US Expired 62/462,609 23/Feb-17 US Abandoned 09/903,549 13-Jul-01 US Abandoned 14/828,598 18-Aug-15 US Expired 62/187,925 2-Jul-15 US Granted 12/425,560 17-Apr-09 8,357,752 22-Jan-13 US Granted 13/741,770 15-Jan-13 8,617,654 31-Dec-13 AU Granted 2014274559 10-Dec-14 2014274559 24-Mar-16 EP Published 14199378.2 19-Dec-14 CN Published 2015109813242 23-Dec-15 EP Published 15202406.3 23-Dec-15 US Granted 14/580,347 23-Dec-14 9,567,755 14-Feb-17
Country App. Status App. Number Filing Date Patent Number Issue Date US Pending 15/724,391 5-Oct-17
Schedule 1.1(f) - Arizona Assigned Trademarks
Country Trademark Status App. Number App. Date Reg. Number Reg. Date US AMERICAN SCRAPE Registered 85616030 3-May-12 4481771 11-Feb-14
CA ARTISAN COLLECTIVE Pending 1817435 10-Jan-17
US ARTISAN COLLECTIVE CLTM
CA ARTISTIC TIMBERS Registered 1670991 2-Apr-14 TMA967273 31-Mar-17
US ARTISTIC TIMBERS CLTM
US BIRCH RUN Registered 85/931,142 14-May-13 4,524,637 6-May-14
CA BIRCH RUN Registered 1,636,822 25-Jul-13 TMA905398 4-Jun-15
US BRISTOL TRAIL Registered 86919986 25-Feb-16 5423957 13-Mar-18
CA BRISTOL TRAIL Published 1769733 26-Feb-16
Country Trademark Status App. Number App. Date Reg. Number Reg. Date US BRUSHED IMPRESSIONS Registered 86906683 12-Feb-16 5183009 11-Apr-17
CA BRUSHED IMPRESSIONS Published 1768050 16-Feb-16
CA CAPELLA Published 1789784 4-Jul-16
US DUNDEE Registered 86274578 7-May-14 4649247 2-Dec-14
US EVERGUARD Registered 86084365 7-Oct-13 4654066 9-Dec-14
US FARMINGTON Registered 86920079 25-Feb-16 5423958 13-Mar-18
CA FARMINGTON Published 1769729 26-Feb-16
US FOREST GLEN Registered 86084354 7-Oct-13 4633917 4-Nov-14
CA FOREST GLEN Registered 1769732 26-Feb-16 961263 27-Jan-17
Country Trademark Status App. Number App. Date Reg. Number Reg. Date CA FORGED HERITAGE Published 1,752,076 26-Oct-15
CA Hydropel Pending 1917541 30-Aug-18
US Hydropel Pending 88148020 9-Oct-18
US LOCK&FOLD Registered 76656450 13-Mar-06 3200208 23-Jan-07
US MIDTOWN Registered 85736605 24-Sep-12 4401628 10-Sep-13
US MILLWORK SQUARE Registered 86906649 12-Feb-16 5183008 11-Apr-17
CA MILLWORK SQUARE Published 1768051 16-Feb-16
CA ORIGINAL RUSTICS Published 1791791 18-Jul-16
US ORIGINAL RUSTICS CLTM
Country Trademark Status App. Number App. Date Reg. Number Reg. Date US PARAGON CLTM
CA PARAGON CLTM
US PRIME HARVEST Registered 86/285,289 19-May-14 4,742,207 26-May-15
CA PRIME HARVEST Registered 1,677,599 20-May-14 TMA906580 17-Jun-15
US RIGHT EVERY TIME Published 87261852 8-Dec-16
US RUSTIC RESTORATIONS Published 87215879 26-Oct-16 5520272 17-Jul-18
CA RUSTIC RESTORATIONS Pending 1806462 26-Oct-16
US SDF Pending '87947440 4-Jun-18
CA SDF Pending 1902212 1-Jun-18
Country Trademark Status App. Number App. Date Reg. Number Reg. Date US SIGNATURE SCRAPE Registered 86920111 25-Feb-16 5187924 18-Apr-17
CA SIGNATURE SCRAPE Published 1769731 26-Feb-16
CA SIGNATURE SOFT SCRAPE Published 1769730 26-Feb-16
US TimberBlock Published 87839322 19-Mar-18
CA TimberBlock Pending 1889001 20-Mar-18
US TIMBERBRUSHED Registered 87105110 15-Jul-16 5267454 15-Aug-17
US TIMBERCUTS Registered 87295586 10-Jan-17 5371502 2-Jan-18
CA TIMBERCUTS Pending 1817434 10-Jan-17
US TIMBERLAND Registered 76496979 13-Mar-03 2923877 1-Feb-05
Country Trademark Status App. Number App. Date Reg. Number Reg. Date CA TRANQUIL WOODS Published 1790828 11-Jul-16
US TRANQUIL WOODS CLTM
US TruTop Published 87870541 10-Apr-18
CA TruTop Pending 1892873 10-Apr-18
CA VINTAGE FARMHOUSE Published 1790827 11-Jul-16
US WEAR MASTER Registered 74/329383 9-Nov-92 1834641 3-May-94
CN WEAR MASTER Registered 4819937 5-Aug-05 4819937
CA OPAL CREEK Registered 1738695 23-Jul-15 1002365 08-Aug-18
US OPAL CREEK Registered CLTM
Schedule 1.1(g) - Arizona Domain Names
Domain Name Expiration date Owner armstrongwoodproducts.com 19-Dec- 2018 AFI
Schedule 1.1(l) - Arizona Licensed Patents COUNTRY APP NO. FILING DATE PATENT NUMBER ISSUE DATE AU 2009241803 30-Apr-09 2009241803 26-Sep-13 AU 2013231111 19-Sep-13 2013231111 7-Jan-16 CN 200980120494 30-Apr-09 DE 60 2009 024 610.0 30-Apr-09 2 286 018 EP 9739191.6 30-Apr-09 2286018 11-Jun-14 EP 13192693.3 30-Apr-09 2703461 31-Aug-16 FR 9739191.6 30-Apr-09 2 286 018 11-Jun-14 GB 9739191.6 30-Apr-09 2 286 018 11-Jun-14 US 12/432,845 30-Apr-09 8,420,710 16-Apr-13 US 14/700,669 30-Apr-15 BE 10770074.2 29-Nov-11 2 424 911 23-Mar-16 DE DE 60 2010 031 448.0 29-Nov-11 2 424 911 23-Mar-16 EP 10770074.2 29-Nov-11 2 424 911 23-Mar-16 FR 10770074.2 29-Nov-11 2 424 911 23-Mar-16 GB 10770074.2 29-Nov-11 2 424 911 23-Mar-16 NL 10770074.2 29-Nov-11 2 424 911 23-Mar-16 US 12/799,700 30-Apr-10 US 14/140,206 24-Dec-13 AU 2012286867 26-Jul-12 2012286867 4-Feb-16 CN 2012800367594 26-Jul-12 2094039 1-Jun-16 DE 12751639.1 26-Jul-12 EP2736977 20-May-15 EP 12751639.1 26-Jul-12 EP2736977 20-May-15 GB 12751639.1 26-Jul-12 EP2736977 20-May-15 AU 2013222106 25-Feb-13 2013222106 25-Feb-13 EP 13707792.1 25-Feb-13 US 14/380,432 22-Aug-14 9540825 10-Jan-17 AU 2013308554 30-Aug-13 2013308554 28-Apr-16 CN 201380046030 4-Mar-15 2789549 23-Jan-18 EP 13770989.5 30-Mar-15 EP2890749 16-May-18 US 14/423,186 23-Feb-15 AU 2014207438 8-Jul-15 2014207438 9-Feb-17 EP 14702412.9 14-Aug-15 US 14/760,080 9-Jul-15 AU 2014207441 8-Jul-15 2014207441 10-Nov-16 CN 2014800055962 15-Jul-15 2581656 11-Aug-17 EP 14703007.6 14-Aug-15
COUNTRY APP NO. FILING DATE PATENT NUMBER ISSUE DATE US 14/760,060 9-Jul-15 AU 2015227440 16-Sep-15 2015227440 30-Mar-17 CN 2015105859497 23-Dec-14 3045520 24-Aug-18 EP 15198373.1 8-Dec-15 US 14/580,312 23-Dec-14 9650792 16-May-17 EP 1151281 12-Jul-00 1072659 13-Oct-04 US 10/062,616 31-Jan-02 6572932 3-Jun-03 US 10/060,487 30-Jan-02 6911263 28-Jun-05 AU 2016243556 6-Nov-17 CN 2016800223098 16-Oct-17 EP 16719581.7 14-Nov-17 TW 105110285 31-Mar-16 624366 21-May-18 US 14/678,163 3-Apr-15 WO PCT/US16/24457 28-Mar-16 AU 2016243132 6-Nov-17 CN 2016800229978 20-Oct-17 EP 16718052 14-Nov-17 US 15564161 3-Oct-17 WO PCT/US16/24462 28-Mar-16 US 62/142,611 3-Apr-15 AU 2016243552 6-Nov-17 CN 2016800226325 18-Oct-17 EP 16719580.9 14-Nov-17 US 14/678,183 3-Apr-15 WO PCT/US16/24451 28-Mar-16 AU 2016357732 18-Apr-18 CN 2016800648806 7-May-18 EP 16866982.8 14-Jun-18 US 15776637 16-May-18 WO PCT/US2016/062133 16-Nov-16 WO PCT/US2017/055060 5-Oct-17 WO PCT/US2017/055047 4-Oct-17 WO PCT/US2017/055077 4-Oct-17 WO PCT/US2017/055089 5-Oct-17 WO PCT/US2017/055044 5-Oct-17 WO PCT/US2017/055033 4-Oct-17 US 14/721,724 26-May-15 9468314 18-Oct-16
Schedule 1.1(m) - Arizona Licensed Trademarks
ARMSTRONG
Schedule 1.1(s) - Company Licensed Patents
Country App. Status App. Number Filing Date Patent Number Issue Date US Granted 12/425,560 17-Apr-09 8,357,752 22-Jan-13 US Granted 13/741,770 15-Jan-13 8,617,654 31-Dec-13 CN Published 2015109813242 23-Dec-15 EP Published 15202406.3 23-Dec-15 US Granted 14/580,347 23-Dec-14 9,567,755 14-Feb-17 US Pending 15/724,391 5-Oct-17
Schedule 1.1(u) - Diamond Licensed Trademarks
DIAMOND 10
Schedule 6.1 - Presentation of Arizona Licensed Trademarks
Armstrong Logo Usage: 1. Logo Colors: The Armstrong logo can appear only in black, white or 100% Tungsten. If reversed out white, it should be on a dark background color. The entire mark must be the same color. The Armstrong logo cannot be used alone.
2. Logo Size: The minimum logo size is 1" or 25mm. In digital formats, the minimum width is 100 pixels at 72 dpi.
3. Clear Space: If the business unit identifier is used below the logo, the clear space is 1∕2 the diameter of the Armstrong ring on the top, right side and left side and the width of the stem in in the lower case "r" on the bottom.
If the business unit identifier is used above the logo, the clear space is 1∕2 the diameter of the Armstrong ring on the right side, left side and bottom and the width of the stem of the lower case "r" on the top.
a. There is no clear space defined below the business unit identifier if used below the logo and no clear space defined above the business unit identifier if used above the logo. b. If the business unit identifier is two lines, the clear space definition applies to the top most line, if used above, or bottom most line, if used below the Armstrong logo. 4. Font: The Armstrong logo is considered art and the font type, spacing, bold, cannot be modified.
5. Logo Background: The logo should never be used on a busy background or one that does not provide enough contrast.
6. Logo Direction: The logo can be used on an angle or vertically but must read left to right and top to bottom
7. Circle A: The Circle A can never be used as a separate graphic element.
Notice: 1. The trademark should always be distinguishable from surrounding text - at a minimum, the trademark notice (TM or ®) should be used at least the first time in the text. After first instance, mark should appear with some other distinguishing feature (e.g., different font, all caps, and/or different color) from the surrounding text. 2. Must include notice of AWI Licensing LLC's ownership of the trademark within the credit notice of the product, product documentation, or other product communication. (E.g., Armstrong and the Armstrong Logo are registered trademarks of AWI Licensing LLC.
Schedule 6.2 - Presentation of Diamond Licensed Trademarks
Diamond 10® Technology trademark and logo usage: 1. When using Diamond 10® Technology in sentences to identify goods or services: a. Always mark with ® (required for first usage on page) b. Always add a space between Diamond and 10. c. Always keep the entire mark together. 2. Use of Diamond 10® or the Diamond 10® logo must include notice of AFI Licensing LLC's ownership of the trademark within the credit notice of the product, product documentation, or other product communication. (E.g., Diamond 10 and the Diamond 10 Technology logo are registered trademarks of AFI Licensing LLC.) 3. Logo Colors: Can appear only in White or 4 Color Process comprised of Morado, Tungsten and Black. If reversed out White, use only on dark background color for contrast.
COLORS
4. Logo Size: A general guideline for the maximum width of the logo in any application should be the equivalent to 20% of the width of the shortest side. Exceptions may be made for signage and promotional materials. The minimum logo size is 1" or 25mm. In digital formats, the minimum width is 100 pixels at 72 dpi.
5. Clear Space: The size of the clear space around the logo is determined by the size of the circle of the capital height of the word diamond.
6. Font: The Diamond 10 Technology logo is considered art and the font type, spacing, bold, cannot be modified.
7. Logo Background: The logo should never be used on a busy background or one that does not provide enough contrast.
Exhibit A - Trademark License Agreement
Attached.
Exhibit B - Form of Patent Assignment
FORM OF PATENT ASSIGNMENT
This PATENT ASSIGNMENT (the "Assignment"), dated as of December 31, 2018 (the "Effective Date"), is by and between Armstrong Flooring, Inc., a Delaware corporation ("Seller") and AFI Licensing LLC, a Delaware limited liability company ("Licensing" and together with Seller, "Assignor") and Armstrong Hardwood Flooring Company, a Tennessee corporation (the "Company" or "Assignee") (each of Assignor and Assignee, a "Party" and collectively, the "Parties"). All capitalized terms used, but not defined herein, shall have the meanings ascribed to such terms in the Intellectual Property Agreement (defined herein below).
WHEREAS, Seller and AHF Holding, Inc. (formerly known as Tarzan Holdco, Inc.), a Delaware corporation ("Buyer") have entered into that certain Stock Purchase Agreement, dated November 14, 2018 (the "SPA") and Seller, Buyer and the Company have entered into that certain Intellectual Property Agreement, dated December 31, 2018 (the "Intellectual Property Agreement");
WHEREAS, pursuant to the SPA, the Seller has agreed to sell and transfer, and the Buyer has agreed to purchase and acquire, all of Seller's right, title and interest in and to Armstrong Wood Products, Inc. and the Company Subsidiaries (including the Company) by way of a purchase by Buyer and sale by Seller of the Shares, all upon the terms and condition set forth therein; and
WHEREAS, pursuant to the Intellectual Property Agreement, Assignor has agreed to sell, convey, assign, and transfer to Assignee all of Assignor's right, title, and interest in and to the patent applications and registrations set forth on Schedule A hereto (collectively, the "Assigned Patents").
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:
1. Conveyance. Assignor does hereby irrevocably sell, convey, grant, set over, assign and transfer to Assignee, without reservation of any rights, title or interest, all of Assignor's right, title and interest in and to the Assigned Patents, all rights corresponding to the Assigned Patents throughout the world, and all continuations, continuations-in-part, divisions or renewals thereof, all patents that may be granted therefrom, all reissues, re-exams, or extensions of such patents, and in and to any applications that have been or shall be filed in any country, and all patents or utility models of countries that may be granted therefrom, for its own use and enjoyment, and for the use and enjoyment of any of Assignee's successors and assigns, as the
same would have been held and enjoyed by Assignor if this Assignment had not been made, together with any and all claims or causes of infringement thereof that may have accrued prior to the effective date of this Assignment, together with the right to bring suit for and/or initiate any proceeding to collect any and all damages arising from said claims or causes of action. Assignee hereby accepts such assignment, transfer and conveyance.
2. Recordation. Assignor hereby authorizes and requests the Commissioner of Patents and Trademarks and any other applicable governmental entity or registrar (including any applicable foreign or international office or registrar), to record Assignee as the owner of the Assigned Patents, and to issue any and all Assigned Patents to Assignee, as assignee of Assignor's entire right, title and interest in, to, and under the same. Assignee shall have the right to record this Assignment with all applicable governmental authorities and registrars so as to perfect its ownership of the Assigned Patents.
3. Further Assistance. Upon Assignee's reasonable request and at Assignee's sole cost and expense, Assignor shall (i) provide any further assistance reasonably necessary to effect the assignment of all rights, title and interest in and to the Assigned Patents to Assignee, including, but not limited to, the execution of any further documents and instruments, and (ii) take such other actions as are reasonably necessary to document the aforesaid assignment and transfer to Assignee.
4. No Modification. Nothing contained in this Assignment is intended to or shall be deemed to modify, alter, amend or otherwise change any of the rights or obligations of Assignor and Assignee and their respective Affiliates under the SPA or the Intellectual Property Agreement.
5. Successors and Assigns. This Assignment shall inure to the benefit of and be binding upon the Parties hereto and their respective successors and permitted assigns.
6. Counterparts. This Assignment may be executed in any number of counterparts, including by means of email in portable document format (.pdf), each of which when executed shall be deemed to be an original copy of this Assignment and all of which taken together shall constitute one and the same agreement.
7. Descriptive Headings. The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Assignment.
8. Governing Law. This Assignment shall be governed by the laws of the State of Delaware, its rules of conflict of laws notwithstanding. Each Party hereby agrees and consents to be subject to the jurisdiction of the Court of Chancery of the State of Delaware in and for New Castle County, or if the Court of Chancery lacks jurisdiction over such dispute, in any
state or federal court having jurisdiction over the matter situated in New Castle County, Delaware, in any Action seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Assignment or the transactions contemplated hereby.
9. Severability. If any term or other provision of this Assignment, or any portion thereof, is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms and provisions of this Assignment, or the remaining portion thereof, shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any such term or other provision, or any portion thereof, is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Assignment so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are consummated to the fullest extent possible.
10. Authority. Each Party hereby represents that its undersigned representative is authorized and legally competent to execute this Assignment as a binding and enforceable agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the Parties have caused this Assignment to be executed as of the date above first written by their duly authorized representatives. SELLER:
By: Name: Title:
LICENSING
By: Name: Title:
Acknowledged and Accepted:
ASSIGNEE:
By: Name: Title:
SCHEDULE A TO PATENT ASSIGNMENT
Exhibit C - Form of Trademark Assignment
FORM OF TRADEMARK ASSIGNMENT
This TRADEMARK ASSIGNMENT (the "Assignment"), dated as of December 31, 2018 (the "Effective Date"), is by and between Armstrong Flooring, Inc., a Delaware corporation ("Seller") and AFI Licensing LLC, a Delaware limited liability company ("Licensing" and together with Seller, "Assignor") and Armstrong Hardwood Flooring Company, a Tennessee corporation (the "Company" or "Assignee") (each of Assignor and Assignee, a "Party" and collectively, the "Parties"). All capitalized terms used, but not defined herein, shall have the meanings ascribed to such terms in the Intellectual Property Agreement (defined herein below).
WHEREAS, Seller and AHF Holding, Inc. (formerly known as Tarzan Holdco, Inc.), a Delaware corporation ("Buyer") have entered into that certain Stock Purchase Agreement, dated November 14, 2018 (the "SPA") and Seller, Buyer and the Company have entered into that certain Intellectual Property Agreement, dated December 31, 2018 (the "Intellectual Property Agreement");
WHEREAS, pursuant to the SPA, the Seller has agreed to sell and transfer, and the Buyer has agreed to purchase and acquire, all of Seller's right, title and interest in and to the Company and the Company Subsidiaries (including the Company) by way of a purchase by Buyer and sale by Seller of the Shares, all upon the terms and condition set forth therein; and
WHEREAS, pursuant to the Intellectual Property Agreement, Assignor has agreed to sell, convey, assign, and transfer to Assignee all of Assignor's right, title, and interest in and to the trademarks applications and registrations set forth on Schedule A hereto (collectively, the "Assigned Marks").
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:
11. Conveyance. Assignor does hereby irrevocably sell, convey, grant, set over, assign and transfer to Assignee, without reservation of any rights, title or interest, all of Assignor's worldwide and universal rights, title and interest in and to the Assigned Marks, including, but not limited to, the applications and registrations therefor which are identified in Schedule A attached hereto, together with the goodwill of the business symbolized by such Assigned Marks, the same to be held and enjoyed by Assignee, for its own use and enjoyment, and for the use and enjoyment of any of Assignee's successors and assigns, as the same would have been held and enjoyed by Assignor if this Assignment had not been made, including, but not limited to, all common-law rights of Assignor in and/or to the Assigned Marks, and
Assignor's right to sue for all claims, demands and/or causes of action, both at law and in equity, that Assignor may have on account of any infringement, claim of unfair competitions, likelihood of confusion or dilution of the Assigned Marks or any other claim or cause of action related to the Assigned Marks prior to and following the effective date of this Assignment. Assignor further assigns to Assignee the right to sue and recover damages and/or profits for claims of past, present and/or future infringement, unfair competition, dilution, or any other violation or unlawful act relating to the Assigned Marks, if any. Assignee hereby accepts such grant, assignment, transfer and conveyance.
12. Recordation. Assignor hereby authorizes and requests the Commissioner of Patents and Trademarks and any other applicable governmental entity or registrar (including any applicable foreign or international office or registrar), to record Assignee as the owner of the Assigned Marks, and to issue any and all Assigned Marks to Assignee, as assignee of Assignor's entire right, title and interest in, to, and under the same. Assignee shall have the right to record this Assignment with all applicable governmental authorities and registrars so as to perfect its ownership of the Assigned Marks.
13. Further Assistance. Upon Assignee's reasonable request and at Assignee's sole cost and expense, Assignor shall (i) provide any further assistance reasonably necessary to effect the assignment of all rights, title and interest in and to the Assigned Marks to Assignee, including, but not limited to, the execution of any further documents and instruments, and (ii) take such other actions as are reasonably necessary to document the aforesaid assignment and transfer to Assignee.
14. No Modification. Nothing contained in this Assignment is intended to or shall be deemed to modify, alter, amend or otherwise change any of the rights or obligations of Assignor and Assignee and their respective Affiliates under the SPA or the Intellectual Property Agreement.
15. Successors and Assigns. This Assignment shall inure to the benefit of and be binding upon the Parties hereto and their respective successors and permitted assigns.
16. Counterparts. This Assignment may be executed in any number of counterparts, including by means of email in portable document format (.pdf), each of which when executed shall be deemed to be an original copy of this Assignment and all of which taken together shall constitute one and the same agreement.
17. Descriptive Headings. The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Assignment.
18. Governing Law. This Assignment shall be governed by the laws of the State of Delaware, its rules of conflict of laws notwithstanding. Each Party hereby agrees and consents to be subject to the jurisdiction of the Court of Chancery of the State of Delaware in and for New Castle County, or if the Court of Chancery lacks jurisdiction over such dispute, in any state or federal court having jurisdiction over the matter situated in New Castle County, Delaware, in any Action seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Assignment or the transactions contemplated hereby.
19. Authority. Each Party hereby represents that its undersigned representative is authorized and legally competent to execute this Assignment as a binding and enforceable agreement.
20. Severability. If any term or other provision of this Assignment, or any portion thereof, is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms and provisions of this Assignment, or the remaining portion thereof, shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any such term or other provision, or any portion thereof, is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Assignment so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are consummated to the fullest extent possible.
[Signature Page Follows]
IN WITNESS WHEREOF, the Parties have caused this Assignment to be executed as of the date above first written by their duly authorized representatives. SELLER:
By: Name: Title:
LICENSING:
By: Name: Title:
Acknowledged and Accepted:
ASSIGNEE:
By: Name: Title:
SCHEDULE A TO TRADEMARK ASSIGNMENT | Highlight the parts (if any) of this contract related to "Parties" that should be reviewed by a lawyer. Details: The two or more parties who signed the contract | {
"answer_start": [
207
],
"text": [
"Armstrong Flooring, Inc."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Insurance" that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?
Context: Exhibit 10.20
(TRANSLATION) OUTSOURCING AGREEMENT
This Outsourcing Agreement (hereinafter "Agreement") is effective as from the 1st day of January, 2009, by and between:
Parties to this agreement
SILICON SMELTERS << Pty >> Ltd, registration nr 1998/019036/07, VAT n° 4310178506, Registered office at Beyersnek Road, PO Box 657 Polokwane - South Africa, represented by Benoit Emile Norbert Ollivier, Managing Director, acting pursuant to the powers granted to him by the Board on the 22nd of May, 2008 (hereinafter referred to as "the Customer"),
AND
ESPACIO INFORMATION TECHNOLOGY, SA., a public limited company with place of business in P° de la Castellana, N° 259, 28046, Madrid, SPAIN, and represented by Mr. Carlos Lafitte as Chief Executive, in virtue of his powers, currently in force, conferred to him the 23rd of January of 1996 (Protocol No. 134), before Mr. Jose Maria Lucena Conde, Notary Public in Madrid, (hereinafter referred to as "EIT"). 1
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
1. RECORDINGS
This Agreement is being made and entered into with reference to the following facts:
1.1. Silicon Smelters and EIT both belong to the GROUP VILLAR MIR.
1.2. The Customer is a company that manufactures ferro-alloys in both its factories: Polokwane and Rand Carbide.
1.3. EIT is a company that installs, integrates and develops the management and maintenance of Data Processing Systems, and desires toperform for the Customer the outsourcing services described in this Agreement.
1.4. GROUP VILLAR MIR demands the Customer to use the management services of the group, developed and maintained by EIT, andsubcontract the management of its IT infrastructure to EIT.
In consideration of the payments to be made and services to be performed hereunder, the parties agree as follows:
2. PURPOSE OF AGREEMENT
2.1. The Agreement documents:
2.1.1. The services EIT renders to the Customer's users on all the company's levels;
2.1.2. The clauses made regarding services and products between the Customer and EIT.
2.1.3. The terms and conditions under which the Customer agrees to purchase and EIT agrees to provide the Services.
2.2. The definitions that apply in the present Agreement are listed in Annex 1.
2.3. The scope of application of this Agreement is restricted to the IT Management System of the Customer. The IT involving the industrialand production environments is excluded from this Agreement.
2.4. The supervision of the Agreement is assured by EIT, represented by its Chief Executive, and by the Customer, represented by its Headof Information Technology Department.
2.5. These specific services can be grouped in different types:
2.5.1. Network 2
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
2.5.2. Servers
2.5.3. Applications
2.5.4. User Workstations
2.5.5. Standard software licences
2.5.6. Definition of the agreed guidelines for negotiation
3. DESCRIPTION OF THE SERVICES RENDERED BY EIT
The specific services rendered by EIT according to this Agreement include the following:
3.1. NETWORK
EIT is in charge of the remote Network, which connects each workstation of the Customer to the Central Server of EIT and to Internet (hereinafter "WAN"). The internal network of the factories (hereinafter "LAN") is excluded from this Agreement and the Customer is responsible for it.
3.1.1. The Customer has contracted, taking into account the technological standards defined by EIT, an external company (hereinafter "Network Supplier") for the setting up and the management of the Network. This Network Supplier is accountable to the Customer for the management of the Network.
3.1.2. EIT commits itself to monitor the Network during working hours in South Africa, up to where the service rendered by theNetwork Supplier allows.
3.1.3. EIT commits itself to alert the IT Department of the Customer when any malfunction (power cut, saturation, etc.) is identified, and to carry out the necessary actions with the Network Supplier in order to solve this malfunction as quickly as possible.
3.1.4. EIT commits to assure a high availability (availability rate defined in Annex 2) and the proper performance (response timeand no saturation) of the Network during working hours in South Africa (established in Annex 2).
3.1.5. The Customer and EIT commit themselves to give each other notice of any case of malfunction with the Network Supplier. 3
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
3.2. SERVERS:
3.2.1. EIT is in charge of the list of servers (hereinafter "Servers") provided in Annex 3.
3.2.2. The Customer is responsible for the maintenance of the hardware of the local servers.
3.2.3. EIT is responsible for the maintenance of the hardware of the Central Server.
3.2.4. EIT commits to monitor the Servers during working hours in South Africa.
3.2.5. EIT must alert the IT Department of the Customer if any problem should occur in any of the Servers, within the timeestablished in Annex 2.
3.2.6. EIT commits to solve any problems that may arise in the Servers, within the time established in Annex 2.
3.2.7. EIT is in charge of supervising and assuring the proper performance of the backups. For this, it has provided the Customerwith a backup process.
3.2.8. The Customer commits to follow the backup process that EIT has provided for him.
3.2.9. The Customer must alert EIT of any incidence it might detect by sending an electronic mail to sistemas@eit.es.
3.3. APPLICATIONS
EIT provides and is responsible for the support and maintenance of the applications (defined in the table in Annex 4).
For each of these applications, EIT commits to:
3.3.1. Provide the Customer with hardware installations (servers, disks, backup tapes, etc.) which enable the performance of theapplication.
3.3.2. Assure the availability of the application (which varies for each application, defined in Annex 2). 4
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
3.3.3. Monitor the applications to analyse the transaction charges and carry out the appropriate corrections in order to optimizethe system.
3.3.4. Provide Level 2 assistance to users via direct telephone numbers of the persons responsible for each application, during the hours established in Annex 2. If there is a public holiday in Spain, EIT commits to provide for the Customer a central telephone number to communicate any incidences that may occur.
3.3.5. Solve the problems communicated by e-mail to incident.smelters@eit.es during working hours in South Africa, within timeaccording to the severity of the problem, defined in Annex 2.
3.3.6. Maintain the present interfaces between the central application GES-INDUS and the Customer's local applications: PayrollGesprod and Maximo.
3.3.7. Guarantee the reliability of the application (software and databases) and of the hardware support (server, disks, etc.), toprevent any loss of information that could affect the Customer's business.
3.3.8. Carry out the backups and necessary restorations in order to assure the durability of the application and prevent any lossof information.
3.3.9. Guarantee a high service level (reasonable response time and correct progress of transactions). With regard to the electronic mail service, EIT will be able, after contacting with the Customer, to restrict the type and size of exchanged files. It is noted that the customer currently do not make use of this service but has the option to use it at no additional cost
3.3.10. Assure the security of the access to information: the Customer is responsible for the opening of accesses to the applications. EIT commits to supply the necessary securities to ensure the access rights defined by the Customer guarantee access only to the data authorized by the Customer.
3.4. WORKSTATIONS AND PRINTERS
3.4.1. The Customer is responsible for the purchase and maintenance of the workstations and printers.
3.4.2. EIT commits to assist the Customer to implement a master that allows the quick installation of all the standard software inworkstations.
3.5. STANDARD SOFTWARE LICENCES
3.5.1. The Customer will benefit from the group contracts negotiated by EIT in name of Group Villar Mir for the purchase oflicences.
3.5.2. The purchase of licences will be carried out directly by the Customer. 5
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
3.5.3. EIT declares and guarantees the Customer the legal purchase of licences of all the software necessary for the use of thecentral applications created by EIT.
3.5.4. EIT must inform the Customer in due course if any changes take place in licences or in their rights of use.
3.6. DEFINITION OF STANDARDS AND AGREED GUIDELINES
EIT is responsible for:
3.6.1. The definition of the technological standards to be used in the Customer's IT environment.
3.6.2. The agreed guidelines with the suppliers, in order to assure the provision of certain services or the purchase of certain ITtools which, according to EIT, are necessary for the provision of the mentioned services.
4. PROJECTS
4.1. Apart from these services, EIT must provide other supplementary services, not considered in the present Agreement. These services include the study, development and implementation of new applications, changing to new platforms, as well as any other service that the Customer may need in the field of IT services.
4.2. The terms and conditions of these services will be separately negotiated if and when it applies.
4.3. For that purpose and before the execution of the mentioned services by EIT, the Customer will pay EIT the package price, previously agreed by the parties. These services can either be carried out directly by EIT or by subcontracts in the sole discretion of EIT, which will have to notify the customer of this fact before the project commence. However if EIT decides to subcontract the project EIT remains responsible for the quality, the cost and the supervision of the services to the satisfaction of the customer. 6
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
5. WORK PLACE AND NATURE OF SERVICES
5.1. The services described in this Agreement are provided from the following location: EIT, P° de la Castellana, 259D, 28046, Madrid,SPAIN.
5.2. For this reason, EIT uses its own IT environment, as well as the local equipment of the Customer, connected by a teleprocessingsystem to the Central Server of EIT.
5.3. If necessary, EIT personnel will travel, in prior agreement with the Customer, to the different factories of the company. In this case, thetravelling expenses (travel, accommodation and meals) will be paid by the Customer.
5.4. The IT environment belongs to EIT during the total course of the Agreement, with exception of the services subcontracted to thirdparties by EIT, for which the subcontractor will be responsible.
5.5. EIT is responsible for the choice of the equipment considered the most appropriate in order to reach the service level convened in this Agreement. This equipment, and its further updates, should it arise, will be shown to the Customer and agreed upon prior to purchase and installation and refusal by the customer will only be valid upon presentation of a justification to EIT. EIT is responsible for the maintenance of its own IT environment, as well as of its maintenance and modernization expenses.
5.5.1. EIT STAFF
5.5.1.1. The work team appointed by EIT to fullfill this Agreement is responsible only to EIT, in accordance with the Spanish law. EIT will supervise and will be responsible for the behaviour and tasks of this team, especially on what concerns the confidentiality of the information.
5.5.1.2. The Customer does not have any responsibility for the accidents that might be suffered by the staff of EIT, orfor the damages that might be caused by it to third parties, in the framework of its activities.
5.5.2. SUBCONTRACTING
EIT assumes full responsibility for the execution of the tasks carried out by any subcontractor. The subcontractor is equally obliged to assure the service level, the confidentiality and the security convened in the Agreement, for the provision of these services. It is the responsibility of EIT to enter into an agreement with the subcontractor to ensure their performance. 7
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
6. SUPERVISION OF THE SERVICE LEVEL
6.1. EIT commits to provide monthly measurements to analyse the service level defined in Annex 2.
6.2. The parties will analyse monthly these measurements in order to identify what can be improved.
6.3. The parties will review annually by mutual agreement the contents and aims of the Service Level Agreement.
7. PAYMENTS AND PRICING
7.1. TOTAL ANNUAL AMOUNT
The total annual amount to be paid, excluding taxes, for the year 2009, for the total provision of the services described in Article 2 of this Agreement, as well as the supervision of these (establishment of measurements and supervision meetings) will be:
TWO HUNDRED THOUSAND EUROS (200,000 €)
7.1.1. This amount has been fixed for the two factories of Silicon Smelters: Polokwane and Rand Carbide, being the annualamount per factory A HUNDRED THOUSAND EUROS (100,000 €).
7.1.2. If one of the factories closes down, the total amount due will be reduced pro rata for the rest of the annual period for thefactory's annual amount.
7.2. INVOICING
7.2.1. The invoicing of this amount will be carried out quarterly.
The invoices will be issued by EIT at the start of each term. Such invoice must be paid by the customer within 45 days of the date on which the invoice is issued.
7.2.2. INFRASTRUCTURE COSTS
7.2.3. The costs of the communication lines, the network infrastructure, the local servers, the micro computing material (PC andprinters) are the Customer's responsibility and it is not included in the total annual amount defined in this Agreement.
7.3. ANNUAL PAYMENT REVIEW
7.3.1. The amount defined in Article 6.1 will be subjected to annual revision, following the publication of the Consumer Price Index in Spain (Spanish CPI) in January of each financial year by the National Statistics Institute of Spain. It will correspond to the financial year that has concluded. 8
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
7.3.2. The Annual Package Price does not include a protection to inflation. For this reason, the amount will be adjusted annually,according to the growth of the Spanish CPI as was indicated above.
7.3.3. The new payment is calculated using the following formula: R = R0 * (S+1), where:
7.3.4. R0 is the payment corresponding to the previous year.
7.3.5. R is the new payment, and
7.3.6. S is the last Spanish CPI published on the revision date.
7.3.7. As a result, once the first year, since the date the Agreement was executed, has passed, and on this same date on thefollowing years, the annual price will be modified in proportion with the growth of the Spanish CPI.
7.3.8. In case that the National Statistics Institute of Spain does not publish the CPI or it be significantly modified in form andcontent, the parties will agree to a new equivalent measurement, which must be published at least annually.
8. INTELLECTUAL PROPERTY
8.1. The Intellectual Property of the programmes in the application GES-INDUS, used by the Customer's exploitation of the managementsystems, belongs to EIT.
8.2. The rights of Intellectual Property also protect the programmes that might be created, and the data processing, accounts, and diagramsgenerated by the mentioned programme.
9. WARRANTY
9.1. Solution's Adequacy
9.1.1. EIT guarantees that the solution suggested to the Customer in each moment is the best possible one for the needs of theCustomer.
9.2. Cost Saving
9.2.1. EIT declares that the way of acting will always be governed by the cost saving principle. 9
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
9.3. Technology
9.3.1. EIT commits to maintain its IT environment in accordance to the technological advances, in order to prevent it frombecoming obsolete.
9.4. Quality Control
9.4.1. EIT guarantees that the services described in this Agreement will be rendered in accordance with the best practice, aquality level accepted by the Customer, and in accordance with the service levels defined in Annex 2.
9.5. Availability
9.5.1. The IT staff of EIT will carry out the exploitation of the services during working hours in South Africa, except for urgentactions that will be carried out exceptionally, if it were necessary, out of the established hours.
9.6. Data and Backup Security
9.6.1. EIT will produce a daily backup copy of the data and the applications residing in its IT environment, in order to re-establish and retrieve lost information.
10. LIABILITY
10.1. EIT is responsible for any damages caused to the Customer or to third parties, when these result from EIT not satisfying thecontractual obligations.
10.2. Nevertheless, EIT will be free of responsibility, in case of not satisfying its obligations, if he can prove that this was due to forcemajeure or external causes out of his control, like accidents, natural disasters, vandalism acts or theft.
10.3. The liability of EIT will be limited to a value equal to contractual value as per clause 7.1 and will not exceed this value. 10
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
11. CONFIDENTIALITY
The parties commit themselves to a total confidentiality and to not spread or use directly, through third parties or other companies, information about the other party to which they have access in the frame of this Agreement.
11.1. PROTECTION AND CONFIDENTIALITY OF DATA
11.1.1. Confidential Information means any information disclosed by either party in the frame of this Agreement. In consequence, each party agrees not to use, disclose, publish or disseminate any Confidential Information of the other party for any purpose except to perform its obligations or exercise its rights under this Agreement, except:
11.1.1.1. Following prior consent of the other party, or
11.1.1.2. If the information was in the public domain at the time it was disclosed or becomes in the public domainthrough no act or omission of the Receiving Party.
11.1.2. Any of these exceptions will not be presumed in any case, and the revealing party must clear any doubt to this respect.
11.1.3. Both parties shall take reasonable precautions to preserve in strict confidence any confidential or proprietary information obtained by them, their agents, employees, subcontractors, suppliers, consultants, and in general, any person that has access to it.
11.1.4. Confidential Information includes any technical, economic, financial and/or commercial information, confidential or not, bearing in any commercial relationship and in general, without any limitation, any information to which any of the parties has access during the application, in the frame of this Agreement.
11.1.5. Except as provided hereinafter, for a period of five years after termination or expiration of this Agreement, each party shall not disclose, publish or disseminate information received from the other party which may be required to carry out this Agreement and which the disclosing party deems proprietary and confidential.
11.1.6. Once this Agreement has expired, each party must, depending on the choice of the other party, destroy or hand over all technical, economic, financial or commercial information, confidential or not, in its possession, directly or indirectly, as convened in the present Agreement. 11
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
11.2. MANAGEMENT OF ACCESS RIGHTS
11.2.1. In accordance to Article 10.1, the Customer is in charge of defining the opening, closing or modifying of access toinformation. The Customer is also in charge of defining the user accesses, as well as the level of access of its users.
11.2.2. 10.2.2. EIT guarantees the control of access (through an access code and password) to information pursuant to the accessrights defined by the Customer.
11.2.3. 10.2.3. EIT will not be held responsible if a Customer's user uses an access code and password of a third party.
12. SUPERVISION COMMISSION
12.1. The parties commit themselves to constitute a supervision commission formed by persons appointed for that purpose.
12.2. This commission will act as an intermediary between the parties and it will accomplish the following tasks:
12.2.1.1. Verify the fulfilment, in particular, the evolution and implementation, of all the services and applications. This operation willbe recorded in the corresponding reports, according to the convened periodicity.
12.2.1.2. Interpret any Article of this Agreement that might be questioned by the parties.
12.2.1.3. Resolve any potential conflict that may arise during the execution of this Agreement. For this, the commission memberswill act at their best, and assemble all the necessary information.
12.3. If the commission members are not able to resolve a conflict or a problem in the interpretation of this Agreement within thirty naturaldays, the representatives of the parties will be duly informed in order to find a solution on friendly terms. 12
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
13. DURATION
13.1. The present Agreement is effective as from 1 January 2009. It is established by calendar year and renewed tacitly every year.
13.2. The Agreement rests, for all that, cancellable at any time by any of the parties before the expiry date of the Agreement or any of itsrenewals, upon three months prior written notice.
14. EARLY TERMINATION
14.1. The Customer can cancel, on its own accord, the present Agreement upon certified notice to EIT, in the following cases:
14.1.1. If there is a repeated interruption, by EIT, of the services convened in this Agreement, for a period of four working days.
14.1.2. Upon the institution, by or against EIT, of insolvency, receivership or bankruptcy proceedings or any other proceedingsfor the settlement of its debts.
14.1.3. Non-performance by EIT of its contractual obligations and warranties, assumed in the present Agreement.
14.1.4. Absorption or fusion of EIT by other companies. In this case, the Customer can decide if he wants to continue working with the new company, which will have to continue rendering all the services convened in this Agreement, in the same conditions.
14.2. For simple convenience.
14.2.1. In case the Customer cancels the Agreement in accordance with Articles 13.1, 13.2, EIT will pay the Customer the amountof 3.000 €, for the non observance of the Agreement of which it is responsible.
14.2.2. In case of termination of this Agreement by the Customer according to Article 13.5, the Customer will pay EIT the amountof 3.000 €.
15. CONTRACTUAL TRANSITION
15.1. In case of expiration or termination of the present Agreement, the Customer and EIT will cooperate, in good faith, to make possible a transfer, in due form to the Customer or to a third party, chosen by the Customer, for the provision of the services defined in this Agreement. For that purpose, the parties will develop, with enough time in advance and with the necessary haste, a Transition Plan where the actions and measures to be taken will be defined. 13
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
15.2. EIT will continue to provide the services defined in this Agreement between the date it receives from the Customer a notice ofexpiration or termination of this Agreement and the date this expiration or termination becomes effective.
15.3. EIT commits to hand over to the Customer, on this date, all the data and its copies, in the frame of the provision of services.
16. LITIGATION RULINGS
16.1. All the litigations that may arise between the parties during the period of application of the present Agreement, in relation with its Articles, and that have not been solved in a friendly manner, will be subjected to the rulings of their respective Chief Executives. In case of persistent disagreement, the litigation will be subjected to the General Management of Group Villar Mir.
16.2. However, if any of the parties no longer belongs to Group Villar Mir, any litigation that may not be solved in a friendly manner will besettled in compliance with the laws of Spain.
16.3. Any doubt that arises, in the frame of this Agreement, will be settled through arbitration in equity, in compliance with the Spanish Law of Arbitration, Ley 60/2003, both parties agreeing to obey the decision. For the designation of the arbitrators and the management of the arbitration, the following rules will apply:
16.3.1. There will be three arbitrators, solicitors. Each party will designate one, and these two will designate a third one.
16.3.2. The place of arbitration will be Madrid.
16.3.3. It will be governed by the laws of Spain and the language of the process will be Spanish.
16.3.4. The arbitrators will dictate the decision within three months of the notice of the parties' acceptance.
16.4. The parties, expressly waiving the Jurisdiction that may correspond to the same, submit themselves to the jurisdiction of the Courtsand Tribunals of Madrid for any matter derived from the present Agreement that cannot be subjected to arbitration. 14
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
17. GOVERNING LAW
17.1. This Agreement shall be governed by, and construed in accordance with the laws of Spain.
18. IN WITNESS WHEREOF, the parties acknowledge that each has fully read and understood this Agreement, and, intending to be legally bound thereby, executed this Agreement on the date first above written. SLICON SMELTERS PTY LTD ESPACIO INFORMATION TECHNOLOGY, S.A.
Name: Dr B.E.N. Ollivier Name: Carlos Lafitte Pradal
Title: Managing Director Title: Director General 15
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
ANNEX 1: DEFINITIONS
The following definitions apply in the present Agreement:
IT Department: Customer's work team in charge of the support and maintenance of the Customer's local infrastructure and applications.
LAN: Internal network at the factories that connects the factory's routers with the workstations and peripheral devices of the site.
WAN: External network that connects the Silicon Smelter factories with the central node located in Madrid. Network leaving the router of each factory.
South African workdays: Monday to Friday, except for legal holidays of the South African work schedule.
South African working hours: 8h00 - 20h00 during South African workdays.
Local Servers: Servers listed in Annex 3, which are located in the factories of Silicon Smelters.
Central Servers: Servers listed in Annex 3, which are located outside the factories of Silicon Smelters.
Local Applications: IT applications used by Silicon Smelters and implemented on the local Servers. Silicon Smelters is responsible for these applications, which are listed in Annex 4.
Data: The data or information belonging to the Customer saved on magnetic support or others, and that is subject to computer treatment.
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
ANNEX 2: SERVICES AND LIABILITIES Service Period Timetable Response Liability Evaluation Period
Type of Evaluation
Network Availability
Workdays in South African work schedule 8H-20H 98% availability Monthly
Measuring periods when the network is not available
Fault reports of network and server infrastructure problems
Workdays in South African work schedule
8H-20H
Alert in the 15 minutes following the fault report as well as an account when the problem has been solved. Define what alert, how and who communicates it.
98% of faults reported in the time period
Monthly
Measuring the period between the beginning and the end of the problem, and fault reporting
Ges-Indus Availability
Workdays in South African work schedule 8H-20H 98% availability Monthly
Measuring periods when the application is not available
Ges-Indus Support Level 2
Workdays in South African work schedule 8H-20H
Ø
Response: less than two South African working hours
98% of requests solved in the time period Monthly
Measuring response times for each request
Ø Blocking Bug:
Ges-Indus Maintenance
Workdays in South African work schedule
8H-20H
●
Consideration and response: less than two South African working hours
98% of requests solved in the time period
Monthly
Measuring the response times for encountered problems
●
Solution or work-around: less than one South African workday
Ø Non-blocking Bug:
●
Consideration and response: less than three South African workdays
● Solution or work-around: set out by the requestor
Electronic Mail Service Availability 7d/7d 24h/24h 99% availability
Measuring periods when the electronic mail service is not available
OFINET Availability 7d/7d 24h/24h 95% availability Measuring periods when OFINET is not available
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
ANNEX 3: INVENTORY OF SERVERS USED BY SILICON SMELTERS
Name of Servers Functionality Priority Local or Central Server Server Management Responsibility ERP Ges-indus Management of commercial and financial flow High Central EIT SMTP.EIT.ES Transmission of electronic mail High Central EIT POP.EIT.ES Delivery of electronic mail High Central EIT OFINET WEB application, access to electronic mail service and sharing of documents and information Medium Central EIT
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
ANNEX 4: INVENTORY OF APPLICATIONS USED BY SILICON SMELTERS
Name of Application Functionality Priority Local or Central Server Server and Application Management Responsibility Ges-Indus Management of commercial and financial flow High Central EIT Email service Transmission and reception of electronic mail High Central EIT OFINET WEB application, access to electronic mail service and sharing of documents and information Medium Central EIT
Source: FERROGLOBE PLC, F-4/A, 6/24/2015 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 10.20
(TRANSLATION) OUTSOURCING AGREEMENT
This Outsourcing Agreement (hereinafter "Agreement") is effective as from the 1st day of January, 2009, by and between:
Parties to this agreement
SILICON SMELTERS << Pty >> Ltd, registration nr 1998/019036/07, VAT n° 4310178506, Registered office at Beyersnek Road, PO Box 657 Polokwane - South Africa, represented by Benoit Emile Norbert Ollivier, Managing Director, acting pursuant to the powers granted to him by the Board on the 22nd of May, 2008 (hereinafter referred to as "the Customer"),
AND
ESPACIO INFORMATION TECHNOLOGY, SA., a public limited company with place of business in P° de la Castellana, N° 259, 28046, Madrid, SPAIN, and represented by Mr. Carlos Lafitte as Chief Executive, in virtue of his powers, currently in force, conferred to him the 23rd of January of 1996 (Protocol No. 134), before Mr. Jose Maria Lucena Conde, Notary Public in Madrid, (hereinafter referred to as "EIT"). 1
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
1. RECORDINGS
This Agreement is being made and entered into with reference to the following facts:
1.1. Silicon Smelters and EIT both belong to the GROUP VILLAR MIR.
1.2. The Customer is a company that manufactures ferro-alloys in both its factories: Polokwane and Rand Carbide.
1.3. EIT is a company that installs, integrates and develops the management and maintenance of Data Processing Systems, and desires toperform for the Customer the outsourcing services described in this Agreement.
1.4. GROUP VILLAR MIR demands the Customer to use the management services of the group, developed and maintained by EIT, andsubcontract the management of its IT infrastructure to EIT.
In consideration of the payments to be made and services to be performed hereunder, the parties agree as follows:
2. PURPOSE OF AGREEMENT
2.1. The Agreement documents:
2.1.1. The services EIT renders to the Customer's users on all the company's levels;
2.1.2. The clauses made regarding services and products between the Customer and EIT.
2.1.3. The terms and conditions under which the Customer agrees to purchase and EIT agrees to provide the Services.
2.2. The definitions that apply in the present Agreement are listed in Annex 1.
2.3. The scope of application of this Agreement is restricted to the IT Management System of the Customer. The IT involving the industrialand production environments is excluded from this Agreement.
2.4. The supervision of the Agreement is assured by EIT, represented by its Chief Executive, and by the Customer, represented by its Headof Information Technology Department.
2.5. These specific services can be grouped in different types:
2.5.1. Network 2
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
2.5.2. Servers
2.5.3. Applications
2.5.4. User Workstations
2.5.5. Standard software licences
2.5.6. Definition of the agreed guidelines for negotiation
3. DESCRIPTION OF THE SERVICES RENDERED BY EIT
The specific services rendered by EIT according to this Agreement include the following:
3.1. NETWORK
EIT is in charge of the remote Network, which connects each workstation of the Customer to the Central Server of EIT and to Internet (hereinafter "WAN"). The internal network of the factories (hereinafter "LAN") is excluded from this Agreement and the Customer is responsible for it.
3.1.1. The Customer has contracted, taking into account the technological standards defined by EIT, an external company (hereinafter "Network Supplier") for the setting up and the management of the Network. This Network Supplier is accountable to the Customer for the management of the Network.
3.1.2. EIT commits itself to monitor the Network during working hours in South Africa, up to where the service rendered by theNetwork Supplier allows.
3.1.3. EIT commits itself to alert the IT Department of the Customer when any malfunction (power cut, saturation, etc.) is identified, and to carry out the necessary actions with the Network Supplier in order to solve this malfunction as quickly as possible.
3.1.4. EIT commits to assure a high availability (availability rate defined in Annex 2) and the proper performance (response timeand no saturation) of the Network during working hours in South Africa (established in Annex 2).
3.1.5. The Customer and EIT commit themselves to give each other notice of any case of malfunction with the Network Supplier. 3
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
3.2. SERVERS:
3.2.1. EIT is in charge of the list of servers (hereinafter "Servers") provided in Annex 3.
3.2.2. The Customer is responsible for the maintenance of the hardware of the local servers.
3.2.3. EIT is responsible for the maintenance of the hardware of the Central Server.
3.2.4. EIT commits to monitor the Servers during working hours in South Africa.
3.2.5. EIT must alert the IT Department of the Customer if any problem should occur in any of the Servers, within the timeestablished in Annex 2.
3.2.6. EIT commits to solve any problems that may arise in the Servers, within the time established in Annex 2.
3.2.7. EIT is in charge of supervising and assuring the proper performance of the backups. For this, it has provided the Customerwith a backup process.
3.2.8. The Customer commits to follow the backup process that EIT has provided for him.
3.2.9. The Customer must alert EIT of any incidence it might detect by sending an electronic mail to sistemas@eit.es.
3.3. APPLICATIONS
EIT provides and is responsible for the support and maintenance of the applications (defined in the table in Annex 4).
For each of these applications, EIT commits to:
3.3.1. Provide the Customer with hardware installations (servers, disks, backup tapes, etc.) which enable the performance of theapplication.
3.3.2. Assure the availability of the application (which varies for each application, defined in Annex 2). 4
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
3.3.3. Monitor the applications to analyse the transaction charges and carry out the appropriate corrections in order to optimizethe system.
3.3.4. Provide Level 2 assistance to users via direct telephone numbers of the persons responsible for each application, during the hours established in Annex 2. If there is a public holiday in Spain, EIT commits to provide for the Customer a central telephone number to communicate any incidences that may occur.
3.3.5. Solve the problems communicated by e-mail to incident.smelters@eit.es during working hours in South Africa, within timeaccording to the severity of the problem, defined in Annex 2.
3.3.6. Maintain the present interfaces between the central application GES-INDUS and the Customer's local applications: PayrollGesprod and Maximo.
3.3.7. Guarantee the reliability of the application (software and databases) and of the hardware support (server, disks, etc.), toprevent any loss of information that could affect the Customer's business.
3.3.8. Carry out the backups and necessary restorations in order to assure the durability of the application and prevent any lossof information.
3.3.9. Guarantee a high service level (reasonable response time and correct progress of transactions). With regard to the electronic mail service, EIT will be able, after contacting with the Customer, to restrict the type and size of exchanged files. It is noted that the customer currently do not make use of this service but has the option to use it at no additional cost
3.3.10. Assure the security of the access to information: the Customer is responsible for the opening of accesses to the applications. EIT commits to supply the necessary securities to ensure the access rights defined by the Customer guarantee access only to the data authorized by the Customer.
3.4. WORKSTATIONS AND PRINTERS
3.4.1. The Customer is responsible for the purchase and maintenance of the workstations and printers.
3.4.2. EIT commits to assist the Customer to implement a master that allows the quick installation of all the standard software inworkstations.
3.5. STANDARD SOFTWARE LICENCES
3.5.1. The Customer will benefit from the group contracts negotiated by EIT in name of Group Villar Mir for the purchase oflicences.
3.5.2. The purchase of licences will be carried out directly by the Customer. 5
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
3.5.3. EIT declares and guarantees the Customer the legal purchase of licences of all the software necessary for the use of thecentral applications created by EIT.
3.5.4. EIT must inform the Customer in due course if any changes take place in licences or in their rights of use.
3.6. DEFINITION OF STANDARDS AND AGREED GUIDELINES
EIT is responsible for:
3.6.1. The definition of the technological standards to be used in the Customer's IT environment.
3.6.2. The agreed guidelines with the suppliers, in order to assure the provision of certain services or the purchase of certain ITtools which, according to EIT, are necessary for the provision of the mentioned services.
4. PROJECTS
4.1. Apart from these services, EIT must provide other supplementary services, not considered in the present Agreement. These services include the study, development and implementation of new applications, changing to new platforms, as well as any other service that the Customer may need in the field of IT services.
4.2. The terms and conditions of these services will be separately negotiated if and when it applies.
4.3. For that purpose and before the execution of the mentioned services by EIT, the Customer will pay EIT the package price, previously agreed by the parties. These services can either be carried out directly by EIT or by subcontracts in the sole discretion of EIT, which will have to notify the customer of this fact before the project commence. However if EIT decides to subcontract the project EIT remains responsible for the quality, the cost and the supervision of the services to the satisfaction of the customer. 6
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
5. WORK PLACE AND NATURE OF SERVICES
5.1. The services described in this Agreement are provided from the following location: EIT, P° de la Castellana, 259D, 28046, Madrid,SPAIN.
5.2. For this reason, EIT uses its own IT environment, as well as the local equipment of the Customer, connected by a teleprocessingsystem to the Central Server of EIT.
5.3. If necessary, EIT personnel will travel, in prior agreement with the Customer, to the different factories of the company. In this case, thetravelling expenses (travel, accommodation and meals) will be paid by the Customer.
5.4. The IT environment belongs to EIT during the total course of the Agreement, with exception of the services subcontracted to thirdparties by EIT, for which the subcontractor will be responsible.
5.5. EIT is responsible for the choice of the equipment considered the most appropriate in order to reach the service level convened in this Agreement. This equipment, and its further updates, should it arise, will be shown to the Customer and agreed upon prior to purchase and installation and refusal by the customer will only be valid upon presentation of a justification to EIT. EIT is responsible for the maintenance of its own IT environment, as well as of its maintenance and modernization expenses.
5.5.1. EIT STAFF
5.5.1.1. The work team appointed by EIT to fullfill this Agreement is responsible only to EIT, in accordance with the Spanish law. EIT will supervise and will be responsible for the behaviour and tasks of this team, especially on what concerns the confidentiality of the information.
5.5.1.2. The Customer does not have any responsibility for the accidents that might be suffered by the staff of EIT, orfor the damages that might be caused by it to third parties, in the framework of its activities.
5.5.2. SUBCONTRACTING
EIT assumes full responsibility for the execution of the tasks carried out by any subcontractor. The subcontractor is equally obliged to assure the service level, the confidentiality and the security convened in the Agreement, for the provision of these services. It is the responsibility of EIT to enter into an agreement with the subcontractor to ensure their performance. 7
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
6. SUPERVISION OF THE SERVICE LEVEL
6.1. EIT commits to provide monthly measurements to analyse the service level defined in Annex 2.
6.2. The parties will analyse monthly these measurements in order to identify what can be improved.
6.3. The parties will review annually by mutual agreement the contents and aims of the Service Level Agreement.
7. PAYMENTS AND PRICING
7.1. TOTAL ANNUAL AMOUNT
The total annual amount to be paid, excluding taxes, for the year 2009, for the total provision of the services described in Article 2 of this Agreement, as well as the supervision of these (establishment of measurements and supervision meetings) will be:
TWO HUNDRED THOUSAND EUROS (200,000 €)
7.1.1. This amount has been fixed for the two factories of Silicon Smelters: Polokwane and Rand Carbide, being the annualamount per factory A HUNDRED THOUSAND EUROS (100,000 €).
7.1.2. If one of the factories closes down, the total amount due will be reduced pro rata for the rest of the annual period for thefactory's annual amount.
7.2. INVOICING
7.2.1. The invoicing of this amount will be carried out quarterly.
The invoices will be issued by EIT at the start of each term. Such invoice must be paid by the customer within 45 days of the date on which the invoice is issued.
7.2.2. INFRASTRUCTURE COSTS
7.2.3. The costs of the communication lines, the network infrastructure, the local servers, the micro computing material (PC andprinters) are the Customer's responsibility and it is not included in the total annual amount defined in this Agreement.
7.3. ANNUAL PAYMENT REVIEW
7.3.1. The amount defined in Article 6.1 will be subjected to annual revision, following the publication of the Consumer Price Index in Spain (Spanish CPI) in January of each financial year by the National Statistics Institute of Spain. It will correspond to the financial year that has concluded. 8
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
7.3.2. The Annual Package Price does not include a protection to inflation. For this reason, the amount will be adjusted annually,according to the growth of the Spanish CPI as was indicated above.
7.3.3. The new payment is calculated using the following formula: R = R0 * (S+1), where:
7.3.4. R0 is the payment corresponding to the previous year.
7.3.5. R is the new payment, and
7.3.6. S is the last Spanish CPI published on the revision date.
7.3.7. As a result, once the first year, since the date the Agreement was executed, has passed, and on this same date on thefollowing years, the annual price will be modified in proportion with the growth of the Spanish CPI.
7.3.8. In case that the National Statistics Institute of Spain does not publish the CPI or it be significantly modified in form andcontent, the parties will agree to a new equivalent measurement, which must be published at least annually.
8. INTELLECTUAL PROPERTY
8.1. The Intellectual Property of the programmes in the application GES-INDUS, used by the Customer's exploitation of the managementsystems, belongs to EIT.
8.2. The rights of Intellectual Property also protect the programmes that might be created, and the data processing, accounts, and diagramsgenerated by the mentioned programme.
9. WARRANTY
9.1. Solution's Adequacy
9.1.1. EIT guarantees that the solution suggested to the Customer in each moment is the best possible one for the needs of theCustomer.
9.2. Cost Saving
9.2.1. EIT declares that the way of acting will always be governed by the cost saving principle. 9
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
9.3. Technology
9.3.1. EIT commits to maintain its IT environment in accordance to the technological advances, in order to prevent it frombecoming obsolete.
9.4. Quality Control
9.4.1. EIT guarantees that the services described in this Agreement will be rendered in accordance with the best practice, aquality level accepted by the Customer, and in accordance with the service levels defined in Annex 2.
9.5. Availability
9.5.1. The IT staff of EIT will carry out the exploitation of the services during working hours in South Africa, except for urgentactions that will be carried out exceptionally, if it were necessary, out of the established hours.
9.6. Data and Backup Security
9.6.1. EIT will produce a daily backup copy of the data and the applications residing in its IT environment, in order to re-establish and retrieve lost information.
10. LIABILITY
10.1. EIT is responsible for any damages caused to the Customer or to third parties, when these result from EIT not satisfying thecontractual obligations.
10.2. Nevertheless, EIT will be free of responsibility, in case of not satisfying its obligations, if he can prove that this was due to forcemajeure or external causes out of his control, like accidents, natural disasters, vandalism acts or theft.
10.3. The liability of EIT will be limited to a value equal to contractual value as per clause 7.1 and will not exceed this value. 10
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
11. CONFIDENTIALITY
The parties commit themselves to a total confidentiality and to not spread or use directly, through third parties or other companies, information about the other party to which they have access in the frame of this Agreement.
11.1. PROTECTION AND CONFIDENTIALITY OF DATA
11.1.1. Confidential Information means any information disclosed by either party in the frame of this Agreement. In consequence, each party agrees not to use, disclose, publish or disseminate any Confidential Information of the other party for any purpose except to perform its obligations or exercise its rights under this Agreement, except:
11.1.1.1. Following prior consent of the other party, or
11.1.1.2. If the information was in the public domain at the time it was disclosed or becomes in the public domainthrough no act or omission of the Receiving Party.
11.1.2. Any of these exceptions will not be presumed in any case, and the revealing party must clear any doubt to this respect.
11.1.3. Both parties shall take reasonable precautions to preserve in strict confidence any confidential or proprietary information obtained by them, their agents, employees, subcontractors, suppliers, consultants, and in general, any person that has access to it.
11.1.4. Confidential Information includes any technical, economic, financial and/or commercial information, confidential or not, bearing in any commercial relationship and in general, without any limitation, any information to which any of the parties has access during the application, in the frame of this Agreement.
11.1.5. Except as provided hereinafter, for a period of five years after termination or expiration of this Agreement, each party shall not disclose, publish or disseminate information received from the other party which may be required to carry out this Agreement and which the disclosing party deems proprietary and confidential.
11.1.6. Once this Agreement has expired, each party must, depending on the choice of the other party, destroy or hand over all technical, economic, financial or commercial information, confidential or not, in its possession, directly or indirectly, as convened in the present Agreement. 11
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
11.2. MANAGEMENT OF ACCESS RIGHTS
11.2.1. In accordance to Article 10.1, the Customer is in charge of defining the opening, closing or modifying of access toinformation. The Customer is also in charge of defining the user accesses, as well as the level of access of its users.
11.2.2. 10.2.2. EIT guarantees the control of access (through an access code and password) to information pursuant to the accessrights defined by the Customer.
11.2.3. 10.2.3. EIT will not be held responsible if a Customer's user uses an access code and password of a third party.
12. SUPERVISION COMMISSION
12.1. The parties commit themselves to constitute a supervision commission formed by persons appointed for that purpose.
12.2. This commission will act as an intermediary between the parties and it will accomplish the following tasks:
12.2.1.1. Verify the fulfilment, in particular, the evolution and implementation, of all the services and applications. This operation willbe recorded in the corresponding reports, according to the convened periodicity.
12.2.1.2. Interpret any Article of this Agreement that might be questioned by the parties.
12.2.1.3. Resolve any potential conflict that may arise during the execution of this Agreement. For this, the commission memberswill act at their best, and assemble all the necessary information.
12.3. If the commission members are not able to resolve a conflict or a problem in the interpretation of this Agreement within thirty naturaldays, the representatives of the parties will be duly informed in order to find a solution on friendly terms. 12
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
13. DURATION
13.1. The present Agreement is effective as from 1 January 2009. It is established by calendar year and renewed tacitly every year.
13.2. The Agreement rests, for all that, cancellable at any time by any of the parties before the expiry date of the Agreement or any of itsrenewals, upon three months prior written notice.
14. EARLY TERMINATION
14.1. The Customer can cancel, on its own accord, the present Agreement upon certified notice to EIT, in the following cases:
14.1.1. If there is a repeated interruption, by EIT, of the services convened in this Agreement, for a period of four working days.
14.1.2. Upon the institution, by or against EIT, of insolvency, receivership or bankruptcy proceedings or any other proceedingsfor the settlement of its debts.
14.1.3. Non-performance by EIT of its contractual obligations and warranties, assumed in the present Agreement.
14.1.4. Absorption or fusion of EIT by other companies. In this case, the Customer can decide if he wants to continue working with the new company, which will have to continue rendering all the services convened in this Agreement, in the same conditions.
14.2. For simple convenience.
14.2.1. In case the Customer cancels the Agreement in accordance with Articles 13.1, 13.2, EIT will pay the Customer the amountof 3.000 €, for the non observance of the Agreement of which it is responsible.
14.2.2. In case of termination of this Agreement by the Customer according to Article 13.5, the Customer will pay EIT the amountof 3.000 €.
15. CONTRACTUAL TRANSITION
15.1. In case of expiration or termination of the present Agreement, the Customer and EIT will cooperate, in good faith, to make possible a transfer, in due form to the Customer or to a third party, chosen by the Customer, for the provision of the services defined in this Agreement. For that purpose, the parties will develop, with enough time in advance and with the necessary haste, a Transition Plan where the actions and measures to be taken will be defined. 13
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
15.2. EIT will continue to provide the services defined in this Agreement between the date it receives from the Customer a notice ofexpiration or termination of this Agreement and the date this expiration or termination becomes effective.
15.3. EIT commits to hand over to the Customer, on this date, all the data and its copies, in the frame of the provision of services.
16. LITIGATION RULINGS
16.1. All the litigations that may arise between the parties during the period of application of the present Agreement, in relation with its Articles, and that have not been solved in a friendly manner, will be subjected to the rulings of their respective Chief Executives. In case of persistent disagreement, the litigation will be subjected to the General Management of Group Villar Mir.
16.2. However, if any of the parties no longer belongs to Group Villar Mir, any litigation that may not be solved in a friendly manner will besettled in compliance with the laws of Spain.
16.3. Any doubt that arises, in the frame of this Agreement, will be settled through arbitration in equity, in compliance with the Spanish Law of Arbitration, Ley 60/2003, both parties agreeing to obey the decision. For the designation of the arbitrators and the management of the arbitration, the following rules will apply:
16.3.1. There will be three arbitrators, solicitors. Each party will designate one, and these two will designate a third one.
16.3.2. The place of arbitration will be Madrid.
16.3.3. It will be governed by the laws of Spain and the language of the process will be Spanish.
16.3.4. The arbitrators will dictate the decision within three months of the notice of the parties' acceptance.
16.4. The parties, expressly waiving the Jurisdiction that may correspond to the same, submit themselves to the jurisdiction of the Courtsand Tribunals of Madrid for any matter derived from the present Agreement that cannot be subjected to arbitration. 14
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
17. GOVERNING LAW
17.1. This Agreement shall be governed by, and construed in accordance with the laws of Spain.
18. IN WITNESS WHEREOF, the parties acknowledge that each has fully read and understood this Agreement, and, intending to be legally bound thereby, executed this Agreement on the date first above written. SLICON SMELTERS PTY LTD ESPACIO INFORMATION TECHNOLOGY, S.A.
Name: Dr B.E.N. Ollivier Name: Carlos Lafitte Pradal
Title: Managing Director Title: Director General 15
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
ANNEX 1: DEFINITIONS
The following definitions apply in the present Agreement:
IT Department: Customer's work team in charge of the support and maintenance of the Customer's local infrastructure and applications.
LAN: Internal network at the factories that connects the factory's routers with the workstations and peripheral devices of the site.
WAN: External network that connects the Silicon Smelter factories with the central node located in Madrid. Network leaving the router of each factory.
South African workdays: Monday to Friday, except for legal holidays of the South African work schedule.
South African working hours: 8h00 - 20h00 during South African workdays.
Local Servers: Servers listed in Annex 3, which are located in the factories of Silicon Smelters.
Central Servers: Servers listed in Annex 3, which are located outside the factories of Silicon Smelters.
Local Applications: IT applications used by Silicon Smelters and implemented on the local Servers. Silicon Smelters is responsible for these applications, which are listed in Annex 4.
Data: The data or information belonging to the Customer saved on magnetic support or others, and that is subject to computer treatment.
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
ANNEX 2: SERVICES AND LIABILITIES Service Period Timetable Response Liability Evaluation Period
Type of Evaluation
Network Availability
Workdays in South African work schedule 8H-20H 98% availability Monthly
Measuring periods when the network is not available
Fault reports of network and server infrastructure problems
Workdays in South African work schedule
8H-20H
Alert in the 15 minutes following the fault report as well as an account when the problem has been solved. Define what alert, how and who communicates it.
98% of faults reported in the time period
Monthly
Measuring the period between the beginning and the end of the problem, and fault reporting
Ges-Indus Availability
Workdays in South African work schedule 8H-20H 98% availability Monthly
Measuring periods when the application is not available
Ges-Indus Support Level 2
Workdays in South African work schedule 8H-20H
Ø
Response: less than two South African working hours
98% of requests solved in the time period Monthly
Measuring response times for each request
Ø Blocking Bug:
Ges-Indus Maintenance
Workdays in South African work schedule
8H-20H
●
Consideration and response: less than two South African working hours
98% of requests solved in the time period
Monthly
Measuring the response times for encountered problems
●
Solution or work-around: less than one South African workday
Ø Non-blocking Bug:
●
Consideration and response: less than three South African workdays
● Solution or work-around: set out by the requestor
Electronic Mail Service Availability 7d/7d 24h/24h 99% availability
Measuring periods when the electronic mail service is not available
OFINET Availability 7d/7d 24h/24h 95% availability Measuring periods when OFINET is not available
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
ANNEX 3: INVENTORY OF SERVERS USED BY SILICON SMELTERS
Name of Servers Functionality Priority Local or Central Server Server Management Responsibility ERP Ges-indus Management of commercial and financial flow High Central EIT SMTP.EIT.ES Transmission of electronic mail High Central EIT POP.EIT.ES Delivery of electronic mail High Central EIT OFINET WEB application, access to electronic mail service and sharing of documents and information Medium Central EIT
Source: FERROGLOBE PLC, F-4/A, 6/24/2015
ANNEX 4: INVENTORY OF APPLICATIONS USED BY SILICON SMELTERS
Name of Application Functionality Priority Local or Central Server Server and Application Management Responsibility Ges-Indus Management of commercial and financial flow High Central EIT Email service Transmission and reception of electronic mail High Central EIT OFINET WEB application, access to electronic mail service and sharing of documents and information Medium Central EIT
Source: FERROGLOBE PLC, F-4/A, 6/24/2015 | Highlight the parts (if any) of this contract related to "Insurance" that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Expiration Date" that should be reviewed by a lawyer. Details: On what date will the contract's initial term expire?
Context: EXHIBIT 10.18
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED WITH "[***]", HAS BEEN EXCLUDED BECAUSE IT IS NOT MATERIAL AND WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.
MASTER SUPPLY AGREEMENT
THIS MASTER SUPPLY AGREEMENT ("Agreement") is made as of 31 October 2019 ("Effective Date") by and between Premier Nutrition Company, LLC, a Delaware limited liability company with its headquarters located at 1222 67th Street, Suite 210, Emeryville, CA 94608 ("Buyer" or "PNC"), and Fonterra (USA) Inc., a California corporation with its principal place of business located at 8700 W. Bryn Mawr Avenue, Suite 500N, Chicago, IL 60631 ("Supplier" or "Fonterra") (each a "Party", collectively "Parties").
WHEREAS PNC produces, distributes, markets and sells products including ready to drink protein shakes and beverages, powdered protein shakes, nutrition bars, and dietary supplements (the "Finished Products"); and
WHEREAS Supplier produces raw materials including protein powders used by PNC to produce at least some of the Finished Products;
NOW THEREFORE in consideration of their respective rights and obligations as set forth in this Agreement, and for other good and valuable consideration, the adequacy and receipt of which are acknowledged, PNC and Supplier agree as follows:
1 Supply of Ingredients
1.1 Supplier will provide such materials to PNC or its Third Party Manufacturers ("TPMs") as are specified in any Master Purchase Commitment or any other purchase orders that the Parties may execute from time to time during the term of this Agreement ("Ingredients"). Ingredients will be produced at Supplier's facilities listed in a Master Purchase Commitment, or any other of Supplier's facilities approved in advance, in writing by PNC.
1.2 PNC or its TPMs will place specific orders for Ingredients from Supplier by issuing a purchase order that specifies, at minimum, the item, quantities, price, delivery dates, and delivery and payment terms (each a "Purchase Order").
1.3 PNC and Supplier may enter certain Master Purchase Commitments from time to time during the Term of this Master Supply Agreement. Such Master Purchase Commitments and any Purchase Orders issued against such Commitments shall be subject exclusively to the terms and conditions of this Agreement. In the event the terms of any Master Purchase Commitment conflicts with the terms of this Agreement, the terms of the Master Purchase Commitment shall control.
1.4 Supplier will receive Purchase Orders by telephone, USPS, overnight courier, email, and fax transmission, Monday through Friday except on state or nationally recognized bank holidays. Purchase Orders not received by 3:00 p.m. Eastern Time are considered to be received on the following
Page 1
business day. Supplier will confirm or reject Purchase Orders within [***] of receipt of the Purchase Order. Orders not rejected in writing within such time will be deemed confirmed and accepted by Supplier. Each Purchase Order issued by PNC or its TPMs and accepted by Supplier shall be governed by the terms and conditions of this Agreement. Additional terms included in acknowledgments, standard terms and conditions, or any other documents or communications exchanged by the Parties in connection with the sale or purchase of any Ingredients shall be void and of no force or effect. The Parties may only modify, add to or amend any of the terms or conditions of this Agreement by a writing signed by authorized representatives of both Parties.
1.5 Supplier represents and warrants that at the time and date of delivery, the Ingredients will comply with all specifications ("Specifications"), a copy of which will be attached to the relevant Master Purchase Commitment or Purchase Order accordingly. A Specification may be updated from time to time by PNC in its sole discretion, provided PNC provides Supplier with reasonable prior notice on any updates ("Change Notification"). Within [***] from receipt of the Change Notification, Supplier will either: (1) accept the Specification change at the current price and terms; or (2) submit to PNC a proposal ("Proposal") setting forth the conditions of acceptance that may include a change in price and/or other terms, including documentation to support same. Within [***] the Parties will discuss the Proposal in good faith and exercise their best efforts to agree on the appropriate adjustment if any. PNC will not issue any Purchase Orders, nor be required to issue any Purchase Orders to Supplier until PNC and Supplier have agreed on required Ingredient Specifications and any associated price and/or term adjustment. In the event the Parties fail to agree on required Ingredient Specifications or price and/or term adjustments despite their best good faith efforts, neither Party will have any further obligation with regard to purchase or supply of those Ingredients under any Master Purchase Commitments except that PNC shall take and pay for [***] of Ingredient inventory manufactured according to the then-current Specification.
1.6 Supplier will provide a Certificate of Analysis ("COA") completed in accordance with the Specifications with any shipment of Ingredients.
1.7 INTENTIONALLY LEFT BLANK
1.8 This Agreement is nonexclusive and sets forth the terms and conditions under which the Parties will supply and purchase Ingredients from the other Party. Nothing herein is intended to, nor does, guarantee that either Party will supply or purchase any specific, item, in any specific quantity, or conclude any business transaction with the other.
1.9 Supplier Performance metrics will be identified and tracked periodically through Supplier Performance Review meetings no more frequently than each calendar quarter during the Term. [***] Metric targets will be established by PNC and agreed by Fonterra and updated as needed. The ultimate goal is zero defects for quality and administrative compliance issues.
1.10 Supplier agrees to make a good faith effort to provide Advance Ship Notices ("ASN") with bar-coded pallet labels; Invoices, Purchase Orders and other business transactions, as may be advised by PNC, for each Ingredient shipment. Supplier will provide, itself or through a third-party provider, the information via Electronic Data Interface ("EDI") if and as requested by PNC. The technical specifications for all required EDI transactions will be provided by PNC.
2
2 Quality and Food Safety
2.1 For the purposes set forth in Section 303(c) of the Federal Food, Drug, and Cosmetic Act (the "Act"), Supplier guarantees to PNC that as of the time and date of delivery, all Ingredients will not be adulterated or misbranded within the meaning of the Act, nor will any Ingredients constitute an article that may not, under the provisions of Sections 404 and 505 of the Act, be introduced into interstate commerce. The Supplier further guarantees that as of the time and date of delivery, all of the Ingredients will be in compliance with all applicable laws, regulations, requirements and programs including those administered by the Food and Drug Administration (the "FDA"), the United States Department of Agriculture (the "USDA") and any state or local food or drug laws then in effect. This guarantee specifically includes Proposition 65 (California Safe Drinking Water and Toxic Enforcement Act), and Supplier hereby certifies that the Ingredients will not contain any non-naturally occurring chemicals subject to Proposition 65 or that any such chemicals pose "no significant risk" or cause "no observable effect" as set forth in the California Health and Safety Code, 22 CCR §§ 12701 et seq. and 22 CCR §§ 12801 et seq., as amended. Supplier shall comply with all applicable regulatory requirements for determining and documenting that all Ingredients are at or below no significant risk levels and no observable effect levels, as applicable.
2.2 Supplier shall develop and maintain a food safety/food defense program as required under the Food Safety Modernization Act 21 USC §301 et seq and shall submit a copy of such plan (and any changes thereto) to PNC upon PNC's request. Supplier will conduct [***] third-party food safety/food defense audits (the "Audits") in compliance with, and consistent with, relevant audit schemes approved by the Global Food Safety Initiatives, AIB International, Silliker, or GMA SAFE. Supplier will submit summaries of audit reports to PNC's Quality Manager at [***] upon request. Failure to comply with the requirements of this Section 2.2 will constitute a material breach of this Agreement.
2.3 Supplier will notify PNC immediately, by person-to-person voice communication or equivalent means, if any of the Ingredients contain, or are reasonably suspected to contain, material hazardous to human health, including but not limited to, chemical, physical or biological hazards.
2.4 PNC shall notify Supplier in writing if it determines any Ingredient fails to meet the Specifications. Supplier shall be given an opportunity to and will promptly inspect and/or test such Ingredients to confirm compliance to Specification. If after any reasonable, good faith inspection and testing it is confirmed that certain Ingredients fail to meet the Specifications [***].
2.5 Subject to the occurring of a Force Majeure Event, if Supplier fails to deliver the Ingredients in accordance with the Specifications, including within the time specified on the Purchase Order, in addition to any other remedies available, PNC may terminate the Purchase Order in whole or in part. In the event of such a termination, Supplier shall continue performance of any nonterminated portion of the Purchase Order, or any nonterminated Purchase Orders, and the quantity of Ingredient ordered and so terminated shall be deducted against any relevant Master Purchase Commitment.
2.6 PNC or its contracted third-party auditors may enter and audit/inspect Supplier's facilities where the Ingredients are produced, stored, packaged or otherwise processed [***] unless food safety is at issue or PNC has a good faith reason to believe the Ingredients are being stored, packaged, or processed
3
in a way that is inconsistent with the Specifications, in which case an audit may be performed at any time during the Term. For routine visits and audits, PNC will provide [***] if facilities located in the US and with [***] if facilities are located [***], provided that such examination will be conducted during Supplier's normal business hours and in such a manner as to reasonably minimize disruption to Supplier's business, unless food safety is at issue, in which case such examination may be conducted at any time. Supplier shall cooperate in good faith with PNC during all such inspections. During qualification processes and on-site inspections, Supplier will present necessary documentation to ensure compliance with all applicable programs specified under 21 CFR Part 117 Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventative Controls for Human Food. Records of environmental monitoring activities by the Supplier, following Supplier's established environmental monitoring program and standard operating procedures will be made available upon request to PNC. Supplier will notify Buyer immediately via person-to- person voice communication in the event that any pathogen is found, or reasonably suspected, in the plant environment during any environmental monitoring activity that could have an impact on the quality or safety of PNC's Ingredients. In the event of an actual or suspected food safety concern, Supplier shall conduct sampling in all relevant areas and promptly provide results of such tests to PNC. If PNC or its representatives find that any of Supplier's facilities, processes, inventory, procedures or equipment are not in accordance or compliance with the requirements of this Agreement or applicable law or regulation, PNC will give notice to Supplier, and Supplier shall promptly take all reasonable steps to correct such deficiency as soon as possible. If correction of the deficiency cannot be affected within [***] of such notice, then Supplier shall promptly notify PNC with its plan to correct the deficiency including an estimated schedule. If the deficiency cannot be corrected within [***], unless otherwise agreed, then PNC shall have the right to terminate any Purchase Orders then outstanding, along with any Master Purchase Commitment related thereto.
3 Business Continuity/Continuous Supply Assurances. Supplier will develop and maintain a business continuity plan that identifies critical pathways and potential crisis situations that could interrupt the supply of Ingredients to PNC and establish contingency plans for dealing with each crisis situation. Upon PNC's written request, Supplier will submit the business continuity plan to PNC for PNC's review.
4 Intellectual Property. 4.1 Each Party shall retain ownership of all Intellectual Property Rights (as defined below): (1) owned or licensed by that Party prior to the commencement date of this Agreement; or (2) developed or acquired independently of this Agreement by that Party or its licensors other than in connection with this Agreement. 4.2 Ownership in the Intellectual Property Rights, if any, of any developments and/or modifications to the Ingredients during the Term shall be [***]. 4.3 For purposes of this Section 4, the term "Intellectual Property Rights" shall mean all statutory, common law and proprietary intellectual property rights, including rights in know-how, confidential information, copyright works, designs, inventions, patents, plant varieties, trademarks and all other rights, whether registered or unregistered (including applications for such rights).
5 Confidential Information. "Confidential Information" means all business, financial and technical information of the Parties, or of a third- party as to whom a Party has an obligation of confidentiality, whether disclosed before or after the Effective Date and whether disclosed in writing, orally, by electronic delivery, or by inspection of tangible objects. Confidential Information includes, without limitation, trade secrets, ideas,
4
processes, formulae (including formula and specifications for Ingredients and Finished Products), computer software (including source code), algorithms, data, data structures, know-how, copyrightable material, improvements, inventions (whether or not patentable), techniques, strategies, business and product development plans, timetables, forecasts, customer and supplier information, and information relating to product designs, specifications and schematics, product costs, product prices, product names, financial information, marketing plans, business opportunities, personnel, research, development and know-how. Confidential Information includes that which is marked or otherwise identified as confidential, as well as that which by its nature and the circumstances of its disclosure are reasonably understood to be confidential.
5.1 Maintenance of Confidentiality and Limitations on Use. Each Party will hold in strict confidence and keep confidential all Confidential Information disclosed to it by the other. The Parties will use at least the same degree of care to avoid publication or dissemination of such Confidential Information as it uses with respect to similarly confidential information of its own, but in no event less than reasonable care. Use of such Confidential Information by such Party will be strictly limited to activities directly in support of its activities under this Agreement. The Parties will disclose such Confidential Information on a need-to-know basis only, and in all events only to such employees and independent contractors who are informed of the confidential nature of the Confidential Information and are bound by obligations substantially similar to those set forth herein applicable to such Confidential Information. Each Party hereby guarantees the performance of the provisions hereof by each person obtaining disclosure of such Confidential Information directly or indirectly from such Party.
5.2 Copying and Return of Confidential Information. Each Party shall not make any copies or extracts of Confidential Information, or include such Confidential Information in its own materials except as reasonably required directly in support of its activities under this Agreement. When a Party no longer has need thereof in support of its activities under this Agreement or upon request of the other Party, whichever occurs first, such Party shall promptly cease using and shall return or destroy (and, if requested, certify destruction of) all such Confidential Information along with all tangible and electronic copies which it may have made, provided, however, that a Party is not obligated to remove Confidential Information from back up devices that have been made and are maintained in accordance with a corporate records retention policy.
5.3 Certain Exceptions. Information will not be, or will cease being, Confidential Information, as the case may be, if Supplier can show:
5.3.1 that such information entered the public domain other than by breach of this Agreement on the part of any Party obligated to confidentiality hereunder; 5.3.2 it is rightfully known to the receiving Party without obligation of confidentiality to any third-party prior to receipt of same from the disclosing Party as evidenced by bona fide written, dated documents; 5.3.3 it is independently developed by personnel of the receiving Party who have not had access to Confidential Information of the disclosing Party; and, 5.3.4 that it is generally made available to third-parties by the disclosing Party without obligation of confidentiality.
5.4 Legally Required Disclosure. A Party shall not be in breach hereof if it discloses Confidential Information pursuant to a judicial or governmental order, or as required by applicable law or the rules
5
of a recognized stock exchange, but any such disclosure shall be made only to the extent so ordered or required. In any such event, the Party (i) shall timely notify the other Party so that it may intervene in response to such order or take action to protect its interests (in which event such Party will cooperate in such effort), or (ii) if timely notice cannot be given, shall seek to obtain a protective order or confidential treatment from the court or government for such information.
5.5 Defend Trade Secrets Act. Notwithstanding anything in this agreement to the contrary, a receiving Party is hereby notified in accordance with the US Defend Trade Secrets Act of 2016 that it will not be held criminally or civilly liable under any US federal or state trade secret law for the disclosure of a trade secret that: (x) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (y) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.
5.6 Trading in Securities. Supplier acknowledges that it is aware, and agrees to advise its directors, officers, employees, agents and representatives who are informed as to the matters which are the subject of this Agreement, that the United States securities laws prohibit any person who has material, non-public information concerning PNC, its parent and affiliate companies including BellRing Brands, Inc. and Post Holdings, Inc. from purchasing or selling securities of those companies or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.
5.7 Title. As between the Parties, title or right to possess Confidential Information of PNC, except as otherwise provided herein, shall remain in PNC. Nothing in this Agreement shall be construed as granting or conferring any rights to any Confidential Information, except as otherwise explicitly stated in this Agreement.
5.8 No Representation or Warranty. Except as expressly set forth herein, neither Party makes any representations or warranties of any nature whatsoever with respect to any Confidential Information it may provide, including, without limitation, any warranties of merchantability, fitness for a particular purpose or accuracy. All Confidential Information is provided on an "as-is" basis, and the recipient assumes all responsibility for its use thereof or reliance thereon. Further, each Party understands and acknowledges that any confidential information received from the other Party concerning future plans may be tentative and may not represent firm decisions concerning such plans, and neither Party shall be liable to the other Party for inaccuracies in Confidential Information under any theory of liability.
6 Term and Termination.
6.1 This Agreement will commence on the Effective Date and continue for an Initial Term of five (5) years, and will automatically renew for additional periods of five (5) years unless one Party notifies the other of its intention not to renew, no less than 12 months prior to the expiration of the then-current term, unless terminated as permitted under this Agreement.
6.2 Either Party may terminate this Agreement for cause if the other Party fails to perform any material provision of this Agreement or commits a material breach of this Agreement which is not corrected within [***] after receiving written notice of the failure or breach. except that if the default is by
6
Supplier that creates an immediate public food safety risk, PNC may terminate this Agreement immediately without regard to any period for correction.
6.3 This Agreement will automatically terminate if either Party becomes insolvent or files a petition in bankruptcy, if a Party makes an assignment for the benefit of a creditor, if a receiver is appointed to take possession of any part of a Party's assets or if a Party becomes unable generally to pay its debts as they become due, or otherwise ceases to do business.
6.4 On the termination of this Agreement for any reason, all rights granted to Supplier under this Agreement will immediately cease, and Supplier must deliver to PNC all written or recorded materials relating to the Confidential Information of PNC in the possession or control of Supplier or any of its related party, subject to Section 5.2.
7 Indemnification and Insurance. 7.1 Each Party will defend and hold harmless the other Party and its subsidiaries, affiliates, officers, directors, employees, attorneys, insurers, shareholders, representatives and agents from and against any and all liabilities, losses, damages, claims, actions, proceedings, suits, costs or expenses, including reasonable attorney fees for counsel retained by the indemnified Party, brought by a Third Party, arising out of or in connection with: 7.1.1 any negligent or intentional act or omission of the indemnifying Party, its agents or employees; 7.1.2 any breach in or default by the indemnifying Party of its obligations under this Agreement; 7.1.3 any other loss, damage or injury caused by or arising out of the indemnifying Party's or its agents' or employees' on-site visits to the indemnified Party's premises; or any claims relating directly to trademark, patent or copyright infringement arising out of a Party's use of the other Party's (or its licensors') trademarks, patents or copyrights as permitted hereunder. 7.1.4 For purposes of this Section 7.1, "Third Party" means any individual, corporation, partnership, trust, cooperative, or other business organization or entity, and any other recognized organization, other than the Parties or their affiliates.
7.2 Except for a Party's gross negligence or intentional acts or omissions and its obligations of indemnity under this Agreement, under no circumstances will either Party be liable to the other Party for [***].
7.3 Supplier agrees to indemnify and hold PNC harmless from any and all employment-related claims, payments, entitlements, taxes, interest and penalties assessed against or obtained from PNC by any individual or authority as a consequence of or related to the performance by any agent or employee of Supplier.
7.4 Supplier shall maintain insurance with an insurance company with an equivalent of an A.M. Best rating of "A" or better, of the following kinds and in the following amounts during the term of this Agreement: 7.5 7.5.1 Comprehensive General Liability (CGL) Insurance with limits of not less than [***] each occurrence and [***] in the aggregate, including Contractual, Completed-Operations and
7
Product-Liability Coverage's with limits of not less than [***] for each occurrence, covering both bodily injury and property damage liability. 7.5.2 Umbrella/Excess Liability with limits of not less than [***]. 7.5.3 Workers' Compensation Coverage plus Occupational Disease Insurance if Occupational Disease coverage is required by the laws of the state where the Facility is located or work is to be performed. Employers Liability $500,000 each accident 7.5.4 Auto Liability $1,000,000 combined single limit.
7.6 Supplier shall have Buyer named as an additional insured on its insurance policies in subparts 7.5.1 and 7.5.2 above. Supplier shall furnish Buyer with a certificate from its insurer verifying that it has the above insurance in effect during the duration of this Agreement and that insurer acknowledges (a) the contractual liability assumed by Supplier in this Agreement and (b) that Buyer is an additional insured on such policies and (c) Supplier's CGL policy is primary and Buyer's CGL policy is non-contributory and (d) a waiver of subrogation shall be provided in favor of Buyer on the CGL, Workers' Compensation and Auto policies. Said certificate of insurance shall require Supplier's insurance carrier to give Buyer no less than ten (10) days written notice of any cancellation or change in coverage. Failure to secure such insurance as of the date of execution of this Agreement shall constitute a breach of this Agreement. Supplier shall provide to PNC a certificate evidencing such insurance within thirty (30) days of a request for same from PNC.
7.7 Supplier shall, at its own expense, maintain throughout the term of this Agreement, all insurance required by law or regulation in all countries in which this Agreement will be performed.
8 Recall. If Ingredients provided by Supplier under this Agreement are misbranded, contaminated, or otherwise unfit for human consumption at the time they are delivered to PNC or its TPM ("Defect"), PNC in its sole discretion will make a determination of the necessity of a recall, market withdrawal, inventory retrieval, or other action designed to prevent the distribution or sale of the affected Finished Products, plus the type, extent, method of handling, disposition of the Finished Products as well as any affected work in progress, and all other particulars involved in such an action (a "Recall"), and PNC will execute any Recall. Supplier, in its sole discretion, will make a determination of the necessity of a recall, market withdrawal, inventory retrieval or other action designed to prevent the distribution or sale of the Ingredients. Subject to Section 9.1, Supplier shall bear the complete responsibility for a Recall occasioned by a Defect in the Ingredient and shall indemnify PNC for [***] resulting from or related to the Recall. Any Recall occasioned by PNC labels or by tampering with the Ingredients after they have left Supplier's control, or by improper storing or handling by PNC, will not be considered a Defect.
9 Limitation of Liability.
9.1 The maximum liability of one Party to the other Party and its affiliates in relation to this Agreement will be [***] ("Liability Cap"), provided however that:
8
9.1.1 The Liability Cap will not apply to any (1) material confidentiality breach under Section 5, and/or (2) indemnification obligations under Section 7.1. 9.1.2 The Liability Cap will not apply to intentional misconduct and/or gross negligence.
9.2 For the purpose of this Section, "liability" means liability for any and all claims, causes of action, judgments, costs and expenses (including but not limited to reasonable attorney fees and expenses), reimbursements, losses, and any and all other liabilities and damages of any kind, whether in contract, tort (including negligence), equity, statute or otherwise arising out of, in relation to or as a result of this Agreement.
10 Force Majeure.
10.1 Neither Party will be liable for any breach of its obligations under this Agreement resulting from causes beyond its reasonable control, including, but not limited to, an act of nature, drought, outbreak of foot and mouth disease, port and other transport strikes, war, fires, quarantine restrictions, insurrections or riots, energy shortages, embargo or the inability to obtain supplies or raw materials because of a global shortage or governmental action (a "Force Majeure Event"). Notwithstanding anything herein to the contrary, in the event of a Force Majeure Event, or any other circumstance that limits Fonterra's ability to produce or deliver product, Supplier will exercise its best efforts to comply with its obligations hereunder, mitigate the adverse impact on and not disfavor PNC, and will treat it in parity with its other customers.
10.2 Any obligation of either Party under this Agreement will be postponed until the cause underlying the Force Majeure Event has been eliminated, at which time the obligation will again be in effect. Any loss of time by the Force Majeure Event will not be held against the Party who was unable to comply with its obligations under this Agreement because of the Force Majeure Event. The Party unable to comply with its obligations under this Agreement will immediately notify the other Party in writing that a Force Majeure Event has delayed its performance and will state, to the best of its knowledge, the revised date for performance. If a Force Majeure Event persists for longer than [***], the Party not directly affected by the Force Majeure Event may terminate this Agreement with regard to any relevant Master Purchase Commitments or Purchase Orders.
10.3 Should Supplier be unable to comply with its obligations under this Agreement because of a Force Majeure Event, PNC may obtain elsewhere the Ingredients the Supplier was unable to deliver because of the Force Majeure Event and those Ingredients will be credited against any relevant Minimum Purchase Commitment. PNC will not be obligated to purchase those Ingredients from Supplier at a later time.
11 Notices. Notices contemplated by this Agreement must be in writing and may be sent by registered or certified mail, postage prepaid, to the address specified in the first paragraph of this Agreement or to any other address designated by prior written notice.
12 Governing Law; Dispute Resolution.
9
12.1 This Agreement will be governed by the laws of the State of Delaware without regard to its conflicts of law principles.
12.2 The Parties consent to, acknowledge, and agree that any dispute arising out of or relating to this Agreement, including the breach, termination or validity thereof, shall be brought exclusively before the state and federal courts in and for the City of Wilmington and County of New Castle, Delaware Each Party waives any objection based on forum non conveniens.
13 Assignment. Neither Party may transfer or assign any of its rights or obligations under this Agreement without the prior written consent of the other Party, except that either Party may assign this Agreement to any entity controlled by it, its parents, subsidiaries, or affiliates, or to any purchaser of the business to which this Agreement relates subject to the other Parties consent which will not be unreasonably withheld or delayed.
14 Supplier Conduct. Supplier agrees to engage in responsible and ethical business practices and conduct itself in full compliance with all applicable laws, rules, and regulations in every country in which it does business.
15 California Transparency Act. PNC does not accept or support the use of illegal, abusive, or forced labor in our own facilities. Within its supply chain, Supplier will comply with all laws of the country they are doing business in and are subject to.
16 U.S. Government Affirmative Action Regulations. During the performance of this contract or any purchase order issued hereunder, the Supplier agrees to comply with all applicable Federal, state and local laws respecting discrimination in employment and non-segregation of facilities including, but not limited to, requirements set out at 41 CFR §60-1.4, 41 CFR §61-300.10, 29 CFR Part 471 Appendix A to Subpart A, 41 CFR §60-300.5 and 41 CFR §60-741.5, which specific clauses are herein incorporated by reference into all covered contracts and subcontracts as required by Federal law. This Supplier and any applicable subcontractor shall abide by the requirements of 41 CFR §60- 300.5(a) and §60-741.5(a) to the extent applicable. These regulations prohibit discrimination against qualified individuals on the basis of protected veteran status or disability, and require affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified protected veterans and individuals with disabilities.
17 Fair Labor Practices.
17.1 Supplier shall provide workers with clean, safe and healthy work environments; recognize and respect the right of employees to free association and collective bargaining in accordance with law; comply with all applicable wage and hour laws; and properly verify the employment eligibility of its employees.
17.2 Forced Labor. Suppliers will not employ, use or otherwise benefit from involuntary labor, forced labor, or labor that results from slavery or human trafficking. Supplier hereby certifies that: (i) it is in compliance with this paragraph; and (ii) all materials incorporated into its products comply with all applicable laws addressing slavery, human trafficking and other forms of forced labor. Supplier shall provide PNC with documentation establishing compliance with this paragraph upon [***] notice.
10
17.3 Child Labor. Supplier will not employ anyone under the legal working age defined by local law. Supplier will comply with all applicable laws addressing the working requirements and conditions for child workers.
17.4 Respectful Workplace. Supplier shall prohibit all forms of unlawful discrimination, abuse, harassment, violence and retaliation.
18 Gifts and Entertainment. Supplier will not offer any gift to a PNC employee, contractor, or agent that is: (i) more than a nominal value; (ii) more than an infrequent occurrence; (iii) cash or cash equivalents; or (iv) illegal, sexually oriented, offensive or otherwise inappropriate.
19 Environment & Sustainability. Supplier will comply with all applicable environmental laws and reporting obligations, maintain all required permits, and strive to responsibly manage the impacts of their operations on the environment.
20 Anticorruption. Suppliers will not, directly or indirectly, offer improper gifts to government employees, engage in bribery or fraud, or take any other action that would cause a violation of the U.S. Foreign Corrupt Practices Act, the UK Bribery Act or any other applicable anti- corruption law.
21 Miscellaneous.
21.1 If any provision of this Agreement is determined to be illegal or unenforceable, all other provisions will continue in full force and effect.
21.2 This Agreement may be executed concurrently by original or facsimile signature in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
21.3 Each right and remedy of each Party described in this Agreement is cumulative and in addition to every other right or remedy, express or implied, now or hereafter arising, available to such Party, at law or in equity, or under any other agreement. No delay or omission by either Party in the exercise of any right or remedy arising under this Agreement will impair any such right or remedy or the right of such Party to resort thereto at a later date or be construed to be a waiver of any default under this Agreement. The indemnities, representations and warranties of each Party will survive termination of this Agreement.
21.4 This Agreement, together with any schedules and exhibits and any Purchase Orders, Specifications and COAs, constitutes the complete agreement between the Parties and supersedes all prior agreements between the Parties regarding this subject matter. The Parties hereby agree that any such prior agreements are hereby terminated. No other contracts, warranties, promises or representations, either oral or in writing, relating to this Agreement will bind either Party except for the Purchase Orders, Specifications and COAs. This Agreement may not be amended or modified except by a writing signed by an authorized representative of the Party against whom such amendment or modification is asserted. This Agreement will be binding upon, and will inure to the benefit of, the parties, their successors and permitted assigns.
(signature page follows)
11
Agreed to and executed effective as of the date first above written.
Fonterra (USA) Inc. Premier Nutrition Company, LLC
By: [***] By: /s/ Paul Rode Title: President Title: CFO
12
Agreed to and executed effective as of the date first above written.
Fonterra (USA) Inc. Premier Nutrition Company, LLC
By: By: /s/ Paul Rode
Title: Title: CFO [/INST] ```json
{<answer_start>
"answer": "This Agreement will commence on the Effective Date and continue for an Initial Term of five (5) years, and will automatically renew for additional periods of five (5) years unless one Party notifies the other of its intention not to renew, no less than 12 months prior to the expiration of the then-current term, unless terminated as permitted under this Agreement."
<answer_end>
}
``` </s> | EXHIBIT 10.18
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED WITH "[***]", HAS BEEN EXCLUDED BECAUSE IT IS NOT MATERIAL AND WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.
MASTER SUPPLY AGREEMENT
THIS MASTER SUPPLY AGREEMENT ("Agreement") is made as of 31 October 2019 ("Effective Date") by and between Premier Nutrition Company, LLC, a Delaware limited liability company with its headquarters located at 1222 67th Street, Suite 210, Emeryville, CA 94608 ("Buyer" or "PNC"), and Fonterra (USA) Inc., a California corporation with its principal place of business located at 8700 W. Bryn Mawr Avenue, Suite 500N, Chicago, IL 60631 ("Supplier" or "Fonterra") (each a "Party", collectively "Parties").
WHEREAS PNC produces, distributes, markets and sells products including ready to drink protein shakes and beverages, powdered protein shakes, nutrition bars, and dietary supplements (the "Finished Products"); and
WHEREAS Supplier produces raw materials including protein powders used by PNC to produce at least some of the Finished Products;
NOW THEREFORE in consideration of their respective rights and obligations as set forth in this Agreement, and for other good and valuable consideration, the adequacy and receipt of which are acknowledged, PNC and Supplier agree as follows:
1 Supply of Ingredients
1.1 Supplier will provide such materials to PNC or its Third Party Manufacturers ("TPMs") as are specified in any Master Purchase Commitment or any other purchase orders that the Parties may execute from time to time during the term of this Agreement ("Ingredients"). Ingredients will be produced at Supplier's facilities listed in a Master Purchase Commitment, or any other of Supplier's facilities approved in advance, in writing by PNC.
1.2 PNC or its TPMs will place specific orders for Ingredients from Supplier by issuing a purchase order that specifies, at minimum, the item, quantities, price, delivery dates, and delivery and payment terms (each a "Purchase Order").
1.3 PNC and Supplier may enter certain Master Purchase Commitments from time to time during the Term of this Master Supply Agreement. Such Master Purchase Commitments and any Purchase Orders issued against such Commitments shall be subject exclusively to the terms and conditions of this Agreement. In the event the terms of any Master Purchase Commitment conflicts with the terms of this Agreement, the terms of the Master Purchase Commitment shall control.
1.4 Supplier will receive Purchase Orders by telephone, USPS, overnight courier, email, and fax transmission, Monday through Friday except on state or nationally recognized bank holidays. Purchase Orders not received by 3:00 p.m. Eastern Time are considered to be received on the following
Page 1
business day. Supplier will confirm or reject Purchase Orders within [***] of receipt of the Purchase Order. Orders not rejected in writing within such time will be deemed confirmed and accepted by Supplier. Each Purchase Order issued by PNC or its TPMs and accepted by Supplier shall be governed by the terms and conditions of this Agreement. Additional terms included in acknowledgments, standard terms and conditions, or any other documents or communications exchanged by the Parties in connection with the sale or purchase of any Ingredients shall be void and of no force or effect. The Parties may only modify, add to or amend any of the terms or conditions of this Agreement by a writing signed by authorized representatives of both Parties.
1.5 Supplier represents and warrants that at the time and date of delivery, the Ingredients will comply with all specifications ("Specifications"), a copy of which will be attached to the relevant Master Purchase Commitment or Purchase Order accordingly. A Specification may be updated from time to time by PNC in its sole discretion, provided PNC provides Supplier with reasonable prior notice on any updates ("Change Notification"). Within [***] from receipt of the Change Notification, Supplier will either: (1) accept the Specification change at the current price and terms; or (2) submit to PNC a proposal ("Proposal") setting forth the conditions of acceptance that may include a change in price and/or other terms, including documentation to support same. Within [***] the Parties will discuss the Proposal in good faith and exercise their best efforts to agree on the appropriate adjustment if any. PNC will not issue any Purchase Orders, nor be required to issue any Purchase Orders to Supplier until PNC and Supplier have agreed on required Ingredient Specifications and any associated price and/or term adjustment. In the event the Parties fail to agree on required Ingredient Specifications or price and/or term adjustments despite their best good faith efforts, neither Party will have any further obligation with regard to purchase or supply of those Ingredients under any Master Purchase Commitments except that PNC shall take and pay for [***] of Ingredient inventory manufactured according to the then-current Specification.
1.6 Supplier will provide a Certificate of Analysis ("COA") completed in accordance with the Specifications with any shipment of Ingredients.
1.7 INTENTIONALLY LEFT BLANK
1.8 This Agreement is nonexclusive and sets forth the terms and conditions under which the Parties will supply and purchase Ingredients from the other Party. Nothing herein is intended to, nor does, guarantee that either Party will supply or purchase any specific, item, in any specific quantity, or conclude any business transaction with the other.
1.9 Supplier Performance metrics will be identified and tracked periodically through Supplier Performance Review meetings no more frequently than each calendar quarter during the Term. [***] Metric targets will be established by PNC and agreed by Fonterra and updated as needed. The ultimate goal is zero defects for quality and administrative compliance issues.
1.10 Supplier agrees to make a good faith effort to provide Advance Ship Notices ("ASN") with bar-coded pallet labels; Invoices, Purchase Orders and other business transactions, as may be advised by PNC, for each Ingredient shipment. Supplier will provide, itself or through a third-party provider, the information via Electronic Data Interface ("EDI") if and as requested by PNC. The technical specifications for all required EDI transactions will be provided by PNC.
2
2 Quality and Food Safety
2.1 For the purposes set forth in Section 303(c) of the Federal Food, Drug, and Cosmetic Act (the "Act"), Supplier guarantees to PNC that as of the time and date of delivery, all Ingredients will not be adulterated or misbranded within the meaning of the Act, nor will any Ingredients constitute an article that may not, under the provisions of Sections 404 and 505 of the Act, be introduced into interstate commerce. The Supplier further guarantees that as of the time and date of delivery, all of the Ingredients will be in compliance with all applicable laws, regulations, requirements and programs including those administered by the Food and Drug Administration (the "FDA"), the United States Department of Agriculture (the "USDA") and any state or local food or drug laws then in effect. This guarantee specifically includes Proposition 65 (California Safe Drinking Water and Toxic Enforcement Act), and Supplier hereby certifies that the Ingredients will not contain any non-naturally occurring chemicals subject to Proposition 65 or that any such chemicals pose "no significant risk" or cause "no observable effect" as set forth in the California Health and Safety Code, 22 CCR §§ 12701 et seq. and 22 CCR §§ 12801 et seq., as amended. Supplier shall comply with all applicable regulatory requirements for determining and documenting that all Ingredients are at or below no significant risk levels and no observable effect levels, as applicable.
2.2 Supplier shall develop and maintain a food safety/food defense program as required under the Food Safety Modernization Act 21 USC §301 et seq and shall submit a copy of such plan (and any changes thereto) to PNC upon PNC's request. Supplier will conduct [***] third-party food safety/food defense audits (the "Audits") in compliance with, and consistent with, relevant audit schemes approved by the Global Food Safety Initiatives, AIB International, Silliker, or GMA SAFE. Supplier will submit summaries of audit reports to PNC's Quality Manager at [***] upon request. Failure to comply with the requirements of this Section 2.2 will constitute a material breach of this Agreement.
2.3 Supplier will notify PNC immediately, by person-to-person voice communication or equivalent means, if any of the Ingredients contain, or are reasonably suspected to contain, material hazardous to human health, including but not limited to, chemical, physical or biological hazards.
2.4 PNC shall notify Supplier in writing if it determines any Ingredient fails to meet the Specifications. Supplier shall be given an opportunity to and will promptly inspect and/or test such Ingredients to confirm compliance to Specification. If after any reasonable, good faith inspection and testing it is confirmed that certain Ingredients fail to meet the Specifications [***].
2.5 Subject to the occurring of a Force Majeure Event, if Supplier fails to deliver the Ingredients in accordance with the Specifications, including within the time specified on the Purchase Order, in addition to any other remedies available, PNC may terminate the Purchase Order in whole or in part. In the event of such a termination, Supplier shall continue performance of any nonterminated portion of the Purchase Order, or any nonterminated Purchase Orders, and the quantity of Ingredient ordered and so terminated shall be deducted against any relevant Master Purchase Commitment.
2.6 PNC or its contracted third-party auditors may enter and audit/inspect Supplier's facilities where the Ingredients are produced, stored, packaged or otherwise processed [***] unless food safety is at issue or PNC has a good faith reason to believe the Ingredients are being stored, packaged, or processed
3
in a way that is inconsistent with the Specifications, in which case an audit may be performed at any time during the Term. For routine visits and audits, PNC will provide [***] if facilities located in the US and with [***] if facilities are located [***], provided that such examination will be conducted during Supplier's normal business hours and in such a manner as to reasonably minimize disruption to Supplier's business, unless food safety is at issue, in which case such examination may be conducted at any time. Supplier shall cooperate in good faith with PNC during all such inspections. During qualification processes and on-site inspections, Supplier will present necessary documentation to ensure compliance with all applicable programs specified under 21 CFR Part 117 Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventative Controls for Human Food. Records of environmental monitoring activities by the Supplier, following Supplier's established environmental monitoring program and standard operating procedures will be made available upon request to PNC. Supplier will notify Buyer immediately via person-to- person voice communication in the event that any pathogen is found, or reasonably suspected, in the plant environment during any environmental monitoring activity that could have an impact on the quality or safety of PNC's Ingredients. In the event of an actual or suspected food safety concern, Supplier shall conduct sampling in all relevant areas and promptly provide results of such tests to PNC. If PNC or its representatives find that any of Supplier's facilities, processes, inventory, procedures or equipment are not in accordance or compliance with the requirements of this Agreement or applicable law or regulation, PNC will give notice to Supplier, and Supplier shall promptly take all reasonable steps to correct such deficiency as soon as possible. If correction of the deficiency cannot be affected within [***] of such notice, then Supplier shall promptly notify PNC with its plan to correct the deficiency including an estimated schedule. If the deficiency cannot be corrected within [***], unless otherwise agreed, then PNC shall have the right to terminate any Purchase Orders then outstanding, along with any Master Purchase Commitment related thereto.
3 Business Continuity/Continuous Supply Assurances. Supplier will develop and maintain a business continuity plan that identifies critical pathways and potential crisis situations that could interrupt the supply of Ingredients to PNC and establish contingency plans for dealing with each crisis situation. Upon PNC's written request, Supplier will submit the business continuity plan to PNC for PNC's review.
4 Intellectual Property. 4.1 Each Party shall retain ownership of all Intellectual Property Rights (as defined below): (1) owned or licensed by that Party prior to the commencement date of this Agreement; or (2) developed or acquired independently of this Agreement by that Party or its licensors other than in connection with this Agreement. 4.2 Ownership in the Intellectual Property Rights, if any, of any developments and/or modifications to the Ingredients during the Term shall be [***]. 4.3 For purposes of this Section 4, the term "Intellectual Property Rights" shall mean all statutory, common law and proprietary intellectual property rights, including rights in know-how, confidential information, copyright works, designs, inventions, patents, plant varieties, trademarks and all other rights, whether registered or unregistered (including applications for such rights).
5 Confidential Information. "Confidential Information" means all business, financial and technical information of the Parties, or of a third- party as to whom a Party has an obligation of confidentiality, whether disclosed before or after the Effective Date and whether disclosed in writing, orally, by electronic delivery, or by inspection of tangible objects. Confidential Information includes, without limitation, trade secrets, ideas,
4
processes, formulae (including formula and specifications for Ingredients and Finished Products), computer software (including source code), algorithms, data, data structures, know-how, copyrightable material, improvements, inventions (whether or not patentable), techniques, strategies, business and product development plans, timetables, forecasts, customer and supplier information, and information relating to product designs, specifications and schematics, product costs, product prices, product names, financial information, marketing plans, business opportunities, personnel, research, development and know-how. Confidential Information includes that which is marked or otherwise identified as confidential, as well as that which by its nature and the circumstances of its disclosure are reasonably understood to be confidential.
5.1 Maintenance of Confidentiality and Limitations on Use. Each Party will hold in strict confidence and keep confidential all Confidential Information disclosed to it by the other. The Parties will use at least the same degree of care to avoid publication or dissemination of such Confidential Information as it uses with respect to similarly confidential information of its own, but in no event less than reasonable care. Use of such Confidential Information by such Party will be strictly limited to activities directly in support of its activities under this Agreement. The Parties will disclose such Confidential Information on a need-to-know basis only, and in all events only to such employees and independent contractors who are informed of the confidential nature of the Confidential Information and are bound by obligations substantially similar to those set forth herein applicable to such Confidential Information. Each Party hereby guarantees the performance of the provisions hereof by each person obtaining disclosure of such Confidential Information directly or indirectly from such Party.
5.2 Copying and Return of Confidential Information. Each Party shall not make any copies or extracts of Confidential Information, or include such Confidential Information in its own materials except as reasonably required directly in support of its activities under this Agreement. When a Party no longer has need thereof in support of its activities under this Agreement or upon request of the other Party, whichever occurs first, such Party shall promptly cease using and shall return or destroy (and, if requested, certify destruction of) all such Confidential Information along with all tangible and electronic copies which it may have made, provided, however, that a Party is not obligated to remove Confidential Information from back up devices that have been made and are maintained in accordance with a corporate records retention policy.
5.3 Certain Exceptions. Information will not be, or will cease being, Confidential Information, as the case may be, if Supplier can show:
5.3.1 that such information entered the public domain other than by breach of this Agreement on the part of any Party obligated to confidentiality hereunder; 5.3.2 it is rightfully known to the receiving Party without obligation of confidentiality to any third-party prior to receipt of same from the disclosing Party as evidenced by bona fide written, dated documents; 5.3.3 it is independently developed by personnel of the receiving Party who have not had access to Confidential Information of the disclosing Party; and, 5.3.4 that it is generally made available to third-parties by the disclosing Party without obligation of confidentiality.
5.4 Legally Required Disclosure. A Party shall not be in breach hereof if it discloses Confidential Information pursuant to a judicial or governmental order, or as required by applicable law or the rules
5
of a recognized stock exchange, but any such disclosure shall be made only to the extent so ordered or required. In any such event, the Party (i) shall timely notify the other Party so that it may intervene in response to such order or take action to protect its interests (in which event such Party will cooperate in such effort), or (ii) if timely notice cannot be given, shall seek to obtain a protective order or confidential treatment from the court or government for such information.
5.5 Defend Trade Secrets Act. Notwithstanding anything in this agreement to the contrary, a receiving Party is hereby notified in accordance with the US Defend Trade Secrets Act of 2016 that it will not be held criminally or civilly liable under any US federal or state trade secret law for the disclosure of a trade secret that: (x) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (y) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.
5.6 Trading in Securities. Supplier acknowledges that it is aware, and agrees to advise its directors, officers, employees, agents and representatives who are informed as to the matters which are the subject of this Agreement, that the United States securities laws prohibit any person who has material, non-public information concerning PNC, its parent and affiliate companies including BellRing Brands, Inc. and Post Holdings, Inc. from purchasing or selling securities of those companies or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.
5.7 Title. As between the Parties, title or right to possess Confidential Information of PNC, except as otherwise provided herein, shall remain in PNC. Nothing in this Agreement shall be construed as granting or conferring any rights to any Confidential Information, except as otherwise explicitly stated in this Agreement.
5.8 No Representation or Warranty. Except as expressly set forth herein, neither Party makes any representations or warranties of any nature whatsoever with respect to any Confidential Information it may provide, including, without limitation, any warranties of merchantability, fitness for a particular purpose or accuracy. All Confidential Information is provided on an "as-is" basis, and the recipient assumes all responsibility for its use thereof or reliance thereon. Further, each Party understands and acknowledges that any confidential information received from the other Party concerning future plans may be tentative and may not represent firm decisions concerning such plans, and neither Party shall be liable to the other Party for inaccuracies in Confidential Information under any theory of liability.
6 Term and Termination.
6.1 This Agreement will commence on the Effective Date and continue for an Initial Term of five (5) years, and will automatically renew for additional periods of five (5) years unless one Party notifies the other of its intention not to renew, no less than 12 months prior to the expiration of the then-current term, unless terminated as permitted under this Agreement.
6.2 Either Party may terminate this Agreement for cause if the other Party fails to perform any material provision of this Agreement or commits a material breach of this Agreement which is not corrected within [***] after receiving written notice of the failure or breach. except that if the default is by
6
Supplier that creates an immediate public food safety risk, PNC may terminate this Agreement immediately without regard to any period for correction.
6.3 This Agreement will automatically terminate if either Party becomes insolvent or files a petition in bankruptcy, if a Party makes an assignment for the benefit of a creditor, if a receiver is appointed to take possession of any part of a Party's assets or if a Party becomes unable generally to pay its debts as they become due, or otherwise ceases to do business.
6.4 On the termination of this Agreement for any reason, all rights granted to Supplier under this Agreement will immediately cease, and Supplier must deliver to PNC all written or recorded materials relating to the Confidential Information of PNC in the possession or control of Supplier or any of its related party, subject to Section 5.2.
7 Indemnification and Insurance. 7.1 Each Party will defend and hold harmless the other Party and its subsidiaries, affiliates, officers, directors, employees, attorneys, insurers, shareholders, representatives and agents from and against any and all liabilities, losses, damages, claims, actions, proceedings, suits, costs or expenses, including reasonable attorney fees for counsel retained by the indemnified Party, brought by a Third Party, arising out of or in connection with: 7.1.1 any negligent or intentional act or omission of the indemnifying Party, its agents or employees; 7.1.2 any breach in or default by the indemnifying Party of its obligations under this Agreement; 7.1.3 any other loss, damage or injury caused by or arising out of the indemnifying Party's or its agents' or employees' on-site visits to the indemnified Party's premises; or any claims relating directly to trademark, patent or copyright infringement arising out of a Party's use of the other Party's (or its licensors') trademarks, patents or copyrights as permitted hereunder. 7.1.4 For purposes of this Section 7.1, "Third Party" means any individual, corporation, partnership, trust, cooperative, or other business organization or entity, and any other recognized organization, other than the Parties or their affiliates.
7.2 Except for a Party's gross negligence or intentional acts or omissions and its obligations of indemnity under this Agreement, under no circumstances will either Party be liable to the other Party for [***].
7.3 Supplier agrees to indemnify and hold PNC harmless from any and all employment-related claims, payments, entitlements, taxes, interest and penalties assessed against or obtained from PNC by any individual or authority as a consequence of or related to the performance by any agent or employee of Supplier.
7.4 Supplier shall maintain insurance with an insurance company with an equivalent of an A.M. Best rating of "A" or better, of the following kinds and in the following amounts during the term of this Agreement: 7.5 7.5.1 Comprehensive General Liability (CGL) Insurance with limits of not less than [***] each occurrence and [***] in the aggregate, including Contractual, Completed-Operations and
7
Product-Liability Coverage's with limits of not less than [***] for each occurrence, covering both bodily injury and property damage liability. 7.5.2 Umbrella/Excess Liability with limits of not less than [***]. 7.5.3 Workers' Compensation Coverage plus Occupational Disease Insurance if Occupational Disease coverage is required by the laws of the state where the Facility is located or work is to be performed. Employers Liability $500,000 each accident 7.5.4 Auto Liability $1,000,000 combined single limit.
7.6 Supplier shall have Buyer named as an additional insured on its insurance policies in subparts 7.5.1 and 7.5.2 above. Supplier shall furnish Buyer with a certificate from its insurer verifying that it has the above insurance in effect during the duration of this Agreement and that insurer acknowledges (a) the contractual liability assumed by Supplier in this Agreement and (b) that Buyer is an additional insured on such policies and (c) Supplier's CGL policy is primary and Buyer's CGL policy is non-contributory and (d) a waiver of subrogation shall be provided in favor of Buyer on the CGL, Workers' Compensation and Auto policies. Said certificate of insurance shall require Supplier's insurance carrier to give Buyer no less than ten (10) days written notice of any cancellation or change in coverage. Failure to secure such insurance as of the date of execution of this Agreement shall constitute a breach of this Agreement. Supplier shall provide to PNC a certificate evidencing such insurance within thirty (30) days of a request for same from PNC.
7.7 Supplier shall, at its own expense, maintain throughout the term of this Agreement, all insurance required by law or regulation in all countries in which this Agreement will be performed.
8 Recall. If Ingredients provided by Supplier under this Agreement are misbranded, contaminated, or otherwise unfit for human consumption at the time they are delivered to PNC or its TPM ("Defect"), PNC in its sole discretion will make a determination of the necessity of a recall, market withdrawal, inventory retrieval, or other action designed to prevent the distribution or sale of the affected Finished Products, plus the type, extent, method of handling, disposition of the Finished Products as well as any affected work in progress, and all other particulars involved in such an action (a "Recall"), and PNC will execute any Recall. Supplier, in its sole discretion, will make a determination of the necessity of a recall, market withdrawal, inventory retrieval or other action designed to prevent the distribution or sale of the Ingredients. Subject to Section 9.1, Supplier shall bear the complete responsibility for a Recall occasioned by a Defect in the Ingredient and shall indemnify PNC for [***] resulting from or related to the Recall. Any Recall occasioned by PNC labels or by tampering with the Ingredients after they have left Supplier's control, or by improper storing or handling by PNC, will not be considered a Defect.
9 Limitation of Liability.
9.1 The maximum liability of one Party to the other Party and its affiliates in relation to this Agreement will be [***] ("Liability Cap"), provided however that:
8
9.1.1 The Liability Cap will not apply to any (1) material confidentiality breach under Section 5, and/or (2) indemnification obligations under Section 7.1. 9.1.2 The Liability Cap will not apply to intentional misconduct and/or gross negligence.
9.2 For the purpose of this Section, "liability" means liability for any and all claims, causes of action, judgments, costs and expenses (including but not limited to reasonable attorney fees and expenses), reimbursements, losses, and any and all other liabilities and damages of any kind, whether in contract, tort (including negligence), equity, statute or otherwise arising out of, in relation to or as a result of this Agreement.
10 Force Majeure.
10.1 Neither Party will be liable for any breach of its obligations under this Agreement resulting from causes beyond its reasonable control, including, but not limited to, an act of nature, drought, outbreak of foot and mouth disease, port and other transport strikes, war, fires, quarantine restrictions, insurrections or riots, energy shortages, embargo or the inability to obtain supplies or raw materials because of a global shortage or governmental action (a "Force Majeure Event"). Notwithstanding anything herein to the contrary, in the event of a Force Majeure Event, or any other circumstance that limits Fonterra's ability to produce or deliver product, Supplier will exercise its best efforts to comply with its obligations hereunder, mitigate the adverse impact on and not disfavor PNC, and will treat it in parity with its other customers.
10.2 Any obligation of either Party under this Agreement will be postponed until the cause underlying the Force Majeure Event has been eliminated, at which time the obligation will again be in effect. Any loss of time by the Force Majeure Event will not be held against the Party who was unable to comply with its obligations under this Agreement because of the Force Majeure Event. The Party unable to comply with its obligations under this Agreement will immediately notify the other Party in writing that a Force Majeure Event has delayed its performance and will state, to the best of its knowledge, the revised date for performance. If a Force Majeure Event persists for longer than [***], the Party not directly affected by the Force Majeure Event may terminate this Agreement with regard to any relevant Master Purchase Commitments or Purchase Orders.
10.3 Should Supplier be unable to comply with its obligations under this Agreement because of a Force Majeure Event, PNC may obtain elsewhere the Ingredients the Supplier was unable to deliver because of the Force Majeure Event and those Ingredients will be credited against any relevant Minimum Purchase Commitment. PNC will not be obligated to purchase those Ingredients from Supplier at a later time.
11 Notices. Notices contemplated by this Agreement must be in writing and may be sent by registered or certified mail, postage prepaid, to the address specified in the first paragraph of this Agreement or to any other address designated by prior written notice.
12 Governing Law; Dispute Resolution.
9
12.1 This Agreement will be governed by the laws of the State of Delaware without regard to its conflicts of law principles.
12.2 The Parties consent to, acknowledge, and agree that any dispute arising out of or relating to this Agreement, including the breach, termination or validity thereof, shall be brought exclusively before the state and federal courts in and for the City of Wilmington and County of New Castle, Delaware Each Party waives any objection based on forum non conveniens.
13 Assignment. Neither Party may transfer or assign any of its rights or obligations under this Agreement without the prior written consent of the other Party, except that either Party may assign this Agreement to any entity controlled by it, its parents, subsidiaries, or affiliates, or to any purchaser of the business to which this Agreement relates subject to the other Parties consent which will not be unreasonably withheld or delayed.
14 Supplier Conduct. Supplier agrees to engage in responsible and ethical business practices and conduct itself in full compliance with all applicable laws, rules, and regulations in every country in which it does business.
15 California Transparency Act. PNC does not accept or support the use of illegal, abusive, or forced labor in our own facilities. Within its supply chain, Supplier will comply with all laws of the country they are doing business in and are subject to.
16 U.S. Government Affirmative Action Regulations. During the performance of this contract or any purchase order issued hereunder, the Supplier agrees to comply with all applicable Federal, state and local laws respecting discrimination in employment and non-segregation of facilities including, but not limited to, requirements set out at 41 CFR §60-1.4, 41 CFR §61-300.10, 29 CFR Part 471 Appendix A to Subpart A, 41 CFR §60-300.5 and 41 CFR §60-741.5, which specific clauses are herein incorporated by reference into all covered contracts and subcontracts as required by Federal law. This Supplier and any applicable subcontractor shall abide by the requirements of 41 CFR §60- 300.5(a) and §60-741.5(a) to the extent applicable. These regulations prohibit discrimination against qualified individuals on the basis of protected veteran status or disability, and require affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified protected veterans and individuals with disabilities.
17 Fair Labor Practices.
17.1 Supplier shall provide workers with clean, safe and healthy work environments; recognize and respect the right of employees to free association and collective bargaining in accordance with law; comply with all applicable wage and hour laws; and properly verify the employment eligibility of its employees.
17.2 Forced Labor. Suppliers will not employ, use or otherwise benefit from involuntary labor, forced labor, or labor that results from slavery or human trafficking. Supplier hereby certifies that: (i) it is in compliance with this paragraph; and (ii) all materials incorporated into its products comply with all applicable laws addressing slavery, human trafficking and other forms of forced labor. Supplier shall provide PNC with documentation establishing compliance with this paragraph upon [***] notice.
10
17.3 Child Labor. Supplier will not employ anyone under the legal working age defined by local law. Supplier will comply with all applicable laws addressing the working requirements and conditions for child workers.
17.4 Respectful Workplace. Supplier shall prohibit all forms of unlawful discrimination, abuse, harassment, violence and retaliation.
18 Gifts and Entertainment. Supplier will not offer any gift to a PNC employee, contractor, or agent that is: (i) more than a nominal value; (ii) more than an infrequent occurrence; (iii) cash or cash equivalents; or (iv) illegal, sexually oriented, offensive or otherwise inappropriate.
19 Environment & Sustainability. Supplier will comply with all applicable environmental laws and reporting obligations, maintain all required permits, and strive to responsibly manage the impacts of their operations on the environment.
20 Anticorruption. Suppliers will not, directly or indirectly, offer improper gifts to government employees, engage in bribery or fraud, or take any other action that would cause a violation of the U.S. Foreign Corrupt Practices Act, the UK Bribery Act or any other applicable anti- corruption law.
21 Miscellaneous.
21.1 If any provision of this Agreement is determined to be illegal or unenforceable, all other provisions will continue in full force and effect.
21.2 This Agreement may be executed concurrently by original or facsimile signature in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
21.3 Each right and remedy of each Party described in this Agreement is cumulative and in addition to every other right or remedy, express or implied, now or hereafter arising, available to such Party, at law or in equity, or under any other agreement. No delay or omission by either Party in the exercise of any right or remedy arising under this Agreement will impair any such right or remedy or the right of such Party to resort thereto at a later date or be construed to be a waiver of any default under this Agreement. The indemnities, representations and warranties of each Party will survive termination of this Agreement.
21.4 This Agreement, together with any schedules and exhibits and any Purchase Orders, Specifications and COAs, constitutes the complete agreement between the Parties and supersedes all prior agreements between the Parties regarding this subject matter. The Parties hereby agree that any such prior agreements are hereby terminated. No other contracts, warranties, promises or representations, either oral or in writing, relating to this Agreement will bind either Party except for the Purchase Orders, Specifications and COAs. This Agreement may not be amended or modified except by a writing signed by an authorized representative of the Party against whom such amendment or modification is asserted. This Agreement will be binding upon, and will inure to the benefit of, the parties, their successors and permitted assigns.
(signature page follows)
11
Agreed to and executed effective as of the date first above written.
Fonterra (USA) Inc. Premier Nutrition Company, LLC
By: [***] By: /s/ Paul Rode Title: President Title: CFO
12
Agreed to and executed effective as of the date first above written.
Fonterra (USA) Inc. Premier Nutrition Company, LLC
By: By: /s/ Paul Rode
Title: Title: CFO | Highlight the parts (if any) of this contract related to "Expiration Date" that should be reviewed by a lawyer. Details: On what date will the contract's initial term expire? | {
"answer_start": [
21036
],
"text": [
"This Agreement will commence on the Effective Date and continue for an Initial Term of five (5) years, and will automatically renew for additional periods of five (5) years unless one Party notifies the other of its intention not to renew, no less than 12 months prior to the expiration of the then-current term, unless terminated as permitted under this Agreement."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Anti-Assignment" that should be reviewed by a lawyer. Details: Is consent or notice required of a party if the contract is assigned to a third party?
Context: EXHIBIT 10.4
CO-BRANDING AGREEMENT
THIS CO-BRANDING AGREEMENT (the "Agreement") is made as of May 22, 2000 (the "Effective Date"), by and between WOMEN.COM NETWORKS, INC., a Delaware corporation having a place of business at 1820 Gateway Drive Suite 150, San Mateo, CA 94404 ("Women.com"), and EDIETS.COM, INC., a Delaware corporation, having its principal place of business at 3467 West Hillsboro Boulevard, Suite 2, Deerfield Beach, Florida 33442 ("eDiets").
WHEREAS, eDiets maintains a site on the Internet, currently located at http://www.eDiets.com (the "eDiets Site"), that provides personalized diet and counseling on-line;
WHEREAS, Women.com maintains sites on the Internet, currently located at http://www.women.com (the "Women.com Sites"), that provides an on-line portal for women, blending content, community, commerce and services;
WHEREAS, eDiets and Women.com wish to establish and maintain a custom, category-exclusive, co-branded center containing repackaged content from the eDiets Site, including a free personal diet profile, which will be a part of the Women.com Sites, in order to promote the eDiets brand and drive traffic to the eDiets Site.
NOW THEREFORE, in consideration of the mutual covenants, representations and warranties set forth herein, the parties hereby agree as follows:
1. THE DIET CENTER.
1.1 Women.com will name an area, in which eDiets content will be published (such area, the "Diet Center"). Links (presented as Diet Center logos) to the Diet Center will be located on three Women.com channels (the Fitness Channel www.women.com/fitness; the Health Channel www.women.com/health; and the Food Channel www.women.com/food) and two subchannels within such channels to be determined in accordance with Exhibit B hereto. The first page of the Diet Center (the "Gateway Page") will have the look and feel of the Women.com Sites as specified in Exhibit A hereto. The Diet Center shall be branded with an icon that includes the eDiets logo. There will be no Women.com or eDiets registration required to enter and use the Gateway Page of the Diet Center. Women.com and eDiets will mutually agree upon the content and logo of the Gateway Page, including the display, appearance and placement of the Diet Center's logo, in accordance with the terms of this Agreement, including the specifications set forth on Exhibit A hereto, prior to the launch date of the Diet Center (the "Launch Date"). eDiets and Women.com shall work together in good faith in order to implement such design and development and the continued enhancement of the Diet Center.
1.2 Women.com shall store and maintain the Gateway Page on, and serve the Gateway Page from, server(s) located on Women.com's premises or the premises of Women.com's third party web host. eDiets shall store and maintain the Diet Center beneath the Gateway Page, and serve the Diet Center beneath the Gateway Page from, server(s) located on eDiets' premises or the premises of eDiets' third party web host. Effective one week from the
1
Launch Date, eDiets shall include a back button to the Women.com Site on all pages of the Diet Center beneath the Gateway Page. If at any time during the Term of this Agreement, eDiets reasonably believes that the inclusion of such back buttons has a material negative effect upon the rate at which users of the Diet Center register to become members of eDiets or convert into registered participants of the services offered by eDiets on the Diet Center (the "Negative Effect"), eDiets may conduct a one (1) month test of the effect of such back buttons which may include the exclusion of the back button. If such test verifies the Negative Effect of the back button(s) to the Women.com Site, eDiets may remove any such back buttons.
1.3 Except as set forth in Section 1.2 [Women], eDiets will have sole responsibility for providing and maintaining at its own expense the Diet Center beneath the Gateway Page. eDiets and Women.com will work together regarding the on-going design and maintenance of the Diet Center.
1.4 Each party shall bear its own expenses related to its responsibilities under this Section 1.
2. EDIETS OBLIGATIONS.
2.1 Content License. eDiets hereby grants to Women.com, subject to the terms and conditions of this Agreement, a non-exclusive, nontransferable, worldwide, royalty-free license to use, copy, reproduce and display the editorial content and other data, branding and other identification provided by eDiets to Women.com in connection with this Agreement (the "eDiets Content") on the Women.com Sites: (i) for publication in the Diet Center and elsewhere throughout the Women.com Sites; (ii) for the promotion of eDiets and the Diet Center on the Women.com Sites and in collateral advertising materials; and (iii) for such other purposes as are consistent with or otherwise authorized under this Agreement.
2.2 Delivery of Content. eDiets agrees to deliver to Women.com, by no later than fifteen (15) days after the Effective Date, in a format specified by Women.com, the initial eDiets Content required by this Agreement, including any photos, text, data, illustrations, graphical elements, animation or banner ads. All eDiets Content delivered under this Agreement shall be consistent with the specifications for such eDiets Content (including specifications as to manner and media), and otherwise in accordance with, the terms of this Agreement,
Source: EDIETS COM INC, 10QSB, 10/30/2000
including Exhibit D hereto, and any production schedules developed by the parties from time to time. eDiets agrees that it will respond in a timely manner to be agreed upon by the parties to all reasonable requests made by Women.com or its agents for updated eDiets Content and refreshing of eDiets Content for the Women.com Sites.
2.3 Format. eDiets will deliver the eDiets Content in such "camera-ready" or digital format, as agreed to by the parties.
2.4 Editorial Guidelines. eDiets shall ensure that the eDiets Content complies with Women.com's editorial guidelines. Women.com will provide eDiets with specific editorial guidelines for eDiets Content. Women.com reserves the right to reject any and all content that does not meet Women.com's editorial guidelines. eDiets will then be required to edit such
2
content until all content provided by eDiets complies with Women.com's editorial guidelines and standards. In the event that eDiets fails, within five (5) days after submission by Women.com, to provide Women.com with necessary revisions thereto, such failure shall be deemed to be approval of Women.com's edits. Women.com reserves the right, in its sole discretion, to require eDiets to eliminate, any banner, hypertext or other link from the Women.com Site to any web site containing content promoting or advertising tobacco, liquor, controlled substances, gambling, firearms or sexually explicit, offensive or degrading material. In addition to the foregoing and the content guidelines set forth in Section 5.2 [EXCLUSIVITY] hereof, eDiets may not directly link from the Gateway Page to any Women.com Competitive Company (as defined in Section 5.2 [EXCLUSIVITY]).
2.5 Facts. eDiets shall be solely responsible for ensuring the timeliness, accuracy, and correctness of all facts, data and information ("Facts") contained within the eDiet Content. eDiets shall indemnify, defend and hold harmless Women.com, its officers, directors, employees and agents from and against all damages, awards, costs, fees (including reasonable attorneys' fees), and expenses that such parties may incur as a result of third party claims arising from such third parties' reliance on Facts. Women.com retains the right, but not the obligation, to independently corroborate, or have corroborated, the timeliness, accuracy, and correctness of all Facts.
3. ADVERTISING.
3.1 Advertising and Promotion. Advertising and Promotion. Women.com shall make available to eDiets and eDiets shall purchase from Women.com advertising and promotional inventory in the amounts and at the rates specified in Exhibit B hereto and in accordance with the terms specified in Exhibit D hereto. If Women.com does not deliver at least 80% of the Quarterly Impression Guarantee for Advertsing Promotions as set forth on Exhibit B (11,250,000 per quarter; 45,000,000 per year); 80% of the Quarterly Impression Guarantee for the Diet Center Logo as set forth on Exhibit B (3,250,000 per quarter; 13,000,000 per year); and 80% of the Quarterly Impression Guarantee for Other Campaigns as set forth on Exhibit B (3,000,000 per quarter; 12,000,000 per year) each quarter following the Launch Date, within sixty (60) days of the end of the applicable quarter, Women.com shall deliver an amount equal to the under-delivery within the same campaign elements, including newsletters, promotions, exclusive sponsorships, targeted rotations, ROS, channel and sub-channel center logo placements, or mutually agreed upon comparable elements. If Women.com does not deliver the shortfall within sixty (60) days of the end of the applicable quarter, eDiets may terminate this Agreement in its entirety immediately or authorize Women.com to deliver the shortfall within an extended number of days to be mutually agreed upon by the parties (the "Make Good Period"). Should eDiets elect to terminate this Agreement, Women.com shall reimburse eDiets within thirty (30) days of the date of such termination for all pre-paid impressions or other promotions not delivered as of the date of termination. Women.com agrees that if eDiets elects to extend the Agreement the monthly fee due and payable during the Make Good Period will be recalculated and reduced to reflect the changes in the revised delivery schedule.
3
3.2 Women.com and eDiets agree that all media metrics (e.g. pageviews and impressions) with respect to the Gateway Page of the Diet Center shall be allocated to Women.com.
4. PUBLICITY. Neither party will make any public statement, press release or other announcement relating to the terms of or existence of this Agreement without the prior written consent of the other. Notwithstanding the foregoing, each party hereby grants to the other the right to issue an initial press release, the timing and wording of which will be subject to such party's reasonable approval, regarding the relationship between Women.com and eDiets and the launch of the Diet Center. This Section shall not in any way restrict either party from complying with any law, regulation or other governmental demand or request for information.
5. EXCLUSIVITY.
5.1 During the Term, (a) Women.com will not buy, sell, display, distribute advertising from (including, but not limited to, banner ads, buttons, badges, text links, hyperlinks or editorial mentions) or otherwise promote a Competitive Company on any page of the Diet Center; (b) eDiets will be the exclusive third party provider of content and interactive tools for diets and diet counseling to Women.com within the Diet Center; (c) Women.com will not enter into a relationship with a Competitive Company that involves any of the following; (i) custom developed mini or micro web sites; (ii) content integration; (iii) discounts offered only to Women.com members on the Member Central page of the Women.com Sites; (iv) editorial endorsement (such as
Source: EDIETS COM INC, 10QSB, 10/30/2000
"Brought to you by....") or fixed placement of 468x60 (top) and 125x365 (side) banners within eight (8) of the Content Features selected by eDiets; and (v) anchor sponsorship in any multi-sponsor Women.com promotion. Notwithstanding the foregoing, Women.com shall be entitled to (aa) provide mini and micro web sites and Women.com promotions and sponsorships to Jenny Craig; (bb) sell, display, or distribute advertisements, including banner advertisements, newsletter placements, internet radio, commerce placements and market research, or otherwise promote Competitive Companies on pages other than the Gateway Page of the Diet Center. For purposes of this Agreement, "Competitive Company" means any company that eDiets reasonably presents as, and Women.com reasonably agrees is, a direct competitor to eDiets by distributing on-line content principally relating to diets and diet counseling, including, but not limited to, Weight Watchers, Jenny Craig, NutriSystem, Nutrio, Asimba, DietSmart and uMagic.
During the Term, Women.com agrees to give eDiets the right of first refusal to participate in all diet and diet-counseling related promotion opportunities created or otherwise made available by Women.com on channels or sub-channels created after the Effective Date of this Agreement, including sponsorships, anchor placements and any other content integration opportunities ("Diet Promos"). If Women.com proposes to create and make available Diet Promos after the Effective Date, it shall give eDiets written notice of its intention, describing the terms and conditions of participation in the Diet Promos. eDiets shall have fifteen (15) days from the giving of such notice to agree to participate in the applicable Diet Promo upon the terms and conditions specified in the notice by giving written notice of its agreement to Women.com.
4
5.2 During the Term, eDiets will not buy, sell, display or distribute advertising from (including, but not limited to, banner ads, buttons, badges, text links, hyperlinks or editorial mentions) or otherwise promote any Women.com Compettive Company on any page of the eDiets Site that is within two clicks from the Gateway Page of the Diet Center. For purposes of this Agreement, "Women.com Competitive Company" means any company that Women.com reasonably presents as, and eDiets reasonably agrees is, a direct competitor to Women.com by providing an on-line portal for women, including, but not limited to, Oxygen Media and iVillage,
6. PAYMENTS.
6.1 Payment Schedule. In consideration of Women.com's developing, maintaining and promoting the Diet Center pursuant to this Agreement, beginning on the tenth (10th) day after the execution of this Agreement and thereafter on the last day of each month during the Term of this Agreement, eDiets shall pay to Women.com a monthly fee in the amount set forth on Exhibit C unless adjusted as set forth in Section 3.1 [Advertising and Promotion]. Following the Initial Term, Women.com shall have the right, upon no fewer than sixty (60) days prior written notice to eDiets, to increase the amount of the Payment Schedule; provided, that (i) Women.com may not increase the Payment Schedule more than once in any period of twelve (12) consecutive months; and (ii) such increase may not exceed twenty percent (20%) of the then current Payment Schedule.
7. REPORTING.
7.1 Women.com shall make advertising reports generated by NetGravity available to eDiets either online or in some other mutually agreed upon format. Such reports shall contain the number of impressions and other metrics attributable to each general category of advertising specified in Exhibit B hereto, as well as such other information as eDiets may reasonably request, to the extent reasonable commercial efforts and current technology permit. eDiets agrees to accept such advertising reports provided by Women.com as the official basis for measuring all services to be provided under this Agreement, provided, however, that if the traffic data contained in such reports materially differs (meaning a differential of 25% or more), from the data captured and reported by eDiets, the parties agree to either (a) identify the source of and remedy the difference or (b) equally split the difference between the traffic data reported by each party. If a technological malfunction causes the data reported by NetGravity to materially inflate the number of impressions provided eDiets by Women.com, Women.com shall deliver eDiets an amount of impressions equal to the overcount in accordance with the provisions for under-delivery set forth in Section 3.1 [Advertising and Promotion] hereof.
8. OWNERSHIP.
8.1 eDiets Content. Nothing in this Agreement shall effect a transfer of ownership in the eDiets Content from eDiets to Women.com, and eDiets shall retain all rights of copyright, trademark or other intellectual property rights in such eDiets Content that it possessed prior to providing such eDiets Content to Women.com, subject only to the licenses expressly granted by eDiets to Women.com by this Agreement. eDiets retains all rights with respect to eDiets
5
Content that are not specifically granted to Women.com herein. Women.com acknowledges that eDiets owns all right, title and interest in and to the eDiets Content, and Women.com shall not now or in the future contest the validity of the eDiets' ownership rights in and to the eDiets Content. eDiets agrees to periodically include mention of Women.com, including a link to the Women.com Site if desired by eDiets, within the eDiets Newsletter (the "Mention"). eDiets shall determine in its sole discretion the placement, frequency and timing of such Mention, provided that eDiets submits each Mention to Women.com for approval and secures such approval prior to publication or distribution of such Mention.
8.2 Women.com Content. All content, including but not limited to all
Source: EDIETS COM INC, 10QSB, 10/30/2000
photos, text, data, illustrations, graphical elements, animation and tools, appearing on the Women.com Sites (with the exception of the eDiets Content) or provided to eDiets pursuant to this Agreement by Women.com, including all software, methods of operation, interfaces, specifications and documentation in respect of the foregoing contained therein (collectively, "Women.com Content") is and shall remain the sole and exclusive property of Women.com or its third party licensors and eDiets acquires no right, title or interest therein or thereto.
8.3 Data Ownership. Women.com routinely collects data from Women.com visitors to the Women.com Sites. Women.com shall retain all ownership, right, title and interest in and to any data provided to Women.com by Women.com users while directly on the Women.com Site. eDiets shall retain all ownership, right, title and interest in and to any data collected within the eDiets Site including, but not limited to demographic information and email addresses submitted to eDiets by users of the eDiets Site.
8.4 Privacy. eDiets agrees to treat all consumer data collected from Women.com users on the Women.com Site in accordance with Women.com's privacy and security policies (the "Women.com Data"). Women.com reserves the right to change such policies in its sole discretion from time to time. In no event shall eDiets disclose or otherwise transfer to any person or entity any Women.com Data that individually or in the aggregate identifies the identity, habits or transactions of the Women.com users.
8.5 Tools. To the extent either party, directly or indirectly, utilizes any software, HTML and/or Java scripts, proprietary tools and/or methodologies (collectively the "Tools") in performing under this Agreement, such party and its licensors retain all right, title and interest in and to any such Tools.
9. TRADEMARK OWNERSHIP AND LICENSE.
9.1 Women.com Marks. Women.com hereby grants eDiets a non-exclusive, non-transferable, royalty-free worldwide right and license without the right to sublicense to use the Women.com Marks during the Term solely in connection with (i) the fulfillment of eDiets' obligations under this Agreement, and (ii) in advertising and marketing collateral related to this Agreement. eDiets acknowledges and agrees that Women.com owns and otherwise has the exclusive right to use and to license the Women.com Marks and that Women.com, in each instance, shall have the right to review and approve or disapprove eDiets' use of the Women.com Marks, such approval not to be unnecessarily withheld or delayed. All uses of
6
Women.com Marks by eDiets, including all goodwill arising therefrom shall inure solely to the benefit of Women.com. Women.com retains all rights with respect to Women.com Marks that are not specifically granted to eDiets herein. Women.com, in its sole discretion, may withdraw specific or general permission to use the Women.com Marks upon seventy-two (72) hours written notice to eDiets. Upon expiration of such notice period, eDiets shall immediately discontinue use of the applicable Women.com Marks. As used herein, "Women.com Marks" means all trademarks, service marks and corporate and brand identification and indicia, including without limitation word marks, logos and other picture marks, phrases, jingles, composite marks, corporate, commercial and institutional images, product designations and identifications of Women.com, whether registered or not.
9.2 eDiets Marks. eDiets hereby grants Women.com a non-exclusive, non-transferable, royalty-free worldwide right and license without the right to sublicense to use the eDiets Marks during the Term solely in connection with (i) the fulfillment of Women.com's obligations under this Agreement, and (ii) in advertising and marketing collateral related to this Agreement. Women.com acknowledges and agrees that eDiets owns and otherwise has the exclusive right to use and to license the eDiets Marks and that eDiets shall have the right, in each instance, to review and approve or disapprove Women.com's use of the eDiets Marks, such approval not to be unnecessarily withheld or delayed. All uses of eDiets Marks by Women.com, including all goodwill arising therefrom shall inure solely to the benefit of eDiets. eDiets retains all rights with respect to eDiets Marks that are not specifically granted to Women.com herein. eDiets, in its sole discretion, may withdraw specific or general permission to use the eDiets Marks upon seventy-two (72) hours written notice to Women.com. Upon expiration of such notice period, Women.com shall immediately discontinue use of the applicable eDiets Marks. As used herein, "eDiets Marks" means all trademarks, service marks and corporate and brand identification and indicia, including without limitation word marks, logos and other picture marks, phrases, jingles, composite marks, corporate, commercial and institutional images, product designations and identifications of eDiets, whether registered or not.
9.3 Usage. All uses by one party of the other party's Marks shall be in accordance with such quality control standards as the licensing party may promulgate from time to time and each party agrees to refrain from all uses of the other party's Marks to which the other party objects. All promotional literature and other materials prepared by a party in connection with its promotional obligations hereunder shall bear appropriate copyright and/or trademark notices as prescribed by the other party, if the other party's content or branding is included therein. Each party agrees that it will not use, register or attempt to register in any jurisdiction, or otherwise appropriate or adopt any name, mark or logo that is confusingly similar to the other party's Marks. At no time during the term of the Agreement or thereafter shall eDiets attack, challenge or file any application with respect to any Women.com Mark. At no time during the term of the Agreement or thereafter shall Women.com attack, challenge or file any application with respect to any eDiets Mark.
9.4 Non-Alteration. In any identification of either party pursuant to this Agreement, one party shall not alter or otherwise impair the branding or other identification of the other party, nor alter or remove any copyright,
Source: EDIETS COM INC, 10QSB, 10/30/2000
trademark or other protective notices of such other
7
party. Women.com agrees that, except as may be reasonably necessary, it shall not mask, frame, overlay, impair or otherwise materially alter or affect the images, information, perception, service quality or security obtained from a eDiets Site once the link or equivalent pathway is selected or initiated.
10. TERM AND TERMINATION.
10.1 Initial Term. This Agreement will become effective as of the Effective Date and, unless sooner terminated pursuant to Sections 3.1 [Advertising and Promotion] or 10.2 [Termination for Breach], shall remain effective for two (2) years from and after the Effective Date (the "Initial Term"). This agreement shall automatically renew for additional successive terms of twelve (12) months each at the end of the Initial Term ("Renewal Terms"), unless either party notifies the other in writing at least sixty (60) days prior to the end of the Initial Term. As used in this agreement, "Term" shall mean the Initial Term and the Renewal Terms, if any.
10.2 Termination for Breach. In the event of a material breach of this Agreement by either party, the non-breaching party may terminate this Agreement if such breach is not cured within thirty (30) days from receipt of written notice of such breach sent to the address of the breaching party as specified herein. Such termination shall be in addition to any and all other actions or remedies the parties may seek at law or equity with respect to a breach of this Agreement.
10.3 Effect of Termination. Upon the termination, expiration or earlier termination of this Agreement in accordance with its terms (the "Termination Date"):
(a) the rights and licenses granted by each party to the other pursuant to this Agreement shall automatically terminate;
(b) where applicable, each party shall return to the other party, within thirty (30) days from such Termination Date, all intellectual property, technology or other property in its possession used in connection with this Agreement that is proprietary to the other party;
(c) Confidential Information shall be returned in accordance with the terms of Section 11;
(d) within sixty (60) days after such Termination Date, Women.com shall remove and cease to use all eDiets Content provided or made available for use or display on the Gateway Page pursuant to or in connection with this Agreement;
(e) within sixty (60) days after such Termination Date, each party shall eliminate from their respective web sites and/or respective web pages any marks or branding related to the other party (i.e., the eDiets Marks and the Women.com Marks, respectively) used in connection with this Agreement;
8
(f) within sixty (60) days after such Termination Date, Women.com shall purge from its servers and systems all eDiets Content;
(g) within sixty (60) days after such Termination Date, Women.com shall make-good to eDiets any and all payments made to Women.com under this Agreement for advertising inventory not yet delivered or run, provided that eDiets has paid for such inventory; and
(h) within sixty (60) days after such Termination Date, eDiets shall pay to Woman.com any and all payment due under this Agreement for delivered advertising and promotions inventory in accordance with Sections 3.1 [Advertising and Promotion] and 6.1.
10.4 Survival. The provisions of Sections 4, 8, 10, 11, 12, 13, 14 and 15, as well as all defined terms, will survive any expiration or earlier termination of this Agreement for any reason.
11. CONFIDENTIALITY.
11.1 The parties acknowledge that, in the course of performing duties under this Agreement, each party may obtain Confidential Information from the other party. For the purposes of this Section 11, the party disclosing Confidential Information shall be the "Disclosing Party" and the party receiving Confidential Information shall be the "Receiving Party." "Confidential Information" means any and all technical and non-technical information provided by the Disclosing Party to the Receiving Party and shall include, but not be limited to, all information regarding (a) patent and patent applications, (b) trade secrets, and (c) proprietary information, ideas, samples, media, techniques, sketches, drawings, works of authorship, models, inventions, know-how, processes, apparatuses, equipment, algorithms, software programs, software source documents, and formulae related to the current, future, and proposed products and services of the Company, and including, without limitation, the Company's information concerning research, experimental work, development, design details and specifications, engineering, financial information, procurement requirements, purchasing, manufacturing, customer lists, investors, employees, business and contractual relationships, business forecasts, sales and merchandising, marketing plans and information the Company provides regarding third parties. Confidential Information also includes proprietary or confidential information of any third party that may disclose such information to either party in the course of such party's business.
Source: EDIETS COM INC, 10QSB, 10/30/2000
Confidential Information may be disclosed in writing, in other tangible form, orally or visually.
11.2 Confidential Information of the Disclosing Party will not include information that the Disclosing Party can demonstrate by reasonable evidence (a) is in or enters the public domain without breach of this Agreement, (b) the Receiving Party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation, (c) is approved for release by written authorization of the Disclosing Party, (d) the Receiving Party knew prior to receiving such information from the Disclosing Party or (e) is independently developed by the Receiving Party without reference to Confidential Information of the Disclosing Party.
9
11.3 By virtue of this Agreement, each party hereto may disclose to the other any information that is Confidential Information. Such Confidential Information shall be governed by the terms of this Section 11. Each party agrees to use the Confidential Information of the other party solely to the extent necessary to fulfill its obligations or exercise its rights hereunder, and not for any other purpose.
11.4 Each party agrees (a) that it will disclose such Confidential Information only to its employees, agents and contractors with a need to know such Confidential Information and who have obligations of confidentiality not to use such Confidential Information for any purpose except as expressly permitted hereunder, (b) that it will not disclose to any third party or use any Confidential Information disclosed to it by the other except as expressly permitted in this Agreement, and (c) that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance.
11.5 Notwithstanding the foregoing, each party may disclose Confidential Information (a) to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by law, provided that the Receiving Party uses reasonable efforts to provide the Disclosing Party with prior notice of such obligation in order to permit the Disclosing Party a reasonable opportunity to take legal action to prevent or limit the scope of such disclosure, or (b) on a "need-to-know" basis under an obligation of confidentiality to its legal counsel, accountants, banks and other financing sources and their advisors.
11.6 Within fifteen (15) days of receipt by Receiving Party of a written request from the Disclosing Party for the return of Confidential Information, all Disclosing Party's Confidential Information and all copies thereof in Receiving Party's possession or control shall be returned to Disclosing Party or destroyed by Receiving Party at Disclosing Party's instruction. Receiving Party shall then certify the same in writing and that no copies have been retained by Receiving Party, its employees, agents or contractors.
11.7 Each party acknowledges that unauthorized disclosure or use of the Confidential Information may cause irreparable harm to the other party for which recovery of money damages would be inadequate, and the other party shall therefore be entitled to seek timely injunctive relief to protect its rights under this Section 11, in addition to any and all other remedies available at law or in equity.
11.8 The terms and conditions of this Agreement will be deemed to be the Confidential Information of each party and will not be disclosed without the written consent of the other party.
12. WARRANTY.
12.1 General. Each party represents and warrants to the other that: (a) such party has the full corporate right, power, and authority to enter into this Agreement and perform the acts required of it hereunder, (b) the execution of this Agreement by such party, and the performance
10
by such party of its obligations and duties hereunder, do not and will not violate any agreement to which such party is a party or by which it is bound, (c) when executed and delivered by such party, this Agreement will constitute the legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms and (d) such party will perform its obligations hereunder in compliance with applicable law and regulations.
12.2 eDiets Warranties. eDiets hereby represents and warrants to and for the benefit of Women.com and its Affiliates that:
(a) the eDiets Content may be used by Women.com as permitted by this Agreement without violating or infringing the rights of any person or entity, including, without limitation, rights of privacy or publicity, contractual rights, copyright, trademark, or other Intellectual Property rights;
(b) publication of the eDiets Content by Women.com as permitted by this Agreement will not constitute defamation, product disparagement or trade libel;
(c) the use of the eDiets Marks by Women.com as permitted by this Agreement will not infringe or violate the trademark, service mark or trade dress rights of any Person; and
Source: EDIETS COM INC, 10QSB, 10/30/2000
(d) during the Term of this Agreement, the pages of the eDiets Site to which the Gateway Page provides links shall operate in accordance with the specifications set forth on Exhibit D.
For the purposes of this Agreement, "Affiliate" shall mean another entity that controls, is controlled by or is under common control with such party; provided, however, that such entity is not a human being. For purposes of this definition, the terms "controls," "is controlled by," or "is under common control with," refer to the power to direct the policies and day-to-day operations of an entity, whether by virtue of ownership of a voting securities, contract, or otherwise.
12.3 Women.com Warranties. Women.com hereby represents and warrants to and for the benefit of eDiets and its Affiliates that:
(e) that the Women.com Content, except to the extent of any eDiets Content incorporated therein, used in connection with this Agreement does not and will not violate or infringe the rights of any person or entity, including, without limitation, rights of privacy or publicity, contractual rights, copyright, trademark, or other intellectual property rights;
(f) that publication of the Women.com Content will not constitute defamation, product disparagement or trade libel;
11
(g) that the use of the Women.com Marks by eDiets as permitted by this Agreement will not infringe or violate the trademark, service mark or trade dress rights of any person or entity.
12.4 Sole Remedy. Each party agrees that the sole and exclusive remedy for a breach of the warranties set forth in this Section 12 shall be the indemnification set forth in Section 13 below.
12.5 EXCEPT AS SPECIFIED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS ANY AND ALL IMPLIED OR STATUTORY WARRANTIES, INCLUDING ALL IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY, NONINFRINGEMENT AND FITNESS FOR A PARTICULAR USE OR PURPOSE REGARDING SUCH SUBJECT MATTER. NEITHER PARTY WARRANTS THAT ITS WEB SITE(S) OR THE CENTER WILL FUNCTION WITHOUT INTERRUPTION OR THAT THEY ARE ERROR FREE. To the extent that a party may not, as a matter of applicable law, disclaim any implied warranty, the scope and duration of such warranty shall be the minimum permitted under such law.
13. INDEMNIFICATION.
13.1 Breach of Warranty. Subject to Section 13.3 [Indemnification Requirements and Procedures], eDiets and Women.com each agree to indemnify, defend and forever hold the other party, its present and former Affiliates, officers, members, stockholders, directors, employees, and agents, and successors and assigns (collectively, the "Indemnitees") harmless from and against any and all losses, liabilities, claims, costs, damages, fees and expenses (including, without limitation, fines, forfeitures, reasonable attorneys' fees, disbursements and administrative or court costs) (collectively, "Indemnifiable Sums") that the other party may incur as a result of third party claims arising from circumstances that constitute a breach or alleged breach of such party's warranties set forth in Section 12 or otherwise explicitly set forth in this Agreement.
13.2 Products, Services and Content.
(a) Women.com Liability. Subject to Section 13.3 [Indemnification Requirements and Procedures], Women.com agrees to indemnify, defend and forever hold harmless the eDiets Indemnitees from and against all Indemnifiable Sums arising out of third party claims to the extent such claims are based upon: (a) content published on the Women.com Sites, other than eDiets Content; (b) the operation of the Women.com membership program; or (c) any product or service, other than a product or service provided by eDiets, sold, licensed or otherwise made available on the Women.com Sites.
(b) eDiets Liability. Subject to Section 13.3 [Indemnification Requirements and Procedures], eDiets agrees to indemnify, defend and forever hold harmless the Women.com Indemnitees from and against all Indemnifiable Sums arising out of third party claims to the extent such claims are based upon: (a) content published on the eDiets Sites, other than Women.com Content; (b) tools used on or in connection with the eDiets Site, including, but not limited to the Diet Tool; (c) the operation of the eDiets membership program; (d) any product or service sold, licensed or otherwise made
12
available on any eDiets Site; or (e) any product or service sold, licensed or made available by eDiets on the Diet Center.
13.3 Indemnification Requirements and Procedures. Each party's obligation to indemnify the other pursuant to this Section 13, is predicated upon the indemnified party's (i) giving prompt written notice of any indemnifiable claim to the indemnifying party (provided that failure to give such notice shall not release the indemnifying party from its obligations hereunder except to the extent it is prejudiced thereby), (ii) giving the indemnifying party the opportunity to assume (by written notice to the Indemnitee) control over the defense and settlement of such claim, and (iii) providing, at the indemnifying party's expense, all relevant information, assistance and authority to enable to the indemnifying party to defend such claim. Each party, as Indemnitee, may participate, at its own cost, in the defense of any indemnifiable claim with counsel of its own choosing. Each party agrees not to settle any indemnifiable claim without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed.
Source: EDIETS COM INC, 10QSB, 10/30/2000
13.4 Limitations on Indemnification. Notwithstanding the terms of Sections 13.1 [Breach of Warranty] and 13.2 [Products, Services and Content], an indemnifying party shall have no liability for, nor shall it indemnify, defend or hold any Indemnitee harmless from or against any claim based on: (a) use of old, superseded content or Marks if such infringement would have been avoided by the use of the current version of such content or replacement Marks made available by the indemnifying party to the other party; (b) use of content or Marks not in accordance with the terms of this Agreement; (c) any modification of the indemnifying party's content or Marks not made or explicitly authorized by the indemnifying party if, in the absence of such modification, the content or Marks would not be infringing; or (d) a claimed act of infringement or misappropriation which act occurred after the other party received notice of such potential claim.
14. LIMITATION OF LIABILITY. EXCEPT FOR BREACHES OF SECTION 11 OR BREACHES OF ANY LICENSE GRANT SET FORTH IN THIS AGREEMENT, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, WHETHER OR NOT THAT PARTY HAS BEEN ADVISED OF, KNEW, OR SHOULD HAVE KNOWN OF, THE POSSIBILITY OF SUCH DAMAGE AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. THE LIMITATIONS ON LIABILITY FOR DAMAGES SET FORTH IN THIS AGREEMENT SHALL BE INAPPLICABLE TO EACH PARTY'S CONTRACTUAL OBLIGATION TO INDEMNIFY THE OTHER PARTY AS SET FORTH IN SECTIONS 2.6 AND 13.
15. GENERAL.
15.1 Assignment. Neither party may assign this Agreement, in whole or in part, without the other party's written consent (which will not be unreasonably delayed or withheld), except that no such consent will be required in connection with an assignment or transfer of this Agreement to (a) a party's successor in connection with a Change in Control of such party, provided that such successor is not a competitor of the other party, or (b) to any entity that is
13
controlled by, under common control with, or controls a party. For purposes hereof, the terms "control", "controlled by" or "under common control with" refer to the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting securities, by contract or otherwise. Any attempt to assign this Agreement other than as permitted above will be null and void. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. For purposes of this Agreement, "Change in Control" means a merger or consolidation of the party with, or any sale of all or substantially all of the assets of such party to, any other person, corporation or entity, unless as a result of such merger, consolidation or sale of assets the holders of such party's voting securities prior thereto hold at least fifty percent (50%) of the total voting power represented by the voting securities of the surviving or successor corporation after such transaction.
15.2 Jurisdiction and Venue. The parties agree that all lawsuits arising out of or related to this Agreement shall be brought in the state or federal courts located in the state of California, San Francisco County, and each party hereby referred consents to the exclusive personal jurisdiction of such courts for such purpose.
15.3 Governing Law. This Agreement shall be interpreted and enforced in accordance with the laws of the State of California as applied to agreements made, entered into and performed entirely in California by California residents, notwithstanding the actual residence of the parties, without giving effect to any choice of laws of California that would require the application of the laws of a state other than California.
15.4 Notice. Any notice under this Agreement will be in writing and delivered by personal delivery, express courier, confirmed facsimile, confirmed e-mail or certified or registered mail, return receipt requested, and will be deemed given upon personal delivery, one (1) day after deposit with express courier, upon confirmation of receipt of facsimile or e-mail or five (5) days after deposit in the mail. Notices will be sent to a party at its address set forth below or such other address as that party may specify in writing pursuant to this Section.
15.5 No Agency. The parties are independent contractors and will have no power or authority to assume or create any obligation or responsibility on behalf of each other. This Agreement will not be construed to create or imply any partnership, agency or joint venture.
15.6 Force Majeure. Any delay in or failure of performance by either party under this Agreement will not be considered a breach of this Agreement and will be excused to the extent caused by any occurrence beyond the reasonable control of such party including, but not limited to, acts of God, power outages and governmental restrictions.
15.7 Severability. In the event that any of the provisions of this Agreement are held to be unenforceable, the remaining portions of the Agreement will remain in full force and effect.
15.8 Entire Agreement. This Agreement is the complete and exclusive agreement between the parties with respect to the subject matter hereof, superseding that certain Letter of
14
Intent dated April 3, 2000, and any other agreements and communications (both
Source: EDIETS COM INC, 10QSB, 10/30/2000
written and oral) regarding such subject matter. This Agreement may only be modified, or any rights under it waived, by a written document executed by both parties.
WOMEN.COM NETWORKS, INC. EDIETS.COM, INC.
By: /S/ Bud Ward By: /S/ David R. Humble
Name: Bus Ward Name: David R. Humble
Title: Vice President Eastern Ad Sales Title: CEO and Chairman
1820 Gateway Drive, Suite 150 3467 West Hillsboro Boulevard, Suite 2 San Mateo, CA 94404 Deerfield Beach, FL 33442 Voice: (650) 378-6500 Voice: (954) 360-9022 Fax: (650) 378-6599 Fax: (954) 360-9095
15
EXHIBIT A
[GRAPHIC OMITTED]
A-1
EXHIBIT B
DIET CENTER LOGO
eDiets will have the following Channel and Subchannel Center Logo Placements
(1) Health Channel Home Page and Two Sub Channels of Choice http://www.women.com/health/ 2 Sub Channels:
Health News http://www.prevention.com/healing/ Condition & Ailments http://www.prevention.com/healing/cond_ail/ Estimated Impressions per month- 160,000 Estimated Impressions for Year 1- 1,920,000 Estimated Impressions for Year 2- 1,920,000
Total Estimated Impressions: 3,840,000
OR
(2) Food Channel Home Page and Two Sub Channels of Choice
http://food.homearts.com/food/ 2 Sub Channels: Restaurants http://food.homearts.com/food/restaura/00rest17.htm Food For Thought http://food.homearts.com/food/thoughts/00thou17.htm
Estimated Impressions Per month- 300,000
Estimated Impressions for Year 1- 3,600,000 Estimated Impressions for Year 2- 3,600,000
Total Estimated impressions: 7,200,000
(3) Fitness Channel Home Page and Two Sub Channels of Choice
http://www.women.com/fitness/
2 Sub Channels
Weight Loss http://www.prevention.com/weight/getstart.html
Fitness News http://www.prevention.com/weight/
Estimated Impressions per month- 60,000 (before re-launch) Estimated Impressions for Year 1- 720,000 Estimated Impressions for Year 2- 720,000 Total Estimated impressions: 1,440,000
B-1
Upon committing to this partnership, eDiets will receive a two-week banner advertisement test in rotation across the channels set forth above in order to determine the most suitable fixed placements for the eDiets center logos. This test will consist of a total of 100,000 impressions, 20,000 per channel. Given that expectations for banner advertisement performance are not necessarily equivalent to that of a fixed center logo, eDiets understands and acknowledges that the results will be considered directional in nature and not used to determine ultimate performance of the eDiets center logos placed in the channels selected by eDiets.
The parties may agree at a later date to add other channels to the above list of channels. In any event, eDiets may select from only three channels.
Source: EDIETS COM INC, 10QSB, 10/30/2000
PROMOTION OF DIET CENTER ON WOMEN.COM SITES
Relevant Feature Content Sponsorships
Women.com will provide eDiets with a fixed top and 125x365 side banner on eight (8) of the content features set forth below.
eDiets may select up to eight (8) of the content features set forth below: (1) Fat to Firm at 40+ (Estimated Impressions per Month- 7,000) http://www.prevention.com/weight/fattofirm/
(2) Nutrition News - If you make one change to your diet, what would it be? (This is an Expert piece) (Estimated Impressions per Month- 10,000) http://www.prevention.com/cooking/news/
(3) 71 Weight Loss Tips (Estimated Impressions per Month- 100,000) http://www.prevention.com/report/980610/
(4) Weight Loss Program - Working Out (Estimated Impressions per Month- 15,000) http://www.healthyideas.com/weight/workout.html
(5) 45 Best and Worst Belly Flatteners (pull down menu to select scenarios with exercise tips) (Estimated Impressions per Month- 7,000)
http://www.healthyideas.com/report/bellyflat/
(6) 8 Ways to Make Weight lifting fun (Estimated Impressions per Month- 16,000) http://www.prevention.com/weight/buzz/
(7) Gym Shorts (Q&A Michelle Staten, Fitness Editor, Prevention) (Estimated Impressions per Month- 10,000) http://www.prevention.com/weight/gym/
(8) Calorie Calculator (Tool) (Estimated Impressions per Month- 20,000) http://www.prevention.com/weight/bonfire/
(9) Weight Loss Program: Success Stories (Estimated Impressions per Month- 17,000)
B-2
www.prevention.com/weight/success.html
(10) Weight Quiz: What will you Weigh one Year from now? (Quiz) (Estimated Impressions per Month- 39,000) www.prevention.com/weight/what_will_you/
(11) Weight Loss Program Planner (Tool) (Estimated Impressions per Month- 50,000) www.prevention.com/weight/planner/
(12) A Choice of one top level sponsorship in the newly launched Fitness Channel scheduled for 3Q, 2000
eDiets.com will have the first right to substitute any of the following content features for any of the eight (8) content features selected above once inventory on such features becomes available. When the following content features become available, eDiets.com has the choice to switch sponsorships and not add to their overall sponsorships.
(1) Weight Loss Program: Finding Support (Available 6/30/01) (Estimated Impressions per Month- 2,000) www.prevention.com/weight/support.html
(2) Weight Loss Program: Eating Well (Available 6/30/01) (Estimated Impressions per Month- 2,000) www.prevention.com/weight/eatwell.html
(3) Weight Loss Program: Getting Started (Available 6/30/01) (Estimated Impressions per Month- 7,000) www.prevention.com/weight/getstart.html ROS advertisement rotation on Women.com Sites
The Following Advertising Impressions will include these campaign elements:
-All Sponsorships -Targeted Banner Rotations (Targeted rotation includes Fitness, Entertainment, Wedding, Health, Fashion & Beauty, Food Channels, Redbook, Cosmopolitan, Prevention, Good Housekeeping, eHarlequin and Home and Garden and other relevant areas as they become available) -ROS
Per Year
o Impressions Guaranteed per month: 3,750,000 o Total Advertising Impressions Guaranteed: 45,000,000 (of which shall not include the top 468x60 nor the 120x240 banner located on the Gateway page of the Diet Center) 60% ROS and 40% Targeted and Sponsorship elements
B-3
o Ad banners on the Diet Center will be co-branded with the Women.com and eDiets logos
Women.com Special Membership Integration Opportunities:
Women.com will provide eDiets with one (1) membership offer opportunity to Women.com users who have registered for membership on the Women.com Sites per
Source: EDIETS COM INC, 10QSB, 10/30/2000
quarter after the Effective Date. These member offers will be promoted via membership newsletters as listed below, on the Membership Menu Page (http://women.com/membership/central.html) and on the Promotion Page (http://women.com/promotions/). The member offer provided by eDiets can not run anywhere other than Women.com for one month prior to or one month after the member promotion period without Women.com's written consent
eDiets shall offer in any membership offer provided pursuant to this Agreement a minimum discount of 20% on the fair market value of any products or services.
Placement within Women.com Newsletters:
eDiets.com will have the opportunity to participate within the following newsletters, the placement, frequency and timing of such participation to be determined by Women.com in its sole discretion provided that Women.com uses its best efforts not to place reference to eDiets on the same page as content which may appear to be contrary to the basic foundation of the eDiets' philosophy. During the Term, eDiets.com will be guaranteed 12 million circulation per year from and after the Effective Date via newsletters, including but not limited to: >> Fashion & Beauty Newsletter: 300,000 subscribers per month >> Food News: 180,000 subscribers per month >> Prevention: 1,600,000 subscribers per month >> Internet Scopes: 2,400,000 subscribers per month >> Sex & Romance: 120,000 subscribers per month >> What's New: 1,100,000 subscribers per month >> Women.com Member Newsletter: 1,700,000 subscribers per month
Guaranteed Circulation Per Year: 12,000,000
Anchor Tenancy Sponsorship of the Women.com Promotions/ Sweepstakes:
Women.com will provide eDiets.com with three (3) Anchor Sponsorships and two (2) Premier Sponsorships of the following Women.com promotions.
The "Anchor Sponsorship" includes the following elements: o Grand prize sweepstakes opportunity o Exclusive sponsorship of an editorial feature showcased within the promotion o Availability to ask two (2) demographic or brand research questions o Full database of names collected from the sweepstakes (estimated 30,000 to 60,000 names), the use of which is subject to all applicable Women.com privacy policy. o Network wide promotion of the sweepstakes, the placement, size, frequency and timing of such promotions to be determined by Women.com in its sole discretion.
B-4
Included in a "Premier Sponsorship" are all of the following elements: o 1/st/ place sweepstakes opportunity o Co-sponsorship of an editorial feature showcased within the promotion o Full database of names collected from the sweepstakes (30,000 to 60,000 names) o Network wide promotion of the sweepstakes, the placement, size, frequency and timing of such promotions to be determined by Women.com in its sole discretion.
Available Promotions for Participation: o Wedding Promotion (Year 2000) o Holiday Survival Guide (Year 2000) o Resolutions Promotion (Year 2001) o Valentine's Day Promotion (Year 2001) o Mother's Day Promotion (Year 2001)
Total estimated impressions per promotion: 1,000,000
Women.com E Commerce Elements:
Sports/Fitness Diet Center Homepage: http://www.women.com/shopping/webstoreguide/sports/
o Rotating "Featured Partner" Ad Button on the side of the page
All Sub Categories:
o Rotating "Featured Partner" Ad Button on the side of the page
o Affiliate text link placement within all sub-sub categories
- New category creation at a minimum of 3 weeks from receipt of all coded links, descriptions and images have been received from client. Note: if category requires the participation of more than one client, it will not be created until all material has been received from all participants.
Impression Break-Out Per Year:
Advertising Impressions: Estimated Guaranteed
-Sponsorships and Targeted Rotations: 18,000,000
-ROS 27,000,000
Total Guaranteed Advertising Impressions: 45,000,000
QUARTERY IMPRESSION GUARANTEED 11,250,000
Diet Center, Channel & SubChannel
Impressions: Estimated Guaranteed
Source: EDIETS COM INC, 10QSB, 10/30/2000
"eDiets Diet Center" logo impressions: 30,000,000
B-5
"eDiets Diet Center" logo impressions: 13,000,000
Other Campaign Impressions: Estimated Guaranteed Newsletters 12,000,000 Promotions 500,000 Added Value Commerce Impressions: 3,600,000 Total Estimated Impressions: 79,100,000 Total Impressions Guaranteed: 70,000,000
B-6
EXHIBIT C
PAYMENT SCHEDULE
Pricing/Delivery: PRICING AS PART OF THIS PACKAGE ONLY Flight: 2 Year Deal Net Advertising CPM: $37.00 (Just Co-Branded Banners) Overall Net CPM $28.57 (With all other elements) Total Net Cost: $2,000,000 (Per Year)/$4,000,000 (Two Years) Total Guaranteed Impressions: 70,000,000 (Per Year)/140,000,000 (TwoYears)
YEAR 1
10 days after Effective Date-Production $250,000
Last day of each of the 1st through 12/th/ months after the Launch Date $145,833
Media Component $138,750
Other (Promotions, production, etc) $7,083
YEAR 2
Last day of each of 13/th/ through 24/th/ months after the Launch Date $166,666
Media Component $138,750
Other (Promotions, production) $27,916.66
Total Payment to Women.com $4,000,000
[GRAPHIC OMITTED]
C-1
EXHIBIT D
GENERAL ADVERTISING & PRODUCTION GUIDELINES
The following are the Women.com advertising and production guidelines. Any exceptions to these guidelines require prior written approval of Women.com.
All impressions per section are estimated; however, Women.com shall extend every reasonable effort to deliver the estimated number of impressions per section as set forth in Exhibit B. Notwithstanding the foregoing, Women.com does guarantee a minimum of 13,000,000 impressions promoting eDiets per year on the Diet Center.
BANNER CREATIVE & STANDARDS
All campaigns must submit 468x60, 234x60, and 125x365 creative units.
1. ACCEPTED BANNER SIZES
o 234x60 half-banner (8k or less) o 468x60 banner (10k or less) o 125x365 sponsorship (12K or less) o 125x125 promo (8K or less; reserved for marketing and co-branded tagged tune-ins with management approval)
2. BANNER CREATIVE FORMATS ACCEPTED
o GIF (animated and non-animated) o JPEG o HTML o JAVASCRIPT
3. THE FOLLOWING ADDITIONAL FORMATS CAN POTENTIALLY BE USED BUT REQUIRE ADDITIONAL PRODUCTION AND TESTING TIME TO ENSURE NETWORK COMPATIBILITY:
o JAVA o ENLIVEN o UNICAST o FLASH
Source: EDIETS COM INC, 10QSB, 10/30/2000
Please check with ad production regarding other formats.
D-1
PRODUCTION LEAD TIME AND "SHIP TO" INFO
Lead Times
The following lead times should be considered standard. Additionally, more extensive campaigns/sponsorships and/or incorporating new technologies may take longer. o Banner campaigns require 5 business days from the time all advertiser materials/instructions are received. o Creative rotation changes/refreshes require 3 business days from the time all advertiser materials/instructions are received.
"Ship To" Info
All creative should be sent to ads@women.com.
ADVERTISING/LINKS - CATEGORIES NOT ACCEPTED
The following categories of advertising or links to such material are not accepted on Women.com:
o Tobacco o Controlled substances o Liquor o Firearms o Gambling o Sexually explicit advertising and/or advertising that is degrading. o Women.com, specifically Prevention on-line (Healthy Ideas) cannot accept advertising that promotes: 1) a product deemed defective or unsafe by the FDA, 2) a product, therapy or service whose possible harm to the consumer outweighs it benefits, and 3) a health product for which there is no good evidence of benefit and no good reason to believe there is a benefit.
THIRD PARTY AD SERVING
Women.com accepts third party ad serving. However, third party serving relies on the third party's servers being fully operational. If Women.com determines that the servers are unreliable, the banners must be served from Women.com's site until such time the third party servers are fully operational. Also note that Women.com cannot track click-thrus in its NetGravity reports for rich media banners that are served remotely.
Women.com must be notified in writing regarding the product categorizations of all creative rotations as well as any revisions, in order to maintain proper placement and competitive separation. Any changes made to creative rotations without prior notification to Women.com may result in the interruption or temporary discontinuation of ad delivery until all ad placements and competitive separation issues can be resolved.
NETWORK DESIGN CONFIGURATION
D-2
Women.com reserves the right to make design and configuration changes to all pages and features within the network. Women.com shall notify its advertisers of any changes that significantly impacts ad placements.
D-3
Source: EDIETS COM INC, 10QSB, 10/30/2000 [/INST] ```json
{<answer_start>
"answer": "controlled by, under common control with, or controls a party."
<answer_end>
}
``` </s> | EXHIBIT 10.4
CO-BRANDING AGREEMENT
THIS CO-BRANDING AGREEMENT (the "Agreement") is made as of May 22, 2000 (the "Effective Date"), by and between WOMEN.COM NETWORKS, INC., a Delaware corporation having a place of business at 1820 Gateway Drive Suite 150, San Mateo, CA 94404 ("Women.com"), and EDIETS.COM, INC., a Delaware corporation, having its principal place of business at 3467 West Hillsboro Boulevard, Suite 2, Deerfield Beach, Florida 33442 ("eDiets").
WHEREAS, eDiets maintains a site on the Internet, currently located at http://www.eDiets.com (the "eDiets Site"), that provides personalized diet and counseling on-line;
WHEREAS, Women.com maintains sites on the Internet, currently located at http://www.women.com (the "Women.com Sites"), that provides an on-line portal for women, blending content, community, commerce and services;
WHEREAS, eDiets and Women.com wish to establish and maintain a custom, category-exclusive, co-branded center containing repackaged content from the eDiets Site, including a free personal diet profile, which will be a part of the Women.com Sites, in order to promote the eDiets brand and drive traffic to the eDiets Site.
NOW THEREFORE, in consideration of the mutual covenants, representations and warranties set forth herein, the parties hereby agree as follows:
1. THE DIET CENTER.
1.1 Women.com will name an area, in which eDiets content will be published (such area, the "Diet Center"). Links (presented as Diet Center logos) to the Diet Center will be located on three Women.com channels (the Fitness Channel www.women.com/fitness; the Health Channel www.women.com/health; and the Food Channel www.women.com/food) and two subchannels within such channels to be determined in accordance with Exhibit B hereto. The first page of the Diet Center (the "Gateway Page") will have the look and feel of the Women.com Sites as specified in Exhibit A hereto. The Diet Center shall be branded with an icon that includes the eDiets logo. There will be no Women.com or eDiets registration required to enter and use the Gateway Page of the Diet Center. Women.com and eDiets will mutually agree upon the content and logo of the Gateway Page, including the display, appearance and placement of the Diet Center's logo, in accordance with the terms of this Agreement, including the specifications set forth on Exhibit A hereto, prior to the launch date of the Diet Center (the "Launch Date"). eDiets and Women.com shall work together in good faith in order to implement such design and development and the continued enhancement of the Diet Center.
1.2 Women.com shall store and maintain the Gateway Page on, and serve the Gateway Page from, server(s) located on Women.com's premises or the premises of Women.com's third party web host. eDiets shall store and maintain the Diet Center beneath the Gateway Page, and serve the Diet Center beneath the Gateway Page from, server(s) located on eDiets' premises or the premises of eDiets' third party web host. Effective one week from the
1
Launch Date, eDiets shall include a back button to the Women.com Site on all pages of the Diet Center beneath the Gateway Page. If at any time during the Term of this Agreement, eDiets reasonably believes that the inclusion of such back buttons has a material negative effect upon the rate at which users of the Diet Center register to become members of eDiets or convert into registered participants of the services offered by eDiets on the Diet Center (the "Negative Effect"), eDiets may conduct a one (1) month test of the effect of such back buttons which may include the exclusion of the back button. If such test verifies the Negative Effect of the back button(s) to the Women.com Site, eDiets may remove any such back buttons.
1.3 Except as set forth in Section 1.2 [Women], eDiets will have sole responsibility for providing and maintaining at its own expense the Diet Center beneath the Gateway Page. eDiets and Women.com will work together regarding the on-going design and maintenance of the Diet Center.
1.4 Each party shall bear its own expenses related to its responsibilities under this Section 1.
2. EDIETS OBLIGATIONS.
2.1 Content License. eDiets hereby grants to Women.com, subject to the terms and conditions of this Agreement, a non-exclusive, nontransferable, worldwide, royalty-free license to use, copy, reproduce and display the editorial content and other data, branding and other identification provided by eDiets to Women.com in connection with this Agreement (the "eDiets Content") on the Women.com Sites: (i) for publication in the Diet Center and elsewhere throughout the Women.com Sites; (ii) for the promotion of eDiets and the Diet Center on the Women.com Sites and in collateral advertising materials; and (iii) for such other purposes as are consistent with or otherwise authorized under this Agreement.
2.2 Delivery of Content. eDiets agrees to deliver to Women.com, by no later than fifteen (15) days after the Effective Date, in a format specified by Women.com, the initial eDiets Content required by this Agreement, including any photos, text, data, illustrations, graphical elements, animation or banner ads. All eDiets Content delivered under this Agreement shall be consistent with the specifications for such eDiets Content (including specifications as to manner and media), and otherwise in accordance with, the terms of this Agreement,
Source: EDIETS COM INC, 10QSB, 10/30/2000
including Exhibit D hereto, and any production schedules developed by the parties from time to time. eDiets agrees that it will respond in a timely manner to be agreed upon by the parties to all reasonable requests made by Women.com or its agents for updated eDiets Content and refreshing of eDiets Content for the Women.com Sites.
2.3 Format. eDiets will deliver the eDiets Content in such "camera-ready" or digital format, as agreed to by the parties.
2.4 Editorial Guidelines. eDiets shall ensure that the eDiets Content complies with Women.com's editorial guidelines. Women.com will provide eDiets with specific editorial guidelines for eDiets Content. Women.com reserves the right to reject any and all content that does not meet Women.com's editorial guidelines. eDiets will then be required to edit such
2
content until all content provided by eDiets complies with Women.com's editorial guidelines and standards. In the event that eDiets fails, within five (5) days after submission by Women.com, to provide Women.com with necessary revisions thereto, such failure shall be deemed to be approval of Women.com's edits. Women.com reserves the right, in its sole discretion, to require eDiets to eliminate, any banner, hypertext or other link from the Women.com Site to any web site containing content promoting or advertising tobacco, liquor, controlled substances, gambling, firearms or sexually explicit, offensive or degrading material. In addition to the foregoing and the content guidelines set forth in Section 5.2 [EXCLUSIVITY] hereof, eDiets may not directly link from the Gateway Page to any Women.com Competitive Company (as defined in Section 5.2 [EXCLUSIVITY]).
2.5 Facts. eDiets shall be solely responsible for ensuring the timeliness, accuracy, and correctness of all facts, data and information ("Facts") contained within the eDiet Content. eDiets shall indemnify, defend and hold harmless Women.com, its officers, directors, employees and agents from and against all damages, awards, costs, fees (including reasonable attorneys' fees), and expenses that such parties may incur as a result of third party claims arising from such third parties' reliance on Facts. Women.com retains the right, but not the obligation, to independently corroborate, or have corroborated, the timeliness, accuracy, and correctness of all Facts.
3. ADVERTISING.
3.1 Advertising and Promotion. Advertising and Promotion. Women.com shall make available to eDiets and eDiets shall purchase from Women.com advertising and promotional inventory in the amounts and at the rates specified in Exhibit B hereto and in accordance with the terms specified in Exhibit D hereto. If Women.com does not deliver at least 80% of the Quarterly Impression Guarantee for Advertsing Promotions as set forth on Exhibit B (11,250,000 per quarter; 45,000,000 per year); 80% of the Quarterly Impression Guarantee for the Diet Center Logo as set forth on Exhibit B (3,250,000 per quarter; 13,000,000 per year); and 80% of the Quarterly Impression Guarantee for Other Campaigns as set forth on Exhibit B (3,000,000 per quarter; 12,000,000 per year) each quarter following the Launch Date, within sixty (60) days of the end of the applicable quarter, Women.com shall deliver an amount equal to the under-delivery within the same campaign elements, including newsletters, promotions, exclusive sponsorships, targeted rotations, ROS, channel and sub-channel center logo placements, or mutually agreed upon comparable elements. If Women.com does not deliver the shortfall within sixty (60) days of the end of the applicable quarter, eDiets may terminate this Agreement in its entirety immediately or authorize Women.com to deliver the shortfall within an extended number of days to be mutually agreed upon by the parties (the "Make Good Period"). Should eDiets elect to terminate this Agreement, Women.com shall reimburse eDiets within thirty (30) days of the date of such termination for all pre-paid impressions or other promotions not delivered as of the date of termination. Women.com agrees that if eDiets elects to extend the Agreement the monthly fee due and payable during the Make Good Period will be recalculated and reduced to reflect the changes in the revised delivery schedule.
3
3.2 Women.com and eDiets agree that all media metrics (e.g. pageviews and impressions) with respect to the Gateway Page of the Diet Center shall be allocated to Women.com.
4. PUBLICITY. Neither party will make any public statement, press release or other announcement relating to the terms of or existence of this Agreement without the prior written consent of the other. Notwithstanding the foregoing, each party hereby grants to the other the right to issue an initial press release, the timing and wording of which will be subject to such party's reasonable approval, regarding the relationship between Women.com and eDiets and the launch of the Diet Center. This Section shall not in any way restrict either party from complying with any law, regulation or other governmental demand or request for information.
5. EXCLUSIVITY.
5.1 During the Term, (a) Women.com will not buy, sell, display, distribute advertising from (including, but not limited to, banner ads, buttons, badges, text links, hyperlinks or editorial mentions) or otherwise promote a Competitive Company on any page of the Diet Center; (b) eDiets will be the exclusive third party provider of content and interactive tools for diets and diet counseling to Women.com within the Diet Center; (c) Women.com will not enter into a relationship with a Competitive Company that involves any of the following; (i) custom developed mini or micro web sites; (ii) content integration; (iii) discounts offered only to Women.com members on the Member Central page of the Women.com Sites; (iv) editorial endorsement (such as
Source: EDIETS COM INC, 10QSB, 10/30/2000
"Brought to you by....") or fixed placement of 468x60 (top) and 125x365 (side) banners within eight (8) of the Content Features selected by eDiets; and (v) anchor sponsorship in any multi-sponsor Women.com promotion. Notwithstanding the foregoing, Women.com shall be entitled to (aa) provide mini and micro web sites and Women.com promotions and sponsorships to Jenny Craig; (bb) sell, display, or distribute advertisements, including banner advertisements, newsletter placements, internet radio, commerce placements and market research, or otherwise promote Competitive Companies on pages other than the Gateway Page of the Diet Center. For purposes of this Agreement, "Competitive Company" means any company that eDiets reasonably presents as, and Women.com reasonably agrees is, a direct competitor to eDiets by distributing on-line content principally relating to diets and diet counseling, including, but not limited to, Weight Watchers, Jenny Craig, NutriSystem, Nutrio, Asimba, DietSmart and uMagic.
During the Term, Women.com agrees to give eDiets the right of first refusal to participate in all diet and diet-counseling related promotion opportunities created or otherwise made available by Women.com on channels or sub-channels created after the Effective Date of this Agreement, including sponsorships, anchor placements and any other content integration opportunities ("Diet Promos"). If Women.com proposes to create and make available Diet Promos after the Effective Date, it shall give eDiets written notice of its intention, describing the terms and conditions of participation in the Diet Promos. eDiets shall have fifteen (15) days from the giving of such notice to agree to participate in the applicable Diet Promo upon the terms and conditions specified in the notice by giving written notice of its agreement to Women.com.
4
5.2 During the Term, eDiets will not buy, sell, display or distribute advertising from (including, but not limited to, banner ads, buttons, badges, text links, hyperlinks or editorial mentions) or otherwise promote any Women.com Compettive Company on any page of the eDiets Site that is within two clicks from the Gateway Page of the Diet Center. For purposes of this Agreement, "Women.com Competitive Company" means any company that Women.com reasonably presents as, and eDiets reasonably agrees is, a direct competitor to Women.com by providing an on-line portal for women, including, but not limited to, Oxygen Media and iVillage,
6. PAYMENTS.
6.1 Payment Schedule. In consideration of Women.com's developing, maintaining and promoting the Diet Center pursuant to this Agreement, beginning on the tenth (10th) day after the execution of this Agreement and thereafter on the last day of each month during the Term of this Agreement, eDiets shall pay to Women.com a monthly fee in the amount set forth on Exhibit C unless adjusted as set forth in Section 3.1 [Advertising and Promotion]. Following the Initial Term, Women.com shall have the right, upon no fewer than sixty (60) days prior written notice to eDiets, to increase the amount of the Payment Schedule; provided, that (i) Women.com may not increase the Payment Schedule more than once in any period of twelve (12) consecutive months; and (ii) such increase may not exceed twenty percent (20%) of the then current Payment Schedule.
7. REPORTING.
7.1 Women.com shall make advertising reports generated by NetGravity available to eDiets either online or in some other mutually agreed upon format. Such reports shall contain the number of impressions and other metrics attributable to each general category of advertising specified in Exhibit B hereto, as well as such other information as eDiets may reasonably request, to the extent reasonable commercial efforts and current technology permit. eDiets agrees to accept such advertising reports provided by Women.com as the official basis for measuring all services to be provided under this Agreement, provided, however, that if the traffic data contained in such reports materially differs (meaning a differential of 25% or more), from the data captured and reported by eDiets, the parties agree to either (a) identify the source of and remedy the difference or (b) equally split the difference between the traffic data reported by each party. If a technological malfunction causes the data reported by NetGravity to materially inflate the number of impressions provided eDiets by Women.com, Women.com shall deliver eDiets an amount of impressions equal to the overcount in accordance with the provisions for under-delivery set forth in Section 3.1 [Advertising and Promotion] hereof.
8. OWNERSHIP.
8.1 eDiets Content. Nothing in this Agreement shall effect a transfer of ownership in the eDiets Content from eDiets to Women.com, and eDiets shall retain all rights of copyright, trademark or other intellectual property rights in such eDiets Content that it possessed prior to providing such eDiets Content to Women.com, subject only to the licenses expressly granted by eDiets to Women.com by this Agreement. eDiets retains all rights with respect to eDiets
5
Content that are not specifically granted to Women.com herein. Women.com acknowledges that eDiets owns all right, title and interest in and to the eDiets Content, and Women.com shall not now or in the future contest the validity of the eDiets' ownership rights in and to the eDiets Content. eDiets agrees to periodically include mention of Women.com, including a link to the Women.com Site if desired by eDiets, within the eDiets Newsletter (the "Mention"). eDiets shall determine in its sole discretion the placement, frequency and timing of such Mention, provided that eDiets submits each Mention to Women.com for approval and secures such approval prior to publication or distribution of such Mention.
8.2 Women.com Content. All content, including but not limited to all
Source: EDIETS COM INC, 10QSB, 10/30/2000
photos, text, data, illustrations, graphical elements, animation and tools, appearing on the Women.com Sites (with the exception of the eDiets Content) or provided to eDiets pursuant to this Agreement by Women.com, including all software, methods of operation, interfaces, specifications and documentation in respect of the foregoing contained therein (collectively, "Women.com Content") is and shall remain the sole and exclusive property of Women.com or its third party licensors and eDiets acquires no right, title or interest therein or thereto.
8.3 Data Ownership. Women.com routinely collects data from Women.com visitors to the Women.com Sites. Women.com shall retain all ownership, right, title and interest in and to any data provided to Women.com by Women.com users while directly on the Women.com Site. eDiets shall retain all ownership, right, title and interest in and to any data collected within the eDiets Site including, but not limited to demographic information and email addresses submitted to eDiets by users of the eDiets Site.
8.4 Privacy. eDiets agrees to treat all consumer data collected from Women.com users on the Women.com Site in accordance with Women.com's privacy and security policies (the "Women.com Data"). Women.com reserves the right to change such policies in its sole discretion from time to time. In no event shall eDiets disclose or otherwise transfer to any person or entity any Women.com Data that individually or in the aggregate identifies the identity, habits or transactions of the Women.com users.
8.5 Tools. To the extent either party, directly or indirectly, utilizes any software, HTML and/or Java scripts, proprietary tools and/or methodologies (collectively the "Tools") in performing under this Agreement, such party and its licensors retain all right, title and interest in and to any such Tools.
9. TRADEMARK OWNERSHIP AND LICENSE.
9.1 Women.com Marks. Women.com hereby grants eDiets a non-exclusive, non-transferable, royalty-free worldwide right and license without the right to sublicense to use the Women.com Marks during the Term solely in connection with (i) the fulfillment of eDiets' obligations under this Agreement, and (ii) in advertising and marketing collateral related to this Agreement. eDiets acknowledges and agrees that Women.com owns and otherwise has the exclusive right to use and to license the Women.com Marks and that Women.com, in each instance, shall have the right to review and approve or disapprove eDiets' use of the Women.com Marks, such approval not to be unnecessarily withheld or delayed. All uses of
6
Women.com Marks by eDiets, including all goodwill arising therefrom shall inure solely to the benefit of Women.com. Women.com retains all rights with respect to Women.com Marks that are not specifically granted to eDiets herein. Women.com, in its sole discretion, may withdraw specific or general permission to use the Women.com Marks upon seventy-two (72) hours written notice to eDiets. Upon expiration of such notice period, eDiets shall immediately discontinue use of the applicable Women.com Marks. As used herein, "Women.com Marks" means all trademarks, service marks and corporate and brand identification and indicia, including without limitation word marks, logos and other picture marks, phrases, jingles, composite marks, corporate, commercial and institutional images, product designations and identifications of Women.com, whether registered or not.
9.2 eDiets Marks. eDiets hereby grants Women.com a non-exclusive, non-transferable, royalty-free worldwide right and license without the right to sublicense to use the eDiets Marks during the Term solely in connection with (i) the fulfillment of Women.com's obligations under this Agreement, and (ii) in advertising and marketing collateral related to this Agreement. Women.com acknowledges and agrees that eDiets owns and otherwise has the exclusive right to use and to license the eDiets Marks and that eDiets shall have the right, in each instance, to review and approve or disapprove Women.com's use of the eDiets Marks, such approval not to be unnecessarily withheld or delayed. All uses of eDiets Marks by Women.com, including all goodwill arising therefrom shall inure solely to the benefit of eDiets. eDiets retains all rights with respect to eDiets Marks that are not specifically granted to Women.com herein. eDiets, in its sole discretion, may withdraw specific or general permission to use the eDiets Marks upon seventy-two (72) hours written notice to Women.com. Upon expiration of such notice period, Women.com shall immediately discontinue use of the applicable eDiets Marks. As used herein, "eDiets Marks" means all trademarks, service marks and corporate and brand identification and indicia, including without limitation word marks, logos and other picture marks, phrases, jingles, composite marks, corporate, commercial and institutional images, product designations and identifications of eDiets, whether registered or not.
9.3 Usage. All uses by one party of the other party's Marks shall be in accordance with such quality control standards as the licensing party may promulgate from time to time and each party agrees to refrain from all uses of the other party's Marks to which the other party objects. All promotional literature and other materials prepared by a party in connection with its promotional obligations hereunder shall bear appropriate copyright and/or trademark notices as prescribed by the other party, if the other party's content or branding is included therein. Each party agrees that it will not use, register or attempt to register in any jurisdiction, or otherwise appropriate or adopt any name, mark or logo that is confusingly similar to the other party's Marks. At no time during the term of the Agreement or thereafter shall eDiets attack, challenge or file any application with respect to any Women.com Mark. At no time during the term of the Agreement or thereafter shall Women.com attack, challenge or file any application with respect to any eDiets Mark.
9.4 Non-Alteration. In any identification of either party pursuant to this Agreement, one party shall not alter or otherwise impair the branding or other identification of the other party, nor alter or remove any copyright,
Source: EDIETS COM INC, 10QSB, 10/30/2000
trademark or other protective notices of such other
7
party. Women.com agrees that, except as may be reasonably necessary, it shall not mask, frame, overlay, impair or otherwise materially alter or affect the images, information, perception, service quality or security obtained from a eDiets Site once the link or equivalent pathway is selected or initiated.
10. TERM AND TERMINATION.
10.1 Initial Term. This Agreement will become effective as of the Effective Date and, unless sooner terminated pursuant to Sections 3.1 [Advertising and Promotion] or 10.2 [Termination for Breach], shall remain effective for two (2) years from and after the Effective Date (the "Initial Term"). This agreement shall automatically renew for additional successive terms of twelve (12) months each at the end of the Initial Term ("Renewal Terms"), unless either party notifies the other in writing at least sixty (60) days prior to the end of the Initial Term. As used in this agreement, "Term" shall mean the Initial Term and the Renewal Terms, if any.
10.2 Termination for Breach. In the event of a material breach of this Agreement by either party, the non-breaching party may terminate this Agreement if such breach is not cured within thirty (30) days from receipt of written notice of such breach sent to the address of the breaching party as specified herein. Such termination shall be in addition to any and all other actions or remedies the parties may seek at law or equity with respect to a breach of this Agreement.
10.3 Effect of Termination. Upon the termination, expiration or earlier termination of this Agreement in accordance with its terms (the "Termination Date"):
(a) the rights and licenses granted by each party to the other pursuant to this Agreement shall automatically terminate;
(b) where applicable, each party shall return to the other party, within thirty (30) days from such Termination Date, all intellectual property, technology or other property in its possession used in connection with this Agreement that is proprietary to the other party;
(c) Confidential Information shall be returned in accordance with the terms of Section 11;
(d) within sixty (60) days after such Termination Date, Women.com shall remove and cease to use all eDiets Content provided or made available for use or display on the Gateway Page pursuant to or in connection with this Agreement;
(e) within sixty (60) days after such Termination Date, each party shall eliminate from their respective web sites and/or respective web pages any marks or branding related to the other party (i.e., the eDiets Marks and the Women.com Marks, respectively) used in connection with this Agreement;
8
(f) within sixty (60) days after such Termination Date, Women.com shall purge from its servers and systems all eDiets Content;
(g) within sixty (60) days after such Termination Date, Women.com shall make-good to eDiets any and all payments made to Women.com under this Agreement for advertising inventory not yet delivered or run, provided that eDiets has paid for such inventory; and
(h) within sixty (60) days after such Termination Date, eDiets shall pay to Woman.com any and all payment due under this Agreement for delivered advertising and promotions inventory in accordance with Sections 3.1 [Advertising and Promotion] and 6.1.
10.4 Survival. The provisions of Sections 4, 8, 10, 11, 12, 13, 14 and 15, as well as all defined terms, will survive any expiration or earlier termination of this Agreement for any reason.
11. CONFIDENTIALITY.
11.1 The parties acknowledge that, in the course of performing duties under this Agreement, each party may obtain Confidential Information from the other party. For the purposes of this Section 11, the party disclosing Confidential Information shall be the "Disclosing Party" and the party receiving Confidential Information shall be the "Receiving Party." "Confidential Information" means any and all technical and non-technical information provided by the Disclosing Party to the Receiving Party and shall include, but not be limited to, all information regarding (a) patent and patent applications, (b) trade secrets, and (c) proprietary information, ideas, samples, media, techniques, sketches, drawings, works of authorship, models, inventions, know-how, processes, apparatuses, equipment, algorithms, software programs, software source documents, and formulae related to the current, future, and proposed products and services of the Company, and including, without limitation, the Company's information concerning research, experimental work, development, design details and specifications, engineering, financial information, procurement requirements, purchasing, manufacturing, customer lists, investors, employees, business and contractual relationships, business forecasts, sales and merchandising, marketing plans and information the Company provides regarding third parties. Confidential Information also includes proprietary or confidential information of any third party that may disclose such information to either party in the course of such party's business.
Source: EDIETS COM INC, 10QSB, 10/30/2000
Confidential Information may be disclosed in writing, in other tangible form, orally or visually.
11.2 Confidential Information of the Disclosing Party will not include information that the Disclosing Party can demonstrate by reasonable evidence (a) is in or enters the public domain without breach of this Agreement, (b) the Receiving Party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation, (c) is approved for release by written authorization of the Disclosing Party, (d) the Receiving Party knew prior to receiving such information from the Disclosing Party or (e) is independently developed by the Receiving Party without reference to Confidential Information of the Disclosing Party.
9
11.3 By virtue of this Agreement, each party hereto may disclose to the other any information that is Confidential Information. Such Confidential Information shall be governed by the terms of this Section 11. Each party agrees to use the Confidential Information of the other party solely to the extent necessary to fulfill its obligations or exercise its rights hereunder, and not for any other purpose.
11.4 Each party agrees (a) that it will disclose such Confidential Information only to its employees, agents and contractors with a need to know such Confidential Information and who have obligations of confidentiality not to use such Confidential Information for any purpose except as expressly permitted hereunder, (b) that it will not disclose to any third party or use any Confidential Information disclosed to it by the other except as expressly permitted in this Agreement, and (c) that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance.
11.5 Notwithstanding the foregoing, each party may disclose Confidential Information (a) to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by law, provided that the Receiving Party uses reasonable efforts to provide the Disclosing Party with prior notice of such obligation in order to permit the Disclosing Party a reasonable opportunity to take legal action to prevent or limit the scope of such disclosure, or (b) on a "need-to-know" basis under an obligation of confidentiality to its legal counsel, accountants, banks and other financing sources and their advisors.
11.6 Within fifteen (15) days of receipt by Receiving Party of a written request from the Disclosing Party for the return of Confidential Information, all Disclosing Party's Confidential Information and all copies thereof in Receiving Party's possession or control shall be returned to Disclosing Party or destroyed by Receiving Party at Disclosing Party's instruction. Receiving Party shall then certify the same in writing and that no copies have been retained by Receiving Party, its employees, agents or contractors.
11.7 Each party acknowledges that unauthorized disclosure or use of the Confidential Information may cause irreparable harm to the other party for which recovery of money damages would be inadequate, and the other party shall therefore be entitled to seek timely injunctive relief to protect its rights under this Section 11, in addition to any and all other remedies available at law or in equity.
11.8 The terms and conditions of this Agreement will be deemed to be the Confidential Information of each party and will not be disclosed without the written consent of the other party.
12. WARRANTY.
12.1 General. Each party represents and warrants to the other that: (a) such party has the full corporate right, power, and authority to enter into this Agreement and perform the acts required of it hereunder, (b) the execution of this Agreement by such party, and the performance
10
by such party of its obligations and duties hereunder, do not and will not violate any agreement to which such party is a party or by which it is bound, (c) when executed and delivered by such party, this Agreement will constitute the legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms and (d) such party will perform its obligations hereunder in compliance with applicable law and regulations.
12.2 eDiets Warranties. eDiets hereby represents and warrants to and for the benefit of Women.com and its Affiliates that:
(a) the eDiets Content may be used by Women.com as permitted by this Agreement without violating or infringing the rights of any person or entity, including, without limitation, rights of privacy or publicity, contractual rights, copyright, trademark, or other Intellectual Property rights;
(b) publication of the eDiets Content by Women.com as permitted by this Agreement will not constitute defamation, product disparagement or trade libel;
(c) the use of the eDiets Marks by Women.com as permitted by this Agreement will not infringe or violate the trademark, service mark or trade dress rights of any Person; and
Source: EDIETS COM INC, 10QSB, 10/30/2000
(d) during the Term of this Agreement, the pages of the eDiets Site to which the Gateway Page provides links shall operate in accordance with the specifications set forth on Exhibit D.
For the purposes of this Agreement, "Affiliate" shall mean another entity that controls, is controlled by or is under common control with such party; provided, however, that such entity is not a human being. For purposes of this definition, the terms "controls," "is controlled by," or "is under common control with," refer to the power to direct the policies and day-to-day operations of an entity, whether by virtue of ownership of a voting securities, contract, or otherwise.
12.3 Women.com Warranties. Women.com hereby represents and warrants to and for the benefit of eDiets and its Affiliates that:
(e) that the Women.com Content, except to the extent of any eDiets Content incorporated therein, used in connection with this Agreement does not and will not violate or infringe the rights of any person or entity, including, without limitation, rights of privacy or publicity, contractual rights, copyright, trademark, or other intellectual property rights;
(f) that publication of the Women.com Content will not constitute defamation, product disparagement or trade libel;
11
(g) that the use of the Women.com Marks by eDiets as permitted by this Agreement will not infringe or violate the trademark, service mark or trade dress rights of any person or entity.
12.4 Sole Remedy. Each party agrees that the sole and exclusive remedy for a breach of the warranties set forth in this Section 12 shall be the indemnification set forth in Section 13 below.
12.5 EXCEPT AS SPECIFIED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS ANY AND ALL IMPLIED OR STATUTORY WARRANTIES, INCLUDING ALL IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY, NONINFRINGEMENT AND FITNESS FOR A PARTICULAR USE OR PURPOSE REGARDING SUCH SUBJECT MATTER. NEITHER PARTY WARRANTS THAT ITS WEB SITE(S) OR THE CENTER WILL FUNCTION WITHOUT INTERRUPTION OR THAT THEY ARE ERROR FREE. To the extent that a party may not, as a matter of applicable law, disclaim any implied warranty, the scope and duration of such warranty shall be the minimum permitted under such law.
13. INDEMNIFICATION.
13.1 Breach of Warranty. Subject to Section 13.3 [Indemnification Requirements and Procedures], eDiets and Women.com each agree to indemnify, defend and forever hold the other party, its present and former Affiliates, officers, members, stockholders, directors, employees, and agents, and successors and assigns (collectively, the "Indemnitees") harmless from and against any and all losses, liabilities, claims, costs, damages, fees and expenses (including, without limitation, fines, forfeitures, reasonable attorneys' fees, disbursements and administrative or court costs) (collectively, "Indemnifiable Sums") that the other party may incur as a result of third party claims arising from circumstances that constitute a breach or alleged breach of such party's warranties set forth in Section 12 or otherwise explicitly set forth in this Agreement.
13.2 Products, Services and Content.
(a) Women.com Liability. Subject to Section 13.3 [Indemnification Requirements and Procedures], Women.com agrees to indemnify, defend and forever hold harmless the eDiets Indemnitees from and against all Indemnifiable Sums arising out of third party claims to the extent such claims are based upon: (a) content published on the Women.com Sites, other than eDiets Content; (b) the operation of the Women.com membership program; or (c) any product or service, other than a product or service provided by eDiets, sold, licensed or otherwise made available on the Women.com Sites.
(b) eDiets Liability. Subject to Section 13.3 [Indemnification Requirements and Procedures], eDiets agrees to indemnify, defend and forever hold harmless the Women.com Indemnitees from and against all Indemnifiable Sums arising out of third party claims to the extent such claims are based upon: (a) content published on the eDiets Sites, other than Women.com Content; (b) tools used on or in connection with the eDiets Site, including, but not limited to the Diet Tool; (c) the operation of the eDiets membership program; (d) any product or service sold, licensed or otherwise made
12
available on any eDiets Site; or (e) any product or service sold, licensed or made available by eDiets on the Diet Center.
13.3 Indemnification Requirements and Procedures. Each party's obligation to indemnify the other pursuant to this Section 13, is predicated upon the indemnified party's (i) giving prompt written notice of any indemnifiable claim to the indemnifying party (provided that failure to give such notice shall not release the indemnifying party from its obligations hereunder except to the extent it is prejudiced thereby), (ii) giving the indemnifying party the opportunity to assume (by written notice to the Indemnitee) control over the defense and settlement of such claim, and (iii) providing, at the indemnifying party's expense, all relevant information, assistance and authority to enable to the indemnifying party to defend such claim. Each party, as Indemnitee, may participate, at its own cost, in the defense of any indemnifiable claim with counsel of its own choosing. Each party agrees not to settle any indemnifiable claim without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed.
Source: EDIETS COM INC, 10QSB, 10/30/2000
13.4 Limitations on Indemnification. Notwithstanding the terms of Sections 13.1 [Breach of Warranty] and 13.2 [Products, Services and Content], an indemnifying party shall have no liability for, nor shall it indemnify, defend or hold any Indemnitee harmless from or against any claim based on: (a) use of old, superseded content or Marks if such infringement would have been avoided by the use of the current version of such content or replacement Marks made available by the indemnifying party to the other party; (b) use of content or Marks not in accordance with the terms of this Agreement; (c) any modification of the indemnifying party's content or Marks not made or explicitly authorized by the indemnifying party if, in the absence of such modification, the content or Marks would not be infringing; or (d) a claimed act of infringement or misappropriation which act occurred after the other party received notice of such potential claim.
14. LIMITATION OF LIABILITY. EXCEPT FOR BREACHES OF SECTION 11 OR BREACHES OF ANY LICENSE GRANT SET FORTH IN THIS AGREEMENT, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, WHETHER OR NOT THAT PARTY HAS BEEN ADVISED OF, KNEW, OR SHOULD HAVE KNOWN OF, THE POSSIBILITY OF SUCH DAMAGE AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. THE LIMITATIONS ON LIABILITY FOR DAMAGES SET FORTH IN THIS AGREEMENT SHALL BE INAPPLICABLE TO EACH PARTY'S CONTRACTUAL OBLIGATION TO INDEMNIFY THE OTHER PARTY AS SET FORTH IN SECTIONS 2.6 AND 13.
15. GENERAL.
15.1 Assignment. Neither party may assign this Agreement, in whole or in part, without the other party's written consent (which will not be unreasonably delayed or withheld), except that no such consent will be required in connection with an assignment or transfer of this Agreement to (a) a party's successor in connection with a Change in Control of such party, provided that such successor is not a competitor of the other party, or (b) to any entity that is
13
controlled by, under common control with, or controls a party. For purposes hereof, the terms "control", "controlled by" or "under common control with" refer to the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting securities, by contract or otherwise. Any attempt to assign this Agreement other than as permitted above will be null and void. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. For purposes of this Agreement, "Change in Control" means a merger or consolidation of the party with, or any sale of all or substantially all of the assets of such party to, any other person, corporation or entity, unless as a result of such merger, consolidation or sale of assets the holders of such party's voting securities prior thereto hold at least fifty percent (50%) of the total voting power represented by the voting securities of the surviving or successor corporation after such transaction.
15.2 Jurisdiction and Venue. The parties agree that all lawsuits arising out of or related to this Agreement shall be brought in the state or federal courts located in the state of California, San Francisco County, and each party hereby referred consents to the exclusive personal jurisdiction of such courts for such purpose.
15.3 Governing Law. This Agreement shall be interpreted and enforced in accordance with the laws of the State of California as applied to agreements made, entered into and performed entirely in California by California residents, notwithstanding the actual residence of the parties, without giving effect to any choice of laws of California that would require the application of the laws of a state other than California.
15.4 Notice. Any notice under this Agreement will be in writing and delivered by personal delivery, express courier, confirmed facsimile, confirmed e-mail or certified or registered mail, return receipt requested, and will be deemed given upon personal delivery, one (1) day after deposit with express courier, upon confirmation of receipt of facsimile or e-mail or five (5) days after deposit in the mail. Notices will be sent to a party at its address set forth below or such other address as that party may specify in writing pursuant to this Section.
15.5 No Agency. The parties are independent contractors and will have no power or authority to assume or create any obligation or responsibility on behalf of each other. This Agreement will not be construed to create or imply any partnership, agency or joint venture.
15.6 Force Majeure. Any delay in or failure of performance by either party under this Agreement will not be considered a breach of this Agreement and will be excused to the extent caused by any occurrence beyond the reasonable control of such party including, but not limited to, acts of God, power outages and governmental restrictions.
15.7 Severability. In the event that any of the provisions of this Agreement are held to be unenforceable, the remaining portions of the Agreement will remain in full force and effect.
15.8 Entire Agreement. This Agreement is the complete and exclusive agreement between the parties with respect to the subject matter hereof, superseding that certain Letter of
14
Intent dated April 3, 2000, and any other agreements and communications (both
Source: EDIETS COM INC, 10QSB, 10/30/2000
written and oral) regarding such subject matter. This Agreement may only be modified, or any rights under it waived, by a written document executed by both parties.
WOMEN.COM NETWORKS, INC. EDIETS.COM, INC.
By: /S/ Bud Ward By: /S/ David R. Humble
Name: Bus Ward Name: David R. Humble
Title: Vice President Eastern Ad Sales Title: CEO and Chairman
1820 Gateway Drive, Suite 150 3467 West Hillsboro Boulevard, Suite 2 San Mateo, CA 94404 Deerfield Beach, FL 33442 Voice: (650) 378-6500 Voice: (954) 360-9022 Fax: (650) 378-6599 Fax: (954) 360-9095
15
EXHIBIT A
[GRAPHIC OMITTED]
A-1
EXHIBIT B
DIET CENTER LOGO
eDiets will have the following Channel and Subchannel Center Logo Placements
(1) Health Channel Home Page and Two Sub Channels of Choice http://www.women.com/health/ 2 Sub Channels:
Health News http://www.prevention.com/healing/ Condition & Ailments http://www.prevention.com/healing/cond_ail/ Estimated Impressions per month- 160,000 Estimated Impressions for Year 1- 1,920,000 Estimated Impressions for Year 2- 1,920,000
Total Estimated Impressions: 3,840,000
OR
(2) Food Channel Home Page and Two Sub Channels of Choice
http://food.homearts.com/food/ 2 Sub Channels: Restaurants http://food.homearts.com/food/restaura/00rest17.htm Food For Thought http://food.homearts.com/food/thoughts/00thou17.htm
Estimated Impressions Per month- 300,000
Estimated Impressions for Year 1- 3,600,000 Estimated Impressions for Year 2- 3,600,000
Total Estimated impressions: 7,200,000
(3) Fitness Channel Home Page and Two Sub Channels of Choice
http://www.women.com/fitness/
2 Sub Channels
Weight Loss http://www.prevention.com/weight/getstart.html
Fitness News http://www.prevention.com/weight/
Estimated Impressions per month- 60,000 (before re-launch) Estimated Impressions for Year 1- 720,000 Estimated Impressions for Year 2- 720,000 Total Estimated impressions: 1,440,000
B-1
Upon committing to this partnership, eDiets will receive a two-week banner advertisement test in rotation across the channels set forth above in order to determine the most suitable fixed placements for the eDiets center logos. This test will consist of a total of 100,000 impressions, 20,000 per channel. Given that expectations for banner advertisement performance are not necessarily equivalent to that of a fixed center logo, eDiets understands and acknowledges that the results will be considered directional in nature and not used to determine ultimate performance of the eDiets center logos placed in the channels selected by eDiets.
The parties may agree at a later date to add other channels to the above list of channels. In any event, eDiets may select from only three channels.
Source: EDIETS COM INC, 10QSB, 10/30/2000
PROMOTION OF DIET CENTER ON WOMEN.COM SITES
Relevant Feature Content Sponsorships
Women.com will provide eDiets with a fixed top and 125x365 side banner on eight (8) of the content features set forth below.
eDiets may select up to eight (8) of the content features set forth below: (1) Fat to Firm at 40+ (Estimated Impressions per Month- 7,000) http://www.prevention.com/weight/fattofirm/
(2) Nutrition News - If you make one change to your diet, what would it be? (This is an Expert piece) (Estimated Impressions per Month- 10,000) http://www.prevention.com/cooking/news/
(3) 71 Weight Loss Tips (Estimated Impressions per Month- 100,000) http://www.prevention.com/report/980610/
(4) Weight Loss Program - Working Out (Estimated Impressions per Month- 15,000) http://www.healthyideas.com/weight/workout.html
(5) 45 Best and Worst Belly Flatteners (pull down menu to select scenarios with exercise tips) (Estimated Impressions per Month- 7,000)
http://www.healthyideas.com/report/bellyflat/
(6) 8 Ways to Make Weight lifting fun (Estimated Impressions per Month- 16,000) http://www.prevention.com/weight/buzz/
(7) Gym Shorts (Q&A Michelle Staten, Fitness Editor, Prevention) (Estimated Impressions per Month- 10,000) http://www.prevention.com/weight/gym/
(8) Calorie Calculator (Tool) (Estimated Impressions per Month- 20,000) http://www.prevention.com/weight/bonfire/
(9) Weight Loss Program: Success Stories (Estimated Impressions per Month- 17,000)
B-2
www.prevention.com/weight/success.html
(10) Weight Quiz: What will you Weigh one Year from now? (Quiz) (Estimated Impressions per Month- 39,000) www.prevention.com/weight/what_will_you/
(11) Weight Loss Program Planner (Tool) (Estimated Impressions per Month- 50,000) www.prevention.com/weight/planner/
(12) A Choice of one top level sponsorship in the newly launched Fitness Channel scheduled for 3Q, 2000
eDiets.com will have the first right to substitute any of the following content features for any of the eight (8) content features selected above once inventory on such features becomes available. When the following content features become available, eDiets.com has the choice to switch sponsorships and not add to their overall sponsorships.
(1) Weight Loss Program: Finding Support (Available 6/30/01) (Estimated Impressions per Month- 2,000) www.prevention.com/weight/support.html
(2) Weight Loss Program: Eating Well (Available 6/30/01) (Estimated Impressions per Month- 2,000) www.prevention.com/weight/eatwell.html
(3) Weight Loss Program: Getting Started (Available 6/30/01) (Estimated Impressions per Month- 7,000) www.prevention.com/weight/getstart.html ROS advertisement rotation on Women.com Sites
The Following Advertising Impressions will include these campaign elements:
-All Sponsorships -Targeted Banner Rotations (Targeted rotation includes Fitness, Entertainment, Wedding, Health, Fashion & Beauty, Food Channels, Redbook, Cosmopolitan, Prevention, Good Housekeeping, eHarlequin and Home and Garden and other relevant areas as they become available) -ROS
Per Year
o Impressions Guaranteed per month: 3,750,000 o Total Advertising Impressions Guaranteed: 45,000,000 (of which shall not include the top 468x60 nor the 120x240 banner located on the Gateway page of the Diet Center) 60% ROS and 40% Targeted and Sponsorship elements
B-3
o Ad banners on the Diet Center will be co-branded with the Women.com and eDiets logos
Women.com Special Membership Integration Opportunities:
Women.com will provide eDiets with one (1) membership offer opportunity to Women.com users who have registered for membership on the Women.com Sites per
Source: EDIETS COM INC, 10QSB, 10/30/2000
quarter after the Effective Date. These member offers will be promoted via membership newsletters as listed below, on the Membership Menu Page (http://women.com/membership/central.html) and on the Promotion Page (http://women.com/promotions/). The member offer provided by eDiets can not run anywhere other than Women.com for one month prior to or one month after the member promotion period without Women.com's written consent
eDiets shall offer in any membership offer provided pursuant to this Agreement a minimum discount of 20% on the fair market value of any products or services.
Placement within Women.com Newsletters:
eDiets.com will have the opportunity to participate within the following newsletters, the placement, frequency and timing of such participation to be determined by Women.com in its sole discretion provided that Women.com uses its best efforts not to place reference to eDiets on the same page as content which may appear to be contrary to the basic foundation of the eDiets' philosophy. During the Term, eDiets.com will be guaranteed 12 million circulation per year from and after the Effective Date via newsletters, including but not limited to: >> Fashion & Beauty Newsletter: 300,000 subscribers per month >> Food News: 180,000 subscribers per month >> Prevention: 1,600,000 subscribers per month >> Internet Scopes: 2,400,000 subscribers per month >> Sex & Romance: 120,000 subscribers per month >> What's New: 1,100,000 subscribers per month >> Women.com Member Newsletter: 1,700,000 subscribers per month
Guaranteed Circulation Per Year: 12,000,000
Anchor Tenancy Sponsorship of the Women.com Promotions/ Sweepstakes:
Women.com will provide eDiets.com with three (3) Anchor Sponsorships and two (2) Premier Sponsorships of the following Women.com promotions.
The "Anchor Sponsorship" includes the following elements: o Grand prize sweepstakes opportunity o Exclusive sponsorship of an editorial feature showcased within the promotion o Availability to ask two (2) demographic or brand research questions o Full database of names collected from the sweepstakes (estimated 30,000 to 60,000 names), the use of which is subject to all applicable Women.com privacy policy. o Network wide promotion of the sweepstakes, the placement, size, frequency and timing of such promotions to be determined by Women.com in its sole discretion.
B-4
Included in a "Premier Sponsorship" are all of the following elements: o 1/st/ place sweepstakes opportunity o Co-sponsorship of an editorial feature showcased within the promotion o Full database of names collected from the sweepstakes (30,000 to 60,000 names) o Network wide promotion of the sweepstakes, the placement, size, frequency and timing of such promotions to be determined by Women.com in its sole discretion.
Available Promotions for Participation: o Wedding Promotion (Year 2000) o Holiday Survival Guide (Year 2000) o Resolutions Promotion (Year 2001) o Valentine's Day Promotion (Year 2001) o Mother's Day Promotion (Year 2001)
Total estimated impressions per promotion: 1,000,000
Women.com E Commerce Elements:
Sports/Fitness Diet Center Homepage: http://www.women.com/shopping/webstoreguide/sports/
o Rotating "Featured Partner" Ad Button on the side of the page
All Sub Categories:
o Rotating "Featured Partner" Ad Button on the side of the page
o Affiliate text link placement within all sub-sub categories
- New category creation at a minimum of 3 weeks from receipt of all coded links, descriptions and images have been received from client. Note: if category requires the participation of more than one client, it will not be created until all material has been received from all participants.
Impression Break-Out Per Year:
Advertising Impressions: Estimated Guaranteed
-Sponsorships and Targeted Rotations: 18,000,000
-ROS 27,000,000
Total Guaranteed Advertising Impressions: 45,000,000
QUARTERY IMPRESSION GUARANTEED 11,250,000
Diet Center, Channel & SubChannel
Impressions: Estimated Guaranteed
Source: EDIETS COM INC, 10QSB, 10/30/2000
"eDiets Diet Center" logo impressions: 30,000,000
B-5
"eDiets Diet Center" logo impressions: 13,000,000
Other Campaign Impressions: Estimated Guaranteed Newsletters 12,000,000 Promotions 500,000 Added Value Commerce Impressions: 3,600,000 Total Estimated Impressions: 79,100,000 Total Impressions Guaranteed: 70,000,000
B-6
EXHIBIT C
PAYMENT SCHEDULE
Pricing/Delivery: PRICING AS PART OF THIS PACKAGE ONLY Flight: 2 Year Deal Net Advertising CPM: $37.00 (Just Co-Branded Banners) Overall Net CPM $28.57 (With all other elements) Total Net Cost: $2,000,000 (Per Year)/$4,000,000 (Two Years) Total Guaranteed Impressions: 70,000,000 (Per Year)/140,000,000 (TwoYears)
YEAR 1
10 days after Effective Date-Production $250,000
Last day of each of the 1st through 12/th/ months after the Launch Date $145,833
Media Component $138,750
Other (Promotions, production, etc) $7,083
YEAR 2
Last day of each of 13/th/ through 24/th/ months after the Launch Date $166,666
Media Component $138,750
Other (Promotions, production) $27,916.66
Total Payment to Women.com $4,000,000
[GRAPHIC OMITTED]
C-1
EXHIBIT D
GENERAL ADVERTISING & PRODUCTION GUIDELINES
The following are the Women.com advertising and production guidelines. Any exceptions to these guidelines require prior written approval of Women.com.
All impressions per section are estimated; however, Women.com shall extend every reasonable effort to deliver the estimated number of impressions per section as set forth in Exhibit B. Notwithstanding the foregoing, Women.com does guarantee a minimum of 13,000,000 impressions promoting eDiets per year on the Diet Center.
BANNER CREATIVE & STANDARDS
All campaigns must submit 468x60, 234x60, and 125x365 creative units.
1. ACCEPTED BANNER SIZES
o 234x60 half-banner (8k or less) o 468x60 banner (10k or less) o 125x365 sponsorship (12K or less) o 125x125 promo (8K or less; reserved for marketing and co-branded tagged tune-ins with management approval)
2. BANNER CREATIVE FORMATS ACCEPTED
o GIF (animated and non-animated) o JPEG o HTML o JAVASCRIPT
3. THE FOLLOWING ADDITIONAL FORMATS CAN POTENTIALLY BE USED BUT REQUIRE ADDITIONAL PRODUCTION AND TESTING TIME TO ENSURE NETWORK COMPATIBILITY:
o JAVA o ENLIVEN o UNICAST o FLASH
Source: EDIETS COM INC, 10QSB, 10/30/2000
Please check with ad production regarding other formats.
D-1
PRODUCTION LEAD TIME AND "SHIP TO" INFO
Lead Times
The following lead times should be considered standard. Additionally, more extensive campaigns/sponsorships and/or incorporating new technologies may take longer. o Banner campaigns require 5 business days from the time all advertiser materials/instructions are received. o Creative rotation changes/refreshes require 3 business days from the time all advertiser materials/instructions are received.
"Ship To" Info
All creative should be sent to ads@women.com.
ADVERTISING/LINKS - CATEGORIES NOT ACCEPTED
The following categories of advertising or links to such material are not accepted on Women.com:
o Tobacco o Controlled substances o Liquor o Firearms o Gambling o Sexually explicit advertising and/or advertising that is degrading. o Women.com, specifically Prevention on-line (Healthy Ideas) cannot accept advertising that promotes: 1) a product deemed defective or unsafe by the FDA, 2) a product, therapy or service whose possible harm to the consumer outweighs it benefits, and 3) a health product for which there is no good evidence of benefit and no good reason to believe there is a benefit.
THIRD PARTY AD SERVING
Women.com accepts third party ad serving. However, third party serving relies on the third party's servers being fully operational. If Women.com determines that the servers are unreliable, the banners must be served from Women.com's site until such time the third party servers are fully operational. Also note that Women.com cannot track click-thrus in its NetGravity reports for rich media banners that are served remotely.
Women.com must be notified in writing regarding the product categorizations of all creative rotations as well as any revisions, in order to maintain proper placement and competitive separation. Any changes made to creative rotations without prior notification to Women.com may result in the interruption or temporary discontinuation of ad delivery until all ad placements and competitive separation issues can be resolved.
NETWORK DESIGN CONFIGURATION
D-2
Women.com reserves the right to make design and configuration changes to all pages and features within the network. Women.com shall notify its advertisers of any changes that significantly impacts ad placements.
D-3
Source: EDIETS COM INC, 10QSB, 10/30/2000 | Highlight the parts (if any) of this contract related to "Anti-Assignment" that should be reviewed by a lawyer. Details: Is consent or notice required of a party if the contract is assigned to a third party? | {
"answer_start": [
43157
],
"text": [
"controlled by, under common control with, or controls a party."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Joint Ip Ownership" that should be reviewed by a lawyer. Details: Is there any clause providing for joint or shared ownership of intellectual property between the parties to the contract?
Context: [LOGO]
EXHIBIT C
AIRSOPURE FRANCHISE AGREEMENT
THIS AGREEMENT is entered into on this ____ day of ___________, 2000, by and between Airsopure International Group, Inc., a Nevada corporation whose principal place of business is located at 15400 Knoll Trail, Suite 200, Dallas, Texas 75248 (hereinafter "AIRSOPURE" or by reference "we", "us", "our"), and You: , ------------------------------------ whose address is:
- ----------------------------------------
- ---------------------------------------- (hereinafter "You" or by reference "Franchisee", or "Your"). Either Party or both Parties respectively may be referred to as "Party" or "Parties."
RECITALS
A. AIRSOPURE and its affiliate design, manufacture and distribute indoor air cleaning systems under the name and mark "AIRSOPURE" (the "Products").
B. AIRSOPURE has developed a system for the establishment, development and operation of sales centers ("AIRSOPURE Center(s)" or "Center(s)") for the sale and servicing of AIRSOPURE's exclusive line of Products using the service mark "AIRSOPURE" and other trademarks, service marks (including but not limited to, "The Essence of Clean Air"), logos and identifying features designated from time to time by AIRSOPURE (the "Licensed Marks") and using AIRSOPURE's distinctive methods for establishing and operating AIRSOPURE Centers.
C. You desire to establish an AIRSOPURE Center to be located in the following geographic area:
- ----------------------------------------
- ----------------------------------------
(the "Exclusive Territory"), and AIRSOPURE desires to grant You the right to operate an AIRSOPURE Center at such location under the terms and conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the mutual rights, covenants and obligations set forth herein, the Parties agree as follows:
1. GRANT OF FRANCHISE
1.01. AIRSOPURE grants to You, and You accept from AIRSOPURE, the right and license to operate an AIRSOPURE Center (or the "Franchise") for the sale or lease of AIRSOPURE's exclusive line of Products or at a location in the Exclusive Territory to be approved in writing by AIRSOPURE and listed in attached Exhibit A (the "Exclusive Territory and Center Location"), to purchase Products from AIRSOPURE or its affiliates for resale at the Center to customers in the Exclusive Territory, and to use the Licensed Marks only in connection with the operation of the Franchise in accordance with the terms and conditions of this Agreement. AIRSOPURE grants the Franchise to You hereunder in reliance upon Your agreement to at all times operate and manage the Franchise faithfully, honestly and diligently in strict conformance with AIRSOPURE's operating procedures and specifications, as set forth herein and as otherwise from time to time communicated to You, using Your best efforts to promote and enhance the performance and operation of the Franchise.
1.02. AIRSOPURE hereby grants to You the exclusive right to solicit customers for the Products by direct mail advertising, or other approved means, but not including the World Wide Web (Internet) nor by printed catalogues, in
1
the Exclusive Territory described above and in Exhibit A. Other AIRSOPURE franchisees will not be permitted to solicit customers for Products by advertising in Your Exclusive Territory. Likewise, You may not target or solicit customers for Products by advertising in other Franchisees respective Exclusive Territories. Exclusive Territories will not overlap into other Exclusive Territories. You shall not purposely solicit sales and service to customers located outside Your Exclusive Territory, provided such activity in not within an assigned Exclusive Territory. You have been granted an exclusive trade area by this Agreement.
2. TERM AND RENEWAL
2.01. The term of this Agreement shall be for 10 years commencing on the date of execution of this Agreement by AIRSOPURE.
2.02. At the expiration of the term or any renewal term hereof, You may, at its option, renew the Franchise granted hereunder for 2 additional terms of 10 years each on the following terms and conditions:
A. You shall give AIRSOPURE notice in writing of Your election to renew this Agreement at least 3 months prior to the expiration of the then-current term.
B. You shall not be in default of any provision of this Agreement or amendment hereto, including without limitation all payment obligations to AIRSOPURE and its affiliates.
C. As a condition of renewal of the Franchise, You agree to execute AIRSOPURE's then-current form of franchise agreement and to comply fully with all terms and conditions thereof, and to pay AIRSOPURE the then-current renewal fee, which is presently $1,000.00. You understand that AIRSOPURE may revise its franchise agreement for any renewal term, at AIRSOPURE's sole discretion, including without limitation to increase the royalty fees or other fees payable by You or to require other obligations of franchisees.
D. You shall meet AIRSOPURE's then-current qualifications and training requirements.
E. You shall execute a general release in a form prescribed by AIRSOPURE releasing AIRSOPURE and its affiliates, directors, officers, employees and agents from all known and unknown claims and liabilities to the extent permitted by state and federal law.
F. You may be required, at AIRSOPURE's sole discretion, to upgrade or remodel Your AIRSOPURE Center to conform to AIRSOPURE's then-current specifications and standards as specified in AIRSOPURE's Operating Manual of otherwise in writing, provided such upgrade or remodel is reasonable in terms of cost and implementation schedule.
3. FEES
3.01. In consideration of the Franchise rights and license granted herein, You agree to pay to AIRSOPURE the following fees:
A. You shall pay to AIRSOPURE an initial franchise fee of $25,000.00 upon execution of this Agreement. You agree that the initial franchise fee represents payment for the initial grant of the Franchise rights and license granted herein, shall be fully earned upon execution of this Agreement, and the said fee will not be refunded under any circumstances unless otherwise specifically set forth herein. You must find a suitable Center site within 90 days of signing the Franchise Agreement, unless we mutually agree otherwise. If we cannot agree on a Center location, within 4 months, we may a) extend your search time, b) exchange your territory, or c) terminate your Franchise and refund up to 70% of your Franchise Fee, at our sole discretion. There are no refunds under any other circumstances.
B. You shall pay to AIRSOPURE a continuing non-refundable royalty fee on a monthly basis of
2
5% of Your total monthly gross sales, as defined below. This fee is due by the 7th of the month for the preceding month.
C. You shall account to AIRSOPURE for Your continuing non-refundable local advertising fee of 2% of Your total monthly gross sales, which You must spend on the promotion of Your Center. This accounting is due by the 7th of the month for the preceding month.
D. You shall pay to AIRSOPURE a continuing non-refundable Advertising Fund fee of 2% of Your total monthly gross sales, beginning January 1, 2001, or later at our sole option, as described in Section 10 hereof. This fee will be due by the 7th of the month for the preceding month.
E. "Gross sales" as used in this Section 3.01 shall mean the amount of gross revenues received by You from all sources, including without limitation sales of Products, services or other merchandise of every kind or nature from, at or in connection with the operation of the AIRSOPURE Center granted herein, excluding state, federal or local sales taxes collected from customers and paid to the appropriate taxing authority.
F. Fees payable under Paragraphs 3.01.B and 3.01.D above shall be due and payable monthly by the seventh day of each month, based on Your gross sales of the previous month. Delinquent fees shall bear interest at a rate of the lower of: (i) one and one-half percent (1.5%) per month, or (ii) the maximum rate permitted by applicable law.
4. DUTIES OF AIRSOPURE
4.01. Prior to the opening of the Franchise, AIRSOPURE shall:
A. Following receipt in writing from You of a request for approval of at least 3 possible locations as the Authorized Location for the Franchise, AIRSOPURE will promptly evaluate such locations and notify You in writing of its approval or rejection of such location(s) within 7 working days.
B. Provide You with AIRSOPURE's specifications and requirements or other assistance deemed necessary by AIRSOPURE to assist You in opening the Center.
C. Provide an initial training program for 2 people to be designated by You as described in AIRSOPURE's Operations Manual.
D. Provide one copy, on loan to You, of AIRSOPURE's Operations Manual as described in Section 8 hereof for use solely in connection with operation of the
AIRSOPURE Center granted hereunder.
E. Sell to You an opening order of Products for resale or lease at the Franchise as described in Paragraph 6.01 below.
4.02. Following the opening of the Franchise, AIRSOPURE shall:
A. Provide daily consultation by telephone as reasonably requested by You during the first two weeks of operation of the AIRSOPURE Center Franchise.
B. Provide continuing general advisory assistance as deemed necessary by AIRSOPURE regarding the operation and advertising of the Franchise.
C. Provide updates, revisions and amendments to the AIRSOPURE Operating Manual and system as AIRSOPURE may from time to time deem necessary or desirable.
D. Fill Your orders for Products for resale at the Franchise in accordance with Section 6 below.
E. Provide training programs or seminars as AIRSOPURE may, from time to time in its sole discretion, deem appropriate. AIRSOPURE's training programs for franchisees is described in AIRSOPURE's Operations Manual, and is subject to change at any time in AIRSOPURE's sole
3
discretion.
F. AIRSOPURE may, from time to time at its sole discretion, provide test customers or store visits by AIRSOPURE representatives to evaluate Your methods of operation and compliance with AIRSOPURE's standards and specifications.
5. YOUR DUTIES
5.01. You shall: A. You must find a suitable Center site within 90 days of signing the Franchise Agreement, unless we mutually agree otherwise, and attend (or if You are a corporation, Your majority shareholder will attend or Your Operating Principal or manager and one other employee) and successfully complete to AIRSOPURE's reasonable satisfaction AIRSOPURE's initial training program within 90 DAYS following execution of this Agreement.
B. Obtain all federal, state and local business licenses, permits, certifications and bonds required for lawful operation of the Franchise and certify in writing to AIRSOPURE prior to opening that all such requirements have been obtained.
C. Attend (with Your manager) and complete to AIRSOPURE's reasonable satisfaction such continuing training or educational programs as AIRSOPURE may from time to time require in writing. AIRSOPURE will not charge You for the training programs, but You shall be responsible for the costs of meals, lodging, travel and all other expenses incurred by You or Your employees in attending such programs.
D. Actively promote AIRSOPURE's Products and services and exert Your best efforts to fully develop and maximize the market for AIRSOPURE's Products and services in Your Exclusive Territory.
E. Devote Your full time (or if You are a corporation, designate a manager) to oversee the management and operation of the Center.
F. Purchase and maintain and adequate supply for use in connection with the operation of the Franchise Business various copyrighted materials and forms which are the proprietary property of AIRSOPURE and which are an integral part of AIRSOPURE's system franchised hereunder. Other supplies and equipment necessary for operation of the Center may be purchased from third Party suppliers who meet AIRSOPURE's standards and specifications and have been approved in writing by AIRSOPURE in accordance with the procedures set forth in AIRSOPURE's Operating Manual, which may be amended from time to time by AIRSOPURE at its sole discretion.
G. Purchase Products from AIRSOPURE for resale to customers in the Exclusive Territory in accordance with Section 6 below.
H. Comply with all federal, state and local health and safety laws, rules and standards applicable to operation of the Franchise. You will forward copies of all notices of non-compliance by the Franchise with any law, rule, regulation or ordinance to AIRSOPURE within three days from receipt thereof accompanied by a summary of action You will take to comply.
I. Maintain adequate working capital to operate the Franchise in accordance with the AIRSOPURE Operations Manual, as such may be amended by AIRSOPURE from time to time.
J. Operate the Franchise in strict conformance with AIRSOPURE's policies, procedures, standards and specifications as may be prescribed by AIRSOPURE from time to time in the Operations Manual or otherwise in writing, including without limitation all changes specified by AIRSOPURE to its system or Products. .
K. Display AIRSOPURE's Licensed Marks or logos on all marketing materials and at Your AIRSOPURE Center. AIRSOPURE reserves the
4
right to alter or change its Licensed Marks, logos or trade dress at any time, and You agree to use such Licensed Marks, logos or trade dress as specified from time to time by AIRSOPURE promptly upon receipt of notice in writing from AIRSOPURE.
L. Maintain and supply to third Parties upon request information to be supplied by AIRSOPURE regarding the availability of franchises.
M. Provide AIRSOPURE and its representatives with unlimited access to FRANCHISEE'S offices or its AIRSOPURE Center (personal residence excluded), including Your books, computer system (for sales and products only, unless we are auditing You) and records of the Franchise, during normal business hours for purposes of conducting inspections to fully examine and evaluate Your methods of doing business, including interviews with Your employees and customers.
N. You acknowledge and agree that such inspections and evaluations are necessary for AIRSOPURE to insure the maintenance of its quality standards, and You agree to fully cooperate with any reasonable request by AIRSOPURE in connection with such inspections and evaluations.
O. Diligently and immediately take such steps as are deemed reasonably necessary by AIRSOPURE to correct any deficiencies detected by AIRSOPURE in Your adherence to AIRSOPURE's operating policies, procedures, standards and specifications.
P. In the event You are a corporation, comply with the following:
1. You will provide in Your Articles of Incorporation that Your sole corporate purpose is the operation of the Franchise.
2. Every certificate for shares of stock in the corporation will include the following legend printed thereon if sole purpose of the corporation is to own and operate franchised business:
"THE TRANSFER, PLEDGE OR ASSIGNMENT OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND RESTRICTIONS CONTAINED IN A FRANCHISE AGREEMENT BETWEEN THE HOLDER OF THESE SHARES AND AIRSOPURE FRANCHISE GROUP, INC."
3. You agree to comply with the restrictions on transfer of ownership of the corporation set forth in Section 12.02 below.
4. You will provide AIRSOPURE, prior to the opening of the Franchise, with copies of Your Articles of Incorporation, Bylaws and other governing documents, including all amendments thereto, and a copy of the resolutions by Your Board of Directors authorizing execution of this Agreement, certified by the Secretary of the corporation.
5. You will provide AIRSOPURE with a current list of shareholders and will update such list from time to time as the list changes.
6. Each shareholder of the corporation (if sole corporate purpose is the franchise), will execute a personal guarantee of Your performance under this Agreement and all amounts owed by You to AIRSOPURE in the form of attached Exhibit B.
Q. The Parties recognize the importance of fully developing the market for Products in the Exclusive Territory, and a substantial part of the consideration for and inducement to AIRSOPURE to enter into this Agreement is Your agreement to devote Your best efforts to market, sell and support Products to customers located in Your Exclusive Territory. You agree to concentrate Your marketing efforts to customers located in Your Territory, and You agree not to advertise the Products using media or publications whose primary coverage area is outside Your Exclusive Territory.
5
R. You may relocate Your Center at Your sole expense, within Your Exclusive Territory, provided You give us written notification at least 30 days prior to relocation stating the reasons for such a move.
6. PURCHASE AND SALE OF PRODUCTS
6.01. You will purchase from AIRSOPURE and AIRSOPURE will sell to You for resale or lease at the Center to customers in the Exclusive Territory an opening order of Products having an aggregate cost to You of from $5,000.00 to $10,000.00, by mutual agreement, based on market conditions. Such purchase must be consummated in its entirety before You open Your Center, unless AIRSOPURE agrees in writing to extend such time period.
6.02. After the opening order contemplated by the preceding Paragraph, You will from time to time place orders for Products with AIRSOPURE on the following basis:
A. All orders for Products shall be accompanied by payment, unless at AIRSOPURE's sole discretion, other payment terms are permitted.
B. All orders will be shipped freight collect unless freight is paid in advance by You.
C. You will pay the prices then prevailing at the time AIRSOPURE receives each order. Such prices are subject to change at any time by AIRSOPURE.
D. All merchandise will be shipped to You at the Center for resale to customers
in the Exclusive Territory. You will sell Products only to end-user customers and not for resale. You will not sell or lease Products at any location other than within Your Exclusive Territory, engage in mail order sales of Products or supply Products to others for resale or lease at any other location.
E. All orders for Products are subject to availability. In the event any Product is in short supply, AIRSOPURE shall have the right to allocate such Product on an equitable basis.
F. You will not modify the Products, and You will not offer or carry any products or services other than AIRSOPURE's Products and services specified by AIRSOPURE without written approval from AIRSOPURE.
G. Notwithstanding nationally advertised prices by AIRSOPURE, You may resell Products purchased under this Agreement at prices set by You. However, AIRSOPURE retains the right, to the extent permitted by law, to refuse to fill Your orders for Products if You fail to honor AIRSOPURE's suggested prices for the same Products sold by other franchise owners in Your region.
7. LICENSED MARKS
7.01. AIRSOPURE represents with respect to the Licensed Marks that:
A. AIRSOPURE is the owner of all right, title and interest in and to the Licensed Marks or has the right and license to use and grant a license to You to use the said Licensed Marks.
B. AIRSOPURE will take all steps reasonably necessary to preserve and protect the ownership and validity in and to the Licensed Marks.
7.02. With respect to Your licensed use of the Licensed Marks pursuant to this Agreement, You agree that:
A. You shall use only the Licensed Marks designated by AIRSOPURE and shall use them only in the manner authorized and permitted by AIRSOPURE.
B. You shall use the Licensed Marks only for the operation of the Franchise at the Authorized Location.
6
C. During the term of this Agreement, You shall identify Yourself as the owner of the Franchise in conjunction with any use of the Licensed Marks, including, but not limited to, on invoices, order forms, receipts, business cards, contracts and at such conspicuous locations on the Center's premises or in the field as AIRSOPURE may specify. The identification shall be in a form which specifies Your name, followed by the term "Independent Franchise Owner" or such other identification as shall be approved by AIRSOPURE.
D. You shall not use the Licensed Marks to incur any obligation or indebtedness on behalf of AIRSOPURE, and You shall not represent that Your Center is owned, operated by or affiliated with AIRSOPURE other than as a franchisee.
E. You shall not use the Licensed Marks as part of Your corporate or other legal name, without the prior written consent of AIRSOPURE.
F. You shall file an assumed name registration, and shall execute any documents deemed necessary by AIRSOPURE to obtain protection for the Licensed Marks or to maintain their continued validity and enforceability.
7.03. You expressly understand and acknowledge that:
A. As between the Parties hereto, AIRSOPURE, by its trademark License Agreement with Airsopure, Inc. is the licensor of all right, title and interest in and to the Licensed Marks and the goodwill associated with and symbolized by them.
B. You shall not directly or indirectly contest the validity of the ownership of the Licensed Marks.
C. Your use of the Licensed Marks pursuant to this Agreement does not give You any ownership interest or other interest in or to the Licensed Marks.
D. Any and all goodwill arising from Your use of the Licensed Marks in the Franchise under AIRSOPURE's system shall inure solely and exclusively to the benefit of AIRSOPURE, and upon expiration or termination of this Agreement and the Franchise herein granted, no monetary amount shall be assigned as attributable to any goodwill associated with Your use of the Licensed Marks.
E. The right and license to use the Licensed Marks granted hereunder to You is nonexclusive, and AIRSOPURE may use and grant franchises to others to use the Licensed Marks in any manner except as expressly provided otherwise herein.
F. AIRSOPURE reserves the right to substitute different Licensed Marks for use in identifying the System and the businesses operating thereunder, and You agree to comply with AIRSOPURE's requirements relating thereto.
7.04. You shall promptly notify AIRSOPURE of any unauthorized use of the Licensed Marks or marks confusingly similar thereto, any challenge to the validity of the Licensed Marks, or any challenge to AIRSOPURE's ownership of, or Your right to use, the Licensed Marks. You acknowledge that AIRSOPURE has the sole right to direct and control any administrative proceeding or litigation involving the Licensed Marks, including any settlement thereof. AIRSOPURE has the right, but not the obligation, to take action against uses by others that may constitute infringement of the Licensed Marks.
7.05. Provided You have used the Licensed Marks in accordance with this Franchise Agreement and AIRSOPURE's Operations Manual, AIRSOPURE will defend You at AIRSOPURE's expense against any third Party claim, suit or demand involving the Licensed Marks and arising out of Your use thereof. In the event that You have not used the Licensed Marks in accordance with this Agreement, AIRSOPURE shall defend You, at Your expense, against such third Party claims, suits or demands.
7
7.06. In the event of any litigation or administrative proceeding relating to the Licensed Marks, You shall execute any and all documents and do all acts as may, in the opinion of AIRSOPURE, be necessary to carry out such defense or prosecution, including, but not limited to, becoming a nominal Party to any legal action. Except to the extent that such litigation is the result of Your use of the Proprietary Marks in a manner inconsistent with the terms of this Agreement, AIRSOPURE agrees to reimburse You for its out-of-pocket costs in performing such acts, except that You shall bear the salary costs of its employees, and AIRSOPURE shall bear the cost of any judgment or settlement.
8. OPERATIONS MANUAL
8.01. AIRSOPURE shall provide You with one copy of AIRSOPURE's Operations Manual covering the proper operating and marketing techniques and the standards and specifications for operation of the Franchise. You agree to fully comply with the Operations Manual in its entirety as an essential aspect of Your obligations under this Agreement. Failure to so comply shall be treated as a breach of this Agreement.
8.02. You shall at all times treat the Operations Manual, all supplements and revisions thereto, any other operations manual, brochure or memorandum created for or approved for use in the operation of the Franchise and the information contained therein as the confidential and proprietary information of AIRSOPURE, and shall use all reasonable efforts to maintain the confidentiality of such information. You shall not at any time, without AIRSOPURE's prior written consent, copy, duplicate, record, or otherwise reproduce the foregoing materials, in whole or in part, nor otherwise make the same available to any unauthorized person. You may disclose such information and materials only to such of Your employees or agents, or others who must have access to it in connection with their employment or the performance of this Agreement, in which event You shall obtain the agreement of such persons and entities to maintain the confidentiality thereof. The Operations Manual shall remain at all times the sole property of AIRSOPURE.
8.03. AIRSOPURE may from time to time revise the contents of the Operations Manual, and You expressly agree to comply with each new or changed standard, specification or procedure set forth therein. You shall at all times ensure that Your copy of the Operations Manual is kept current and up to date. In the event of any dispute as to the content of the Operations Manual, the terms of the master copy of the Operations Manual maintained by AIRSOPURE at AIRSOPURE's home office shall be controlling.
9. ACCOUNTING AND RECORDS
9.01. During the term of this Agreement, You shall maintain and preserve, for at least five years from the date of their preparation, full, complete, and accurate, books, records and accounts in the form and manner prescribed by AIRSOPURE from time to time in the Operations Manual or otherwise in writing.
9.02. You shall, at Your expense, submit to AIRSOPURE, by the 7th day of each month, a monthly statement on forms prescribed by AIRSOPURE accurately reflecting gross sales of the Franchise for the preceding calendar month. Each statement shall accompany Your monthly royalty and advertising fund fee payments and shall be signed by You attesting that it is true and correct.
9.03. You shall, at Your expense, submit to AIRSOPURE an annual financial statement for the Franchise, which includes an income statement prepared in accordance with generally accepted accounting principals, within 90 days of the end of each fiscal year during the term hereof. Each statement shall be signed by You attesting that it is true and correct.
9.04. You shall submit to AIRSOPURE for review and auditing such other forms, reports,
8
records, information and data, as AIRSOPURE may reasonably request in writing.
9.05. AIRSOPURE or its designated agents shall have the right at all reasonable times to examine and copy, at its expense, all books, records, receipts and tax returns of Yours related to the Franchise and, at its option, to have an independent audit made, and thereupon be allowed to search Your computer accounting files. If an inspection or audit should reveal that payments have been understated in any report to AIRSOPURE, then You shall immediately pay to AIRSOPURE the amount understated upon demand, in addition to interest from the date such amount was due until paid, at the prime rate being charged by Bank of America on the date the payment was due plus 2%, or the maximum rate permitted by law, whichever is less. If an inspection discloses an underpayment to AIRSOPURE of 2% or more of the total amount that should have been paid to AIRSOPURE, You shall, in addition to repayment of such understated amount with interest, reimburse AIRSOPURE for any and all costs and expenses incurred in connection with the inspection or audit (including, without limitation,
reasonable accounting and attorneys' fees). The foregoing remedies shall be in addition to any other remedies AIRSOPURE may have, including without limitation, the remedies for default.
10. MARKETING AND ADVERTISING
10.01. You shall submit to AIRSOPURE for review prior to use samples of all advertising and promotional materials that have not been previously approved by AIRSOPURE. AIRSOPURE shall notify You of its approval or disapproval within 7 days or less from the date of receipt by AIRSOPURE of such materials. Failure by You to obtain the prior approval in writing of AIRSOPURE for all advertising and promotional materials shall be a violation of this Agreement.
10.02. AIRSOPURE has established an advertising fund (the "Fund") to build recognition of the Products and the Licensed Marks and to promote AIRSOPURE's Products and the Franchise. You shall participate in the Fund, in addition to Your obligation to conduct local advertising of the Franchise, on the basis described in Paragraph 3.01.D above.
10.03. AIRSOPURE will administer the Fund as follows:
A. The Fund shall be maintained in a separate bank account. Upon request by You, AIRSOPURE will provide an annual accounting of amounts spent from the Fund, including a reasonable allocation to cover AIRSOPURE's overhead expenses for administration and management of the Fund.
B. AIRSOPURE may allocate amounts held in the Fund at its discretion as AIRSOPURE deems appropriate. You are not guaranteed that any particular amount or percentage of the Fund will be spent in Your local market.
C. AIRSOPURE shall have the right to terminate the Fund at any time. However, the Fund will not be terminated until all moneys in the Fund have been expended for the purposes stated in Paragraph 10.02 above.
D. AIRSOPURE may from time to time amend its policies or establish new policies and procedures for administration of the Fund.
10.04. In addition to its monthly contribution to the Fund, You shall spend an amount equal to at least 2% of Your total monthly gross sales (as defined in Paragraph 3.01.C above) on local advertising in Your Exclusive Territory. You shall submit to AIRSOPURE a monthly report to accompany Your advertising fund fee and royalty fee payments accounting for and evidencing Your local advertising expenditures. Your local advertising shall comply with the procedures specified in Paragraph 10.01 above.
9
11. INSURANCE
11.01. You shall procure and maintain in full force and effect during the term of this Agreement, at Your expense, insurance policies written by an insurance company satisfactory to AIRSOPURE in accordance with standards and specifications set forth in the Operations Manual or otherwise by AIRSOPURE in writing. Such policies shall name AIRSOPURE as an additional insured and shall include, at a minimum:
A. Comprehensive general liability insurance in the amount of $1,000,000.00.
B. Comprehensive automobile liability insurance, including collision, comprehensive, medical and liability to satisfy state law requirements.
C. Additional coverage's and higher policy limits may be required from time to time by AIRSOPURE.
11.02. At least 7 days prior to the opening of the Center and on each policy renewal date thereafter, You shall submit to AIRSOPURE copies of all policies and policy amendments. The evidence of insurance shall include a statement by the insurer that the policy or policies will not be canceled or materially altered without at least 30 days prior written notice to AIRSOPURE.
11.03. Your obligation to obtain and maintain the foregoing policy or policies in the amounts specified shall not be limited in any way by reason of any insurance which may be maintained by AIRSOPURE, nor shall Your performance of that obligation relieve You of liability under the indemnity provisions set forth in Section 17 of this Agreement.
11.04. Should You, for any reason, fail to procure or maintain the insurance required by this Agreement, AIRSOPURE shall have the right and authority (without, however, any obligation to do so) immediately to procure such insurance and to charge same to You, which charges, together with a reasonable fee for AIRSOPURE's expenses in so acting, shall be payable by You immediately upon notice. AIRSOPURE is not a licensed insurance agent or agency.
12. TRANSFER OF INTEREST
12.01. Transfer by AIRSOPURE
A. AIRSOPURE shall have the right to transfer or assign all or any part of its rights or obligations in this Agreement to any person or legal entity. AIRSOPURE may sell or assign any of its assets, including without limitation the Licensed Marks, the system or Products, to any person or legal entity without liability or obligation to You.
B. Nothing in this Agreement or otherwise shall obligate AIRSOPURE to remain in
the indoor air purification business in the event AIRSOPURE should exercise its right to assign this Agreement or its assets which are the subject of this Agreement to a third Party.
12.02. Transfer by You A. You agree that the rights and duties set forth in this Agreement are personal to You, and that AIRSOPURE has entered into this Agreement and granted the Franchise rights and license hereunder in reliance on Your business skill, financial capacity, and character. Accordingly, You shall not sell, assign, transfer, convey, give away, mortgage or otherwise encumber any direct or indirect interest in the Franchise without the prior written consent of AIRSOPURE.
B. Any purported assignment or transfer, by operation of law or otherwise, not having the prior written consent of AIRSOPURE shall be null and void and shall constitute a material breach of this Agreement.
C. AIRSOPURE shall not unreasonably withhold its consent to a transfer of any interest in Your Franchise or in this Agreement if the following conditions have been met:
1. All of Your accrued monetary and other
10
obligations to AIRSOPURE and its subsidiaries, affiliates and suppliers shall have been satisfied;
2. You shall not be in default of any provisions of this Agreement or any other agreement between You and AIRSOPURE or its affiliates or suppliers;
3. You shall have executed a general release, in a form satisfactory to AIRSOPURE, of any and all claims against AIRSOPURE and its officers, directors, shareholders and employees.
4. You shall remain liable for all obligations to AIRSOPURE in connection with the Franchise prior to the effective date of the transfer;
5. The transferee shall enter into a written assignment in a form satisfactory to AIRSOPURE assuming and agreeing to discharge all of Your obligations under this Agreement;
6. The transferee shall demonstrate to AIRSOPURE's satisfaction that the transferee meets AIRSOPURE's then existing requirements and qualifications for the granting of an AIRSOPURE Franchise;
7. The transferee shall execute for a term ending on the expiration date of this Agreement the standard form franchise agreement then being offered to new franchisees and such other ancillary agreements and documents as AIRSOPURE may then require for the Franchise, which may include changes in required fee payments or other terms;
8. The transferee shall agree to upgrade the Franchise to conform to the then current standards and specifications for AIRSOPURE franchises;
9. Transferee and its employees shall complete such training programs as AIRSOPURE may reasonably require, at the transferee's expense;
10. You shall pay AIRSOPURE a transfer fee of $1000.00 to cover AIRSOPURE's administrative expenses in connection with the transfer.
12.03. Right of First Refusal
In the event You desire to sell the AIRSOPURE Center and Franchise rights and license granted herein, or any part of Your stock interest in a corporation that has been granted such rights, and receives a bona fide acceptable offer in writing, You agree to notify AIRSOPURE in writing of the terms and conditions of such offer. AIRSOPURE shall have the option, within 15 days after receipt of such written notice, to notify You that AIRSOPURE elects to purchase the rights and license granted herein or stock ownership on the same terms and conditions as the bona fide written offer. You agree to sell to AIRSOPURE on the same terms and conditions as the bona fide offer and to comply with all applicable laws relating to bulk transfers of assets. If AIRSOPURE fails to notify You of its election to exercise its right of first refusal granted herein within the thirty day period, then You may sell the franchise rights and license or the stock for the amount of the bona fide offer, subject to AIRSOPURE's rights under Section 12.02 above. Any material change in the terms or conditions of any offer prior to closing shall constitute a new offer subject to AIRSOPURE's right of first refusal described herein. If You fail to consummate the transaction within 30 days from the earlier of: (a) receipt of notice from AIRSOPURE that it elects not to exercise its right of first refusal, or (b) expiration of the 15 day period referred to herein, then You must resubmit the proposed transaction to AIRSOPURE, and AIRSOPURE shall have a new 15 day review period and right of first refusal.
12.04. Transfer Upon Death or Mental Incapacity Upon Your death or mental incapacity, or a person owning all or controlling interest in Your Franchise, AIRSOPURE shall consent to the transfer of such interest to Your spouse or heirs provided, in AIRSOPURE's sole determination, such person(s) meet AIRSOPURE's then existing requirements and qualifications for the granting of an AIRSOPURE Franchise. If the said transfer
11
shall not be approved by AIRSOPURE, Your executor, administrator or personal representative shall transfer Your interest to a third Party approved by AIRSOPURE within 6 months after Your death or the determination of Your mental incapacity. If Your interest is not disposed of within 6 months after such death or mental incapacity, AIRSOPURE may terminate this Agreement.
12.05. Operation of Franchise by AIRSOPURE In order to prevent any interruption in the business that would cause harm to the Franchise or AIRSOPURE, You authorize AIRSOPURE, at its option but not its obligation, in the event that You are absent or incapacitated by reason of illness, death or otherwise and are not, in AIRSOPURE's sole judgment, able to operate the Franchise for any extended period of time, to operate and manage the Franchise for so long as AIRSOPURE deems necessary, without waiving any of AIRSOPURE's other rights and remedies under this Agreement. All monies from the operation of the Franchise during such period of operation by AIRSOPURE shall be kept in a separate account, and the expenses of AIRSOPURE during such period for operating the Franchise, including reasonable compensation of AIRSOPURE and its employees or representatives, shall be charged to such account. You agree to save harmless and fully indemnify AIRSOPURE and its employees and representatives for and against all claims, losses or actions in connection with the operation and management of the Franchise hereunder.
12.06. Non-Waiver of Claims AIRSOPURE's consent to a transfer of any interest in the Franchise granted herein shall not constitute a waiver of any claims it may have against You, nor shall it be deemed a waiver of AIRSOPURE's right to demand exact compliance with any of the terms of this Agreement by the transferee.
13. CONFIDENTIAL INFORMATION
13.01 You shall not, during the term of this Agreement or thereafter, communicate, divulge, or use for the benefit of any other person or entity any confidential information, knowledge, or know-how concerning AIRSOPURE's system, the Products or the operation of the Franchise, including without limitation the Operations Manual. You shall divulge such confidential information only to such of Your employees or agents as must have access to it in order to operate the Franchise. Any and all information, trade secrets, knowledge, know-how, or other data concerning AIRSOPURE's system, the Products or which AIRSOPURE designates as confidential shall be deemed confidential for purposes of this Agreement, except information which You can demonstrate came to Your attention prior to disclosure thereof by AIRSOPURE, or which, at or after the time of disclosure by AIRSOPURE to You, had become or later becomes a part of the public domain, through publication or communication by others. You agree to use such proprietary information of AIRSOPURE only for operation of the Franchise Business.
13.02. You acknowledge that the provisions of this Section 13 are and have been a primary inducement to AIRSOPURE to enter into this Agreement, and that any failure to comply with the requirements of Section 13.01 will cause AIRSOPURE irreparable injury without an adequate remedy at law; and You agree to pay all court costs and reasonable attorneys' fees incurred by AIRSOPURE in obtaining specific performance of, or an injunction against any violation of, the requirements of Section 13.01.
14. DEFAULT AND TERMINATION
14.01. AIRSOPURE may, at its option, terminate this Agreement and all rights granted hereunder, without affording You any opportunity to cure the defaults, effective immediately upon receipt of notice by You, upon the occurrence of any of the following:
A. You become insolvent or makes a general assignment for the benefit of creditors; or if a
12
petition in bankruptcy is filed by You or such a petition is filed against and consented to by You; or if You are adjudicated a bankrupt; or if You are unable to pay commercial debts as they become due.
B. You (or a principal shareholder if the Franchisee is a corporation) is convicted of a felony or any other crime or offense that is reasonably likely, in the sole opinion of AIRSOPURE, to adversely affect the goodwill or reputation of AIRSOPURE or the Licensed Marks.
C. A judgment or consent decree is entered against You (or a principal shareholder if the Franchisee is a corporation) in a case involving allegations of fraud, racketeering, unfair or deceptive trade practices or similar allegations which, in AIRSOPURE's judgment, are likely to adversely affect AIRSOPURE, its Products, the Licensed Marks or the goodwill associated therewith.
D. You or any partner or shareholder in You transfers any rights or obligations under this Agreement or any interest in You or in the Franchise to any third Party without AIRSOPURE's prior written consent.
E. You intentionally disclose the contents of the Operations Manual or&bbsp;other trade secrets or confidential information provided to You by AIRSOPURE to any unauthorized person or fails to exercise reasonable care to prevent such disclosure.
F. You maintain false books or records of the Franchise or knowingly make any material false statements or omission to AIRSOPURE in connection with Your
application for the franchise granted herein or in connection with any reports submitted to AIRSOPURE, including without limitation the understatement of gross sales by more than 2%.
G. You fail to commence business within 4 months following the execution of this Agreement.
H. You (and Your manager) fail to attend any scheduled training program which AIRSOPURE has indicated is mandatory.
I. You operate the Franchise in such a manner which causes a threat or danger to public health or safety.
J. You receive 3 or more notices of default of this Agreement from AIRSOPURE for violations under Section 14.02 hereof.
14.02. Except for violations of this Agreement listed in Section 13.01 above, or violations specifically provided for elsewhere in this Agreement, You shall have 30 days from receipt from AIRSOPURE of a written Notice of Termination (citing the reason(s) therefor) within which to remedy any default listed in this Section 13.02, or any other violation of this Agreement.
A. You fail to pay promptly any monies owing to AIRSOPURE or its subsidiaries or affiliates when due, or to submit the financial information or reports required by AIRSOPURE under this Agreement.
B. You fail to meet or comply with any standards, specifications or procedures prescribed by AIRSOPURE in this Agreement, the Operations Manual or otherwise specified in writing from time to time by AIRSOPURE.
C. You are convicted, plead guilty or enter into a consent agreement for violation of any federal, state or local law, ordinance, rule or regulation that is reasonably likely, in the sole opinion of AIRSOPURE, to materially and unfavorably affect the Franchise or AIRSOPURE, the Licensed Marks or the goodwill associated therewith.
D. You misuse or make any unauthorized use of the Proprietary Marks or otherwise impairs the
13
goodwill associated therewith or AIRSOPURE's rights therein.
E. You abandon the Franchise or fail to operate the Center during normal business hours without the consent in writing of AIRSOPURE.
F. You fail to submit advertising or promotional materials to AIRSOPURE for approval in writing prior to use.
14.03. No right or remedy of AIRSOPURE conferred herein shall be exclusive of any other right or remedy provided herein, at law or in equity, unless specifically provided otherwise in this Agreement or any amendment hereto.
14.04. In the event this Agreement is terminated by AIRSOPURE for violation of this Agreement by You, AIRSOPURE shall have the right, at its option, to purchase Your interest in the tangible assets of the Franchise at their fair market value.
15. OBLIGATIONS UPON TERMINATION
15.01. Upon termination or expiration of this Agreement, this Agreement and all rights granted hereunder to You shall immediately terminate, and:
A. You shall immediately cease to operate the Franchise and shall not thereafter, directly or indirectly, represent to the public or hold itself out as a present or former franchisee of AIRSOPURE.
B. You shall immediately and permanently cease to use, by advertising or in any other manner whatsoever, the Licensed Marks of AIRSOPURE, any other identifying characteristics or trade dress of the system, and all confidential methods, procedures and techniques associated with the Franchise.
C. You shall take such action as may be necessary to cancel any assumed name or equivalent registrations or listings in telephone or other directories which contain the names or Licensed Marks of AIRSOPURE, and You shall furnish AIRSOPURE with evidence satisfactory to AIRSOPURE of compliance with this obligation within 30 days after termination or expiration of this Agreement.
D. You shall promptly pay all sums owing to AIRSOPURE and its subsidiaries and affiliates, including all damages, costs and expenses, including reasonable attorneys' fees, incurred by AIRSOPURE as a result of the default.
E. You shall pay to AIRSOPURE all damages, costs and expenses, including reasonable attorneys' fees, incurred by AIRSOPURE subsequent to the termination or expiration of the Franchise herein granted in obtaining injunctive or other relief for the enforcement of any provisions of this Agreement.
F. You shall immediately turn over to AIRSOPURE the Operations Manual, records, files, instructions, software, correspondence, and all other materials provided by AIRSOPURE related to the operation of the Franchise, and all copies thereof (all of which are acknowledged to be AIRSOPURE's property), and shall retain no copy or record of any of the foregoing, except only Your copy of this Agreement and any correspondence between the Parties, and any other documents which You reasonably need for compliance with any applicable provision of law.
G. AIRSOPURE shall have the right, but not the duty, to be exercised by notice of intent to do so within 30 days after termination or expiration, to purchase any or all signs, advertising materials, supplies and inventory and any other items bearing AIRSOPURE's Licensed Marks, at Your cost or at fair market value, whichever is less. If the Parties cannot agree on the fair market value of such items, the Parties will select and share the expense of an independent appraiser to determine fair market value. With respect to any purchase by AIRSOPURE as provided herein, AIRSOPURE shall have the right to set off against the purchase price all amounts due from
14
You under this Agreement.
16. COVENANTS
16.01. You covenant and agree (or if Your Franchise is a corporation Your controlling shareholder agrees) to supervise and devote Your best efforts to manage and operate the Franchise.
16.02. You acknowledge that, pursuant to this Agreement, You will receive valuable specialized training and confidential and proprietary information of AIRSOPURE, including, without limitation, information regarding the operational, sales, promotional, and marketing methods and techniques of AIRSOPURE and its system. You covenant and agree that during the term of this Agreement, and subject to the post-termination provisions contained herein, You shall not, except as otherwise approved in writing by AIRSOPURE, either directly or indirectly:
A. Divert or attempt to divert any business or customer of the Franchise to any competitor, or competing business, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to AIRSOPURE or the goodwill associated with the Licensed Marks and Products.
B. Employ or seek to employ any person who is at that time employed by AIRSOPURE or by another AIRSOPURE franchisee or induce such person to leave his or her employment.
C. Own, maintain, engage in, be employed by, advise, consult, assist, invest in or have any interest whatsoever in any business or entity which competes with or offers products or services which are the same or similar to those of AIRSOPURE or the Franchise.
16.03. You covenant and agree that You (or any shareholder if Your Franchise is a corporation) shall not, for a period of two years following termination of this Agreement for any reason, either directly or indirectly own, maintain, engage in, be employed by, advise, consult, assist, invest in or have any interest whatsoever in any business or entity which competes with or offers products or services which are the same or similar to those of AIRSOPURE or the Franchise within a radius of 25 miles of Your Exclusive Territory. In the event a court of competent jurisdiction should hold this covenant to be unreasonable or overly broad, the Parties agree to reduce the scope of such covenant to the maximum restriction permitted by law, and You agree to be bound by such less restrictive terms of this covenant. If requested by AIRSOPURE, You agree to obtain and provide to AIRSOPURE executed covenants containing terms equivalent to those contained herein from any employee of Yours who has received training from AIRSOPURE, and, if Your Franchise is a corporation, from any director or shareholder of Your corporation.
16.04. AIRSOPURE covenants and agrees that the restrictions set forth above in Paragraphs 16.02.C and 16.03 shall not apply to ownership by You of less than a 5% beneficial interest in the outstanding equity securities of any publicly traded corporation, provided that You are not an employee, consultant or director of such corporation.
16.05. You covenant and agree that its violation of any covenant contained herein would result in serious, immediate and irreparable injury to AIRSOPURE for which no adequate remedy at law will be available, and You consent, in addition to other remedies which may be available to AIRSOPURE, to the entry without opposition of an injunction prohibiting any conduct by You in violation of any covenant set forth herein.
17. INDEMNIFICATION
17.01. You agree to defend, indemnify and hold AIRSOPURE and its affiliates, directors, officers, employees and agents harmless from all claims, losses, lawsuits and expenses arising from or relating to the Franchise and Your operation thereof, except for: (i) any claims of infringement
15
from third Parties due to Your use of the Licensed Marks, provided that You have used the said Licensed Marks as authorized by AIRSOPURE; and (ii) claims alleging that Products sold or leased by You are defective.
17.02. AIRSOPURE agrees to defend, indemnify and hold You harmless from all claims, losses, lawsuits and expenses arising from or relating to: (i) any claims of infringement from third Parties due to Your use of the Licensed Marks, provided that You have used the Licensed Marks as authorized by AIRSOPURE; and (ii) claims alleging that Products sold or leased by You are defective.
18. GENERAL PROVISIONS
18.01. No failure of a Party to exercise any power reserved to it by this Agreement or to insist upon strict compliance by the other Party with any obligation or condition hereunder shall constitute a waiver of such Party's rights unless such waiver is in writing. Any waiver by either Party shall not constitute a waiver thereafter to demand exact compliance with any of the terms herein. Waiver by a Party of any particular default by the other Party shall not affect or impair such Party's rights with respect to any subsequent default of the same, similar or different nature; nor shall any delay, forbearance or omission of a Party to exercise any power or right arising out of any breach or default by the other Party of any of the terms, provisions, or covenants thereof, affect or impair such Party's right to exercise the same.
18.02. Unforeseen Events
Delays in the performance of any duties hereunder which are not the fault of and are beyond the ability of the Party to control, including without limitation fires, floods, natural disasters, acts of God, labor disputes, riots or other similar events, shall not constitute a default in the Party's performance of this Agreement, and the Parties agree to extend the time of performance for a reasonable period of time to allow for such delays.
18.03. The relationship between the Parties is that of independent contractors. No partnership, joint venture, employment or relationship of principal and agent is intended, and You may not commit or bind AIRSOPURE to any obligation whatsoever.
18.04. Any and all notices required or permitted under this Agreement shall be in writing and shall be delivered by any means which will provide evidence of the date received, to the respective Parties at the following addresses unless and until a different address has been designated by written notice to the other Party:
Notices to AIRSOPURE: Airsopure International Group, Inc. 15400 Knoll Trail, Suite 200 Dallas, Texas 75248 Attn: John Potter, President
Notices to You:
- --------------------------------
- --------------------------------
- --------------------------------
Any notice shall be deemed to have been given at the date and time it is received.
18.05. This Agreement and the documents referred to herein constitute the entire Agreement between AIRSOPURE and You concerning the subject matter hereof, and supersede all prior agreements, oral or written. No amendment, change or variance from this Agreement shall be binding on either Party unless executed by both Parties in writing.
18.06. Except as expressly provided to the contrary herein, each provision of this Agreement shall be considered severable; and if, for any reason, any provision herein is determined to be invalid under any law or by a court having valid jurisdiction, such shall not impair the operation of, or have any other effect upon, such other
16
provisions of this Agreement, and the latter shall continue to be given full force and effect and bind the Parties hereto, and the invalid provision shall be deemed not to be a part of this Agreement.
18.07. This Agreement takes effect upon its acceptance and execution by AIRSOPURE in the State of Texas, and shall be interpreted and construed under the laws of the State of Texas.
18.08. The Parties agree that any action brought by either Party against the other in any court, whether federal or state, shall be brought within the State of Texas in the judicial district in which AIRSOPURE has its principal place of business and do hereby waive all questions of personal jurisdiction or venue for the purpose of carrying out this provision.
18.09. If either Party is required to resort to legal process to enforce any provision of this Agreement, the prevailing Party will recover all costs, including reasonable attorneys fees, incurred in such legal proceeding.
18.10. You represent to AIRSOPURE that You have conducted an independent investigation of the business franchised hereunder and recognizes that the business venture contemplated by this Agreement involves business risks, and that its success will be largely dependent upon Your ability as an independent business person. AIRSOPURE expressly disclaims the making of, and You acknowledge that You have not received, any representation or guarantee, express or implied, as to the potential volume, profits or success of the business venture contemplated by this Agreement.
18.11. You acknowledge that You received a completed copy of this Agreement, the attachments hereto, if any, and agreements relating thereto, if any, at least 5
business days prior to the date on which this Agreement was executed. You further acknowledge that You have received the Offering Circular, as required by the Federal Trade Commission, at least 10 business days prior to the date on which this Agreement was executed.
18.12. This Agreement contains various headings, but it is agreed that such headings are for convenience only and shall not affect the meaning of the provisions of this Agreement.
18.13. You acknowledge that You have read and understood this Agreement, the attachments hereto, if any, and agreements relating thereto, if any, and that AIRSOPURE has accorded You ample time and opportunity to consult with advisors of Your own choosing about the potential benefits and risks of entering into this Agreement.
19. APPLICABLE LAW AND MEDIATION
A. THE PARTIES AGREE TO SUBMIT ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT (AND ATTACHMENTS) OR THE RELATIONSHIP CREATED BY THIS AGREEMENT TO NON-BINDING MEDIATION PRIOR TO BRINGING SUCH CLAIM, CONTROVERSY OR DISPUTE IN A COURT. THE MEDIATION SHALL BE CONDUCTED THROUGH EITHER AN INDIVIDUAL MEDIATOR OR A MEDIATOR APPOINTED BY A MEDIATION SERVICES ORGANIZATION OR BODY, EXPERIENCED IN THE MEDIATION OF DISPUTES IN THE AIR PURIFICATION SERVICE BUSINESS, AGREED UPON BY THE PARTIES AND, FAILING SUCH AGREEMENT WITHIN A REASONABLE PERIOD OF TIME AFTER EACH PARTY HAS NOTIFIED THE OTHER OF ITS DESIRE TO SEEK MEDIATION OF ANY CLAIM CONTROVERSY OR DISPUTE (NOT TO EXCEED 15 DAYS), THROUGH THE AMERICAN ARBITRATION ASSOCIATION IN ACCORDANCE THE RULES GOVERNING MEDIATION, AT AIRSOPURE CORPORATE HEADQUARTERS IN DALLAS, TEXAS. THE COSTS AND EXPENSES OF MEDIATION, INCLUDING COMPENSATION AND EXPENSES OF THE MEDIATOR, SHALL BE BORNE BY THE PARTIES EQUALLY. IF THE PARTIES ARE UNABLE TO RESOLVE THE CLAIM, CONTROVERSY OR DISPUTE 90 DAYS
17
AFTER THE MEDIATOR HAS BEEN APPOINTED, THEN EITHER PARTY MAY SUBMIT SUCH CLAIM, CONTROVERSY OR DISPUTE TO A COURT IN ACCORDANCE WITH SECTION 19.B. BELOW NOTWITHSTANDING THE FOREGOING, EITHER PARTY MAY BRING AN ACTION (1) FOR MONEYS OWED, (2) FOR INJUNCTIVE RELIEF, OR (3) INVOLVING THE POSSESSION OR DISPOSITION OF, OR OTHER RELIEF RELATING TO, REAL PROPERTY IN A COURT HAVING JURISDICTION AND IN ACCORDANCE WITH SECTION 19.B. BELOW, WITHOUT SUBMITTING SUCH ACTION TO MEDIATION.
B. WITH RESPECT TO ANY CLAIMS, CONTROVERSIES OR DISPUTES WHICH ARE NOT FINALLY RESOLVED THROUGH MEDIATION, YOU HEREBY IRREVOCABLY SUBMIT YOURSELF TO THE NONEXCLUSIVE JURISDICTION OF THE STATE COURTS OF DALLAS COUNTY, TEXAS AND THE FEDERAL DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, DALLAS DIVISION. YOU HEREBY IRREVOCABLY AGREE THAT SERVICE OF PROCESS MAY BE MADE UPON YOU IN ANY EACH PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE RELATIONSHIP CREATED BY THIS AGREEMENT BY ANY MEANS ALLOWED BY TEXAS OR FEDERAL LAW. VENUE FOR ANY SUCH LEGAL PROCEEDING SHALL BE DALLAS COUNTY, TEXAS; PROVIDED, HOWEVER WITH RESPECT TO ANY ACTION (1) FOR MONEYS OWED, (2) FOR INJUNCTIVE OR OTHER EXTRAORDINARY RELIEF OR (3) INVOLVING POSSESSION OR DISPOSITION OF; OR OFFER RELIEF RELATING TO, REAL PROPERTY, AIRSOPURE MAY BRING SUCH ACTION IN ANY STATE OR FEDERAL DISTRICT COURT WHICH HAS JURISDICTION. YOU HEREBY WAIVE ALL QUESTIONS OF PERSONAL JURISDICTION FOR TITLE PURPOSE OF CARRYING OUT THIS PROVISION. WITH RESPECT TO ALL CLAIMS, CONTROVERSIES, DISPUTES OR ACTIONS, THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED UNDER TEXAS LAW (EXCEPT FOR TEXAS CHOICE OF LAW RULES).
C. YOU AND AIRSOPURE ACKNOWLEDGE THAT THE PARTIES' AGREEMENT REGARDING APPLICABLE STATE LAW AND FORUM SET FORTH IN SECTION 19.B. ABOVE PROVIDE EACH OF THE PARTIES WITH THE MUTUAL BENEFIT OF UNIFORM INTERPRETATION OF THIS AGREEMENT AND ANY DISPUTE ARISING OUT OF THIS AGREEMENT OR THE PARTIES' RELATIONSHIP CREATED BY THIS AGREEMENT, EACH OF YOU AND AIRSOPURE FURTHER ACKNOWLEDGE THE RECEIPT AND SUFFICIENCY OF MUTUAL CONSIDERATION FOR SUCH BENEFIT.
D. YOU AND AIRSOPURE ACKNOWLEDGE THAT THE EXECUTION OF THIS AGREEMENT OCCURRED IN DALLAS, TEXAS AND FURTHER ACKNOWLEDGE THAT THE PERFORMANCE OF CERTAIN OBLIGATIONS OF YOU ARISING UNDER THIS AGREEMENT SHALL OCCUR IN DALLAS, TEXAS.
IN WITNESS WHEREOF, the Parties hereto have duly executed, sealed, and delivered this Agreement on the day and year first above written.
AIRSOPURE:
By: ---------------------------------
Title: ------------------------------
YOU:
By: ---------------------------------
Title: ------------------------------
18
EXHIBIT F
PERSONAL GUARANTEE
For value received, and in consideration of the execution by Airsopure International Group, Inc. ("Airsopure") of a Franchise Agreement with
- ---------------------------------------- ("Franchisee"), The undersigned
- ---------------------------------------- ("Guarantor") hereby unconditionally guarantees to Airsopure all indebtedness, obligations and liabilities, direct or indirect, matured or immatured, primary or secondary, certain or contingent, of Franchisee to Airsopure, now or hereafter owing or incurred. This Guarantee is an absolute, unconditional, unlimited and continuing guarantee of the full and punctual payment by Franchisee of the foregoing indebtedness, obligations and liabilities and not of their collectibility only. Upon any default by Franchisee in such full and punctual payment, the liabilities and obligations of the Guarantor hereunder shall, at Airsopure's option, become forthwith due and payable without demand or notice of any nature, all of which are expressly waived by the Guarantor.
Airsopure may deal with Franchisee in such manner as Airsopure in its sole discretion deems fit, and Guarantor gives to Airsopure full authority, in its sole discretion, to do any or all of the following things: a) extend credit, make loans and afford other financial accommodations to Franchisee at such times, in such amounts and on such terms as Airsopure may approve; b) vary the terms and grant extensions or renewals of any present or future indebtedness of Franchisee to Airsopure; c) grant time, waivers and other indulgences in respect thereto; d) vary, exchange, release or discharge, wholly or partially, or delay in or abstain from perfecting and enforcing any security or guaranty or other means of obtaining payment; e) accept partial payments from Franchisee; f) release or discharge, wholly or partially, any endorser or guarantor; g) compromise or make any settlement or other arrangement with Franchisee.
Guarantor waives notice of acceptance hereof or of any action taken or omitted by Airsopure in reliance hereon and any requirement that Airsopure be diligent or prompt in making demands hereunder, giving notice of any default by Franchisee or asserting any other right hereunder.
No provision of this Guaranty can be changed, waived, discharged or terminated except by an instrument in writing signed by Airsopure and Guarantor, and no such waiver shall extend to, affect or impair any other right of Airsopure hereunder.
This Unlimited Guarantee shall inure to the benefit of Airsopure and its successors and assigns, and shall be binding on the Guarantor and the Guarantor's successors, heirs and assigns.
EXECUTED on this ____ day of ____________, 2000.
- ---------------------------------------- GUARANTOR
- ---------------------------------------- WITNESS
EXHIBIT G
CONFIDENTIALITY AGREEMENT
This Confidentiality and Noncompetition Agreement (the "Agreement") is made and entered into effective the _____day of ________________, 2000 by and between Airsopure International Group, Inc., a Nevada corporation, located at 15400 Knoll Trail, Suite 200, Dallas, Texas 75248 (the "Company") and
- ----------------------------------------------- who resides at
- -----------------------------------------------
- -----------------------------------------------
- -----------------------------------------------
- ----------------------------------------------- (the "Associate").
RECITALS
A. Company sells franchises for the operation of air purification system business which operate under the name and service mark "Airsopure" (the "Franchises");
B. Company has developed a business method for operating Franchises utilizing certain Information, plans, methods, data, processes, marketing systems, techniques, operating procedures, trademarks, designs, information and know how of Company (the "Confidential Information"), and such Confidential Information may be further developed from time to time by Company:
C. Company has established substantial goodwill and an excellent reputation with respect to the quality of services available, which goodwill and reputation have been and will continue to be of Major benefit to Company;
D. Associate is or will become involved with Company, or a franchise of Company, in the capacity of an officer, partner, director or as beneficial owner of an Airsopure Franchise or an employee of a Franchise, and will become privileged to certain Confidential Information; and
E. Associate and Company have reached an understanding with regard to nondisclosure by Associate of Confidential Information and Noncompetition by Associate with Company
NOW THEREFORE, in consideration of the foregoing, the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, Associate and Company, intending legally to be bound, hereby agree as follows:
1. CONFIDENTIAL INFORMATION. Associate and Company acknowledge that the business plan and methods used in connection with the operation of the Franchise which utilize Company's Confidential Information, are confidential, unique, constitute the exclusive property of Company and are trade secrets of Company. Associate acknowledges that any disclosure of the Confidential Information would be wrong and would cause irreparable injury and harm to Company. Associate further acknowledges that Company has expended a great amount of effort and money in obtaining and developing the Confidential Information, the Company has taken numerous precautions to guard the secrecy of the Confidential Information and that it would be very costly for competitors to acquire or duplicate the Confidential Information.
2. OPERATIONS MANUAL AS TRADE SECRET It is understood that Confidential Information, constituting "trade secret", as used in this Agreement is deemed to include, without initiation, any and all information contained in the Franchise Operations Manual, which may be provided AS one or more separate manuals, or written instructional guides, as the same are changed or supplemented from time to time, and any information of whatever nature which gives to Company an opportunity to obtain an advantage over its competitors who do not have access to, know or use such lists, written materials or information.
3. CONFIDENTIAL INFORMATION. Associate shall not at any time, publish, disclose, divulge or in any manner communicate to any person, firm' corporation, association. partnership or any other entity whatsoever or use, directly or indirectly, for its own benefit or for the benefit of any Person, firm, corporation or other entity, other than the use of Company, any of the Confidential Information of Company or its Affiliates.
4. NO INTERFERENCE WITH BUSINESS. During the term of this Agreement, neither Associate nor any member of his or her immediate finally shall divert or attempt to divert: I) any business related to, or any customer or prospective customer of; the Franchise by direct inducement or otherwise, or 2) the employment of Company or another franchisee licensed by Company,
1
to any Competitive Business by any direct inducement or otherwise.
5. REMEDIES. Associate hereby acknowledges and agrees that in the event of any violations of this Agreement, Company shall be authorized and entitled, without posting a bond to obtain from any court of competent jurisdiction, preliminary and permanent injunctive relief as well as an equitable accounting of all profits or benefits arising out of any such violation, which rights and remedies shall be cumulative and in addition to any rights or remedies to which Company may be entitled.
6. EFFECT OF WAVIER. The waiver by Associate or company of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach thereof
7. BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit of Associate and Company and their respective heirs, executors, representatives successors and assigns.
8. ENTIRE AGREEMENT. This instrument contains the entire agreement of Associate and Company relating to the matters set forth here It may not be changed orally, but only by an agreement in writing, signed by the party against whom enforcement of any waiver, change modification, extension or discharge is sought.
9. GOVERNING LAW. This instrument shall be governed by and construed under the laws of the State of Texas.
10. JURISDICTION AND VENUE. In the event of a breach or threatened breach by Associate of this Agreement, Associate hereby irrevocably submits to the jurisdiction of the State District Court in Dallas County, Texas and the Federal District Court for the Northern District of Texas, and irrevocably agrees that venue for any action or proceeding shall be in Dallas County, Texas. Notwithstanding the foregoing, in the event that the laws of the state where, Associate resides require that the jurisdiction or venue be elsewhere, then such other states laws shall control. but only to the extent that such other state's laws so require.
11. SEVERABILITV. Should anyone or more of the provisions hereof be determined to be illegal or unenforceable, all other provisions hereof shall be given separately therefrom and shall not be affected thereby.
12. COST OF ENFORCEMENT. In any action at law or in equity to enforce any of the provisions or rights under this Agreement, the unsuccessful party in such
litigation as determined by the court in a final judgment or decree, shall pay the successful party or parties all costs, expenses and reasonable attorney's fees incurred therein by such arty or parties (including without Initiation such as costs, expenses and fees on any appeals), plus, if applicable, interest at the highest rate allowable by law, accruing from the date of the breach of this Agreement. If such successful party shall recover judgement in any such action or proceeding, such costs, expenses. attorney's fees and interest shall be included as part of such judgment.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement on the date first above written.
FOR AIRSOPURE (COMPANY):
- --------------------------------------------
FOR FRANCHISEE OF AIRSOPURE:
- --------------------------------------------
ASSOCIATE OF FRANCHISEE:
- --------------------------------------------
ASSOCIATE'S WORK CAPACITY:
- --------------------------------------------
2 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | [LOGO]
EXHIBIT C
AIRSOPURE FRANCHISE AGREEMENT
THIS AGREEMENT is entered into on this ____ day of ___________, 2000, by and between Airsopure International Group, Inc., a Nevada corporation whose principal place of business is located at 15400 Knoll Trail, Suite 200, Dallas, Texas 75248 (hereinafter "AIRSOPURE" or by reference "we", "us", "our"), and You: , ------------------------------------ whose address is:
- ----------------------------------------
- ---------------------------------------- (hereinafter "You" or by reference "Franchisee", or "Your"). Either Party or both Parties respectively may be referred to as "Party" or "Parties."
RECITALS
A. AIRSOPURE and its affiliate design, manufacture and distribute indoor air cleaning systems under the name and mark "AIRSOPURE" (the "Products").
B. AIRSOPURE has developed a system for the establishment, development and operation of sales centers ("AIRSOPURE Center(s)" or "Center(s)") for the sale and servicing of AIRSOPURE's exclusive line of Products using the service mark "AIRSOPURE" and other trademarks, service marks (including but not limited to, "The Essence of Clean Air"), logos and identifying features designated from time to time by AIRSOPURE (the "Licensed Marks") and using AIRSOPURE's distinctive methods for establishing and operating AIRSOPURE Centers.
C. You desire to establish an AIRSOPURE Center to be located in the following geographic area:
- ----------------------------------------
- ----------------------------------------
(the "Exclusive Territory"), and AIRSOPURE desires to grant You the right to operate an AIRSOPURE Center at such location under the terms and conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the mutual rights, covenants and obligations set forth herein, the Parties agree as follows:
1. GRANT OF FRANCHISE
1.01. AIRSOPURE grants to You, and You accept from AIRSOPURE, the right and license to operate an AIRSOPURE Center (or the "Franchise") for the sale or lease of AIRSOPURE's exclusive line of Products or at a location in the Exclusive Territory to be approved in writing by AIRSOPURE and listed in attached Exhibit A (the "Exclusive Territory and Center Location"), to purchase Products from AIRSOPURE or its affiliates for resale at the Center to customers in the Exclusive Territory, and to use the Licensed Marks only in connection with the operation of the Franchise in accordance with the terms and conditions of this Agreement. AIRSOPURE grants the Franchise to You hereunder in reliance upon Your agreement to at all times operate and manage the Franchise faithfully, honestly and diligently in strict conformance with AIRSOPURE's operating procedures and specifications, as set forth herein and as otherwise from time to time communicated to You, using Your best efforts to promote and enhance the performance and operation of the Franchise.
1.02. AIRSOPURE hereby grants to You the exclusive right to solicit customers for the Products by direct mail advertising, or other approved means, but not including the World Wide Web (Internet) nor by printed catalogues, in
1
the Exclusive Territory described above and in Exhibit A. Other AIRSOPURE franchisees will not be permitted to solicit customers for Products by advertising in Your Exclusive Territory. Likewise, You may not target or solicit customers for Products by advertising in other Franchisees respective Exclusive Territories. Exclusive Territories will not overlap into other Exclusive Territories. You shall not purposely solicit sales and service to customers located outside Your Exclusive Territory, provided such activity in not within an assigned Exclusive Territory. You have been granted an exclusive trade area by this Agreement.
2. TERM AND RENEWAL
2.01. The term of this Agreement shall be for 10 years commencing on the date of execution of this Agreement by AIRSOPURE.
2.02. At the expiration of the term or any renewal term hereof, You may, at its option, renew the Franchise granted hereunder for 2 additional terms of 10 years each on the following terms and conditions:
A. You shall give AIRSOPURE notice in writing of Your election to renew this Agreement at least 3 months prior to the expiration of the then-current term.
B. You shall not be in default of any provision of this Agreement or amendment hereto, including without limitation all payment obligations to AIRSOPURE and its affiliates.
C. As a condition of renewal of the Franchise, You agree to execute AIRSOPURE's then-current form of franchise agreement and to comply fully with all terms and conditions thereof, and to pay AIRSOPURE the then-current renewal fee, which is presently $1,000.00. You understand that AIRSOPURE may revise its franchise agreement for any renewal term, at AIRSOPURE's sole discretion, including without limitation to increase the royalty fees or other fees payable by You or to require other obligations of franchisees.
D. You shall meet AIRSOPURE's then-current qualifications and training requirements.
E. You shall execute a general release in a form prescribed by AIRSOPURE releasing AIRSOPURE and its affiliates, directors, officers, employees and agents from all known and unknown claims and liabilities to the extent permitted by state and federal law.
F. You may be required, at AIRSOPURE's sole discretion, to upgrade or remodel Your AIRSOPURE Center to conform to AIRSOPURE's then-current specifications and standards as specified in AIRSOPURE's Operating Manual of otherwise in writing, provided such upgrade or remodel is reasonable in terms of cost and implementation schedule.
3. FEES
3.01. In consideration of the Franchise rights and license granted herein, You agree to pay to AIRSOPURE the following fees:
A. You shall pay to AIRSOPURE an initial franchise fee of $25,000.00 upon execution of this Agreement. You agree that the initial franchise fee represents payment for the initial grant of the Franchise rights and license granted herein, shall be fully earned upon execution of this Agreement, and the said fee will not be refunded under any circumstances unless otherwise specifically set forth herein. You must find a suitable Center site within 90 days of signing the Franchise Agreement, unless we mutually agree otherwise. If we cannot agree on a Center location, within 4 months, we may a) extend your search time, b) exchange your territory, or c) terminate your Franchise and refund up to 70% of your Franchise Fee, at our sole discretion. There are no refunds under any other circumstances.
B. You shall pay to AIRSOPURE a continuing non-refundable royalty fee on a monthly basis of
2
5% of Your total monthly gross sales, as defined below. This fee is due by the 7th of the month for the preceding month.
C. You shall account to AIRSOPURE for Your continuing non-refundable local advertising fee of 2% of Your total monthly gross sales, which You must spend on the promotion of Your Center. This accounting is due by the 7th of the month for the preceding month.
D. You shall pay to AIRSOPURE a continuing non-refundable Advertising Fund fee of 2% of Your total monthly gross sales, beginning January 1, 2001, or later at our sole option, as described in Section 10 hereof. This fee will be due by the 7th of the month for the preceding month.
E. "Gross sales" as used in this Section 3.01 shall mean the amount of gross revenues received by You from all sources, including without limitation sales of Products, services or other merchandise of every kind or nature from, at or in connection with the operation of the AIRSOPURE Center granted herein, excluding state, federal or local sales taxes collected from customers and paid to the appropriate taxing authority.
F. Fees payable under Paragraphs 3.01.B and 3.01.D above shall be due and payable monthly by the seventh day of each month, based on Your gross sales of the previous month. Delinquent fees shall bear interest at a rate of the lower of: (i) one and one-half percent (1.5%) per month, or (ii) the maximum rate permitted by applicable law.
4. DUTIES OF AIRSOPURE
4.01. Prior to the opening of the Franchise, AIRSOPURE shall:
A. Following receipt in writing from You of a request for approval of at least 3 possible locations as the Authorized Location for the Franchise, AIRSOPURE will promptly evaluate such locations and notify You in writing of its approval or rejection of such location(s) within 7 working days.
B. Provide You with AIRSOPURE's specifications and requirements or other assistance deemed necessary by AIRSOPURE to assist You in opening the Center.
C. Provide an initial training program for 2 people to be designated by You as described in AIRSOPURE's Operations Manual.
D. Provide one copy, on loan to You, of AIRSOPURE's Operations Manual as described in Section 8 hereof for use solely in connection with operation of the
AIRSOPURE Center granted hereunder.
E. Sell to You an opening order of Products for resale or lease at the Franchise as described in Paragraph 6.01 below.
4.02. Following the opening of the Franchise, AIRSOPURE shall:
A. Provide daily consultation by telephone as reasonably requested by You during the first two weeks of operation of the AIRSOPURE Center Franchise.
B. Provide continuing general advisory assistance as deemed necessary by AIRSOPURE regarding the operation and advertising of the Franchise.
C. Provide updates, revisions and amendments to the AIRSOPURE Operating Manual and system as AIRSOPURE may from time to time deem necessary or desirable.
D. Fill Your orders for Products for resale at the Franchise in accordance with Section 6 below.
E. Provide training programs or seminars as AIRSOPURE may, from time to time in its sole discretion, deem appropriate. AIRSOPURE's training programs for franchisees is described in AIRSOPURE's Operations Manual, and is subject to change at any time in AIRSOPURE's sole
3
discretion.
F. AIRSOPURE may, from time to time at its sole discretion, provide test customers or store visits by AIRSOPURE representatives to evaluate Your methods of operation and compliance with AIRSOPURE's standards and specifications.
5. YOUR DUTIES
5.01. You shall: A. You must find a suitable Center site within 90 days of signing the Franchise Agreement, unless we mutually agree otherwise, and attend (or if You are a corporation, Your majority shareholder will attend or Your Operating Principal or manager and one other employee) and successfully complete to AIRSOPURE's reasonable satisfaction AIRSOPURE's initial training program within 90 DAYS following execution of this Agreement.
B. Obtain all federal, state and local business licenses, permits, certifications and bonds required for lawful operation of the Franchise and certify in writing to AIRSOPURE prior to opening that all such requirements have been obtained.
C. Attend (with Your manager) and complete to AIRSOPURE's reasonable satisfaction such continuing training or educational programs as AIRSOPURE may from time to time require in writing. AIRSOPURE will not charge You for the training programs, but You shall be responsible for the costs of meals, lodging, travel and all other expenses incurred by You or Your employees in attending such programs.
D. Actively promote AIRSOPURE's Products and services and exert Your best efforts to fully develop and maximize the market for AIRSOPURE's Products and services in Your Exclusive Territory.
E. Devote Your full time (or if You are a corporation, designate a manager) to oversee the management and operation of the Center.
F. Purchase and maintain and adequate supply for use in connection with the operation of the Franchise Business various copyrighted materials and forms which are the proprietary property of AIRSOPURE and which are an integral part of AIRSOPURE's system franchised hereunder. Other supplies and equipment necessary for operation of the Center may be purchased from third Party suppliers who meet AIRSOPURE's standards and specifications and have been approved in writing by AIRSOPURE in accordance with the procedures set forth in AIRSOPURE's Operating Manual, which may be amended from time to time by AIRSOPURE at its sole discretion.
G. Purchase Products from AIRSOPURE for resale to customers in the Exclusive Territory in accordance with Section 6 below.
H. Comply with all federal, state and local health and safety laws, rules and standards applicable to operation of the Franchise. You will forward copies of all notices of non-compliance by the Franchise with any law, rule, regulation or ordinance to AIRSOPURE within three days from receipt thereof accompanied by a summary of action You will take to comply.
I. Maintain adequate working capital to operate the Franchise in accordance with the AIRSOPURE Operations Manual, as such may be amended by AIRSOPURE from time to time.
J. Operate the Franchise in strict conformance with AIRSOPURE's policies, procedures, standards and specifications as may be prescribed by AIRSOPURE from time to time in the Operations Manual or otherwise in writing, including without limitation all changes specified by AIRSOPURE to its system or Products. .
K. Display AIRSOPURE's Licensed Marks or logos on all marketing materials and at Your AIRSOPURE Center. AIRSOPURE reserves the
4
right to alter or change its Licensed Marks, logos or trade dress at any time, and You agree to use such Licensed Marks, logos or trade dress as specified from time to time by AIRSOPURE promptly upon receipt of notice in writing from AIRSOPURE.
L. Maintain and supply to third Parties upon request information to be supplied by AIRSOPURE regarding the availability of franchises.
M. Provide AIRSOPURE and its representatives with unlimited access to FRANCHISEE'S offices or its AIRSOPURE Center (personal residence excluded), including Your books, computer system (for sales and products only, unless we are auditing You) and records of the Franchise, during normal business hours for purposes of conducting inspections to fully examine and evaluate Your methods of doing business, including interviews with Your employees and customers.
N. You acknowledge and agree that such inspections and evaluations are necessary for AIRSOPURE to insure the maintenance of its quality standards, and You agree to fully cooperate with any reasonable request by AIRSOPURE in connection with such inspections and evaluations.
O. Diligently and immediately take such steps as are deemed reasonably necessary by AIRSOPURE to correct any deficiencies detected by AIRSOPURE in Your adherence to AIRSOPURE's operating policies, procedures, standards and specifications.
P. In the event You are a corporation, comply with the following:
1. You will provide in Your Articles of Incorporation that Your sole corporate purpose is the operation of the Franchise.
2. Every certificate for shares of stock in the corporation will include the following legend printed thereon if sole purpose of the corporation is to own and operate franchised business:
"THE TRANSFER, PLEDGE OR ASSIGNMENT OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND RESTRICTIONS CONTAINED IN A FRANCHISE AGREEMENT BETWEEN THE HOLDER OF THESE SHARES AND AIRSOPURE FRANCHISE GROUP, INC."
3. You agree to comply with the restrictions on transfer of ownership of the corporation set forth in Section 12.02 below.
4. You will provide AIRSOPURE, prior to the opening of the Franchise, with copies of Your Articles of Incorporation, Bylaws and other governing documents, including all amendments thereto, and a copy of the resolutions by Your Board of Directors authorizing execution of this Agreement, certified by the Secretary of the corporation.
5. You will provide AIRSOPURE with a current list of shareholders and will update such list from time to time as the list changes.
6. Each shareholder of the corporation (if sole corporate purpose is the franchise), will execute a personal guarantee of Your performance under this Agreement and all amounts owed by You to AIRSOPURE in the form of attached Exhibit B.
Q. The Parties recognize the importance of fully developing the market for Products in the Exclusive Territory, and a substantial part of the consideration for and inducement to AIRSOPURE to enter into this Agreement is Your agreement to devote Your best efforts to market, sell and support Products to customers located in Your Exclusive Territory. You agree to concentrate Your marketing efforts to customers located in Your Territory, and You agree not to advertise the Products using media or publications whose primary coverage area is outside Your Exclusive Territory.
5
R. You may relocate Your Center at Your sole expense, within Your Exclusive Territory, provided You give us written notification at least 30 days prior to relocation stating the reasons for such a move.
6. PURCHASE AND SALE OF PRODUCTS
6.01. You will purchase from AIRSOPURE and AIRSOPURE will sell to You for resale or lease at the Center to customers in the Exclusive Territory an opening order of Products having an aggregate cost to You of from $5,000.00 to $10,000.00, by mutual agreement, based on market conditions. Such purchase must be consummated in its entirety before You open Your Center, unless AIRSOPURE agrees in writing to extend such time period.
6.02. After the opening order contemplated by the preceding Paragraph, You will from time to time place orders for Products with AIRSOPURE on the following basis:
A. All orders for Products shall be accompanied by payment, unless at AIRSOPURE's sole discretion, other payment terms are permitted.
B. All orders will be shipped freight collect unless freight is paid in advance by You.
C. You will pay the prices then prevailing at the time AIRSOPURE receives each order. Such prices are subject to change at any time by AIRSOPURE.
D. All merchandise will be shipped to You at the Center for resale to customers
in the Exclusive Territory. You will sell Products only to end-user customers and not for resale. You will not sell or lease Products at any location other than within Your Exclusive Territory, engage in mail order sales of Products or supply Products to others for resale or lease at any other location.
E. All orders for Products are subject to availability. In the event any Product is in short supply, AIRSOPURE shall have the right to allocate such Product on an equitable basis.
F. You will not modify the Products, and You will not offer or carry any products or services other than AIRSOPURE's Products and services specified by AIRSOPURE without written approval from AIRSOPURE.
G. Notwithstanding nationally advertised prices by AIRSOPURE, You may resell Products purchased under this Agreement at prices set by You. However, AIRSOPURE retains the right, to the extent permitted by law, to refuse to fill Your orders for Products if You fail to honor AIRSOPURE's suggested prices for the same Products sold by other franchise owners in Your region.
7. LICENSED MARKS
7.01. AIRSOPURE represents with respect to the Licensed Marks that:
A. AIRSOPURE is the owner of all right, title and interest in and to the Licensed Marks or has the right and license to use and grant a license to You to use the said Licensed Marks.
B. AIRSOPURE will take all steps reasonably necessary to preserve and protect the ownership and validity in and to the Licensed Marks.
7.02. With respect to Your licensed use of the Licensed Marks pursuant to this Agreement, You agree that:
A. You shall use only the Licensed Marks designated by AIRSOPURE and shall use them only in the manner authorized and permitted by AIRSOPURE.
B. You shall use the Licensed Marks only for the operation of the Franchise at the Authorized Location.
6
C. During the term of this Agreement, You shall identify Yourself as the owner of the Franchise in conjunction with any use of the Licensed Marks, including, but not limited to, on invoices, order forms, receipts, business cards, contracts and at such conspicuous locations on the Center's premises or in the field as AIRSOPURE may specify. The identification shall be in a form which specifies Your name, followed by the term "Independent Franchise Owner" or such other identification as shall be approved by AIRSOPURE.
D. You shall not use the Licensed Marks to incur any obligation or indebtedness on behalf of AIRSOPURE, and You shall not represent that Your Center is owned, operated by or affiliated with AIRSOPURE other than as a franchisee.
E. You shall not use the Licensed Marks as part of Your corporate or other legal name, without the prior written consent of AIRSOPURE.
F. You shall file an assumed name registration, and shall execute any documents deemed necessary by AIRSOPURE to obtain protection for the Licensed Marks or to maintain their continued validity and enforceability.
7.03. You expressly understand and acknowledge that:
A. As between the Parties hereto, AIRSOPURE, by its trademark License Agreement with Airsopure, Inc. is the licensor of all right, title and interest in and to the Licensed Marks and the goodwill associated with and symbolized by them.
B. You shall not directly or indirectly contest the validity of the ownership of the Licensed Marks.
C. Your use of the Licensed Marks pursuant to this Agreement does not give You any ownership interest or other interest in or to the Licensed Marks.
D. Any and all goodwill arising from Your use of the Licensed Marks in the Franchise under AIRSOPURE's system shall inure solely and exclusively to the benefit of AIRSOPURE, and upon expiration or termination of this Agreement and the Franchise herein granted, no monetary amount shall be assigned as attributable to any goodwill associated with Your use of the Licensed Marks.
E. The right and license to use the Licensed Marks granted hereunder to You is nonexclusive, and AIRSOPURE may use and grant franchises to others to use the Licensed Marks in any manner except as expressly provided otherwise herein.
F. AIRSOPURE reserves the right to substitute different Licensed Marks for use in identifying the System and the businesses operating thereunder, and You agree to comply with AIRSOPURE's requirements relating thereto.
7.04. You shall promptly notify AIRSOPURE of any unauthorized use of the Licensed Marks or marks confusingly similar thereto, any challenge to the validity of the Licensed Marks, or any challenge to AIRSOPURE's ownership of, or Your right to use, the Licensed Marks. You acknowledge that AIRSOPURE has the sole right to direct and control any administrative proceeding or litigation involving the Licensed Marks, including any settlement thereof. AIRSOPURE has the right, but not the obligation, to take action against uses by others that may constitute infringement of the Licensed Marks.
7.05. Provided You have used the Licensed Marks in accordance with this Franchise Agreement and AIRSOPURE's Operations Manual, AIRSOPURE will defend You at AIRSOPURE's expense against any third Party claim, suit or demand involving the Licensed Marks and arising out of Your use thereof. In the event that You have not used the Licensed Marks in accordance with this Agreement, AIRSOPURE shall defend You, at Your expense, against such third Party claims, suits or demands.
7
7.06. In the event of any litigation or administrative proceeding relating to the Licensed Marks, You shall execute any and all documents and do all acts as may, in the opinion of AIRSOPURE, be necessary to carry out such defense or prosecution, including, but not limited to, becoming a nominal Party to any legal action. Except to the extent that such litigation is the result of Your use of the Proprietary Marks in a manner inconsistent with the terms of this Agreement, AIRSOPURE agrees to reimburse You for its out-of-pocket costs in performing such acts, except that You shall bear the salary costs of its employees, and AIRSOPURE shall bear the cost of any judgment or settlement.
8. OPERATIONS MANUAL
8.01. AIRSOPURE shall provide You with one copy of AIRSOPURE's Operations Manual covering the proper operating and marketing techniques and the standards and specifications for operation of the Franchise. You agree to fully comply with the Operations Manual in its entirety as an essential aspect of Your obligations under this Agreement. Failure to so comply shall be treated as a breach of this Agreement.
8.02. You shall at all times treat the Operations Manual, all supplements and revisions thereto, any other operations manual, brochure or memorandum created for or approved for use in the operation of the Franchise and the information contained therein as the confidential and proprietary information of AIRSOPURE, and shall use all reasonable efforts to maintain the confidentiality of such information. You shall not at any time, without AIRSOPURE's prior written consent, copy, duplicate, record, or otherwise reproduce the foregoing materials, in whole or in part, nor otherwise make the same available to any unauthorized person. You may disclose such information and materials only to such of Your employees or agents, or others who must have access to it in connection with their employment or the performance of this Agreement, in which event You shall obtain the agreement of such persons and entities to maintain the confidentiality thereof. The Operations Manual shall remain at all times the sole property of AIRSOPURE.
8.03. AIRSOPURE may from time to time revise the contents of the Operations Manual, and You expressly agree to comply with each new or changed standard, specification or procedure set forth therein. You shall at all times ensure that Your copy of the Operations Manual is kept current and up to date. In the event of any dispute as to the content of the Operations Manual, the terms of the master copy of the Operations Manual maintained by AIRSOPURE at AIRSOPURE's home office shall be controlling.
9. ACCOUNTING AND RECORDS
9.01. During the term of this Agreement, You shall maintain and preserve, for at least five years from the date of their preparation, full, complete, and accurate, books, records and accounts in the form and manner prescribed by AIRSOPURE from time to time in the Operations Manual or otherwise in writing.
9.02. You shall, at Your expense, submit to AIRSOPURE, by the 7th day of each month, a monthly statement on forms prescribed by AIRSOPURE accurately reflecting gross sales of the Franchise for the preceding calendar month. Each statement shall accompany Your monthly royalty and advertising fund fee payments and shall be signed by You attesting that it is true and correct.
9.03. You shall, at Your expense, submit to AIRSOPURE an annual financial statement for the Franchise, which includes an income statement prepared in accordance with generally accepted accounting principals, within 90 days of the end of each fiscal year during the term hereof. Each statement shall be signed by You attesting that it is true and correct.
9.04. You shall submit to AIRSOPURE for review and auditing such other forms, reports,
8
records, information and data, as AIRSOPURE may reasonably request in writing.
9.05. AIRSOPURE or its designated agents shall have the right at all reasonable times to examine and copy, at its expense, all books, records, receipts and tax returns of Yours related to the Franchise and, at its option, to have an independent audit made, and thereupon be allowed to search Your computer accounting files. If an inspection or audit should reveal that payments have been understated in any report to AIRSOPURE, then You shall immediately pay to AIRSOPURE the amount understated upon demand, in addition to interest from the date such amount was due until paid, at the prime rate being charged by Bank of America on the date the payment was due plus 2%, or the maximum rate permitted by law, whichever is less. If an inspection discloses an underpayment to AIRSOPURE of 2% or more of the total amount that should have been paid to AIRSOPURE, You shall, in addition to repayment of such understated amount with interest, reimburse AIRSOPURE for any and all costs and expenses incurred in connection with the inspection or audit (including, without limitation,
reasonable accounting and attorneys' fees). The foregoing remedies shall be in addition to any other remedies AIRSOPURE may have, including without limitation, the remedies for default.
10. MARKETING AND ADVERTISING
10.01. You shall submit to AIRSOPURE for review prior to use samples of all advertising and promotional materials that have not been previously approved by AIRSOPURE. AIRSOPURE shall notify You of its approval or disapproval within 7 days or less from the date of receipt by AIRSOPURE of such materials. Failure by You to obtain the prior approval in writing of AIRSOPURE for all advertising and promotional materials shall be a violation of this Agreement.
10.02. AIRSOPURE has established an advertising fund (the "Fund") to build recognition of the Products and the Licensed Marks and to promote AIRSOPURE's Products and the Franchise. You shall participate in the Fund, in addition to Your obligation to conduct local advertising of the Franchise, on the basis described in Paragraph 3.01.D above.
10.03. AIRSOPURE will administer the Fund as follows:
A. The Fund shall be maintained in a separate bank account. Upon request by You, AIRSOPURE will provide an annual accounting of amounts spent from the Fund, including a reasonable allocation to cover AIRSOPURE's overhead expenses for administration and management of the Fund.
B. AIRSOPURE may allocate amounts held in the Fund at its discretion as AIRSOPURE deems appropriate. You are not guaranteed that any particular amount or percentage of the Fund will be spent in Your local market.
C. AIRSOPURE shall have the right to terminate the Fund at any time. However, the Fund will not be terminated until all moneys in the Fund have been expended for the purposes stated in Paragraph 10.02 above.
D. AIRSOPURE may from time to time amend its policies or establish new policies and procedures for administration of the Fund.
10.04. In addition to its monthly contribution to the Fund, You shall spend an amount equal to at least 2% of Your total monthly gross sales (as defined in Paragraph 3.01.C above) on local advertising in Your Exclusive Territory. You shall submit to AIRSOPURE a monthly report to accompany Your advertising fund fee and royalty fee payments accounting for and evidencing Your local advertising expenditures. Your local advertising shall comply with the procedures specified in Paragraph 10.01 above.
9
11. INSURANCE
11.01. You shall procure and maintain in full force and effect during the term of this Agreement, at Your expense, insurance policies written by an insurance company satisfactory to AIRSOPURE in accordance with standards and specifications set forth in the Operations Manual or otherwise by AIRSOPURE in writing. Such policies shall name AIRSOPURE as an additional insured and shall include, at a minimum:
A. Comprehensive general liability insurance in the amount of $1,000,000.00.
B. Comprehensive automobile liability insurance, including collision, comprehensive, medical and liability to satisfy state law requirements.
C. Additional coverage's and higher policy limits may be required from time to time by AIRSOPURE.
11.02. At least 7 days prior to the opening of the Center and on each policy renewal date thereafter, You shall submit to AIRSOPURE copies of all policies and policy amendments. The evidence of insurance shall include a statement by the insurer that the policy or policies will not be canceled or materially altered without at least 30 days prior written notice to AIRSOPURE.
11.03. Your obligation to obtain and maintain the foregoing policy or policies in the amounts specified shall not be limited in any way by reason of any insurance which may be maintained by AIRSOPURE, nor shall Your performance of that obligation relieve You of liability under the indemnity provisions set forth in Section 17 of this Agreement.
11.04. Should You, for any reason, fail to procure or maintain the insurance required by this Agreement, AIRSOPURE shall have the right and authority (without, however, any obligation to do so) immediately to procure such insurance and to charge same to You, which charges, together with a reasonable fee for AIRSOPURE's expenses in so acting, shall be payable by You immediately upon notice. AIRSOPURE is not a licensed insurance agent or agency.
12. TRANSFER OF INTEREST
12.01. Transfer by AIRSOPURE
A. AIRSOPURE shall have the right to transfer or assign all or any part of its rights or obligations in this Agreement to any person or legal entity. AIRSOPURE may sell or assign any of its assets, including without limitation the Licensed Marks, the system or Products, to any person or legal entity without liability or obligation to You.
B. Nothing in this Agreement or otherwise shall obligate AIRSOPURE to remain in
the indoor air purification business in the event AIRSOPURE should exercise its right to assign this Agreement or its assets which are the subject of this Agreement to a third Party.
12.02. Transfer by You A. You agree that the rights and duties set forth in this Agreement are personal to You, and that AIRSOPURE has entered into this Agreement and granted the Franchise rights and license hereunder in reliance on Your business skill, financial capacity, and character. Accordingly, You shall not sell, assign, transfer, convey, give away, mortgage or otherwise encumber any direct or indirect interest in the Franchise without the prior written consent of AIRSOPURE.
B. Any purported assignment or transfer, by operation of law or otherwise, not having the prior written consent of AIRSOPURE shall be null and void and shall constitute a material breach of this Agreement.
C. AIRSOPURE shall not unreasonably withhold its consent to a transfer of any interest in Your Franchise or in this Agreement if the following conditions have been met:
1. All of Your accrued monetary and other
10
obligations to AIRSOPURE and its subsidiaries, affiliates and suppliers shall have been satisfied;
2. You shall not be in default of any provisions of this Agreement or any other agreement between You and AIRSOPURE or its affiliates or suppliers;
3. You shall have executed a general release, in a form satisfactory to AIRSOPURE, of any and all claims against AIRSOPURE and its officers, directors, shareholders and employees.
4. You shall remain liable for all obligations to AIRSOPURE in connection with the Franchise prior to the effective date of the transfer;
5. The transferee shall enter into a written assignment in a form satisfactory to AIRSOPURE assuming and agreeing to discharge all of Your obligations under this Agreement;
6. The transferee shall demonstrate to AIRSOPURE's satisfaction that the transferee meets AIRSOPURE's then existing requirements and qualifications for the granting of an AIRSOPURE Franchise;
7. The transferee shall execute for a term ending on the expiration date of this Agreement the standard form franchise agreement then being offered to new franchisees and such other ancillary agreements and documents as AIRSOPURE may then require for the Franchise, which may include changes in required fee payments or other terms;
8. The transferee shall agree to upgrade the Franchise to conform to the then current standards and specifications for AIRSOPURE franchises;
9. Transferee and its employees shall complete such training programs as AIRSOPURE may reasonably require, at the transferee's expense;
10. You shall pay AIRSOPURE a transfer fee of $1000.00 to cover AIRSOPURE's administrative expenses in connection with the transfer.
12.03. Right of First Refusal
In the event You desire to sell the AIRSOPURE Center and Franchise rights and license granted herein, or any part of Your stock interest in a corporation that has been granted such rights, and receives a bona fide acceptable offer in writing, You agree to notify AIRSOPURE in writing of the terms and conditions of such offer. AIRSOPURE shall have the option, within 15 days after receipt of such written notice, to notify You that AIRSOPURE elects to purchase the rights and license granted herein or stock ownership on the same terms and conditions as the bona fide written offer. You agree to sell to AIRSOPURE on the same terms and conditions as the bona fide offer and to comply with all applicable laws relating to bulk transfers of assets. If AIRSOPURE fails to notify You of its election to exercise its right of first refusal granted herein within the thirty day period, then You may sell the franchise rights and license or the stock for the amount of the bona fide offer, subject to AIRSOPURE's rights under Section 12.02 above. Any material change in the terms or conditions of any offer prior to closing shall constitute a new offer subject to AIRSOPURE's right of first refusal described herein. If You fail to consummate the transaction within 30 days from the earlier of: (a) receipt of notice from AIRSOPURE that it elects not to exercise its right of first refusal, or (b) expiration of the 15 day period referred to herein, then You must resubmit the proposed transaction to AIRSOPURE, and AIRSOPURE shall have a new 15 day review period and right of first refusal.
12.04. Transfer Upon Death or Mental Incapacity Upon Your death or mental incapacity, or a person owning all or controlling interest in Your Franchise, AIRSOPURE shall consent to the transfer of such interest to Your spouse or heirs provided, in AIRSOPURE's sole determination, such person(s) meet AIRSOPURE's then existing requirements and qualifications for the granting of an AIRSOPURE Franchise. If the said transfer
11
shall not be approved by AIRSOPURE, Your executor, administrator or personal representative shall transfer Your interest to a third Party approved by AIRSOPURE within 6 months after Your death or the determination of Your mental incapacity. If Your interest is not disposed of within 6 months after such death or mental incapacity, AIRSOPURE may terminate this Agreement.
12.05. Operation of Franchise by AIRSOPURE In order to prevent any interruption in the business that would cause harm to the Franchise or AIRSOPURE, You authorize AIRSOPURE, at its option but not its obligation, in the event that You are absent or incapacitated by reason of illness, death or otherwise and are not, in AIRSOPURE's sole judgment, able to operate the Franchise for any extended period of time, to operate and manage the Franchise for so long as AIRSOPURE deems necessary, without waiving any of AIRSOPURE's other rights and remedies under this Agreement. All monies from the operation of the Franchise during such period of operation by AIRSOPURE shall be kept in a separate account, and the expenses of AIRSOPURE during such period for operating the Franchise, including reasonable compensation of AIRSOPURE and its employees or representatives, shall be charged to such account. You agree to save harmless and fully indemnify AIRSOPURE and its employees and representatives for and against all claims, losses or actions in connection with the operation and management of the Franchise hereunder.
12.06. Non-Waiver of Claims AIRSOPURE's consent to a transfer of any interest in the Franchise granted herein shall not constitute a waiver of any claims it may have against You, nor shall it be deemed a waiver of AIRSOPURE's right to demand exact compliance with any of the terms of this Agreement by the transferee.
13. CONFIDENTIAL INFORMATION
13.01 You shall not, during the term of this Agreement or thereafter, communicate, divulge, or use for the benefit of any other person or entity any confidential information, knowledge, or know-how concerning AIRSOPURE's system, the Products or the operation of the Franchise, including without limitation the Operations Manual. You shall divulge such confidential information only to such of Your employees or agents as must have access to it in order to operate the Franchise. Any and all information, trade secrets, knowledge, know-how, or other data concerning AIRSOPURE's system, the Products or which AIRSOPURE designates as confidential shall be deemed confidential for purposes of this Agreement, except information which You can demonstrate came to Your attention prior to disclosure thereof by AIRSOPURE, or which, at or after the time of disclosure by AIRSOPURE to You, had become or later becomes a part of the public domain, through publication or communication by others. You agree to use such proprietary information of AIRSOPURE only for operation of the Franchise Business.
13.02. You acknowledge that the provisions of this Section 13 are and have been a primary inducement to AIRSOPURE to enter into this Agreement, and that any failure to comply with the requirements of Section 13.01 will cause AIRSOPURE irreparable injury without an adequate remedy at law; and You agree to pay all court costs and reasonable attorneys' fees incurred by AIRSOPURE in obtaining specific performance of, or an injunction against any violation of, the requirements of Section 13.01.
14. DEFAULT AND TERMINATION
14.01. AIRSOPURE may, at its option, terminate this Agreement and all rights granted hereunder, without affording You any opportunity to cure the defaults, effective immediately upon receipt of notice by You, upon the occurrence of any of the following:
A. You become insolvent or makes a general assignment for the benefit of creditors; or if a
12
petition in bankruptcy is filed by You or such a petition is filed against and consented to by You; or if You are adjudicated a bankrupt; or if You are unable to pay commercial debts as they become due.
B. You (or a principal shareholder if the Franchisee is a corporation) is convicted of a felony or any other crime or offense that is reasonably likely, in the sole opinion of AIRSOPURE, to adversely affect the goodwill or reputation of AIRSOPURE or the Licensed Marks.
C. A judgment or consent decree is entered against You (or a principal shareholder if the Franchisee is a corporation) in a case involving allegations of fraud, racketeering, unfair or deceptive trade practices or similar allegations which, in AIRSOPURE's judgment, are likely to adversely affect AIRSOPURE, its Products, the Licensed Marks or the goodwill associated therewith.
D. You or any partner or shareholder in You transfers any rights or obligations under this Agreement or any interest in You or in the Franchise to any third Party without AIRSOPURE's prior written consent.
E. You intentionally disclose the contents of the Operations Manual or&bbsp;other trade secrets or confidential information provided to You by AIRSOPURE to any unauthorized person or fails to exercise reasonable care to prevent such disclosure.
F. You maintain false books or records of the Franchise or knowingly make any material false statements or omission to AIRSOPURE in connection with Your
application for the franchise granted herein or in connection with any reports submitted to AIRSOPURE, including without limitation the understatement of gross sales by more than 2%.
G. You fail to commence business within 4 months following the execution of this Agreement.
H. You (and Your manager) fail to attend any scheduled training program which AIRSOPURE has indicated is mandatory.
I. You operate the Franchise in such a manner which causes a threat or danger to public health or safety.
J. You receive 3 or more notices of default of this Agreement from AIRSOPURE for violations under Section 14.02 hereof.
14.02. Except for violations of this Agreement listed in Section 13.01 above, or violations specifically provided for elsewhere in this Agreement, You shall have 30 days from receipt from AIRSOPURE of a written Notice of Termination (citing the reason(s) therefor) within which to remedy any default listed in this Section 13.02, or any other violation of this Agreement.
A. You fail to pay promptly any monies owing to AIRSOPURE or its subsidiaries or affiliates when due, or to submit the financial information or reports required by AIRSOPURE under this Agreement.
B. You fail to meet or comply with any standards, specifications or procedures prescribed by AIRSOPURE in this Agreement, the Operations Manual or otherwise specified in writing from time to time by AIRSOPURE.
C. You are convicted, plead guilty or enter into a consent agreement for violation of any federal, state or local law, ordinance, rule or regulation that is reasonably likely, in the sole opinion of AIRSOPURE, to materially and unfavorably affect the Franchise or AIRSOPURE, the Licensed Marks or the goodwill associated therewith.
D. You misuse or make any unauthorized use of the Proprietary Marks or otherwise impairs the
13
goodwill associated therewith or AIRSOPURE's rights therein.
E. You abandon the Franchise or fail to operate the Center during normal business hours without the consent in writing of AIRSOPURE.
F. You fail to submit advertising or promotional materials to AIRSOPURE for approval in writing prior to use.
14.03. No right or remedy of AIRSOPURE conferred herein shall be exclusive of any other right or remedy provided herein, at law or in equity, unless specifically provided otherwise in this Agreement or any amendment hereto.
14.04. In the event this Agreement is terminated by AIRSOPURE for violation of this Agreement by You, AIRSOPURE shall have the right, at its option, to purchase Your interest in the tangible assets of the Franchise at their fair market value.
15. OBLIGATIONS UPON TERMINATION
15.01. Upon termination or expiration of this Agreement, this Agreement and all rights granted hereunder to You shall immediately terminate, and:
A. You shall immediately cease to operate the Franchise and shall not thereafter, directly or indirectly, represent to the public or hold itself out as a present or former franchisee of AIRSOPURE.
B. You shall immediately and permanently cease to use, by advertising or in any other manner whatsoever, the Licensed Marks of AIRSOPURE, any other identifying characteristics or trade dress of the system, and all confidential methods, procedures and techniques associated with the Franchise.
C. You shall take such action as may be necessary to cancel any assumed name or equivalent registrations or listings in telephone or other directories which contain the names or Licensed Marks of AIRSOPURE, and You shall furnish AIRSOPURE with evidence satisfactory to AIRSOPURE of compliance with this obligation within 30 days after termination or expiration of this Agreement.
D. You shall promptly pay all sums owing to AIRSOPURE and its subsidiaries and affiliates, including all damages, costs and expenses, including reasonable attorneys' fees, incurred by AIRSOPURE as a result of the default.
E. You shall pay to AIRSOPURE all damages, costs and expenses, including reasonable attorneys' fees, incurred by AIRSOPURE subsequent to the termination or expiration of the Franchise herein granted in obtaining injunctive or other relief for the enforcement of any provisions of this Agreement.
F. You shall immediately turn over to AIRSOPURE the Operations Manual, records, files, instructions, software, correspondence, and all other materials provided by AIRSOPURE related to the operation of the Franchise, and all copies thereof (all of which are acknowledged to be AIRSOPURE's property), and shall retain no copy or record of any of the foregoing, except only Your copy of this Agreement and any correspondence between the Parties, and any other documents which You reasonably need for compliance with any applicable provision of law.
G. AIRSOPURE shall have the right, but not the duty, to be exercised by notice of intent to do so within 30 days after termination or expiration, to purchase any or all signs, advertising materials, supplies and inventory and any other items bearing AIRSOPURE's Licensed Marks, at Your cost or at fair market value, whichever is less. If the Parties cannot agree on the fair market value of such items, the Parties will select and share the expense of an independent appraiser to determine fair market value. With respect to any purchase by AIRSOPURE as provided herein, AIRSOPURE shall have the right to set off against the purchase price all amounts due from
14
You under this Agreement.
16. COVENANTS
16.01. You covenant and agree (or if Your Franchise is a corporation Your controlling shareholder agrees) to supervise and devote Your best efforts to manage and operate the Franchise.
16.02. You acknowledge that, pursuant to this Agreement, You will receive valuable specialized training and confidential and proprietary information of AIRSOPURE, including, without limitation, information regarding the operational, sales, promotional, and marketing methods and techniques of AIRSOPURE and its system. You covenant and agree that during the term of this Agreement, and subject to the post-termination provisions contained herein, You shall not, except as otherwise approved in writing by AIRSOPURE, either directly or indirectly:
A. Divert or attempt to divert any business or customer of the Franchise to any competitor, or competing business, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to AIRSOPURE or the goodwill associated with the Licensed Marks and Products.
B. Employ or seek to employ any person who is at that time employed by AIRSOPURE or by another AIRSOPURE franchisee or induce such person to leave his or her employment.
C. Own, maintain, engage in, be employed by, advise, consult, assist, invest in or have any interest whatsoever in any business or entity which competes with or offers products or services which are the same or similar to those of AIRSOPURE or the Franchise.
16.03. You covenant and agree that You (or any shareholder if Your Franchise is a corporation) shall not, for a period of two years following termination of this Agreement for any reason, either directly or indirectly own, maintain, engage in, be employed by, advise, consult, assist, invest in or have any interest whatsoever in any business or entity which competes with or offers products or services which are the same or similar to those of AIRSOPURE or the Franchise within a radius of 25 miles of Your Exclusive Territory. In the event a court of competent jurisdiction should hold this covenant to be unreasonable or overly broad, the Parties agree to reduce the scope of such covenant to the maximum restriction permitted by law, and You agree to be bound by such less restrictive terms of this covenant. If requested by AIRSOPURE, You agree to obtain and provide to AIRSOPURE executed covenants containing terms equivalent to those contained herein from any employee of Yours who has received training from AIRSOPURE, and, if Your Franchise is a corporation, from any director or shareholder of Your corporation.
16.04. AIRSOPURE covenants and agrees that the restrictions set forth above in Paragraphs 16.02.C and 16.03 shall not apply to ownership by You of less than a 5% beneficial interest in the outstanding equity securities of any publicly traded corporation, provided that You are not an employee, consultant or director of such corporation.
16.05. You covenant and agree that its violation of any covenant contained herein would result in serious, immediate and irreparable injury to AIRSOPURE for which no adequate remedy at law will be available, and You consent, in addition to other remedies which may be available to AIRSOPURE, to the entry without opposition of an injunction prohibiting any conduct by You in violation of any covenant set forth herein.
17. INDEMNIFICATION
17.01. You agree to defend, indemnify and hold AIRSOPURE and its affiliates, directors, officers, employees and agents harmless from all claims, losses, lawsuits and expenses arising from or relating to the Franchise and Your operation thereof, except for: (i) any claims of infringement
15
from third Parties due to Your use of the Licensed Marks, provided that You have used the said Licensed Marks as authorized by AIRSOPURE; and (ii) claims alleging that Products sold or leased by You are defective.
17.02. AIRSOPURE agrees to defend, indemnify and hold You harmless from all claims, losses, lawsuits and expenses arising from or relating to: (i) any claims of infringement from third Parties due to Your use of the Licensed Marks, provided that You have used the Licensed Marks as authorized by AIRSOPURE; and (ii) claims alleging that Products sold or leased by You are defective.
18. GENERAL PROVISIONS
18.01. No failure of a Party to exercise any power reserved to it by this Agreement or to insist upon strict compliance by the other Party with any obligation or condition hereunder shall constitute a waiver of such Party's rights unless such waiver is in writing. Any waiver by either Party shall not constitute a waiver thereafter to demand exact compliance with any of the terms herein. Waiver by a Party of any particular default by the other Party shall not affect or impair such Party's rights with respect to any subsequent default of the same, similar or different nature; nor shall any delay, forbearance or omission of a Party to exercise any power or right arising out of any breach or default by the other Party of any of the terms, provisions, or covenants thereof, affect or impair such Party's right to exercise the same.
18.02. Unforeseen Events
Delays in the performance of any duties hereunder which are not the fault of and are beyond the ability of the Party to control, including without limitation fires, floods, natural disasters, acts of God, labor disputes, riots or other similar events, shall not constitute a default in the Party's performance of this Agreement, and the Parties agree to extend the time of performance for a reasonable period of time to allow for such delays.
18.03. The relationship between the Parties is that of independent contractors. No partnership, joint venture, employment or relationship of principal and agent is intended, and You may not commit or bind AIRSOPURE to any obligation whatsoever.
18.04. Any and all notices required or permitted under this Agreement shall be in writing and shall be delivered by any means which will provide evidence of the date received, to the respective Parties at the following addresses unless and until a different address has been designated by written notice to the other Party:
Notices to AIRSOPURE: Airsopure International Group, Inc. 15400 Knoll Trail, Suite 200 Dallas, Texas 75248 Attn: John Potter, President
Notices to You:
- --------------------------------
- --------------------------------
- --------------------------------
Any notice shall be deemed to have been given at the date and time it is received.
18.05. This Agreement and the documents referred to herein constitute the entire Agreement between AIRSOPURE and You concerning the subject matter hereof, and supersede all prior agreements, oral or written. No amendment, change or variance from this Agreement shall be binding on either Party unless executed by both Parties in writing.
18.06. Except as expressly provided to the contrary herein, each provision of this Agreement shall be considered severable; and if, for any reason, any provision herein is determined to be invalid under any law or by a court having valid jurisdiction, such shall not impair the operation of, or have any other effect upon, such other
16
provisions of this Agreement, and the latter shall continue to be given full force and effect and bind the Parties hereto, and the invalid provision shall be deemed not to be a part of this Agreement.
18.07. This Agreement takes effect upon its acceptance and execution by AIRSOPURE in the State of Texas, and shall be interpreted and construed under the laws of the State of Texas.
18.08. The Parties agree that any action brought by either Party against the other in any court, whether federal or state, shall be brought within the State of Texas in the judicial district in which AIRSOPURE has its principal place of business and do hereby waive all questions of personal jurisdiction or venue for the purpose of carrying out this provision.
18.09. If either Party is required to resort to legal process to enforce any provision of this Agreement, the prevailing Party will recover all costs, including reasonable attorneys fees, incurred in such legal proceeding.
18.10. You represent to AIRSOPURE that You have conducted an independent investigation of the business franchised hereunder and recognizes that the business venture contemplated by this Agreement involves business risks, and that its success will be largely dependent upon Your ability as an independent business person. AIRSOPURE expressly disclaims the making of, and You acknowledge that You have not received, any representation or guarantee, express or implied, as to the potential volume, profits or success of the business venture contemplated by this Agreement.
18.11. You acknowledge that You received a completed copy of this Agreement, the attachments hereto, if any, and agreements relating thereto, if any, at least 5
business days prior to the date on which this Agreement was executed. You further acknowledge that You have received the Offering Circular, as required by the Federal Trade Commission, at least 10 business days prior to the date on which this Agreement was executed.
18.12. This Agreement contains various headings, but it is agreed that such headings are for convenience only and shall not affect the meaning of the provisions of this Agreement.
18.13. You acknowledge that You have read and understood this Agreement, the attachments hereto, if any, and agreements relating thereto, if any, and that AIRSOPURE has accorded You ample time and opportunity to consult with advisors of Your own choosing about the potential benefits and risks of entering into this Agreement.
19. APPLICABLE LAW AND MEDIATION
A. THE PARTIES AGREE TO SUBMIT ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT (AND ATTACHMENTS) OR THE RELATIONSHIP CREATED BY THIS AGREEMENT TO NON-BINDING MEDIATION PRIOR TO BRINGING SUCH CLAIM, CONTROVERSY OR DISPUTE IN A COURT. THE MEDIATION SHALL BE CONDUCTED THROUGH EITHER AN INDIVIDUAL MEDIATOR OR A MEDIATOR APPOINTED BY A MEDIATION SERVICES ORGANIZATION OR BODY, EXPERIENCED IN THE MEDIATION OF DISPUTES IN THE AIR PURIFICATION SERVICE BUSINESS, AGREED UPON BY THE PARTIES AND, FAILING SUCH AGREEMENT WITHIN A REASONABLE PERIOD OF TIME AFTER EACH PARTY HAS NOTIFIED THE OTHER OF ITS DESIRE TO SEEK MEDIATION OF ANY CLAIM CONTROVERSY OR DISPUTE (NOT TO EXCEED 15 DAYS), THROUGH THE AMERICAN ARBITRATION ASSOCIATION IN ACCORDANCE THE RULES GOVERNING MEDIATION, AT AIRSOPURE CORPORATE HEADQUARTERS IN DALLAS, TEXAS. THE COSTS AND EXPENSES OF MEDIATION, INCLUDING COMPENSATION AND EXPENSES OF THE MEDIATOR, SHALL BE BORNE BY THE PARTIES EQUALLY. IF THE PARTIES ARE UNABLE TO RESOLVE THE CLAIM, CONTROVERSY OR DISPUTE 90 DAYS
17
AFTER THE MEDIATOR HAS BEEN APPOINTED, THEN EITHER PARTY MAY SUBMIT SUCH CLAIM, CONTROVERSY OR DISPUTE TO A COURT IN ACCORDANCE WITH SECTION 19.B. BELOW NOTWITHSTANDING THE FOREGOING, EITHER PARTY MAY BRING AN ACTION (1) FOR MONEYS OWED, (2) FOR INJUNCTIVE RELIEF, OR (3) INVOLVING THE POSSESSION OR DISPOSITION OF, OR OTHER RELIEF RELATING TO, REAL PROPERTY IN A COURT HAVING JURISDICTION AND IN ACCORDANCE WITH SECTION 19.B. BELOW, WITHOUT SUBMITTING SUCH ACTION TO MEDIATION.
B. WITH RESPECT TO ANY CLAIMS, CONTROVERSIES OR DISPUTES WHICH ARE NOT FINALLY RESOLVED THROUGH MEDIATION, YOU HEREBY IRREVOCABLY SUBMIT YOURSELF TO THE NONEXCLUSIVE JURISDICTION OF THE STATE COURTS OF DALLAS COUNTY, TEXAS AND THE FEDERAL DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, DALLAS DIVISION. YOU HEREBY IRREVOCABLY AGREE THAT SERVICE OF PROCESS MAY BE MADE UPON YOU IN ANY EACH PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE RELATIONSHIP CREATED BY THIS AGREEMENT BY ANY MEANS ALLOWED BY TEXAS OR FEDERAL LAW. VENUE FOR ANY SUCH LEGAL PROCEEDING SHALL BE DALLAS COUNTY, TEXAS; PROVIDED, HOWEVER WITH RESPECT TO ANY ACTION (1) FOR MONEYS OWED, (2) FOR INJUNCTIVE OR OTHER EXTRAORDINARY RELIEF OR (3) INVOLVING POSSESSION OR DISPOSITION OF; OR OFFER RELIEF RELATING TO, REAL PROPERTY, AIRSOPURE MAY BRING SUCH ACTION IN ANY STATE OR FEDERAL DISTRICT COURT WHICH HAS JURISDICTION. YOU HEREBY WAIVE ALL QUESTIONS OF PERSONAL JURISDICTION FOR TITLE PURPOSE OF CARRYING OUT THIS PROVISION. WITH RESPECT TO ALL CLAIMS, CONTROVERSIES, DISPUTES OR ACTIONS, THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED UNDER TEXAS LAW (EXCEPT FOR TEXAS CHOICE OF LAW RULES).
C. YOU AND AIRSOPURE ACKNOWLEDGE THAT THE PARTIES' AGREEMENT REGARDING APPLICABLE STATE LAW AND FORUM SET FORTH IN SECTION 19.B. ABOVE PROVIDE EACH OF THE PARTIES WITH THE MUTUAL BENEFIT OF UNIFORM INTERPRETATION OF THIS AGREEMENT AND ANY DISPUTE ARISING OUT OF THIS AGREEMENT OR THE PARTIES' RELATIONSHIP CREATED BY THIS AGREEMENT, EACH OF YOU AND AIRSOPURE FURTHER ACKNOWLEDGE THE RECEIPT AND SUFFICIENCY OF MUTUAL CONSIDERATION FOR SUCH BENEFIT.
D. YOU AND AIRSOPURE ACKNOWLEDGE THAT THE EXECUTION OF THIS AGREEMENT OCCURRED IN DALLAS, TEXAS AND FURTHER ACKNOWLEDGE THAT THE PERFORMANCE OF CERTAIN OBLIGATIONS OF YOU ARISING UNDER THIS AGREEMENT SHALL OCCUR IN DALLAS, TEXAS.
IN WITNESS WHEREOF, the Parties hereto have duly executed, sealed, and delivered this Agreement on the day and year first above written.
AIRSOPURE:
By: ---------------------------------
Title: ------------------------------
YOU:
By: ---------------------------------
Title: ------------------------------
18
EXHIBIT F
PERSONAL GUARANTEE
For value received, and in consideration of the execution by Airsopure International Group, Inc. ("Airsopure") of a Franchise Agreement with
- ---------------------------------------- ("Franchisee"), The undersigned
- ---------------------------------------- ("Guarantor") hereby unconditionally guarantees to Airsopure all indebtedness, obligations and liabilities, direct or indirect, matured or immatured, primary or secondary, certain or contingent, of Franchisee to Airsopure, now or hereafter owing or incurred. This Guarantee is an absolute, unconditional, unlimited and continuing guarantee of the full and punctual payment by Franchisee of the foregoing indebtedness, obligations and liabilities and not of their collectibility only. Upon any default by Franchisee in such full and punctual payment, the liabilities and obligations of the Guarantor hereunder shall, at Airsopure's option, become forthwith due and payable without demand or notice of any nature, all of which are expressly waived by the Guarantor.
Airsopure may deal with Franchisee in such manner as Airsopure in its sole discretion deems fit, and Guarantor gives to Airsopure full authority, in its sole discretion, to do any or all of the following things: a) extend credit, make loans and afford other financial accommodations to Franchisee at such times, in such amounts and on such terms as Airsopure may approve; b) vary the terms and grant extensions or renewals of any present or future indebtedness of Franchisee to Airsopure; c) grant time, waivers and other indulgences in respect thereto; d) vary, exchange, release or discharge, wholly or partially, or delay in or abstain from perfecting and enforcing any security or guaranty or other means of obtaining payment; e) accept partial payments from Franchisee; f) release or discharge, wholly or partially, any endorser or guarantor; g) compromise or make any settlement or other arrangement with Franchisee.
Guarantor waives notice of acceptance hereof or of any action taken or omitted by Airsopure in reliance hereon and any requirement that Airsopure be diligent or prompt in making demands hereunder, giving notice of any default by Franchisee or asserting any other right hereunder.
No provision of this Guaranty can be changed, waived, discharged or terminated except by an instrument in writing signed by Airsopure and Guarantor, and no such waiver shall extend to, affect or impair any other right of Airsopure hereunder.
This Unlimited Guarantee shall inure to the benefit of Airsopure and its successors and assigns, and shall be binding on the Guarantor and the Guarantor's successors, heirs and assigns.
EXECUTED on this ____ day of ____________, 2000.
- ---------------------------------------- GUARANTOR
- ---------------------------------------- WITNESS
EXHIBIT G
CONFIDENTIALITY AGREEMENT
This Confidentiality and Noncompetition Agreement (the "Agreement") is made and entered into effective the _____day of ________________, 2000 by and between Airsopure International Group, Inc., a Nevada corporation, located at 15400 Knoll Trail, Suite 200, Dallas, Texas 75248 (the "Company") and
- ----------------------------------------------- who resides at
- -----------------------------------------------
- -----------------------------------------------
- -----------------------------------------------
- ----------------------------------------------- (the "Associate").
RECITALS
A. Company sells franchises for the operation of air purification system business which operate under the name and service mark "Airsopure" (the "Franchises");
B. Company has developed a business method for operating Franchises utilizing certain Information, plans, methods, data, processes, marketing systems, techniques, operating procedures, trademarks, designs, information and know how of Company (the "Confidential Information"), and such Confidential Information may be further developed from time to time by Company:
C. Company has established substantial goodwill and an excellent reputation with respect to the quality of services available, which goodwill and reputation have been and will continue to be of Major benefit to Company;
D. Associate is or will become involved with Company, or a franchise of Company, in the capacity of an officer, partner, director or as beneficial owner of an Airsopure Franchise or an employee of a Franchise, and will become privileged to certain Confidential Information; and
E. Associate and Company have reached an understanding with regard to nondisclosure by Associate of Confidential Information and Noncompetition by Associate with Company
NOW THEREFORE, in consideration of the foregoing, the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, Associate and Company, intending legally to be bound, hereby agree as follows:
1. CONFIDENTIAL INFORMATION. Associate and Company acknowledge that the business plan and methods used in connection with the operation of the Franchise which utilize Company's Confidential Information, are confidential, unique, constitute the exclusive property of Company and are trade secrets of Company. Associate acknowledges that any disclosure of the Confidential Information would be wrong and would cause irreparable injury and harm to Company. Associate further acknowledges that Company has expended a great amount of effort and money in obtaining and developing the Confidential Information, the Company has taken numerous precautions to guard the secrecy of the Confidential Information and that it would be very costly for competitors to acquire or duplicate the Confidential Information.
2. OPERATIONS MANUAL AS TRADE SECRET It is understood that Confidential Information, constituting "trade secret", as used in this Agreement is deemed to include, without initiation, any and all information contained in the Franchise Operations Manual, which may be provided AS one or more separate manuals, or written instructional guides, as the same are changed or supplemented from time to time, and any information of whatever nature which gives to Company an opportunity to obtain an advantage over its competitors who do not have access to, know or use such lists, written materials or information.
3. CONFIDENTIAL INFORMATION. Associate shall not at any time, publish, disclose, divulge or in any manner communicate to any person, firm' corporation, association. partnership or any other entity whatsoever or use, directly or indirectly, for its own benefit or for the benefit of any Person, firm, corporation or other entity, other than the use of Company, any of the Confidential Information of Company or its Affiliates.
4. NO INTERFERENCE WITH BUSINESS. During the term of this Agreement, neither Associate nor any member of his or her immediate finally shall divert or attempt to divert: I) any business related to, or any customer or prospective customer of; the Franchise by direct inducement or otherwise, or 2) the employment of Company or another franchisee licensed by Company,
1
to any Competitive Business by any direct inducement or otherwise.
5. REMEDIES. Associate hereby acknowledges and agrees that in the event of any violations of this Agreement, Company shall be authorized and entitled, without posting a bond to obtain from any court of competent jurisdiction, preliminary and permanent injunctive relief as well as an equitable accounting of all profits or benefits arising out of any such violation, which rights and remedies shall be cumulative and in addition to any rights or remedies to which Company may be entitled.
6. EFFECT OF WAVIER. The waiver by Associate or company of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach thereof
7. BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit of Associate and Company and their respective heirs, executors, representatives successors and assigns.
8. ENTIRE AGREEMENT. This instrument contains the entire agreement of Associate and Company relating to the matters set forth here It may not be changed orally, but only by an agreement in writing, signed by the party against whom enforcement of any waiver, change modification, extension or discharge is sought.
9. GOVERNING LAW. This instrument shall be governed by and construed under the laws of the State of Texas.
10. JURISDICTION AND VENUE. In the event of a breach or threatened breach by Associate of this Agreement, Associate hereby irrevocably submits to the jurisdiction of the State District Court in Dallas County, Texas and the Federal District Court for the Northern District of Texas, and irrevocably agrees that venue for any action or proceeding shall be in Dallas County, Texas. Notwithstanding the foregoing, in the event that the laws of the state where, Associate resides require that the jurisdiction or venue be elsewhere, then such other states laws shall control. but only to the extent that such other state's laws so require.
11. SEVERABILITV. Should anyone or more of the provisions hereof be determined to be illegal or unenforceable, all other provisions hereof shall be given separately therefrom and shall not be affected thereby.
12. COST OF ENFORCEMENT. In any action at law or in equity to enforce any of the provisions or rights under this Agreement, the unsuccessful party in such
litigation as determined by the court in a final judgment or decree, shall pay the successful party or parties all costs, expenses and reasonable attorney's fees incurred therein by such arty or parties (including without Initiation such as costs, expenses and fees on any appeals), plus, if applicable, interest at the highest rate allowable by law, accruing from the date of the breach of this Agreement. If such successful party shall recover judgement in any such action or proceeding, such costs, expenses. attorney's fees and interest shall be included as part of such judgment.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement on the date first above written.
FOR AIRSOPURE (COMPANY):
- --------------------------------------------
FOR FRANCHISEE OF AIRSOPURE:
- --------------------------------------------
ASSOCIATE OF FRANCHISEE:
- --------------------------------------------
ASSOCIATE'S WORK CAPACITY:
- --------------------------------------------
2 | Highlight the parts (if any) of this contract related to "Joint Ip Ownership" that should be reviewed by a lawyer. Details: Is there any clause providing for joint or shared ownership of intellectual property between the parties to the contract? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "No-Solicit Of Employees" that should be reviewed by a lawyer. Details: Is there a restriction on a party’s soliciting or hiring employees and/or contractors from the counterparty, whether during the contract or after the contract ends (or both)?
Context: Exhibit 10.24
______________________________________________________________________________
______________________________________________________________________________
OPERATION AND MAINTENANCE AGREEMENT
Dated as of November 3, 2010
______________________________________________________________________________
______________________________________________________________________________
10.23
TABLE OF CONTENTS Page
ARTICLE I : DEFINITIONS1
ARTICLE II : ENGAGEMENT OF OPERATOR5 2.1 Engagement.. 5 2.2 Independent Contractor. 5 2.3 Owner Cooperation 5
ARTICLE III : TERM, RESIGNATION OR REMOVAL OF OPERATOR5 3.1 Term. 5 3.2 Owner Default. 5 3.3 Operator Default 6 3.4 Cooperation with Owner or Successor Operator 7 3.5 Effect of Termination 7
ARTICLE IV : DUTIES AS OPERATOR7 4.1 Duties as Operator. 7 4.2 Standard of Care.. 11 4.4 Limitation of Authority 12
ARTICLE V : ACCOUNTING, REPORTS, RECORDS12 5.1 Accounting Methods. 12 5.2 Independent Audit. 12
ARTICLE VI : FORCE MAJEURE12 6.1 Procedure.. 12
6.2 Strikes. 13
ARTICLE VII : INSURANCE AND INDEMNIFICATION13 7.1 Operator Insurance. 13 7.2 Contractors 14 7.3 Notice of Claims.. 14 7.4 Mutual Release and Indemnification. 14
ARTICLE VIII : GENERAL PROVISIONS15 8.2 Notices 15 8.3 Rights 16 8.4 Applicable Laws 16 8.5 Rules of Construction. 16 8.6 Governing Law.. 17 8.7 Dispute Resolution. 17 8.8 Limitation of Liability.. 17 8.9 Entirety of Agreement, Amendments 17 8.10 Waivers. 18 8.11 Headings. 18 8.12 Rights and Remedies. 18 8.13 Assignment 18 8.14 Counterparts 18 8.15 No Third Party Beneficiary 18 8.16 Further Assurances. 28
10.23
OPERATION AND MAINTENANCE AGREEMENT This OPERATIONS AND MAINTENANCE AGREEMENT dated this 3rd day of November, 2010 (the "Effective Date"), is made and entered into by and between MAGELLAN TERMINALS HOLDINGS, L.P. (f/k/a Marrero Terminal, LLC), a Delaware limited partnership ("Owner"), and OMEGA REFINING, LLC, a Delaware limited liability company ("Omega" or "Operator"). Owner and Operator are referred to individually herein as a "Party" and collectively herein as the "Parties".
WITNESSETH:
WHEREAS, Owner currently operates that certain six spot rail car loading/offloading area located at 5000 River Road, Marrero, Louisiana, including associated piping, hoses, and pumps as more particularly described on Exhibit "A" attached hereto and incorporated by reference herein (the "Rail Facility"); and
WHEREAS, Owner wishes to retain Operator to maintain and operate the Rail Facility as well as administering the business and regulatory affairs of Owner relating to the Rail Facility, all in accordance with the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I : DEFINITIONS
Capitalized terms used in this Agreement but not otherwise defined herein shall have the following meanings:
"Affiliate" means, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by, or is under common control with, such specified Person through one or more intermediaries or otherwise. For the purposes of this definition, "control" means, where used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Securities or interests, by contract or otherwise, and the terms "controlling" and "controlled" have correlative meanings.
"Agreement" means this Amended and Restated Operations and Maintenance Agreement (including all exhibits), as amended from time to time in accordance with the terms hereof.
"Business Day" means any calendar day, other than a Saturday or Sunday, on which commercial banks in New Orleans, Louisiana are open for business.
"Calendar Year" means the time period from January 1 through December 31 of the same calendar year.
1
"Capital Project" means any capital expenditure to repair, maintain, construct, expand, or modify the Rail Facility.
"Capital Project Proposal" shall have the meaning set forth in Section 4.1.11.
"Claim" means any lawsuit, claim, proceeding, investigation, review, audit or other cause of action of any kind.
"Constituent of Concern" means any substance defined as a hazardous substance, hazardous waste, hazardous material, toxic substance, solid waste, pollutant or contaminant by an Environmental Law.
"Effective Date" shall have the meaning set forth in the preamble to this Agreement.
"Emergency" means a sudden or unexpected event that causes, or risks causing, imminent material damage to the Rail Facility, death or injury to any Person, or material damage to property or the environment.
"Emergency Work" shall have the meaning set forth in Section 4.1.12.
"Environmental Law" means all applicable Laws and Environmental Permits of any Governmental Authority relating to the environment, natural resources, or the protection thereof, including, without limitation: (a) all requirements pertaining to liability for reporting, management, licensing, permitting, investigation, and remediation of emissions, discharges, releases, or threatened releases of a Constituent of Concern; and (b) CERCLA, the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq. the Federal Clean Water Act, the Federal Clean Air Act, the Federal Solid Waste Disposal Act (which includes the Resource Conservation and Recovery Act), the Federal Toxic Substances Control Act, and the Federal Insecticide, Fungicide and Rodenticide Act, the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq., and the Safe Drinking Water Act, 42 U.S.C. § 300f et seq. and any applicable Law relating to health, safety, the environment, natural resources or the protection thereof, each as amended from time to time, including any regulations promulgated pursuant thereto, and any state or local counterparts. "Environmental Permits" all permits, licenses, registrations, authorizations, certificates and approvals, and any other similar items, of Governmental Authorities required by Environmental Laws and necessary for or held in connection with the ownership and/or operation of the Rail Facility or any of the transactions contemplated hereby.
"Force Majeure" means any cause or causes not reasonably within the control of the Party claiming suspension and which, by the exercise of reasonable diligence, such Party is unable to prevent or overcome, including, without limitation, acts of God, acts, omissions to act, and/or delays in action of federal, state, or local government or any agency thereof, strikes, lockouts, work stoppages, or other industrial disturbances, acts of a public enemy, sabotage, wars, blockades, insurrections, riots, acts of terror, epidemics, landslides, lightning, earthquakes, fires, storms, storm warnings, floods, washouts, extreme cold or freezing weather, arrests and restraints of governments
2 10.23
and people, civil or criminal disturbances, interruptions by governmental or court orders, present and future valid orders of any regulatory body having jurisdiction, explosions, mechanical failures, breakage, or accident to equipment installations, machinery, compressors, or lines of pipe, and associated repairs, freezing of wells or lines of pipe, partial or entire failure of wells, pipes, facilities, or equipment, electric power unavailability or shortages, failure of pipelines or carriers to transport, partial or entire failure or refusal of operators of upstream or downstream pipelines or facilities to receive used motor oil, governmental regulations, and inability to obtain or timely obtain, or obtain at a reasonable cost, after exercise of reasonable diligence, pipe, materials, equipment, rights-of-way, servitudes, governmental approvals, or labor, including those necessary for the facilities provided for in this Agreement.
"GAAP" means generally accepted accounting principles, consistently applied.
"Governmental Authority" means any federal, state, municipal, local or similar governmental authority, regulatory or administrative agency, court or arbitral body with jurisdiction over the Parties, this Agreement, any of the transactions contemplated hereby or the Rail Facility.
"Hazardous Materials" means any materials, including without limitation chemicals and wastes that are regulated under Environmental Law. "Law" means any statute, writ, law, common law, rule, regulation, ordinance, order, judgment, injunction, award, determination or decree of a Governmental Authority, or any requirement under the common law.
"Lease" shall mean that certain Land Lease dated as of April 30, 2008, pursuant to which Operator leased certain property from Owner's predecessor in interest, as described therein, as amended by that certain First Amendment to Land Lease dated as of October 29, 2009.
"Liability Claim" means a Claim arising out of the administration, operation, or maintenance of the Rail Facility, or arising out of or incidental to the activities carried on or work performed or required by this Agreement.
"Loss" means any loss, cost, expense, liability, damage, sanction, judgment, lien, fine, or penalty, including reasonable attorney's and consultant's fees and expenses, incurred, suffered or paid by, or resulting to, the applicable indemnified Persons on account of (i) injuries (including death) to any Person or damage to or destruction of any property, sustained or alleged to have been sustained in connection with or arising out of the matters for which the indemnifying Party has indemnified the applicable indemnified Persons, (ii) any failure of any representation or warranty made by Operator in this Agreement to be true and correct when made, or (iii) the breach of any covenant or agreement made or to be performed by the indemnifying Party pursuant to this Agreement.
"Operating and Capital Expenditure Budget" means, with respect to each period, the Operating and Capital Expenditure Budget for such period approved by Owner.
3 10.23
"Operator" shall have the meaning set forth in the preamble to this Agreement.
"Operator Indemnified Parties" means, collectively, Operator, its successors and permitted assigns, and their respective Affiliates, shareholders, members, partners, officers, directors, employees, and agents.
"Operator Parties" means, collectively, Operator, Operator's Affiliates, and their respective successors and assigns; "Operator Party" means any such Person individually.
"Owner" shall have the meaning set forth in the preamble to this Agreement.
"Owner Indemnified Parties" means, collectively, Owner, its successors and permitted assigns, and their respective Affiliates, shareholders, members, partners, officers, directors, employees, and agents.
"Party" means either Owner or Operator, as applicable, and "Parties" means both Owner and Operator.
"Person" means an individual, a corporation, a partnership, a limited partnership, a limited liability company, an association, a joint venture, a trust, an unincorporated organization, or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
"Rail Facility" shall have the meaning ascribed to such term m the recital of this Agreement.
""Tax" or "Taxes" means any (i) federal, state, provincial, county, local or foreign taxes, charges, fees, levies or other assessments, including all sales and use, goods and services, ad valorem, transfer, gains, profits, excise, franchise, real and personal property, gross receipt, value added, capital stock, production, business and occupation, disability, employment, payroll, license, estimated, stamp, custom duties, severance, unemployment, social security, Medicare, alternative minimum or withholding taxes or charges imposed by any Governmental Authority, and including any interest and penalties (civil or criminal) on or additions to any such taxes, but expressly excluding any income tax or tax based on income, such as, without limitation, the franchise tax set forth in Delaware Tax Code: 8 Del. Laws, c. 5 §501 et. seq., as the same may be amended or recodified from time to time, and (ii) liability for items in (i) of any other Person by contract, operation of Law (including Treasury Regulation 1.1502-6) or otherwise.
"Tax Returns" means any return, report, election, declaration, statement, notice, information return, schedule, or other document (including any related or supporting information) filed or required to be filed with any Governmental Authority in connection with the determination, assessment, collection or administration of any Taxes or any income tax or tax based on income, such as, without limitation, the franchise tax set forth in Delaware Tax Code 8 Del. Laws, c. 5 §501
4 10.23
et. seq., as the same may be amended or recodified from time to time, or the administration of any laws, regulations or administrative requirements relating to any Taxes or any amendment thereof.
"Voting Securities" means, as it relates to a Person, securities of any class of such Person entitling the holders thereof to vote in the election of, or to appoint, members of the board of directors or other similar governing body of the Person; provided that if such Person is a limited partnership, Voting Securities of such Person shall be the general partner interest in such Person.
ARTICLE II : ENGAGEMENT OF OPERATOR
2.1 Engagement. Owner hereby appoints and retains Operator to manage, operate, and maintain the Rail Facility and to administer the business and regulatory affairs of Owner relating to the Rail Facility in accordance with the terms and conditions set forth herein, and Operator hereby accepts such appointment.
2.2 Independent Contractor. The Parties expressly understand and agree that Operator is acting and shall perform and execute the provisions of this Agreement as an independent contractor unrelated to Owner or any Owner Affiliate, and the work performed by Operator hereunder shall be subject to Owner's general right of inspection and approval. Nothing in this Agreement is intended to create a relationship, expressed or implied, of employer-employee or principal-agent between Owner and Operator or between Owner and any individual employed or provided to work hereunder by Operator.
2.3 Owner Cooperation. Owner shall cooperate with Operator and provide Operator with such information as Operator may reasonably request from time to time in connection with the performance of Operator's duties hereunder.
ARTICLE III : TERM, RESIGNATION OR REMOVAL OF OPERATOR
3.1 Term. This Agreement shall commence on the Effective Date and, shall continue for the duration of the Lease, unless terminated earlier pursuant to Section 3.2 or 3.3.
3.2 Owner Default. Operator may terminate this Agreement at any time upon the occurrence of any of the following:
(a) the dissolution or bankruptcy of Owner;
(b) Owner fails to pay when due any amount due and payable hereunder, including, without limitation, any interest, fees, reimbursements or indemnifications, and such failure shall continue for a period of 15 days after the due date thereof; or
(c) other than as set forth in clause (b) above, Owner breaches or fails to observe or perform any material term, condition, or obligation contained in this Agreement and fails to correct, or fails to diligently pursue correction of, such breach within 60 days after receipt of written notice from Operator of any such breach.
5 10.23
If any of the above occurs and Operator elects to terminate this Agreement, then Operator may give a written notice of termination to Owner, which termination shall be effective on the date specified by Operator in such notice, provided that such termination date shall be within 60 days of the date such notice is delivered to Owner. Operator's notice of breach to Owner under Section 3.2(b) or (c) shall state with particularity the breach alleged by Operator. To the extent Owner disputes the basis for Operator's notice of breach, the matter shall be addressed under Section 8.6. Nothing in this Section 3.2 shall be construed to limit or preclude any remedy Operator may have at law or in equity with respect to any material breach by Owner.
3.3 Operator Default. Owner may terminate this Agreement at any time upon the occurrence of any of the following:
(a) the dissolution or bankruptcy of Operator;
(b) Operator fails to pay when due any amount due and payable hereunder, including, without limitation, any interest, fees, reimbursements or indemnifications, and such failure shall continue for a period of 15 days after the due date thereof;
(c) other than as set forth in clause (b) above, Operator breaches or fails to observe or perform any material term, condition, or obligation contained in this Agreement and fails to correct, or fails to diligently pursue correction of, such breach within 60 days after receipt of written notice from Owner of any such breach;
(d) Termination by Owner pursuant to Section 4.1.1; or
(e) Without cause on no less than seven (7) days prior written notice.
In the event Owner terminates this Agreement pursuant to subparagraph (e) above, Owner may reimburse Operator for any unamortized capital expenditure (determined in accordance with GAAP) to the extent such capital expenditure was included in the Operating and Capital Expenditure Budget. If any of the above occurs, other than an event described in subparagraph (d), and Owner elects to terminate this Agreement (a termination for "cause"), then Owner may give a written notice of termination to Operator, which termination shall be effective on the date specified by Owner in the notice, provided that such termination date shall be within 60 days of the date the notice is delivered to Operator. Owner's notice of breach to Operator under Section 3.3(b) or (c) shall state with particularity the breach alleged by Owner. To the extent Operator disputes the basis for Owner's notice of breach, the matter shall be addressed under Section 8.6. Nothing in this Section 3.3 shall be construed to limit or preclude any remedy Owner may have at law or in equity with respect to any material breach by Operator.
3.4 Cooperation with Owner or Successor Operator. Upon the termination of this Agreement, Operator shall cooperate in the transition of operations to Owner or a successor operator
6 10.23
and upon Owner's request, will promptly deliver all books and records and other property (including, without limitation, intellectual property) of Owner to Owner or the successor operator, as applicable.
3.5 Effect of Termination. Any termination of this Agreement pursuant to this Article III will release Operator from, and Owner agrees to indemnify Operator against, any liability accruing or accrued hereunder after the effective date of termination, except with respect to the obligations and liabilities of Operator that survive termination including any and all liabilities arising out of or resulting from Operator's operation and maintenance of the Rail Facility. Termination of this Agreement shall not relieve the Parties from any liability or obligation accruing or accrued prior to the date of such termination or deprive a Party not in breach (other than a breach which occurs because such Party is rightfully withholding performance in response to a breach by the other Party) of its right to any remedy otherwise available to such Party.
ARTICLE IV : DUTIES AS OPERATOR
4.1 Duties as Operator. Operator shall be responsible for (1) construction of the improvements to the Rail Facility in accordance with those plans and specifications approved by Owner in writing, (2) administering the regulatory, business, and financial affairs of the Rail Facility; (3) maintaining the financial and product accounting records of the Rail Facility; 4) preparing and distributing financial statements; (5) complying with any and all instructions it receives from Owner with respect to the operation and maintenance of the Rail Facility, provided that such instructions are consistent with applicable Laws and (6) complying with any and all Law and Environmental Law including any other permits or licenses.
4.1.2 Improvements/Alterations to the Rail Facility. Operator shall evaluate and modify, at its sole cost and expense, the rail car containment pan system (the "Containment Pan System") so that such system is in compliance with the Spill Prevention, Control, and Countermeasure Regulations promulgated by the Environmental Protection Agency (the "SPCC Regulations") and any other applicable regulations, rules or similar administrative publications promulgated by any other federal, state, or local regulatory agency. Such evaluation and modification, if necessary, of the Containment Pan System shall occur within ninety (90) days of the Effective Date. Owner specifically reserves the right to review, evaluate and approve the plans and specifications developed by Operator for any modifications to be made to the Containment Pan System for such compliance. Owner will provide written notice to Operator, within fifteen (15) days of Operator's submission of the plans and specifications for the Containment Pan System, confirming or denying its approval of Operator's plans and specifications for modification to the Containment Pan System, and in the event Owner does not approve such plans and specifications, Owner will provide Operator with written detail describing why such approval was withheld. Operator will have ten (10) days from the date it receives such written notice from Owner denying approval of its Containment Pan System plans and specifications to remediate such plans and specifications so that the modifications will comply with the SPCC Regulations. If Operator fails to remediate the Containment Pan System plans and specifications in a manner that will result in the modifications to the Containment Pan System complying with the SPCC Regulations within such ten (10) day period in a manner satisfactory to Owner, Owner, in its sole discretion, may unilaterally terminate this Agreement. Additionally, Owner reserves the right to inspect the
7 10.23
Containment Pan System after Operator has modified such equipment, and if such modifications made by Operator to the Containment Pay System do not comply with SPCC Regulations, then Owner, in its sole discretion, may unilaterally terminate this Agreement. Any other alterations or improvements to the Rail Facility may not be made by Operator without the written consent of Owner.
4.1.3 Operation of the Rail Facility. Operator shall manage and operate the Rail Facility, the construction and future modifications to the Rail Facility, and negotiate agreements in Owner's name with third parties related to the operation of the Rail Facility (provided that (i) Owner shall have the right to approve or disapprove any such agreements, and (ii) if approved, except as provided in Section 4.1.1, Owner, and not Operator, shall execute all such agreements), comply with any instructions it receives from Owner with respect to the operation and maintenance of the Rail Facility, provided that such instructions are consistent with applicable Laws, and perform all other services and functions related thereto subject to the limits, requirements, and restrictions otherwise set forth in this Agreement.
4.1.4 Maintenance of the Rail Facility. Subject to the terms, conditions and limitations set forth in this Agreement, Owner hereby authorizes and empowers Operator, and Operator agrees, in the name of and on behalf of Owner, to, at its sole cost and expense, keep and maintain the Rail Facility in a condition and repair similar to, but not less than, its condition and repair on the Effective Date hereof.
4.1.5 Operator Recommendations. In the event that Operator makes a good-faith recommendation in writing regarding an operational issue to Owner, and Owner does not, for any reason whatsoever, approve such recommendation, then Operator shall not be liable and Owner hereby releases and shall indemnify, defend and hold Operator harmless from and against any Claim or Loss that arises from, or is attributable to, the failure to implement such recommendation.
4.1.6 Compliance with Owner Instructions. Notwithstanding anything to the contrary in this Agreement, in the event that Owner instructs Operator to take any action or refrain from taking any action in connection with the operation or maintenance of the Rail Facility and Operator in good faith disagrees with Owner because, among other reasons, it is not consistent with prudent operating standards, then Operator shall notify Owner of such disagreement in writing, and Owner hereby releases and shall indemnify, defend and hold Operator harmless from and against any Claim or Loss that arises from, or is attributable to, Operator's compliance with Owner's instructions.
4.1.7 Environmental Laws. Operator shall comply, in the performance of its duties and responsibilities hereunder, in all respects with all Environmental Laws and all Environmental Permits.
4.1.8 Purchase of Services, Materials and Supplies. Except as otherwise provided below and subject to the limitations herein, Operator shall, on Owner's behalf and as its agent, purchase or cause to be purchased necessary services, materials and supplies and incur such expenses and enter into such commitments as may be necessary to operate and maintain the Rail Facility, including, but not limited to, (i) contracts for the maintenance, repair and replacement of the Rail
8 10.23
Facility and, if requested by Owner, construction of additions to the Rail Facility; and (ii) contracts for power, fuel, other utilities, and communication facilities as may be necessary in connection with proper operation and maintenance of the Rail Facility and for providing adjustments and replacements thereto.
4.1.9 Personnel. Except as otherwise provided below and subject to the limitations herein, Operator, in its reasonable judgment, shall employ such personnel, with Operator or an Affiliate as their employer, as it may deem necessary to operate and maintain the Rail Facility and to provide adjustments and replacements thereto and to perform its other obligations hereunder. In addition to Operator's or Operator's Affiliates' employees who are either full-time or part-time dedicated to operating and maintaining the Rail Facility, Operator may: (i) utilize from time to time its other employees or the employees of Operator's Affiliates in services in connection therewith at a usual and customary rate of compensation; and/or (ii) engage the services of third-party contractors in the performance of such functions. Notwithstanding the foregoing, all personnel provided by Operator to operate and maintain the Rail Facility shall have the requisite background, training and skill necessary to operate such a facility in accordance with all current industry standards and any and all applicable state and federal Laws, Environmental Laws, and Environmental Permits.
4.1.10 Payment of Operating Expenses. Operator shall promptly pay all direct costs and expenses incurred in operating and maintaining the Rail Facility as they become due, without reimbursement by Owner save and except to the extent specifically provided otherwise herein.
4.1.11 Operating Expense Budget. Operator shall (i) administer and otherwise comply with the budget proposed by Operator and approved by Owner (ii) operate and maintain the Rail Facility in compliance with the Operating and Capital Expenditure Budget established for the Rail Facility; provided, however, if Owner instructs Operator to perform any services outside of the scope of the services contemplated in the Operating and Capital Expenditure Budget (exclusive of those services to be performed by Operator in connection with any necessary alterations or modifications to the Containment Pan System pursuant to Section 4.1.1), then Owner shall reimburse Operator for the costs and expenses associated therewith.
4.1.12 Capital Projects. Operator may propose an unbudgeted Capital Project at any time by giving written notice of such to Owner. The notice (the "Capital Project Proposal") must specifically describe the proposed Capital Project and shall include the following:
(i)a good-faith estimate of the costs associated with the operation and maintenance of the proposed Capital Project;
(ii)preliminary engineering designs and plans; and
(iii)general requirements or provisions for the Capital Project, including construction of the Capital Project and insurance coverage.
9 10.23
Owner shall approve or reject the proposed Capital Project set forth in the applicable Capital Project Proposal within fifteen (15) days from the date of receipt of the same, such approval not to be unreasonably withheld, conditioned or delayed. If Owner approves the applicable Capital Project, then Operator shall have the right and authority with respect to the approved Capital Project to make expenditures, or enter into contracts to incur expenditures, without further authorization by Owner; provided, however, Owner will not be responsible for reimbursing Operator for any expenditures incurred by Operator related to the construction, operation, and maintenance of the Capital Project.
4.1.13 Emergencies. Notwithstanding any provision of this Agreement, in the event of an Emergency, Operator shall proceed with maintenance or repair work or with any other action when necessary to minimize damage and to end the Emergency ("Emergency Work"), without regard to the limits set forth in this Article IV. Operator shall, as soon as reasonably practicable, notify Owner of the existence or occurrence of the Emergency, setting forth the nature of the emergency, the corrective action taken or proposed to be taken, and the actual or estimated cost of such corrective action. Emergency Work shall include only such work as is necessary to immediately address the Emergency and does not include any work necessary to restore the Rail Facility or improve the Rail Facility in order to permit continued operations.
4.1.14 Reporting By Operator. Operator shall (by either (i) submitting written reports or records or (ii) providing Owner with access to Operator's internet website containing the relevant information, at Operator's discretion) provide to Owner the following reports or records, based on the best data available at the time of preparation and subject to revision based on acquisition of more accurate data:
(i) as soon as available, and in any event within 30 days after the end of each calendar month, an operational report on major repairs and other operational details materially affecting the operations of the Rail Facility during such month;
(ii) as soon as available, and in any event within 30 days after the end of each Calendar Year, a certificate from the president or chief executive officer of Operator stating that no event or condition exists or has occurred that violates, results in a breach of, or constitutes a default on the part of any Operator Party under, any of the terms, conditions or provisions of this Agreement;
(iii) within 5 days of Owner's request, environmental information or records pertaining to the Rail Facility (as specified by Owner) necessary for Owner to comply with any reporting obligations of Owner related to all applicable Environmental Law and Environmental Permits; and
(iv) such other information regarding the Rail Facility or the operation and maintenance of the Rail Facility as Owner may from time to time reasonably request.
10 10.23
4.1.15 Notices to Owner. Operator shall immediately notify Owner in writing of (i) any enforcement, clean-up, removal or other governmental or regulatory action instituted, completed or threatened against Operator Parties or Owner pursuant to any Law or Environmental Law as a result of the operation of the Rail Facility; (ii) any claim made or threatened by any person arising out of or in connection with the operation of the Rail Facility against Operator Parties or Owner relating to damage, contribution, cost recovery, compensation loss or injury resulting from or claimed to result from any Hazardous Materials; (iii) any reports made to any environmental agency arising out of or in connection with any Hazardous Materials removed from the Rail Facility or the property on which the Rail Facility is situated including any complaints, notices, warnings, reports or asserted violations in connection therewith; and (d) the discovery of any Hazardous Materials at the Rail Facility or the property on which the Rail Facility is situated that are or may be in violation of Environmental Law. Operator shall also provide to Owner, as promptly as possible, and in any event within five (5) business days after the Operator Parties first received or sent the same, copies of all claims, reports, complaints, notices, warnings or asserted violations relating in any way to the Rail Facility or the Operator Parties' operation thereof. Upon written request of Owner (to enable Owner to defend itself from any claim or charge related to any Law or Environmental Law), Operator shall promptly deliver to Owner notices of hazardous waste manifests reflecting the legal and proper disposal of all such Hazardous Materials removed from the Rail Facility or the property on which the Rail Facility is situated.
4.1.16 Chevron Terminaling Agreement. Each of the parties hereto acknowledges that rail car utilization is a service to which Chevron Marine Products LLC ("Chevron") is entitled under that certain Terminaling Agreement between Chevron and Owner, dated as of May 1, 2008 (the "Chevron Terminaling Agreement"). As such, Operator agrees to provide such service to Chevron in the event such service is warranted until the earlier to occur of (i) the termination of the provisions of this Agreement, or (ii) the termination of the Chevron Terminaling Agreement.
4.1.17 Regulatory Affairs. Operator shall be responsible for preparing and submitting all regulatory filings pertaining to the Rail Facility required by any Governmental Authority.
4.1.18 Devotion of Time. The employees of Operator, or the Operator Parties, as applicable, designated to perform the functions under this Agreement shall devote such time to the operation and maintenance of the Rail Facility as necessary to accomplish the responsibilities of Operator as set forth in this Article IV. Owner recognizes that the employees of Operator, or the Operator Parties, as applicable, shall not be obligated to devote full time to the operation and maintenance of the Rail Facility and that such employees of Operator may act on behalf of Operator or the Operator Parties, as applicable, in activities not associated with this Agreement.
4.2 Standard of Care. Operator shall perform its duties and obligations hereunder and its responsibilities as Operator of the Rail Facility, (i) in a good and workmanlike manner, (ii) in conformity with the good practices in the rail car loading and unloading industry, (iii) in accordance with all valid and applicable Laws, including, without limitation, all Environmental Laws and Environmental Permits, and (iv) in accordance with the Operating and Capital Expenditure Budget.
11 10.23
4.3 Limitation of Authority. Notwithstanding anything in this Agreement, Operator shall seek prior approval of Owner prior to taking the following actions:
4.3.1 Binding Owner. Endorsing the name of Owner on any contract, commercial paper, or instruments of any nature or otherwise creating any obligation binding upon Owner except as expressly permitted under this Agreement.
4.3.2 Asset Sales. Acquiring or disposing of any assets of Owner in a single transaction or in a series of related transactions, with a fair market value exceeding $10,000 in the aggregate, provided, however that Operator is expressly permitted to terminate leases or other contracts in respect of rental equipment regardless of value.
4.3.3 Incurring any indebtedness on behalf of Owner, except for trade credit incurred by Operator in the ordinary course of business or within its expenditure authority set forth in this Agreement.
ARTICLE V : ACCOUNTING, REPORTS, RECORDS
5.1 Accounting Methods. Operator shall keep proper and complete records and books of account, which shall fully and accurately reflect all transactions and other matters relative to its operation and maintenance of the Rail Facility as are entered into records and books of account in accordance with generally accepted industry practices, and the same shall be supported by purchase orders, invoices, payrolls or other customary or necessary records pertaining thereto. Operator's financial books and records shall be kept in accordance with GAAP and shall be maintained on an accrual basis. The costs of any audit of Operator's books or records shall be borne by Owner absent manifest error.
5.2 Independent Audits. Upon reasonable prior written notice to Operator, Owner shall have the right during normal business hours to audit or examine all books and records of Operator to the extent they relate to Operator's performance hereunder as well as the relevant books of account of Operator's contractors, relating to the performance of Operator's obligations under this Agreement. Operator shall cooperate with Owner's auditors by (i) making the applicable books and records available for inspection by Owner's auditors, and (ii) making such copies of books and records as may be reasonably requested by such auditors. In no event shall Owner's audits unreasonably interfere with Operator's operations.
ARTICLE VI : FORCE MAJEURE
6.1 Procedure. If either Party is rendered unable, wholly or in part, by Force Majeure to carry out its obligations under this Agreement, other than the obligation to indemnify and to make payments then or thereafter due hereunder, upon such Party giving notice and full particulars of such Force Majeure in writing to the other Party as soon as reasonably possible after the occurrence of the cause relied on, then the obligations of the Party giving such notice, so far as they are affected by such Force Majeure, will be suspended during the continuance of any inability so caused but for no longer period, and such cause must as far as possible be remedied with all reasonable and diligent dispatch by the Party claiming such in order to put itself in a position to carry out its obligations
12 10.23
under this Agreement. Such notifying Party must also provide notice of the date of termination of such Force Majeure event. A Force Majeure event affecting the performance by either Party shall not relieve it of liability in the event of its negligence, where such negligence was a cause of the Force Majeure event, or in the event of its failure to use commercially reasonable efforts to remedy the situation and remove the cause with all reasonable dispatch.
6.2 Strikes. It is understood and agreed that the settlement of strikes or lockouts is entirely within the discretion of the Party directly involved in the strike or lockout, and that the above requirement that any Force Majeure must be remedied with all reasonable dispatch will not require the settlement of strikes or lockouts by acceding to the demands of the opposing party when such course is inadvisable in the discretion of the Party having the difficulty.
ARTICLE VII : INSURANCE AND INDEMNIFICATION
7.1 Operator Insurance.
7.1.1 Operator, with respect to Operator's activities provided for under this Agreement, shall maintain the following insurance coverage with responsible insurance carriers:
(a) Workers' Compensation. Operator shall maintain statutory worker's compensation insurance, covering all of its and its Affiliates' employees and statutory employees, in accordance with the benefits afforded by the statutory Worker's Compensation Acts applicable to the state, territory, or district of hire, supervision, or place of accident. In addition, Operator shall maintain employer's liability insurance with a limit of not less than one million dollars ($1,000,000) each accident, one million dollars ($1,000,000) disease each employee, and one million dollars ($1,000,000) disease policy limit. Where not prohibited by law, Operator shall waive its right of subrogation against Owner.
(b) Commercial General Liability Insurance. Operator shall maintain Commercial General Liability Insurance covering its operations under this Agreement including, without limitation, bodily injury, death, property damage, premises/operations, sudden and accidental pollution, independent contractors, products/completed operations, contractual, and personal injury liability, with a limit of not less than one million dollars ($1,000,000) per occurrence and two million dollars ($2,000,000) in the annual aggregate.
(c) Commercial Automobile Insurance. Operator shall maintain Commercial Automobile Insurance coverage, including, without limitation, bodily injury and property damage for owned, hired, rented, and non-owned automotive equipment with a limit of not less than one million dollars ($1,000,000) per accident.
(d) Umbrella Liability Insurance. Operator shall maintain Umbrella Liability Insurance coverage covering in excess of (a), (b), and (c) above, excluding Worker's Compensation, in the amount of ten million dollars ($10,000,000).
7.1.2 To the extent of the liabilities assumed by Operator in this Agreement, Operator shall name Owner Indemnified Parties as additional insured on all insurance policies,
13 10.23
except Workers' Compensation. The Owner Indemnified Parties' additional insured status will not limit the application of insurance protection as required by this Agreement which arises out of the Operator's indemnity obligations. These policies shall provide primary coverage for claims in which Operator has agreed to hold harmless and/or to indemnify the Owner Indemnified Parties. No "other insurance" clause may be invoked by any insurer. This coverage shall apply whether or not the indemnification is valid. Operator shall have its insurer(s) waive its right of subrogation against Owner Indemnified Parties on all insurance carried. Unless expressly stated to the contrary elsewhere in this Agreement or prohibited by applicable law or legal statute, Operator's indemnification obligations under this Agreement shall not be limited by amount or in scope to coverage provided by insurance which is required under this Agreement.
7.1.3 Upon request, Operator agrees to furnish to Owner certificates of insurance or other evidence satisfactory to Owner to demonstrate that the required insurance has been procured and is in force. The certificate shall accurately reflect the required insurance coverages and shall provide that in the event of modification, expiration, cancellation or material change in a policy affecting the certificate holder, thirty days prior written notice shall be given to the certificate holder. Operator waives all rights against Owner for recovery of damages to the extent such damages are covered by the insurance maintained in accordance with this Section 7.1.
7.2 Contractors. Operator acknowledges and agrees that any contractor engaged by Operator to perform services at the Rail Facility will be required to execute an access agreement, in a form acceptable to Owner, prior to such contractor accessing the Rail Facility and performing any services. Further, Operator shall attempt to obtain reasonable indemnification and insurance protection from contractors performing services for Owner to protect Owner and Operator. Operator shall require each of its contractors to carry insurance coverage substantially equivalent to the insurance required of Operator above, and to include provisions for its contractors to name Owner and Operator as additional insureds, with the exception of Workers' Compensation Insurance, and state that such policies will be primary to and non-contributory with any other insurance maintained by Operator and Owner. With respect to Workers' Compensation Insurance, the applicable contractor shall be required to cause its insurers to wave all rights of recovery or subrogation against Owner and Operator, where not prohibited by law.
7.3 Notice of Claims. In the event that Operator receives notice, either in writing or orally, of an asserted or threatened Liability Claim against Operator or Owner, Operator shall provide Owner within 10 days of receipt of such Liability Claim a copy of any demand letter, petition, or similar documentation of the Liability Claim.
7.4 Mutual Release and Indemnification.
7.4.1 Owner's Indemnification. Subject to the terms of this Agreement, including, without limitation, Section 8.8 of this Agreement, Owner shall indemnify, defend, and hold harmless the Operator Indemnified Parties from and against all Claims and Losses arising out of or relating to (i) allegations of death or bodily injury or damage to property, to the extent arising out of or resulting from the negligence, gross negligence or willful misconduct of Owner, its Affiliates or its or their respective officers, directors, employees, or contractors in connection with this Agreement or the performance hereof; provided that Owner shall not be required to indemnify the Operator
14 10.23
Indemnified Parties against such Claims and Losses to the extent such Claims and Losses are attributable to the acts or omissions of any Operator Indemnified Parties, (ii) any breach of this Agreement by Owner, and (iii) any agreements relating to the Rail Facility between Owner and third parties not affiliated with the Operator Parties (except to the extent expressly assumed by Operator hereunder). The duty to indemnify, defend and hold harmless under this Section 7.4.1 shall continue in full force and effect, notwithstanding the expiration or early termination of this Agreement, with respect to any Claims or Losses based on facts or conditions that occurred prior to such expiration or termination.
7.4.2 Operator's Indemnification. Subject to the terms of this Agreement, including, without limitation, Section 8.8 of this Agreement, Operator shall indemnify, defend, and hold harmless the Owner Indemnified Parties from and against all Claims and Losses arising out of or relating to (i) allegations of death or bodily injury or damage to property, to the extent arising out of or resulting from the negligence, gross negligence or willful misconduct of Operator, its Affiliates or its or their respective officers, directors, employees, or contractors in connection with this Agreement or the performance hereof; provided that Operator shall not be required to indemnify the Owner Indemnified Parties against such Claims or Losses to the extent such Claims or Losses are attributable to the acts or omissions of any Owner Indemnified Party, (ii) any breach of this Agreement by Operator, and (iii) any agreements relating to the Rail Facility between Operator and third parties not affiliated with Owner (except to the extent expressly assumed by Owner hereunder). The duty to indemnify, defend and hold harmless under this Section 7.4.2 shall continue in full force and effect, notwithstanding the expiration or early termination of this Agreement, with respect to any Claims or Losses based on facts or conditions that occurred prior to such expiration or termination.
ARTICLE VIII : GENERAL PROVISIONS
8.1 Additional Rail Facilities. Nothing in this Agreement shall limit Owner's right to construct, expand or modify, and operate other rail car loading/off loading facilities (i) at Owner's terminal and storage facility located on the property on which the Rail Facility is located, or (ii) at any other location in Owner deems necessary and beneficial.
8.2 Notices. Except as specifically provided otherwise herein, any notice, claim, or other communication provided for in this Agreement or any notice that either Party may desire to give to the other shall be in writing and shall be: (i) sent by facsimile transmission; (ii) delivered by hand; (iii) sent by United States mail with all postage fully prepaid; or (iv) delivered by courier with charges paid in accordance with the customary arrangements established by such courier, in each of the foregoing cases addressed to the Party at the following addresses:
To Owner:
Magellan Terminals Holdings, L.P. Attn: Mark Roles Manager, Commercial Development P.O. Box 22186 MD 31st Floor
15 10.23
Tulsa, Oklahoma 74121-2186 To Operator:
Omega Refining, LLC Attn: Robert Winland 5000 River Road Marrero, Louisiana 70072
with a copy to:
Gregory & Plotkin, LLC Attn: James P. Gregory, Esq. 1331 17t h Street, Suite 1060 Denver, Colorado 80202
or at such other address as either Party may at any time designate by giving written notice to the other Party. Such notices, claims, or other communications shall be deemed received as follows:
(i) if delivered personally, upon delivery;
(ii) if sent by United States mail, whether by express mail, registered mail, certified mail or regular mail, the notice shall be deemed to have been received on the day receipt is refused or is confirmed orally or in writing by the receiving Party;
(iii)if sent by a courier service, upon delivery; or
(iv)if sent by facsimile, the Business Day following the day on which it was transmitted and confirmed by transmission report or such earlier time as confirmed orally or in writing by the receiving Party.
8.3 Rights. The failure of either Party to exercise any right granted hereunder shall not impair nor be deemed a waiver of that Party's privilege of exercising that right at any subsequent time or times.
8.4 Applicable Laws. This Agreement is subject to all valid present and future laws, regulations, rules, and orders of governmental authorities now or hereafter having jurisdiction over the Parties, this Agreement, any of the transactions contemplated hereby or the Rail Facility.
8.5 Rules of Construction. In construing this Agreement, the following principles shall be followed:
8.5.1 no consideration shall be given to the fact or presumption that one Party had a greater or lesser hand in drafting this Agreement;
16 10.23
8.5.2 examples shall not be construed to limit, expressly or by implication, the matter they illustrate;
8.5.3 the word "includes" and its syntactical variants mean "includes, but is not limited to" and corresponding syntactical variant expressions; and
8.5.4 the plural shall be deemed to include the singular and vice versa, as applicable.
8.6 Governing Law. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Delaware, without regard to choice of law principles that would require the application of the laws of any other jurisdiction.
8.7 Dispute Resolution.
8.7.1 Negotiation. Prior to submitting any dispute for resolution by a court, a Party shall provide written notice to the other of the occurrence of such dispute. If the Parties have failed to resolve the dispute within 15 Business Days after such notice was given, the Parties shall seek to resolve the dispute by negotiation between senior management personnel of each Party. Such personnel shall endeavor to meet and attempt to amicably resolve the dispute. If the Parties are unable to resolve the dispute for any reason within 30 Business Days after the original notice of dispute was given, then either Party shall be entitled to pursue any remedies available at law or in equity; provided, however, this Section 8.6.1 shall not limit a Party's right to initiate litigation prior to the expiration of the time periods set forth herein of such limitations would prevent a Party from filing a lawsuit or claim within the applicable period for filing lawsuits (e.g. statutes of limitation, prescription, etc.).
8.7.2 Costs and Expenses. The prevailing Party in any litigation pertaining to any dispute hereunder shall be entitled to recover its reasonable costs, expenses, and attorney's fees in connection with such litigation.
8.8 Limitation of Liability. Notwithstanding anything in this agreement to the contrary, neither Party shall be liable to the other Party for special, indirect, consequential, punitive, or exemplary damages suffered by such Party resulting from or arising out of this Agreement or the breach thereof or under any other theory of liability, whether tort, negligence, strict liability, breach of contract, warranty, indemnity, or otherwise, including, without limitation, loss of use, increased cost of operations, loss of profit or revenue, or business interruptions. In furtherance of the foregoing, each Party releases the other Party and waives any right of recovery for special, indirect, consequential, punitive, or exemplary damages suffered by such Party regardless of whether any such damages are caused by the other Party's negligence (and regardless of whether such negligence is sole, joint, concurrent, active, passive, or gross negligence), fault, or liability without fault.
8.9 Entirety of Agreement, Amendments. This Agreement, including, without limitation, all exhibits hereto, integrate the entire understanding between the Parties with respect to the operation and maintenance by Operator of Owner's Rail Facility and supersede all prior understandings, drafts, discussions, or statements, whether oral or in writing, expressed or implied,
17 10.23
dealing with the same subject matter. This Agreement may not be amended or modified in any manner except by a written document signed by the Parties that expressly amends this Agreement.
8.10 Waivers. No waiver by either Party of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless expressly provided. No waiver shall be effective unless made in writing and signed by the Party to be charged with such waiver.
8.11 Headings. The headings and captions in this Agreement have been inserted for convenience of reference only and shall not define or limit any of the terms and provisions hereof.
8.12 Rights and Remedies. Except as otherwise provided in this Agreement, each Party reserves to itself all rights, counterclaims, other remedies, and defenses to which such Party is or may be entitled arising from or out of this Agreement or as otherwise provided by law.
8.13 Assignment. Operator shall not make any assignment of all or any part of this Agreement or any of the rights or obligations hereunder unless there first shall have been obtained the written consent thereto of Owner, which consent shall not be unreasonably withheld, conditioned, or delayed. Owner shall not make any assignment of all or any part of this Agreement or any of the rights or obligations hereunder except in connection with the sale, financing or conveyance of all or any part of the Rail Facility. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Parties. Any attempted assignment of this Agreement in violation of this Section 8.12 shall be null and void.
8.14 Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile), each of which shall be deemed an original, and all of which shall be deemed one and the same Agreement.
8.15 No Third Party Beneficiary. Except for parties indemnified hereunder, this Agreement is for the sole benefit of the Parties and their respective successors and permitted assigns, and shall not inure to the benefit of any other Person whomsoever or whatsoever, it being the intention of the Parties that no third Person shall be deemed a third-party beneficiary of this Agreement.
8.16 Further Assurances. Each Party shall take such acts and execute and deliver such documents as may be reasonably required to effectuate the purposes of this Agreement.
* * * * *
18 10.23
IN WITNESS WHEREOF, the undersigned have executed or caused to be executed on their behalf this Agreement to be effective on the Effective Date.
Operation & Maintenance Agreement Signature Page K&E 10351208.3
EXHIBIT "A"
Exhibit "A" K&E 10351208.3
EXHIBIT "C" Owner's Facility Security Plan
2 10.23 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 10.24
______________________________________________________________________________
______________________________________________________________________________
OPERATION AND MAINTENANCE AGREEMENT
Dated as of November 3, 2010
______________________________________________________________________________
______________________________________________________________________________
10.23
TABLE OF CONTENTS Page
ARTICLE I : DEFINITIONS1
ARTICLE II : ENGAGEMENT OF OPERATOR5 2.1 Engagement.. 5 2.2 Independent Contractor. 5 2.3 Owner Cooperation 5
ARTICLE III : TERM, RESIGNATION OR REMOVAL OF OPERATOR5 3.1 Term. 5 3.2 Owner Default. 5 3.3 Operator Default 6 3.4 Cooperation with Owner or Successor Operator 7 3.5 Effect of Termination 7
ARTICLE IV : DUTIES AS OPERATOR7 4.1 Duties as Operator. 7 4.2 Standard of Care.. 11 4.4 Limitation of Authority 12
ARTICLE V : ACCOUNTING, REPORTS, RECORDS12 5.1 Accounting Methods. 12 5.2 Independent Audit. 12
ARTICLE VI : FORCE MAJEURE12 6.1 Procedure.. 12
6.2 Strikes. 13
ARTICLE VII : INSURANCE AND INDEMNIFICATION13 7.1 Operator Insurance. 13 7.2 Contractors 14 7.3 Notice of Claims.. 14 7.4 Mutual Release and Indemnification. 14
ARTICLE VIII : GENERAL PROVISIONS15 8.2 Notices 15 8.3 Rights 16 8.4 Applicable Laws 16 8.5 Rules of Construction. 16 8.6 Governing Law.. 17 8.7 Dispute Resolution. 17 8.8 Limitation of Liability.. 17 8.9 Entirety of Agreement, Amendments 17 8.10 Waivers. 18 8.11 Headings. 18 8.12 Rights and Remedies. 18 8.13 Assignment 18 8.14 Counterparts 18 8.15 No Third Party Beneficiary 18 8.16 Further Assurances. 28
10.23
OPERATION AND MAINTENANCE AGREEMENT This OPERATIONS AND MAINTENANCE AGREEMENT dated this 3rd day of November, 2010 (the "Effective Date"), is made and entered into by and between MAGELLAN TERMINALS HOLDINGS, L.P. (f/k/a Marrero Terminal, LLC), a Delaware limited partnership ("Owner"), and OMEGA REFINING, LLC, a Delaware limited liability company ("Omega" or "Operator"). Owner and Operator are referred to individually herein as a "Party" and collectively herein as the "Parties".
WITNESSETH:
WHEREAS, Owner currently operates that certain six spot rail car loading/offloading area located at 5000 River Road, Marrero, Louisiana, including associated piping, hoses, and pumps as more particularly described on Exhibit "A" attached hereto and incorporated by reference herein (the "Rail Facility"); and
WHEREAS, Owner wishes to retain Operator to maintain and operate the Rail Facility as well as administering the business and regulatory affairs of Owner relating to the Rail Facility, all in accordance with the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I : DEFINITIONS
Capitalized terms used in this Agreement but not otherwise defined herein shall have the following meanings:
"Affiliate" means, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by, or is under common control with, such specified Person through one or more intermediaries or otherwise. For the purposes of this definition, "control" means, where used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Securities or interests, by contract or otherwise, and the terms "controlling" and "controlled" have correlative meanings.
"Agreement" means this Amended and Restated Operations and Maintenance Agreement (including all exhibits), as amended from time to time in accordance with the terms hereof.
"Business Day" means any calendar day, other than a Saturday or Sunday, on which commercial banks in New Orleans, Louisiana are open for business.
"Calendar Year" means the time period from January 1 through December 31 of the same calendar year.
1
"Capital Project" means any capital expenditure to repair, maintain, construct, expand, or modify the Rail Facility.
"Capital Project Proposal" shall have the meaning set forth in Section 4.1.11.
"Claim" means any lawsuit, claim, proceeding, investigation, review, audit or other cause of action of any kind.
"Constituent of Concern" means any substance defined as a hazardous substance, hazardous waste, hazardous material, toxic substance, solid waste, pollutant or contaminant by an Environmental Law.
"Effective Date" shall have the meaning set forth in the preamble to this Agreement.
"Emergency" means a sudden or unexpected event that causes, or risks causing, imminent material damage to the Rail Facility, death or injury to any Person, or material damage to property or the environment.
"Emergency Work" shall have the meaning set forth in Section 4.1.12.
"Environmental Law" means all applicable Laws and Environmental Permits of any Governmental Authority relating to the environment, natural resources, or the protection thereof, including, without limitation: (a) all requirements pertaining to liability for reporting, management, licensing, permitting, investigation, and remediation of emissions, discharges, releases, or threatened releases of a Constituent of Concern; and (b) CERCLA, the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq. the Federal Clean Water Act, the Federal Clean Air Act, the Federal Solid Waste Disposal Act (which includes the Resource Conservation and Recovery Act), the Federal Toxic Substances Control Act, and the Federal Insecticide, Fungicide and Rodenticide Act, the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq., and the Safe Drinking Water Act, 42 U.S.C. § 300f et seq. and any applicable Law relating to health, safety, the environment, natural resources or the protection thereof, each as amended from time to time, including any regulations promulgated pursuant thereto, and any state or local counterparts. "Environmental Permits" all permits, licenses, registrations, authorizations, certificates and approvals, and any other similar items, of Governmental Authorities required by Environmental Laws and necessary for or held in connection with the ownership and/or operation of the Rail Facility or any of the transactions contemplated hereby.
"Force Majeure" means any cause or causes not reasonably within the control of the Party claiming suspension and which, by the exercise of reasonable diligence, such Party is unable to prevent or overcome, including, without limitation, acts of God, acts, omissions to act, and/or delays in action of federal, state, or local government or any agency thereof, strikes, lockouts, work stoppages, or other industrial disturbances, acts of a public enemy, sabotage, wars, blockades, insurrections, riots, acts of terror, epidemics, landslides, lightning, earthquakes, fires, storms, storm warnings, floods, washouts, extreme cold or freezing weather, arrests and restraints of governments
2 10.23
and people, civil or criminal disturbances, interruptions by governmental or court orders, present and future valid orders of any regulatory body having jurisdiction, explosions, mechanical failures, breakage, or accident to equipment installations, machinery, compressors, or lines of pipe, and associated repairs, freezing of wells or lines of pipe, partial or entire failure of wells, pipes, facilities, or equipment, electric power unavailability or shortages, failure of pipelines or carriers to transport, partial or entire failure or refusal of operators of upstream or downstream pipelines or facilities to receive used motor oil, governmental regulations, and inability to obtain or timely obtain, or obtain at a reasonable cost, after exercise of reasonable diligence, pipe, materials, equipment, rights-of-way, servitudes, governmental approvals, or labor, including those necessary for the facilities provided for in this Agreement.
"GAAP" means generally accepted accounting principles, consistently applied.
"Governmental Authority" means any federal, state, municipal, local or similar governmental authority, regulatory or administrative agency, court or arbitral body with jurisdiction over the Parties, this Agreement, any of the transactions contemplated hereby or the Rail Facility.
"Hazardous Materials" means any materials, including without limitation chemicals and wastes that are regulated under Environmental Law. "Law" means any statute, writ, law, common law, rule, regulation, ordinance, order, judgment, injunction, award, determination or decree of a Governmental Authority, or any requirement under the common law.
"Lease" shall mean that certain Land Lease dated as of April 30, 2008, pursuant to which Operator leased certain property from Owner's predecessor in interest, as described therein, as amended by that certain First Amendment to Land Lease dated as of October 29, 2009.
"Liability Claim" means a Claim arising out of the administration, operation, or maintenance of the Rail Facility, or arising out of or incidental to the activities carried on or work performed or required by this Agreement.
"Loss" means any loss, cost, expense, liability, damage, sanction, judgment, lien, fine, or penalty, including reasonable attorney's and consultant's fees and expenses, incurred, suffered or paid by, or resulting to, the applicable indemnified Persons on account of (i) injuries (including death) to any Person or damage to or destruction of any property, sustained or alleged to have been sustained in connection with or arising out of the matters for which the indemnifying Party has indemnified the applicable indemnified Persons, (ii) any failure of any representation or warranty made by Operator in this Agreement to be true and correct when made, or (iii) the breach of any covenant or agreement made or to be performed by the indemnifying Party pursuant to this Agreement.
"Operating and Capital Expenditure Budget" means, with respect to each period, the Operating and Capital Expenditure Budget for such period approved by Owner.
3 10.23
"Operator" shall have the meaning set forth in the preamble to this Agreement.
"Operator Indemnified Parties" means, collectively, Operator, its successors and permitted assigns, and their respective Affiliates, shareholders, members, partners, officers, directors, employees, and agents.
"Operator Parties" means, collectively, Operator, Operator's Affiliates, and their respective successors and assigns; "Operator Party" means any such Person individually.
"Owner" shall have the meaning set forth in the preamble to this Agreement.
"Owner Indemnified Parties" means, collectively, Owner, its successors and permitted assigns, and their respective Affiliates, shareholders, members, partners, officers, directors, employees, and agents.
"Party" means either Owner or Operator, as applicable, and "Parties" means both Owner and Operator.
"Person" means an individual, a corporation, a partnership, a limited partnership, a limited liability company, an association, a joint venture, a trust, an unincorporated organization, or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
"Rail Facility" shall have the meaning ascribed to such term m the recital of this Agreement.
""Tax" or "Taxes" means any (i) federal, state, provincial, county, local or foreign taxes, charges, fees, levies or other assessments, including all sales and use, goods and services, ad valorem, transfer, gains, profits, excise, franchise, real and personal property, gross receipt, value added, capital stock, production, business and occupation, disability, employment, payroll, license, estimated, stamp, custom duties, severance, unemployment, social security, Medicare, alternative minimum or withholding taxes or charges imposed by any Governmental Authority, and including any interest and penalties (civil or criminal) on or additions to any such taxes, but expressly excluding any income tax or tax based on income, such as, without limitation, the franchise tax set forth in Delaware Tax Code: 8 Del. Laws, c. 5 §501 et. seq., as the same may be amended or recodified from time to time, and (ii) liability for items in (i) of any other Person by contract, operation of Law (including Treasury Regulation 1.1502-6) or otherwise.
"Tax Returns" means any return, report, election, declaration, statement, notice, information return, schedule, or other document (including any related or supporting information) filed or required to be filed with any Governmental Authority in connection with the determination, assessment, collection or administration of any Taxes or any income tax or tax based on income, such as, without limitation, the franchise tax set forth in Delaware Tax Code 8 Del. Laws, c. 5 §501
4 10.23
et. seq., as the same may be amended or recodified from time to time, or the administration of any laws, regulations or administrative requirements relating to any Taxes or any amendment thereof.
"Voting Securities" means, as it relates to a Person, securities of any class of such Person entitling the holders thereof to vote in the election of, or to appoint, members of the board of directors or other similar governing body of the Person; provided that if such Person is a limited partnership, Voting Securities of such Person shall be the general partner interest in such Person.
ARTICLE II : ENGAGEMENT OF OPERATOR
2.1 Engagement. Owner hereby appoints and retains Operator to manage, operate, and maintain the Rail Facility and to administer the business and regulatory affairs of Owner relating to the Rail Facility in accordance with the terms and conditions set forth herein, and Operator hereby accepts such appointment.
2.2 Independent Contractor. The Parties expressly understand and agree that Operator is acting and shall perform and execute the provisions of this Agreement as an independent contractor unrelated to Owner or any Owner Affiliate, and the work performed by Operator hereunder shall be subject to Owner's general right of inspection and approval. Nothing in this Agreement is intended to create a relationship, expressed or implied, of employer-employee or principal-agent between Owner and Operator or between Owner and any individual employed or provided to work hereunder by Operator.
2.3 Owner Cooperation. Owner shall cooperate with Operator and provide Operator with such information as Operator may reasonably request from time to time in connection with the performance of Operator's duties hereunder.
ARTICLE III : TERM, RESIGNATION OR REMOVAL OF OPERATOR
3.1 Term. This Agreement shall commence on the Effective Date and, shall continue for the duration of the Lease, unless terminated earlier pursuant to Section 3.2 or 3.3.
3.2 Owner Default. Operator may terminate this Agreement at any time upon the occurrence of any of the following:
(a) the dissolution or bankruptcy of Owner;
(b) Owner fails to pay when due any amount due and payable hereunder, including, without limitation, any interest, fees, reimbursements or indemnifications, and such failure shall continue for a period of 15 days after the due date thereof; or
(c) other than as set forth in clause (b) above, Owner breaches or fails to observe or perform any material term, condition, or obligation contained in this Agreement and fails to correct, or fails to diligently pursue correction of, such breach within 60 days after receipt of written notice from Operator of any such breach.
5 10.23
If any of the above occurs and Operator elects to terminate this Agreement, then Operator may give a written notice of termination to Owner, which termination shall be effective on the date specified by Operator in such notice, provided that such termination date shall be within 60 days of the date such notice is delivered to Owner. Operator's notice of breach to Owner under Section 3.2(b) or (c) shall state with particularity the breach alleged by Operator. To the extent Owner disputes the basis for Operator's notice of breach, the matter shall be addressed under Section 8.6. Nothing in this Section 3.2 shall be construed to limit or preclude any remedy Operator may have at law or in equity with respect to any material breach by Owner.
3.3 Operator Default. Owner may terminate this Agreement at any time upon the occurrence of any of the following:
(a) the dissolution or bankruptcy of Operator;
(b) Operator fails to pay when due any amount due and payable hereunder, including, without limitation, any interest, fees, reimbursements or indemnifications, and such failure shall continue for a period of 15 days after the due date thereof;
(c) other than as set forth in clause (b) above, Operator breaches or fails to observe or perform any material term, condition, or obligation contained in this Agreement and fails to correct, or fails to diligently pursue correction of, such breach within 60 days after receipt of written notice from Owner of any such breach;
(d) Termination by Owner pursuant to Section 4.1.1; or
(e) Without cause on no less than seven (7) days prior written notice.
In the event Owner terminates this Agreement pursuant to subparagraph (e) above, Owner may reimburse Operator for any unamortized capital expenditure (determined in accordance with GAAP) to the extent such capital expenditure was included in the Operating and Capital Expenditure Budget. If any of the above occurs, other than an event described in subparagraph (d), and Owner elects to terminate this Agreement (a termination for "cause"), then Owner may give a written notice of termination to Operator, which termination shall be effective on the date specified by Owner in the notice, provided that such termination date shall be within 60 days of the date the notice is delivered to Operator. Owner's notice of breach to Operator under Section 3.3(b) or (c) shall state with particularity the breach alleged by Owner. To the extent Operator disputes the basis for Owner's notice of breach, the matter shall be addressed under Section 8.6. Nothing in this Section 3.3 shall be construed to limit or preclude any remedy Owner may have at law or in equity with respect to any material breach by Operator.
3.4 Cooperation with Owner or Successor Operator. Upon the termination of this Agreement, Operator shall cooperate in the transition of operations to Owner or a successor operator
6 10.23
and upon Owner's request, will promptly deliver all books and records and other property (including, without limitation, intellectual property) of Owner to Owner or the successor operator, as applicable.
3.5 Effect of Termination. Any termination of this Agreement pursuant to this Article III will release Operator from, and Owner agrees to indemnify Operator against, any liability accruing or accrued hereunder after the effective date of termination, except with respect to the obligations and liabilities of Operator that survive termination including any and all liabilities arising out of or resulting from Operator's operation and maintenance of the Rail Facility. Termination of this Agreement shall not relieve the Parties from any liability or obligation accruing or accrued prior to the date of such termination or deprive a Party not in breach (other than a breach which occurs because such Party is rightfully withholding performance in response to a breach by the other Party) of its right to any remedy otherwise available to such Party.
ARTICLE IV : DUTIES AS OPERATOR
4.1 Duties as Operator. Operator shall be responsible for (1) construction of the improvements to the Rail Facility in accordance with those plans and specifications approved by Owner in writing, (2) administering the regulatory, business, and financial affairs of the Rail Facility; (3) maintaining the financial and product accounting records of the Rail Facility; 4) preparing and distributing financial statements; (5) complying with any and all instructions it receives from Owner with respect to the operation and maintenance of the Rail Facility, provided that such instructions are consistent with applicable Laws and (6) complying with any and all Law and Environmental Law including any other permits or licenses.
4.1.2 Improvements/Alterations to the Rail Facility. Operator shall evaluate and modify, at its sole cost and expense, the rail car containment pan system (the "Containment Pan System") so that such system is in compliance with the Spill Prevention, Control, and Countermeasure Regulations promulgated by the Environmental Protection Agency (the "SPCC Regulations") and any other applicable regulations, rules or similar administrative publications promulgated by any other federal, state, or local regulatory agency. Such evaluation and modification, if necessary, of the Containment Pan System shall occur within ninety (90) days of the Effective Date. Owner specifically reserves the right to review, evaluate and approve the plans and specifications developed by Operator for any modifications to be made to the Containment Pan System for such compliance. Owner will provide written notice to Operator, within fifteen (15) days of Operator's submission of the plans and specifications for the Containment Pan System, confirming or denying its approval of Operator's plans and specifications for modification to the Containment Pan System, and in the event Owner does not approve such plans and specifications, Owner will provide Operator with written detail describing why such approval was withheld. Operator will have ten (10) days from the date it receives such written notice from Owner denying approval of its Containment Pan System plans and specifications to remediate such plans and specifications so that the modifications will comply with the SPCC Regulations. If Operator fails to remediate the Containment Pan System plans and specifications in a manner that will result in the modifications to the Containment Pan System complying with the SPCC Regulations within such ten (10) day period in a manner satisfactory to Owner, Owner, in its sole discretion, may unilaterally terminate this Agreement. Additionally, Owner reserves the right to inspect the
7 10.23
Containment Pan System after Operator has modified such equipment, and if such modifications made by Operator to the Containment Pay System do not comply with SPCC Regulations, then Owner, in its sole discretion, may unilaterally terminate this Agreement. Any other alterations or improvements to the Rail Facility may not be made by Operator without the written consent of Owner.
4.1.3 Operation of the Rail Facility. Operator shall manage and operate the Rail Facility, the construction and future modifications to the Rail Facility, and negotiate agreements in Owner's name with third parties related to the operation of the Rail Facility (provided that (i) Owner shall have the right to approve or disapprove any such agreements, and (ii) if approved, except as provided in Section 4.1.1, Owner, and not Operator, shall execute all such agreements), comply with any instructions it receives from Owner with respect to the operation and maintenance of the Rail Facility, provided that such instructions are consistent with applicable Laws, and perform all other services and functions related thereto subject to the limits, requirements, and restrictions otherwise set forth in this Agreement.
4.1.4 Maintenance of the Rail Facility. Subject to the terms, conditions and limitations set forth in this Agreement, Owner hereby authorizes and empowers Operator, and Operator agrees, in the name of and on behalf of Owner, to, at its sole cost and expense, keep and maintain the Rail Facility in a condition and repair similar to, but not less than, its condition and repair on the Effective Date hereof.
4.1.5 Operator Recommendations. In the event that Operator makes a good-faith recommendation in writing regarding an operational issue to Owner, and Owner does not, for any reason whatsoever, approve such recommendation, then Operator shall not be liable and Owner hereby releases and shall indemnify, defend and hold Operator harmless from and against any Claim or Loss that arises from, or is attributable to, the failure to implement such recommendation.
4.1.6 Compliance with Owner Instructions. Notwithstanding anything to the contrary in this Agreement, in the event that Owner instructs Operator to take any action or refrain from taking any action in connection with the operation or maintenance of the Rail Facility and Operator in good faith disagrees with Owner because, among other reasons, it is not consistent with prudent operating standards, then Operator shall notify Owner of such disagreement in writing, and Owner hereby releases and shall indemnify, defend and hold Operator harmless from and against any Claim or Loss that arises from, or is attributable to, Operator's compliance with Owner's instructions.
4.1.7 Environmental Laws. Operator shall comply, in the performance of its duties and responsibilities hereunder, in all respects with all Environmental Laws and all Environmental Permits.
4.1.8 Purchase of Services, Materials and Supplies. Except as otherwise provided below and subject to the limitations herein, Operator shall, on Owner's behalf and as its agent, purchase or cause to be purchased necessary services, materials and supplies and incur such expenses and enter into such commitments as may be necessary to operate and maintain the Rail Facility, including, but not limited to, (i) contracts for the maintenance, repair and replacement of the Rail
8 10.23
Facility and, if requested by Owner, construction of additions to the Rail Facility; and (ii) contracts for power, fuel, other utilities, and communication facilities as may be necessary in connection with proper operation and maintenance of the Rail Facility and for providing adjustments and replacements thereto.
4.1.9 Personnel. Except as otherwise provided below and subject to the limitations herein, Operator, in its reasonable judgment, shall employ such personnel, with Operator or an Affiliate as their employer, as it may deem necessary to operate and maintain the Rail Facility and to provide adjustments and replacements thereto and to perform its other obligations hereunder. In addition to Operator's or Operator's Affiliates' employees who are either full-time or part-time dedicated to operating and maintaining the Rail Facility, Operator may: (i) utilize from time to time its other employees or the employees of Operator's Affiliates in services in connection therewith at a usual and customary rate of compensation; and/or (ii) engage the services of third-party contractors in the performance of such functions. Notwithstanding the foregoing, all personnel provided by Operator to operate and maintain the Rail Facility shall have the requisite background, training and skill necessary to operate such a facility in accordance with all current industry standards and any and all applicable state and federal Laws, Environmental Laws, and Environmental Permits.
4.1.10 Payment of Operating Expenses. Operator shall promptly pay all direct costs and expenses incurred in operating and maintaining the Rail Facility as they become due, without reimbursement by Owner save and except to the extent specifically provided otherwise herein.
4.1.11 Operating Expense Budget. Operator shall (i) administer and otherwise comply with the budget proposed by Operator and approved by Owner (ii) operate and maintain the Rail Facility in compliance with the Operating and Capital Expenditure Budget established for the Rail Facility; provided, however, if Owner instructs Operator to perform any services outside of the scope of the services contemplated in the Operating and Capital Expenditure Budget (exclusive of those services to be performed by Operator in connection with any necessary alterations or modifications to the Containment Pan System pursuant to Section 4.1.1), then Owner shall reimburse Operator for the costs and expenses associated therewith.
4.1.12 Capital Projects. Operator may propose an unbudgeted Capital Project at any time by giving written notice of such to Owner. The notice (the "Capital Project Proposal") must specifically describe the proposed Capital Project and shall include the following:
(i)a good-faith estimate of the costs associated with the operation and maintenance of the proposed Capital Project;
(ii)preliminary engineering designs and plans; and
(iii)general requirements or provisions for the Capital Project, including construction of the Capital Project and insurance coverage.
9 10.23
Owner shall approve or reject the proposed Capital Project set forth in the applicable Capital Project Proposal within fifteen (15) days from the date of receipt of the same, such approval not to be unreasonably withheld, conditioned or delayed. If Owner approves the applicable Capital Project, then Operator shall have the right and authority with respect to the approved Capital Project to make expenditures, or enter into contracts to incur expenditures, without further authorization by Owner; provided, however, Owner will not be responsible for reimbursing Operator for any expenditures incurred by Operator related to the construction, operation, and maintenance of the Capital Project.
4.1.13 Emergencies. Notwithstanding any provision of this Agreement, in the event of an Emergency, Operator shall proceed with maintenance or repair work or with any other action when necessary to minimize damage and to end the Emergency ("Emergency Work"), without regard to the limits set forth in this Article IV. Operator shall, as soon as reasonably practicable, notify Owner of the existence or occurrence of the Emergency, setting forth the nature of the emergency, the corrective action taken or proposed to be taken, and the actual or estimated cost of such corrective action. Emergency Work shall include only such work as is necessary to immediately address the Emergency and does not include any work necessary to restore the Rail Facility or improve the Rail Facility in order to permit continued operations.
4.1.14 Reporting By Operator. Operator shall (by either (i) submitting written reports or records or (ii) providing Owner with access to Operator's internet website containing the relevant information, at Operator's discretion) provide to Owner the following reports or records, based on the best data available at the time of preparation and subject to revision based on acquisition of more accurate data:
(i) as soon as available, and in any event within 30 days after the end of each calendar month, an operational report on major repairs and other operational details materially affecting the operations of the Rail Facility during such month;
(ii) as soon as available, and in any event within 30 days after the end of each Calendar Year, a certificate from the president or chief executive officer of Operator stating that no event or condition exists or has occurred that violates, results in a breach of, or constitutes a default on the part of any Operator Party under, any of the terms, conditions or provisions of this Agreement;
(iii) within 5 days of Owner's request, environmental information or records pertaining to the Rail Facility (as specified by Owner) necessary for Owner to comply with any reporting obligations of Owner related to all applicable Environmental Law and Environmental Permits; and
(iv) such other information regarding the Rail Facility or the operation and maintenance of the Rail Facility as Owner may from time to time reasonably request.
10 10.23
4.1.15 Notices to Owner. Operator shall immediately notify Owner in writing of (i) any enforcement, clean-up, removal or other governmental or regulatory action instituted, completed or threatened against Operator Parties or Owner pursuant to any Law or Environmental Law as a result of the operation of the Rail Facility; (ii) any claim made or threatened by any person arising out of or in connection with the operation of the Rail Facility against Operator Parties or Owner relating to damage, contribution, cost recovery, compensation loss or injury resulting from or claimed to result from any Hazardous Materials; (iii) any reports made to any environmental agency arising out of or in connection with any Hazardous Materials removed from the Rail Facility or the property on which the Rail Facility is situated including any complaints, notices, warnings, reports or asserted violations in connection therewith; and (d) the discovery of any Hazardous Materials at the Rail Facility or the property on which the Rail Facility is situated that are or may be in violation of Environmental Law. Operator shall also provide to Owner, as promptly as possible, and in any event within five (5) business days after the Operator Parties first received or sent the same, copies of all claims, reports, complaints, notices, warnings or asserted violations relating in any way to the Rail Facility or the Operator Parties' operation thereof. Upon written request of Owner (to enable Owner to defend itself from any claim or charge related to any Law or Environmental Law), Operator shall promptly deliver to Owner notices of hazardous waste manifests reflecting the legal and proper disposal of all such Hazardous Materials removed from the Rail Facility or the property on which the Rail Facility is situated.
4.1.16 Chevron Terminaling Agreement. Each of the parties hereto acknowledges that rail car utilization is a service to which Chevron Marine Products LLC ("Chevron") is entitled under that certain Terminaling Agreement between Chevron and Owner, dated as of May 1, 2008 (the "Chevron Terminaling Agreement"). As such, Operator agrees to provide such service to Chevron in the event such service is warranted until the earlier to occur of (i) the termination of the provisions of this Agreement, or (ii) the termination of the Chevron Terminaling Agreement.
4.1.17 Regulatory Affairs. Operator shall be responsible for preparing and submitting all regulatory filings pertaining to the Rail Facility required by any Governmental Authority.
4.1.18 Devotion of Time. The employees of Operator, or the Operator Parties, as applicable, designated to perform the functions under this Agreement shall devote such time to the operation and maintenance of the Rail Facility as necessary to accomplish the responsibilities of Operator as set forth in this Article IV. Owner recognizes that the employees of Operator, or the Operator Parties, as applicable, shall not be obligated to devote full time to the operation and maintenance of the Rail Facility and that such employees of Operator may act on behalf of Operator or the Operator Parties, as applicable, in activities not associated with this Agreement.
4.2 Standard of Care. Operator shall perform its duties and obligations hereunder and its responsibilities as Operator of the Rail Facility, (i) in a good and workmanlike manner, (ii) in conformity with the good practices in the rail car loading and unloading industry, (iii) in accordance with all valid and applicable Laws, including, without limitation, all Environmental Laws and Environmental Permits, and (iv) in accordance with the Operating and Capital Expenditure Budget.
11 10.23
4.3 Limitation of Authority. Notwithstanding anything in this Agreement, Operator shall seek prior approval of Owner prior to taking the following actions:
4.3.1 Binding Owner. Endorsing the name of Owner on any contract, commercial paper, or instruments of any nature or otherwise creating any obligation binding upon Owner except as expressly permitted under this Agreement.
4.3.2 Asset Sales. Acquiring or disposing of any assets of Owner in a single transaction or in a series of related transactions, with a fair market value exceeding $10,000 in the aggregate, provided, however that Operator is expressly permitted to terminate leases or other contracts in respect of rental equipment regardless of value.
4.3.3 Incurring any indebtedness on behalf of Owner, except for trade credit incurred by Operator in the ordinary course of business or within its expenditure authority set forth in this Agreement.
ARTICLE V : ACCOUNTING, REPORTS, RECORDS
5.1 Accounting Methods. Operator shall keep proper and complete records and books of account, which shall fully and accurately reflect all transactions and other matters relative to its operation and maintenance of the Rail Facility as are entered into records and books of account in accordance with generally accepted industry practices, and the same shall be supported by purchase orders, invoices, payrolls or other customary or necessary records pertaining thereto. Operator's financial books and records shall be kept in accordance with GAAP and shall be maintained on an accrual basis. The costs of any audit of Operator's books or records shall be borne by Owner absent manifest error.
5.2 Independent Audits. Upon reasonable prior written notice to Operator, Owner shall have the right during normal business hours to audit or examine all books and records of Operator to the extent they relate to Operator's performance hereunder as well as the relevant books of account of Operator's contractors, relating to the performance of Operator's obligations under this Agreement. Operator shall cooperate with Owner's auditors by (i) making the applicable books and records available for inspection by Owner's auditors, and (ii) making such copies of books and records as may be reasonably requested by such auditors. In no event shall Owner's audits unreasonably interfere with Operator's operations.
ARTICLE VI : FORCE MAJEURE
6.1 Procedure. If either Party is rendered unable, wholly or in part, by Force Majeure to carry out its obligations under this Agreement, other than the obligation to indemnify and to make payments then or thereafter due hereunder, upon such Party giving notice and full particulars of such Force Majeure in writing to the other Party as soon as reasonably possible after the occurrence of the cause relied on, then the obligations of the Party giving such notice, so far as they are affected by such Force Majeure, will be suspended during the continuance of any inability so caused but for no longer period, and such cause must as far as possible be remedied with all reasonable and diligent dispatch by the Party claiming such in order to put itself in a position to carry out its obligations
12 10.23
under this Agreement. Such notifying Party must also provide notice of the date of termination of such Force Majeure event. A Force Majeure event affecting the performance by either Party shall not relieve it of liability in the event of its negligence, where such negligence was a cause of the Force Majeure event, or in the event of its failure to use commercially reasonable efforts to remedy the situation and remove the cause with all reasonable dispatch.
6.2 Strikes. It is understood and agreed that the settlement of strikes or lockouts is entirely within the discretion of the Party directly involved in the strike or lockout, and that the above requirement that any Force Majeure must be remedied with all reasonable dispatch will not require the settlement of strikes or lockouts by acceding to the demands of the opposing party when such course is inadvisable in the discretion of the Party having the difficulty.
ARTICLE VII : INSURANCE AND INDEMNIFICATION
7.1 Operator Insurance.
7.1.1 Operator, with respect to Operator's activities provided for under this Agreement, shall maintain the following insurance coverage with responsible insurance carriers:
(a) Workers' Compensation. Operator shall maintain statutory worker's compensation insurance, covering all of its and its Affiliates' employees and statutory employees, in accordance with the benefits afforded by the statutory Worker's Compensation Acts applicable to the state, territory, or district of hire, supervision, or place of accident. In addition, Operator shall maintain employer's liability insurance with a limit of not less than one million dollars ($1,000,000) each accident, one million dollars ($1,000,000) disease each employee, and one million dollars ($1,000,000) disease policy limit. Where not prohibited by law, Operator shall waive its right of subrogation against Owner.
(b) Commercial General Liability Insurance. Operator shall maintain Commercial General Liability Insurance covering its operations under this Agreement including, without limitation, bodily injury, death, property damage, premises/operations, sudden and accidental pollution, independent contractors, products/completed operations, contractual, and personal injury liability, with a limit of not less than one million dollars ($1,000,000) per occurrence and two million dollars ($2,000,000) in the annual aggregate.
(c) Commercial Automobile Insurance. Operator shall maintain Commercial Automobile Insurance coverage, including, without limitation, bodily injury and property damage for owned, hired, rented, and non-owned automotive equipment with a limit of not less than one million dollars ($1,000,000) per accident.
(d) Umbrella Liability Insurance. Operator shall maintain Umbrella Liability Insurance coverage covering in excess of (a), (b), and (c) above, excluding Worker's Compensation, in the amount of ten million dollars ($10,000,000).
7.1.2 To the extent of the liabilities assumed by Operator in this Agreement, Operator shall name Owner Indemnified Parties as additional insured on all insurance policies,
13 10.23
except Workers' Compensation. The Owner Indemnified Parties' additional insured status will not limit the application of insurance protection as required by this Agreement which arises out of the Operator's indemnity obligations. These policies shall provide primary coverage for claims in which Operator has agreed to hold harmless and/or to indemnify the Owner Indemnified Parties. No "other insurance" clause may be invoked by any insurer. This coverage shall apply whether or not the indemnification is valid. Operator shall have its insurer(s) waive its right of subrogation against Owner Indemnified Parties on all insurance carried. Unless expressly stated to the contrary elsewhere in this Agreement or prohibited by applicable law or legal statute, Operator's indemnification obligations under this Agreement shall not be limited by amount or in scope to coverage provided by insurance which is required under this Agreement.
7.1.3 Upon request, Operator agrees to furnish to Owner certificates of insurance or other evidence satisfactory to Owner to demonstrate that the required insurance has been procured and is in force. The certificate shall accurately reflect the required insurance coverages and shall provide that in the event of modification, expiration, cancellation or material change in a policy affecting the certificate holder, thirty days prior written notice shall be given to the certificate holder. Operator waives all rights against Owner for recovery of damages to the extent such damages are covered by the insurance maintained in accordance with this Section 7.1.
7.2 Contractors. Operator acknowledges and agrees that any contractor engaged by Operator to perform services at the Rail Facility will be required to execute an access agreement, in a form acceptable to Owner, prior to such contractor accessing the Rail Facility and performing any services. Further, Operator shall attempt to obtain reasonable indemnification and insurance protection from contractors performing services for Owner to protect Owner and Operator. Operator shall require each of its contractors to carry insurance coverage substantially equivalent to the insurance required of Operator above, and to include provisions for its contractors to name Owner and Operator as additional insureds, with the exception of Workers' Compensation Insurance, and state that such policies will be primary to and non-contributory with any other insurance maintained by Operator and Owner. With respect to Workers' Compensation Insurance, the applicable contractor shall be required to cause its insurers to wave all rights of recovery or subrogation against Owner and Operator, where not prohibited by law.
7.3 Notice of Claims. In the event that Operator receives notice, either in writing or orally, of an asserted or threatened Liability Claim against Operator or Owner, Operator shall provide Owner within 10 days of receipt of such Liability Claim a copy of any demand letter, petition, or similar documentation of the Liability Claim.
7.4 Mutual Release and Indemnification.
7.4.1 Owner's Indemnification. Subject to the terms of this Agreement, including, without limitation, Section 8.8 of this Agreement, Owner shall indemnify, defend, and hold harmless the Operator Indemnified Parties from and against all Claims and Losses arising out of or relating to (i) allegations of death or bodily injury or damage to property, to the extent arising out of or resulting from the negligence, gross negligence or willful misconduct of Owner, its Affiliates or its or their respective officers, directors, employees, or contractors in connection with this Agreement or the performance hereof; provided that Owner shall not be required to indemnify the Operator
14 10.23
Indemnified Parties against such Claims and Losses to the extent such Claims and Losses are attributable to the acts or omissions of any Operator Indemnified Parties, (ii) any breach of this Agreement by Owner, and (iii) any agreements relating to the Rail Facility between Owner and third parties not affiliated with the Operator Parties (except to the extent expressly assumed by Operator hereunder). The duty to indemnify, defend and hold harmless under this Section 7.4.1 shall continue in full force and effect, notwithstanding the expiration or early termination of this Agreement, with respect to any Claims or Losses based on facts or conditions that occurred prior to such expiration or termination.
7.4.2 Operator's Indemnification. Subject to the terms of this Agreement, including, without limitation, Section 8.8 of this Agreement, Operator shall indemnify, defend, and hold harmless the Owner Indemnified Parties from and against all Claims and Losses arising out of or relating to (i) allegations of death or bodily injury or damage to property, to the extent arising out of or resulting from the negligence, gross negligence or willful misconduct of Operator, its Affiliates or its or their respective officers, directors, employees, or contractors in connection with this Agreement or the performance hereof; provided that Operator shall not be required to indemnify the Owner Indemnified Parties against such Claims or Losses to the extent such Claims or Losses are attributable to the acts or omissions of any Owner Indemnified Party, (ii) any breach of this Agreement by Operator, and (iii) any agreements relating to the Rail Facility between Operator and third parties not affiliated with Owner (except to the extent expressly assumed by Owner hereunder). The duty to indemnify, defend and hold harmless under this Section 7.4.2 shall continue in full force and effect, notwithstanding the expiration or early termination of this Agreement, with respect to any Claims or Losses based on facts or conditions that occurred prior to such expiration or termination.
ARTICLE VIII : GENERAL PROVISIONS
8.1 Additional Rail Facilities. Nothing in this Agreement shall limit Owner's right to construct, expand or modify, and operate other rail car loading/off loading facilities (i) at Owner's terminal and storage facility located on the property on which the Rail Facility is located, or (ii) at any other location in Owner deems necessary and beneficial.
8.2 Notices. Except as specifically provided otherwise herein, any notice, claim, or other communication provided for in this Agreement or any notice that either Party may desire to give to the other shall be in writing and shall be: (i) sent by facsimile transmission; (ii) delivered by hand; (iii) sent by United States mail with all postage fully prepaid; or (iv) delivered by courier with charges paid in accordance with the customary arrangements established by such courier, in each of the foregoing cases addressed to the Party at the following addresses:
To Owner:
Magellan Terminals Holdings, L.P. Attn: Mark Roles Manager, Commercial Development P.O. Box 22186 MD 31st Floor
15 10.23
Tulsa, Oklahoma 74121-2186 To Operator:
Omega Refining, LLC Attn: Robert Winland 5000 River Road Marrero, Louisiana 70072
with a copy to:
Gregory & Plotkin, LLC Attn: James P. Gregory, Esq. 1331 17t h Street, Suite 1060 Denver, Colorado 80202
or at such other address as either Party may at any time designate by giving written notice to the other Party. Such notices, claims, or other communications shall be deemed received as follows:
(i) if delivered personally, upon delivery;
(ii) if sent by United States mail, whether by express mail, registered mail, certified mail or regular mail, the notice shall be deemed to have been received on the day receipt is refused or is confirmed orally or in writing by the receiving Party;
(iii)if sent by a courier service, upon delivery; or
(iv)if sent by facsimile, the Business Day following the day on which it was transmitted and confirmed by transmission report or such earlier time as confirmed orally or in writing by the receiving Party.
8.3 Rights. The failure of either Party to exercise any right granted hereunder shall not impair nor be deemed a waiver of that Party's privilege of exercising that right at any subsequent time or times.
8.4 Applicable Laws. This Agreement is subject to all valid present and future laws, regulations, rules, and orders of governmental authorities now or hereafter having jurisdiction over the Parties, this Agreement, any of the transactions contemplated hereby or the Rail Facility.
8.5 Rules of Construction. In construing this Agreement, the following principles shall be followed:
8.5.1 no consideration shall be given to the fact or presumption that one Party had a greater or lesser hand in drafting this Agreement;
16 10.23
8.5.2 examples shall not be construed to limit, expressly or by implication, the matter they illustrate;
8.5.3 the word "includes" and its syntactical variants mean "includes, but is not limited to" and corresponding syntactical variant expressions; and
8.5.4 the plural shall be deemed to include the singular and vice versa, as applicable.
8.6 Governing Law. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Delaware, without regard to choice of law principles that would require the application of the laws of any other jurisdiction.
8.7 Dispute Resolution.
8.7.1 Negotiation. Prior to submitting any dispute for resolution by a court, a Party shall provide written notice to the other of the occurrence of such dispute. If the Parties have failed to resolve the dispute within 15 Business Days after such notice was given, the Parties shall seek to resolve the dispute by negotiation between senior management personnel of each Party. Such personnel shall endeavor to meet and attempt to amicably resolve the dispute. If the Parties are unable to resolve the dispute for any reason within 30 Business Days after the original notice of dispute was given, then either Party shall be entitled to pursue any remedies available at law or in equity; provided, however, this Section 8.6.1 shall not limit a Party's right to initiate litigation prior to the expiration of the time periods set forth herein of such limitations would prevent a Party from filing a lawsuit or claim within the applicable period for filing lawsuits (e.g. statutes of limitation, prescription, etc.).
8.7.2 Costs and Expenses. The prevailing Party in any litigation pertaining to any dispute hereunder shall be entitled to recover its reasonable costs, expenses, and attorney's fees in connection with such litigation.
8.8 Limitation of Liability. Notwithstanding anything in this agreement to the contrary, neither Party shall be liable to the other Party for special, indirect, consequential, punitive, or exemplary damages suffered by such Party resulting from or arising out of this Agreement or the breach thereof or under any other theory of liability, whether tort, negligence, strict liability, breach of contract, warranty, indemnity, or otherwise, including, without limitation, loss of use, increased cost of operations, loss of profit or revenue, or business interruptions. In furtherance of the foregoing, each Party releases the other Party and waives any right of recovery for special, indirect, consequential, punitive, or exemplary damages suffered by such Party regardless of whether any such damages are caused by the other Party's negligence (and regardless of whether such negligence is sole, joint, concurrent, active, passive, or gross negligence), fault, or liability without fault.
8.9 Entirety of Agreement, Amendments. This Agreement, including, without limitation, all exhibits hereto, integrate the entire understanding between the Parties with respect to the operation and maintenance by Operator of Owner's Rail Facility and supersede all prior understandings, drafts, discussions, or statements, whether oral or in writing, expressed or implied,
17 10.23
dealing with the same subject matter. This Agreement may not be amended or modified in any manner except by a written document signed by the Parties that expressly amends this Agreement.
8.10 Waivers. No waiver by either Party of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless expressly provided. No waiver shall be effective unless made in writing and signed by the Party to be charged with such waiver.
8.11 Headings. The headings and captions in this Agreement have been inserted for convenience of reference only and shall not define or limit any of the terms and provisions hereof.
8.12 Rights and Remedies. Except as otherwise provided in this Agreement, each Party reserves to itself all rights, counterclaims, other remedies, and defenses to which such Party is or may be entitled arising from or out of this Agreement or as otherwise provided by law.
8.13 Assignment. Operator shall not make any assignment of all or any part of this Agreement or any of the rights or obligations hereunder unless there first shall have been obtained the written consent thereto of Owner, which consent shall not be unreasonably withheld, conditioned, or delayed. Owner shall not make any assignment of all or any part of this Agreement or any of the rights or obligations hereunder except in connection with the sale, financing or conveyance of all or any part of the Rail Facility. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Parties. Any attempted assignment of this Agreement in violation of this Section 8.12 shall be null and void.
8.14 Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile), each of which shall be deemed an original, and all of which shall be deemed one and the same Agreement.
8.15 No Third Party Beneficiary. Except for parties indemnified hereunder, this Agreement is for the sole benefit of the Parties and their respective successors and permitted assigns, and shall not inure to the benefit of any other Person whomsoever or whatsoever, it being the intention of the Parties that no third Person shall be deemed a third-party beneficiary of this Agreement.
8.16 Further Assurances. Each Party shall take such acts and execute and deliver such documents as may be reasonably required to effectuate the purposes of this Agreement.
* * * * *
18 10.23
IN WITNESS WHEREOF, the undersigned have executed or caused to be executed on their behalf this Agreement to be effective on the Effective Date.
Operation & Maintenance Agreement Signature Page K&E 10351208.3
EXHIBIT "A"
Exhibit "A" K&E 10351208.3
EXHIBIT "C" Owner's Facility Security Plan
2 10.23 | Highlight the parts (if any) of this contract related to "No-Solicit Of Employees" that should be reviewed by a lawyer. Details: Is there a restriction on a party’s soliciting or hiring employees and/or contractors from the counterparty, whether during the contract or after the contract ends (or both)? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Third Party Beneficiary" that should be reviewed by a lawyer. Details: Is there a non-contracting party who is a beneficiary to some or all of the clauses in the contract and therefore can enforce its rights against a contracting party?
Context: [LOGO]
SECOND AMENDMENT TO CO-BRANDING AGREEMENT
THIS SECOND AMENDMENT TO CO-BRANDING AGREEMENT (this "Amendment") is made and entered into, effective for all purposes and in all respects as of the 23rd day of February, 1998, by and between PC QUOTE, INC., with its principal place of business at 300 South Wacker Drive, Chicago, Illinois 60605 ("PCQ") and A.B. Watley, Inc., with its principal place of business at 33 West 17th Street, New York, New York 10011 ("ABW").
WHEREAS, PCQ and ABW have executed that certain Co-Branding Agreement dated October 11, 1996, as amended on December 10, 1996 (as so amended, the "Agreement");
WHEREAS, the parties hereto desire to further amend the Agreement to modify the provisions of the Agreement regarding [***] of the term thereof; and
WHEREAS, the parties hereto desire to set forth herein the terms and conditions of their agreements and understandings with respect to the foregoing.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises for the parties contained herein and of other good valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending legally to be bound, hereby covenant and agree as follows:
1. The preamble hereto is incorporated herein and, by this reference, is made a substantive part hereof.
2. The text of Section 2. A. and B. of the Agreement is hereby deleted in its entirety and the following language is inserted in its stead:
[***]
3. To the extent, if any, that provision of this Agreement conflicts with or differs from any provision of the Agreement, such provision of this Second Amendment shall prevail and govern for all purposes and in all respects.
4. Except as modified hereby, the Agreement and its terms and provisions are hereby ratified and confirmed for all purposes and in all respects.
5. This Second Amendment may be executed in several counterparts, each of which shall be deemed an original but all of which collectively shall constitute the same instrument.
Source: PCQUOTE COM INC, S-1/A, 7/21/1999
IN WITNESS WHEREOF, the undersigned parties have hereunto affixed their signatures and seals as of the day and year first above written.
PC QUOTE, INC.
By: /s/ Scott Clyde ------------------------ Name: Scott Clyde ---------------------- Title: VP --------------------
A. B. WATLEY, INC.
By: /s/ Robert Malin ------------------------ Name: Robert Malin ---------------------- Title: President --------------------
-2-
Source: PCQUOTE COM INC, S-1/A, 7/21/1999 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | [LOGO]
SECOND AMENDMENT TO CO-BRANDING AGREEMENT
THIS SECOND AMENDMENT TO CO-BRANDING AGREEMENT (this "Amendment") is made and entered into, effective for all purposes and in all respects as of the 23rd day of February, 1998, by and between PC QUOTE, INC., with its principal place of business at 300 South Wacker Drive, Chicago, Illinois 60605 ("PCQ") and A.B. Watley, Inc., with its principal place of business at 33 West 17th Street, New York, New York 10011 ("ABW").
WHEREAS, PCQ and ABW have executed that certain Co-Branding Agreement dated October 11, 1996, as amended on December 10, 1996 (as so amended, the "Agreement");
WHEREAS, the parties hereto desire to further amend the Agreement to modify the provisions of the Agreement regarding [***] of the term thereof; and
WHEREAS, the parties hereto desire to set forth herein the terms and conditions of their agreements and understandings with respect to the foregoing.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises for the parties contained herein and of other good valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending legally to be bound, hereby covenant and agree as follows:
1. The preamble hereto is incorporated herein and, by this reference, is made a substantive part hereof.
2. The text of Section 2. A. and B. of the Agreement is hereby deleted in its entirety and the following language is inserted in its stead:
[***]
3. To the extent, if any, that provision of this Agreement conflicts with or differs from any provision of the Agreement, such provision of this Second Amendment shall prevail and govern for all purposes and in all respects.
4. Except as modified hereby, the Agreement and its terms and provisions are hereby ratified and confirmed for all purposes and in all respects.
5. This Second Amendment may be executed in several counterparts, each of which shall be deemed an original but all of which collectively shall constitute the same instrument.
Source: PCQUOTE COM INC, S-1/A, 7/21/1999
IN WITNESS WHEREOF, the undersigned parties have hereunto affixed their signatures and seals as of the day and year first above written.
PC QUOTE, INC.
By: /s/ Scott Clyde ------------------------ Name: Scott Clyde ---------------------- Title: VP --------------------
A. B. WATLEY, INC.
By: /s/ Robert Malin ------------------------ Name: Robert Malin ---------------------- Title: President --------------------
-2-
Source: PCQUOTE COM INC, S-1/A, 7/21/1999 | Highlight the parts (if any) of this contract related to "Third Party Beneficiary" that should be reviewed by a lawyer. Details: Is there a non-contracting party who is a beneficiary to some or all of the clauses in the contract and therefore can enforce its rights against a contracting party? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Parties" that should be reviewed by a lawyer. Details: The two or more parties who signed the contract
Context: Exhibit 10.09
***** CONFIDENTIAL TREATMENT REQUESTED
Agreement Number 12965
WIRELESS CONTENT LICENSE AGREEMENT
This License Agreement (this "Agreement") is entered into effective as of December 16, 2004, (the "Effective Date") by and between TWENTIETH CENTURY FOX LICENSING & MERCHANDISING, a division of Fox Entertainment Group, Inc. ("Fox"), as Administrator for Twentieth Century Fox Film Corporation ("Trademark Licensor"), and Sorrent, Inc. ("Licensee"). Fox and Licensee are collectively referred to as the "parties" and each individually as a "party."
RECITALS:
WHEREAS, Trademark Licensor owns the rights to develop, manufacture, publish, and distribute entertainment applications based on the story, plot, theme, distinctive creative elements and name/logo (collectively, the "PSM") appearing in the theatrical motion pictures set forth on Exhibit A attached hereto (individually, the "Property" and collectively, the "Properties," and further designated as "Major Release(s)" and "Targeted Release(s)"); and
WHEREAS, Fox is the administrator of such rights for Trademark Licensor; and
WHEREAS, Licensee is engaged in the business of, among other things, developing and producing interactive entertainment applications for wireless communication devices, such as mobile telephones; and
WHEREAS, Licensee desires to obtain a license from Fox to develop a variety of wireless products utilizing elements of the PSM and to be operated on mobile/cellular telephones; and further to publish, license, promote, distribute and sell such wireless products to end users through communications service provider(s) and portals providing wireless products ("CSP(s)") on the terms and conditions set forth herein; and
WHEREAS, Fox and Vodafone Group Services Limited ("VGSL") have entered into a wireless content distribution agreement ("VGSL Agreement") whereby Fox is to be the content provider for VGSL wireless products relating to various Properties, and Fox desires a license to distribute Wireless Products to VGSL pursuant to the VGSL Agreement.
AGREEMENT
NOW, THEREFORE, the parties do hereby agree as follows:
1. GRANT OF RIGHTS:
(a) Wireless Products and Wireless Platform: Fox grants to Licensee a limited, exclusive (except as otherwise may be provided in this Agreement), non-transferable (except as permitted in Paragraph 17(d)) right and license to use, make, have made (as set forth in Paragraph 1(a)(i) below), reproduce, modify, and create derivative works of
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-1-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
the PSM in each Property, solely for the purpose of developing the wireless applications specifically set forth for each of the Properties on Exhibits B through M attached hereto ("Wireless Products"), some of which Wireless Products are defined in the Glossary attached hereto as Exhibit N. To the extent not specified in this Agreement the parties will agree upon the specific Wireless Products to be developed for each Property in accordance with the procedure set forth in Paragraph 2. Notwithstanding the foregoing, Licensee acknowledges that it shall be obligated to develop all Wireless Products set forth on Exhibits B, C, D, and G, and any other Wireless Products for other Properties that the parties mutually agree in writing will be added to the VGSL Agreement for distribution by VGSL (the "VGSL Products"). The Wireless Products shall utilize elements of the PSM and shall be operated on mobile or cellular telephones. Furthermore, Fox grants to Licensee a limited, exclusive (except as may otherwise be provided in this Agreement), non-transferable (except as permitted in Paragraph 17(d)) right and license to make, have made, reproduce, modify, create derivative works of, advertise, promote, distribute, sell and license the Wireless Products, including any PSM included therein, solely (i) for use on mobile or cellular telephones (the "Wireless Platform"); (ii) in the Territory (as defined in Paragraph 3), (iii) during the Term (as defined in Paragraph 4), (iv) for distribution by Licensee through the Distribution Channels (as defined in Paragraph 2(c)) granted herein; and (v) by means of periodic subscription fee, a per-download basis, or through a retail purchase. Nothing contained herein shall be construed as granting Licensee the right to develop and/or distribute video clips and/or trailers for the Properties, except where Fox expressly agrees to development and/or distribution of such video clips and/or trailers.
(i) Sublicense: Licensee shall be permitted to sublicense the rights and licenses granted herein to third party contractors of Licensee, solely for purposes of development and distribution of the Wireless Products on behalf of Licensee in accordance with this Agreement; provided that such third party contractors have entered into binding written agreements with Licensee that are no less protective of Fox's intellectual property rights than are the terms and conditions of this Agreement, and provided further that Licensee will not subcontract development of any video games hereunder without Fox's prior written approval of the third party game development contractor. Notwithstanding the foregoing, Licensee shall remain the primary contact under this Agreement and shall remain liable for all obligations performed by a sublicensee.
(ii) Substitution of Properties and Addition of Properties: Fox reserves the right to remove any Property listed on Exhibit A in the event that Fox determines not to theatrically release such Property or is found to be legally prohibited from engaging in the development and sale of Wireless Products in connection with such Property, and shall replace the removed Property with a like Property, which designation shall be subject to the mutual agreement of Fox and Licensee. Any further additions to Exhibit A shall also be subject to the mutual agreement of Fox and Licensee, provided however Fox shall reasonably determine if the Property constitutes a Major Release or a Targeted Release consistent with its past practices. In no event will the number of Major Releases and Targeted Releases included as Properties licensed to Licensee under this Agreement be less than four (4) and eight (8) respectively.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-2-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
(iii) Addition of Wireless Products: The parties may amend this Agreement to include additional Wireless Products for the Properties set forth on Exhibit A, subject to their mutual agreement in writing, provided that if they are unable to agree upon such additions within five (5) business days of a request from Fox, Fox will have the right to develop or have developed the requested Wireless Products for the relevant Property notwithstanding the exclusivity granted to Licensee in this Agreement.
(b) Bundling: Neither party will solicit or enter into any agreement with any third party regarding the bundling of the Wireless Products with any other property (including a Fox property) or with any other products and services including preloading, OEM and soft bundling, except as mutually agreed between the parties. The parties will mutually agree upon the terms of each bundling transaction, the nature of the bundle, the timing, and any new or different royalties for such bundling on a case-by-case basis.
(c) Third-Party Promotions: Neither party may solicit or enter into any agreement with any third party regarding third-party promotional opportunities with respect to the Wireless Products without the other party's prior written consent; provided that the foregoing will not limit Licensee's rights to market and promote the Wireless Products directly and through (i) CSPs, subject to any Fox approval rights set forth elsewhere in this Agreement, or (ii) Fox's right to engage in third party promotions for the Properties involving wireless content otherwise sourced or created.
(d) Excluded Products: For the avoidance of any doubt, the rights granted in Paragraph 1(a) and (b) shall be specifically limited to the Wireless Products for the Wireless Platform and shall not extend to any other device, platform, operating system or distribution method, whether wired or wireless, pursuant to which interactive entertainment software may be delivered to or accessed by end-users, including, but not limited to, the following: (i) traditional entertainment software console platforms, such as Sony PlayStation and PlayStation 2, Microsoft Xbox, and Nintendo GameCube and successor platforms; (ii) desktop or laptop computer systems, such as PC Windows, Macintosh, (iii) hand-held electronic dedicated gaming devices (e.g., Nintendo's GameBoy Color and GameBoy Advance handheld devices, Sony's PSX handheld device, and Tiger Electronic hand- held devices); (iv) pay-per-play arcade systems and other forms of location-based entertainment; (v) interactive toys; (vi) television, whether via cable, satellite, set-top boxes or other on-demand service; (vii) massively multiplayer games; (viii) internet gaming and (ix) any other technology now known or hereafter devised. Except as otherwise specifically stated herein with respect to the Wireless Products, Licensee shall have no right to develop, manufacture, reproduce, distribute, sell or exploit any other products based on the PSM or the Property.
(e) Fox's Reservation of Rights: Fox expressly reserves and retains any and all rights that are expressly excluded from or not specifically granted to Licensee pursuant to this Agreement, including but not limited to the following:
(i) Development/Exploitation/Distribution: the right to develop, publish, and/or distribute (or grant a third party the right to develop, publish, and/or distribute) other wireless products or wireless content of any nature which may be derived from the Properties (and further, to exploit same) which are similar or in direct
Wireless Content License Agreement Multiple Properties /Sorrent, Inc. / Final PLZ
-3-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
competition with the Wireless Products at any time in Japan including during the Term and within Japan, provided that Fox will not grant to any other party any such rights to develop, publish, and/or distribute Wireless Products for the Wireless Platform to end users outside of Japan (with the exception of those distribution rights for Wireless Products granted to VGSL under the VGSL Agreement in accordance with Paragraph 1(f) of this Agreement), or provide to any Licensee Competitor (as defined in Exhibit Q) any Licensee Materials or otherwise grant any rights to any Licensee Competitor to develop, publish, and/or distribute Wireless Products, or other wireless products or content based on the Properties. Fox has not granted and will not grant any exclusive distribution rights with respect to the Wireless Products to VGSL or any other party; and
(ii) Use of Fox's Logo or Other Intellectual Property Rights: the right to use the Fox logo or trademark, or any other trademark(s), logo(s) or copyrights owned by Fox other than those specifically set forth herein in the manner set forth; and
(iii) Video Clips and Trailers: except as may otherwise be provided in this Agreement, the right to develop and/or distribute (or grant a third party the right to develop and distribute) video clips and/or trailers for the Properties. At any time during the Term, Fox may distribute directly (or grant a third party the right to distribute) video clips and/or trailers to CSPs in connection with the Properties; and
(iv) SMS/Text Messaging: the right to develop, market and distribute (or grant a third party the right to develop, market and distribute) SMS or text messaging in connection with the Properties; and
(v) Promotional Content: the right to develop and/or distribute (or grant a third party the right to develop and/or distribute) free promotional and/or give-away content in connection with the Properties, provided that Fox will use all reasonable efforts to make mention of the Wireless Products developed by Licensee, or cause the third party to do the same, in the context of the promotion and/or give-away.
(f) Licensee's Grant of Rights. Subject to Fox's compliance with the terms and conditions of this Agreement, including its payment obligations in accordance with Section 7, Licensee hereby grants to Fox a limited, non-exclusive, non-transferable (except as permitted in Section 17(d)), right to distribute Licensee Materials (as defined in Paragraph 11 (c)) to VGSL and T-Mobile, solely as incorporated into Wireless Products, and to authorize VGSL and T-Mobile to distribute such Wireless Products to end users outside of the United States. Fox's rights in the Licensee Materials will be limited to those expressly granted in this Paragraph 1(f). Licensee reserves all rights and licenses in and to the Licensee Materials not expressly granted to Fox in this Section 1(f). Any other marketing, distribution, or sale of the Wireless Products and/or Licensee Materials by Fox will be subject to Licensee's prior written consent, in Licensee's reasonable discretion.
2. DEVELOPMENT AND DISTRIBUTION OF THE WIRELESS PRODUCTS:
(a) Development: Subject to Fox's delivery of the PSM Materials (as defined in Paragraph 2(a)(i) below), Licensee shall be obligated to create, develop, and publish the Wireless Products, pursuant to the terms and conditions of this Agreement. Subject to
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-4-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
Fox's approval rights, Licensee shall assume full responsibility for the creation, development and production of the Wireless Products, which shall include, without limitation, (A) designing the creative and technical specifications for the Wireless Products, (B) creating all computer code for the Wireless Products, (C) creating all visual assets for the Wireless Products, (D) acquiring and/or licensing any and all other technology, software and hardware needed for purposes of creating and distributing the Wireless Products, (E) ensuring compatibility of technology with the CSPs to which Licensee grants distribution rights, which shall include without limitation VGSL and T-Mobile, (the "Licensed CSPs"), and (F) conducting quality assurance testing of the Wireless Products. For the avoidance of doubt, Licensee acknowledges and agrees that Fox will have no development obligations whatsoever with respect to the Wireless Products, and further that Fox's sole role with respect to such development will be limited to delivering the PSM Materials, supervising Licensee's obligations with respect to same, granting or denying approvals as set forth hereunder, providing photos, style guides and other materials to Licensee where necessary, and collaborating with Licensee on the creative direction with respect to the Wireless Products.
(i) Delivery of PSM Materials. For each of the Properties identified in or added by mutual agreement to Exhibit A, Fox will provide to Licensee no later than ***** prior to the release of any games to be developed in connection with each Property and no later than ***** prior to the release of any other wireless applications to be developed in connection with each Property, some or all of the following items, to the extent available, on a Property-by-Property basis and only in electronic format where available: style guides, one-sheets (art used for movie poster), digital images, audio clips, storyboards, video tapes of trailers as they are produced, hard-copy scripts, publicity photos, and non-trailer video which shall only be available for viewing on the Fox lot premises (collectively, the "PSM Materials"). For the avoidance of doubt, Licensee will not be provided electronic copies of any scripts. Fox will update the PSM Materials provided to Licensee as new or different materials become available.
(ii) VGSL Development: Licensee expressly acknowledges and agrees that Fox has entered into the VGSL Agreement with VGSL for the development of certain Wireless Products set forth on Exhibits B, C, D and G, in connection with the following Properties: "Robots;" Untitled Ridley Scott Film; "Ice Age 2;" and "Mr & Mrs. Smith." Licensee shall be obligated to develop such Wireless Products, and distribute them as set forth in Paragraph 2(c)(ii) below, on behalf of Fox.
(iii) Development for Japan: Upon Fox's notice to Licensee, Licensee shall immediately cease all development, publication and distribution of the Wireless Products in Japan.
(iv) Music and Sound Effects: If Licensee seeks to use music or sound effects from any of the Properties in connection with the development of the Wireless Products, such use shall be subject to the advance written approval of Fox, and, if applicable, Fox Music, Inc., c/o the Vice President, General Manager, Fox Music Publishing ("Fox Music"). Subject to Fox and Fox Music's approval, Licensee shall be solely responsible for any and all third party payments that may arise out of the
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-5-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
approved use of the music from the Property in connection with the Wireless Products, including without limitation any royalties, mechanical fees, residuals, publishing fees, license fees, reuse fees or other guild-related payments. In such event, Licensee shall pay directly to Fox Music a separate Royalty, at a rate subject to good faith negotiation between Licensee and Fox Music, on sales of the Wireless Products incorporating such music. Further, Licensee shall obtain the prior written approval of Fox Music concerning the final music arrangement to be so utilized and provide Fox Music with two samples of the final, approved Wireless Products prior to the sale or distribution thereof.
(A) No License for Music Realtones or Trutones: For the avoidance of doubt, nothing herein shall be construed as granting Licensee the right to develop and/or distribute any Wireless Products containing music Realtones or Trutones (each as defined in Exhibit N).
(b) Release:
(i) The Wireless Products: Subject to the timely delivery of the PSM Materials to Licensee by Fox, Licensee shall deliver the Wireless Products to VGSL a minimum of ***** before the initial theatrical release of each Property in each of the VGSL Territories as defined in Paragraph 2(c)(ii) (A) below, and to the other Licensed CSPs within such time frames mandated by such Licensed CSPs so as to enable the release of the Wireless Products ***** prior to the initial theatrical release of each Property in each of the Territories as defined in Paragraph 3 below (the "Wireless Products Latest Commencement Date"). If Licensee fails to make the Wireless Products commercially available to the CSPs by the Wireless Products Latest Commencement Date, and such failure is not due solely to any delay by Fox in delivery of the PSM Materials, Fox shall have the right to terminate this Agreement immediately upon notice to Licensee and all rights to utilize the PSM shall automatically revert to Fox; provided that, subject to Paragraph 9(b)(ii) below, Fox will not exercise the right to terminate with respect to any delayed delivery of Wireless Products for films that have their initial theatrical release prior to June 30, 2005; and provided further that nothing in this Paragraph 2(b)(i) will limit Fox's indemnification under Paragraph 14 or any other rights and remedies Fox may have under this Agreement. Licensee shall use all commercially reasonable efforts to cause the Licensed CSPs to make available to end users the Wireless Products for each of the Major Releases and Targeted Releases no later than ***** prior to the initial theatrical release of each of the Major Releases and Targeted Releases.
(c) Distribution:
(i) CSP Distribution: Licensee shall distribute the Wireless Products to end users through the Licensed CSPs and each Licensed CSP's respective Internet portals and distribution systems ("Distribution Channel").
(A) Minimum Subscriber Market Penetration: Licensee shall use all commercially reasonable efforts to secure distribution of the Wireless Products through CSPs and to ensure that the Wireless Products are
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-6-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
available on substantially all medium and high volume handsets of all Licensed CSPs, which for the purposes of this obligation shall include VGSL.
(1) Major Releases: Licensee furthermore shall use all commercially reasonable efforts to achieve the following market penetration targets in Europe for the Major Releases ("Market Penetration Targets"): (1) distribution of the Wireless Products for the Major Releases through CSP's that hold at least ***** (*****%) of the subscribers in Western Europe during the ***** of this Agreement; and (2) distribution of the Wireless Products for the Major Releases through CSP's that hold at least ***** percent (*****%) of the subscribers in Western Europe during the ***** of this Agreement. If Licensee fails to reach the Market Penetration Targets Fox shall in its sole discretion have the right to terminate Licensee's exclusivity under this Agreement. In the event of termination of Licensee's exclusivity for Licensee's failure to achieve the Market Penetration Targets, Fox shall not distribute the Wireless Products which have been developed by Licensee prior to such termination, without first obtaining a license from Licensee on terms to be mutually agreed in each party's reasonable discretion, for the exploitation of the Licensee Materials.
(2) Targeted Releases: Fox acknowledges that Licensee may not be able to secure placement of all Targeted Releases at the levels set forth for the Market Penetration Targets defined in the previous sub-Paragraph. Notwithstanding the foregoing, Licensee shall use all commercially reasonable efforts to secure the widest possible distribution of the Wireless Products derived from the Targeted Releases in Europe.
(ii) VGSL and T-Mobile Distribution: For the Territories (as defined in Paragraph 3 below) set forth in Paragraph 2(c)(ii)(A) below, Licensee expressly acknowledges and agrees that Fox has entered into the VGSL Agreement with VGSL for the development of certain Wireless Products as set forth in Paragraph 2(a)(ii) above, and for the distribution of such Wireless Products. Fox has also entered into a separate agreement with T-Mobile to permit T-Mobile to distribute certain Wireless Products to end users outside of the United States the "T-Mobile Agreement"). Licensee hereby grants all licenses to Fox to enable Fox to provide Wireless Products to VGSL and T-Mobile for distribution to VGSL and T-Mobile subscribers outside of the United States in accordance with the terms of this Agreement, and shall further deliver such Wireless Products to VGSL and T-Mobile on behalf of Fox. Licensee further acknowledges and agrees that pursuant to the VGSL Agreement and the T-Mobile Agreement, VGSL and T-Mobile will remit directly to Fox all receipts generated from sales of the Wireless Products to VGSL and T-Mobile subscribers. Fox will pass through all such receipts received from VGSL and T-Mobile to Licensee and such receipts shall be treated as Gross Receipts, as defined in Paragraph 7(a)(ii) below, for the purpose of this Agreement. Licensee shall not enter into an exclusive distribution agreement with
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-7-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
a CSP in any of the VGSL Territories listed in Paragraph 2(c)(ii)(A) below, and Fox has not granted and will not grant any exclusive distribution rights to VGSL or T-Mobile. Fox and Licensee will cooperate together in good faith, on a schedule to be mutually agreed, to jointly manage the VGSL and T-Mobile relationships with respect to the Wireless Products, subject to willingness on the parts of VGSL and T-Mobile to so cooperate. Notwithstanding the foregoing, any conversations undertaken between Fox and VGSL and/or T-Mobile without Licensee's participation shall not be a breach of this provision.
(A) Non-Exclusive CSP Distribution in VGSL Territories: Under no circumstances shall Licensee enter into an exclusive distribution agreement with a CSP other than VGSL in the following territories ("VGSL Territories") covered under the VGSL Agreement: (1) United Kingdom; (2) Ireland; (3) Germany; (4) Spain; (5) France; (6) Sweden; (7) Switzerland; (8) Portugal; (9) Netherlands; (10) Greece; (11) Italy; (12) Australia; (13) New Zealand; (14) Egypt; (15) Slovenia; (16) Belgium; (17) Austria; (18) Hungary; (19) Malta; (20) Croatia; (21) South Africa; and (22) Japan.
(iii) Japan Distribution: Upon Fox's notice to Licensee, Licensee shall cease immediately some or all distribution of the Wireless Products in Japan. In the event Fox provides such termination notice to Licensee, Licensee hereby grants Fox a license to the Licensee Materials in order for Fox to distribute the Wireless Products that Licensee has developed for distribution in Japan prior to such termination, either directly or through a third-party. In consideration of such license, Fox shall pay Licensee a royalty as set forth in Paragraph 7(b)(i) below.
(iv) Unless otherwise mutually agreed between Fox and Licensee, Licensee will require each Licensed CSP to distribute Wireless Products to end users only for the payment of a fee; provided that Licensee may permit limited distribution (i.e. one Wireless Product per Property in each category of Wireless Products and including only one game level for each game) of Wireless Products without a fee for promotional or marketing purposes. The fees will typically appear on the end user's Wireless Platform bill and be remitted by the end user to the CSP pursuant to an agreement between the end user and the CSP. The CSP will in turn remit fees to Licensee (less any Deductions as that term is defined in Paragraph 7(a)(ii) below) pursuant to an agreement between Licensee and the CSP. Licensee will then remit royalties to Fox in accordance with Paragraph 7, below.
3. TERRITORY: Licensee shall use commercially reasonable efforts to exploit the rights granted hereunder throughout the world (the "Territory"), including without limitation all of the following VGSL Territories set forth in Paragraph 2(c)(i)(B) above: (1) United Kingdom; (2) Ireland; (3) Germany; (4) Spain; (5) France; (6) Sweden; (7) Switzerland; (8) Portugal; (9) Netherlands; (10) Greece; (11) Italy; (12) Australia; (13) New Zealand; (14) Egypt; (15) Slovenia; (16) Belgium; (17) Austria; (18) Hungary; (19) Malta; (20) Croatia; (21) South Africa; and (22) Japan. Licensee shall localize the Wireless Products into the following languages: English, French, German, Italian, Spanish, and Japanese. In addition to the previously stated languages, to the extent practicable Licensee also shall localize the Wireless Products to be delivered to VGSL into Portuguese, Greek, Dutch and Swedish, to the extent that the Properties
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-8-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
are dubbed into such languages, Fox holds foreign rights to the dubbed tracks, and such dubbed tracks are timely available.
4. TERM: The rights granted hereunder shall be effective as of the Effective Date and shall expire on December 31, 2006 (the "Term"); provided, however, that with respect to each Property, all rights and licenses granted herein will continue in full force and effect for a period of eighteen (18) months after the initial theatrical release of that Property.
(a) Licensee's Right of First Negotiation on New Properties: For the Term of this Agreement, Fox hereby grants to Licensee a right of first negotiation with respect to those theatrical motion pictures released during the Term of this Agreement (in addition to the Properties identified in Exhibit A) in which (i) Fox owns or controls licensing and merchandising rights, for which Fox determines in its sole discretion to grant to any third party any licensing rights for the development and distribution of wireless products, and (ii) which theatrical motion pictures Fox reasonably deems to be a Major Release consistent with its past practices. The Right of First Negotiation shall be exercised as follows. Whenever Fox desires to grant to any third party any licensing rights for a Major Release (each such instance, an "Opportunity"), Fox shall request that Licensee submit a bid regarding the Opportunity. If Licensee intends to exercise its Right of First Negotiation, it must submit a bid in response to Fox's request within 10 business days. If Licensee does submit a bid, both parties shall negotiate in good faith over the bid for a reasonable period of time, not to exceed 10 additional business days. If the parties have not reached agreement in writing regarding the terms and conditions for the exploitation of the Opportunity within said time period, or if Licensee fails to submit a bid in a timely manner, Fox shall be free to accept any bid from any other party with respect to the Opportunity, or Fox shall be free not to exploit the Opportunity at all. Should Licensee choose to exercise its Right of First Negotiation, its floor bid shall be at least US$***** for each Major Release (as defined in Exhibit N).
5. ADVANCE: Licensee shall pay Fox a non-refundable recoupable advance in the amount of US$***** upon Licensee's signature of this Agreement (the "Advance"). The Advance shall be treated as the first installment of the Guarantee described in Section 6(a), and will be recoupable against royalties as part of the Guarantee.
6. GUARANTEE:
(a) Amount: Licensee shall pay to Fox a non-refundable guarantee in the amount of US$***** ("Guarantee"), inclusive of the Advance. The Guarantee shall be recoupable against royalty payments and payable as follows: (a) US$***** inclusive of the Advance above; (b) US$***** on or before *****; (c) US$***** on or before *****; (d) US$***** on or before *****; (e) US$***** on or before *****; (f) US$***** on or before *****; and (g) US$***** on or before *****. There shall be no cross-collateralization among the Royalties earned, as defined in Paragraph 7 below, for the purposes of recouping the Guarantee for any of the Major Releases or Targeted Releases.
(b) Individual Property Guarantees: Notwithstanding the payment schedule set forth in Paragraph 6(a) above, a minimum recoupable guarantee (each "Individual Property
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-9-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
Guarantee") shall be apportioned from the Guarantee set forth in Paragraph 6(a) above to each of the individual Major Releases and Targeted Releases set forth on Exhibit A as follows for the purposes of determining recoupment of Guarantees and Royalty payments attributable to each of the Major Releases and Targeted Releases as set forth in Paragraph 7 below:
(i) Major Releases: The Individual Property Guarantee for each of the Major Releases set forth on Exhibit A shall be US$*****.
(ii) Targeted Releases: The Individual Property Guarantee for each of the Targeted Releases set forth on Exhibit A shall be US$*****.
(c) Overages: At such time that Fox has earned in Royalties, as defined in Paragraph 7 below, the amount of an Individual Property Guarantee attributable to a specific Property, Licensee shall then remit to Fox on a quarterly basis in accordance with Paragraph 7(c) all Royalties due and payable in excess of such Individual Property Guarantee. Notwithstanding the foregoing, all Guarantee installments shall remain due and payable in accordance with the schedule of payments set forth in Paragraph 6(a) above and may not be allocated or apportioned to Royalty overages due.
7. ROYALTIES:
(a) Payments from Licensee to Fox: In consideration of the rights granted to Licensee pursuant to this Agreement, Licensee shall pay to Fox, or such other party as Fox may designate in writing, a royalty in the following amounts:
(i) Major Releases:
(A) Until such time as ***** percent (*****%) of an Individual Property Guarantee for a Major Release is recouped by Licensee, Fox shall earn, and credit against the Individual Property Guarantees, Royalties at the rate of ***** percent (*****%) of Licensee's Gross Receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Major Release; and
(B) Thereafter and until such time as ***** percent (*****%) of an Individual Property Guarantee for a Major Release is recouped by Licensee, Fox shall earn and Licensee shall pay to Fox Royalties at the rate of ***** percent (*****%) of Licensee's Gross Receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Major Release; and
(C) Thereafter (and for the remainder of the Term), Fox shall earn and Licensee shall pay to Fox Royalties at the rate of ***** percent (*****%) of Licensee's Gross Receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Major Release.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-10-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
(ii) Targeted Releases:
(A) Until such time as ***** percent (*****%) of an Individual Property Guarantee for a Targeted Release is recouped by Licensee, Fox shall earn, and credit against the Individual Property Guarantees, Royalties at the rate of ***** percent (*****%) of Licensee's Gross Receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Targeted Release; and
(B) Thereafter (and for the remainder of the Term), Fox shall earn and Licensee shall pay to Fox Royalties at the rate of ***** percent (*****%) of Licensee's gross receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Targeted Release.
Royalties shall accrue when the Wireless Products are sold, downloaded or otherwise distributed to the end user, whichever first occurs, and shall become payable upon receipt by Licensee. "Gross Receipts" shall mean all monies received by or credited to Licensee for download of the Wireless Products by end users less only monies actually retained by the CSPs (the "Deductions").
(b) Payments from Fox to Licensee: In consideration of the rights granted by Licensee to Fox and VGSL pursuant to this Agreement, Fox shall pay to Licensee, or such other party as Licensee may designate in writing, a royalty in the following amounts:
(i) Distribution in Japan. In the event that Fox distributes, licenses, or otherwise exploits the Wireless Products in Japan pursuant to Paragraph 2(c)(iii), or grants to any third party any rights to distribute the Wireless Products for the Wireless Platform to end users within Japan, or otherwise uses in Japan any elements of the Fox Intellectual Property (as defined in Paragraph 11(a) that are solely attributable to Licensee's development efforts pursuant to this Agreement, Fox agrees to pay Licensee a royalty in the amount of ***** percent (*****%) of Fox's gross receipts for any such activity, which shall be defined as all monies actually received by Fox for the Wireless Products or other such elements of the PSM, less any Deductions.
(ii) VGSL Payments: As set forth in Paragraph 2(c)(ii) above, pursuant to the VGSL Agreement, VGSL will remit directly to Fox Fox's contractual share (pursuant to the VGSL Agreement) of all revenue from sales of the Wireless Products by VGSL in the VGSL Territories ("VGSL Revenue"). Fox will remit all VGSL Revenue to Licensee and such VGSL Revenue shall be treated as Gross Receipts for the purpose of this Agreement. The VGSL Revenue shall be treated in accordance with Paragraph 7(a) in calculating Royalties due to Fox from Licensee.
(iii) Other Payments: To the extent that Fox enters into an agreement with a CSP other than VGSL with Licensee's consent in accordance with Paragraph 1(f),
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-11-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
whereby Fox's contractual share of revenue from the sale of the Wireless Products to the CSP's subscribers is remitted directly to Fox from the CSP, Fox will pass through all such revenue from the CSP to Licensee and such revenue shall be treated as Gross Receipts for the purpose of this Agreement. Payments of all royalties from the sale of Wireless Products through any such arrangements shall be made by Licensee to Fox in accordance with Paragraph 7(b) above. Except as otherwise provided under this Agreement, Fox hereby agrees not to enter into any future agreements with a CSP for the distribution of the Wireless Products without the involvement and prior written agreement of Licensee.
(iv) For the avoidance of doubt, Fox will have no right or license to develop, publish, and or distribute any Wireless Products for the Wireless Platform, or to permit any third party to do so, or to otherwise use or exploit any Licensee Materials, except in accordance with Paragraphs 1(b) (with respect to bundling), 2(c)(iii) (with respect to Japan), and 2(c)(ii) (with respect to VGSL and T-Mobile).
(c) Payment Terms. Payment of all royalties and other payments by either party to the other shall be made in United States Dollars by check or wire transfer to a bank account to be designated by the receiving party. Payment of all royalties shall be made without deduction, reduction or set-off of any kind, provided that the paying party shall be permitted to deduct withholding taxes as permitted by applicable law. Each party agrees that it shall not be entitled to withhold any portion of the royalties as a reserve. Each party agrees to provide the other with all necessary withholding tax forms.
(d) Accounting Statement: Royalty statements (which statements shall be on the form attached hereto as Exhibit O and incorporated herein by this reference or such other form as the receiving party may designate in its discretion) shall be due and payments made within thirty (30) days after the close of each calendar quarter in which the paying party received any applicable revenue. Each party shall keep a record of all sales and shall submit, together with the royalty statements, a quarterly summary report of such sales. Notwithstanding the foregoing, pursuant to Paragraphs 7(b) (2) and 7(b)(3), Fox shall make all payments of revenue remitted directly by VGSL or any other CSP with whom the parties prospectively agree Fox will receive revenue directly, within thirty (30) days of receipt of such revenue.
(e) Books and Records: Each party shall keep accurate and complete books and records as they relate hereto for the greater of three years from the Effective Date or two years from the termination or expiration of the Term. On reasonable notice, each party shall have the right to examine said books and records; provided that such examination will be made no more than twice in any given twelve month period, and shall be made during normal business hours. If any audit discloses that a party owes royalties in excess of 5% of royalties paid during any accounting period, the audited party shall pay the audit costs together with shortfall and interest at rates as specified in Paragraph 7(e) below.
(f) Late Payments: If a party does not receive the applicable royalty payment as specified on or before the thirtieth day after the close of any calendar quarter, the party owing such royalty shall pay interest with respect to any royalties owed from day to day until the date of payment at a rate of 5% above U.S. Prime Rate on an annual basis. Interest on royalties owed calculated in accordance with this Paragraph shall accrue after
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-12-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
as well as before any judgment. Neither the acceptance of any payment or royalty statement nor the deposit of any check shall preclude a party from questioning the correctness of any such payment or royalty statement at any time.
8. DUTIES OF LICENSEE:
(a) Marketing and Promotion: Licensee shall be responsible for all marketing, advertising and promotional efforts with respect to the Wireless Products throughout the Territory during the Term. Licensee shall (A) participate in face to face meetings and conference calls regarding marketing from time to time, the frequency, location and subject matter of which shall be mutually agreed; (B) submit a separate marketing plan for the Wireless Products for each Property for which Fox has approved a Treatment (as defined in Paragraph 9(a)(ii)) within thirty (30) days of Fox's approval of such Treatment, subject to Fox's providing sufficient information regarding its release plans for the applicable Property (each, a "Marketing Plan"); (C) commit funds to the marketing of the Wireless Products as is commensurate with Licensee's marketing efforts of other similar wireless products that Licensee publishes; (D) perform business to business and trade marketing efforts (e.g., to the CSPs) commensurate with industry standards; and (E) appoint a marketing point of contact which shall be responsible for coordinating communications and facilitating relationships between Fox and Licensee and for overseeing the performance of Licensee's obligations hereunder.
All marketing materials for the Wireless Products that incorporate and/or make reference to any part of the PSM or the Properties (collectively, the "Licensee Marketing Materials") shall be subject to Fox's approval as follows:
(i) Licensee Marketing Materials: Licensee shall be responsible for producing the Licensee Marketing Materials, all of which shall be subject to Fox's prior written approval, at Licensee's sole cost and expense. Licensee will submit samples of all Licensee Marketing Materials to Fox for review and approval prior to Licensee's use of the Licensee Marketing Materials. Fox shall endeavor to review the Licensee Marketing Materials within two (2) weeks of receipt thereof, provided however, a delayed Fox response shall not constitute a deemed approval under any circumstances. Only after Fox has approved the Licensee Marketing Materials may Licensee proceed with production thereof. Once approval has been granted by Fox, Licensee will not make alterations, modifications or revisions to the Licensee Marketing Materials without the prior written consent of Fox.
(ii) CSP Marketing Materials: If any Licensed CSP seeks to incorporate any element of the PSM in its advertising, marketing, packaging (if any), consumer and trade publicity and promotional materials as well as any collateral materials related thereto ("CSP Marketing Materials"), Licensee shall ensure that such Licensed CSP obtains Fox's approval in accordance with Paragraph 8(a)(i). Licensee shall submit any such proposed CSP Marketing Materials on the CSP's behalf. Once Fox has approved any such CSP Marketing Materials and notified Licensee, Licensee shall notify the CSP and Licensee and the CSP may proceed with production thereof, provided there are no alterations from the approved packaging.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-13-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
(b) Product Support: Licensee shall provide all customer product support, including technical support, for the Wireless Products in the same manner as it provides such support for any other product that it distributes and/or publishes, and in any case in accordance with wireless industry standards. Licensee will display (and ensure that the CSP displays) a toll free telephone number (or an email address, in Licensee's discretion, on a country by country basis) on its website so that customers may contact Licensee and/or the CSP regarding the Wireless Products ("Customer Request"). Licensee and/or the CSP will use all commercially reasonable efforts to respond to each such Customer Request within 24 hours after receipt of such request. Licensee shall exercise commercially reasonable efforts to resolve each such Customer Request. Licensee also shall respond to all inquiries from VGSL relating to the Wireless Products delivered to VGSL.
(c) Solicitation of Sales: So long as the Agreement has not been terminated or otherwise expired, Licensee shall use all commercially reasonable efforts to promote sales of the Wireless Products during the Term of this Agreement.
(d) No Preferential Treatment: Licensee agrees that it will use substantially similar efforts to advertise, promote, manufacture, sell and distribute the Wireless Products as it devotes to its other licensed products.
(e) Compliance with all Laws: Licensee shall comply with all laws, rules, treaties, and regulations governing the distribution of the Wireless Products throughout the Territory.
(f) Internet Data: Licensee shall comply with COPPA regulations as well as with Fox's Internet Privacy Policy with respect to the collection of any consumer information via the Internet. The policy is attached hereto as Exhibit P and incorporated herein by this reference.
(g) Localization: Licensee shall localize the Wireless Products into the following languages: English, French, German, Italian, Spanish, and Japanese, with Portuguese, Greek, Dutch and Swedish to be made available where practicable to the extent that the Properties are dubbed into such languages, Fox holds foreign rights to the dubbed tracks, and such dubbed tracks are timely available.
(h) Optimization: Licensee shall be required to optimize the Wireless Products for all Territories and Licensed CSPs.
(i) Compatibility Testing: Licensee shall be responsible for any compatibility testing of the Wireless Products required by CSPs, and further shall be responsible for the following: (i) quality assurance of the Wireless Products which is consistent with industry standards; and (ii) adequate operation and functionality of the Wireless Products on the Wireless Platform in connection with each Licensed CSP's networks. To the extent that a material bug or defect is discovered in the Wireless Products which impacts in any manner the functionality of the Wireless Products, Licensee will promptly investigate and correct such bugs or defects, whether discovered by Licensee, Fox, the Wireless Platform manufacturer(s) or the CSP(s). As between Fox and Licensee, all costs of performing the foregoing obligations shall be borne by Licensee.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-14-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
9. FOX APPROVALS:
(a) Wireless Products Approval: Fox shall have the right to approve the Wireless Products in accordance with the procedure set forth below. Licensee acknowledges that Fox's approval shall include the approval of any third party who has approval rights over any of the Properties, as applicable.
(i) Creative Meetings: Licensee shall participate in face to face creative meetings with Fox on a monthly basis to determine which Wireless Products shall be developed for upcoming Major Releases and Targeted Releases. The parties will mutually agree upon the list of Wireless Products for each Property, and will amend the applicable Exhibit for that property upon reaching such agreement. Notwithstanding the foregoing, Licensee shall develop the Wireless Products set forth in Exhibits B through M for each Property.
(ii) Concept / Treatment: For each of the Major Releases and Targeted Releases, within ***** after receipt from Fox of the applicable PSM Materials, Licensee will deliver to Fox a concept / treatment for the applicable Wireless Products, which will outline the technical and creative aspects of the Wireless Products (each, a "Treatment"). Each Treatment shall be subject to Fox's approval, which approval is within Fox's discretion. Once a Treatment is approved by Fox and to the extent the approved Treatment requires compatibility input from a Licensed CSP, it shall be Licensee's sole responsibility to secure concept approval from such Licensed CSP. If the Licensed CSP requires changes, modifications or alterations to a Treatment, or to any element of the Wireless Products, Licensee shall seek Fox's written approval of any such change, which approval may be withheld in Fox's sole discretion.
(iii) Design Document: Once a given Treatment is approved by Fox, Licensee shall then submit to Fox a game design document ("Design Document") which will lay out the creative and technical aspects for the Wireless Product, including how Licensee intends to use the Property and the PSM in the Wireless Product. The Design Document shall be subject to Fox's written approval, which approval is within Fox's sole discretion.
(iv) Alpha Testing: Upon approval of the Design Document by Fox, Licensee shall submit a prototype of the applicable Wireless Product, which demonstrates all of the features and functions set forth in the Design Document, although colors, graphics and related elements need not be in their final form (each, an "Alpha Prototype"). Each Alpha Prototype will be subject to Fox's written approval, which approval will be in Fox's sole discretion.
(v) Beta Testing: Upon approval of the Alpha Prototype, Licensee shall submit a post-Alpha prototype of the Wireless Product meeting all Alpha requirements and in substantial conformance with the Design Document, with all features and functions implemented and in which all interface, memory allocation and code size issues are effectively addressed (each, a "Beta Prototype"). Each Beta Prototype will have passed Licensee's established testing procedures and have no known Bugs. Each Beta Prototype shall be subject to Fox's written approval, which
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-15-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
approval will be in Fox's sole discretion. After Fox has approved a Beta Prototype, Licensee shall be free to release the Beta Prototype as a final commercial product.
(A) Modifications: After approval of a Beta Prototype, Licensee shall not modify the Wireless Products without the prior written approval of Fox. For purposes of this paragraph, porting, enhancements, optimization (which alters the content displayed in any material manner) and localization shall be deemed a modification requiring Fox's prior written approval. Notwithstanding the foregoing, Porting that does not require substantive changes to a Wireless Product will not be deemed a modification requiring Fox's prior approval.
(b) Approval Process:
(i) Evaluation: Fox shall approve or reject in writing all Treatments, Design Documents, Alpha Prototypes, and Beta Prototypes submitted to it for its approval (each individually a "Deliverable"). Fox's approval or rejection of all Deliverables shall be rendered in good faith.
(ii) Rejection: If Fox rejects any Deliverable, Fox shall provide to Licensee, in writing, the reasons for its rejection of that Deliverable. Licensee shall then use commercially reasonable efforts to make the changes to that Deliverable and resubmit the Deliverable to Fox for Fox's reconsideration. If Fox rejects a given Alpha Prototype more than twice based on a reason previously notified to Licensee by Fox, then Fox may terminate this Agreement in whole or with respect to the affected Property and Wireless Products and shall reserve all remedies available under this Agreement. Notwithstanding the foregoing, Fox will not terminate this Agreement for rejection of any Deliverables related to Properties that have their initial theatrical release prior to June 30, 2005, provided such Deliverables are accepted and delivered not later than ***** after the U.S. theatrical releases for each of the following Properties: "Robots"; "Mr. & Mrs. Smith"; and Untitled Ridley Scott Film.
(iii) Collaborative Process: The parties intend that development of the Wireless Products will be a collaborative effort between Fox and Licensee, such that Fox shall have a reasonable opportunity to provide input into the primary aspects of each Wireless Product through the review and approval procedure described above, including, but not limited to, the look and feel of the Wireless Products, art direction, as well as the use of the Property (and all elements therefrom) in the Wireless Products and in the advertising, promotion and marketing thereof in accordance with this Agreement. Licensee understands and agrees that approval of any two-dimensional artwork does not constitute approval of the implementation of the artwork in the Wireless Products.
(iv) Timing: Fox shall endeavor to approve or reject in writing all Deliverables and all materials submitted to it for its approval within two (2) weeks of Fox's receipt thereof. If Fox does not approve or reject in writing a Deliverable within two (2) weeks of its receipt and causes a significant delay in the development of the
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-16-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
Wireless Products, then Fox and Licensee shall mutually and in good faith discuss and agree to any adjustments in the Wireless Products Latest Commencement Date which are necessary due to such delay. Fox shall not terminate this Agreement for Licensee's delay in delivery of the Wireless Products, where such delay is solely caused by Fox's failure to deliver the PSM Materials in a timely manner in accordance with Paragraph 2(a)(i). Fox reserves the right to terminate this Agreement in accordance with paragraph 2(b)(i) where Licensee's delay in delivery of the Wireless Products is the result of Fox's disapproval of the Deliverables.
10. PRICING: As between Fox and Licensee, Licensee will be responsible for determining the prices and/or fees at which the Wireless Products will be offered for sale to the general public but will do so in accordance with Licensee's agreements with the CSPs. Licensee acknowledges that VGSL will be responsible for making pricing decisions for the Wireless Products distributed through VGSL, provided that Fox will not agree to any reduction in the share of revenue it receives from VGSL, other than the ***** percent (*****%) reduction in Fox's revenue share for late delivery provided for in the current version of the VGSL Agreement.
11. INTELLECTUAL PROPERTY RIGHTS:
(a) Intellectual Property Rights Defined: For purposes of this Agreement, the term "Intellectual Property Rights" means know-how, inventions, patents, patent rights, and registrations and applications, renewals, continuations and extensions thereof, works of authorship and art, copyrightable materials and copyrights (including, but not limited to, titles, computer code, designs, themes, objects, characters, character names, stories, dialog, catch phrases, concepts, artwork, animation, sounds, musical compositions, graphics and visual elements, audio-visual effects and methods of operation, and any related documentation), copyright registrations and applications, renewals and extensions thereof, mask works, industrial rights, trademarks, service marks, trade names, logos, trademark registrations and applications, renewals and extensions thereof, trade secrets, rights in trade dress and packaging, publicity, personality and privacy rights, rights of attribution, paternity, integrity and other similarly afforded "moral" rights, and all other forms of intellectual property and proprietary rights recognized by the U.S. laws, and other applicable foreign and international laws, treaties and conventions.
(b) Fox Intellectual Property: Fox shall own all Intellectual Property Rights in and to any derivative works made from the Properties, whether or not used in the Wireless Products, including without limitation design documents, graphics, animation, music, packaging, advertising, promotional and other artwork used in connection with the development and distribution of the Wireless Products but at all times excluding the Licensee Materials as defined in Paragraph 11(c) below (collectively, the "Fox Intellectual Property"). The Fox Intellectual Property includes all rights in and to the entire "look and feel" of the Wireless Products, all visual displays, scripts, dialogue, literary treatments, concepts, characters, backgrounds, environments, and other elements visible to the Wireless Products' users; all sounds, sound effects, soundtracks and other elements audible to the user. Licensee acknowledges and agrees Fox shall be the exclusive owner of these rights as a work made for hire. Licensee acknowledges that Licensee's use of any Property shall not confer or imply a grant of rights, title or interest in the Property or good will associated therewith, except as specifically provided herein.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-17-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
Fox's Intellectual Property Rights shall be indefeasible and irrevocable and shall not be subject to reversion under any circumstance, including cancellation, termination, expiration, or breach of this Agreement. Licensee further agrees to execute one or more copyright assignments at Fox's request, or any other subsequent document as further evidence of this assignment, and to cooperate with Fox in perfecting the assignment of any rights to the Fox Intellectual Property, and hereby appoints Fox as its attorney-in-fact to execute any documents required in connection with such assignment. All materials created hereunder shall be prepared by an employee-for-hire of Licensee under Licensee's sole supervision, responsibility and monetary obligation, or, if third parties who are not employees of Licensee, including without limitation all software developers developing the Wireless Products contribute to the creation of any Fox Intellectual Property, Licensee shall obtain from such third parties a full written assignment of rights so that all right, title and interest in the Fox Intellectual Property shall vest in Fox.
(c) Licensee Materials: Licensee owns and shall retain all right, title, and interest in and to (i) all software source code, tools, and technical documentation used by or for Licensee to create the Wireless Products, including without limitation any and all software code included in the Wireless Products, (ii) all aspects and elements of the Wireless Products other than the Fox Intellectual Property therein, including without limitation any and all gaming engines, game concepts, rules, scripts, and other Intellectual Property Rights therein; and (iii) any and all Intellectual Property Rights in any of the foregoing (the "Licensee Materials").
(d) Moral Rights: Licensee hereby does expressly assign to Fox any and all rights of paternity or integrity, rights to claim authorship, to object to any distortion, mutilation or other modification of, or other derogatory actions in relation to the PSM, the Fox Intellectual Property, and any of Fox's Intellectual Property Rights in and to the PSM and or the Fox Intellectual Property and any derivative works thereof, whether or not such would be prejudicial to Fox's honor or reputation, and any similar right, existing under judicial or statutory law of any country in the world, or under any treaty ("Moral Rights"), regardless of whether such right is denominated or generally referred to as a moral right. Licensee hereby does irrevocably transfer and assign to Fox any and all Moral Rights that Licensee may have in Fox's Intellectual Property Rights in and to the PSM and the Fox Intellectual Property and any derivative works thereof and shall cause Licensee's employees and contractors, including Licensee's developers of the Wireless Products, to do likewise. Licensee hereby does forever waive and agree never to assert any and all Moral Rights it may have in Fox's Intellectual Property Rights in and to the PSM and the Fox Intellectual Property and any derivative works thereof and shall cause its employees and contractors (including the developers) to do likewise.
(e) Licensee Cooperation: Licensee shall not by any act or omission to act impair or prejudice the Intellectual Property Rights of Fox in the PSM, the Fox Intellectual Property or the Properties, or violate any moral rights or deal with the PSM, the Fox Intellectual Property or Properties so that any third party might obtain any lien or other right of whatever nature incompatible with the Intellectual Property Rights of Fox. Licensee agrees to notify Fox of any known or suspected infringement of Fox's Intellectual Property Rights in the PSM and the Property that comes to Licensee's attention and to assist Fox, at Fox's expense, in taking such action as Fox, in its sole discretion, deems necessary or appropriate to prevent or remedy such infringing activities. Licensee shall
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-18-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
also promptly notify Fox in writing of any legal proceeding instituted, or written claim or demand asserted, by any third party against Licensee with respect to the infringement of any Intellectual Property Rights that is alleged to result from the use of the PSM or the Properties in connection with the Wireless Products in accordance with this Agreement.
(f) First Sale Doctrine Not Applicable: The PSM is licensed, not sold, by Fox to Licensee, and nothing in this Agreement will be interpreted or construed as a sale or purchase of the PSM, including but not limited to any use of a "purchase order" by Licensee in connection with the transactions contemplated hereunder. Furthermore, notwithstanding use of the terms "sale" and "sell" throughout this Agreement, any distribution or delivery of the Wireless Products by Licensee to any sublicensee (including, without limitation, CSPs and end-users) will be by license and not by sale (and Licensee shall post notice of that fact in sufficient size, location and manner on Licensee's website on the page from which the general public can subscribe to the Wireless Products). Accordingly, Licensee acknowledges that the "First Sale Doctrine" (as embodied in 17 U.S.C., Paragraph 109 of the United States Copyright Act of 1976, as amended, or the equivalent law or statute in the Territory) does not apply to Licensee's acquisition of rights in and to the PSM and the Property hereunder or to any sublicensee's acquisition of rights in and to the Wireless Products under any agreement between Licensee and a sublicensee.
12. TRADEMARKS AND COPYRIGHTS; FOX'S TITLE AND GOODWILL:
(a) Intellectual Property Notices: Licensee agrees to place on Licensee's website and in the Wireless Products, and on the packaging and related documentation, if any, and Marketing Materials for the Wireless Products, all trademarks, copyright notices, logos and other legal or proprietary designations of Fox in the form and manner reasonably directed by Fox, including, without limitation, a notice indicating that the Wireless Products are produced by Licensee under license from Fox. All copyrights, trademarks and service marks relating to the Properties, PSM Materials, and Fox Intellectual Property, are, will be and shall remain the sole property of Fox and any rights therein granted to Licensee shall terminate immediately upon termination of this Agreement. All goodwill and reputation attaching to such copyrights, trademarks and service marks shall vest in Fox. Licensee shall create, execute and deliver to Fox all documents and instruments reasonably required by Fox for the protection of or otherwise in connection with the copyrights, trademarks and service marks of Fox. Licensee shall not have the right to use Fox's trademarks or trade names except in connection with the promotion and distribution of the Wireless Products in the Territory in accordance with the terms of this Agreement. Notwithstanding the foregoing, Licensee may include a notice for the Licensee Materials, where appropriate.
(b) Goodwill: Licensee acknowledges that Fox is the owner of all right, title and interest in and to the PSM and the Properties, and further acknowledges the great value of the goodwill associated with the PSM and the Properties and that the PSM and the Properties have acquired secondary meaning in the mind of the public and that the trademarks and copyrights included in the PSM and the Properties, and the registrations thereof, are valid and subsisting, and further agrees that it shall not during the Term of this Agreement or at any time thereafter dispute or contest directly or indirectly, or do or cause to be done any act which in any way contests, impairs or tends to impair Fox's
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-19-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
exclusive rights and title to the PSM and the Properties, or the validity thereof or the validity of this Agreement, and shall not assist others in so doing.
(c) Cooperation: Licensee shall not in any manner represent that it has any ownership in the PSM or the Properties, or in any trademarks or copyrights included in the PSM or the Properties (or registrations thereof), but may, only during the Term, and only if Licensee has complied with any and all applicable laws and registration requirements within the Territory for so doing, represent that it is a "licensee" or "official licensee" hereunder. Licensee shall not register or attempt to register any copyright or trademark in the Properties, in its own name or that of any third party, nor shall it assist any third party in doing so.
13. REPRESENTATIONS AND WARRANTIES:
(a) By Licensee: Licensee represents and warrants to Fox that:
(i) Governmental Authority: Licensee has full power and authority to enter into and perform this Agreement without approval from any governmental entity or third party, and that such ability is not limited or restricted by any agreements or understanding between Licensee and any other person or company;
(ii) Corporate Authority: The execution, delivery and performance by Licensee of this Agreement have been duly authorized by any and all necessary corporate action by Licensee, and this Agreement constitutes the legal, valid and binding obligation of Licensee enforceable in accordance with its terms;
(iii) Expertise: Licensee possesses the expertise and know-how and experience to develop the Wireless Products and is otherwise fully capable of performing its obligations under this Agreement;
(iv) Infringement: The Licensee Materials and any other computer code, technology, information, art or other materials created, developed or used by Licensee pursuant to this Agreement will not infringe upon or misappropriate the Intellectual Property Rights or any other legal rights of any third party, and should any aspect of the Licensee Materials, or such other computer code, technology, information, art or materials created, developed or used by Licensee pursuant to this Agreement, become, or, in Fox's opinion, be likely to become, the object of any infringement or misappropriation claim or suit, Licensee will procure, at Licensee's expense, the right to use such Licensee Materials, computer code, technology, information, art or other materials in all respects, or will replace or modify the affected material to make it non- infringing; and
(v) Licensee Conduct: Licensee will (A) conduct its business in a manner that reflects favorably at all times on the Property, the Wireless Products and the good name, goodwill and reputation of Fox, (B) avoid deceptive, misleading or unethical practices, that are or might be detrimental to Fox, the Property, the Wireless Products or the public, (C) avoid making disparaging, false or misleading statements or representations with regard to Fox, the Property or the Wireless Products, (D) not employ or cooperate in the employment of any deceptive or
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-20-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
misleading advertising material with regard to Fox, the Property or the Wireless Products, (E) make no representations, warranties or guarantees to customers or to the trade with respect to the specifications, features or capabilities of the Wireless Products that are inconsistent with the warranties and disclaimers included in or with the Wireless Products, (F) not sell the Wireless Products to any party who it knows, or reasonably should know, will infringe Fox's Intellectual Property Rights in the Wireless Products, and (G) comply with all applicable international, national, regional, and local laws in performing its duties hereunder and in any of its dealings with respect to the Wireless Products.
(b) By Fox: Fox represents and warrants to Licensee that:
(i) Authority: Fox has full power and authority to enter into and perform this Agreement, and that such ability is not limited or restricted by any agreements or understanding between Fox and any other person or company. The execution, delivery and performance by Fox of this Agreement have been duly authorized by any and all necessary corporate action by Fox, and this Agreement constitutes the legal, valid and binding obligation of Fox enforceable in accordance with its terms.
(ii) No Representations/Warranties Regarding Revenue: Notwithstanding the representations and warranties made by Fox in this Paragraph 13(b), Fox makes no representations or warranties whatsoever regarding the amount of revenue that may be generated by sales of the Wireless Products.
14. INDEMNIFICATION:
(a) By Licensee: Licensee agrees to indemnify, defend and hold harmless Fox, Trademark Licensor and their respective successors, assigns, parents, subsidiaries, affiliates and co-venturers, and their respective directors, officers, employees and agents from and against all third party claims, damages, losses, liabilities, suits and expenses (including reasonable attorneys' fees), arising out of or in connection with any allegations that (i) the Licensee Materials or the manufacture, packaging, distribution, promotion, sale, or exploitation thereof (except with respect to those matters against which Fox has agreed to indemnify Licensee hereunder) infringes or misappropriates the Intellectual Property Rights of any third party or (ii) any breach of warranty, representation or covenant contained in this Agreement; provided that Fox (a) promptly notifies Licensee in writing of the claim; (b) grants Licensee sole control of the defense, subject to Fox's approval of counsel (to avoid conflicts of interest) and the terms of any settlement that affect Fox; and (c) provides Licensee, at Licensee's expense, with all assistance, information and authority reasonably required for the defense and settlement of the claim. If Licensee fails to undertake such defense, Licensee shall reimburse Fox for reasonable attorneys' fees incurred by Fox in its defense of such claim or suit. Furthermore, Licensee agrees to indemnify, defend and hold harmless Fox, Trademark Licensor and their respective successors, assigns, parents, subsidiaries, affiliates and co-venturers and all other parties associated with the Property, and their respective directors, officers, employees and agents from and against claims made by VGSL against Fox regarding failure to deliver and distribute the VGSL Products (as defined in Paragraph 1(a)) in a timely manner as set forth in Paragraphs 2(a)(ii), 2(b)(i) and 2(c)(ii), third-party Intellectual Property claims relating to the Licensee Materials, and all related damages, losses,
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-21-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
liabilities, suits and expenses (including reasonable attorneys' fees). Fox's failure to provide notice in accordance with this Paragraph shall not relieve Licensee of its obligations to indemnify, defend and hold Fox harmless from any such claims, unless and except to the extent that Licensee is prejudiced by any such failure.
(b) By Fox: Fox agrees to indemnify, defend and hold harmless Licensee, its successors, assigns, parents, subsidiaries, affiliates and co-venturers, and their respective directors, officers, employees and agents from and against all third party claims, damages, losses, liabilities, suits and expenses (including reasonable attorneys' fees), arising out of or in connection with any allegations that the PSM, PSM Materials, or Properties infringe or misappropriate any Intellectual Property Rights of any third party; provided that Licensee (a) promptly notifies Fox in writing of the claim; (b) grants Fox sole control of the defense and settlement of the claim; and (c) provides Fox, at Fox's expense, with all assistance, information and authority reasonably required for the defense and settlement of the claim. If Fox fails to undertake such defense, Fox shall reimburse Licensee for reasonable attorneys' fees incurred by Licensee in its defense of such claim or suit.
(c) Injunctions. If either party's use or exploitation of any materials provided and licensed hereunder is, or in the licensor's opinion is likely to be, enjoined due to the type of claim specified in Paragraphs 13(a) or (b), above, the licensor may, at its sole option and expense: (a) procure for the licensee the right to continue using such rights under the terms of this Agreement; (b) replace or modify any materials provided so that they are non-infringing; or (c) if options (a) and (b) above cannot be accomplished despite the licensor's reasonable efforts, then the licensor may terminate the licensee's rights and the licensor's obligations hereunder with respect to such materials, in which event the licensor will refund to the licensee any amounts paid by the licensee with respect to such materials. For the avoidance of doubt, Licensee is the licensor of the Licensee Materials, pursuant to Paragraph 1(e), for the purpose of this Paragraph.
(d) Sole Remedy. THE PROVISIONS OF THIS PARAGRAPH 14 SET FORTH EACH PARTY'S SOLE AND EXCLUSIVE OBLIGATIONS AND REMEDIES WITH RESPECT TO THIRD PARTY CLAIMS OF INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL PROPERTY RIGHTS OF ANY KIND UNLESS OTHERWISE STIPULATED BY JUDICIAL ORDER.
15. TERMINATION:
(a) Termination Rights;
(i) Bankruptcy: If Licensee's liabilities exceed its assets, or if Licensee becomes unable to pay its debts as they become due, or files or has filed against Licensee a petition in bankruptcy, reorganization or for the adoption of an arrangement under any present or future bankruptcy, reorganization or similar law (which petition if filed against Licensee shall not be dismissed within 30 days from the filing date), or if Licensee makes an assignment for the benefit of its creditors or is adjudicated a bankrupt, or if a receiver or trustee of all or substantially all of Licensee's property is appointed, or if Licensee discontinues its business, this Agreement shall automatically terminate forthwith without notice to Licensee.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-22-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
(ii) Transfer or Change of Control: If a substantial portion of the assets or controlling stock in Licensee's business is sold or transferred, or if there is a substantial change in Licensee's management, or if Licensee's property is expropriated, confiscated or nationalized by any government or if any government assumes de facto control of Licensee's business, in whole or in part, Fox may terminate this Agreement upon 30 days' notice to Licensee.
(iii) Unauthorized Uses: If Licensee transfers, sells or distributes to any unauthorized third party any artwork, voice clips, or other Fox proprietary materials related to the Property including but not limited to Marketing Materials, then Fox may terminate this Agreement forthwith on written notice without any cure period.
(iv) Failure to Exploit: If Licensee fails to exploit the PSM as set forth in Paragraph 2(a) and 2(b), or fails to release the Wireless Products in accordance with the dates set forth in Paragraph 2(b), then Fox may terminate this Agreement forthwith on written notice without any cure period subject to the terms and conditions set forth in Paragraph 2(a) and 2(b), respectively.
(v) Failure to Obtain Approvals: If Licensee releases a Wireless Product without first obtaining Fox's approval as specifically set forth in this Agreement in Paragraph 9, then Fox may terminate this Agreement forthwith on written notice without any cure period.
(vi) Other Defaults: Excepting only those Licensee defaults in this Paragraph 15 which permit Fox to terminate immediately without any cure period for Licensee, if either party fails to perform any of its material obligations hereunder, the other party may terminate this Agreement upon 30 days' notice, unless the breaching party cures any such breach within said 30 days and gives notice to the other party thereof within that period. Notwithstanding the foregoing, in the event that either party (A) fails to pay Royalties or other amounts when due, or (B) fails to make Royalty or other accountings in accordance with the terms of this Agreement, then the breaching party shall be subject to a one-time cure period of fifteen (15) days for such breach. If a party fails to cure the breach within such fifteen (15)-day period or another breach of either (A) or (B) above occurs following an initial cure within the fifteen (15)-day period, then the other party shall have the right in its sole discretion to terminate this Agreement forthwith on written notice without any cure period.
(vii) Other Agreements: Should any event of default by Licensee cause Fox to terminate this Agreement, Fox, in its sole discretion, may terminate, without any cure period, any other agreements concurrently existing between Fox and Licensee upon written notice specifying the agreements to be terminated. For the avoidance of doubt, this remedy shall only apply to any agreements concurrently existing between the specific parties to this Agreement and shall not apply to agreements between Licensee and Fox Sports.
(b) Effect of Termination/Expiration: In the event of termination of this Agreement, Licensee shall: (i) immediately stop in all respects the sale and distribution of the Wireless Products and provide Fox with a complete inventory report and accounting with
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-23-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
payment of all Royalties, and (ii) at Fox's election shall either (A) deliver to Fox all materials related to the Wireless Products or (B) give Fox satisfactory evidence of their destruction. Licensee agrees that its failure to stop in all respects the sale and/or distribution of the Wireless Products upon termination or expiration of the Agreement will result in immediate irreparable damage to Fox for which there is no adequate remedy at law, and in the event of such failure by Licensee, Fox shall be entitled to injunctive relief. Fox's exercise of any of the foregoing remedies shall not operate as a waiver of any other rights or remedies which Fox may have. Fox shall not distribute the Wireless Products after the termination or expiration of this Agreement without obtaining from Licensee a separate license to the Licensee Materials.
(i) Sell-Off Period: Notwithstanding Paragraph 15(b), in the event of termination of this Agreement, Licensee shall have a period of ***** from the date of such termination (unless such termination occurs less than ***** prior to the expiration of this Agreement in which case the time period shall be shortened accordingly so as not to exceed the date of expiration) in which to sell-off existing inventory of Wireless Products already in the Distribution Channels ("Sell Off Period"). Licensee agrees that no additional Wireless Products may be developed or distributed during the Sell Off Period and Licensee agrees to require that any Licensed CSP to comply with this provision. Upon the expiration of the Sell Off Period, Licensee agrees to destroy all such remaining inventory and confirm same in writing to Fox (and require that any Licensed CSP do the same). Any revenues, credits or other consideration received by Licensee for the Wireless Products during the Sell Off Period will be subject to Licensee's obligation to pay Fox Royalties pursuant to Paragraph 7 above.
(ii) Fox's Development of Wireless Products: In the event of termination or expiration of this Agreement or Licensee's loss of exclusive rights under this Agreement, Fox shall be free to create and exploit, or have a third party create or exploit, wireless products which may be similar to those developed and distributed by Licensee pursuant to this Agreement for the Properties.
(c) Guarantee Forfeiture: In the event of termination of this Agreement and without limitation of Fox's rights and remedies all of which are expressly reserved, the following payment penalties shall apply: (i) if termination occurs in the first year of the Term, Licensee shall forfeit any Guarantee paid, and shall immediately pay any remaining Guarantee, up to the amount of ***** dollars (US$*****), and any Guarantee payments made in excess of ***** dollars ($*****) shall be refunded by Fox to Licensee; and (ii) if termination occurs in the second year of the Term, Licensee shall forfeit any Guarantee paid, and shall immediately pay any remaining portion of the Guarantee then unpaid, up to the amount of ***** dollars (US$*****). Any forfeited Guarantees will apply as a set off against any additional damages claimed by Fox.
16. CONFIDENTIAL INFORMATION AND PRESS:
(a) Confidential: Each party agrees to use reasonable efforts, and at least the same care that it uses to protect its own confidential information of like importance, to prevent unauthorized dissemination and disclosure of the other party's confidential information
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-24-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
during and for a period of three (3) years after the Term. These obligations will be subject to the following terms and conditions:
(b) Confidential Information Defined: Confidential information includes, but is not limited to, the following: (i) the design, technology and know- how related to the Wireless Products, the PSM and the Property; (ii) the computer object and source code of the Wireless Products, the PSM and the Property; (iii) non-public information concerning either party's financing, financial status, research and development, proposed new products, marketing plans and pricing, unless and until publicly announced; and (iv) any information designated by either party as confidential or proprietary in writing:
(i) Certain Information Not Deemed Confidential: The foregoing obligations will not apply to any information that: (A) becomes known to the general public without fault or breach on the part of the receiving party; (B) the receiving party receives from a third party without breach of a nondisclosure obligation and without restriction on disclosure; (C) was in the possession of the receiving party prior to disclosure by the other; or (D) is independently developed by the receiving party's personnel having no access to similar confidential information obtained from the other.
(ii) Confidential Information of Another: Nothing in this Agreement will affect any obligation of either party to maintain the confidentiality of a third party's confidential information.
(c) Press Releases: Licensee may not issue a press release or otherwise disclose to or discuss with the press the existence or terms of this Agreement without the prior written consent of Fox (it being understood that Fox's legal counsel shall have final approval over the timing and/or content of any press release or other public disclosure by Licensee regarding this Agreement). Notwithstanding the foregoing, the parties (and their respective parent companies) shall be free to disclose Confidential information to the extent required by any law or regulation to any relevant stock exchange. The parties will liaise and endeavor to agree to the wording of any such disclosure in advance.
17. MISCELLANEOUS:
(a) Notices: All notices and statements shall be in writing and shall together with any payments be personally delivered or sent postage prepaid to the intended party at the address set forth below (unless notification of a change of address is given in writing). The date of mailing of a notice or statement shall be deemed the date the notice is given or statement rendered.
To Fox:
Mail: Twentieth Century Fox Licensing & Merchandising P.O. Box 900 Beverly Hills, California 90213 USA Attention: Vice President, Wireless Development
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-25-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
Messenger: 2121 Avenue of the Stars, 4th Floor Los Angeles, California 90067 USA Attention: Vice President, Wireless Development Facsimile: (310) 369-1465 With copies to: Mail: Twentieth Century Fox Licensing & Merchandising P.O. Box 900 Beverly Hills, California 90213 USA Attention: Legal Department Messenger: 2121 Avenue of the Stars, Suite 1334 Los Angeles, California 90067 USA Attention: Legal Department Facsimile: (310) 369-4241 and: Mail: Twentieth Century Fox Licensing & Merchandising P.O. Box 900 Beverly Hills, California 90213 USA Attention: Finance Department Messenger: 2121 Avenue of the Stars, 4th Floor Los Angeles, California 90067 USA Attention: Finance Department Facsimile: (310) 369-8531 To Licensee: Mail & Sorrent Inc.
Messenger: 1800 Gateway Drive, Suite 200 San Mateo, CA 94404 Attention: Paul Zuzelo E-mail: pzuzelo@sorrent.com Facsimile: (650) 571-5698
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-26-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
With copies to: Mail & Sorrent Inc. Messenger: 1800 Gateway Drive, Suite 200 San Mateo, CA 94404 Attention: Greg Suarez E-mail: greg.suarez@sorrent.com Facsimile: (650) 571-5698
(b) Waiver, Modification: The terms of this Agreement may not be waived or modified except by an agreement in writing executed by the parties hereto. The waiver by either party of any breach of this Agreement by the other party must be in writing and shall not be deemed to be a waiver of any prior or succeeding breach.
(c) Relationship of the Parties: Nothing herein contained shall be construed to place the parties in the relationship of principal and agent, partners or joint venturers and neither party shall have the power to obligate or bind the other party in any manner whatsoever.
(d) No Assignment: Licensee may not assign any of its rights and obligations under this Agreement without the prior written consent of Fox; provided that Licensee may assign all of its rights and obligations hereunder to its successor in the event of a sale of all or substantially all of its assets or voting securities, or of the business unit associated with this Agreement. Subject to the foregoing, this Agreement will inure to the benefit of each parties successors and assigns. Any purported assignment or transfer except in accordance with the above shall be void and of no effect.
(e) Governing Law; Jurisdiction; Service of Process: This Agreement shall be construed in accordance with the laws of the State of California applicable to agreements executed and to be wholly performed therein. The parties hereto agree that any suit, action or proceeding arising out of or relating to this Agreement shall be instituted and prosecuted in the United States District Court for the Central District of California or in any court of competent jurisdiction of the State of California. The parties hereto irrevocably submit to the jurisdiction of said courts and waive any rights to object to or challenge the appropriateness of said forums. Service of process shall be in accordance with the laws of the State of California.
(f) Appointment/Change of Agent: Upon notice to Licensee, Fox may appoint an agent or designate a substitute agent from time to time to act on Fox's behalf to collect from Licensee and remit to Fox all Royalty payments due to Fox under this Agreement. The termination or substitution of an agent by Fox shall not affect the rights, duties, privileges or obligations of Fox or of Licensee hereunder. No agent so appointed is authorized to make any representation or warranty with respect to the ownership or title of the Property and or to approve the manufacture, sale or distribution of the Wireless Products.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-27-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
(g) Binding Agreement: Licensee shall have no rights hereunder and neither Fox nor Trademark Licensor shall be bound hereby unless and until this Agreement has been accepted in writing by Fox. If Fox does not accept this Agreement, the parties shall be released from all liability and this document shall be of no force and effect.
(h) Limitation of Actions: No legal action shall be brought by Licensee under this Agreement unless commenced within 12 months from the date the cause of action arose.
(i) Severability: Should any paragraph, clause or provision of this Agreement be found invalid or unenforceable by any court having jurisdiction over this Agreement, the subject matter hereof, or the parties hereto, such decision shall affect only the paragraph, clause or provision so construed or interpreted and all remaining paragraphs, clauses or provisions shall remain valid and enforceable.
(j) Entire Agreement: There are no representations, warranties or covenants other than those set forth in this Agreement which sets forth the entire understanding among the parties hereto.
(k) Headings: The headings of the Paragraphs of this Agreement are for convenience only and shall not be of any effect in construing the meanings of the Paragraphs.
(l) Survival: The following Paragraphs shall survive the expiration or termination of this Agreement: 5; 6; 7; 11; 13(a)(iv); 14, and 16.
(m) Drafting: Because the parties hereto have participated in drafting and negotiating this Agreement, there shall be no presumption against any party on the ground that such party was responsible for preparing this Agreement or any part of it.
(n) Force Majeure: Neither party shall be liable for any delay or failure in performing any of its obligations hereunder when any such delay or failure is occasioned by causes or contingencies beyond its control, including but not limited to force majeure, fires, floods, war, strikes and governmental regulations, provided the party delaying or failing to perform shall promptly after its inception give written notice of such cause or contingency to the other party and provided further that the party giving such notice shall make all reasonable efforts to remove such disability as soon as possible. Notwithstanding the foregoing, in the event the events constituting force majeure cause a delay in performance of thirty consecutive days or more, either party may terminate this Agreement immediately upon written notice to the other party.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-28-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
By signing in the spaces provided below, the parties hereto have agreed to all of the terms and conditions of this Agreement. SORRENT, INC. TWENTIETH CENTURY FOX LICENSING & MERCHANDISING, a division of Fox Entertainment Group, Inc. ("Licensee") ("Fox") By /s/ Paul Zuzelo By /s/ Jamie Samson
Name Paul Zuzelo Jamie Samson Its Senior Vice President Its CAO & Exec. V.P. Date December 17, 2004 Date 12/17/04
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-29-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT A
Properties
Major Releases:
"Robots"
Untitled Ridley Scott Film
"Ice Age 2"
"Eragon"
• The inclusion of "Eragon" shall be contingent upon Fox's acquisition of the rights to the Property and its ability to grant licensing and merchandising rights thereto. For the avoidance of doubt, there shall be no grant of rights to the Property from Fox to Licensee without Fox's prior written notice advising of Fox's acquisition of the rights to the Property and related licensing and merchandising rights. This Exhibit A and Exhibit E will be amended at such time that Fox can grant such rights.
Targeted Releases:
Untitled Mike Judge Film
"Mr. & Mrs. Smith"
"Lady Luck"
• The inclusion of "Lady Luck" shall be contingent upon Fox's acquisition of the rights to the Property and its ability to grant licensing and merchandising rights thereto. For the avoidance of doubt, there shall be no grant of rights to the Property from Fox to Licensee without Fox's prior written notice advising of Fox's acquisition of the rights to the Property and related licensing and merchandising rights. This Exhibit A and Exhibit H will be amended at such time that Fox can grant such rights.
TBD
TBD
TBD
TBD
TBD
The Properties set forth on this Exhibit A may be removed and substituted, or additional Properties may be included, in accordance with Paragraph 1(a) (i).
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-30-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT B
"Robots" Wireless Products
A minimum of:
12-D Java Game in connection with the initial theatrical release
1 3-D Java Game in connection with the DVD release
5 Java Applications ('Screensavers') (2 3-D Screensavers and 3 2-D Screensavers) in connection with the initial theatrical release
5 MMS
10 Wallpapers
5 Voicetones
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-31-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT C
Untitled Ridley Scott Film Wireless Products
A minimum of:
1 2-D Java Game, which shall include mutually agreed upon 3-D elements
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-32-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT D
"Ice Age 2" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-33-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT E
"Eragon" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-34-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT F
"Untitled Mike Judge Film" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-35-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT G
"Mr. & Mrs. Smith" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-36-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT H
"Lady Luck" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-37-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT I
"TBD" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-38-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT J
"TBD" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-39-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT K
"TBD" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-40-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT L
"TBD" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-41-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT M
"TBD" Wireless Products
Up to:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-42-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT N
Glossary
"MMS" stands for Multimedia Messaging Service — a store and forward messaging service that allows mobile subscribers to exchange multimedia messages with other mobile subscribers. MMS supports the transmission of additional media types: text, picture, audio, video and combinations of them.
"Realtone" or "Trutone" (also referred to as Master Tone) shall mean a digital, audio file containing an excerpt of a master recording of a musical composition, no more than 45 seconds in length, formatted for playback by a wireless device when such wireless device receives an incoming call.
"Screensaver" shall mean a Java application that replaces the image on a screen when the screen is not in use.
"Wallpaper" on a mobile phone shall mean the background pattern or picture against which mobile phone screen menus, icons, and other elements are displayed and moved around. A wallpaper image can be in a JPEG or a GIF file format. Each model/make of the mobile phone provides several pre- installed wallpaper images for the user to choose from. A user can also choose to download and install third-party wallpapers and use one of these instead.
"Voicetone" shall mean the audio speech sound heard by a caller, such as lines from a movie or spoken lyrics of a song.
"Ringtone" shall mean a digital, audio file containing a portion of a musical composition, no more than 45 seconds in length, formatted for playback by a wireless device when such wireless device receives an incoming call. For the avoidance of doubt, a Ring Tone may be either monophonic or polyphonic.
[Remaining definitions are TBD]
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-43-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT O Royalty Statement
TWENTIETH CENTURY FOX LICENSING & MERCHANDISING LICENSING STATEMENT OF ROYALTIES PAYABLE Licensee Contract Number:
Property Report Period Start Date:
Territory Report Period End Date:
Wallpaper Screensaver MMS Game Ringer Wallpaper Screensaver MMS Game Ringer Name/Likeness No Music No Music No Music No Music No Music Music Music Music Music Music None
1
2
3
4
5
6
7 Mail to: Twentieth Century Fox Licensing & Merchandising Total Net Sales
P.O. Box 900 Royalty Rates
Beverly Hills, CA 90213-0900 Royalty Earned
Attn: Jimyong Kim Less: Advance Balance
Street address: 2121 Avenue of the Stars, Room 4014 Royalty Payment Enclosed
Los Angeles, CA 90067 -or-New Advance Balance
This report is based on our books and records and is, to the best of my knowledge, true, correct and complete for the period stated and complies with all contractual requirements Minimum Guarantee Amount
NAME TITLE Payment Required to Meet Guarantee due on:
SIGNATURE DATE
NOTE: This report is required to be filed whether or not there were any sales for the period. For most licenses, the report is due no later than 30 days following every calendar quarter the agreement is active.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-44-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT P
News America Incorporated Statement of Privacy Principles
PREAMBLE
News America Incorporated ("News America") is the principal U.S. subsidiary of The News Corporation Limited, one of the world's largest media companies. The businesses of News America and its subsidiary, Fox Entertainment Group, Inc., include: the production and distribution of motion pictures, television programming and related consumer products (Twentieth Century Fox); television and cable broadcasting (the Fox Network, Fox owned television stations, Fox Sports Net, Fox Sports World, Fox Sports World Espaňol, Speedvision, Fox News Channel, FX and Fox Movie Channel); the publication of newspapers, books, magazines and promotional free-standing inserts (The New York Post, HarperCollins Publishers, The Weekly Standard and News America Marketing); sports franchises (the Los Angeles Dodgers); and marketing services (SmartSource/iGroup). In this Statement of Privacy Principles these businesses are collectively called the News America Group. At the News America Group we strive to enhance our relationship with consumers. Collecting personal information about consumers is vital to this effort. This Statement of Privacy Principles describes the policies and procedures of the News America Group's U.S.-based businesses for the collection, use, and dissemination of personally identifiable information about U.S. consumers in both the online and offline world. The Principles are based on the concepts of consumer notice and choice.* The News America Group is actively involved in the ongoing privacy debate and is continually monitoring privacy developments. Accordingly, from time to time we may modify these Privacy Principles to reflect changes in the law, self-regulatory initiatives and technology.
COLLECTION
The News America Group obtains personally identifiable information only if we believe the information is relevant to our relationship with a consumer or to assist us in creating a relationship with a consumer. We obtain personally identifiable information about consumers directly from consumers whenever possible, primarily in the course of providing them with products, information and services. When the News America Group obtains personally identifiable information from third-party sources, we use only reputable sources. In those instances where our information collection activities involve children, the News America Group provides special privacy protections.
NOTICE
When The News America Group collects personally identifiable information from consumers, we inform them about who is collecting the information, why it is being collected, how it is being collected, the types of uses we will make of the information, whether we will disclose the information to third parties and the types of third parties to whom we will disclose the information, and consumers' options regarding the use of their information.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-45-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
CHOICE
The News America Group provides consumers with an opportunity to choose whether the business unit that collects their personally identifiable information may use it for purposes that are other than those for which the information was submitted, and whether the information may be shared with third parties.
USE OF PERSONAL INFORMATION
Inside the News America Group, we use personally identifiable information only in a manner consistent with these Privacy Principles. Personally identifiable information is available only to our employees, agents and contractors who have a business reason to have access to such information. The News America Group uses personally identifiable information to respond to our customers and to make decisions about the goods and services that the News America Group or its business partners provide or hope to provide to consumers. Subject to the exercise of consumer choice, personally identifiable information may be used for different purposes, or shared with our business partners. A News America Group business entity may disclose personally identifiable information without providing consumers with a choice in order to protect the rights of the companies within the News America Group or their respective employees, agents and contractors; to protect the safety and security of visitors to web sites operated by News America Group companies; to protect against fraud or for risk management purposes; or to comply with the law or legal process. In addition, if a News America Group entity sells all or part of one of its businesses, makes a sale or transfer of assets or is otherwise involved in a business merger or transfer, personally identifiable information may be transferred to a third party as part of that transaction.
SECURITY
The News America Group uses reasonable administrative, technical, personnel, and physical measures to safeguard personally identifiable information in its possession against loss, theft, and unauthorized use, disclosure or modification.
ACCESS, CORRECTION AND DELETION
Whenever possible, each News America Group business unit permits consumers to have a right to see the personally identifiable information that it has collected from them, to correct any information that is incorrect and to instruct the business unit to delete the information from its files.
REMEDIES
Consumers may contact a privacy officer at each News America Group business unit regarding privacy complaints and disputes.
COMPLIANCE
Each News America Group company will take appropriate measures to ensure compliance with these Privacy Principles.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-46-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT Q
LICENSEE COMPETITORS
Jamdat Mforma Digital Bridges Digital Chocolate Game Loft Infospace
Any further additions and/or deletions shall be mutually agreed and addressed via amendment to this Agreement.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-47-
Source: GLU MOBILE INC, S-1/A, 3/19/2007 [/INST] ```json
{<answer_start>
"answer": "Fox"
<answer_end>
}
``` </s> | Exhibit 10.09
***** CONFIDENTIAL TREATMENT REQUESTED
Agreement Number 12965
WIRELESS CONTENT LICENSE AGREEMENT
This License Agreement (this "Agreement") is entered into effective as of December 16, 2004, (the "Effective Date") by and between TWENTIETH CENTURY FOX LICENSING & MERCHANDISING, a division of Fox Entertainment Group, Inc. ("Fox"), as Administrator for Twentieth Century Fox Film Corporation ("Trademark Licensor"), and Sorrent, Inc. ("Licensee"). Fox and Licensee are collectively referred to as the "parties" and each individually as a "party."
RECITALS:
WHEREAS, Trademark Licensor owns the rights to develop, manufacture, publish, and distribute entertainment applications based on the story, plot, theme, distinctive creative elements and name/logo (collectively, the "PSM") appearing in the theatrical motion pictures set forth on Exhibit A attached hereto (individually, the "Property" and collectively, the "Properties," and further designated as "Major Release(s)" and "Targeted Release(s)"); and
WHEREAS, Fox is the administrator of such rights for Trademark Licensor; and
WHEREAS, Licensee is engaged in the business of, among other things, developing and producing interactive entertainment applications for wireless communication devices, such as mobile telephones; and
WHEREAS, Licensee desires to obtain a license from Fox to develop a variety of wireless products utilizing elements of the PSM and to be operated on mobile/cellular telephones; and further to publish, license, promote, distribute and sell such wireless products to end users through communications service provider(s) and portals providing wireless products ("CSP(s)") on the terms and conditions set forth herein; and
WHEREAS, Fox and Vodafone Group Services Limited ("VGSL") have entered into a wireless content distribution agreement ("VGSL Agreement") whereby Fox is to be the content provider for VGSL wireless products relating to various Properties, and Fox desires a license to distribute Wireless Products to VGSL pursuant to the VGSL Agreement.
AGREEMENT
NOW, THEREFORE, the parties do hereby agree as follows:
1. GRANT OF RIGHTS:
(a) Wireless Products and Wireless Platform: Fox grants to Licensee a limited, exclusive (except as otherwise may be provided in this Agreement), non-transferable (except as permitted in Paragraph 17(d)) right and license to use, make, have made (as set forth in Paragraph 1(a)(i) below), reproduce, modify, and create derivative works of
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-1-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
the PSM in each Property, solely for the purpose of developing the wireless applications specifically set forth for each of the Properties on Exhibits B through M attached hereto ("Wireless Products"), some of which Wireless Products are defined in the Glossary attached hereto as Exhibit N. To the extent not specified in this Agreement the parties will agree upon the specific Wireless Products to be developed for each Property in accordance with the procedure set forth in Paragraph 2. Notwithstanding the foregoing, Licensee acknowledges that it shall be obligated to develop all Wireless Products set forth on Exhibits B, C, D, and G, and any other Wireless Products for other Properties that the parties mutually agree in writing will be added to the VGSL Agreement for distribution by VGSL (the "VGSL Products"). The Wireless Products shall utilize elements of the PSM and shall be operated on mobile or cellular telephones. Furthermore, Fox grants to Licensee a limited, exclusive (except as may otherwise be provided in this Agreement), non-transferable (except as permitted in Paragraph 17(d)) right and license to make, have made, reproduce, modify, create derivative works of, advertise, promote, distribute, sell and license the Wireless Products, including any PSM included therein, solely (i) for use on mobile or cellular telephones (the "Wireless Platform"); (ii) in the Territory (as defined in Paragraph 3), (iii) during the Term (as defined in Paragraph 4), (iv) for distribution by Licensee through the Distribution Channels (as defined in Paragraph 2(c)) granted herein; and (v) by means of periodic subscription fee, a per-download basis, or through a retail purchase. Nothing contained herein shall be construed as granting Licensee the right to develop and/or distribute video clips and/or trailers for the Properties, except where Fox expressly agrees to development and/or distribution of such video clips and/or trailers.
(i) Sublicense: Licensee shall be permitted to sublicense the rights and licenses granted herein to third party contractors of Licensee, solely for purposes of development and distribution of the Wireless Products on behalf of Licensee in accordance with this Agreement; provided that such third party contractors have entered into binding written agreements with Licensee that are no less protective of Fox's intellectual property rights than are the terms and conditions of this Agreement, and provided further that Licensee will not subcontract development of any video games hereunder without Fox's prior written approval of the third party game development contractor. Notwithstanding the foregoing, Licensee shall remain the primary contact under this Agreement and shall remain liable for all obligations performed by a sublicensee.
(ii) Substitution of Properties and Addition of Properties: Fox reserves the right to remove any Property listed on Exhibit A in the event that Fox determines not to theatrically release such Property or is found to be legally prohibited from engaging in the development and sale of Wireless Products in connection with such Property, and shall replace the removed Property with a like Property, which designation shall be subject to the mutual agreement of Fox and Licensee. Any further additions to Exhibit A shall also be subject to the mutual agreement of Fox and Licensee, provided however Fox shall reasonably determine if the Property constitutes a Major Release or a Targeted Release consistent with its past practices. In no event will the number of Major Releases and Targeted Releases included as Properties licensed to Licensee under this Agreement be less than four (4) and eight (8) respectively.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-2-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
(iii) Addition of Wireless Products: The parties may amend this Agreement to include additional Wireless Products for the Properties set forth on Exhibit A, subject to their mutual agreement in writing, provided that if they are unable to agree upon such additions within five (5) business days of a request from Fox, Fox will have the right to develop or have developed the requested Wireless Products for the relevant Property notwithstanding the exclusivity granted to Licensee in this Agreement.
(b) Bundling: Neither party will solicit or enter into any agreement with any third party regarding the bundling of the Wireless Products with any other property (including a Fox property) or with any other products and services including preloading, OEM and soft bundling, except as mutually agreed between the parties. The parties will mutually agree upon the terms of each bundling transaction, the nature of the bundle, the timing, and any new or different royalties for such bundling on a case-by-case basis.
(c) Third-Party Promotions: Neither party may solicit or enter into any agreement with any third party regarding third-party promotional opportunities with respect to the Wireless Products without the other party's prior written consent; provided that the foregoing will not limit Licensee's rights to market and promote the Wireless Products directly and through (i) CSPs, subject to any Fox approval rights set forth elsewhere in this Agreement, or (ii) Fox's right to engage in third party promotions for the Properties involving wireless content otherwise sourced or created.
(d) Excluded Products: For the avoidance of any doubt, the rights granted in Paragraph 1(a) and (b) shall be specifically limited to the Wireless Products for the Wireless Platform and shall not extend to any other device, platform, operating system or distribution method, whether wired or wireless, pursuant to which interactive entertainment software may be delivered to or accessed by end-users, including, but not limited to, the following: (i) traditional entertainment software console platforms, such as Sony PlayStation and PlayStation 2, Microsoft Xbox, and Nintendo GameCube and successor platforms; (ii) desktop or laptop computer systems, such as PC Windows, Macintosh, (iii) hand-held electronic dedicated gaming devices (e.g., Nintendo's GameBoy Color and GameBoy Advance handheld devices, Sony's PSX handheld device, and Tiger Electronic hand- held devices); (iv) pay-per-play arcade systems and other forms of location-based entertainment; (v) interactive toys; (vi) television, whether via cable, satellite, set-top boxes or other on-demand service; (vii) massively multiplayer games; (viii) internet gaming and (ix) any other technology now known or hereafter devised. Except as otherwise specifically stated herein with respect to the Wireless Products, Licensee shall have no right to develop, manufacture, reproduce, distribute, sell or exploit any other products based on the PSM or the Property.
(e) Fox's Reservation of Rights: Fox expressly reserves and retains any and all rights that are expressly excluded from or not specifically granted to Licensee pursuant to this Agreement, including but not limited to the following:
(i) Development/Exploitation/Distribution: the right to develop, publish, and/or distribute (or grant a third party the right to develop, publish, and/or distribute) other wireless products or wireless content of any nature which may be derived from the Properties (and further, to exploit same) which are similar or in direct
Wireless Content License Agreement Multiple Properties /Sorrent, Inc. / Final PLZ
-3-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
competition with the Wireless Products at any time in Japan including during the Term and within Japan, provided that Fox will not grant to any other party any such rights to develop, publish, and/or distribute Wireless Products for the Wireless Platform to end users outside of Japan (with the exception of those distribution rights for Wireless Products granted to VGSL under the VGSL Agreement in accordance with Paragraph 1(f) of this Agreement), or provide to any Licensee Competitor (as defined in Exhibit Q) any Licensee Materials or otherwise grant any rights to any Licensee Competitor to develop, publish, and/or distribute Wireless Products, or other wireless products or content based on the Properties. Fox has not granted and will not grant any exclusive distribution rights with respect to the Wireless Products to VGSL or any other party; and
(ii) Use of Fox's Logo or Other Intellectual Property Rights: the right to use the Fox logo or trademark, or any other trademark(s), logo(s) or copyrights owned by Fox other than those specifically set forth herein in the manner set forth; and
(iii) Video Clips and Trailers: except as may otherwise be provided in this Agreement, the right to develop and/or distribute (or grant a third party the right to develop and distribute) video clips and/or trailers for the Properties. At any time during the Term, Fox may distribute directly (or grant a third party the right to distribute) video clips and/or trailers to CSPs in connection with the Properties; and
(iv) SMS/Text Messaging: the right to develop, market and distribute (or grant a third party the right to develop, market and distribute) SMS or text messaging in connection with the Properties; and
(v) Promotional Content: the right to develop and/or distribute (or grant a third party the right to develop and/or distribute) free promotional and/or give-away content in connection with the Properties, provided that Fox will use all reasonable efforts to make mention of the Wireless Products developed by Licensee, or cause the third party to do the same, in the context of the promotion and/or give-away.
(f) Licensee's Grant of Rights. Subject to Fox's compliance with the terms and conditions of this Agreement, including its payment obligations in accordance with Section 7, Licensee hereby grants to Fox a limited, non-exclusive, non-transferable (except as permitted in Section 17(d)), right to distribute Licensee Materials (as defined in Paragraph 11 (c)) to VGSL and T-Mobile, solely as incorporated into Wireless Products, and to authorize VGSL and T-Mobile to distribute such Wireless Products to end users outside of the United States. Fox's rights in the Licensee Materials will be limited to those expressly granted in this Paragraph 1(f). Licensee reserves all rights and licenses in and to the Licensee Materials not expressly granted to Fox in this Section 1(f). Any other marketing, distribution, or sale of the Wireless Products and/or Licensee Materials by Fox will be subject to Licensee's prior written consent, in Licensee's reasonable discretion.
2. DEVELOPMENT AND DISTRIBUTION OF THE WIRELESS PRODUCTS:
(a) Development: Subject to Fox's delivery of the PSM Materials (as defined in Paragraph 2(a)(i) below), Licensee shall be obligated to create, develop, and publish the Wireless Products, pursuant to the terms and conditions of this Agreement. Subject to
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-4-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
Fox's approval rights, Licensee shall assume full responsibility for the creation, development and production of the Wireless Products, which shall include, without limitation, (A) designing the creative and technical specifications for the Wireless Products, (B) creating all computer code for the Wireless Products, (C) creating all visual assets for the Wireless Products, (D) acquiring and/or licensing any and all other technology, software and hardware needed for purposes of creating and distributing the Wireless Products, (E) ensuring compatibility of technology with the CSPs to which Licensee grants distribution rights, which shall include without limitation VGSL and T-Mobile, (the "Licensed CSPs"), and (F) conducting quality assurance testing of the Wireless Products. For the avoidance of doubt, Licensee acknowledges and agrees that Fox will have no development obligations whatsoever with respect to the Wireless Products, and further that Fox's sole role with respect to such development will be limited to delivering the PSM Materials, supervising Licensee's obligations with respect to same, granting or denying approvals as set forth hereunder, providing photos, style guides and other materials to Licensee where necessary, and collaborating with Licensee on the creative direction with respect to the Wireless Products.
(i) Delivery of PSM Materials. For each of the Properties identified in or added by mutual agreement to Exhibit A, Fox will provide to Licensee no later than ***** prior to the release of any games to be developed in connection with each Property and no later than ***** prior to the release of any other wireless applications to be developed in connection with each Property, some or all of the following items, to the extent available, on a Property-by-Property basis and only in electronic format where available: style guides, one-sheets (art used for movie poster), digital images, audio clips, storyboards, video tapes of trailers as they are produced, hard-copy scripts, publicity photos, and non-trailer video which shall only be available for viewing on the Fox lot premises (collectively, the "PSM Materials"). For the avoidance of doubt, Licensee will not be provided electronic copies of any scripts. Fox will update the PSM Materials provided to Licensee as new or different materials become available.
(ii) VGSL Development: Licensee expressly acknowledges and agrees that Fox has entered into the VGSL Agreement with VGSL for the development of certain Wireless Products set forth on Exhibits B, C, D and G, in connection with the following Properties: "Robots;" Untitled Ridley Scott Film; "Ice Age 2;" and "Mr & Mrs. Smith." Licensee shall be obligated to develop such Wireless Products, and distribute them as set forth in Paragraph 2(c)(ii) below, on behalf of Fox.
(iii) Development for Japan: Upon Fox's notice to Licensee, Licensee shall immediately cease all development, publication and distribution of the Wireless Products in Japan.
(iv) Music and Sound Effects: If Licensee seeks to use music or sound effects from any of the Properties in connection with the development of the Wireless Products, such use shall be subject to the advance written approval of Fox, and, if applicable, Fox Music, Inc., c/o the Vice President, General Manager, Fox Music Publishing ("Fox Music"). Subject to Fox and Fox Music's approval, Licensee shall be solely responsible for any and all third party payments that may arise out of the
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-5-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
approved use of the music from the Property in connection with the Wireless Products, including without limitation any royalties, mechanical fees, residuals, publishing fees, license fees, reuse fees or other guild-related payments. In such event, Licensee shall pay directly to Fox Music a separate Royalty, at a rate subject to good faith negotiation between Licensee and Fox Music, on sales of the Wireless Products incorporating such music. Further, Licensee shall obtain the prior written approval of Fox Music concerning the final music arrangement to be so utilized and provide Fox Music with two samples of the final, approved Wireless Products prior to the sale or distribution thereof.
(A) No License for Music Realtones or Trutones: For the avoidance of doubt, nothing herein shall be construed as granting Licensee the right to develop and/or distribute any Wireless Products containing music Realtones or Trutones (each as defined in Exhibit N).
(b) Release:
(i) The Wireless Products: Subject to the timely delivery of the PSM Materials to Licensee by Fox, Licensee shall deliver the Wireless Products to VGSL a minimum of ***** before the initial theatrical release of each Property in each of the VGSL Territories as defined in Paragraph 2(c)(ii) (A) below, and to the other Licensed CSPs within such time frames mandated by such Licensed CSPs so as to enable the release of the Wireless Products ***** prior to the initial theatrical release of each Property in each of the Territories as defined in Paragraph 3 below (the "Wireless Products Latest Commencement Date"). If Licensee fails to make the Wireless Products commercially available to the CSPs by the Wireless Products Latest Commencement Date, and such failure is not due solely to any delay by Fox in delivery of the PSM Materials, Fox shall have the right to terminate this Agreement immediately upon notice to Licensee and all rights to utilize the PSM shall automatically revert to Fox; provided that, subject to Paragraph 9(b)(ii) below, Fox will not exercise the right to terminate with respect to any delayed delivery of Wireless Products for films that have their initial theatrical release prior to June 30, 2005; and provided further that nothing in this Paragraph 2(b)(i) will limit Fox's indemnification under Paragraph 14 or any other rights and remedies Fox may have under this Agreement. Licensee shall use all commercially reasonable efforts to cause the Licensed CSPs to make available to end users the Wireless Products for each of the Major Releases and Targeted Releases no later than ***** prior to the initial theatrical release of each of the Major Releases and Targeted Releases.
(c) Distribution:
(i) CSP Distribution: Licensee shall distribute the Wireless Products to end users through the Licensed CSPs and each Licensed CSP's respective Internet portals and distribution systems ("Distribution Channel").
(A) Minimum Subscriber Market Penetration: Licensee shall use all commercially reasonable efforts to secure distribution of the Wireless Products through CSPs and to ensure that the Wireless Products are
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-6-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
available on substantially all medium and high volume handsets of all Licensed CSPs, which for the purposes of this obligation shall include VGSL.
(1) Major Releases: Licensee furthermore shall use all commercially reasonable efforts to achieve the following market penetration targets in Europe for the Major Releases ("Market Penetration Targets"): (1) distribution of the Wireless Products for the Major Releases through CSP's that hold at least ***** (*****%) of the subscribers in Western Europe during the ***** of this Agreement; and (2) distribution of the Wireless Products for the Major Releases through CSP's that hold at least ***** percent (*****%) of the subscribers in Western Europe during the ***** of this Agreement. If Licensee fails to reach the Market Penetration Targets Fox shall in its sole discretion have the right to terminate Licensee's exclusivity under this Agreement. In the event of termination of Licensee's exclusivity for Licensee's failure to achieve the Market Penetration Targets, Fox shall not distribute the Wireless Products which have been developed by Licensee prior to such termination, without first obtaining a license from Licensee on terms to be mutually agreed in each party's reasonable discretion, for the exploitation of the Licensee Materials.
(2) Targeted Releases: Fox acknowledges that Licensee may not be able to secure placement of all Targeted Releases at the levels set forth for the Market Penetration Targets defined in the previous sub-Paragraph. Notwithstanding the foregoing, Licensee shall use all commercially reasonable efforts to secure the widest possible distribution of the Wireless Products derived from the Targeted Releases in Europe.
(ii) VGSL and T-Mobile Distribution: For the Territories (as defined in Paragraph 3 below) set forth in Paragraph 2(c)(ii)(A) below, Licensee expressly acknowledges and agrees that Fox has entered into the VGSL Agreement with VGSL for the development of certain Wireless Products as set forth in Paragraph 2(a)(ii) above, and for the distribution of such Wireless Products. Fox has also entered into a separate agreement with T-Mobile to permit T-Mobile to distribute certain Wireless Products to end users outside of the United States the "T-Mobile Agreement"). Licensee hereby grants all licenses to Fox to enable Fox to provide Wireless Products to VGSL and T-Mobile for distribution to VGSL and T-Mobile subscribers outside of the United States in accordance with the terms of this Agreement, and shall further deliver such Wireless Products to VGSL and T-Mobile on behalf of Fox. Licensee further acknowledges and agrees that pursuant to the VGSL Agreement and the T-Mobile Agreement, VGSL and T-Mobile will remit directly to Fox all receipts generated from sales of the Wireless Products to VGSL and T-Mobile subscribers. Fox will pass through all such receipts received from VGSL and T-Mobile to Licensee and such receipts shall be treated as Gross Receipts, as defined in Paragraph 7(a)(ii) below, for the purpose of this Agreement. Licensee shall not enter into an exclusive distribution agreement with
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-7-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
a CSP in any of the VGSL Territories listed in Paragraph 2(c)(ii)(A) below, and Fox has not granted and will not grant any exclusive distribution rights to VGSL or T-Mobile. Fox and Licensee will cooperate together in good faith, on a schedule to be mutually agreed, to jointly manage the VGSL and T-Mobile relationships with respect to the Wireless Products, subject to willingness on the parts of VGSL and T-Mobile to so cooperate. Notwithstanding the foregoing, any conversations undertaken between Fox and VGSL and/or T-Mobile without Licensee's participation shall not be a breach of this provision.
(A) Non-Exclusive CSP Distribution in VGSL Territories: Under no circumstances shall Licensee enter into an exclusive distribution agreement with a CSP other than VGSL in the following territories ("VGSL Territories") covered under the VGSL Agreement: (1) United Kingdom; (2) Ireland; (3) Germany; (4) Spain; (5) France; (6) Sweden; (7) Switzerland; (8) Portugal; (9) Netherlands; (10) Greece; (11) Italy; (12) Australia; (13) New Zealand; (14) Egypt; (15) Slovenia; (16) Belgium; (17) Austria; (18) Hungary; (19) Malta; (20) Croatia; (21) South Africa; and (22) Japan.
(iii) Japan Distribution: Upon Fox's notice to Licensee, Licensee shall cease immediately some or all distribution of the Wireless Products in Japan. In the event Fox provides such termination notice to Licensee, Licensee hereby grants Fox a license to the Licensee Materials in order for Fox to distribute the Wireless Products that Licensee has developed for distribution in Japan prior to such termination, either directly or through a third-party. In consideration of such license, Fox shall pay Licensee a royalty as set forth in Paragraph 7(b)(i) below.
(iv) Unless otherwise mutually agreed between Fox and Licensee, Licensee will require each Licensed CSP to distribute Wireless Products to end users only for the payment of a fee; provided that Licensee may permit limited distribution (i.e. one Wireless Product per Property in each category of Wireless Products and including only one game level for each game) of Wireless Products without a fee for promotional or marketing purposes. The fees will typically appear on the end user's Wireless Platform bill and be remitted by the end user to the CSP pursuant to an agreement between the end user and the CSP. The CSP will in turn remit fees to Licensee (less any Deductions as that term is defined in Paragraph 7(a)(ii) below) pursuant to an agreement between Licensee and the CSP. Licensee will then remit royalties to Fox in accordance with Paragraph 7, below.
3. TERRITORY: Licensee shall use commercially reasonable efforts to exploit the rights granted hereunder throughout the world (the "Territory"), including without limitation all of the following VGSL Territories set forth in Paragraph 2(c)(i)(B) above: (1) United Kingdom; (2) Ireland; (3) Germany; (4) Spain; (5) France; (6) Sweden; (7) Switzerland; (8) Portugal; (9) Netherlands; (10) Greece; (11) Italy; (12) Australia; (13) New Zealand; (14) Egypt; (15) Slovenia; (16) Belgium; (17) Austria; (18) Hungary; (19) Malta; (20) Croatia; (21) South Africa; and (22) Japan. Licensee shall localize the Wireless Products into the following languages: English, French, German, Italian, Spanish, and Japanese. In addition to the previously stated languages, to the extent practicable Licensee also shall localize the Wireless Products to be delivered to VGSL into Portuguese, Greek, Dutch and Swedish, to the extent that the Properties
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-8-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
are dubbed into such languages, Fox holds foreign rights to the dubbed tracks, and such dubbed tracks are timely available.
4. TERM: The rights granted hereunder shall be effective as of the Effective Date and shall expire on December 31, 2006 (the "Term"); provided, however, that with respect to each Property, all rights and licenses granted herein will continue in full force and effect for a period of eighteen (18) months after the initial theatrical release of that Property.
(a) Licensee's Right of First Negotiation on New Properties: For the Term of this Agreement, Fox hereby grants to Licensee a right of first negotiation with respect to those theatrical motion pictures released during the Term of this Agreement (in addition to the Properties identified in Exhibit A) in which (i) Fox owns or controls licensing and merchandising rights, for which Fox determines in its sole discretion to grant to any third party any licensing rights for the development and distribution of wireless products, and (ii) which theatrical motion pictures Fox reasonably deems to be a Major Release consistent with its past practices. The Right of First Negotiation shall be exercised as follows. Whenever Fox desires to grant to any third party any licensing rights for a Major Release (each such instance, an "Opportunity"), Fox shall request that Licensee submit a bid regarding the Opportunity. If Licensee intends to exercise its Right of First Negotiation, it must submit a bid in response to Fox's request within 10 business days. If Licensee does submit a bid, both parties shall negotiate in good faith over the bid for a reasonable period of time, not to exceed 10 additional business days. If the parties have not reached agreement in writing regarding the terms and conditions for the exploitation of the Opportunity within said time period, or if Licensee fails to submit a bid in a timely manner, Fox shall be free to accept any bid from any other party with respect to the Opportunity, or Fox shall be free not to exploit the Opportunity at all. Should Licensee choose to exercise its Right of First Negotiation, its floor bid shall be at least US$***** for each Major Release (as defined in Exhibit N).
5. ADVANCE: Licensee shall pay Fox a non-refundable recoupable advance in the amount of US$***** upon Licensee's signature of this Agreement (the "Advance"). The Advance shall be treated as the first installment of the Guarantee described in Section 6(a), and will be recoupable against royalties as part of the Guarantee.
6. GUARANTEE:
(a) Amount: Licensee shall pay to Fox a non-refundable guarantee in the amount of US$***** ("Guarantee"), inclusive of the Advance. The Guarantee shall be recoupable against royalty payments and payable as follows: (a) US$***** inclusive of the Advance above; (b) US$***** on or before *****; (c) US$***** on or before *****; (d) US$***** on or before *****; (e) US$***** on or before *****; (f) US$***** on or before *****; and (g) US$***** on or before *****. There shall be no cross-collateralization among the Royalties earned, as defined in Paragraph 7 below, for the purposes of recouping the Guarantee for any of the Major Releases or Targeted Releases.
(b) Individual Property Guarantees: Notwithstanding the payment schedule set forth in Paragraph 6(a) above, a minimum recoupable guarantee (each "Individual Property
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-9-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
Guarantee") shall be apportioned from the Guarantee set forth in Paragraph 6(a) above to each of the individual Major Releases and Targeted Releases set forth on Exhibit A as follows for the purposes of determining recoupment of Guarantees and Royalty payments attributable to each of the Major Releases and Targeted Releases as set forth in Paragraph 7 below:
(i) Major Releases: The Individual Property Guarantee for each of the Major Releases set forth on Exhibit A shall be US$*****.
(ii) Targeted Releases: The Individual Property Guarantee for each of the Targeted Releases set forth on Exhibit A shall be US$*****.
(c) Overages: At such time that Fox has earned in Royalties, as defined in Paragraph 7 below, the amount of an Individual Property Guarantee attributable to a specific Property, Licensee shall then remit to Fox on a quarterly basis in accordance with Paragraph 7(c) all Royalties due and payable in excess of such Individual Property Guarantee. Notwithstanding the foregoing, all Guarantee installments shall remain due and payable in accordance with the schedule of payments set forth in Paragraph 6(a) above and may not be allocated or apportioned to Royalty overages due.
7. ROYALTIES:
(a) Payments from Licensee to Fox: In consideration of the rights granted to Licensee pursuant to this Agreement, Licensee shall pay to Fox, or such other party as Fox may designate in writing, a royalty in the following amounts:
(i) Major Releases:
(A) Until such time as ***** percent (*****%) of an Individual Property Guarantee for a Major Release is recouped by Licensee, Fox shall earn, and credit against the Individual Property Guarantees, Royalties at the rate of ***** percent (*****%) of Licensee's Gross Receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Major Release; and
(B) Thereafter and until such time as ***** percent (*****%) of an Individual Property Guarantee for a Major Release is recouped by Licensee, Fox shall earn and Licensee shall pay to Fox Royalties at the rate of ***** percent (*****%) of Licensee's Gross Receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Major Release; and
(C) Thereafter (and for the remainder of the Term), Fox shall earn and Licensee shall pay to Fox Royalties at the rate of ***** percent (*****%) of Licensee's Gross Receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Major Release.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-10-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
(ii) Targeted Releases:
(A) Until such time as ***** percent (*****%) of an Individual Property Guarantee for a Targeted Release is recouped by Licensee, Fox shall earn, and credit against the Individual Property Guarantees, Royalties at the rate of ***** percent (*****%) of Licensee's Gross Receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Targeted Release; and
(B) Thereafter (and for the remainder of the Term), Fox shall earn and Licensee shall pay to Fox Royalties at the rate of ***** percent (*****%) of Licensee's gross receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Targeted Release.
Royalties shall accrue when the Wireless Products are sold, downloaded or otherwise distributed to the end user, whichever first occurs, and shall become payable upon receipt by Licensee. "Gross Receipts" shall mean all monies received by or credited to Licensee for download of the Wireless Products by end users less only monies actually retained by the CSPs (the "Deductions").
(b) Payments from Fox to Licensee: In consideration of the rights granted by Licensee to Fox and VGSL pursuant to this Agreement, Fox shall pay to Licensee, or such other party as Licensee may designate in writing, a royalty in the following amounts:
(i) Distribution in Japan. In the event that Fox distributes, licenses, or otherwise exploits the Wireless Products in Japan pursuant to Paragraph 2(c)(iii), or grants to any third party any rights to distribute the Wireless Products for the Wireless Platform to end users within Japan, or otherwise uses in Japan any elements of the Fox Intellectual Property (as defined in Paragraph 11(a) that are solely attributable to Licensee's development efforts pursuant to this Agreement, Fox agrees to pay Licensee a royalty in the amount of ***** percent (*****%) of Fox's gross receipts for any such activity, which shall be defined as all monies actually received by Fox for the Wireless Products or other such elements of the PSM, less any Deductions.
(ii) VGSL Payments: As set forth in Paragraph 2(c)(ii) above, pursuant to the VGSL Agreement, VGSL will remit directly to Fox Fox's contractual share (pursuant to the VGSL Agreement) of all revenue from sales of the Wireless Products by VGSL in the VGSL Territories ("VGSL Revenue"). Fox will remit all VGSL Revenue to Licensee and such VGSL Revenue shall be treated as Gross Receipts for the purpose of this Agreement. The VGSL Revenue shall be treated in accordance with Paragraph 7(a) in calculating Royalties due to Fox from Licensee.
(iii) Other Payments: To the extent that Fox enters into an agreement with a CSP other than VGSL with Licensee's consent in accordance with Paragraph 1(f),
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-11-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
whereby Fox's contractual share of revenue from the sale of the Wireless Products to the CSP's subscribers is remitted directly to Fox from the CSP, Fox will pass through all such revenue from the CSP to Licensee and such revenue shall be treated as Gross Receipts for the purpose of this Agreement. Payments of all royalties from the sale of Wireless Products through any such arrangements shall be made by Licensee to Fox in accordance with Paragraph 7(b) above. Except as otherwise provided under this Agreement, Fox hereby agrees not to enter into any future agreements with a CSP for the distribution of the Wireless Products without the involvement and prior written agreement of Licensee.
(iv) For the avoidance of doubt, Fox will have no right or license to develop, publish, and or distribute any Wireless Products for the Wireless Platform, or to permit any third party to do so, or to otherwise use or exploit any Licensee Materials, except in accordance with Paragraphs 1(b) (with respect to bundling), 2(c)(iii) (with respect to Japan), and 2(c)(ii) (with respect to VGSL and T-Mobile).
(c) Payment Terms. Payment of all royalties and other payments by either party to the other shall be made in United States Dollars by check or wire transfer to a bank account to be designated by the receiving party. Payment of all royalties shall be made without deduction, reduction or set-off of any kind, provided that the paying party shall be permitted to deduct withholding taxes as permitted by applicable law. Each party agrees that it shall not be entitled to withhold any portion of the royalties as a reserve. Each party agrees to provide the other with all necessary withholding tax forms.
(d) Accounting Statement: Royalty statements (which statements shall be on the form attached hereto as Exhibit O and incorporated herein by this reference or such other form as the receiving party may designate in its discretion) shall be due and payments made within thirty (30) days after the close of each calendar quarter in which the paying party received any applicable revenue. Each party shall keep a record of all sales and shall submit, together with the royalty statements, a quarterly summary report of such sales. Notwithstanding the foregoing, pursuant to Paragraphs 7(b) (2) and 7(b)(3), Fox shall make all payments of revenue remitted directly by VGSL or any other CSP with whom the parties prospectively agree Fox will receive revenue directly, within thirty (30) days of receipt of such revenue.
(e) Books and Records: Each party shall keep accurate and complete books and records as they relate hereto for the greater of three years from the Effective Date or two years from the termination or expiration of the Term. On reasonable notice, each party shall have the right to examine said books and records; provided that such examination will be made no more than twice in any given twelve month period, and shall be made during normal business hours. If any audit discloses that a party owes royalties in excess of 5% of royalties paid during any accounting period, the audited party shall pay the audit costs together with shortfall and interest at rates as specified in Paragraph 7(e) below.
(f) Late Payments: If a party does not receive the applicable royalty payment as specified on or before the thirtieth day after the close of any calendar quarter, the party owing such royalty shall pay interest with respect to any royalties owed from day to day until the date of payment at a rate of 5% above U.S. Prime Rate on an annual basis. Interest on royalties owed calculated in accordance with this Paragraph shall accrue after
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-12-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
as well as before any judgment. Neither the acceptance of any payment or royalty statement nor the deposit of any check shall preclude a party from questioning the correctness of any such payment or royalty statement at any time.
8. DUTIES OF LICENSEE:
(a) Marketing and Promotion: Licensee shall be responsible for all marketing, advertising and promotional efforts with respect to the Wireless Products throughout the Territory during the Term. Licensee shall (A) participate in face to face meetings and conference calls regarding marketing from time to time, the frequency, location and subject matter of which shall be mutually agreed; (B) submit a separate marketing plan for the Wireless Products for each Property for which Fox has approved a Treatment (as defined in Paragraph 9(a)(ii)) within thirty (30) days of Fox's approval of such Treatment, subject to Fox's providing sufficient information regarding its release plans for the applicable Property (each, a "Marketing Plan"); (C) commit funds to the marketing of the Wireless Products as is commensurate with Licensee's marketing efforts of other similar wireless products that Licensee publishes; (D) perform business to business and trade marketing efforts (e.g., to the CSPs) commensurate with industry standards; and (E) appoint a marketing point of contact which shall be responsible for coordinating communications and facilitating relationships between Fox and Licensee and for overseeing the performance of Licensee's obligations hereunder.
All marketing materials for the Wireless Products that incorporate and/or make reference to any part of the PSM or the Properties (collectively, the "Licensee Marketing Materials") shall be subject to Fox's approval as follows:
(i) Licensee Marketing Materials: Licensee shall be responsible for producing the Licensee Marketing Materials, all of which shall be subject to Fox's prior written approval, at Licensee's sole cost and expense. Licensee will submit samples of all Licensee Marketing Materials to Fox for review and approval prior to Licensee's use of the Licensee Marketing Materials. Fox shall endeavor to review the Licensee Marketing Materials within two (2) weeks of receipt thereof, provided however, a delayed Fox response shall not constitute a deemed approval under any circumstances. Only after Fox has approved the Licensee Marketing Materials may Licensee proceed with production thereof. Once approval has been granted by Fox, Licensee will not make alterations, modifications or revisions to the Licensee Marketing Materials without the prior written consent of Fox.
(ii) CSP Marketing Materials: If any Licensed CSP seeks to incorporate any element of the PSM in its advertising, marketing, packaging (if any), consumer and trade publicity and promotional materials as well as any collateral materials related thereto ("CSP Marketing Materials"), Licensee shall ensure that such Licensed CSP obtains Fox's approval in accordance with Paragraph 8(a)(i). Licensee shall submit any such proposed CSP Marketing Materials on the CSP's behalf. Once Fox has approved any such CSP Marketing Materials and notified Licensee, Licensee shall notify the CSP and Licensee and the CSP may proceed with production thereof, provided there are no alterations from the approved packaging.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-13-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
(b) Product Support: Licensee shall provide all customer product support, including technical support, for the Wireless Products in the same manner as it provides such support for any other product that it distributes and/or publishes, and in any case in accordance with wireless industry standards. Licensee will display (and ensure that the CSP displays) a toll free telephone number (or an email address, in Licensee's discretion, on a country by country basis) on its website so that customers may contact Licensee and/or the CSP regarding the Wireless Products ("Customer Request"). Licensee and/or the CSP will use all commercially reasonable efforts to respond to each such Customer Request within 24 hours after receipt of such request. Licensee shall exercise commercially reasonable efforts to resolve each such Customer Request. Licensee also shall respond to all inquiries from VGSL relating to the Wireless Products delivered to VGSL.
(c) Solicitation of Sales: So long as the Agreement has not been terminated or otherwise expired, Licensee shall use all commercially reasonable efforts to promote sales of the Wireless Products during the Term of this Agreement.
(d) No Preferential Treatment: Licensee agrees that it will use substantially similar efforts to advertise, promote, manufacture, sell and distribute the Wireless Products as it devotes to its other licensed products.
(e) Compliance with all Laws: Licensee shall comply with all laws, rules, treaties, and regulations governing the distribution of the Wireless Products throughout the Territory.
(f) Internet Data: Licensee shall comply with COPPA regulations as well as with Fox's Internet Privacy Policy with respect to the collection of any consumer information via the Internet. The policy is attached hereto as Exhibit P and incorporated herein by this reference.
(g) Localization: Licensee shall localize the Wireless Products into the following languages: English, French, German, Italian, Spanish, and Japanese, with Portuguese, Greek, Dutch and Swedish to be made available where practicable to the extent that the Properties are dubbed into such languages, Fox holds foreign rights to the dubbed tracks, and such dubbed tracks are timely available.
(h) Optimization: Licensee shall be required to optimize the Wireless Products for all Territories and Licensed CSPs.
(i) Compatibility Testing: Licensee shall be responsible for any compatibility testing of the Wireless Products required by CSPs, and further shall be responsible for the following: (i) quality assurance of the Wireless Products which is consistent with industry standards; and (ii) adequate operation and functionality of the Wireless Products on the Wireless Platform in connection with each Licensed CSP's networks. To the extent that a material bug or defect is discovered in the Wireless Products which impacts in any manner the functionality of the Wireless Products, Licensee will promptly investigate and correct such bugs or defects, whether discovered by Licensee, Fox, the Wireless Platform manufacturer(s) or the CSP(s). As between Fox and Licensee, all costs of performing the foregoing obligations shall be borne by Licensee.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-14-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
9. FOX APPROVALS:
(a) Wireless Products Approval: Fox shall have the right to approve the Wireless Products in accordance with the procedure set forth below. Licensee acknowledges that Fox's approval shall include the approval of any third party who has approval rights over any of the Properties, as applicable.
(i) Creative Meetings: Licensee shall participate in face to face creative meetings with Fox on a monthly basis to determine which Wireless Products shall be developed for upcoming Major Releases and Targeted Releases. The parties will mutually agree upon the list of Wireless Products for each Property, and will amend the applicable Exhibit for that property upon reaching such agreement. Notwithstanding the foregoing, Licensee shall develop the Wireless Products set forth in Exhibits B through M for each Property.
(ii) Concept / Treatment: For each of the Major Releases and Targeted Releases, within ***** after receipt from Fox of the applicable PSM Materials, Licensee will deliver to Fox a concept / treatment for the applicable Wireless Products, which will outline the technical and creative aspects of the Wireless Products (each, a "Treatment"). Each Treatment shall be subject to Fox's approval, which approval is within Fox's discretion. Once a Treatment is approved by Fox and to the extent the approved Treatment requires compatibility input from a Licensed CSP, it shall be Licensee's sole responsibility to secure concept approval from such Licensed CSP. If the Licensed CSP requires changes, modifications or alterations to a Treatment, or to any element of the Wireless Products, Licensee shall seek Fox's written approval of any such change, which approval may be withheld in Fox's sole discretion.
(iii) Design Document: Once a given Treatment is approved by Fox, Licensee shall then submit to Fox a game design document ("Design Document") which will lay out the creative and technical aspects for the Wireless Product, including how Licensee intends to use the Property and the PSM in the Wireless Product. The Design Document shall be subject to Fox's written approval, which approval is within Fox's sole discretion.
(iv) Alpha Testing: Upon approval of the Design Document by Fox, Licensee shall submit a prototype of the applicable Wireless Product, which demonstrates all of the features and functions set forth in the Design Document, although colors, graphics and related elements need not be in their final form (each, an "Alpha Prototype"). Each Alpha Prototype will be subject to Fox's written approval, which approval will be in Fox's sole discretion.
(v) Beta Testing: Upon approval of the Alpha Prototype, Licensee shall submit a post-Alpha prototype of the Wireless Product meeting all Alpha requirements and in substantial conformance with the Design Document, with all features and functions implemented and in which all interface, memory allocation and code size issues are effectively addressed (each, a "Beta Prototype"). Each Beta Prototype will have passed Licensee's established testing procedures and have no known Bugs. Each Beta Prototype shall be subject to Fox's written approval, which
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-15-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
approval will be in Fox's sole discretion. After Fox has approved a Beta Prototype, Licensee shall be free to release the Beta Prototype as a final commercial product.
(A) Modifications: After approval of a Beta Prototype, Licensee shall not modify the Wireless Products without the prior written approval of Fox. For purposes of this paragraph, porting, enhancements, optimization (which alters the content displayed in any material manner) and localization shall be deemed a modification requiring Fox's prior written approval. Notwithstanding the foregoing, Porting that does not require substantive changes to a Wireless Product will not be deemed a modification requiring Fox's prior approval.
(b) Approval Process:
(i) Evaluation: Fox shall approve or reject in writing all Treatments, Design Documents, Alpha Prototypes, and Beta Prototypes submitted to it for its approval (each individually a "Deliverable"). Fox's approval or rejection of all Deliverables shall be rendered in good faith.
(ii) Rejection: If Fox rejects any Deliverable, Fox shall provide to Licensee, in writing, the reasons for its rejection of that Deliverable. Licensee shall then use commercially reasonable efforts to make the changes to that Deliverable and resubmit the Deliverable to Fox for Fox's reconsideration. If Fox rejects a given Alpha Prototype more than twice based on a reason previously notified to Licensee by Fox, then Fox may terminate this Agreement in whole or with respect to the affected Property and Wireless Products and shall reserve all remedies available under this Agreement. Notwithstanding the foregoing, Fox will not terminate this Agreement for rejection of any Deliverables related to Properties that have their initial theatrical release prior to June 30, 2005, provided such Deliverables are accepted and delivered not later than ***** after the U.S. theatrical releases for each of the following Properties: "Robots"; "Mr. & Mrs. Smith"; and Untitled Ridley Scott Film.
(iii) Collaborative Process: The parties intend that development of the Wireless Products will be a collaborative effort between Fox and Licensee, such that Fox shall have a reasonable opportunity to provide input into the primary aspects of each Wireless Product through the review and approval procedure described above, including, but not limited to, the look and feel of the Wireless Products, art direction, as well as the use of the Property (and all elements therefrom) in the Wireless Products and in the advertising, promotion and marketing thereof in accordance with this Agreement. Licensee understands and agrees that approval of any two-dimensional artwork does not constitute approval of the implementation of the artwork in the Wireless Products.
(iv) Timing: Fox shall endeavor to approve or reject in writing all Deliverables and all materials submitted to it for its approval within two (2) weeks of Fox's receipt thereof. If Fox does not approve or reject in writing a Deliverable within two (2) weeks of its receipt and causes a significant delay in the development of the
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-16-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
Wireless Products, then Fox and Licensee shall mutually and in good faith discuss and agree to any adjustments in the Wireless Products Latest Commencement Date which are necessary due to such delay. Fox shall not terminate this Agreement for Licensee's delay in delivery of the Wireless Products, where such delay is solely caused by Fox's failure to deliver the PSM Materials in a timely manner in accordance with Paragraph 2(a)(i). Fox reserves the right to terminate this Agreement in accordance with paragraph 2(b)(i) where Licensee's delay in delivery of the Wireless Products is the result of Fox's disapproval of the Deliverables.
10. PRICING: As between Fox and Licensee, Licensee will be responsible for determining the prices and/or fees at which the Wireless Products will be offered for sale to the general public but will do so in accordance with Licensee's agreements with the CSPs. Licensee acknowledges that VGSL will be responsible for making pricing decisions for the Wireless Products distributed through VGSL, provided that Fox will not agree to any reduction in the share of revenue it receives from VGSL, other than the ***** percent (*****%) reduction in Fox's revenue share for late delivery provided for in the current version of the VGSL Agreement.
11. INTELLECTUAL PROPERTY RIGHTS:
(a) Intellectual Property Rights Defined: For purposes of this Agreement, the term "Intellectual Property Rights" means know-how, inventions, patents, patent rights, and registrations and applications, renewals, continuations and extensions thereof, works of authorship and art, copyrightable materials and copyrights (including, but not limited to, titles, computer code, designs, themes, objects, characters, character names, stories, dialog, catch phrases, concepts, artwork, animation, sounds, musical compositions, graphics and visual elements, audio-visual effects and methods of operation, and any related documentation), copyright registrations and applications, renewals and extensions thereof, mask works, industrial rights, trademarks, service marks, trade names, logos, trademark registrations and applications, renewals and extensions thereof, trade secrets, rights in trade dress and packaging, publicity, personality and privacy rights, rights of attribution, paternity, integrity and other similarly afforded "moral" rights, and all other forms of intellectual property and proprietary rights recognized by the U.S. laws, and other applicable foreign and international laws, treaties and conventions.
(b) Fox Intellectual Property: Fox shall own all Intellectual Property Rights in and to any derivative works made from the Properties, whether or not used in the Wireless Products, including without limitation design documents, graphics, animation, music, packaging, advertising, promotional and other artwork used in connection with the development and distribution of the Wireless Products but at all times excluding the Licensee Materials as defined in Paragraph 11(c) below (collectively, the "Fox Intellectual Property"). The Fox Intellectual Property includes all rights in and to the entire "look and feel" of the Wireless Products, all visual displays, scripts, dialogue, literary treatments, concepts, characters, backgrounds, environments, and other elements visible to the Wireless Products' users; all sounds, sound effects, soundtracks and other elements audible to the user. Licensee acknowledges and agrees Fox shall be the exclusive owner of these rights as a work made for hire. Licensee acknowledges that Licensee's use of any Property shall not confer or imply a grant of rights, title or interest in the Property or good will associated therewith, except as specifically provided herein.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-17-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
Fox's Intellectual Property Rights shall be indefeasible and irrevocable and shall not be subject to reversion under any circumstance, including cancellation, termination, expiration, or breach of this Agreement. Licensee further agrees to execute one or more copyright assignments at Fox's request, or any other subsequent document as further evidence of this assignment, and to cooperate with Fox in perfecting the assignment of any rights to the Fox Intellectual Property, and hereby appoints Fox as its attorney-in-fact to execute any documents required in connection with such assignment. All materials created hereunder shall be prepared by an employee-for-hire of Licensee under Licensee's sole supervision, responsibility and monetary obligation, or, if third parties who are not employees of Licensee, including without limitation all software developers developing the Wireless Products contribute to the creation of any Fox Intellectual Property, Licensee shall obtain from such third parties a full written assignment of rights so that all right, title and interest in the Fox Intellectual Property shall vest in Fox.
(c) Licensee Materials: Licensee owns and shall retain all right, title, and interest in and to (i) all software source code, tools, and technical documentation used by or for Licensee to create the Wireless Products, including without limitation any and all software code included in the Wireless Products, (ii) all aspects and elements of the Wireless Products other than the Fox Intellectual Property therein, including without limitation any and all gaming engines, game concepts, rules, scripts, and other Intellectual Property Rights therein; and (iii) any and all Intellectual Property Rights in any of the foregoing (the "Licensee Materials").
(d) Moral Rights: Licensee hereby does expressly assign to Fox any and all rights of paternity or integrity, rights to claim authorship, to object to any distortion, mutilation or other modification of, or other derogatory actions in relation to the PSM, the Fox Intellectual Property, and any of Fox's Intellectual Property Rights in and to the PSM and or the Fox Intellectual Property and any derivative works thereof, whether or not such would be prejudicial to Fox's honor or reputation, and any similar right, existing under judicial or statutory law of any country in the world, or under any treaty ("Moral Rights"), regardless of whether such right is denominated or generally referred to as a moral right. Licensee hereby does irrevocably transfer and assign to Fox any and all Moral Rights that Licensee may have in Fox's Intellectual Property Rights in and to the PSM and the Fox Intellectual Property and any derivative works thereof and shall cause Licensee's employees and contractors, including Licensee's developers of the Wireless Products, to do likewise. Licensee hereby does forever waive and agree never to assert any and all Moral Rights it may have in Fox's Intellectual Property Rights in and to the PSM and the Fox Intellectual Property and any derivative works thereof and shall cause its employees and contractors (including the developers) to do likewise.
(e) Licensee Cooperation: Licensee shall not by any act or omission to act impair or prejudice the Intellectual Property Rights of Fox in the PSM, the Fox Intellectual Property or the Properties, or violate any moral rights or deal with the PSM, the Fox Intellectual Property or Properties so that any third party might obtain any lien or other right of whatever nature incompatible with the Intellectual Property Rights of Fox. Licensee agrees to notify Fox of any known or suspected infringement of Fox's Intellectual Property Rights in the PSM and the Property that comes to Licensee's attention and to assist Fox, at Fox's expense, in taking such action as Fox, in its sole discretion, deems necessary or appropriate to prevent or remedy such infringing activities. Licensee shall
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-18-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
also promptly notify Fox in writing of any legal proceeding instituted, or written claim or demand asserted, by any third party against Licensee with respect to the infringement of any Intellectual Property Rights that is alleged to result from the use of the PSM or the Properties in connection with the Wireless Products in accordance with this Agreement.
(f) First Sale Doctrine Not Applicable: The PSM is licensed, not sold, by Fox to Licensee, and nothing in this Agreement will be interpreted or construed as a sale or purchase of the PSM, including but not limited to any use of a "purchase order" by Licensee in connection with the transactions contemplated hereunder. Furthermore, notwithstanding use of the terms "sale" and "sell" throughout this Agreement, any distribution or delivery of the Wireless Products by Licensee to any sublicensee (including, without limitation, CSPs and end-users) will be by license and not by sale (and Licensee shall post notice of that fact in sufficient size, location and manner on Licensee's website on the page from which the general public can subscribe to the Wireless Products). Accordingly, Licensee acknowledges that the "First Sale Doctrine" (as embodied in 17 U.S.C., Paragraph 109 of the United States Copyright Act of 1976, as amended, or the equivalent law or statute in the Territory) does not apply to Licensee's acquisition of rights in and to the PSM and the Property hereunder or to any sublicensee's acquisition of rights in and to the Wireless Products under any agreement between Licensee and a sublicensee.
12. TRADEMARKS AND COPYRIGHTS; FOX'S TITLE AND GOODWILL:
(a) Intellectual Property Notices: Licensee agrees to place on Licensee's website and in the Wireless Products, and on the packaging and related documentation, if any, and Marketing Materials for the Wireless Products, all trademarks, copyright notices, logos and other legal or proprietary designations of Fox in the form and manner reasonably directed by Fox, including, without limitation, a notice indicating that the Wireless Products are produced by Licensee under license from Fox. All copyrights, trademarks and service marks relating to the Properties, PSM Materials, and Fox Intellectual Property, are, will be and shall remain the sole property of Fox and any rights therein granted to Licensee shall terminate immediately upon termination of this Agreement. All goodwill and reputation attaching to such copyrights, trademarks and service marks shall vest in Fox. Licensee shall create, execute and deliver to Fox all documents and instruments reasonably required by Fox for the protection of or otherwise in connection with the copyrights, trademarks and service marks of Fox. Licensee shall not have the right to use Fox's trademarks or trade names except in connection with the promotion and distribution of the Wireless Products in the Territory in accordance with the terms of this Agreement. Notwithstanding the foregoing, Licensee may include a notice for the Licensee Materials, where appropriate.
(b) Goodwill: Licensee acknowledges that Fox is the owner of all right, title and interest in and to the PSM and the Properties, and further acknowledges the great value of the goodwill associated with the PSM and the Properties and that the PSM and the Properties have acquired secondary meaning in the mind of the public and that the trademarks and copyrights included in the PSM and the Properties, and the registrations thereof, are valid and subsisting, and further agrees that it shall not during the Term of this Agreement or at any time thereafter dispute or contest directly or indirectly, or do or cause to be done any act which in any way contests, impairs or tends to impair Fox's
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-19-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
exclusive rights and title to the PSM and the Properties, or the validity thereof or the validity of this Agreement, and shall not assist others in so doing.
(c) Cooperation: Licensee shall not in any manner represent that it has any ownership in the PSM or the Properties, or in any trademarks or copyrights included in the PSM or the Properties (or registrations thereof), but may, only during the Term, and only if Licensee has complied with any and all applicable laws and registration requirements within the Territory for so doing, represent that it is a "licensee" or "official licensee" hereunder. Licensee shall not register or attempt to register any copyright or trademark in the Properties, in its own name or that of any third party, nor shall it assist any third party in doing so.
13. REPRESENTATIONS AND WARRANTIES:
(a) By Licensee: Licensee represents and warrants to Fox that:
(i) Governmental Authority: Licensee has full power and authority to enter into and perform this Agreement without approval from any governmental entity or third party, and that such ability is not limited or restricted by any agreements or understanding between Licensee and any other person or company;
(ii) Corporate Authority: The execution, delivery and performance by Licensee of this Agreement have been duly authorized by any and all necessary corporate action by Licensee, and this Agreement constitutes the legal, valid and binding obligation of Licensee enforceable in accordance with its terms;
(iii) Expertise: Licensee possesses the expertise and know-how and experience to develop the Wireless Products and is otherwise fully capable of performing its obligations under this Agreement;
(iv) Infringement: The Licensee Materials and any other computer code, technology, information, art or other materials created, developed or used by Licensee pursuant to this Agreement will not infringe upon or misappropriate the Intellectual Property Rights or any other legal rights of any third party, and should any aspect of the Licensee Materials, or such other computer code, technology, information, art or materials created, developed or used by Licensee pursuant to this Agreement, become, or, in Fox's opinion, be likely to become, the object of any infringement or misappropriation claim or suit, Licensee will procure, at Licensee's expense, the right to use such Licensee Materials, computer code, technology, information, art or other materials in all respects, or will replace or modify the affected material to make it non- infringing; and
(v) Licensee Conduct: Licensee will (A) conduct its business in a manner that reflects favorably at all times on the Property, the Wireless Products and the good name, goodwill and reputation of Fox, (B) avoid deceptive, misleading or unethical practices, that are or might be detrimental to Fox, the Property, the Wireless Products or the public, (C) avoid making disparaging, false or misleading statements or representations with regard to Fox, the Property or the Wireless Products, (D) not employ or cooperate in the employment of any deceptive or
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-20-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
misleading advertising material with regard to Fox, the Property or the Wireless Products, (E) make no representations, warranties or guarantees to customers or to the trade with respect to the specifications, features or capabilities of the Wireless Products that are inconsistent with the warranties and disclaimers included in or with the Wireless Products, (F) not sell the Wireless Products to any party who it knows, or reasonably should know, will infringe Fox's Intellectual Property Rights in the Wireless Products, and (G) comply with all applicable international, national, regional, and local laws in performing its duties hereunder and in any of its dealings with respect to the Wireless Products.
(b) By Fox: Fox represents and warrants to Licensee that:
(i) Authority: Fox has full power and authority to enter into and perform this Agreement, and that such ability is not limited or restricted by any agreements or understanding between Fox and any other person or company. The execution, delivery and performance by Fox of this Agreement have been duly authorized by any and all necessary corporate action by Fox, and this Agreement constitutes the legal, valid and binding obligation of Fox enforceable in accordance with its terms.
(ii) No Representations/Warranties Regarding Revenue: Notwithstanding the representations and warranties made by Fox in this Paragraph 13(b), Fox makes no representations or warranties whatsoever regarding the amount of revenue that may be generated by sales of the Wireless Products.
14. INDEMNIFICATION:
(a) By Licensee: Licensee agrees to indemnify, defend and hold harmless Fox, Trademark Licensor and their respective successors, assigns, parents, subsidiaries, affiliates and co-venturers, and their respective directors, officers, employees and agents from and against all third party claims, damages, losses, liabilities, suits and expenses (including reasonable attorneys' fees), arising out of or in connection with any allegations that (i) the Licensee Materials or the manufacture, packaging, distribution, promotion, sale, or exploitation thereof (except with respect to those matters against which Fox has agreed to indemnify Licensee hereunder) infringes or misappropriates the Intellectual Property Rights of any third party or (ii) any breach of warranty, representation or covenant contained in this Agreement; provided that Fox (a) promptly notifies Licensee in writing of the claim; (b) grants Licensee sole control of the defense, subject to Fox's approval of counsel (to avoid conflicts of interest) and the terms of any settlement that affect Fox; and (c) provides Licensee, at Licensee's expense, with all assistance, information and authority reasonably required for the defense and settlement of the claim. If Licensee fails to undertake such defense, Licensee shall reimburse Fox for reasonable attorneys' fees incurred by Fox in its defense of such claim or suit. Furthermore, Licensee agrees to indemnify, defend and hold harmless Fox, Trademark Licensor and their respective successors, assigns, parents, subsidiaries, affiliates and co-venturers and all other parties associated with the Property, and their respective directors, officers, employees and agents from and against claims made by VGSL against Fox regarding failure to deliver and distribute the VGSL Products (as defined in Paragraph 1(a)) in a timely manner as set forth in Paragraphs 2(a)(ii), 2(b)(i) and 2(c)(ii), third-party Intellectual Property claims relating to the Licensee Materials, and all related damages, losses,
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-21-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
liabilities, suits and expenses (including reasonable attorneys' fees). Fox's failure to provide notice in accordance with this Paragraph shall not relieve Licensee of its obligations to indemnify, defend and hold Fox harmless from any such claims, unless and except to the extent that Licensee is prejudiced by any such failure.
(b) By Fox: Fox agrees to indemnify, defend and hold harmless Licensee, its successors, assigns, parents, subsidiaries, affiliates and co-venturers, and their respective directors, officers, employees and agents from and against all third party claims, damages, losses, liabilities, suits and expenses (including reasonable attorneys' fees), arising out of or in connection with any allegations that the PSM, PSM Materials, or Properties infringe or misappropriate any Intellectual Property Rights of any third party; provided that Licensee (a) promptly notifies Fox in writing of the claim; (b) grants Fox sole control of the defense and settlement of the claim; and (c) provides Fox, at Fox's expense, with all assistance, information and authority reasonably required for the defense and settlement of the claim. If Fox fails to undertake such defense, Fox shall reimburse Licensee for reasonable attorneys' fees incurred by Licensee in its defense of such claim or suit.
(c) Injunctions. If either party's use or exploitation of any materials provided and licensed hereunder is, or in the licensor's opinion is likely to be, enjoined due to the type of claim specified in Paragraphs 13(a) or (b), above, the licensor may, at its sole option and expense: (a) procure for the licensee the right to continue using such rights under the terms of this Agreement; (b) replace or modify any materials provided so that they are non-infringing; or (c) if options (a) and (b) above cannot be accomplished despite the licensor's reasonable efforts, then the licensor may terminate the licensee's rights and the licensor's obligations hereunder with respect to such materials, in which event the licensor will refund to the licensee any amounts paid by the licensee with respect to such materials. For the avoidance of doubt, Licensee is the licensor of the Licensee Materials, pursuant to Paragraph 1(e), for the purpose of this Paragraph.
(d) Sole Remedy. THE PROVISIONS OF THIS PARAGRAPH 14 SET FORTH EACH PARTY'S SOLE AND EXCLUSIVE OBLIGATIONS AND REMEDIES WITH RESPECT TO THIRD PARTY CLAIMS OF INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL PROPERTY RIGHTS OF ANY KIND UNLESS OTHERWISE STIPULATED BY JUDICIAL ORDER.
15. TERMINATION:
(a) Termination Rights;
(i) Bankruptcy: If Licensee's liabilities exceed its assets, or if Licensee becomes unable to pay its debts as they become due, or files or has filed against Licensee a petition in bankruptcy, reorganization or for the adoption of an arrangement under any present or future bankruptcy, reorganization or similar law (which petition if filed against Licensee shall not be dismissed within 30 days from the filing date), or if Licensee makes an assignment for the benefit of its creditors or is adjudicated a bankrupt, or if a receiver or trustee of all or substantially all of Licensee's property is appointed, or if Licensee discontinues its business, this Agreement shall automatically terminate forthwith without notice to Licensee.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-22-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
(ii) Transfer or Change of Control: If a substantial portion of the assets or controlling stock in Licensee's business is sold or transferred, or if there is a substantial change in Licensee's management, or if Licensee's property is expropriated, confiscated or nationalized by any government or if any government assumes de facto control of Licensee's business, in whole or in part, Fox may terminate this Agreement upon 30 days' notice to Licensee.
(iii) Unauthorized Uses: If Licensee transfers, sells or distributes to any unauthorized third party any artwork, voice clips, or other Fox proprietary materials related to the Property including but not limited to Marketing Materials, then Fox may terminate this Agreement forthwith on written notice without any cure period.
(iv) Failure to Exploit: If Licensee fails to exploit the PSM as set forth in Paragraph 2(a) and 2(b), or fails to release the Wireless Products in accordance with the dates set forth in Paragraph 2(b), then Fox may terminate this Agreement forthwith on written notice without any cure period subject to the terms and conditions set forth in Paragraph 2(a) and 2(b), respectively.
(v) Failure to Obtain Approvals: If Licensee releases a Wireless Product without first obtaining Fox's approval as specifically set forth in this Agreement in Paragraph 9, then Fox may terminate this Agreement forthwith on written notice without any cure period.
(vi) Other Defaults: Excepting only those Licensee defaults in this Paragraph 15 which permit Fox to terminate immediately without any cure period for Licensee, if either party fails to perform any of its material obligations hereunder, the other party may terminate this Agreement upon 30 days' notice, unless the breaching party cures any such breach within said 30 days and gives notice to the other party thereof within that period. Notwithstanding the foregoing, in the event that either party (A) fails to pay Royalties or other amounts when due, or (B) fails to make Royalty or other accountings in accordance with the terms of this Agreement, then the breaching party shall be subject to a one-time cure period of fifteen (15) days for such breach. If a party fails to cure the breach within such fifteen (15)-day period or another breach of either (A) or (B) above occurs following an initial cure within the fifteen (15)-day period, then the other party shall have the right in its sole discretion to terminate this Agreement forthwith on written notice without any cure period.
(vii) Other Agreements: Should any event of default by Licensee cause Fox to terminate this Agreement, Fox, in its sole discretion, may terminate, without any cure period, any other agreements concurrently existing between Fox and Licensee upon written notice specifying the agreements to be terminated. For the avoidance of doubt, this remedy shall only apply to any agreements concurrently existing between the specific parties to this Agreement and shall not apply to agreements between Licensee and Fox Sports.
(b) Effect of Termination/Expiration: In the event of termination of this Agreement, Licensee shall: (i) immediately stop in all respects the sale and distribution of the Wireless Products and provide Fox with a complete inventory report and accounting with
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-23-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
payment of all Royalties, and (ii) at Fox's election shall either (A) deliver to Fox all materials related to the Wireless Products or (B) give Fox satisfactory evidence of their destruction. Licensee agrees that its failure to stop in all respects the sale and/or distribution of the Wireless Products upon termination or expiration of the Agreement will result in immediate irreparable damage to Fox for which there is no adequate remedy at law, and in the event of such failure by Licensee, Fox shall be entitled to injunctive relief. Fox's exercise of any of the foregoing remedies shall not operate as a waiver of any other rights or remedies which Fox may have. Fox shall not distribute the Wireless Products after the termination or expiration of this Agreement without obtaining from Licensee a separate license to the Licensee Materials.
(i) Sell-Off Period: Notwithstanding Paragraph 15(b), in the event of termination of this Agreement, Licensee shall have a period of ***** from the date of such termination (unless such termination occurs less than ***** prior to the expiration of this Agreement in which case the time period shall be shortened accordingly so as not to exceed the date of expiration) in which to sell-off existing inventory of Wireless Products already in the Distribution Channels ("Sell Off Period"). Licensee agrees that no additional Wireless Products may be developed or distributed during the Sell Off Period and Licensee agrees to require that any Licensed CSP to comply with this provision. Upon the expiration of the Sell Off Period, Licensee agrees to destroy all such remaining inventory and confirm same in writing to Fox (and require that any Licensed CSP do the same). Any revenues, credits or other consideration received by Licensee for the Wireless Products during the Sell Off Period will be subject to Licensee's obligation to pay Fox Royalties pursuant to Paragraph 7 above.
(ii) Fox's Development of Wireless Products: In the event of termination or expiration of this Agreement or Licensee's loss of exclusive rights under this Agreement, Fox shall be free to create and exploit, or have a third party create or exploit, wireless products which may be similar to those developed and distributed by Licensee pursuant to this Agreement for the Properties.
(c) Guarantee Forfeiture: In the event of termination of this Agreement and without limitation of Fox's rights and remedies all of which are expressly reserved, the following payment penalties shall apply: (i) if termination occurs in the first year of the Term, Licensee shall forfeit any Guarantee paid, and shall immediately pay any remaining Guarantee, up to the amount of ***** dollars (US$*****), and any Guarantee payments made in excess of ***** dollars ($*****) shall be refunded by Fox to Licensee; and (ii) if termination occurs in the second year of the Term, Licensee shall forfeit any Guarantee paid, and shall immediately pay any remaining portion of the Guarantee then unpaid, up to the amount of ***** dollars (US$*****). Any forfeited Guarantees will apply as a set off against any additional damages claimed by Fox.
16. CONFIDENTIAL INFORMATION AND PRESS:
(a) Confidential: Each party agrees to use reasonable efforts, and at least the same care that it uses to protect its own confidential information of like importance, to prevent unauthorized dissemination and disclosure of the other party's confidential information
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-24-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
during and for a period of three (3) years after the Term. These obligations will be subject to the following terms and conditions:
(b) Confidential Information Defined: Confidential information includes, but is not limited to, the following: (i) the design, technology and know- how related to the Wireless Products, the PSM and the Property; (ii) the computer object and source code of the Wireless Products, the PSM and the Property; (iii) non-public information concerning either party's financing, financial status, research and development, proposed new products, marketing plans and pricing, unless and until publicly announced; and (iv) any information designated by either party as confidential or proprietary in writing:
(i) Certain Information Not Deemed Confidential: The foregoing obligations will not apply to any information that: (A) becomes known to the general public without fault or breach on the part of the receiving party; (B) the receiving party receives from a third party without breach of a nondisclosure obligation and without restriction on disclosure; (C) was in the possession of the receiving party prior to disclosure by the other; or (D) is independently developed by the receiving party's personnel having no access to similar confidential information obtained from the other.
(ii) Confidential Information of Another: Nothing in this Agreement will affect any obligation of either party to maintain the confidentiality of a third party's confidential information.
(c) Press Releases: Licensee may not issue a press release or otherwise disclose to or discuss with the press the existence or terms of this Agreement without the prior written consent of Fox (it being understood that Fox's legal counsel shall have final approval over the timing and/or content of any press release or other public disclosure by Licensee regarding this Agreement). Notwithstanding the foregoing, the parties (and their respective parent companies) shall be free to disclose Confidential information to the extent required by any law or regulation to any relevant stock exchange. The parties will liaise and endeavor to agree to the wording of any such disclosure in advance.
17. MISCELLANEOUS:
(a) Notices: All notices and statements shall be in writing and shall together with any payments be personally delivered or sent postage prepaid to the intended party at the address set forth below (unless notification of a change of address is given in writing). The date of mailing of a notice or statement shall be deemed the date the notice is given or statement rendered.
To Fox:
Mail: Twentieth Century Fox Licensing & Merchandising P.O. Box 900 Beverly Hills, California 90213 USA Attention: Vice President, Wireless Development
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-25-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
Messenger: 2121 Avenue of the Stars, 4th Floor Los Angeles, California 90067 USA Attention: Vice President, Wireless Development Facsimile: (310) 369-1465 With copies to: Mail: Twentieth Century Fox Licensing & Merchandising P.O. Box 900 Beverly Hills, California 90213 USA Attention: Legal Department Messenger: 2121 Avenue of the Stars, Suite 1334 Los Angeles, California 90067 USA Attention: Legal Department Facsimile: (310) 369-4241 and: Mail: Twentieth Century Fox Licensing & Merchandising P.O. Box 900 Beverly Hills, California 90213 USA Attention: Finance Department Messenger: 2121 Avenue of the Stars, 4th Floor Los Angeles, California 90067 USA Attention: Finance Department Facsimile: (310) 369-8531 To Licensee: Mail & Sorrent Inc.
Messenger: 1800 Gateway Drive, Suite 200 San Mateo, CA 94404 Attention: Paul Zuzelo E-mail: pzuzelo@sorrent.com Facsimile: (650) 571-5698
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-26-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
With copies to: Mail & Sorrent Inc. Messenger: 1800 Gateway Drive, Suite 200 San Mateo, CA 94404 Attention: Greg Suarez E-mail: greg.suarez@sorrent.com Facsimile: (650) 571-5698
(b) Waiver, Modification: The terms of this Agreement may not be waived or modified except by an agreement in writing executed by the parties hereto. The waiver by either party of any breach of this Agreement by the other party must be in writing and shall not be deemed to be a waiver of any prior or succeeding breach.
(c) Relationship of the Parties: Nothing herein contained shall be construed to place the parties in the relationship of principal and agent, partners or joint venturers and neither party shall have the power to obligate or bind the other party in any manner whatsoever.
(d) No Assignment: Licensee may not assign any of its rights and obligations under this Agreement without the prior written consent of Fox; provided that Licensee may assign all of its rights and obligations hereunder to its successor in the event of a sale of all or substantially all of its assets or voting securities, or of the business unit associated with this Agreement. Subject to the foregoing, this Agreement will inure to the benefit of each parties successors and assigns. Any purported assignment or transfer except in accordance with the above shall be void and of no effect.
(e) Governing Law; Jurisdiction; Service of Process: This Agreement shall be construed in accordance with the laws of the State of California applicable to agreements executed and to be wholly performed therein. The parties hereto agree that any suit, action or proceeding arising out of or relating to this Agreement shall be instituted and prosecuted in the United States District Court for the Central District of California or in any court of competent jurisdiction of the State of California. The parties hereto irrevocably submit to the jurisdiction of said courts and waive any rights to object to or challenge the appropriateness of said forums. Service of process shall be in accordance with the laws of the State of California.
(f) Appointment/Change of Agent: Upon notice to Licensee, Fox may appoint an agent or designate a substitute agent from time to time to act on Fox's behalf to collect from Licensee and remit to Fox all Royalty payments due to Fox under this Agreement. The termination or substitution of an agent by Fox shall not affect the rights, duties, privileges or obligations of Fox or of Licensee hereunder. No agent so appointed is authorized to make any representation or warranty with respect to the ownership or title of the Property and or to approve the manufacture, sale or distribution of the Wireless Products.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.
-27-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
(g) Binding Agreement: Licensee shall have no rights hereunder and neither Fox nor Trademark Licensor shall be bound hereby unless and until this Agreement has been accepted in writing by Fox. If Fox does not accept this Agreement, the parties shall be released from all liability and this document shall be of no force and effect.
(h) Limitation of Actions: No legal action shall be brought by Licensee under this Agreement unless commenced within 12 months from the date the cause of action arose.
(i) Severability: Should any paragraph, clause or provision of this Agreement be found invalid or unenforceable by any court having jurisdiction over this Agreement, the subject matter hereof, or the parties hereto, such decision shall affect only the paragraph, clause or provision so construed or interpreted and all remaining paragraphs, clauses or provisions shall remain valid and enforceable.
(j) Entire Agreement: There are no representations, warranties or covenants other than those set forth in this Agreement which sets forth the entire understanding among the parties hereto.
(k) Headings: The headings of the Paragraphs of this Agreement are for convenience only and shall not be of any effect in construing the meanings of the Paragraphs.
(l) Survival: The following Paragraphs shall survive the expiration or termination of this Agreement: 5; 6; 7; 11; 13(a)(iv); 14, and 16.
(m) Drafting: Because the parties hereto have participated in drafting and negotiating this Agreement, there shall be no presumption against any party on the ground that such party was responsible for preparing this Agreement or any part of it.
(n) Force Majeure: Neither party shall be liable for any delay or failure in performing any of its obligations hereunder when any such delay or failure is occasioned by causes or contingencies beyond its control, including but not limited to force majeure, fires, floods, war, strikes and governmental regulations, provided the party delaying or failing to perform shall promptly after its inception give written notice of such cause or contingency to the other party and provided further that the party giving such notice shall make all reasonable efforts to remove such disability as soon as possible. Notwithstanding the foregoing, in the event the events constituting force majeure cause a delay in performance of thirty consecutive days or more, either party may terminate this Agreement immediately upon written notice to the other party.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-28-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
By signing in the spaces provided below, the parties hereto have agreed to all of the terms and conditions of this Agreement. SORRENT, INC. TWENTIETH CENTURY FOX LICENSING & MERCHANDISING, a division of Fox Entertainment Group, Inc. ("Licensee") ("Fox") By /s/ Paul Zuzelo By /s/ Jamie Samson
Name Paul Zuzelo Jamie Samson Its Senior Vice President Its CAO & Exec. V.P. Date December 17, 2004 Date 12/17/04
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-29-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT A
Properties
Major Releases:
"Robots"
Untitled Ridley Scott Film
"Ice Age 2"
"Eragon"
• The inclusion of "Eragon" shall be contingent upon Fox's acquisition of the rights to the Property and its ability to grant licensing and merchandising rights thereto. For the avoidance of doubt, there shall be no grant of rights to the Property from Fox to Licensee without Fox's prior written notice advising of Fox's acquisition of the rights to the Property and related licensing and merchandising rights. This Exhibit A and Exhibit E will be amended at such time that Fox can grant such rights.
Targeted Releases:
Untitled Mike Judge Film
"Mr. & Mrs. Smith"
"Lady Luck"
• The inclusion of "Lady Luck" shall be contingent upon Fox's acquisition of the rights to the Property and its ability to grant licensing and merchandising rights thereto. For the avoidance of doubt, there shall be no grant of rights to the Property from Fox to Licensee without Fox's prior written notice advising of Fox's acquisition of the rights to the Property and related licensing and merchandising rights. This Exhibit A and Exhibit H will be amended at such time that Fox can grant such rights.
TBD
TBD
TBD
TBD
TBD
The Properties set forth on this Exhibit A may be removed and substituted, or additional Properties may be included, in accordance with Paragraph 1(a) (i).
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-30-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT B
"Robots" Wireless Products
A minimum of:
12-D Java Game in connection with the initial theatrical release
1 3-D Java Game in connection with the DVD release
5 Java Applications ('Screensavers') (2 3-D Screensavers and 3 2-D Screensavers) in connection with the initial theatrical release
5 MMS
10 Wallpapers
5 Voicetones
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-31-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT C
Untitled Ridley Scott Film Wireless Products
A minimum of:
1 2-D Java Game, which shall include mutually agreed upon 3-D elements
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-32-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT D
"Ice Age 2" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-33-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT E
"Eragon" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-34-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT F
"Untitled Mike Judge Film" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-35-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT G
"Mr. & Mrs. Smith" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-36-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT H
"Lady Luck" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-37-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT I
"TBD" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-38-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT J
"TBD" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-39-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT K
"TBD" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-40-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT L
"TBD" Wireless Products
A minimum of:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-41-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT M
"TBD" Wireless Products
Up to:
1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail)
1 Java Application ('Screensaver') where feasible
5 MMS
10 Wallpapers
5 Voicetones, if talent agreements so allow
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-42-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT N
Glossary
"MMS" stands for Multimedia Messaging Service — a store and forward messaging service that allows mobile subscribers to exchange multimedia messages with other mobile subscribers. MMS supports the transmission of additional media types: text, picture, audio, video and combinations of them.
"Realtone" or "Trutone" (also referred to as Master Tone) shall mean a digital, audio file containing an excerpt of a master recording of a musical composition, no more than 45 seconds in length, formatted for playback by a wireless device when such wireless device receives an incoming call.
"Screensaver" shall mean a Java application that replaces the image on a screen when the screen is not in use.
"Wallpaper" on a mobile phone shall mean the background pattern or picture against which mobile phone screen menus, icons, and other elements are displayed and moved around. A wallpaper image can be in a JPEG or a GIF file format. Each model/make of the mobile phone provides several pre- installed wallpaper images for the user to choose from. A user can also choose to download and install third-party wallpapers and use one of these instead.
"Voicetone" shall mean the audio speech sound heard by a caller, such as lines from a movie or spoken lyrics of a song.
"Ringtone" shall mean a digital, audio file containing a portion of a musical composition, no more than 45 seconds in length, formatted for playback by a wireless device when such wireless device receives an incoming call. For the avoidance of doubt, a Ring Tone may be either monophonic or polyphonic.
[Remaining definitions are TBD]
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-43-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT O Royalty Statement
TWENTIETH CENTURY FOX LICENSING & MERCHANDISING LICENSING STATEMENT OF ROYALTIES PAYABLE Licensee Contract Number:
Property Report Period Start Date:
Territory Report Period End Date:
Wallpaper Screensaver MMS Game Ringer Wallpaper Screensaver MMS Game Ringer Name/Likeness No Music No Music No Music No Music No Music Music Music Music Music Music None
1
2
3
4
5
6
7 Mail to: Twentieth Century Fox Licensing & Merchandising Total Net Sales
P.O. Box 900 Royalty Rates
Beverly Hills, CA 90213-0900 Royalty Earned
Attn: Jimyong Kim Less: Advance Balance
Street address: 2121 Avenue of the Stars, Room 4014 Royalty Payment Enclosed
Los Angeles, CA 90067 -or-New Advance Balance
This report is based on our books and records and is, to the best of my knowledge, true, correct and complete for the period stated and complies with all contractual requirements Minimum Guarantee Amount
NAME TITLE Payment Required to Meet Guarantee due on:
SIGNATURE DATE
NOTE: This report is required to be filed whether or not there were any sales for the period. For most licenses, the report is due no later than 30 days following every calendar quarter the agreement is active.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-44-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT P
News America Incorporated Statement of Privacy Principles
PREAMBLE
News America Incorporated ("News America") is the principal U.S. subsidiary of The News Corporation Limited, one of the world's largest media companies. The businesses of News America and its subsidiary, Fox Entertainment Group, Inc., include: the production and distribution of motion pictures, television programming and related consumer products (Twentieth Century Fox); television and cable broadcasting (the Fox Network, Fox owned television stations, Fox Sports Net, Fox Sports World, Fox Sports World Espaňol, Speedvision, Fox News Channel, FX and Fox Movie Channel); the publication of newspapers, books, magazines and promotional free-standing inserts (The New York Post, HarperCollins Publishers, The Weekly Standard and News America Marketing); sports franchises (the Los Angeles Dodgers); and marketing services (SmartSource/iGroup). In this Statement of Privacy Principles these businesses are collectively called the News America Group. At the News America Group we strive to enhance our relationship with consumers. Collecting personal information about consumers is vital to this effort. This Statement of Privacy Principles describes the policies and procedures of the News America Group's U.S.-based businesses for the collection, use, and dissemination of personally identifiable information about U.S. consumers in both the online and offline world. The Principles are based on the concepts of consumer notice and choice.* The News America Group is actively involved in the ongoing privacy debate and is continually monitoring privacy developments. Accordingly, from time to time we may modify these Privacy Principles to reflect changes in the law, self-regulatory initiatives and technology.
COLLECTION
The News America Group obtains personally identifiable information only if we believe the information is relevant to our relationship with a consumer or to assist us in creating a relationship with a consumer. We obtain personally identifiable information about consumers directly from consumers whenever possible, primarily in the course of providing them with products, information and services. When the News America Group obtains personally identifiable information from third-party sources, we use only reputable sources. In those instances where our information collection activities involve children, the News America Group provides special privacy protections.
NOTICE
When The News America Group collects personally identifiable information from consumers, we inform them about who is collecting the information, why it is being collected, how it is being collected, the types of uses we will make of the information, whether we will disclose the information to third parties and the types of third parties to whom we will disclose the information, and consumers' options regarding the use of their information.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-45-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
CHOICE
The News America Group provides consumers with an opportunity to choose whether the business unit that collects their personally identifiable information may use it for purposes that are other than those for which the information was submitted, and whether the information may be shared with third parties.
USE OF PERSONAL INFORMATION
Inside the News America Group, we use personally identifiable information only in a manner consistent with these Privacy Principles. Personally identifiable information is available only to our employees, agents and contractors who have a business reason to have access to such information. The News America Group uses personally identifiable information to respond to our customers and to make decisions about the goods and services that the News America Group or its business partners provide or hope to provide to consumers. Subject to the exercise of consumer choice, personally identifiable information may be used for different purposes, or shared with our business partners. A News America Group business entity may disclose personally identifiable information without providing consumers with a choice in order to protect the rights of the companies within the News America Group or their respective employees, agents and contractors; to protect the safety and security of visitors to web sites operated by News America Group companies; to protect against fraud or for risk management purposes; or to comply with the law or legal process. In addition, if a News America Group entity sells all or part of one of its businesses, makes a sale or transfer of assets or is otherwise involved in a business merger or transfer, personally identifiable information may be transferred to a third party as part of that transaction.
SECURITY
The News America Group uses reasonable administrative, technical, personnel, and physical measures to safeguard personally identifiable information in its possession against loss, theft, and unauthorized use, disclosure or modification.
ACCESS, CORRECTION AND DELETION
Whenever possible, each News America Group business unit permits consumers to have a right to see the personally identifiable information that it has collected from them, to correct any information that is incorrect and to instruct the business unit to delete the information from its files.
REMEDIES
Consumers may contact a privacy officer at each News America Group business unit regarding privacy complaints and disputes.
COMPLIANCE
Each News America Group company will take appropriate measures to ensure compliance with these Privacy Principles.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-46-
Source: GLU MOBILE INC, S-1/A, 3/19/2007
EXHIBIT Q
LICENSEE COMPETITORS
Jamdat Mforma Digital Bridges Digital Chocolate Game Loft Infospace
Any further additions and/or deletions shall be mutually agreed and addressed via amendment to this Agreement.
Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ
-47-
Source: GLU MOBILE INC, S-1/A, 3/19/2007 | Highlight the parts (if any) of this contract related to "Parties" that should be reviewed by a lawyer. Details: The two or more parties who signed the contract | {
"answer_start": [
309
],
"text": [
"Fox"
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Non-Transferable License" that should be reviewed by a lawyer. Details: Does the contract limit the ability of a party to transfer the license being granted to a third party?
Context: Exhibit 10.66
TRANSPORTATION CONTRACT
Astana January 31, 2000
PREAMBLE
JSC NOC KazakhOil, hereinafter referred to as the "Company", in the person of Executive Marketing Director Ms. A. M. Rakhimbekov, acting on the basis of the Power of Attorney (1) 1-13 dated January 3, 2000, on the one side and JSC Karakudukmunay, hereinafter referred to as the "Principal" in the person of General Director Mr. N. D. Klinchev and Financial Director Mr. R. Moore, acting on the basis of the Charter, on the other side, collectively referred to as the "Parties", have entered into this Transportation Contract (the "Contract") and hereby agree as follows:
1. SUBJECT OF THE CONTRACT
1.1 The Company, at the expense and on the instructions of the Principal, shall arrange transportation for export in batches to the far abroad of crude oil ("Commodity") belonging to the Principal and shall provide such other services in connection therewith as are provided in this Contract.
1.2 The volume of a batch of Commodity transported hereunder shall be determined in accordance with the monthly schedules of transit and distribution of Kazakhstany oil.
2. DEFINITIONS AND INTERPRETATION
2.1 As used in the Contract, the following terms have the meanings indicated:
"Buyer" means STASCO in its capacity as Buyer under the Offtake Agreement and any other person in its capacity as buyer under any Other Agreement.
"Commodity" is defined in item 1.1.
"Company" is defined in the Preamble to this Contract.
"Contract" is defined in the Preamble to this Contract.
"CPC Blend" means the blend of crude oil generally available at the CPC Terminal that complies with minimum specifications agreed by the Principal and STASCO pursuant to the Offtake Agreement.
"CPC Pipeline" means the pipeline being constructed by the Caspian Pipeline Consortium from the Tengiz field to Novorossiysk.
"CPC Pipeline Operational Date" means the last day of the month in which (i) the CPC Pipeline is completed, (ii) the Karakuduk Field is so connected with the CPC Pipeline (via pipeline, rail link, or otherwise) that Karakuduk Crude Oil can and will be evacuated to the CPC Terminal via the CPC Pipeline, (iii) the CPC Pipeline commences pumping commercial quantities of crude oil as determined by the Principal and STASCO pursuant to the Offtake Agreement, and (iv) if the CPC Pipeline is only transporting Commodity on a blend (as opposed to batch) basis, the Principal and STASCO have agreed on the specifications for CPC Blend pursuant to the Offtake Agreement.
"CPC Terminal" means the single buoy-mooring terminal being built by the Caspian Pipeline Consortium near Novorossiysk.
"DAF" has the meaning given to "delivered at frontier" in the Incoterms 1990.
"Delivery Basis" means (i) during the "Principal Period", delivery of Commodity on terms of DAF Adamovo, DAF Fenyeshlitke, DAF Budkovce, FOB sea-port Odessa, FOB sea-port Novorossiysk, or FOB sea-port Ventspils, as applicable, and (ii) during the "Secondary Period", delivery of Commodity on terms of FOB CPC Terminal, in each case in accordance with the route indicated in the monthly delivery schedules of the Company.
"Delivery Date" for a batch of Commodity means the date of execution of the last acceptance-delivery act/bill of lading for that batch of Commodity in accordance with item 4.1.vii.
"Delivery Month" means the period for delivery under the Offtake Agreement or the Other Agreement, as applicable.
"Effective Date" means the date of actual execution of this Contract by the Parties.
"FOB" has the meaning given to "free on board" in the Incoterms 1990.
"Initial Term" means the period commencing on the Effective Date and concluding on the last day of the month in which the fifth anniversary of the Offtake Agreement Effective Date falls.
"Karakuduk Crude Oil" means Commodity produced from the Karakuduk Field or from such other field as the Principal and the Company may agree.
"Karakuduk Field" means the Karakuduk oil field in the Mangistau Oblast of the Republic of Kazakhstan as more particularly described in the Petroleum Contract and the License.
"Offtake Agreement" means that certain Crude Oil Sale and Purchase Agreement between the Principal and STASCO dated 1 November 1999.
"Offtake Agreement Effective Date" means the "effective date" of and as defined in the Offtake Agreement.
"Other Agreement" means any agreement other than the Offtake Agreement pursuant to which the Principal sells Karakuduk Crude Oil.
"Parties" is defined in the Preamble to this Contract.
"Petroleum Contract" means that certain Agreement for Exploration, Development and Production of Oil in Karakuduk Oil Field in Mangistau Oblast of the Republic of Kazakhstan between the Ministry of Oil and Gas Industries of the Republic of Kazakhstan for and on behalf of the Government of the Republic of Kazakhstan and the Principal.
"License" means License No. MG#249 (Oil) dated 25 June 1995 (as subsequently amended) granted to the Principal by the Government of the Republic of Kazakhstan.
"Principal" is defined in the Preamble to this Contract.
"Principal Period" means the period from the Effective Date to the CPC Pipeline Operational Date.
"REBCO" means Commodity that satisfies the specifications of TU-39-1623-93 "Russian oil delivered for export; Specifications" for export to the far abroad.
2
"Secondary Period" means the period from the CPC Pipeline Operational Date to the date of termination of this Contract (inclusive).
"STASCO" means Shell Trading International Limited acting through its agent Shell International Trading and Shipping Company Limited.
"Tenge" means official currency of the Republic of Kazakhstan.
2.2 In this Contract, unless the context otherwise requires:
i. Headings are used for convenience only and do not affect the interpretation of this Contract;
ii. any expression, which means individual, includes any company, Partnership, trust, joint venture, association, corporation, or other corporate organization and vice versa;
iii. references to Articles and Sections, unless otherwise expressly provided in this Contract, are references to articles and sections of this Contract;
iv. except as otherwise expressly provided, any reference to a document includes an amendment or supplement to, or replacement or renovation of, that document;
v. a reference to any Party to this Agreement and to any other document includes that Party's legal successors and assigns;
vi. words, which mean the singular, also include the plural and vice versa;
vii. the word "including" means "including without limitation";
viii. a "business day" means a day (other than a Saturday or a Sunday) on which banks are open for ordinary banking business in London;
ix. "tonne" is a metric ton; and
x. a "year" means a calendar year, a "quarter" means a calendar quarter, and a "month" means a calendar month.
3. QUALITY
3.1 Unless otherwise agreed by the Parties, the Principal shall at all times deliver to the Company Karakuduk Commodity pursuant to this Contract. The Company shall ensure that (i) during the Principal Period, the quality of Commodity delivered at the relevant delivery point shall be REBCO, and (ii) during the Secondary Period, the quality of Commodity delivered at the CPC Terminal shall be Karakuduk Commodity for segregated batch deliveries or shall be CPC Blend for deliveries for which segregated batch delivery is not available.
4. OBLIGATIONS OF THE PARTIES
4.1 At all times during the term of this Contract, the Company shall:
(i) Assist in obtaining required&sbsp;official export permissions (certificate of origin of the Commodity at place the load output, customs declaration on Commodity output) for release of the batch of Commodity being delivered from the customs territory of the Republic of Kazakhstan;
3
(ii) accept Karakuduk Commodity from the Principal at Metering Point 719 (PSP Samara of the Western branch office of KazTransOil) and arrange its transportation for export in accordance with the Delivery Basis;
(iii) execute all customs formalities to carry out transit transportation of the batch of Commodity through the territory of Russian Federation and the countries of the C.I.S.;
(iv) procure sending of a route telegram to AK Transneft;
(v) procure delivery of the indicated Commodity to the Buyer on the Delivery Basis, less operating losses in transportation of the Commodity, that are charged to the Principal's account;
(vi) procure berthing for the Buyer's tanker and delivery of the batch of Commodity to such tanker through the Company's agents in the relevant port;
(vii) timely present to the Principal the Acts of acceptance-delivery of the Commodity (oil)/Bills of Lading executed at the Delivery Basis. (During the Principal Period, Acts of acceptance-delivery executed on the DAF basis (Adamovo, Fenyeshlitke or Budkovce) shall be presented in one copy, Bills of Lading and sets of shipping documents attached to them executed on the FOB basis (Odessa, Novorossiysk or Ventspils) shall be presented in the number of copies specified in the Buyer's instructions, and during the Secondary Period, such documents as may be required at that time executed on the FOB CPC Terminal basis shall be presented according to the list and in the number of copies as it would be agreed between Principal, Company and CPC;
(viii) provide the Principal with information on the status of execution of this Contract;
(ix) on the Principal's request, prepare analyses of the Buyer's calculations of prices;
(x) cooperate with the Principal, to render, if possible, such assistance that can prove necessary for the Principal to perform its obligations under the Offtake Agreement or any other contract with the Buyer regarding Commodity; and
(xi) during the term of this Contract, observe all provisions of this Contract and other terms and conditions agreed upon with the Principal.
4.2 At all times during the term of this Contract, the Principal shall:
(i) Deliver Karakuduk Commodity to the Company at Metering Point 719 (PSP Samara of the Western branch office of KazTransOil) in the amount determined in accordance with item 1.2 of this Agreement;
(ii) independently conclude contracts with the Buyer on selling Crude Oil for export and submit a copy of each such contract with the Buyer to the Company 5 days before the beginning of the relevant Delivery Month;
(iii) obtain, at its own expense, required official export permissions (certificate of origin of the Commodity at place of the load output, customs declaration on Commodity output) for release of the batch of Commodity being delivered from the customs territory of the Republic of Kazakstan and deliver them before the 5th day of the Delivery Month;
(iv) if the Delivery Basis is DAF, provide the Company before the 5th day of the Delivery Month with a copy of confirmation from AK Transneft on its readiness to accept the agreed batch of Commodity from coordinators at the relevant directions;
4
(v) if the Delivery Basis is FOB, to provide the Company and the Company's agent in the relevant port 5 days before the agreed upon loading&bbsp;period (Laycan) with the Buyer's instructions on filling in the shipping documents, including name of the vessel, its characteristics, loading period (Laycan), lay time and other necessary data;
(vi) make a 100% pre-payment for transportation of the batch of Commodity through the territory of Russian Federation and the CIS countries, in accordance with the Payment Order of AK Transneft;
(vii) pay the additional expenses if the transport tariffs are increased, providing the Company presents the appropriate documents;
(viii) reimburse the Company for the cost of execution of the customs declaration at the Energy customs office of the RF in accordance with the Company's invoice;
(ix) reimburse the Company for all expenses reasonably incurred in connection with the performance by the Company of its obligations under this Contract within 30 (thirty) days of delivery to the Principal of proper invoices and other supporting documents for such expenses;
(x) pay the Company's fee for the services rendered under Article 5 hereof, in accordance with the invoice and tax invoice;
(xi) provide copies of all payment documents;
(xii) pay all transportation and other expense of KazTransOil on the territory of Kazakhstan under its contract with KazTransOil;
(xiii) to make all necessary payments to the budget of the Republic of Kazakhstan related to excise taxes, VAT and other obligatory payments to the budget in accordance with the tax legislation
(xiv) during the term of this Contract, observe all provisions of this Contract and other terms and conditions agreed upon with the Company.
5. COMPANY'S FEE AND PAYMENT TERMS
5.1 The Principal shall pay the Company a fee of $1.00 (one dollar), inclusive of VAT, per one net tonne of Commodity shipped pursuant to this Contract.
5.2 The Principal shall pay the commission fee for each delivered batch of Commodity to the Company's account within 30 (thirty) banking days after the Delivery Date.
5.3 The payment shall be made in accordance with the invoice presented by the Company and the tax invoice (original or a fax copy) in Tenge at the official exchange rate of the National Bank of the Republic of Kazakhstan effective on the Delivery Date in accordance with item 4.1.vii.
6. PERIOD AND TERMS OF LOADING
6.1 Commodity will be shipped by the Company in batches during the period from the Effective Date through the term of this Contract subject to (i) the Principal having the requisite supplies of Commodity and (ii) the Principal having entered into the Offtake Agreement or another Agreement with the Buyer.
5
6.2 The Company shall have a right to deliver Commodity to the Buyer with a permissible +/-5% deviation from the number of batches of Commodity.
7. OWNERSHIP RIGHT AND RISK OF ACCIDENTAL LOSS
7.1 Ownership right and risk of loss with respect to all Commodity transported under this Contract, shall remain with the Principal at all times prior to transfer of the ownership right and risk of loss with respect to such Commodity to the Buyer in accordance with the Delivery Basis. At no time shall the Company have the ownership right to any Commodity transported under this Contract.
7.2 At any time in accordance with reasonable requirements of the Principal, the Company shall confirm the Principal's ownership rights to Commodity, transported under this Contract.
7.3 At any time the Principal may insure this Contract at his own expense, and the Company shall render feasible assistance to the Principal in this case.
8. LIABILITY; INDEMNITY
8.1 The Parties shall be liable for non-execution and/or improper execution of their obligations under this Agreement in accordance with the legislation of the Republic of Kazakstan.
8.2 In case if the Principal violates the conditions of this Contract, and such violation entails infringement of the Off-take Agreement conditions by the Principal, then the Principal shall be solely liable in front of the Purchaser for such violations. In addition, the Company shall not be liable in front of the Principal or the Purchaser hereunder.
8.3 In case if violation by the Principal of the Off-take Agreement conditions takes place due to infringement by the Company of its liabilities in front of the Principal under this Contract, the Company shall be soley liable in front of the Principal for such losses resulting from such violation , evidenced and supported by confirming documents ..
9. TERM OF THE CONTRACT
9.1 In accordance with items 9.3, 9.4, and 10.3, this Contract shall come into force on the Effective Date, remain effective throughout the Initial Term, and be prolonged, or further extended automatically for a period of 12
months, each such extension commencing at the end of the last day of the Initial Term or the relevant anniversary thereof, unless either Party serves written notice of termination on the other Party at least 65 days prior to the end of the Initial Term, or any subsequent extension.
9.2 Any notice of termination served by any Party with violation of the period of notice required by item 9.1 shall be invalid and of no effect whatsoever.
9.3 If the Company fails to perform within 30 days upon notice from the Principal on nonperformance by the Company of any of its obligations under this Contract, and keeps non-performing it, then the Principal may upon expiry of the indicated 30 day period, terminate this Contract, with obligatory accounts settling.
6
9.4 If the Principal fails to perform within 30 days upon notice from the Company on nonperformance by the Principal of any of its obligations under this Contract, and keeps non-performing it, then the Company is entitled, upon expiry of such 30 day period, to terminate this Contract, with obligatory accounts settling.
10. FORCE-MAJEURE
10.1 Except for the obligations to make any payment, required by this Contract (which shall not be subject to relief under this item), a Party shall not be in breach of this Contract and liable to the other Party for any failure to fulfil any obligation under this Contract to the extent any fulfillment has been interfered with, hindered, delayed, or prevented by any circumstance whatsoever, which is not reasonably within the control of and is unforeseeable by such Party and if such Party exercised due diligence, including acts of God, fire, flood, freezing, landslides, lightning, earthquakes, fire, storm, floods, washouts, and other natural disasters, wars (declared or undeclared), insurrections, riots, civil disturbances, epidemics, quarantine restrictions, blockade, embargo, strike, lockouts, labor disputes, or restrictions imposed by any government.
10.2 The Party affected by the indicated circumstances shall be excused from performance or accurate performance, as the case may be, of such obligation for so long as such circumstance continues to exist. The Party affected shall promptly, at any rate, within twenty-four (24) hours from the receipt of information about the occurrence of such event must notify the other Party on the occurrence of such circumstances and on the obligations affected.
10.3 If performance of the obligations by any Party under this Contract have been delayed for a period of 3 months, the other Party shall be entitled to terminate this Contract thereafter by giving notice to that effect to the Party claiming relief under Section 10, with obligatory accounts settling.
10.4 No circumstance described in item 10.1 shall result in prolongation of the validity term of this Contract.
11. SETTLEMENT OF DISPUTES AND APPLICABLE LAW
11.1 In the event of any disputes arousal under this Contract, the Parties shall exercise all reasonable efforts to resolve them by negotiations.
11.2 In the event that resolution of the disputes by negotiations is impossible, they shall be subject to court consideration at the defendant's location.
11.3 Effective legislation of the Republic of Kazakhstan shall apply to any relations of the Parties arising out of this Contract.
12. MISCELLANEOUS TERMS AND CONDITIONS
12.1 Neither Party shall be entitled to assign any of its rights or duties hereunder to any third parties without a written consent of the other Party thereto.
7
12.2 Any amendments or alterations to this Contract shall be considered valid only if executed in writing and signed by the authorized representatives of the Company and the Principal. Usage of facsimile communication for signing the above mentioned amendments and alterations shall be acceptable.
12.3 From and after the Effective Date, all prior negotiations and correspondence pertinent to the Contract shall have no legal force.
12.4 In all other matters not stipulated in this Contract, relations of the Parties shall be governed by the legislation of the Republic of Kazakhstan in force.
12.5 The Parties shall guarantee observance of confidentiality in respect to any information and documentation received hereunder; provided, that nothing in
this item shall restrict either Party from disclosing details of or relating to this Contract information (i) to any shareholder of such Party, (ii) to any creditor to such Party, (iii) to any person considering to become a shareholder of or creditor to such Party, (iv) to the extent necessary to comply with any laws or regulations applicable to such Party.
12.6 Any attachments to this Contract shall be an integral part hereof.
12.7 This Contract has been executed in 2 (two) original copies in both the Russian language and the English language, one copy in each language for each of the Parties, in addition, the Russian text of the Contract has priority.
13. REPRESENTATIONS
13.1 Each Party represents to the other Party that:
i. It is duly organized and validly existing under the laws of the jurisdiction of its incorporation or registration and, if provided under such laws, in good standing;
ii. it has the power to sign and deliver this Contract and has undertaken all necessary measures to authorize such signing, delivery and execution;
iii. such signing and delivery do not violate or conflict with any law applicable to it, any provisions of its constitutional documents, any orders or judgements of any court or another agency of government applicable to it or any of its assets or any contractual restrictions binding on or affecting it or any of its assets;
iv. all governmental and other permits which are required to have been obtained by it with respect to this Contract, have been obtained and have full legal force; and all conditions of any such permits have been complied with; and
v obligations of such Party under this Contract constitute its legal, valid and binding obligations, enforceable in accordance with its respective terms (subject to applicable bankruptcy, re-organization, insolvency, moratorium or similar laws affecting creditors' rights generally and subject, as to the enforceability, to equitable principles of general application (regardless of whether enforcement on execution of this Contract is sought in a proceeding in equity or under law)).
8
14. MISCELLANEOUS
14.1 This Contract constitutes the entire agreement of the Parties with respect to the subject matter of this Contract and the Parties acknowledge that they do not enter into this Contract regardless of any previous contacts between the Parties or their affiliates.
14.2 Any amendments or alterations to any of the terms of this Contract shall be effective unless they are registered in writing and signed by or on behalf of each of the Parties; no waiver of any provision hereof shall be effective unless it is in writing and signed by the Party, against which such waiver is sought to be enforced.
14.3 Except as expressly provided herein, the rights, authorities and remedies, provided in this Contract, are cumulative and not exclusive of any rights, authorities and remedies provided by the law.
14.4 Except as expressly provided herein no delay or omission on the part of either Party in exercising any rights, authorities or remedies, provided by law or under this Contract, nor any indulgence granted by any Party to another Party, shall impair such rights, authorities or remedies, or be construed as a waiver thereof; moreover, no single or partial exercise of any right, power or remedy provided by law or under this Contract shall hinder other or further exercise thereof, as well as exercise of any other right, power or remedy.
14.5 This Contract does not confer rights or remedies upon any person other than the Principal and the Company.
15. LEGAL ADDRESSES AND PROPS OF THE PARTIES
COMPANY: PRINCIPAL
JSC NOC KazakhOil JSC Karakudukmunay 473000, Republic of Kazakhstan, Astana, 466200, Aktau, Mangistau oblast 60, Republic avenue District 3, Building 82 Tel.: (3172) 280609, fax 327724 Tel.: (3292) 513795, fax 518336 TRN 600700150675 TRN 430600001175
Bank props: Bank props: Tenge account (1) 000467052 AB Neftebank, Aktau in Akmola affiliate of Tenge account (1) 609614 JSC "Almaty trade and finance bank", Astana IAT 195301730 IAT 192901705
/s/ Amangeldy Tlegenov &bbsp; /s/ Nikolai D. Klinchev
- -------------------------------------------- ------------------------------- A.M. Rakhimbekov Nikolai Klinchev
/s/ Richard J. Moore ------------------------------- Richard Moore
9 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 10.66
TRANSPORTATION CONTRACT
Astana January 31, 2000
PREAMBLE
JSC NOC KazakhOil, hereinafter referred to as the "Company", in the person of Executive Marketing Director Ms. A. M. Rakhimbekov, acting on the basis of the Power of Attorney (1) 1-13 dated January 3, 2000, on the one side and JSC Karakudukmunay, hereinafter referred to as the "Principal" in the person of General Director Mr. N. D. Klinchev and Financial Director Mr. R. Moore, acting on the basis of the Charter, on the other side, collectively referred to as the "Parties", have entered into this Transportation Contract (the "Contract") and hereby agree as follows:
1. SUBJECT OF THE CONTRACT
1.1 The Company, at the expense and on the instructions of the Principal, shall arrange transportation for export in batches to the far abroad of crude oil ("Commodity") belonging to the Principal and shall provide such other services in connection therewith as are provided in this Contract.
1.2 The volume of a batch of Commodity transported hereunder shall be determined in accordance with the monthly schedules of transit and distribution of Kazakhstany oil.
2. DEFINITIONS AND INTERPRETATION
2.1 As used in the Contract, the following terms have the meanings indicated:
"Buyer" means STASCO in its capacity as Buyer under the Offtake Agreement and any other person in its capacity as buyer under any Other Agreement.
"Commodity" is defined in item 1.1.
"Company" is defined in the Preamble to this Contract.
"Contract" is defined in the Preamble to this Contract.
"CPC Blend" means the blend of crude oil generally available at the CPC Terminal that complies with minimum specifications agreed by the Principal and STASCO pursuant to the Offtake Agreement.
"CPC Pipeline" means the pipeline being constructed by the Caspian Pipeline Consortium from the Tengiz field to Novorossiysk.
"CPC Pipeline Operational Date" means the last day of the month in which (i) the CPC Pipeline is completed, (ii) the Karakuduk Field is so connected with the CPC Pipeline (via pipeline, rail link, or otherwise) that Karakuduk Crude Oil can and will be evacuated to the CPC Terminal via the CPC Pipeline, (iii) the CPC Pipeline commences pumping commercial quantities of crude oil as determined by the Principal and STASCO pursuant to the Offtake Agreement, and (iv) if the CPC Pipeline is only transporting Commodity on a blend (as opposed to batch) basis, the Principal and STASCO have agreed on the specifications for CPC Blend pursuant to the Offtake Agreement.
"CPC Terminal" means the single buoy-mooring terminal being built by the Caspian Pipeline Consortium near Novorossiysk.
"DAF" has the meaning given to "delivered at frontier" in the Incoterms 1990.
"Delivery Basis" means (i) during the "Principal Period", delivery of Commodity on terms of DAF Adamovo, DAF Fenyeshlitke, DAF Budkovce, FOB sea-port Odessa, FOB sea-port Novorossiysk, or FOB sea-port Ventspils, as applicable, and (ii) during the "Secondary Period", delivery of Commodity on terms of FOB CPC Terminal, in each case in accordance with the route indicated in the monthly delivery schedules of the Company.
"Delivery Date" for a batch of Commodity means the date of execution of the last acceptance-delivery act/bill of lading for that batch of Commodity in accordance with item 4.1.vii.
"Delivery Month" means the period for delivery under the Offtake Agreement or the Other Agreement, as applicable.
"Effective Date" means the date of actual execution of this Contract by the Parties.
"FOB" has the meaning given to "free on board" in the Incoterms 1990.
"Initial Term" means the period commencing on the Effective Date and concluding on the last day of the month in which the fifth anniversary of the Offtake Agreement Effective Date falls.
"Karakuduk Crude Oil" means Commodity produced from the Karakuduk Field or from such other field as the Principal and the Company may agree.
"Karakuduk Field" means the Karakuduk oil field in the Mangistau Oblast of the Republic of Kazakhstan as more particularly described in the Petroleum Contract and the License.
"Offtake Agreement" means that certain Crude Oil Sale and Purchase Agreement between the Principal and STASCO dated 1 November 1999.
"Offtake Agreement Effective Date" means the "effective date" of and as defined in the Offtake Agreement.
"Other Agreement" means any agreement other than the Offtake Agreement pursuant to which the Principal sells Karakuduk Crude Oil.
"Parties" is defined in the Preamble to this Contract.
"Petroleum Contract" means that certain Agreement for Exploration, Development and Production of Oil in Karakuduk Oil Field in Mangistau Oblast of the Republic of Kazakhstan between the Ministry of Oil and Gas Industries of the Republic of Kazakhstan for and on behalf of the Government of the Republic of Kazakhstan and the Principal.
"License" means License No. MG#249 (Oil) dated 25 June 1995 (as subsequently amended) granted to the Principal by the Government of the Republic of Kazakhstan.
"Principal" is defined in the Preamble to this Contract.
"Principal Period" means the period from the Effective Date to the CPC Pipeline Operational Date.
"REBCO" means Commodity that satisfies the specifications of TU-39-1623-93 "Russian oil delivered for export; Specifications" for export to the far abroad.
2
"Secondary Period" means the period from the CPC Pipeline Operational Date to the date of termination of this Contract (inclusive).
"STASCO" means Shell Trading International Limited acting through its agent Shell International Trading and Shipping Company Limited.
"Tenge" means official currency of the Republic of Kazakhstan.
2.2 In this Contract, unless the context otherwise requires:
i. Headings are used for convenience only and do not affect the interpretation of this Contract;
ii. any expression, which means individual, includes any company, Partnership, trust, joint venture, association, corporation, or other corporate organization and vice versa;
iii. references to Articles and Sections, unless otherwise expressly provided in this Contract, are references to articles and sections of this Contract;
iv. except as otherwise expressly provided, any reference to a document includes an amendment or supplement to, or replacement or renovation of, that document;
v. a reference to any Party to this Agreement and to any other document includes that Party's legal successors and assigns;
vi. words, which mean the singular, also include the plural and vice versa;
vii. the word "including" means "including without limitation";
viii. a "business day" means a day (other than a Saturday or a Sunday) on which banks are open for ordinary banking business in London;
ix. "tonne" is a metric ton; and
x. a "year" means a calendar year, a "quarter" means a calendar quarter, and a "month" means a calendar month.
3. QUALITY
3.1 Unless otherwise agreed by the Parties, the Principal shall at all times deliver to the Company Karakuduk Commodity pursuant to this Contract. The Company shall ensure that (i) during the Principal Period, the quality of Commodity delivered at the relevant delivery point shall be REBCO, and (ii) during the Secondary Period, the quality of Commodity delivered at the CPC Terminal shall be Karakuduk Commodity for segregated batch deliveries or shall be CPC Blend for deliveries for which segregated batch delivery is not available.
4. OBLIGATIONS OF THE PARTIES
4.1 At all times during the term of this Contract, the Company shall:
(i) Assist in obtaining required&sbsp;official export permissions (certificate of origin of the Commodity at place the load output, customs declaration on Commodity output) for release of the batch of Commodity being delivered from the customs territory of the Republic of Kazakhstan;
3
(ii) accept Karakuduk Commodity from the Principal at Metering Point 719 (PSP Samara of the Western branch office of KazTransOil) and arrange its transportation for export in accordance with the Delivery Basis;
(iii) execute all customs formalities to carry out transit transportation of the batch of Commodity through the territory of Russian Federation and the countries of the C.I.S.;
(iv) procure sending of a route telegram to AK Transneft;
(v) procure delivery of the indicated Commodity to the Buyer on the Delivery Basis, less operating losses in transportation of the Commodity, that are charged to the Principal's account;
(vi) procure berthing for the Buyer's tanker and delivery of the batch of Commodity to such tanker through the Company's agents in the relevant port;
(vii) timely present to the Principal the Acts of acceptance-delivery of the Commodity (oil)/Bills of Lading executed at the Delivery Basis. (During the Principal Period, Acts of acceptance-delivery executed on the DAF basis (Adamovo, Fenyeshlitke or Budkovce) shall be presented in one copy, Bills of Lading and sets of shipping documents attached to them executed on the FOB basis (Odessa, Novorossiysk or Ventspils) shall be presented in the number of copies specified in the Buyer's instructions, and during the Secondary Period, such documents as may be required at that time executed on the FOB CPC Terminal basis shall be presented according to the list and in the number of copies as it would be agreed between Principal, Company and CPC;
(viii) provide the Principal with information on the status of execution of this Contract;
(ix) on the Principal's request, prepare analyses of the Buyer's calculations of prices;
(x) cooperate with the Principal, to render, if possible, such assistance that can prove necessary for the Principal to perform its obligations under the Offtake Agreement or any other contract with the Buyer regarding Commodity; and
(xi) during the term of this Contract, observe all provisions of this Contract and other terms and conditions agreed upon with the Principal.
4.2 At all times during the term of this Contract, the Principal shall:
(i) Deliver Karakuduk Commodity to the Company at Metering Point 719 (PSP Samara of the Western branch office of KazTransOil) in the amount determined in accordance with item 1.2 of this Agreement;
(ii) independently conclude contracts with the Buyer on selling Crude Oil for export and submit a copy of each such contract with the Buyer to the Company 5 days before the beginning of the relevant Delivery Month;
(iii) obtain, at its own expense, required official export permissions (certificate of origin of the Commodity at place of the load output, customs declaration on Commodity output) for release of the batch of Commodity being delivered from the customs territory of the Republic of Kazakstan and deliver them before the 5th day of the Delivery Month;
(iv) if the Delivery Basis is DAF, provide the Company before the 5th day of the Delivery Month with a copy of confirmation from AK Transneft on its readiness to accept the agreed batch of Commodity from coordinators at the relevant directions;
4
(v) if the Delivery Basis is FOB, to provide the Company and the Company's agent in the relevant port 5 days before the agreed upon loading&bbsp;period (Laycan) with the Buyer's instructions on filling in the shipping documents, including name of the vessel, its characteristics, loading period (Laycan), lay time and other necessary data;
(vi) make a 100% pre-payment for transportation of the batch of Commodity through the territory of Russian Federation and the CIS countries, in accordance with the Payment Order of AK Transneft;
(vii) pay the additional expenses if the transport tariffs are increased, providing the Company presents the appropriate documents;
(viii) reimburse the Company for the cost of execution of the customs declaration at the Energy customs office of the RF in accordance with the Company's invoice;
(ix) reimburse the Company for all expenses reasonably incurred in connection with the performance by the Company of its obligations under this Contract within 30 (thirty) days of delivery to the Principal of proper invoices and other supporting documents for such expenses;
(x) pay the Company's fee for the services rendered under Article 5 hereof, in accordance with the invoice and tax invoice;
(xi) provide copies of all payment documents;
(xii) pay all transportation and other expense of KazTransOil on the territory of Kazakhstan under its contract with KazTransOil;
(xiii) to make all necessary payments to the budget of the Republic of Kazakhstan related to excise taxes, VAT and other obligatory payments to the budget in accordance with the tax legislation
(xiv) during the term of this Contract, observe all provisions of this Contract and other terms and conditions agreed upon with the Company.
5. COMPANY'S FEE AND PAYMENT TERMS
5.1 The Principal shall pay the Company a fee of $1.00 (one dollar), inclusive of VAT, per one net tonne of Commodity shipped pursuant to this Contract.
5.2 The Principal shall pay the commission fee for each delivered batch of Commodity to the Company's account within 30 (thirty) banking days after the Delivery Date.
5.3 The payment shall be made in accordance with the invoice presented by the Company and the tax invoice (original or a fax copy) in Tenge at the official exchange rate of the National Bank of the Republic of Kazakhstan effective on the Delivery Date in accordance with item 4.1.vii.
6. PERIOD AND TERMS OF LOADING
6.1 Commodity will be shipped by the Company in batches during the period from the Effective Date through the term of this Contract subject to (i) the Principal having the requisite supplies of Commodity and (ii) the Principal having entered into the Offtake Agreement or another Agreement with the Buyer.
5
6.2 The Company shall have a right to deliver Commodity to the Buyer with a permissible +/-5% deviation from the number of batches of Commodity.
7. OWNERSHIP RIGHT AND RISK OF ACCIDENTAL LOSS
7.1 Ownership right and risk of loss with respect to all Commodity transported under this Contract, shall remain with the Principal at all times prior to transfer of the ownership right and risk of loss with respect to such Commodity to the Buyer in accordance with the Delivery Basis. At no time shall the Company have the ownership right to any Commodity transported under this Contract.
7.2 At any time in accordance with reasonable requirements of the Principal, the Company shall confirm the Principal's ownership rights to Commodity, transported under this Contract.
7.3 At any time the Principal may insure this Contract at his own expense, and the Company shall render feasible assistance to the Principal in this case.
8. LIABILITY; INDEMNITY
8.1 The Parties shall be liable for non-execution and/or improper execution of their obligations under this Agreement in accordance with the legislation of the Republic of Kazakstan.
8.2 In case if the Principal violates the conditions of this Contract, and such violation entails infringement of the Off-take Agreement conditions by the Principal, then the Principal shall be solely liable in front of the Purchaser for such violations. In addition, the Company shall not be liable in front of the Principal or the Purchaser hereunder.
8.3 In case if violation by the Principal of the Off-take Agreement conditions takes place due to infringement by the Company of its liabilities in front of the Principal under this Contract, the Company shall be soley liable in front of the Principal for such losses resulting from such violation , evidenced and supported by confirming documents ..
9. TERM OF THE CONTRACT
9.1 In accordance with items 9.3, 9.4, and 10.3, this Contract shall come into force on the Effective Date, remain effective throughout the Initial Term, and be prolonged, or further extended automatically for a period of 12
months, each such extension commencing at the end of the last day of the Initial Term or the relevant anniversary thereof, unless either Party serves written notice of termination on the other Party at least 65 days prior to the end of the Initial Term, or any subsequent extension.
9.2 Any notice of termination served by any Party with violation of the period of notice required by item 9.1 shall be invalid and of no effect whatsoever.
9.3 If the Company fails to perform within 30 days upon notice from the Principal on nonperformance by the Company of any of its obligations under this Contract, and keeps non-performing it, then the Principal may upon expiry of the indicated 30 day period, terminate this Contract, with obligatory accounts settling.
6
9.4 If the Principal fails to perform within 30 days upon notice from the Company on nonperformance by the Principal of any of its obligations under this Contract, and keeps non-performing it, then the Company is entitled, upon expiry of such 30 day period, to terminate this Contract, with obligatory accounts settling.
10. FORCE-MAJEURE
10.1 Except for the obligations to make any payment, required by this Contract (which shall not be subject to relief under this item), a Party shall not be in breach of this Contract and liable to the other Party for any failure to fulfil any obligation under this Contract to the extent any fulfillment has been interfered with, hindered, delayed, or prevented by any circumstance whatsoever, which is not reasonably within the control of and is unforeseeable by such Party and if such Party exercised due diligence, including acts of God, fire, flood, freezing, landslides, lightning, earthquakes, fire, storm, floods, washouts, and other natural disasters, wars (declared or undeclared), insurrections, riots, civil disturbances, epidemics, quarantine restrictions, blockade, embargo, strike, lockouts, labor disputes, or restrictions imposed by any government.
10.2 The Party affected by the indicated circumstances shall be excused from performance or accurate performance, as the case may be, of such obligation for so long as such circumstance continues to exist. The Party affected shall promptly, at any rate, within twenty-four (24) hours from the receipt of information about the occurrence of such event must notify the other Party on the occurrence of such circumstances and on the obligations affected.
10.3 If performance of the obligations by any Party under this Contract have been delayed for a period of 3 months, the other Party shall be entitled to terminate this Contract thereafter by giving notice to that effect to the Party claiming relief under Section 10, with obligatory accounts settling.
10.4 No circumstance described in item 10.1 shall result in prolongation of the validity term of this Contract.
11. SETTLEMENT OF DISPUTES AND APPLICABLE LAW
11.1 In the event of any disputes arousal under this Contract, the Parties shall exercise all reasonable efforts to resolve them by negotiations.
11.2 In the event that resolution of the disputes by negotiations is impossible, they shall be subject to court consideration at the defendant's location.
11.3 Effective legislation of the Republic of Kazakhstan shall apply to any relations of the Parties arising out of this Contract.
12. MISCELLANEOUS TERMS AND CONDITIONS
12.1 Neither Party shall be entitled to assign any of its rights or duties hereunder to any third parties without a written consent of the other Party thereto.
7
12.2 Any amendments or alterations to this Contract shall be considered valid only if executed in writing and signed by the authorized representatives of the Company and the Principal. Usage of facsimile communication for signing the above mentioned amendments and alterations shall be acceptable.
12.3 From and after the Effective Date, all prior negotiations and correspondence pertinent to the Contract shall have no legal force.
12.4 In all other matters not stipulated in this Contract, relations of the Parties shall be governed by the legislation of the Republic of Kazakhstan in force.
12.5 The Parties shall guarantee observance of confidentiality in respect to any information and documentation received hereunder; provided, that nothing in
this item shall restrict either Party from disclosing details of or relating to this Contract information (i) to any shareholder of such Party, (ii) to any creditor to such Party, (iii) to any person considering to become a shareholder of or creditor to such Party, (iv) to the extent necessary to comply with any laws or regulations applicable to such Party.
12.6 Any attachments to this Contract shall be an integral part hereof.
12.7 This Contract has been executed in 2 (two) original copies in both the Russian language and the English language, one copy in each language for each of the Parties, in addition, the Russian text of the Contract has priority.
13. REPRESENTATIONS
13.1 Each Party represents to the other Party that:
i. It is duly organized and validly existing under the laws of the jurisdiction of its incorporation or registration and, if provided under such laws, in good standing;
ii. it has the power to sign and deliver this Contract and has undertaken all necessary measures to authorize such signing, delivery and execution;
iii. such signing and delivery do not violate or conflict with any law applicable to it, any provisions of its constitutional documents, any orders or judgements of any court or another agency of government applicable to it or any of its assets or any contractual restrictions binding on or affecting it or any of its assets;
iv. all governmental and other permits which are required to have been obtained by it with respect to this Contract, have been obtained and have full legal force; and all conditions of any such permits have been complied with; and
v obligations of such Party under this Contract constitute its legal, valid and binding obligations, enforceable in accordance with its respective terms (subject to applicable bankruptcy, re-organization, insolvency, moratorium or similar laws affecting creditors' rights generally and subject, as to the enforceability, to equitable principles of general application (regardless of whether enforcement on execution of this Contract is sought in a proceeding in equity or under law)).
8
14. MISCELLANEOUS
14.1 This Contract constitutes the entire agreement of the Parties with respect to the subject matter of this Contract and the Parties acknowledge that they do not enter into this Contract regardless of any previous contacts between the Parties or their affiliates.
14.2 Any amendments or alterations to any of the terms of this Contract shall be effective unless they are registered in writing and signed by or on behalf of each of the Parties; no waiver of any provision hereof shall be effective unless it is in writing and signed by the Party, against which such waiver is sought to be enforced.
14.3 Except as expressly provided herein, the rights, authorities and remedies, provided in this Contract, are cumulative and not exclusive of any rights, authorities and remedies provided by the law.
14.4 Except as expressly provided herein no delay or omission on the part of either Party in exercising any rights, authorities or remedies, provided by law or under this Contract, nor any indulgence granted by any Party to another Party, shall impair such rights, authorities or remedies, or be construed as a waiver thereof; moreover, no single or partial exercise of any right, power or remedy provided by law or under this Contract shall hinder other or further exercise thereof, as well as exercise of any other right, power or remedy.
14.5 This Contract does not confer rights or remedies upon any person other than the Principal and the Company.
15. LEGAL ADDRESSES AND PROPS OF THE PARTIES
COMPANY: PRINCIPAL
JSC NOC KazakhOil JSC Karakudukmunay 473000, Republic of Kazakhstan, Astana, 466200, Aktau, Mangistau oblast 60, Republic avenue District 3, Building 82 Tel.: (3172) 280609, fax 327724 Tel.: (3292) 513795, fax 518336 TRN 600700150675 TRN 430600001175
Bank props: Bank props: Tenge account (1) 000467052 AB Neftebank, Aktau in Akmola affiliate of Tenge account (1) 609614 JSC "Almaty trade and finance bank", Astana IAT 195301730 IAT 192901705
/s/ Amangeldy Tlegenov &bbsp; /s/ Nikolai D. Klinchev
- -------------------------------------------- ------------------------------- A.M. Rakhimbekov Nikolai Klinchev
/s/ Richard J. Moore ------------------------------- Richard Moore
9 | Highlight the parts (if any) of this contract related to "Non-Transferable License" that should be reviewed by a lawyer. Details: Does the contract limit the ability of a party to transfer the license being granted to a third party? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Notice Period To Terminate Renewal" that should be reviewed by a lawyer. Details: What is the notice period required to terminate renewal?
Context: EXHIBIT 10.46
WEB HOSTING AGREEMENT
This agreement shall void and nullify any and all previous agreements to this date between Galacticomm and Horst Entertainment Inc.
There shall be no additional fees of any kind paid to Galaticomm, other than those stated within this agreement for software usage and/or bandwidth usage.
Horst Entertainment agrees to pay Galactcomm $0.01 (one cent) per access up to 400,000 accesses thereafter payment shall be $0.005 (one-half cent) per access. Horst Entertainment shall send this amount to Galacticomm by no later than Wednesday for accesses used from the previuos week (Monday thru Sunday).
Galacticomm must provide a person(s) to correct any technical problems (Server being down or inaccessible) 24 hours per day, 7 days per week. This person(s) must be available by beeper or telephone. Horst Entertainment shall provide this same 24 hour service at the broadcast location.
In the event Galacticomm, Inc. chooses to terminate this agreement, Horst Entertainment Inc. will have the right to purchase a license copy of the software in the amount of $15,000.00.
All parties have read and fully agree to all terms and conditions as set forth in this Web Hosting Agreement. Any disputes arising herein shall be settled in a court in FLorida.
/s/ Yannick Tessier 9/9/97 - ----------------------- ------ Galacticomm Date
[ILLEGIBLE] HORST 9/9/97 - ------------------------- ------ Horst Entertainment Inc. Date [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | EXHIBIT 10.46
WEB HOSTING AGREEMENT
This agreement shall void and nullify any and all previous agreements to this date between Galacticomm and Horst Entertainment Inc.
There shall be no additional fees of any kind paid to Galaticomm, other than those stated within this agreement for software usage and/or bandwidth usage.
Horst Entertainment agrees to pay Galactcomm $0.01 (one cent) per access up to 400,000 accesses thereafter payment shall be $0.005 (one-half cent) per access. Horst Entertainment shall send this amount to Galacticomm by no later than Wednesday for accesses used from the previuos week (Monday thru Sunday).
Galacticomm must provide a person(s) to correct any technical problems (Server being down or inaccessible) 24 hours per day, 7 days per week. This person(s) must be available by beeper or telephone. Horst Entertainment shall provide this same 24 hour service at the broadcast location.
In the event Galacticomm, Inc. chooses to terminate this agreement, Horst Entertainment Inc. will have the right to purchase a license copy of the software in the amount of $15,000.00.
All parties have read and fully agree to all terms and conditions as set forth in this Web Hosting Agreement. Any disputes arising herein shall be settled in a court in FLorida.
/s/ Yannick Tessier 9/9/97 - ----------------------- ------ Galacticomm Date
[ILLEGIBLE] HORST 9/9/97 - ------------------------- ------ Horst Entertainment Inc. Date | Highlight the parts (if any) of this contract related to "Notice Period To Terminate Renewal" that should be reviewed by a lawyer. Details: What is the notice period required to terminate renewal? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Liquidated Damages" that should be reviewed by a lawyer. Details: Does the contract contain a clause that would award either party liquidated damages for breach or a fee upon the termination of a contract (termination fee)?
Context: Exhibit 10.9
SUPPLY AGREEMENT
between
CREMER OLEO GmbH & Co KG, Glockengiesserwall 3, 20095 Hamburg,
Germany
— hereinafter referred to as Cremer —
and
Ultragenyx Pharmaceutical Inc, 60 Leveroni Court, Suite 200, Novato, California 94949, United States of America
— hereinafter referred to as Ultragenyx —
each party also referred to as a "Party" and jointly as the "Parties" -
Preamble
Whereas, Cremer is a producer of oleo chemical products;
Whereas, Ultragenyx is a biotechnology company committed to bringing life-enhancing therapeutics for patients with rare and ultra-rare genetic diseases, also known as orphan diseases, to market;
Whereas, the Parties desire that Cremer supplies to Ultragenyx the product Triheptanoin (hereinafter also referred to as the "Product") in bulk form pursuant to the terms and conditions of this Agreement;
Whereas, Ultragenyx intends to process the Product into a pharmaceutical product in the meaning of Sec. 2 German Pharmaceuticals Act (Arzneimittelgesetz—AMG) and to market the processed Product in the Field (as defined below) (hereinafter referred to as the "Purpose"); and
Whereas, Ultragenyx intends to obtain regulatory approval for the processed Product as a pharmaceutical product in the meaning of Sec. 2 AMG.
Now therefore, the Parties hereto agree as follows:
Article 1 Supply of Product
1) Subject to the terms and conditions set forth in this Agreement Cremer shall supply Ultragenyx with the Product free from defect and meeting the product specification attached to this Agreement as Annex A (the "Product Specifications").
2) Cremer shall supply Ultragenyx exclusively with the Product worldwide. The aforesaid exclusivity is limited to [***] (collectively, the "Field"). Cremer may supply the Product to other customers outside of the Field.
3) Ultragenyx shall purchase the Product exclusively from Cremer.
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
1
Article 2 Orders and Delivery
1) The Product will be ordered by Ultragenyx through purchase orders. Purchase orders shall be submitted in any written or electronic form or by facsimile, setting out the quantity of Product required and the date for delivery. Cremer shall give its order confirmation in writing stating the quantity and Price (as defined below). Cremer shall not be obliged to deliver the Product in the absence of a written order confirmation given to Ultragenyx.
2) Delivery of the Product in bulk form by Cremer shall be EXW (Incoterms 2010), unless otherwise agreed in writing by the Parties.
3) Within [***] days of execution of this Agreement, Cremer shall deliver to Ultragenyx the Master Batch Record for the Product for Ultragenyx to review.
4) All Product shall be delivered with the applicable certificate of analysis and batch records for the Product delivered and an invoice for the quantity of Product delivered.
5) If Ultragenyx obtains regulatory approval for the processed Product, the Parties shall enter into a separate commercial supply agreement for the Product that sets forth the forecasting and ordering mechanism for commercial supply of the Product, enablement of the manufacturing process in the event of a failure to supply, the term of such commercial supply agreement and other customary terms and conditions.
Article 3 Prices and payment
1) The prices payable by Ultragenyx to Cremer for the Product (the "Price") shall be agreed [***] every contract year; provided, that the Price may not increase more than the [***] for such period or [***]%, whichever is higher. At the date of signing the Parties agree on a Price of €[***] per kilogram for the Product.
2) If the parties cannot agree on a price for the Product by the beginning of a following contract year, Cremer may refuse to deliver the Product to Ultragenyx until the Parties agreed on a respective price.
3) Payments shall be made by Ultragenyx in Euro and within [***] days after receipt of a proper invoice.
4) Transfer of title with respect to any Product shall be subject to full payment and settlement of all claims Cremer may have against Ultragenyx in connection with the execution of this Agreement.
Article 4 Specification; Warranties; Cremer's Liability; Indemnification
1) The Parties assume that the Product constitutes an active pharmaceutical ingredient in the meaning of Sec. 4 para. 19 AMG. Ultragenyx shall process the Product into a pharmaceutical product in the meaning of Sec. 2 AMG and market the processed Product as a pharmaceutical product in the meaning of Sec 2 AMG and to perform clinical trials. Cremer does not participate in the processing, manufacturing and marketing of the respective pharmaceutical product or in the clinical trials.
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
2
2) Upon execution of this Agreement and any purchase order, Cremer shall provide Ultragenyx with following documentation regarding the Product: Certificate of Analysis and the applicants' part of the Drug Master File once compiled.
3) Cremer represents and warrants that all quantities of Product delivered under the Agreement were manufactured in accordance with GMP. The Product shall be free from defects if it is within the specifications according to Annex A.
4) Cremer represents and warrants that it has not received any written notice from a third party alleging that the manufacture, use or sale of the Product infringes intellectual property rights of a third party.
5) Ultragenyx will perform final release of the Product. Ultragenyx may rely on the documentation provided by Cremer and Ultragenyx will not need to independently test the Product unless Ultragenyx determines such independent testing is necessary. In the event that the Product fails to conform to the Product Specifications, and/or GMP, Ultragenyx may reject the Product by giving written notice to Cremer within [***] days after receipt of the Product and all documentation (except such [***] day period will not apply for any latent defect). Within [***] days following receipt of the rejected and returned Product from Ultragenyx, Cremer will, at Ultragenyx's choice, replace such quantity of Product with Product conforming to the Product Specifications, and GMP or refund Ultragenyx the Price paid for such Product.
6) Cremer does not warrant or represent that the Product is effective in a pharmaceutical way within the meaning of Sec. 4 para. 19 AMG. Cremer does not warrant or represent that the Product is safe in a pharmaceutical and pharmacological way. Cremer does not warrant or represent that the Product is suitable for the intended Purpose by Ultragenyx. Cremer is not a pharmaceutical manufacturer within the meaning of Sec. 4 para. 18 AMG. Cremer's liability in connection with the Purpose and the processing and marketing of a pharmaceutical product is excluded. No. 9 below applies.
7) Except for a claim arising out of Cremer's intentional misconduct or gross negligence under this Agreement, in the event of legal proceedings being instituted against Cremer by a third party arising out of Ultragenyx's development, processing and commercialization of the Product, Ultragenyx shall indemnify and keep indemnified Cremer in full against all damages, losses, injuries, costs and expenses in connection with such legal proceedings. Cremer will inform Ultragenyx about any legal proceedings being instituted against Cremer without delay. Ultragenyx shall control the respective legal proceedings but shall not settle any claim that admits fault on behalf of Cremer without Cremer's consent (not be unreasonably withheld).
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
3
8) In the event of legal proceedings being instituted against Ultragenyx by a third party arising out of Cremer's intentional misconduct or gross negligence under this Agreement, Cremer shall indemnify and keep indemnified Ultragenyx in full against all damages, losses, injuries, costs and expenses in connection with such legal proceedings. Ultragenyx will inform Cremer about any legal proceedings being instituted against Ultragenyx without delay. Cremer shall control the respective legal proceedings but shall not settle any claim without Ultragenyx's consent (not be unreasonably withheld).
9) Cremer's liability arising from this Agreement is limited to intentional misconduct or gross negligence. This limitation of liability does not apply to the injury of the life, body or health of a person, to claims according to the Product Liability Act (Produkthaftungsgesetz) or any other coercive legal liability claims.
10) NEITHER PARTY MAY CLAIM AND NEITHER PARTY IS LIABLE FOR CLAIMS FOR INDIRECT DAMAGES AND LOSSES, SUCH AS SPECIAL OR CONSEQUENTIAL LOSS OR DAMAGE, ANY LOSS OF ACTUAL OR ANTICIPATED PROFIT, OR REVENUE, ANTICIPATED SAVINGS OR BUSINESS OR DAMAGE TO GOODWILL OR BRAND EQUITY, ARE EXCLUDED.
Article 5 Term and Termination
1) This Agreement shall become effective on the date of its execution and shall remain in force for three years (the "Initial Term"). Thereafter, the Agreement shall be automatically renewed for additional two year periods (each a "Renewal Term", the Initial Term and all Renewal Terms, the "Term") unless either Party notifies the other Party of its intention not to renew in writing at least three calendar months before the expiration of the then current Term.
2) If a Party materially breaches an obligation under this Agreement and does not cure such breach within sixty (60) days of receiving notice of such breach from the non-breaching Party, the non-breaching Party may terminate this Agreement immediately upon written notice to the breaching Party.
3) Every termination has to be in writing.
Article 6 General Terms and Conditions
The application of General Terms and Conditions of any Party is excluded.
Article 7 Product Development
At the request and expense of Ultragenyx, Cremer shall perform development work for Ultragenyx to develop new formulations of the Product. All such work shall be performed pursuant to a statement of work (including a budget) to be agreed upon by the Parties and attached as an annex to this Agreement (each, a "Statement of Work"). In the event that in the course of performing a Statement of Work new Product knowhow and intellectual property rights may result, can be created or have been created the Parties will enter into a separate Agreement in order to define the rights and duties regarding the aforesaid know how and intellectual property rights.
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
4
Article 8 Invalidity
In the event that any individual clauses of these terms and conditions are, or shall become, invalid, this shall not affect the validity of the remaining clauses. An invalid condition shall be deemed to have been replaced by such provision which is legally valid and corresponds nearest to the economic purpose of the clause originally deemed invalid.
Article 9 Applicable Law; Modifications; Annexes; Miscellaneous
1) The laws of the Federal Republic of Germany shall apply to the Agreement and any legal relations thereof, especially any purchase order, between Cremer and Ultragenyx shall be governed by that law. The law of the United Nations Conventions of the formation of Agreements for the international sale of goods (CISG) is excluded. Exclusive place of Jurisdiction is Hamburg, Germany.
2) No addition or modification to this Agreement shall be valid unless made in writing and signed by the Parties.
3) The Annex attached to this Agreement form an integral part of the Agreement.
4) This Agreement, including the Annexes and any Statement of Work, constitutes the entire agreement between the Parties concerning the subject matter hereof and supersedes all written or oral prior agreements or understandings with respect thereto except the Confidentiality Agreement between the parties dated September 26t h, 2012. This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto, their successors and assigns.
5) All waivers must be in writing and signed by the Party to be charged. Any waiver or failure to enforce any provision of this Agreement on one occasion will not be deemed a waiver of any other provision or of such provision on any other occasion.
6) Each Party must deliver all notices, consents, and approvals required or permitted under this Agreement in writing to the other Party at the address specified above, by personal delivery, by certified or registered mail (postage prepaid and return receipt requested), by a nationally- recognized overnight carrier, or by facsimile transmission with electronic confirmation of transmission. Notice will be effective upon receipt or refusal of delivery. Each Party may change its address for receipt of notice by giving notice of such change to the other Party.
7) This Agreement may be executed in counterparts by original signature, facsimile or PDF files, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
5
Hamburg, November 19t h, 2012
/s/ Thomas Kassberg /s/ Dr. R. Stephan Ultragenyx Pharmaceutical Inc
CREMER OLEO GmbH & Co KG
CREMER OLEO GmbH & Co. KG Postfach 10 11 20, D-20007 Hamburg Tel: 040/320 11-0, Telefax 320 11-400
6
Annex A — Specification of the Product Trihepatanoin (Heptansäuretriglycerid)
No Test EP method Limits
1 [***] [***], [***] 2 [***] [***] [***] 3 [***] [***] [***] 4 [***] [***] [***] 5 [***] [***] [***] 6 [***] [***] [***] 7 [***] [***] [***] 8 [***] [***] [***] 9 [***] [***] [***] 10 [***] [***] [***] 11 [***] [***] [***] 12 [***] [***] 13 [***] [***] [***] 18 [***] [***] [***]
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
7 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 10.9
SUPPLY AGREEMENT
between
CREMER OLEO GmbH & Co KG, Glockengiesserwall 3, 20095 Hamburg,
Germany
— hereinafter referred to as Cremer —
and
Ultragenyx Pharmaceutical Inc, 60 Leveroni Court, Suite 200, Novato, California 94949, United States of America
— hereinafter referred to as Ultragenyx —
each party also referred to as a "Party" and jointly as the "Parties" -
Preamble
Whereas, Cremer is a producer of oleo chemical products;
Whereas, Ultragenyx is a biotechnology company committed to bringing life-enhancing therapeutics for patients with rare and ultra-rare genetic diseases, also known as orphan diseases, to market;
Whereas, the Parties desire that Cremer supplies to Ultragenyx the product Triheptanoin (hereinafter also referred to as the "Product") in bulk form pursuant to the terms and conditions of this Agreement;
Whereas, Ultragenyx intends to process the Product into a pharmaceutical product in the meaning of Sec. 2 German Pharmaceuticals Act (Arzneimittelgesetz—AMG) and to market the processed Product in the Field (as defined below) (hereinafter referred to as the "Purpose"); and
Whereas, Ultragenyx intends to obtain regulatory approval for the processed Product as a pharmaceutical product in the meaning of Sec. 2 AMG.
Now therefore, the Parties hereto agree as follows:
Article 1 Supply of Product
1) Subject to the terms and conditions set forth in this Agreement Cremer shall supply Ultragenyx with the Product free from defect and meeting the product specification attached to this Agreement as Annex A (the "Product Specifications").
2) Cremer shall supply Ultragenyx exclusively with the Product worldwide. The aforesaid exclusivity is limited to [***] (collectively, the "Field"). Cremer may supply the Product to other customers outside of the Field.
3) Ultragenyx shall purchase the Product exclusively from Cremer.
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
1
Article 2 Orders and Delivery
1) The Product will be ordered by Ultragenyx through purchase orders. Purchase orders shall be submitted in any written or electronic form or by facsimile, setting out the quantity of Product required and the date for delivery. Cremer shall give its order confirmation in writing stating the quantity and Price (as defined below). Cremer shall not be obliged to deliver the Product in the absence of a written order confirmation given to Ultragenyx.
2) Delivery of the Product in bulk form by Cremer shall be EXW (Incoterms 2010), unless otherwise agreed in writing by the Parties.
3) Within [***] days of execution of this Agreement, Cremer shall deliver to Ultragenyx the Master Batch Record for the Product for Ultragenyx to review.
4) All Product shall be delivered with the applicable certificate of analysis and batch records for the Product delivered and an invoice for the quantity of Product delivered.
5) If Ultragenyx obtains regulatory approval for the processed Product, the Parties shall enter into a separate commercial supply agreement for the Product that sets forth the forecasting and ordering mechanism for commercial supply of the Product, enablement of the manufacturing process in the event of a failure to supply, the term of such commercial supply agreement and other customary terms and conditions.
Article 3 Prices and payment
1) The prices payable by Ultragenyx to Cremer for the Product (the "Price") shall be agreed [***] every contract year; provided, that the Price may not increase more than the [***] for such period or [***]%, whichever is higher. At the date of signing the Parties agree on a Price of €[***] per kilogram for the Product.
2) If the parties cannot agree on a price for the Product by the beginning of a following contract year, Cremer may refuse to deliver the Product to Ultragenyx until the Parties agreed on a respective price.
3) Payments shall be made by Ultragenyx in Euro and within [***] days after receipt of a proper invoice.
4) Transfer of title with respect to any Product shall be subject to full payment and settlement of all claims Cremer may have against Ultragenyx in connection with the execution of this Agreement.
Article 4 Specification; Warranties; Cremer's Liability; Indemnification
1) The Parties assume that the Product constitutes an active pharmaceutical ingredient in the meaning of Sec. 4 para. 19 AMG. Ultragenyx shall process the Product into a pharmaceutical product in the meaning of Sec. 2 AMG and market the processed Product as a pharmaceutical product in the meaning of Sec 2 AMG and to perform clinical trials. Cremer does not participate in the processing, manufacturing and marketing of the respective pharmaceutical product or in the clinical trials.
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
2
2) Upon execution of this Agreement and any purchase order, Cremer shall provide Ultragenyx with following documentation regarding the Product: Certificate of Analysis and the applicants' part of the Drug Master File once compiled.
3) Cremer represents and warrants that all quantities of Product delivered under the Agreement were manufactured in accordance with GMP. The Product shall be free from defects if it is within the specifications according to Annex A.
4) Cremer represents and warrants that it has not received any written notice from a third party alleging that the manufacture, use or sale of the Product infringes intellectual property rights of a third party.
5) Ultragenyx will perform final release of the Product. Ultragenyx may rely on the documentation provided by Cremer and Ultragenyx will not need to independently test the Product unless Ultragenyx determines such independent testing is necessary. In the event that the Product fails to conform to the Product Specifications, and/or GMP, Ultragenyx may reject the Product by giving written notice to Cremer within [***] days after receipt of the Product and all documentation (except such [***] day period will not apply for any latent defect). Within [***] days following receipt of the rejected and returned Product from Ultragenyx, Cremer will, at Ultragenyx's choice, replace such quantity of Product with Product conforming to the Product Specifications, and GMP or refund Ultragenyx the Price paid for such Product.
6) Cremer does not warrant or represent that the Product is effective in a pharmaceutical way within the meaning of Sec. 4 para. 19 AMG. Cremer does not warrant or represent that the Product is safe in a pharmaceutical and pharmacological way. Cremer does not warrant or represent that the Product is suitable for the intended Purpose by Ultragenyx. Cremer is not a pharmaceutical manufacturer within the meaning of Sec. 4 para. 18 AMG. Cremer's liability in connection with the Purpose and the processing and marketing of a pharmaceutical product is excluded. No. 9 below applies.
7) Except for a claim arising out of Cremer's intentional misconduct or gross negligence under this Agreement, in the event of legal proceedings being instituted against Cremer by a third party arising out of Ultragenyx's development, processing and commercialization of the Product, Ultragenyx shall indemnify and keep indemnified Cremer in full against all damages, losses, injuries, costs and expenses in connection with such legal proceedings. Cremer will inform Ultragenyx about any legal proceedings being instituted against Cremer without delay. Ultragenyx shall control the respective legal proceedings but shall not settle any claim that admits fault on behalf of Cremer without Cremer's consent (not be unreasonably withheld).
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
3
8) In the event of legal proceedings being instituted against Ultragenyx by a third party arising out of Cremer's intentional misconduct or gross negligence under this Agreement, Cremer shall indemnify and keep indemnified Ultragenyx in full against all damages, losses, injuries, costs and expenses in connection with such legal proceedings. Ultragenyx will inform Cremer about any legal proceedings being instituted against Ultragenyx without delay. Cremer shall control the respective legal proceedings but shall not settle any claim without Ultragenyx's consent (not be unreasonably withheld).
9) Cremer's liability arising from this Agreement is limited to intentional misconduct or gross negligence. This limitation of liability does not apply to the injury of the life, body or health of a person, to claims according to the Product Liability Act (Produkthaftungsgesetz) or any other coercive legal liability claims.
10) NEITHER PARTY MAY CLAIM AND NEITHER PARTY IS LIABLE FOR CLAIMS FOR INDIRECT DAMAGES AND LOSSES, SUCH AS SPECIAL OR CONSEQUENTIAL LOSS OR DAMAGE, ANY LOSS OF ACTUAL OR ANTICIPATED PROFIT, OR REVENUE, ANTICIPATED SAVINGS OR BUSINESS OR DAMAGE TO GOODWILL OR BRAND EQUITY, ARE EXCLUDED.
Article 5 Term and Termination
1) This Agreement shall become effective on the date of its execution and shall remain in force for three years (the "Initial Term"). Thereafter, the Agreement shall be automatically renewed for additional two year periods (each a "Renewal Term", the Initial Term and all Renewal Terms, the "Term") unless either Party notifies the other Party of its intention not to renew in writing at least three calendar months before the expiration of the then current Term.
2) If a Party materially breaches an obligation under this Agreement and does not cure such breach within sixty (60) days of receiving notice of such breach from the non-breaching Party, the non-breaching Party may terminate this Agreement immediately upon written notice to the breaching Party.
3) Every termination has to be in writing.
Article 6 General Terms and Conditions
The application of General Terms and Conditions of any Party is excluded.
Article 7 Product Development
At the request and expense of Ultragenyx, Cremer shall perform development work for Ultragenyx to develop new formulations of the Product. All such work shall be performed pursuant to a statement of work (including a budget) to be agreed upon by the Parties and attached as an annex to this Agreement (each, a "Statement of Work"). In the event that in the course of performing a Statement of Work new Product knowhow and intellectual property rights may result, can be created or have been created the Parties will enter into a separate Agreement in order to define the rights and duties regarding the aforesaid know how and intellectual property rights.
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
4
Article 8 Invalidity
In the event that any individual clauses of these terms and conditions are, or shall become, invalid, this shall not affect the validity of the remaining clauses. An invalid condition shall be deemed to have been replaced by such provision which is legally valid and corresponds nearest to the economic purpose of the clause originally deemed invalid.
Article 9 Applicable Law; Modifications; Annexes; Miscellaneous
1) The laws of the Federal Republic of Germany shall apply to the Agreement and any legal relations thereof, especially any purchase order, between Cremer and Ultragenyx shall be governed by that law. The law of the United Nations Conventions of the formation of Agreements for the international sale of goods (CISG) is excluded. Exclusive place of Jurisdiction is Hamburg, Germany.
2) No addition or modification to this Agreement shall be valid unless made in writing and signed by the Parties.
3) The Annex attached to this Agreement form an integral part of the Agreement.
4) This Agreement, including the Annexes and any Statement of Work, constitutes the entire agreement between the Parties concerning the subject matter hereof and supersedes all written or oral prior agreements or understandings with respect thereto except the Confidentiality Agreement between the parties dated September 26t h, 2012. This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto, their successors and assigns.
5) All waivers must be in writing and signed by the Party to be charged. Any waiver or failure to enforce any provision of this Agreement on one occasion will not be deemed a waiver of any other provision or of such provision on any other occasion.
6) Each Party must deliver all notices, consents, and approvals required or permitted under this Agreement in writing to the other Party at the address specified above, by personal delivery, by certified or registered mail (postage prepaid and return receipt requested), by a nationally- recognized overnight carrier, or by facsimile transmission with electronic confirmation of transmission. Notice will be effective upon receipt or refusal of delivery. Each Party may change its address for receipt of notice by giving notice of such change to the other Party.
7) This Agreement may be executed in counterparts by original signature, facsimile or PDF files, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
5
Hamburg, November 19t h, 2012
/s/ Thomas Kassberg /s/ Dr. R. Stephan Ultragenyx Pharmaceutical Inc
CREMER OLEO GmbH & Co KG
CREMER OLEO GmbH & Co. KG Postfach 10 11 20, D-20007 Hamburg Tel: 040/320 11-0, Telefax 320 11-400
6
Annex A — Specification of the Product Trihepatanoin (Heptansäuretriglycerid)
No Test EP method Limits
1 [***] [***], [***] 2 [***] [***] [***] 3 [***] [***] [***] 4 [***] [***] [***] 5 [***] [***] [***] 6 [***] [***] [***] 7 [***] [***] [***] 8 [***] [***] [***] 9 [***] [***] [***] 10 [***] [***] [***] 11 [***] [***] [***] 12 [***] [***] 13 [***] [***] [***] 18 [***] [***] [***]
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
7 | Highlight the parts (if any) of this contract related to "Liquidated Damages" that should be reviewed by a lawyer. Details: Does the contract contain a clause that would award either party liquidated damages for breach or a fee upon the termination of a contract (termination fee)? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Termination For Convenience" that should be reviewed by a lawyer. Details: Can a party terminate this contract without cause (solely by giving a notice and allowing a waiting period to expire)?
Context: EXHIBIT 4.1 CONSULTING AGREEMENT THIS AGREEMENT is dated for reference the 1st day of February, 2020 (the "Effective Date"). BETWEEN: CORAL GOLD RESOURCES LTD., a company duly incorporated pursuant to the laws of the Province of British Columbia and having its head office at Suite 900 - 570 Granville Street, Vancouver, British Columbia V6C 3Pl (the "Company") AND: INTERMARK CAPITAL CORP., a company duly incorporated pursuant to the laws of the Province of British Columbia and having an office at Suite 900 - 570 Granville Street, Vancouver, British Columbia V6C 3PI (the "Consultant") WHEREAS: A. The Company is a mining and exploration company, whose common shares are listed on the TSX Venture Exchange and OTCQX;
B. The Consultant provides management and financial consulting services to exploration and development companies, and the principal shareholder of the Consultant, David Wolfin (the "Principal"), has been the President and Chief Executive Officer and a director of the Company; and
C. The Company wishes to engage the management and financial services of the Consultant, and the Consultant wishes to be engaged by the Company, to perform the functions of a management consultant to the Company as set forth herein below. NOW THEREFORE, in consideration of the premises and the covenants and agreements of the parties hereto as hereinafter set forth, and for other good and reliable consideration, the sufficiency of which is hereby acknowledged by the parties, the parties hereto covenant and agree as follows: 1. ENGAGEMENT OF CONSULTANT
1.1 The Company hereby appoints and engages the Consultant as a consultant with respect to the Services (as defined below) and the Consultant hereby accepts such appointment and engagement by the Company, all upon and subject to the terms and conditions of this Agreement.
2. SERVICES OF CONSULTANT
2.1 During the Term (as defined below), the Consultant shall provide to the Company advisory and consulting services as more particularly set forth in Schedule "A" or as the Company may request from time to time (collectively, the "Services").
-1-
2.2 The Consultant shall at all times and in all respects do its utmost to enhance and develop the business interests and welfareof the Company.
2.3 The Consultant shall be subject to such supervision as may be imposed by the Company in its sole discretion, and the Consultant shall furnish regular reports and any other data and information relating to the Services as may, from time to time, be requested by the Company.
2.4 The Consultant shall provide its services to the Company.
3. FEES
3.1 The Company will pay the Consultant basic remuneration for its services in the sum of $10,000 per month (the "Consulting Fee") commencing on the 1st day of February, 2020, and payable on the last day of each month thereafter up to and including the 31st day of January, 2025, together with any such increments thereto as the Compensation Committee of the Board of Directors of the Company may from time to time determine. In addition, the Company will pay to the Consultant all reasonable expenses of the Consultant as agreed to from time to time which are incurred by the Consultant in delivery of the Services, based on monthly invoices submitted to the Company, including copies of all paid receipts; plus harmonized sales taxes or goods and services taxes, as the case may be, in addition to the Consulting Fees, which taxes will be remitted by the Consultant to the Canada Revenue Agency.
4. TERM AND RENEWAL
4.1 During the term of this Agreement, the Consultant shall provide its Services to the Company through its Principal, and the Consultant shall ensure that the Principal will be available to provide such Services to the Company in a timely manner.
4.2 The term of this Agreement is for a period of five (5) years (the "Term") commencing on the Effective Date and, unless terminated earlier in accordance with the termination provisions of this Agreement, ending on January 31, 2025.
5. TERMINATION
5.1 This Agreement can be terminated at any time prior to the expiry of the Term, as follows: (a) by the Consultant electing to give the Company not less than 3 months prior notice of such termination;
(b) by the Company electing to give the Consultant 3 months prior notice of such termination along with a termination payment equal to the annual Consulting Fee;
(c) by the Consultant electing to give the Company notice, in the event that there occurs a Change of Control (as defined below) within six (6) months of the effective date of such Change of Control, and if the Consultant so elects to terminate this Agreement, then the Consultant will be immediately entitled to a termination payment equal to CDN$750,000; and
-2-
(d) For the purpose of this clause, a Change of Control shall be deemed to have occurred when: (i) any person, entity or group becomes the beneficial owner of 20% or more of the combined voting power of the Company's then outstanding voting securities entitled to vote generally in the election of directors, and such person, entity or group uses such effective voting control to change a majority of the Board of Directors of the Company, either all at once or through any series of elections and appointments when considered together; or
(ii) completion of the sale or other disposition by the Company of all or substantially all of the Company's assets or a reorganization or merger or consolidation of the Company with any other entity or corporation, other than: (A) a reorganization or merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent, either by remaining outstanding or by being converted into voting securities of another entity, more than 50.1 % of the combined voting power of the voting securities of the Company or such other entity outstanding immediately after such reorganization or merger or consolidation; or
(B) a reorganization or merger or consolidation effected to implement a recapitalization or reincorporation of the Company (or similar transaction) that does not result in a material change in beneficial ownership of the voting securities of the Company or its successor. 5.2 On any termination of this Agreement under Section 5.l (a), (b), or (c) all outstanding stock options granted to the Consultant shall be exercisable in accordance with the terms of the option agreements covering such grants. If there is any inconsistency between the terms of this Agreement and the terms of any stock option agreement governing the grant of any stock options to the Consultant or the Principal, then the terms of such stock option agreement shall prevail.
5.3 This Agreement and the Term shall terminate automatically, without any prior notice or any payment to the Consultant, inthe event that: a. the five year Term expires on January 31, 2025;
b. the Consultant should no longer be able to provide the Services through the Principal for any reason;
c. upon the death or permanent incapacity of the Principal; or
d. The Consultant commits any material breach of this Agreement which breach is not remedied within 30 days after notice to the Consultant of such breach. 6. CONFIDENTIALITY
6.1 The Consultant acknowledges and agrees that in the performance of its obligations under this Agreement, it may obtain knowledge of Confidential Information (as defined below) relating to the business or affairs of the Company or its affiliated companies (the "Affiliated Companies").
-3-
The Consultant and the Principal shall not, without the prior written consent of the Company, either during the Term or at any time thereafter: (a) use or disclose any Confidential Information outside of the Company or the Affiliated Companies;
(b) except in undertaking the Services, remove or aid in the removal from the premises of the Company or any of the Affiliated Companies any Confidential Information or any property or material relating thereto; or
(c) use the Confidential Information for any purpose other than in performing the Services. 6.2 The Consultant shall exercise a reasonable degree of care in safeguarding the aforementioned Confidential Information against loss, theft, or other inadvertent disclosure, and further agrees to take all reasonable steps necessary to ensure the maintenance of confidentiality.
6.3 Upon the termination of this Agreement, or upon the Company's earlier request, the Consultant and the Principal shall promptly deliver to the Company all of the Confidential Information that the Consultant and the Principal may have in their possession or control.
6.4 In this Agreement, "Confidential Information" shall mean any information or knowledge including, without limitation, any document, materials, know how, discovery, strategy, method, idea, client list, marketing strategy or employee compensation, or copies or adaptations thereof, that relates to the business or affairs of the Company and I or the Affiliated Companies; and is private or confidential in that it is not generally known or available to the public. Without limiting the generality of the forgoing "Confidential Information" will include: (a) information regarding the Company and the Affiliated Companies' business operations, methods and practices, including marketing strategies, product pricing, margins and hourly rates for staff, costs and all information regarding the financial affairs of the Company and the Affiliated Companies;
(b) all information related to the mineral exploration interests of the Company and the Affiliated Companies including maps, data, records, reports, technical studies, drill hole logs, calculations, opinions, charts, drawings, sketches, plans, documents, summaries, memoranda, analysis and all geological or technical information;
(c) all information related to the properties, projects, facilities, equipment and other assets used in the business of the Company and the Affiliated Companies, and all information related to the exploration or development of (or potential exploration or development of) the Company and the Affiliated Companies' properties or projects, including without limitation any properties or projects in respect of which the Company has made any application or is in any negotiations for the acquisition of an ownership, leasehold or other interest in;
(d) terms of the Company and the Affiliated Companies' relationship with, its investors, (if not otherwise publically available), partners, clients, suppliers of products or services, and the Company and the Affiliated Companies' referral sources;
(e) all information concerning exploration, financing or other business opportunities of the Company and the Affiliated Companies, including all projects, ventures or joint ventures considered by the Company and the Affiliated Companies, whether or not pursued; and
-4-
(f) all trade secrets or other confidential or proprietary information of the Company and the Affiliated Companies including, business plans, concepts, techniques, processes, designs, data, software programs, formula, development or experimental work, work in process or other know-how.
(g) Confidential Information shall specifically not include anything that:
(h) is in or enters lawfully into the public domain other than as a result of a disclosure by the Consultant or the Principal;
(i) becomes available to the Consultant on a non-confidential basis from a source other than the Company or the affiliated Companies, or any of its representatives, and that source was not under any obligation of confidentiality; or
(j) the Consultant is required to disclose pursuant to an order of a court of competent jurisdiction or by the operation of law; provided that, the Consultant provides prompt prior written notice to the Company of such required disclosure and of the action which is proposed to be taken in response. In such an event, and only after the Consultant shall have made a reasonable effort to obtain a protective order or other reliable assurance affording such information confidential treatment, the Consultant shall furnish only that portion of the Confidential Information which it is required to disclose. 7. NON-SOLICITATION
7.1 The Consultant covenants, undertakes and agrees with the Company that during the Term and for a period of one year from the date of expiration or termination of this Agreement for any reason whatsoever, it shall not, on its own behalf or on behalf of any person, whether directly or indirectly, in any capacity whatsoever, offer employment to or solicit the employment of or otherwise entice away from the employment of the Company or any of the Affiliated Companies, any individual who is employed or engaged by the Company or any of the Affiliated Companies at the date of expiration or termination of this Agreement or who was employed or engaged by the Company or any of the Affiliated Companies, within the one year period immediately preceding the date of expiration or termination of this Agreement, as applicable.
7.2 The Consultant acknowledges and agrees that the above restriction on non-solicitation is reasonable and necessary for the proper protection of the businesses, property and goodwill of the Company and the Affiliated Companies.
8. DISCLOSURE AND ASSIGNMENT OF PROJECTS AND WORKS
8.1 The Consultant agrees that all discoveries, maps, technical studies, plans, spreadsheets, documents, inventions, copyright, software, improvements, know-how or other intellectual property, whether or not patentable or copyrightable, created by the Consultant during the Term of this Agreement pertaining to any service, matter, thing, process or method related to this Agreement (the "Works") will be the sole and absolute property of the Company. The Consultant will keep and maintain adequate and current written records of all Works made, which records will be available at all times to the Company and will remain the sole property of the Company.
8.2 The Consultant will assist the Company in obtaining and enforcing, for the Company's own benefit, patents, copyrights and any other protections in any and all countries for any and all Works made by the Consultant (in whole or in part) the rights to which belong to or have been assigned to the Company. The Consultant agrees, upon request, to execute all applications, assignments, instruments and papers and perform all acts that the Company or its counsel may deem necessary or desirable to obtain any and all patents, copyrights or other protection in such Works and otherwise to protect the interests of the Company therein.
-5-
9. COMPLIANCE WITH LAWS
9.1 The Services undertaken by the Consultant under this Agreement shall be in full compliance with all applicable laws andconsistent with a high degree of business ethics.
10. INDEMNIFICATION
10.1 The Consultant shall indemnify and save harmless the Company for any demonstrated losses, damages, costs or other amounts, including without limitation reasonable legal fees, suffered or incurred by the Company arising out of third party claims relating to the presence or activities of the Consultant or its representatives in performing the Services to the extent that such losses, damages, costs or other amounts are caused by: (a) any breach of the Consultant's obligation in Section 9 herein; and
(b) any negligence, willful misconduct or fraud on the part of the Consultant in performing the Services. 10.2 Subject to the Consultant's obligation to indemnify the Company under this Section 10, and provided that the Consultant has not breached Section 9, the Company shall indemnify and save harmless the Consultant for any demonstrated losses, damages, costs or other amounts, including without limitation reasonable legal fees, suffered or incurred by the Consultant arising out of third party claims relating to the presence or activities of the Consultant and/or its representatives in performing the Services to the extent that such losses, damages, costs or other amounts are caused by the negligence, willful misconduct or fraud on the part of the Company.
10.3 Neither the Company nor the Consultant shall be liable for any consequential loss, including but not limited to, claims for loss of profit, revenue or capital, loss of use of utilities, equipment or facilities, down-time cost, service interruption, cost of money, injury or damage of any character whatsoever.
11. REMEDIES
11.1 The Consultant acknowledges and agrees that any breach of this Agreement by it could cause irreparable damage to the Company and I or the Affiliated Companies and that in the event of a breach by the Consultant, the Company shall have in addition to any and all other remedies at law or in equity, the right to an injunction, specific performance or other equitable relief to prevent any violation by the Consultant of any of the provisions of this Agreement. In the event of any such dispute, the Consultant agrees that the Company shall be entitled, without showing actual damages, to a temporary or permanent injunction restraining conduct of the Consultant pending a determination of such dispute and that no bond or other security shall be required from the Company in connection therewith. The Consultant acknowledges and agrees that the remedies of the Company specified in this Agreement are in addition to and not in substitution for any other rights and remedies of the Company at law or in equity and that all such rights and remedies are cumulative and not alternative or exclusive of any other rights or remedies and that the Company may have recourse to any one or more of its available rights and remedies as it shall see fit.
-6-
12. RELATIONSHIP
12.1 The Company and Consultant each acknowledge and agree that the only relationship of the Consultant to the Company created by this Agreement shall for all purposes be that of a contractor, and all persons employed or engaged by the Consultant, including David Wolfin in connection herewith shall for all purposes be considered to be employed or engaged, as applicable, by the Consultant and not by the Company. The Company shall have no obligation whatsoever to pay or compensate the Consultant and/or any representative of the Consultant including David Wolfin, for taxes of any kind whatsoever that arise out of or with respect to any Consulting Fee, or any other fee, remuneration or compensation provided to the Consultant under this Agreement.
12.2 The Consultant shall fully indemnify and hold harmless the Company from and against all assessments, claims, liabilities, costs, expenses and damages that the Company and I or any of the Affiliated Companies may suffer or incur with respect to any such taxes or benefits. For greater clarity, the Consultant is solely responsible for the deduction and remissions of income tax, pension and employment insurance in respect of any employees retained by the Consultant to perform the services under this Agreement. Furthermore, if these amounts are not remitted, the Consultant will, in addition to any other provision under this Agreement, indemnify and hold harmless the Company, its subsidiaries, affiliates and their respective directors and officers from and against any claim for taxes, penalties and for withholding of funds by the applicable tax, worker's compensation, employment standards and insurance agencies or any other government agency with respect to any amount found to be payable by the Company to such agency or commission in respect of the Consultant's provision of services under this Agreement, including any legal fees incurred by the Company in defending such claims.
13. SURVIVAL OF TERMS
13.l Sections 6 through 12, inclusive, and this Section 13, shall survive and remain in force notwithstanding the expiration or other termination of this Agreement for any reason whatsoever. Any expiration or termination of this Agreement shall be without prejudice to any rights and obligations of the parties hereto arising or existing up to the effective date of such expiration or termination, or any remedies of the parties with respect thereto.
14. LIMITED AUTHORITY AS AGENT
14.1 Unless otherwise agreed to in writing by the parties, the Consultant may not act as an agent of the Company; however, this does not and is not intended to restrict the powers of the Principal to act as President and Chief Executive Officer of the Company in any way. Without limiting the generality of the foregoing, the Consultant shall not commit or be entitled to commit the Company to any obligation whatsoever nor shall the Consultant incur or be entitled to incur any debt or liability whatsoever on behalf of the Company, except as otherwise agreed to by the Company.
15. NO ASSIGNMENT
15.1 Neither this Agreement nor any of the rights of any of the parties under this Agreement shall be assigned without thewritten consent of all the parties.
-7-
16. SUCCESSORS AND ASSIGNS
16.1 The Agreement shall enure to the benefit of and be binding upon the parties and their respective heirs, executors,administrators, successors and permitted assigns, as the case may be.
17. WAIVER
17.1 Any waiver of any breach or default under this Agreement shall only be effective if in writing signed by the party against whom the waiver is sought to be enforced, and no waiver shall be implied by indulgence, delay or other act, omission or conduct. Any waiver shall only apply to the specific matter waived and only in the specific instance i n which it is waived.
18. GOVERNING LAWS
18.1 Unless otherwise agreed to in writing by the parties, the Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein, and the parties hereto submit and attorn to the jurisdiction of the courts of the Province of British Columbia.
19. FURTHER ASSURANCES
19.1 Each of the parties shall, on request by the other party, execute and deliver or cause to be executed and delivered all such further documents and instruments and do all such further acts and things as the other party may reasonably require to evidence, carry out and give full effect to the terms, conditions, intent and meaning of this Agreement and to ensure the completion of the transactions contemplated hereby.
20. NOTICES
20.1 All notices required or permitted under this Agreement shall be in writing and shall be given by delivering such notice or mailing such notice by pre-paid registered mail, by facsimile transmission or electronic mail to the addresses provided under the names of each party on the first page to this Agreement. Any such notice or other communication shall, if delivered, be deemed to have been given or made and received on the date delivered (or the next business day if the day of delivery is not a business day), and if mailed, shall be deemed to have been given or made and received on the fifth business day following the day on which it was so mailed and if faxed (with confirmation received) shall be deemed to have been given or made and received on the day on which it was so faxed (or the next business day if the day of sending is not a business day). The parties may give from time to time written notice of change of address in the manner aforesaid.
21. CONSTRUCTION
21.1 In this Agreement, unless otherwise indicated: (a) "Agreement" means this Consulting Agreement;
(b) the words "include", "including" or "in particular", when following any general term or statement, shall not be construed as limiting the general term or statement to the specific items or matters set forth or to similar items or matters, but rather as permitting the general term or statement to refer to all other items or matters that could reasonably fall within the broadest possible scope of the general term or statement;
-8-
(c) "herein", "hereby", "hereunder", "hereof', "hereto" and words of similar import, refer to this Agreement as a whole and not to any particular Section of this Agreement;
(d) a reference to a statute means that statute, as amended and in effect as of the date hereof, and includes each and every regulation and rule made thereunder and in effect as of the date hereof, and includes all amendments thereof given effect from time to time;
(e) a reference to a Section means, unless the context otherwise requires, that specific Section in Agreement;
(f) a reference to a "consent", "notice" or "agreement" means a consent, notice or agreement, as the case may be, by an authorized representative of the party or parties thereto;
(g) where a word, term or phrase is defined herein, its derivatives or other grammatical forms have a corresponding meaning;
(h) all words, other than defined terms, used in this Agreement, regardless of the number and gender in which they are used, shall be deemed and construed to include the singular or the plural and the masculine, feminine or body corporate, as the context may require;
(i) time is of the essence;
(j) in the event that any date on which any action is required to be taken hereunder by any of the parties hereto is not a business day, such action shall be required to be taken on the next succeeding day which is a business day;
(k) references to a "party" or "parties" are references to a party or parties to this Agreement;
(l) the headings in this Agreement form no part of this Agreement and shall be deemed to have been inserted for convenience only;
(m) unless otherwise agreed to in writing by the parties, all dollar amount referred to herein are expressed in Canadian dollars; and
(n) the Effective Date of this Agreement shall be February 1, 2020, despite the actual date of execution of this Agreement. 22. SEVERABILITY
22.1 If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal or unenforceable, then tothe fullest extent permitted by law: (a) all other provisions of this Agreement shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the parties as nearly as may be possible; and
(b) such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction. 23. COUNTERPARTS AND FACSIMILE
23.l This Agreement may be executed in one or more counterparts and delivered by facsimile, each of which when so executed shall constitute an original and all of which together shall constitute one and the same agreement.
24. INDEPENDENT LEGAL ADVICE
24.1 The Company has recommended to the Consultant that it obtain independent legal advice prior to signing this Agreement. The Consultant acknowledges that it has received independent legal advice or have waived the opportunity to do so and have elected to proceed without benefit of same.
-9-
IN WITNESS WHEREOF this Agreement has been executed as of the Effective Date. CORAL GOLD RESOURCES LTD. Per: "Ronald Andrews" Authorized Signatory INTERMARK CAPITAL CORP. Per: "David Wolfin" Authorized Signatory
-10-
THIS IS SCHEDULE "A" TO THE CONSULTING AGREEMENT BETWEEN CORAL GOLD RESOURCES LTD. AND lNTERMARK CAPlTAL CORP. Description of Consulting Services: The Consultant shall provide management and financial consulting services, including the supervision of the senior management, all staff, and all field personnel of the Company, whether employees or consultants, strategic planning and property acquisitions, strategic financial planning and annual budget reviews, as well as the implementation and monitoring of the Company's compliance with continuous reporting requirements, internal controls over accounting systems and financial reporting to the Company. Duties and Responsibilities: The Executive shall serve the Company as an executive officer in the position of President and Chief Executive Officer. The Executive shall report to the Board and shall undertake and perform the following duties and responsibilities: · actively engage with the Board to ensure that the initiatives of the management team are aligned with the strategic direction and objectives for the Company that have been established by the Board;
· provide overall direction for the Company in order for it to implement agreed strategies in order to meet Company goals and objectives;
· provide shareholder and investor communication and manage key investment banking and institutional relationships;
· make decisions in line with organizational goals, leading to desired results, and will be responsible and accountable for results;
· create and sustain the organizational culture and environment needed to achieve objectives and results and recruit and retain a high-performance operating team;
· oversee the implementation and monitoring of internal controls, reporting compliance obligations, sign off on CEO Certificates for the interim and annual financial statements and setting environmental protection policies; and
· such other duties and responsibilities as may be assigned or vested in him by the Board from time to time and which are consistent with the duties and responsibilities of a President and Chief Executive Officer. The Executive agrees, during the continuance of his employment, to devote sufficient working time, services, skill and ability to such employment and to serve at all times with loyalty and honesty in the best interests of the Company. The Executive acknowledges that the position of President and CEO will involve significant travel for business development and for investor relations.
-11- [/INST] ```json
{<answer_start>
"answer": "This Agreement can be terminated at any time prior to the expiry of the Term, as follows: (a) by the Consultant electing to give the Company not less than 3 months prior notice of such termination;
(b) by the Company electing to give the Consultant 3 months prior notice of such termination along with a termination payment equal to the annual Consulting Fee;"
<answer_end>
}
``` </s> | EXHIBIT 4.1 CONSULTING AGREEMENT THIS AGREEMENT is dated for reference the 1st day of February, 2020 (the "Effective Date"). BETWEEN: CORAL GOLD RESOURCES LTD., a company duly incorporated pursuant to the laws of the Province of British Columbia and having its head office at Suite 900 - 570 Granville Street, Vancouver, British Columbia V6C 3Pl (the "Company") AND: INTERMARK CAPITAL CORP., a company duly incorporated pursuant to the laws of the Province of British Columbia and having an office at Suite 900 - 570 Granville Street, Vancouver, British Columbia V6C 3PI (the "Consultant") WHEREAS: A. The Company is a mining and exploration company, whose common shares are listed on the TSX Venture Exchange and OTCQX;
B. The Consultant provides management and financial consulting services to exploration and development companies, and the principal shareholder of the Consultant, David Wolfin (the "Principal"), has been the President and Chief Executive Officer and a director of the Company; and
C. The Company wishes to engage the management and financial services of the Consultant, and the Consultant wishes to be engaged by the Company, to perform the functions of a management consultant to the Company as set forth herein below. NOW THEREFORE, in consideration of the premises and the covenants and agreements of the parties hereto as hereinafter set forth, and for other good and reliable consideration, the sufficiency of which is hereby acknowledged by the parties, the parties hereto covenant and agree as follows: 1. ENGAGEMENT OF CONSULTANT
1.1 The Company hereby appoints and engages the Consultant as a consultant with respect to the Services (as defined below) and the Consultant hereby accepts such appointment and engagement by the Company, all upon and subject to the terms and conditions of this Agreement.
2. SERVICES OF CONSULTANT
2.1 During the Term (as defined below), the Consultant shall provide to the Company advisory and consulting services as more particularly set forth in Schedule "A" or as the Company may request from time to time (collectively, the "Services").
-1-
2.2 The Consultant shall at all times and in all respects do its utmost to enhance and develop the business interests and welfareof the Company.
2.3 The Consultant shall be subject to such supervision as may be imposed by the Company in its sole discretion, and the Consultant shall furnish regular reports and any other data and information relating to the Services as may, from time to time, be requested by the Company.
2.4 The Consultant shall provide its services to the Company.
3. FEES
3.1 The Company will pay the Consultant basic remuneration for its services in the sum of $10,000 per month (the "Consulting Fee") commencing on the 1st day of February, 2020, and payable on the last day of each month thereafter up to and including the 31st day of January, 2025, together with any such increments thereto as the Compensation Committee of the Board of Directors of the Company may from time to time determine. In addition, the Company will pay to the Consultant all reasonable expenses of the Consultant as agreed to from time to time which are incurred by the Consultant in delivery of the Services, based on monthly invoices submitted to the Company, including copies of all paid receipts; plus harmonized sales taxes or goods and services taxes, as the case may be, in addition to the Consulting Fees, which taxes will be remitted by the Consultant to the Canada Revenue Agency.
4. TERM AND RENEWAL
4.1 During the term of this Agreement, the Consultant shall provide its Services to the Company through its Principal, and the Consultant shall ensure that the Principal will be available to provide such Services to the Company in a timely manner.
4.2 The term of this Agreement is for a period of five (5) years (the "Term") commencing on the Effective Date and, unless terminated earlier in accordance with the termination provisions of this Agreement, ending on January 31, 2025.
5. TERMINATION
5.1 This Agreement can be terminated at any time prior to the expiry of the Term, as follows: (a) by the Consultant electing to give the Company not less than 3 months prior notice of such termination;
(b) by the Company electing to give the Consultant 3 months prior notice of such termination along with a termination payment equal to the annual Consulting Fee;
(c) by the Consultant electing to give the Company notice, in the event that there occurs a Change of Control (as defined below) within six (6) months of the effective date of such Change of Control, and if the Consultant so elects to terminate this Agreement, then the Consultant will be immediately entitled to a termination payment equal to CDN$750,000; and
-2-
(d) For the purpose of this clause, a Change of Control shall be deemed to have occurred when: (i) any person, entity or group becomes the beneficial owner of 20% or more of the combined voting power of the Company's then outstanding voting securities entitled to vote generally in the election of directors, and such person, entity or group uses such effective voting control to change a majority of the Board of Directors of the Company, either all at once or through any series of elections and appointments when considered together; or
(ii) completion of the sale or other disposition by the Company of all or substantially all of the Company's assets or a reorganization or merger or consolidation of the Company with any other entity or corporation, other than: (A) a reorganization or merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent, either by remaining outstanding or by being converted into voting securities of another entity, more than 50.1 % of the combined voting power of the voting securities of the Company or such other entity outstanding immediately after such reorganization or merger or consolidation; or
(B) a reorganization or merger or consolidation effected to implement a recapitalization or reincorporation of the Company (or similar transaction) that does not result in a material change in beneficial ownership of the voting securities of the Company or its successor. 5.2 On any termination of this Agreement under Section 5.l (a), (b), or (c) all outstanding stock options granted to the Consultant shall be exercisable in accordance with the terms of the option agreements covering such grants. If there is any inconsistency between the terms of this Agreement and the terms of any stock option agreement governing the grant of any stock options to the Consultant or the Principal, then the terms of such stock option agreement shall prevail.
5.3 This Agreement and the Term shall terminate automatically, without any prior notice or any payment to the Consultant, inthe event that: a. the five year Term expires on January 31, 2025;
b. the Consultant should no longer be able to provide the Services through the Principal for any reason;
c. upon the death or permanent incapacity of the Principal; or
d. The Consultant commits any material breach of this Agreement which breach is not remedied within 30 days after notice to the Consultant of such breach. 6. CONFIDENTIALITY
6.1 The Consultant acknowledges and agrees that in the performance of its obligations under this Agreement, it may obtain knowledge of Confidential Information (as defined below) relating to the business or affairs of the Company or its affiliated companies (the "Affiliated Companies").
-3-
The Consultant and the Principal shall not, without the prior written consent of the Company, either during the Term or at any time thereafter: (a) use or disclose any Confidential Information outside of the Company or the Affiliated Companies;
(b) except in undertaking the Services, remove or aid in the removal from the premises of the Company or any of the Affiliated Companies any Confidential Information or any property or material relating thereto; or
(c) use the Confidential Information for any purpose other than in performing the Services. 6.2 The Consultant shall exercise a reasonable degree of care in safeguarding the aforementioned Confidential Information against loss, theft, or other inadvertent disclosure, and further agrees to take all reasonable steps necessary to ensure the maintenance of confidentiality.
6.3 Upon the termination of this Agreement, or upon the Company's earlier request, the Consultant and the Principal shall promptly deliver to the Company all of the Confidential Information that the Consultant and the Principal may have in their possession or control.
6.4 In this Agreement, "Confidential Information" shall mean any information or knowledge including, without limitation, any document, materials, know how, discovery, strategy, method, idea, client list, marketing strategy or employee compensation, or copies or adaptations thereof, that relates to the business or affairs of the Company and I or the Affiliated Companies; and is private or confidential in that it is not generally known or available to the public. Without limiting the generality of the forgoing "Confidential Information" will include: (a) information regarding the Company and the Affiliated Companies' business operations, methods and practices, including marketing strategies, product pricing, margins and hourly rates for staff, costs and all information regarding the financial affairs of the Company and the Affiliated Companies;
(b) all information related to the mineral exploration interests of the Company and the Affiliated Companies including maps, data, records, reports, technical studies, drill hole logs, calculations, opinions, charts, drawings, sketches, plans, documents, summaries, memoranda, analysis and all geological or technical information;
(c) all information related to the properties, projects, facilities, equipment and other assets used in the business of the Company and the Affiliated Companies, and all information related to the exploration or development of (or potential exploration or development of) the Company and the Affiliated Companies' properties or projects, including without limitation any properties or projects in respect of which the Company has made any application or is in any negotiations for the acquisition of an ownership, leasehold or other interest in;
(d) terms of the Company and the Affiliated Companies' relationship with, its investors, (if not otherwise publically available), partners, clients, suppliers of products or services, and the Company and the Affiliated Companies' referral sources;
(e) all information concerning exploration, financing or other business opportunities of the Company and the Affiliated Companies, including all projects, ventures or joint ventures considered by the Company and the Affiliated Companies, whether or not pursued; and
-4-
(f) all trade secrets or other confidential or proprietary information of the Company and the Affiliated Companies including, business plans, concepts, techniques, processes, designs, data, software programs, formula, development or experimental work, work in process or other know-how.
(g) Confidential Information shall specifically not include anything that:
(h) is in or enters lawfully into the public domain other than as a result of a disclosure by the Consultant or the Principal;
(i) becomes available to the Consultant on a non-confidential basis from a source other than the Company or the affiliated Companies, or any of its representatives, and that source was not under any obligation of confidentiality; or
(j) the Consultant is required to disclose pursuant to an order of a court of competent jurisdiction or by the operation of law; provided that, the Consultant provides prompt prior written notice to the Company of such required disclosure and of the action which is proposed to be taken in response. In such an event, and only after the Consultant shall have made a reasonable effort to obtain a protective order or other reliable assurance affording such information confidential treatment, the Consultant shall furnish only that portion of the Confidential Information which it is required to disclose. 7. NON-SOLICITATION
7.1 The Consultant covenants, undertakes and agrees with the Company that during the Term and for a period of one year from the date of expiration or termination of this Agreement for any reason whatsoever, it shall not, on its own behalf or on behalf of any person, whether directly or indirectly, in any capacity whatsoever, offer employment to or solicit the employment of or otherwise entice away from the employment of the Company or any of the Affiliated Companies, any individual who is employed or engaged by the Company or any of the Affiliated Companies at the date of expiration or termination of this Agreement or who was employed or engaged by the Company or any of the Affiliated Companies, within the one year period immediately preceding the date of expiration or termination of this Agreement, as applicable.
7.2 The Consultant acknowledges and agrees that the above restriction on non-solicitation is reasonable and necessary for the proper protection of the businesses, property and goodwill of the Company and the Affiliated Companies.
8. DISCLOSURE AND ASSIGNMENT OF PROJECTS AND WORKS
8.1 The Consultant agrees that all discoveries, maps, technical studies, plans, spreadsheets, documents, inventions, copyright, software, improvements, know-how or other intellectual property, whether or not patentable or copyrightable, created by the Consultant during the Term of this Agreement pertaining to any service, matter, thing, process or method related to this Agreement (the "Works") will be the sole and absolute property of the Company. The Consultant will keep and maintain adequate and current written records of all Works made, which records will be available at all times to the Company and will remain the sole property of the Company.
8.2 The Consultant will assist the Company in obtaining and enforcing, for the Company's own benefit, patents, copyrights and any other protections in any and all countries for any and all Works made by the Consultant (in whole or in part) the rights to which belong to or have been assigned to the Company. The Consultant agrees, upon request, to execute all applications, assignments, instruments and papers and perform all acts that the Company or its counsel may deem necessary or desirable to obtain any and all patents, copyrights or other protection in such Works and otherwise to protect the interests of the Company therein.
-5-
9. COMPLIANCE WITH LAWS
9.1 The Services undertaken by the Consultant under this Agreement shall be in full compliance with all applicable laws andconsistent with a high degree of business ethics.
10. INDEMNIFICATION
10.1 The Consultant shall indemnify and save harmless the Company for any demonstrated losses, damages, costs or other amounts, including without limitation reasonable legal fees, suffered or incurred by the Company arising out of third party claims relating to the presence or activities of the Consultant or its representatives in performing the Services to the extent that such losses, damages, costs or other amounts are caused by: (a) any breach of the Consultant's obligation in Section 9 herein; and
(b) any negligence, willful misconduct or fraud on the part of the Consultant in performing the Services. 10.2 Subject to the Consultant's obligation to indemnify the Company under this Section 10, and provided that the Consultant has not breached Section 9, the Company shall indemnify and save harmless the Consultant for any demonstrated losses, damages, costs or other amounts, including without limitation reasonable legal fees, suffered or incurred by the Consultant arising out of third party claims relating to the presence or activities of the Consultant and/or its representatives in performing the Services to the extent that such losses, damages, costs or other amounts are caused by the negligence, willful misconduct or fraud on the part of the Company.
10.3 Neither the Company nor the Consultant shall be liable for any consequential loss, including but not limited to, claims for loss of profit, revenue or capital, loss of use of utilities, equipment or facilities, down-time cost, service interruption, cost of money, injury or damage of any character whatsoever.
11. REMEDIES
11.1 The Consultant acknowledges and agrees that any breach of this Agreement by it could cause irreparable damage to the Company and I or the Affiliated Companies and that in the event of a breach by the Consultant, the Company shall have in addition to any and all other remedies at law or in equity, the right to an injunction, specific performance or other equitable relief to prevent any violation by the Consultant of any of the provisions of this Agreement. In the event of any such dispute, the Consultant agrees that the Company shall be entitled, without showing actual damages, to a temporary or permanent injunction restraining conduct of the Consultant pending a determination of such dispute and that no bond or other security shall be required from the Company in connection therewith. The Consultant acknowledges and agrees that the remedies of the Company specified in this Agreement are in addition to and not in substitution for any other rights and remedies of the Company at law or in equity and that all such rights and remedies are cumulative and not alternative or exclusive of any other rights or remedies and that the Company may have recourse to any one or more of its available rights and remedies as it shall see fit.
-6-
12. RELATIONSHIP
12.1 The Company and Consultant each acknowledge and agree that the only relationship of the Consultant to the Company created by this Agreement shall for all purposes be that of a contractor, and all persons employed or engaged by the Consultant, including David Wolfin in connection herewith shall for all purposes be considered to be employed or engaged, as applicable, by the Consultant and not by the Company. The Company shall have no obligation whatsoever to pay or compensate the Consultant and/or any representative of the Consultant including David Wolfin, for taxes of any kind whatsoever that arise out of or with respect to any Consulting Fee, or any other fee, remuneration or compensation provided to the Consultant under this Agreement.
12.2 The Consultant shall fully indemnify and hold harmless the Company from and against all assessments, claims, liabilities, costs, expenses and damages that the Company and I or any of the Affiliated Companies may suffer or incur with respect to any such taxes or benefits. For greater clarity, the Consultant is solely responsible for the deduction and remissions of income tax, pension and employment insurance in respect of any employees retained by the Consultant to perform the services under this Agreement. Furthermore, if these amounts are not remitted, the Consultant will, in addition to any other provision under this Agreement, indemnify and hold harmless the Company, its subsidiaries, affiliates and their respective directors and officers from and against any claim for taxes, penalties and for withholding of funds by the applicable tax, worker's compensation, employment standards and insurance agencies or any other government agency with respect to any amount found to be payable by the Company to such agency or commission in respect of the Consultant's provision of services under this Agreement, including any legal fees incurred by the Company in defending such claims.
13. SURVIVAL OF TERMS
13.l Sections 6 through 12, inclusive, and this Section 13, shall survive and remain in force notwithstanding the expiration or other termination of this Agreement for any reason whatsoever. Any expiration or termination of this Agreement shall be without prejudice to any rights and obligations of the parties hereto arising or existing up to the effective date of such expiration or termination, or any remedies of the parties with respect thereto.
14. LIMITED AUTHORITY AS AGENT
14.1 Unless otherwise agreed to in writing by the parties, the Consultant may not act as an agent of the Company; however, this does not and is not intended to restrict the powers of the Principal to act as President and Chief Executive Officer of the Company in any way. Without limiting the generality of the foregoing, the Consultant shall not commit or be entitled to commit the Company to any obligation whatsoever nor shall the Consultant incur or be entitled to incur any debt or liability whatsoever on behalf of the Company, except as otherwise agreed to by the Company.
15. NO ASSIGNMENT
15.1 Neither this Agreement nor any of the rights of any of the parties under this Agreement shall be assigned without thewritten consent of all the parties.
-7-
16. SUCCESSORS AND ASSIGNS
16.1 The Agreement shall enure to the benefit of and be binding upon the parties and their respective heirs, executors,administrators, successors and permitted assigns, as the case may be.
17. WAIVER
17.1 Any waiver of any breach or default under this Agreement shall only be effective if in writing signed by the party against whom the waiver is sought to be enforced, and no waiver shall be implied by indulgence, delay or other act, omission or conduct. Any waiver shall only apply to the specific matter waived and only in the specific instance i n which it is waived.
18. GOVERNING LAWS
18.1 Unless otherwise agreed to in writing by the parties, the Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein, and the parties hereto submit and attorn to the jurisdiction of the courts of the Province of British Columbia.
19. FURTHER ASSURANCES
19.1 Each of the parties shall, on request by the other party, execute and deliver or cause to be executed and delivered all such further documents and instruments and do all such further acts and things as the other party may reasonably require to evidence, carry out and give full effect to the terms, conditions, intent and meaning of this Agreement and to ensure the completion of the transactions contemplated hereby.
20. NOTICES
20.1 All notices required or permitted under this Agreement shall be in writing and shall be given by delivering such notice or mailing such notice by pre-paid registered mail, by facsimile transmission or electronic mail to the addresses provided under the names of each party on the first page to this Agreement. Any such notice or other communication shall, if delivered, be deemed to have been given or made and received on the date delivered (or the next business day if the day of delivery is not a business day), and if mailed, shall be deemed to have been given or made and received on the fifth business day following the day on which it was so mailed and if faxed (with confirmation received) shall be deemed to have been given or made and received on the day on which it was so faxed (or the next business day if the day of sending is not a business day). The parties may give from time to time written notice of change of address in the manner aforesaid.
21. CONSTRUCTION
21.1 In this Agreement, unless otherwise indicated: (a) "Agreement" means this Consulting Agreement;
(b) the words "include", "including" or "in particular", when following any general term or statement, shall not be construed as limiting the general term or statement to the specific items or matters set forth or to similar items or matters, but rather as permitting the general term or statement to refer to all other items or matters that could reasonably fall within the broadest possible scope of the general term or statement;
-8-
(c) "herein", "hereby", "hereunder", "hereof', "hereto" and words of similar import, refer to this Agreement as a whole and not to any particular Section of this Agreement;
(d) a reference to a statute means that statute, as amended and in effect as of the date hereof, and includes each and every regulation and rule made thereunder and in effect as of the date hereof, and includes all amendments thereof given effect from time to time;
(e) a reference to a Section means, unless the context otherwise requires, that specific Section in Agreement;
(f) a reference to a "consent", "notice" or "agreement" means a consent, notice or agreement, as the case may be, by an authorized representative of the party or parties thereto;
(g) where a word, term or phrase is defined herein, its derivatives or other grammatical forms have a corresponding meaning;
(h) all words, other than defined terms, used in this Agreement, regardless of the number and gender in which they are used, shall be deemed and construed to include the singular or the plural and the masculine, feminine or body corporate, as the context may require;
(i) time is of the essence;
(j) in the event that any date on which any action is required to be taken hereunder by any of the parties hereto is not a business day, such action shall be required to be taken on the next succeeding day which is a business day;
(k) references to a "party" or "parties" are references to a party or parties to this Agreement;
(l) the headings in this Agreement form no part of this Agreement and shall be deemed to have been inserted for convenience only;
(m) unless otherwise agreed to in writing by the parties, all dollar amount referred to herein are expressed in Canadian dollars; and
(n) the Effective Date of this Agreement shall be February 1, 2020, despite the actual date of execution of this Agreement. 22. SEVERABILITY
22.1 If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal or unenforceable, then tothe fullest extent permitted by law: (a) all other provisions of this Agreement shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the parties as nearly as may be possible; and
(b) such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction. 23. COUNTERPARTS AND FACSIMILE
23.l This Agreement may be executed in one or more counterparts and delivered by facsimile, each of which when so executed shall constitute an original and all of which together shall constitute one and the same agreement.
24. INDEPENDENT LEGAL ADVICE
24.1 The Company has recommended to the Consultant that it obtain independent legal advice prior to signing this Agreement. The Consultant acknowledges that it has received independent legal advice or have waived the opportunity to do so and have elected to proceed without benefit of same.
-9-
IN WITNESS WHEREOF this Agreement has been executed as of the Effective Date. CORAL GOLD RESOURCES LTD. Per: "Ronald Andrews" Authorized Signatory INTERMARK CAPITAL CORP. Per: "David Wolfin" Authorized Signatory
-10-
THIS IS SCHEDULE "A" TO THE CONSULTING AGREEMENT BETWEEN CORAL GOLD RESOURCES LTD. AND lNTERMARK CAPlTAL CORP. Description of Consulting Services: The Consultant shall provide management and financial consulting services, including the supervision of the senior management, all staff, and all field personnel of the Company, whether employees or consultants, strategic planning and property acquisitions, strategic financial planning and annual budget reviews, as well as the implementation and monitoring of the Company's compliance with continuous reporting requirements, internal controls over accounting systems and financial reporting to the Company. Duties and Responsibilities: The Executive shall serve the Company as an executive officer in the position of President and Chief Executive Officer. The Executive shall report to the Board and shall undertake and perform the following duties and responsibilities: · actively engage with the Board to ensure that the initiatives of the management team are aligned with the strategic direction and objectives for the Company that have been established by the Board;
· provide overall direction for the Company in order for it to implement agreed strategies in order to meet Company goals and objectives;
· provide shareholder and investor communication and manage key investment banking and institutional relationships;
· make decisions in line with organizational goals, leading to desired results, and will be responsible and accountable for results;
· create and sustain the organizational culture and environment needed to achieve objectives and results and recruit and retain a high-performance operating team;
· oversee the implementation and monitoring of internal controls, reporting compliance obligations, sign off on CEO Certificates for the interim and annual financial statements and setting environmental protection policies; and
· such other duties and responsibilities as may be assigned or vested in him by the Board from time to time and which are consistent with the duties and responsibilities of a President and Chief Executive Officer. The Executive agrees, during the continuance of his employment, to devote sufficient working time, services, skill and ability to such employment and to serve at all times with loyalty and honesty in the best interests of the Company. The Executive acknowledges that the position of President and CEO will involve significant travel for business development and for investor relations.
-11- | Highlight the parts (if any) of this contract related to "Termination For Convenience" that should be reviewed by a lawyer. Details: Can a party terminate this contract without cause (solely by giving a notice and allowing a waiting period to expire)? | {
"answer_start": [
4039
],
"text": [
"This Agreement can be terminated at any time prior to the expiry of the Term, as follows: (a) by the Consultant electing to give the Company not less than 3 months prior notice of such termination;\n\n(b) by the Company electing to give the Consultant 3 months prior notice of such termination along with a termination payment equal to the annual Consulting Fee;"
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Affiliate License-Licensee" that should be reviewed by a lawyer. Details: Does the contract contain a license grant to a licensee (incl. sublicensor) and the affiliates of such licensee/sublicensor?
Context: EXHIBIT 10.6
EXHIBIT 10.06
WATCHGUARD TECHNOLOGIES, INC. DISTRIBUTOR AGREEMENT
This Agreement is made and entered into effective as of November 5, 1997 (the "effective Date), by and between WatchGuard Technologies, Inc., a Delaware corporation ("WGT"), and European Micro ("Distributor"). WGT and Distributor agree as follows:
Section 1. Definitions
"Add-On Software Modules" means those computer software programs that (a) provide additional functionality and may be integrated with the existing Hardware and other Software, (b) may be legally exported to the Territory without any export license and (c) WGT elects to include in Exhibit A at a mutually agreed discount percentage.
"Distributor Cost" means the purchase price payable by Distributor for each Product at the discount from WGT's then current WatchGuard Price List, as such discount is set forth in Exhibit A.
"Documentation" means any and all manuals, user guides, end-user license agreement, limited hardware warranty, on-line help files, on-line menus and other in program printed text regarding the Product prepared by or for WGT in connection with the Product.
"Gross Purchases" means the gross purchase price Distributor pays WGT for the Product, excluding any taxes or pass through charges and net of any credits or returns.
"Guaranteed Minimum Purchases" means the guaranteed minimum purchase amounts set forth in Exhibit A.
"Hardware" means the hardware identified on Exhibit A, together with any Updates to such hardware. WGT reserves the right to add to or delete hardware from Exhibit A and to modify the hardware during the Term.
"Product" means the combination of Hardware, Software and Documentation together as part of the same product package (including any Add-On Software Modules and any Updates thereto), in all cases carrying the "WatchGuard" Trademark.
"Quarter" means any period of three (3) consecutive calendar months that begins on January 1, April 1, July 1 or October 1, during the Term.
"Software" means the computer programs identified on Exhibit A, in object code only, together with any Updates to such programs. WGT reserves the right to add or delete Software from Exhibit A and to modify the Software during the Term.
"Term" means the period of time determined in accordance with Section 5.
"Territory" means the geographic area described in Exhibit A.
"Trademarks" means the trademarks and trade names of WGT identified in Exhibit A.
"Update" means any minor modification, minor upgrade or minor enhancement of the Product (excluding any new version of the Product) that WGT publishes and elects to make available to Distributor via BBS, FTP site or other reasonable means. WGT is not obligated to make or release any update.
Section 2. Relationship of the Parties
2.1 Appointment. Subject to and in accordance with the provisions of this Agreement, WGT hereby appoints Distributor, and Distributor hereby accepts WGT's appointment, as a nonexclusive distributor of the Product to resellers in the Territory during the Term, as long as Distributor makes the Guaranteed Minimum Purchases pursuant to Section 4.
2.2 License Grant. Subject to the terms and conditions of this Agreement, WGT grants to Distributor a nontransferable license to do the following in the Territory during the Term:
(a) market and distribute the Product to resellers;
(b) demonstrate the Product to potential resellers;
(c) use the Product internally for the sole purpose of providing this product support specified in paragraph 4.1(c);
(d) use and display the Trademarks in connection with marketing and distributing the Product in the Territory pursuant to paragraphs (a) and (b) above.
2.3 No Exclusivity. Distributor's appointment and the rights granted hereunder are nonexclusive. WGT may, at its sole option, appoint other distributors of the Product in the Territory at any time during the Term and expressly reserves the right to license the Product directly or indirectly to
end-users, third party original equipment manufacturers or other hardware bundlers, value-added resellers or other resellers for sublicense or resale in the Territory.
Section 3. Compensation
3.1 Support services. As full compensation for the support services described in Exhibit C and provided during the Term, Distributor will pay WGT the Support Fee set forth in Exhibit A. Payment of the Support Fee is due and payable upon execution of this Agreement by wire transfer of immediately payable funds to the bank and account set forth in paragraph 3.4, and then annually by invoice from WGT on the anniversary of the execution of the Agreement.
2
3.2 Price. Distributor will pay WGT for each Product Distributor orders an amount equal to WGT's then current WatchGuard Price List in effect on the date of receipt by WGT of Distributor's order, subject to the applicable discount set forth in Exhibit A. WGT may, from time to time, change its WatchGuard Price List, provided that any such change will not be effective under this Agreement unless and until the expiration of forty-five (45) days after WGT gives Distributor written notices of the change.
3.3 Guaranteed Minimum Purchases. During the Term, Distributor will make Gross Purchases in an amount at least equal to the cumulative Guaranteed Minimum Purchase amounts through committed orders placed pursuant to paragraph 3.5 and calling for shipment on or before the dates set forth in Exhibit A.
3.4 Invoices. WGT will issue invoices for the Products ordered by Distributor and all other amounts payable to WGT under this Agreement. Distributor will pay WGT the full amount invoiced within thirty (30) days after the date of WGT's invoice, unless provided otherwise on the applicable invoice, in the lawful money of the United States of America to WGT by wire transfer of immediately available funds to WGT's bank account number 1141139, at the Commerce Bank of Washington, 601 Union Street, Suite 3600, Seattle, WA 98101, ABA routing number 125008013.
3.5 Orders. Distributor will place orders for the Product from WGT by completing, signing and submitting to WGT a written order for the same, in a form acceptable to WGT, via facsimile, mail or other means. Distributor shall submit such order at least thirty (30) days in advance of the delivery date set forth in each order. All orders will be subject to acceptance by WGT through written acceptance or shipment of the Product subject to the order.
Section 4. General Obligations of the Parties.
4.1 Obligations of Distributor. Distributor will use its best efforts aggressively to develop sales of the Product in the Territory. In furtherance thereof, Distributor will:
(a) keep on hand a reasonable inventory of the Product sufficient to allow for prompt delivery of the Product to resellers;
(b) establish a program to market the Product, including, but not limited to, participating regularly in local and regional trade shows, conventions or like events in the Territory, and conducting regular local promotional and other marketing efforts for the Product;
(c) provide quality product support to resellers, including, but not limited to, providing appropriate installation and application advice and prompt follow-up service and advice to resellers of the Product upon request;
(d) provide a support center to resellers, including, but not limited to, a hotline service to answer reseller questions and to receive and track complaints and any reports of claimed errors in the Product;
3
(e) provide quality product technical and sales training to resellers;
(f) respond promptly to sales leads or referrals furnished by WGT or by other distributors or dealers of WGT;
(g) have a designated number of employees attend such technical and sales training programs as set forth in Exhibit C;
(h) maintain and furnish periodically, as WGT may reasonably request, complete and accurate records of each sale or other distribution of each Product sold or distributed by Distributor (e.g., showing the date of sale, Zip code of the customer, the Product serial number and the applicable Product license key(s)) under this Agreement;
(i) promptly advise WGT of each complaint that Distributor may receive or becomes aware of concerning the Product or any portion thereof (including, but not limited to, warranty claims). Distributor will promptly investigate all such complaints and will give immediate attention to and use its best efforts to promptly, courteously and equitably respond to, adjust and settle (without incurring any obligation or liability on behalf of WGT) all
complaints received by Distributor from any customer, potential customer or anyone else arising out of or in connection with Distributor's sale of any Product, or the performance of any services. In handling any complaints, Distributor will use its best efforts to maintain and promote good public relations for WGT;
(j) secure and maintain, in the name of WGT, any and all registrations, permits, licenses, approvals and other governmental actions required to import, handle, market, sell, demonstrate, use and distribute the Product in the Territory, provide to WGT quarterly progress reports on such action, and provide WGT copies of all registrations, permits, licenses, approvals, certificates, correspondence and other documentation related to such action;
(k) hire, train, coordinate and maintain a qualified staff of sufficient size and with a level and mix of capabilities as are reasonably necessary to accomplish the goals contemplated under this Agreement;
(l) avoid deceptive, misleading or unethical conduct which are or might be detrimental to WGT or its Product, and refrain from making any representation, warranty or guarantee to any reseller with respect to specifications, features or capabilities of the Product that is inconsistent with the literature distributed by WGT or this Agreement;
(m) conduct its business in a manner under its own control, provided that Distributor will at all times comply with all applicable laws and regulations and will not engage in, or permit its employees or agents to engage in, any activities or practices which could reflect negatively upon the reputation or prospects of WGT or the Product or expose WGT to any liability of any nature whatsoever; and
4.2 Obligations of WGT, WGT will:
4
(a) provide Distributor with sixty (60) days advance notice in the event that it discontinues production of any Product;
(b) provide Distributor with the training and product support services described in Exhibit C; and
(c) furnish Distributor with such demonstration Product, promotional literature, data, information and other items as WGT deems appropriate for Distributor's promotion, marketing and sale of the Product. WGT will use such items only for the purpose of performing its obligations under this Agreement.
4.3 Forecasts. Distributor's forecast of Product purchases for the Term is set forth on Exhibit D. At least fifteen (15) days before the beginning of each Quarter during the Term, Distributor will furnish WGT with a rolling revised forecast of Product orders for the remainder of the Term.
Section 5. Term and Termination.
5.1 Term. The Term will commence on the Effective Date of this Agreement and will remain in effect, unless sooner terminated under paragraphs 5.2, 5.3, or 5.4, until the termination date specified in Exhibit A.
The Term will automatically renew for successive additional periods of one (1) year each, provided that: (a) Distributor has made all Guaranteed Minimum Purchases and has complied with the marketing requirements under paragraph 4.1(b); (b) the parties have agreed in writing upon the Guaranteed Minimum Purchase amounts and Product price discounts for the next subsequent one (1) year renewal period; (c) neither party provided the other party with notice of such party's intention not to renew this Agreement at least thirty (30) days prior to any year's Expiration Date; and (d) neither party provided the other party with such notice as may be required pursuant to paragraphs 5.2, 5.3 or 5.4.
5.2 Termination by WGT. Upon the occurrence of any of the following, WGT may terminate the Term by giving Distributor written notice of such termination for:
(a) any failure of Distributor to comply with the marketing requirements under paragraph 4.1(b);
(b) any material change in the general management, ownership or control of Distributor, including without limitation the sale, transfer or relinquishment by Distributor of any substantial interest in the ownership of the business to be carried on by Distributor under this Agreement, unless such change is approved in advance and in writing by an officer of WGT;
(c) any assignment or attempted assignment of this Agreement by Distributor without the prior written consent of WGT;
(d) any solicitation by Distributor for the sale of the Product to resellers located outside the Territory;
5
(e) the insolvency of Distributor, the filing of a petition in bankruptcy by or against Distributor, the appointment of a receiver for Distributor or Distributor's property, the execution of an assignment by Distributor of all or substantially all of its assets for the benefit of its creditors, or the conviction of Distributor or any principal or manager of Distributor for any crime tending to adversely affect the ownership or operation of Distributor's business;
(f) any failure by Distributor to perform any of its other obligations under this Agreement where such failure continues for thirty (30) days after written notice thereof by WGT to Distributor; or
(g) WGT giving Distributor ninety (90) days' advance written notice of termination at any time after the expiration of the Initial Term.
5.3 Failure to Make Guaranteed Minimum Purchases. Upon any failure by Distributor to make Gross Purchases in sufficient amounts to meet or exceed the applicable cumulative Guaranteed Minimum Purchases, WGT may, at its sole option and effective upon notice to Distributor, terminate this Agreement. Distributor shall pay WGT fifty percent (50%) of the unpaid balance of cumulative Guaranteed Minimum Purchase amounts as liquidated damages. The parties acknowledge and agree that it would be difficult or impossible to calculate WGT's actual damages arising from Distributor's failure to timely pay all of the Guaranteed Minimum Purchases. Therefore, the parties have agreed upon the above payment of liquidated damages in lieu of WGT's claim for actual damages from such breach.
5.4 Termination by Distributor. Upon the occurrence of any of the following, Distributor may terminate the Term by giving WGT written notice of such termination;
(a) the insolvency of WGT, the filing of a petition by or against WGT, the appointment of a receiver for WGT or WGT's property, or the execution of an assignment by WGT of all or substantially all of its assets for the benefit of its creditors;
(b) any failure by WGT to perform any of its obligations under this Agreement where such failure continues for thirty (30) days after written notice thereof by Distributor to WGT; or
(c) for convenience whether or not extended beyond the Initial Term, provided Distributor gives WGT thirty (30) days' advance written notice and, within such thirty (30) day period, Distributor pays to WGT a lump-sum payment equal to fifty (50%) of the unpaid balance of cumulative Guaranteed Minimum Purchase amounts.
5.5 Effect of Termination. Any termination pursuant to paragraphs 5.2, 5.3, or 5.4 will be without prejudice to any other right or remedy afforded to either party under this Agreement or any applicable law (e.g., in the case of any breach or default by the other party), and will not affect any rights or obligations which have arisen prior to the date of such termination. In the event of termination, Distributor will:
6
(a) immediately cease to demonstrate, market, sublicense and distribute the Product in the Territory;
(b) cease use of all Trademarks of WGT;
(c) return to WGT within twenty (20) days following the expiration or termination of the Term, any and all (i) demonstration Product provided to Distributor; (ii) Products not already paid for in full by Distributor; and (iii) promotional literature, data, information and other items received by Distributor under this Agreement; and
(d) furnish WGT with such information relating to the marketing, sale or distribution of the Product in the Territory as WGT may reasonably request (including, but not limited to, information as to calls or the status of any negotiations for the sale of the Product, or any sales or service records).
Upon the expiration or termination of the Term, the license granted under Section 2 of this Agreement will terminate. Any end-user licenses of the Software granted under the terms of this Agreement will survive the end of the Term in accordance with the terms of the applicable end-user license agreement.
5.6 Acknowledgment. Any expiration or termination of the Term will be final and absolute. Except as expressly set forth in paragraphs 5.3 and 5.5(c), Distributor waives any right, either express or implied by applicable law or otherwise, to the renewal of this Agreement or to any damages or compensation for any expiration or termination of the Term in accordance with this Section 5. Each of the parties have considered the possibility of such expiration or termination and the possibility of loss and damage resulting therefrom in making expenditures pursuant to the performance of this Agreement. It is the express intent and agreement of the parties that neither will be liable to the other for damages, except as expressly set forth in paragraphs 5.3 and 5.5(c), or otherwise by reason of the expiration or termination of the Term as provided for herein.
6.0 Force Majeure. Neither party will be liable for, or be considered to be in breach of or default under this Agreement on account of, any delay or
failure to perform as required by this Agreement (other than for payment under Section 3), as a result of any cause or condition beyond such party's reasonable control.
7.0 Entire Agreement. This Agreement is subject to the provisions of WGT's Standard Distributor Terms attached hereto as Exhibit B and by this reference incorporated into and as part of this Agreement. This Agreement is also subject to any additional terms or licenses executed by WGT and Distributor and attached as Exhibits, including any Special Terms and Conditions specified in Exhibit A. This Agreement sets forth the entire agreement, and supersedes any and all prior agreements, among the parties related to the Product. WGT will not be bound by, and specifically objects to, any term, condition, or other provision that is different from or in addition to the provisions of this Agreement (whether or not it would materially alter this Agreement) and that is proffered by Distributor or otherwise appears in any order, receipt, acceptance, confirmation, correspondence, or otherwise, unless WGT specifically agrees to such provision in a written instrument signed by WGT. No
7
modifications of any of the provisions of this Agreement will be valid unless set forth in a written instrument signed by both parties. Any remedy by WGT set forth in this Agreement is in addition to any other remedy afforded to WGT under any other contract, by law, or otherwise.
IN WITNESS THEREOF, the parties have executed this Agreement as of the date first above written.
Distributor: WatchGuard Technologies, Inc.
By: /s/ LAURENCE GILBERT By: /s/ WATCHGUARD ------------------------- ------------------------------
Title: MANAGING DIRECTOR Title: VP/SALES
Date Signed: NOVEMBER 5, 1997 Date Signed: NOVEMBER 3, 1997
Address: 20/24 Church Street Required Signature: Altrincham, Cheshire WA14 4DW, ENGLAND By: ------------------------------- Title: Executive Vice-President Sales
Date Signed: ---------------------
Address: 316 Occidental Avenue South Suite 300 Seattle, Washington 98104
8
FULL SERVICE MASTER DISTRIBUTOR SCHEDULE EXHIBIT A
PRODUCTS:
Distributor will be entitled to order the following products (which includes hardware and software) at the following discounts of WGT's then current WatchGuard Price List:
- ------------------------------------------------------------------------------- DISCOUNT FROM WGT'S PRODUCT THEN CURRENT WATCHGUARD PRICE LIST - ------------------------------------------------------------------------------- WatchGuard Security System 40% plus additional 10% on the remaining undiscounted amount, i.e., 46%
- ------------------------------------------------------------------------------
EXCHANGE FEE: $10 per CD SUPPORT FEE: $25,000 per year
CUMULATIVE GUARANTEED MINIMUM PURCHASES DATE OF ORDER (U.S. DOLLARS) - -------------------------------------------------- --------------------------- Upon contract signing $100,000.00 1st subsequent Quarter-end, Sept. 30, 1997 $100,000.00 2nd subsequent Quarter-end, Dec. 31, 1997 $167,000.00 3rd subsequent Quarter-end, Mar. 31, 1997 $234,000.00 4th subsequent Quarter-end, Jun 30, 1997 $300,000.00
TERMINATION DATE: September 30, 1997 TRADEMARKS:
/bullet/ WatchGuard(TM)
/bullet/ WatchGuard(TM) Technologies
/bullet/ WatchGuard(TM) SchoolMate
/bullet/ Firebox(TM)
TERRITORY:
/bullet/ Europe
SPECIAL TERMS AND CONDITIONS
9
These Special Terms and Conditions are part of the Distributor Agreement between WatchGuard Technologies, Inc. ("WGT") and Distributor (collectively, the "Agreement"). Terms that are defined in the Distributor Agreement will have the same meaning when used in these Special Terms and Conditions.
Section A.1 By joint agreement between WGT and Distributor, Distributor may engage in end user sales in the Territory.
If it is agreed that Distributor may engage in end user sales, Distributor may distribute, license and sell up to 20% of the Product purchased from WGT directly to end-users in the Territory. Further, Distributor agrees that high end-users satisfaction is a condition of its continued authorization by WGT. To ensure high end-user satisfaction, Distributor shall: (a) provide quality first level support to its end-user customers; (b) promptly report to WGT all suspected and actual problems with any WGT product; (c) assist WGT in tracing WGT Products to particular end users to distribute critical WGT Product information, locate WGT Products for safety reasons, or to be discover unauthorized marketing or infringing acts; (d) avoid deceptive, misleading or unethical conduct which are or might be detrimental to WGT or its WGT product; and (e) refrain from marking any representation, warranty or guarantee to end users with respect to the specifications, features or capabilities of the WGT Product that is inconsistent with the literature distributed by WGT or this Agreement.
Section A.2 Distributor is legally organized under the jurisdiction of a country belonging to the European Union.
If Distributor is organized under the jurisdiction of the country belonging to the European Union, the following clause is hereby appended to Section 1(c) of the Standard Distributor Terms:
"PROVIDED HOWEVER, the foregoing restriction is not intended to preclude Distributor from fulfilling, and Distributor may fulfill, unsolicited orders for Product received from outside the Territory but within the European Union (and Distributor shall provide WGT written notice of any such Sales);"
Section A.3 As a Full Service Master Distributor, Distributor agrees to sign up a minimum of 10 new WatchGuard resellers in the Territory within the Initial Term of the Agreement.
- -------------------------------------------- --------------------------------- Distributor: WatchGuard Technologies, Inc.:
By: /s/ LAURENCE GILBERT By: /s/ WATCHGUARD -------------------------- ----------------------------- Title: MANAGING DIRECTOR Title: SENIOR VICE PRESIDENT/SALES Date Signed: NOVEMBER 5, 1997 Date Signed: NOVEMBER 3, 1997 -------------------------------------------- ---------------------------------
10
STANDARD DISTRIBUTOR TERMS EXHIBIT B
These Standard Distributor Terms are part of the Distributor Agreement between WatchGuard Technologies, Inc. ("WGT") and Distributor (collectively, the "Agreement"). Terms that are defined in the Distributor Agreement will have the same meaning when used in these Standard Distributor Terms.
1. Reservation of Rights. The Software is licensed, not sold, to Distributor. PARAGRAPH 2.2 LICENSE GRANT of the Distributor Agreement sets forth the entirety of Distributor's rights to use, market, distribute, demonstrate and otherwise deal with the Product. All rights in and to the Product not expressly granted to Distributor under this Agreement are hereby expressly reserved to WGT without restriction. Without limiting the generality of the foregoing, Distributor will comply with the following:
(a) Distributor will distribute the Product to resellers only pursuant to a reseller agreement that substantially conforms to the term of this
Agreement;
(b) Distributor will not market, demonstrate or distribute the Product outside the Territory and Distributor will not supply the Product to any reseller that Distributor knows or has reason to know (i) intends to distribute the Product outside the Territory or (ii) intends to use or install the Product outside the Territory;
(c) Distributor will market, sell and distribute the Product only in its original, unopened package as received from WGT under the terms of the end-user license agreement and limited hardware warranty, as applicable, originally included in the Product package;
(d) Distributor will not modify or make copies of the Product or translate or port the Software into any other computer or human language;
(e) Distributor will not disassemble, reverse engineer, decompile or repackage all or any component of the Product or otherwise attempt to discover any portion of the source code or trade secrets related to the Product;
(f) Distributor will not remove, alter, distort, cover or modify any notice of copyright, trademark or other proprietary right appearing in or on any item included with the Product or its packaging; and
(g) Distributor will not register, attempt to register or assist anyone else to register, directly or indirectly, the Trademarks or any copyright or other proprietary rights associated with the Product in the Territory or elsewhere other than in the name of WGT, without WGT's prior written consent.
2. Protection Against Unauthorized Use. Distributor will promptly notify WGT of any unauthorized use of the Product or the Trademarks which comes to Distributor's attention. In
11
the event of any such unauthorized use by Distributor's employees, agents or representatives, Distributor will use its best efforts to terminate such unauthorized use and to retrieve any copy of the Product in the possession or control of the person or entity engaging in such unauthorized use. Distributor will immediately notify WGT of any legal proceeding initiated by Distributor in connection with such unauthorized use. WGT may, at its option and expense, participate in any proceeding and, in such event, Distributor will provide such authority, information and assistance related to such proceeding as WGT may reasonably request to protect WGT's interests.
3. Use of Trademarks. WGT reserves all rights in and to the Trademarks and all other trademarks and trade names used by WGT in connection with the Products, but WGT grants to Distributor the nonexclusive right to use and display the Trademarks during the Term to promote and identify the Product in the Territory in connection with this Agreement. Distributor will comply with the trademark guidelines and procedures established by WGT in Distributor's use of the Trademarks including without limitation use of the trademark and copyright symbols as specified by WGT from time to time. When using the Trademarks, Distributor will include a statement acknowledging that the Trademarks are owned by WGT. Distributor hereby acknowledges that the goodwill associated with its use of the Trademarks inures solely and exclusively to WGT and that Distributor does not acquire any rights in the Trademarks as a result of such use. Distributor will not use the Trademarks or any confusingly similar name, marks, logos, designs or artwork as part of Distributor's name, trade name, trademark or artwork without WGT's prior written consent.
4. Independent Contractor. Distributor is an independent contractor, not an employee, agent or franchisee of WGT. Distributor will not represent or hold itself out as an employee, agent or franchisee of WGT. Distributor does not have any authority to, and will not, create or assume any license, warranty or other obligation, express or implied, on behalf of WGT. This Agreement will not be interpreted or construed as creating or evidencing any association, joint venture or partnership between the parties or as imposing any partnership or franchisor obligation or liability on either party.
5. Delivery. WGT will deliver all Products ordered by Distributor F.O.B. carrier at WGT's shipping location as determined by WGT from time to time, on or before the delivery date set forth in each accepted order. Distributor will pay or reimburse WGT for all shipping charges, premiums for freight insurance, inspection fees, duties, import and export fees, assessments, transportation and other costs incurred by WGT to transport the Product to the shipping destination.
6. Resale. Distributor represents that all Products acquired under this Agreement are acquired solely for demonstration, licensing or sale (as applicable) and distribution to resellers or end-users in the Territory without intervening use by Distributor. Distributor acknowledges that the prices set forth in this Agreement have been established in reliance upon such representation and that different prices may apply to any Products acquired for any other purpose. Upon WGT's request, Distributor will furnish WGT evidence of such resale (including but not limited to satisfactory evidence of exemption from retail sales, use or similar taxes that may otherwise apply to transactions under this Agreement).
12
7. Software Update Exchange. Once each Quarter during the Term of this Agreement, Distributor shall have the right to exchange any prior version of the Software then in Distributor's inventory for an equivalent quantity of Software containing Updates, subject to Distributor paying WGT an "Exchange Fee" set forth in Exhibit A, for each copy of the Software exchanged hereunder. WGT will invoice Distributor for and Distributor shall pay all Exchange Fees as provided in Exhibit A. WGT will deliver all such exchanged Software Updates in accordance with paragraph 5. Distributor shall return to WGT the copies of the prior versions of the Software exchanged under this paragraph 7 at Distributor's expense.
8. Records; Audit. During the Term and for twenty-four (24) months thereafter, Distributor will keep and maintain accurate accounts and records regarding the Products sold and Product license keys delivered to resellers and end-users under this Agreement. Upon WGT's request, Distributor will provide access to such records for examination, reproduction, and audit by WGT or its representatives. Any such audit will be conducted at such times and in such a manner so as not to unreasonably interfere with Distributor's normal operations. If any such audit discloses that Distributor is deficient in its compliance with the terms and conditions of this Agreement, Distributor will immediately pay to WGT any deficiency, plus interest at the rate of one and one-half percent (1.5%) per month running from the date originally due until the date paid. Acceptance of any payment by WGT will be without prejudice to WGT's rights to an audit under this paragraph 8 or any other rights or remedies afforded to WGT under any other provision of this Agreement or applicable law.
9. Taxes. The Guaranteed Minimum Purchases and other amounts specified in this Agreement do not include sales, use or value added taxes, customs fees, duties or other governmental taxes or charges. Distributor will pay all such taxes and charges. In the event Distributor is required under any applicable law to withhold any taxes or duties from the amounts specified under this Agreement, payment of the amounts specified under this Agreement will be net of such withholding taxes or duties. Distributor will pay the amount of all such withholding taxes and duties and supply WGT with information concerning the amount and type of tax withheld and any certificates concerning payments of such withholding taxes.
10. Interest. Any amount not paid when due will be subject to finance charges at the rate of one and one-half percent (1.5%) per month or the maximum rate permitted by applicable law; whichever is less, determined and compounded on a daily basis from the date due until the date paid. Payment of such finance charges will not excuse or cure Distributor's breach or default for late payment. If WGT retains a collection agency, attorney or other person or entity to collect overdue payments, all collection costs, including but not limited to reasonable attorney's fees, will be payable by Distributor.
11. Confidentiality. Any information received by Distributor in performance of this Agreement relating to the business affairs, customers, markets, finances, methods, Product, technology, trade secrets or proprietary rights of WGT will be treated as confidential and proprietary information of WGT. Distributor will not disclose such information, unless the information is in the public domain at the time of disclosure through no fault of Distributor or WGT consents to the disclosure in writing. Distributor will disclose such information only to its
13
employees whose duties justify their need to know such information and who have agreed to copy with Distributor's confidentiality obligations hereunder.
12. Ownership. The Product involves valuable patent, copyright, trade secret, trade name, trademark and other proprietary rights of WGT. No title to or ownership of such proprietary rights is transferred to Distributor under this Agreement or by use of any trademark, copyright or other proprietary right. WGT reserves all of its copyright, trade secret and other proprietary rights in the Product. Distributor will not infringe, violate or contest and will take appropriate steps and precautions for the protection of, such proprietary rights.
13. Implementation. Distributor will take at WGT's expense, all action during or after the Term that is reasonably requested by WGT for the implementation of the ownership provisions of this Agreement or to evidence, perfect or protect WGT's ownership of this Product and the proprietary rights associated with ownership of the Product (including, without limitation, the execution, acknowledgment and delivery of instruments of conveyance, patent, copyright, trademark or other proprietary rights registration applications or other documents.)
14. Warranty; Returns. WGT will permit Distributor and end-users purchasing through resellers to return any defective Product in accordance with the limited warranty contained in the applicable end-user license agreement or limited hardware warranty, as applicable, provided that the Distributor and end-user have compiled with the applicable warranty terms and conditions. In order to receive the remedy provided for hereunder, Distributor shall
deliver to WGT a sample of the Product which Distributor finds to be defective in workmanship or materials, or damaged in shipment prior to Distributor assuming the risk of loss or damage , along with a written explanation of the alleged defect within thirty (30) days from the later of Distributor's initial receipt of such Product from WGT or from the delivery of such Product to an end-user. In the event WGT verifies a defect reported by Distributor and such defect affects more than one (1) Product, then at WGT's option, Distributor shall either certify destruction of all defective Products or return all Products which it alleges are defective to WGT. Distributor, reseller or the end user will be responsible for transportation charges for such Product units sent to WGT's facilities for service. Provided that WGT is able to verify the presence of the reported defect in such units, transportation charges, via a mode of transportation chosen by WGT, shall be borne by WGT to return the Product units from WGT's location to the Distributor, reseller or the end-user's location. Upon verification of a defect in one or more Products returned in accordance with the foregoing, or upon Distributor's certification that it has destroyed any defective Product in compliance with WGT's instructions, WGT will, at its option, either issue a credit to Distributor in the amount of the purchase price paid or payable for such Product by Distributor or replace the defective Product with an identical (non-defective) Product. Such remedy will be exclusive and in full satisfaction of Distributor's claims hereunder. WGT does not warrant that the Products are free form all bugs, errors, defects, design flaws or omissions. The warranties in this Agreement apply only to the latest version of each Product made available by WGT to Distributor. Such warranties will not apply to any Product which WGT determines has been subject to misuse, neglect, improper installation, repair, alteration or damage by Distributor, reseller or an end-user or any other individual or entity, or modification by any such individual or entity except with the prior express authorization of WGT. WGT's obligations
14
under this paragraph will not apply to the extent arising out of any use or combination of the Product with any other products, goods, services or other items furnished by Distributor or anyone other than WGT, or to any modification or change of the Product not made by WGT. The foregoing warranties and rights may be asserted by Distributor only and not by Distributor's resellers.
15. Infringement. WGT will defend and indemnify Distributor against any judicial proceeding based upon infringement of any U.S. patent or US. copyright by the Product to the extent that such proceeding arises from or in connection with a component of the Product manufactured or developed by WGT and not any third party, provided that Distributor notifies WGT of such proceeding promptly after Distributor receives notice thereof, WGT has control over the defense and settlement of the proceeding, Distributor provides such assistance in the defense and settlement of the proceeding as WGT may reasonably request, and Distributor complies with any settlement or court order made in connection with such proceeding (e.g., as to the future use of any infringing Product). WGT's obligations under this paragraph will not apply to any infringement to the extent arising out of any use or combination of the Product with any other products, goods, services or other items furnished by Distributor or anyone other than WGT or to any modification or change of the Product not made by WGT.
16. Disclaimer and Release. THE WARRANTIES OF WGT AND THE REMEDIES OF DISTRIBUTOR SET FORTH IN PARGRAPHS 14 AND 15 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND DISTRIBUTOR HEREBY WAIVES, RELEASES AND DISCLAIMS. ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF WGT AND ALL OTHER RIGHTS, REMEDIES AND CLAIMS OF DISTRIBUTOR, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY DEFECT, DEFICIENCY OR NONCONFORMITY IN ANY PRODUCT OR OTHER ITEM FURNISHED BY OR ON BEHALF OF WGT UNDER THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE; IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USEAGE OF TRADE; ANY OBLIGATION, LIABLITY, RIGHT, REMEDY OR CLAIM IN TORT (INCLUDING NEGLIGENCE, WHETHER ACTIVE, PASSIVE OR IMPUTED), PRODUCT LIABLITY, STRICKT LIABILITY OR OTHER THEORY; AND CLAIM OF INFRINGEMENT.
17. Representations. Distributor will be solely responsible for any representations or warranties Distributor may make to any reseller with respect to the Product or any products, goods, services or other items provided by Distributor. Except to the extent inconsistent with paragraph 15, Distributor releases and will defend, indemnify and hold harmless WGT and its officers, directors, employees, agents and representatives from any and all claims, losses, damages, liens, liabilities, costs and expenses (including, but not limited, reasonable attorneys' fees) incurred or asserted by any reseller or otherwise arising out of or in connection with (a) any misrepresentation, negligent or tortious act or omission, or breach of or default under this Agreement by Distributor or by anyone else acting for or on behalf of Distributor in connection with the promotion, distribution or other dealings with respect to the Product; (b) any reseller or end-user's use of the Product or any products or services of
15
Distributor; or (c) any representations and warranties made by Distributor that are inconsistent with or in addition to the warranties made in WGT's end-user license agreement or limited hardware warranty, as applicable, accompanying each copy of the Product.
18. Limitations of Liability. EXCEPT AS PROVIDED IN PARAGRAPH 15, WGT'S LIABILITY(WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE WHETHER ACTIVE, PASSIVE, IMPUTED), PRODUCT LIABILITY, STRICT LIABILITY OR OTHER THEORY) UNDER THIS AGREEMENT OR WITH REGARD TO ANY PRODUCT OR OTHER ITEMS FURNISHED UNDER THIS AGREEMENT WILL IN NO EVENT EXCEED THE COMPENSATION PAID TO WGT CONCERNING SUCH PRODUCT UNDER THIS AGREEMENT.
19. Consequential Damages. IN NO EVENT WILL WGT BE LIABLE, WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE (WHETHER ACTIVE, PASSIVE OR IMPUTED), PRODUCT LIABILITY, STRICT LIABILITY OR OTHER THEORY), TO DISTRIBUTOR OR TO ANY RESELLER OF DISTRIBUTOR, END-USER OR OTHER PERSON OR ENTITY FOR COST OF COVER OR FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION DAMAGES FOR LOSS OF PROFIT, BUSINESS OR DATA) ARISING OUT OF ITS PERFORMANCE OR NONPERFORMANCE OF THIS AGREEMENT OR THE USE OF, INABIILTY TO USE OR RESULTS OF USE OF THE PRODUCT.
20. Compliance with Laws. In performing this Agreement, Distributor will comply with all applicable laws, regulations and other requirements, now or hereafter in effect, of government authorities having jurisdiction.
21. Export. Without limiting anything else herein, Distributor will not export or re-export, directly or indirectly, the WGT Product to any country to which export or re-export of such items is prohibited by the U.S. Export Administration Act, regulations of the U.S. Department of Commerce and other export controls of the U.S., as they may be amended without first obtaining an appropriate written authorization from the U.S. Office of Export Licensing or its successor. At the time of execution of this Agreement, Distributor is prohibited from exporting or re-exporting , directly or indirectly, the WGT Product to the following countries: Cuba, Libya, North Korea, Iran, Iraq, Ruwanda, Sudan, Syria and the Federal Republic of Yugoslavia (Serbia and Montenegro). Notwithstanding the foregoing list, Distributor is not relieved from its obligations to comply with the foregoing export control laws, as such laws may be amended from time to time. Distributor shall also comply with all other foreign or local governmental export and import control laws, regulations and rules.
22. Government Approvals. Distributor will obtain at its expense all licenses, permits and other governmental approvals; will provide all notices; and will pay all duties, taxes and other charges required for the license, export, re-export and import of the Product distributed by the Distributor; the license of the Software distributed by Distributor; and the implementation of this Agreement.
16
23. Nonwaiver. The failure of either party to insist upon or enforce strict performance of any of the provisions of this Agreement or to exercise any rights or remedies under this Agreement will not be construed as a waiver or relinquishment to any extent of such party's right to assert or rely upon any such provisions, rights or remedies in that or any other instance; rather, the same will be and remain in full force and effect.
24. Assignment. Distributor will not assign all or any part of this Agreement or any of its rights under this Agreement without the prior written consent of WGT. Subject to the foregoing, this Agreement will be fully binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns.
25. Survival. Paragraphs 1, 2, 3, 13 through 23 and all accrued obligations to pay, together with all other provisions of this Agreement which may reasonably be interpreted or construed as surviving the expiration or termination of the Term, will survive the expiration or termination of the Term.
26. Notices. Any notice or other communication under this Agreement given by either party to the other will be in writing and delivered either (a) in person or by first-class, registered or certified mail or a recognized overnight delivery service, return receipt requested, postage prepaid or (b) by facsimile and then acknowledged as received by return facsimile by the intended recipient. Notices will be deemed received only upon actual receipt. Notices will be directed to the intended recipient at the address specified below its signature on the signature page of this Agreement. Either party may change its address by giving the other party notice of such change in accordance with this paragraph.
27. No Conflict. Distributor represents and warrants to WGT that Distributor is free to enter into and perform this Agreement without thereby being in breach of or default under the terms of any other contract, commitment or understanding.
28. Interpretation. The English language of this Agreement will govern any interpretation of or dispute regarding the terms of this Agreement. Paragraph captions are for convenience of reference and do not alter or limit the terms of this Agreement. The parties hereto have expressly required that the present Agreement and its Exhibits be drawn up on the English language. / Les parties aux presentes ont expressement exige que la presente conventions et se Annexes solent redigees en la langue anglaise.
29. Governing Law; Venue. This Agreement will be governed by and interpreted in accordance with the local laws of the State of Washington, U.S.A., without regard to its conflicts of law provisions and not including the provisions of the 1980 U.N. Convention in Contracts for the International Sale of Goods. Distributor irrevocably consents, and submits to the jurisdiction of the Federal and State courts of and located in King County, in the State of Washington, U.S.A. Distributor will not commence or prosecute any suit, claim, or proceeding arising under this Agreement other than in the courts identified in the preceding sentence. Any remedy of WGT set forth in this Agreement is in addition to any other remedy afforded to WGT under this Agreement, any other contract, by law or otherwise.
17
SUPPORT SERVICES AND PROCEDURES EXHIBIT C
SUPPORT SERVICES:
WGT will provide the following training and product support programs to Distributor:
A. Training.
Promptly after execution of this Agreement, WGT will conduct a one day technical and sales training program for three (3) of Distributor's employees. Such training will be held at Distributor's facilities. Distributor will be responsible for all costs and expenses incurred by Distributor's personnel in attending, receiving or securing training provided by WGT.
B. Product Support Services.
WGT will provide the following product support services to Distributor for the Term of the Agreement:
1. Telephone Support. Reasonable telephone and electronic mail support for the Software will be available in response to a request from Distributor during WGT's normal business hours (6:00 a.m. to 5:00 p.m., Monday through Friday, Pacific Standard Time), excluding holidays that WGT recognizes. Only Distributor's designated, approved personnel will communicate with WGT's customer support specialists.
2. Submitting a Service Request. To submit a request for service, Distributor has two service options:
(a) over the phone, the Distributor will dial WGT's service number as supplied to Distributor by WGT. When a support specialist answers the phone, Distributor will be prepared to discuss the problem with the support specialist.
(b) via electronic mail as supplied to Distributor by WGT, whereby a service request can be submitted to WGT's electronic mail system.
In order to submit a service request, either telephonically or electronically, Distributor will employ the following procedures:
(a) provide a clear description that fully explains what the problem is, and when the problem occurs;
(b) provide a diagnostic trace, sample code or file of the failure symptom that has been recorded on the user's system; and
(c) describe the steps taken to resolve the problem.
18
3. Priority. WGT will respond to problems with the Software in accordance with the following priority schedule:
Priority One ("P-1") is reserved for critical and severe Software problems which cause the Software to fail or act in a manner which causes the Software to be unusable.
Priority Two ("P-2") is reserved for Software problems which cause a major component of the Software to become unusable but the overall Software continues to function.
Priority Three ("P-3") is reserved for Software problems which cause minimal disruption to normal operations of the Software and can be avoided with a simple work-around process.
Priority Four ("P-4") is reserved for all other problems of lesser severity.
4. Response Time: Upon receipt of a service request, a WGT customer support specialist will contact Distributor's designated, approved personnel within the following response times to discuss the problem:
"P-1" - respond within two (2) hours (subject to WGT's normal business hours) of
receipt of a P-1 problem and use all commercially reasonable and diligent efforts to create a fix or work-around as soon as practicable considering the nature of the problem.
"P-2" - respond within four (4) hours (subject to WGT's normal business hours) of receipt of a P-2 problem and use all commercially reasonable and diligent efforts to create a fix or work-around as soon as practicable considering the nature of the problem.
"P-3" - respond within twenty-four (24) hours (subject to WGT's normal business hours) of receipt of a P-3 problem and use all commercially reasonable efforts to create a fix or work-around which may be included in the next Update.
"P-4" - respond within five (5) business days (subject to WGT's normal business hours) of receipt of a P-4 problem and target a fix in a future Update.
WGT will make any corrections available to Distributor via BBS, FTP site or other reasonable means.
19
DISTRIBUTOR'S FORECAST EXHIBIT D
Quarter 1: ____________, 19__ through ____________, 19__ $__________
Quarter 2: ____________, 19__ through ____________, 19__ $__________
Quarter 3: ____________, 19__ through ____________, 19__ $__________
Quarter 4: ____________, 19__ through ____________, 19__ $__________
20 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | EXHIBIT 10.6
EXHIBIT 10.06
WATCHGUARD TECHNOLOGIES, INC. DISTRIBUTOR AGREEMENT
This Agreement is made and entered into effective as of November 5, 1997 (the "effective Date), by and between WatchGuard Technologies, Inc., a Delaware corporation ("WGT"), and European Micro ("Distributor"). WGT and Distributor agree as follows:
Section 1. Definitions
"Add-On Software Modules" means those computer software programs that (a) provide additional functionality and may be integrated with the existing Hardware and other Software, (b) may be legally exported to the Territory without any export license and (c) WGT elects to include in Exhibit A at a mutually agreed discount percentage.
"Distributor Cost" means the purchase price payable by Distributor for each Product at the discount from WGT's then current WatchGuard Price List, as such discount is set forth in Exhibit A.
"Documentation" means any and all manuals, user guides, end-user license agreement, limited hardware warranty, on-line help files, on-line menus and other in program printed text regarding the Product prepared by or for WGT in connection with the Product.
"Gross Purchases" means the gross purchase price Distributor pays WGT for the Product, excluding any taxes or pass through charges and net of any credits or returns.
"Guaranteed Minimum Purchases" means the guaranteed minimum purchase amounts set forth in Exhibit A.
"Hardware" means the hardware identified on Exhibit A, together with any Updates to such hardware. WGT reserves the right to add to or delete hardware from Exhibit A and to modify the hardware during the Term.
"Product" means the combination of Hardware, Software and Documentation together as part of the same product package (including any Add-On Software Modules and any Updates thereto), in all cases carrying the "WatchGuard" Trademark.
"Quarter" means any period of three (3) consecutive calendar months that begins on January 1, April 1, July 1 or October 1, during the Term.
"Software" means the computer programs identified on Exhibit A, in object code only, together with any Updates to such programs. WGT reserves the right to add or delete Software from Exhibit A and to modify the Software during the Term.
"Term" means the period of time determined in accordance with Section 5.
"Territory" means the geographic area described in Exhibit A.
"Trademarks" means the trademarks and trade names of WGT identified in Exhibit A.
"Update" means any minor modification, minor upgrade or minor enhancement of the Product (excluding any new version of the Product) that WGT publishes and elects to make available to Distributor via BBS, FTP site or other reasonable means. WGT is not obligated to make or release any update.
Section 2. Relationship of the Parties
2.1 Appointment. Subject to and in accordance with the provisions of this Agreement, WGT hereby appoints Distributor, and Distributor hereby accepts WGT's appointment, as a nonexclusive distributor of the Product to resellers in the Territory during the Term, as long as Distributor makes the Guaranteed Minimum Purchases pursuant to Section 4.
2.2 License Grant. Subject to the terms and conditions of this Agreement, WGT grants to Distributor a nontransferable license to do the following in the Territory during the Term:
(a) market and distribute the Product to resellers;
(b) demonstrate the Product to potential resellers;
(c) use the Product internally for the sole purpose of providing this product support specified in paragraph 4.1(c);
(d) use and display the Trademarks in connection with marketing and distributing the Product in the Territory pursuant to paragraphs (a) and (b) above.
2.3 No Exclusivity. Distributor's appointment and the rights granted hereunder are nonexclusive. WGT may, at its sole option, appoint other distributors of the Product in the Territory at any time during the Term and expressly reserves the right to license the Product directly or indirectly to
end-users, third party original equipment manufacturers or other hardware bundlers, value-added resellers or other resellers for sublicense or resale in the Territory.
Section 3. Compensation
3.1 Support services. As full compensation for the support services described in Exhibit C and provided during the Term, Distributor will pay WGT the Support Fee set forth in Exhibit A. Payment of the Support Fee is due and payable upon execution of this Agreement by wire transfer of immediately payable funds to the bank and account set forth in paragraph 3.4, and then annually by invoice from WGT on the anniversary of the execution of the Agreement.
2
3.2 Price. Distributor will pay WGT for each Product Distributor orders an amount equal to WGT's then current WatchGuard Price List in effect on the date of receipt by WGT of Distributor's order, subject to the applicable discount set forth in Exhibit A. WGT may, from time to time, change its WatchGuard Price List, provided that any such change will not be effective under this Agreement unless and until the expiration of forty-five (45) days after WGT gives Distributor written notices of the change.
3.3 Guaranteed Minimum Purchases. During the Term, Distributor will make Gross Purchases in an amount at least equal to the cumulative Guaranteed Minimum Purchase amounts through committed orders placed pursuant to paragraph 3.5 and calling for shipment on or before the dates set forth in Exhibit A.
3.4 Invoices. WGT will issue invoices for the Products ordered by Distributor and all other amounts payable to WGT under this Agreement. Distributor will pay WGT the full amount invoiced within thirty (30) days after the date of WGT's invoice, unless provided otherwise on the applicable invoice, in the lawful money of the United States of America to WGT by wire transfer of immediately available funds to WGT's bank account number 1141139, at the Commerce Bank of Washington, 601 Union Street, Suite 3600, Seattle, WA 98101, ABA routing number 125008013.
3.5 Orders. Distributor will place orders for the Product from WGT by completing, signing and submitting to WGT a written order for the same, in a form acceptable to WGT, via facsimile, mail or other means. Distributor shall submit such order at least thirty (30) days in advance of the delivery date set forth in each order. All orders will be subject to acceptance by WGT through written acceptance or shipment of the Product subject to the order.
Section 4. General Obligations of the Parties.
4.1 Obligations of Distributor. Distributor will use its best efforts aggressively to develop sales of the Product in the Territory. In furtherance thereof, Distributor will:
(a) keep on hand a reasonable inventory of the Product sufficient to allow for prompt delivery of the Product to resellers;
(b) establish a program to market the Product, including, but not limited to, participating regularly in local and regional trade shows, conventions or like events in the Territory, and conducting regular local promotional and other marketing efforts for the Product;
(c) provide quality product support to resellers, including, but not limited to, providing appropriate installation and application advice and prompt follow-up service and advice to resellers of the Product upon request;
(d) provide a support center to resellers, including, but not limited to, a hotline service to answer reseller questions and to receive and track complaints and any reports of claimed errors in the Product;
3
(e) provide quality product technical and sales training to resellers;
(f) respond promptly to sales leads or referrals furnished by WGT or by other distributors or dealers of WGT;
(g) have a designated number of employees attend such technical and sales training programs as set forth in Exhibit C;
(h) maintain and furnish periodically, as WGT may reasonably request, complete and accurate records of each sale or other distribution of each Product sold or distributed by Distributor (e.g., showing the date of sale, Zip code of the customer, the Product serial number and the applicable Product license key(s)) under this Agreement;
(i) promptly advise WGT of each complaint that Distributor may receive or becomes aware of concerning the Product or any portion thereof (including, but not limited to, warranty claims). Distributor will promptly investigate all such complaints and will give immediate attention to and use its best efforts to promptly, courteously and equitably respond to, adjust and settle (without incurring any obligation or liability on behalf of WGT) all
complaints received by Distributor from any customer, potential customer or anyone else arising out of or in connection with Distributor's sale of any Product, or the performance of any services. In handling any complaints, Distributor will use its best efforts to maintain and promote good public relations for WGT;
(j) secure and maintain, in the name of WGT, any and all registrations, permits, licenses, approvals and other governmental actions required to import, handle, market, sell, demonstrate, use and distribute the Product in the Territory, provide to WGT quarterly progress reports on such action, and provide WGT copies of all registrations, permits, licenses, approvals, certificates, correspondence and other documentation related to such action;
(k) hire, train, coordinate and maintain a qualified staff of sufficient size and with a level and mix of capabilities as are reasonably necessary to accomplish the goals contemplated under this Agreement;
(l) avoid deceptive, misleading or unethical conduct which are or might be detrimental to WGT or its Product, and refrain from making any representation, warranty or guarantee to any reseller with respect to specifications, features or capabilities of the Product that is inconsistent with the literature distributed by WGT or this Agreement;
(m) conduct its business in a manner under its own control, provided that Distributor will at all times comply with all applicable laws and regulations and will not engage in, or permit its employees or agents to engage in, any activities or practices which could reflect negatively upon the reputation or prospects of WGT or the Product or expose WGT to any liability of any nature whatsoever; and
4.2 Obligations of WGT, WGT will:
4
(a) provide Distributor with sixty (60) days advance notice in the event that it discontinues production of any Product;
(b) provide Distributor with the training and product support services described in Exhibit C; and
(c) furnish Distributor with such demonstration Product, promotional literature, data, information and other items as WGT deems appropriate for Distributor's promotion, marketing and sale of the Product. WGT will use such items only for the purpose of performing its obligations under this Agreement.
4.3 Forecasts. Distributor's forecast of Product purchases for the Term is set forth on Exhibit D. At least fifteen (15) days before the beginning of each Quarter during the Term, Distributor will furnish WGT with a rolling revised forecast of Product orders for the remainder of the Term.
Section 5. Term and Termination.
5.1 Term. The Term will commence on the Effective Date of this Agreement and will remain in effect, unless sooner terminated under paragraphs 5.2, 5.3, or 5.4, until the termination date specified in Exhibit A.
The Term will automatically renew for successive additional periods of one (1) year each, provided that: (a) Distributor has made all Guaranteed Minimum Purchases and has complied with the marketing requirements under paragraph 4.1(b); (b) the parties have agreed in writing upon the Guaranteed Minimum Purchase amounts and Product price discounts for the next subsequent one (1) year renewal period; (c) neither party provided the other party with notice of such party's intention not to renew this Agreement at least thirty (30) days prior to any year's Expiration Date; and (d) neither party provided the other party with such notice as may be required pursuant to paragraphs 5.2, 5.3 or 5.4.
5.2 Termination by WGT. Upon the occurrence of any of the following, WGT may terminate the Term by giving Distributor written notice of such termination for:
(a) any failure of Distributor to comply with the marketing requirements under paragraph 4.1(b);
(b) any material change in the general management, ownership or control of Distributor, including without limitation the sale, transfer or relinquishment by Distributor of any substantial interest in the ownership of the business to be carried on by Distributor under this Agreement, unless such change is approved in advance and in writing by an officer of WGT;
(c) any assignment or attempted assignment of this Agreement by Distributor without the prior written consent of WGT;
(d) any solicitation by Distributor for the sale of the Product to resellers located outside the Territory;
5
(e) the insolvency of Distributor, the filing of a petition in bankruptcy by or against Distributor, the appointment of a receiver for Distributor or Distributor's property, the execution of an assignment by Distributor of all or substantially all of its assets for the benefit of its creditors, or the conviction of Distributor or any principal or manager of Distributor for any crime tending to adversely affect the ownership or operation of Distributor's business;
(f) any failure by Distributor to perform any of its other obligations under this Agreement where such failure continues for thirty (30) days after written notice thereof by WGT to Distributor; or
(g) WGT giving Distributor ninety (90) days' advance written notice of termination at any time after the expiration of the Initial Term.
5.3 Failure to Make Guaranteed Minimum Purchases. Upon any failure by Distributor to make Gross Purchases in sufficient amounts to meet or exceed the applicable cumulative Guaranteed Minimum Purchases, WGT may, at its sole option and effective upon notice to Distributor, terminate this Agreement. Distributor shall pay WGT fifty percent (50%) of the unpaid balance of cumulative Guaranteed Minimum Purchase amounts as liquidated damages. The parties acknowledge and agree that it would be difficult or impossible to calculate WGT's actual damages arising from Distributor's failure to timely pay all of the Guaranteed Minimum Purchases. Therefore, the parties have agreed upon the above payment of liquidated damages in lieu of WGT's claim for actual damages from such breach.
5.4 Termination by Distributor. Upon the occurrence of any of the following, Distributor may terminate the Term by giving WGT written notice of such termination;
(a) the insolvency of WGT, the filing of a petition by or against WGT, the appointment of a receiver for WGT or WGT's property, or the execution of an assignment by WGT of all or substantially all of its assets for the benefit of its creditors;
(b) any failure by WGT to perform any of its obligations under this Agreement where such failure continues for thirty (30) days after written notice thereof by Distributor to WGT; or
(c) for convenience whether or not extended beyond the Initial Term, provided Distributor gives WGT thirty (30) days' advance written notice and, within such thirty (30) day period, Distributor pays to WGT a lump-sum payment equal to fifty (50%) of the unpaid balance of cumulative Guaranteed Minimum Purchase amounts.
5.5 Effect of Termination. Any termination pursuant to paragraphs 5.2, 5.3, or 5.4 will be without prejudice to any other right or remedy afforded to either party under this Agreement or any applicable law (e.g., in the case of any breach or default by the other party), and will not affect any rights or obligations which have arisen prior to the date of such termination. In the event of termination, Distributor will:
6
(a) immediately cease to demonstrate, market, sublicense and distribute the Product in the Territory;
(b) cease use of all Trademarks of WGT;
(c) return to WGT within twenty (20) days following the expiration or termination of the Term, any and all (i) demonstration Product provided to Distributor; (ii) Products not already paid for in full by Distributor; and (iii) promotional literature, data, information and other items received by Distributor under this Agreement; and
(d) furnish WGT with such information relating to the marketing, sale or distribution of the Product in the Territory as WGT may reasonably request (including, but not limited to, information as to calls or the status of any negotiations for the sale of the Product, or any sales or service records).
Upon the expiration or termination of the Term, the license granted under Section 2 of this Agreement will terminate. Any end-user licenses of the Software granted under the terms of this Agreement will survive the end of the Term in accordance with the terms of the applicable end-user license agreement.
5.6 Acknowledgment. Any expiration or termination of the Term will be final and absolute. Except as expressly set forth in paragraphs 5.3 and 5.5(c), Distributor waives any right, either express or implied by applicable law or otherwise, to the renewal of this Agreement or to any damages or compensation for any expiration or termination of the Term in accordance with this Section 5. Each of the parties have considered the possibility of such expiration or termination and the possibility of loss and damage resulting therefrom in making expenditures pursuant to the performance of this Agreement. It is the express intent and agreement of the parties that neither will be liable to the other for damages, except as expressly set forth in paragraphs 5.3 and 5.5(c), or otherwise by reason of the expiration or termination of the Term as provided for herein.
6.0 Force Majeure. Neither party will be liable for, or be considered to be in breach of or default under this Agreement on account of, any delay or
failure to perform as required by this Agreement (other than for payment under Section 3), as a result of any cause or condition beyond such party's reasonable control.
7.0 Entire Agreement. This Agreement is subject to the provisions of WGT's Standard Distributor Terms attached hereto as Exhibit B and by this reference incorporated into and as part of this Agreement. This Agreement is also subject to any additional terms or licenses executed by WGT and Distributor and attached as Exhibits, including any Special Terms and Conditions specified in Exhibit A. This Agreement sets forth the entire agreement, and supersedes any and all prior agreements, among the parties related to the Product. WGT will not be bound by, and specifically objects to, any term, condition, or other provision that is different from or in addition to the provisions of this Agreement (whether or not it would materially alter this Agreement) and that is proffered by Distributor or otherwise appears in any order, receipt, acceptance, confirmation, correspondence, or otherwise, unless WGT specifically agrees to such provision in a written instrument signed by WGT. No
7
modifications of any of the provisions of this Agreement will be valid unless set forth in a written instrument signed by both parties. Any remedy by WGT set forth in this Agreement is in addition to any other remedy afforded to WGT under any other contract, by law, or otherwise.
IN WITNESS THEREOF, the parties have executed this Agreement as of the date first above written.
Distributor: WatchGuard Technologies, Inc.
By: /s/ LAURENCE GILBERT By: /s/ WATCHGUARD ------------------------- ------------------------------
Title: MANAGING DIRECTOR Title: VP/SALES
Date Signed: NOVEMBER 5, 1997 Date Signed: NOVEMBER 3, 1997
Address: 20/24 Church Street Required Signature: Altrincham, Cheshire WA14 4DW, ENGLAND By: ------------------------------- Title: Executive Vice-President Sales
Date Signed: ---------------------
Address: 316 Occidental Avenue South Suite 300 Seattle, Washington 98104
8
FULL SERVICE MASTER DISTRIBUTOR SCHEDULE EXHIBIT A
PRODUCTS:
Distributor will be entitled to order the following products (which includes hardware and software) at the following discounts of WGT's then current WatchGuard Price List:
- ------------------------------------------------------------------------------- DISCOUNT FROM WGT'S PRODUCT THEN CURRENT WATCHGUARD PRICE LIST - ------------------------------------------------------------------------------- WatchGuard Security System 40% plus additional 10% on the remaining undiscounted amount, i.e., 46%
- ------------------------------------------------------------------------------
EXCHANGE FEE: $10 per CD SUPPORT FEE: $25,000 per year
CUMULATIVE GUARANTEED MINIMUM PURCHASES DATE OF ORDER (U.S. DOLLARS) - -------------------------------------------------- --------------------------- Upon contract signing $100,000.00 1st subsequent Quarter-end, Sept. 30, 1997 $100,000.00 2nd subsequent Quarter-end, Dec. 31, 1997 $167,000.00 3rd subsequent Quarter-end, Mar. 31, 1997 $234,000.00 4th subsequent Quarter-end, Jun 30, 1997 $300,000.00
TERMINATION DATE: September 30, 1997 TRADEMARKS:
/bullet/ WatchGuard(TM)
/bullet/ WatchGuard(TM) Technologies
/bullet/ WatchGuard(TM) SchoolMate
/bullet/ Firebox(TM)
TERRITORY:
/bullet/ Europe
SPECIAL TERMS AND CONDITIONS
9
These Special Terms and Conditions are part of the Distributor Agreement between WatchGuard Technologies, Inc. ("WGT") and Distributor (collectively, the "Agreement"). Terms that are defined in the Distributor Agreement will have the same meaning when used in these Special Terms and Conditions.
Section A.1 By joint agreement between WGT and Distributor, Distributor may engage in end user sales in the Territory.
If it is agreed that Distributor may engage in end user sales, Distributor may distribute, license and sell up to 20% of the Product purchased from WGT directly to end-users in the Territory. Further, Distributor agrees that high end-users satisfaction is a condition of its continued authorization by WGT. To ensure high end-user satisfaction, Distributor shall: (a) provide quality first level support to its end-user customers; (b) promptly report to WGT all suspected and actual problems with any WGT product; (c) assist WGT in tracing WGT Products to particular end users to distribute critical WGT Product information, locate WGT Products for safety reasons, or to be discover unauthorized marketing or infringing acts; (d) avoid deceptive, misleading or unethical conduct which are or might be detrimental to WGT or its WGT product; and (e) refrain from marking any representation, warranty or guarantee to end users with respect to the specifications, features or capabilities of the WGT Product that is inconsistent with the literature distributed by WGT or this Agreement.
Section A.2 Distributor is legally organized under the jurisdiction of a country belonging to the European Union.
If Distributor is organized under the jurisdiction of the country belonging to the European Union, the following clause is hereby appended to Section 1(c) of the Standard Distributor Terms:
"PROVIDED HOWEVER, the foregoing restriction is not intended to preclude Distributor from fulfilling, and Distributor may fulfill, unsolicited orders for Product received from outside the Territory but within the European Union (and Distributor shall provide WGT written notice of any such Sales);"
Section A.3 As a Full Service Master Distributor, Distributor agrees to sign up a minimum of 10 new WatchGuard resellers in the Territory within the Initial Term of the Agreement.
- -------------------------------------------- --------------------------------- Distributor: WatchGuard Technologies, Inc.:
By: /s/ LAURENCE GILBERT By: /s/ WATCHGUARD -------------------------- ----------------------------- Title: MANAGING DIRECTOR Title: SENIOR VICE PRESIDENT/SALES Date Signed: NOVEMBER 5, 1997 Date Signed: NOVEMBER 3, 1997 -------------------------------------------- ---------------------------------
10
STANDARD DISTRIBUTOR TERMS EXHIBIT B
These Standard Distributor Terms are part of the Distributor Agreement between WatchGuard Technologies, Inc. ("WGT") and Distributor (collectively, the "Agreement"). Terms that are defined in the Distributor Agreement will have the same meaning when used in these Standard Distributor Terms.
1. Reservation of Rights. The Software is licensed, not sold, to Distributor. PARAGRAPH 2.2 LICENSE GRANT of the Distributor Agreement sets forth the entirety of Distributor's rights to use, market, distribute, demonstrate and otherwise deal with the Product. All rights in and to the Product not expressly granted to Distributor under this Agreement are hereby expressly reserved to WGT without restriction. Without limiting the generality of the foregoing, Distributor will comply with the following:
(a) Distributor will distribute the Product to resellers only pursuant to a reseller agreement that substantially conforms to the term of this
Agreement;
(b) Distributor will not market, demonstrate or distribute the Product outside the Territory and Distributor will not supply the Product to any reseller that Distributor knows or has reason to know (i) intends to distribute the Product outside the Territory or (ii) intends to use or install the Product outside the Territory;
(c) Distributor will market, sell and distribute the Product only in its original, unopened package as received from WGT under the terms of the end-user license agreement and limited hardware warranty, as applicable, originally included in the Product package;
(d) Distributor will not modify or make copies of the Product or translate or port the Software into any other computer or human language;
(e) Distributor will not disassemble, reverse engineer, decompile or repackage all or any component of the Product or otherwise attempt to discover any portion of the source code or trade secrets related to the Product;
(f) Distributor will not remove, alter, distort, cover or modify any notice of copyright, trademark or other proprietary right appearing in or on any item included with the Product or its packaging; and
(g) Distributor will not register, attempt to register or assist anyone else to register, directly or indirectly, the Trademarks or any copyright or other proprietary rights associated with the Product in the Territory or elsewhere other than in the name of WGT, without WGT's prior written consent.
2. Protection Against Unauthorized Use. Distributor will promptly notify WGT of any unauthorized use of the Product or the Trademarks which comes to Distributor's attention. In
11
the event of any such unauthorized use by Distributor's employees, agents or representatives, Distributor will use its best efforts to terminate such unauthorized use and to retrieve any copy of the Product in the possession or control of the person or entity engaging in such unauthorized use. Distributor will immediately notify WGT of any legal proceeding initiated by Distributor in connection with such unauthorized use. WGT may, at its option and expense, participate in any proceeding and, in such event, Distributor will provide such authority, information and assistance related to such proceeding as WGT may reasonably request to protect WGT's interests.
3. Use of Trademarks. WGT reserves all rights in and to the Trademarks and all other trademarks and trade names used by WGT in connection with the Products, but WGT grants to Distributor the nonexclusive right to use and display the Trademarks during the Term to promote and identify the Product in the Territory in connection with this Agreement. Distributor will comply with the trademark guidelines and procedures established by WGT in Distributor's use of the Trademarks including without limitation use of the trademark and copyright symbols as specified by WGT from time to time. When using the Trademarks, Distributor will include a statement acknowledging that the Trademarks are owned by WGT. Distributor hereby acknowledges that the goodwill associated with its use of the Trademarks inures solely and exclusively to WGT and that Distributor does not acquire any rights in the Trademarks as a result of such use. Distributor will not use the Trademarks or any confusingly similar name, marks, logos, designs or artwork as part of Distributor's name, trade name, trademark or artwork without WGT's prior written consent.
4. Independent Contractor. Distributor is an independent contractor, not an employee, agent or franchisee of WGT. Distributor will not represent or hold itself out as an employee, agent or franchisee of WGT. Distributor does not have any authority to, and will not, create or assume any license, warranty or other obligation, express or implied, on behalf of WGT. This Agreement will not be interpreted or construed as creating or evidencing any association, joint venture or partnership between the parties or as imposing any partnership or franchisor obligation or liability on either party.
5. Delivery. WGT will deliver all Products ordered by Distributor F.O.B. carrier at WGT's shipping location as determined by WGT from time to time, on or before the delivery date set forth in each accepted order. Distributor will pay or reimburse WGT for all shipping charges, premiums for freight insurance, inspection fees, duties, import and export fees, assessments, transportation and other costs incurred by WGT to transport the Product to the shipping destination.
6. Resale. Distributor represents that all Products acquired under this Agreement are acquired solely for demonstration, licensing or sale (as applicable) and distribution to resellers or end-users in the Territory without intervening use by Distributor. Distributor acknowledges that the prices set forth in this Agreement have been established in reliance upon such representation and that different prices may apply to any Products acquired for any other purpose. Upon WGT's request, Distributor will furnish WGT evidence of such resale (including but not limited to satisfactory evidence of exemption from retail sales, use or similar taxes that may otherwise apply to transactions under this Agreement).
12
7. Software Update Exchange. Once each Quarter during the Term of this Agreement, Distributor shall have the right to exchange any prior version of the Software then in Distributor's inventory for an equivalent quantity of Software containing Updates, subject to Distributor paying WGT an "Exchange Fee" set forth in Exhibit A, for each copy of the Software exchanged hereunder. WGT will invoice Distributor for and Distributor shall pay all Exchange Fees as provided in Exhibit A. WGT will deliver all such exchanged Software Updates in accordance with paragraph 5. Distributor shall return to WGT the copies of the prior versions of the Software exchanged under this paragraph 7 at Distributor's expense.
8. Records; Audit. During the Term and for twenty-four (24) months thereafter, Distributor will keep and maintain accurate accounts and records regarding the Products sold and Product license keys delivered to resellers and end-users under this Agreement. Upon WGT's request, Distributor will provide access to such records for examination, reproduction, and audit by WGT or its representatives. Any such audit will be conducted at such times and in such a manner so as not to unreasonably interfere with Distributor's normal operations. If any such audit discloses that Distributor is deficient in its compliance with the terms and conditions of this Agreement, Distributor will immediately pay to WGT any deficiency, plus interest at the rate of one and one-half percent (1.5%) per month running from the date originally due until the date paid. Acceptance of any payment by WGT will be without prejudice to WGT's rights to an audit under this paragraph 8 or any other rights or remedies afforded to WGT under any other provision of this Agreement or applicable law.
9. Taxes. The Guaranteed Minimum Purchases and other amounts specified in this Agreement do not include sales, use or value added taxes, customs fees, duties or other governmental taxes or charges. Distributor will pay all such taxes and charges. In the event Distributor is required under any applicable law to withhold any taxes or duties from the amounts specified under this Agreement, payment of the amounts specified under this Agreement will be net of such withholding taxes or duties. Distributor will pay the amount of all such withholding taxes and duties and supply WGT with information concerning the amount and type of tax withheld and any certificates concerning payments of such withholding taxes.
10. Interest. Any amount not paid when due will be subject to finance charges at the rate of one and one-half percent (1.5%) per month or the maximum rate permitted by applicable law; whichever is less, determined and compounded on a daily basis from the date due until the date paid. Payment of such finance charges will not excuse or cure Distributor's breach or default for late payment. If WGT retains a collection agency, attorney or other person or entity to collect overdue payments, all collection costs, including but not limited to reasonable attorney's fees, will be payable by Distributor.
11. Confidentiality. Any information received by Distributor in performance of this Agreement relating to the business affairs, customers, markets, finances, methods, Product, technology, trade secrets or proprietary rights of WGT will be treated as confidential and proprietary information of WGT. Distributor will not disclose such information, unless the information is in the public domain at the time of disclosure through no fault of Distributor or WGT consents to the disclosure in writing. Distributor will disclose such information only to its
13
employees whose duties justify their need to know such information and who have agreed to copy with Distributor's confidentiality obligations hereunder.
12. Ownership. The Product involves valuable patent, copyright, trade secret, trade name, trademark and other proprietary rights of WGT. No title to or ownership of such proprietary rights is transferred to Distributor under this Agreement or by use of any trademark, copyright or other proprietary right. WGT reserves all of its copyright, trade secret and other proprietary rights in the Product. Distributor will not infringe, violate or contest and will take appropriate steps and precautions for the protection of, such proprietary rights.
13. Implementation. Distributor will take at WGT's expense, all action during or after the Term that is reasonably requested by WGT for the implementation of the ownership provisions of this Agreement or to evidence, perfect or protect WGT's ownership of this Product and the proprietary rights associated with ownership of the Product (including, without limitation, the execution, acknowledgment and delivery of instruments of conveyance, patent, copyright, trademark or other proprietary rights registration applications or other documents.)
14. Warranty; Returns. WGT will permit Distributor and end-users purchasing through resellers to return any defective Product in accordance with the limited warranty contained in the applicable end-user license agreement or limited hardware warranty, as applicable, provided that the Distributor and end-user have compiled with the applicable warranty terms and conditions. In order to receive the remedy provided for hereunder, Distributor shall
deliver to WGT a sample of the Product which Distributor finds to be defective in workmanship or materials, or damaged in shipment prior to Distributor assuming the risk of loss or damage , along with a written explanation of the alleged defect within thirty (30) days from the later of Distributor's initial receipt of such Product from WGT or from the delivery of such Product to an end-user. In the event WGT verifies a defect reported by Distributor and such defect affects more than one (1) Product, then at WGT's option, Distributor shall either certify destruction of all defective Products or return all Products which it alleges are defective to WGT. Distributor, reseller or the end user will be responsible for transportation charges for such Product units sent to WGT's facilities for service. Provided that WGT is able to verify the presence of the reported defect in such units, transportation charges, via a mode of transportation chosen by WGT, shall be borne by WGT to return the Product units from WGT's location to the Distributor, reseller or the end-user's location. Upon verification of a defect in one or more Products returned in accordance with the foregoing, or upon Distributor's certification that it has destroyed any defective Product in compliance with WGT's instructions, WGT will, at its option, either issue a credit to Distributor in the amount of the purchase price paid or payable for such Product by Distributor or replace the defective Product with an identical (non-defective) Product. Such remedy will be exclusive and in full satisfaction of Distributor's claims hereunder. WGT does not warrant that the Products are free form all bugs, errors, defects, design flaws or omissions. The warranties in this Agreement apply only to the latest version of each Product made available by WGT to Distributor. Such warranties will not apply to any Product which WGT determines has been subject to misuse, neglect, improper installation, repair, alteration or damage by Distributor, reseller or an end-user or any other individual or entity, or modification by any such individual or entity except with the prior express authorization of WGT. WGT's obligations
14
under this paragraph will not apply to the extent arising out of any use or combination of the Product with any other products, goods, services or other items furnished by Distributor or anyone other than WGT, or to any modification or change of the Product not made by WGT. The foregoing warranties and rights may be asserted by Distributor only and not by Distributor's resellers.
15. Infringement. WGT will defend and indemnify Distributor against any judicial proceeding based upon infringement of any U.S. patent or US. copyright by the Product to the extent that such proceeding arises from or in connection with a component of the Product manufactured or developed by WGT and not any third party, provided that Distributor notifies WGT of such proceeding promptly after Distributor receives notice thereof, WGT has control over the defense and settlement of the proceeding, Distributor provides such assistance in the defense and settlement of the proceeding as WGT may reasonably request, and Distributor complies with any settlement or court order made in connection with such proceeding (e.g., as to the future use of any infringing Product). WGT's obligations under this paragraph will not apply to any infringement to the extent arising out of any use or combination of the Product with any other products, goods, services or other items furnished by Distributor or anyone other than WGT or to any modification or change of the Product not made by WGT.
16. Disclaimer and Release. THE WARRANTIES OF WGT AND THE REMEDIES OF DISTRIBUTOR SET FORTH IN PARGRAPHS 14 AND 15 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND DISTRIBUTOR HEREBY WAIVES, RELEASES AND DISCLAIMS. ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF WGT AND ALL OTHER RIGHTS, REMEDIES AND CLAIMS OF DISTRIBUTOR, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY DEFECT, DEFICIENCY OR NONCONFORMITY IN ANY PRODUCT OR OTHER ITEM FURNISHED BY OR ON BEHALF OF WGT UNDER THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE; IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USEAGE OF TRADE; ANY OBLIGATION, LIABLITY, RIGHT, REMEDY OR CLAIM IN TORT (INCLUDING NEGLIGENCE, WHETHER ACTIVE, PASSIVE OR IMPUTED), PRODUCT LIABLITY, STRICKT LIABILITY OR OTHER THEORY; AND CLAIM OF INFRINGEMENT.
17. Representations. Distributor will be solely responsible for any representations or warranties Distributor may make to any reseller with respect to the Product or any products, goods, services or other items provided by Distributor. Except to the extent inconsistent with paragraph 15, Distributor releases and will defend, indemnify and hold harmless WGT and its officers, directors, employees, agents and representatives from any and all claims, losses, damages, liens, liabilities, costs and expenses (including, but not limited, reasonable attorneys' fees) incurred or asserted by any reseller or otherwise arising out of or in connection with (a) any misrepresentation, negligent or tortious act or omission, or breach of or default under this Agreement by Distributor or by anyone else acting for or on behalf of Distributor in connection with the promotion, distribution or other dealings with respect to the Product; (b) any reseller or end-user's use of the Product or any products or services of
15
Distributor; or (c) any representations and warranties made by Distributor that are inconsistent with or in addition to the warranties made in WGT's end-user license agreement or limited hardware warranty, as applicable, accompanying each copy of the Product.
18. Limitations of Liability. EXCEPT AS PROVIDED IN PARAGRAPH 15, WGT'S LIABILITY(WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE WHETHER ACTIVE, PASSIVE, IMPUTED), PRODUCT LIABILITY, STRICT LIABILITY OR OTHER THEORY) UNDER THIS AGREEMENT OR WITH REGARD TO ANY PRODUCT OR OTHER ITEMS FURNISHED UNDER THIS AGREEMENT WILL IN NO EVENT EXCEED THE COMPENSATION PAID TO WGT CONCERNING SUCH PRODUCT UNDER THIS AGREEMENT.
19. Consequential Damages. IN NO EVENT WILL WGT BE LIABLE, WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE (WHETHER ACTIVE, PASSIVE OR IMPUTED), PRODUCT LIABILITY, STRICT LIABILITY OR OTHER THEORY), TO DISTRIBUTOR OR TO ANY RESELLER OF DISTRIBUTOR, END-USER OR OTHER PERSON OR ENTITY FOR COST OF COVER OR FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION DAMAGES FOR LOSS OF PROFIT, BUSINESS OR DATA) ARISING OUT OF ITS PERFORMANCE OR NONPERFORMANCE OF THIS AGREEMENT OR THE USE OF, INABIILTY TO USE OR RESULTS OF USE OF THE PRODUCT.
20. Compliance with Laws. In performing this Agreement, Distributor will comply with all applicable laws, regulations and other requirements, now or hereafter in effect, of government authorities having jurisdiction.
21. Export. Without limiting anything else herein, Distributor will not export or re-export, directly or indirectly, the WGT Product to any country to which export or re-export of such items is prohibited by the U.S. Export Administration Act, regulations of the U.S. Department of Commerce and other export controls of the U.S., as they may be amended without first obtaining an appropriate written authorization from the U.S. Office of Export Licensing or its successor. At the time of execution of this Agreement, Distributor is prohibited from exporting or re-exporting , directly or indirectly, the WGT Product to the following countries: Cuba, Libya, North Korea, Iran, Iraq, Ruwanda, Sudan, Syria and the Federal Republic of Yugoslavia (Serbia and Montenegro). Notwithstanding the foregoing list, Distributor is not relieved from its obligations to comply with the foregoing export control laws, as such laws may be amended from time to time. Distributor shall also comply with all other foreign or local governmental export and import control laws, regulations and rules.
22. Government Approvals. Distributor will obtain at its expense all licenses, permits and other governmental approvals; will provide all notices; and will pay all duties, taxes and other charges required for the license, export, re-export and import of the Product distributed by the Distributor; the license of the Software distributed by Distributor; and the implementation of this Agreement.
16
23. Nonwaiver. The failure of either party to insist upon or enforce strict performance of any of the provisions of this Agreement or to exercise any rights or remedies under this Agreement will not be construed as a waiver or relinquishment to any extent of such party's right to assert or rely upon any such provisions, rights or remedies in that or any other instance; rather, the same will be and remain in full force and effect.
24. Assignment. Distributor will not assign all or any part of this Agreement or any of its rights under this Agreement without the prior written consent of WGT. Subject to the foregoing, this Agreement will be fully binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns.
25. Survival. Paragraphs 1, 2, 3, 13 through 23 and all accrued obligations to pay, together with all other provisions of this Agreement which may reasonably be interpreted or construed as surviving the expiration or termination of the Term, will survive the expiration or termination of the Term.
26. Notices. Any notice or other communication under this Agreement given by either party to the other will be in writing and delivered either (a) in person or by first-class, registered or certified mail or a recognized overnight delivery service, return receipt requested, postage prepaid or (b) by facsimile and then acknowledged as received by return facsimile by the intended recipient. Notices will be deemed received only upon actual receipt. Notices will be directed to the intended recipient at the address specified below its signature on the signature page of this Agreement. Either party may change its address by giving the other party notice of such change in accordance with this paragraph.
27. No Conflict. Distributor represents and warrants to WGT that Distributor is free to enter into and perform this Agreement without thereby being in breach of or default under the terms of any other contract, commitment or understanding.
28. Interpretation. The English language of this Agreement will govern any interpretation of or dispute regarding the terms of this Agreement. Paragraph captions are for convenience of reference and do not alter or limit the terms of this Agreement. The parties hereto have expressly required that the present Agreement and its Exhibits be drawn up on the English language. / Les parties aux presentes ont expressement exige que la presente conventions et se Annexes solent redigees en la langue anglaise.
29. Governing Law; Venue. This Agreement will be governed by and interpreted in accordance with the local laws of the State of Washington, U.S.A., without regard to its conflicts of law provisions and not including the provisions of the 1980 U.N. Convention in Contracts for the International Sale of Goods. Distributor irrevocably consents, and submits to the jurisdiction of the Federal and State courts of and located in King County, in the State of Washington, U.S.A. Distributor will not commence or prosecute any suit, claim, or proceeding arising under this Agreement other than in the courts identified in the preceding sentence. Any remedy of WGT set forth in this Agreement is in addition to any other remedy afforded to WGT under this Agreement, any other contract, by law or otherwise.
17
SUPPORT SERVICES AND PROCEDURES EXHIBIT C
SUPPORT SERVICES:
WGT will provide the following training and product support programs to Distributor:
A. Training.
Promptly after execution of this Agreement, WGT will conduct a one day technical and sales training program for three (3) of Distributor's employees. Such training will be held at Distributor's facilities. Distributor will be responsible for all costs and expenses incurred by Distributor's personnel in attending, receiving or securing training provided by WGT.
B. Product Support Services.
WGT will provide the following product support services to Distributor for the Term of the Agreement:
1. Telephone Support. Reasonable telephone and electronic mail support for the Software will be available in response to a request from Distributor during WGT's normal business hours (6:00 a.m. to 5:00 p.m., Monday through Friday, Pacific Standard Time), excluding holidays that WGT recognizes. Only Distributor's designated, approved personnel will communicate with WGT's customer support specialists.
2. Submitting a Service Request. To submit a request for service, Distributor has two service options:
(a) over the phone, the Distributor will dial WGT's service number as supplied to Distributor by WGT. When a support specialist answers the phone, Distributor will be prepared to discuss the problem with the support specialist.
(b) via electronic mail as supplied to Distributor by WGT, whereby a service request can be submitted to WGT's electronic mail system.
In order to submit a service request, either telephonically or electronically, Distributor will employ the following procedures:
(a) provide a clear description that fully explains what the problem is, and when the problem occurs;
(b) provide a diagnostic trace, sample code or file of the failure symptom that has been recorded on the user's system; and
(c) describe the steps taken to resolve the problem.
18
3. Priority. WGT will respond to problems with the Software in accordance with the following priority schedule:
Priority One ("P-1") is reserved for critical and severe Software problems which cause the Software to fail or act in a manner which causes the Software to be unusable.
Priority Two ("P-2") is reserved for Software problems which cause a major component of the Software to become unusable but the overall Software continues to function.
Priority Three ("P-3") is reserved for Software problems which cause minimal disruption to normal operations of the Software and can be avoided with a simple work-around process.
Priority Four ("P-4") is reserved for all other problems of lesser severity.
4. Response Time: Upon receipt of a service request, a WGT customer support specialist will contact Distributor's designated, approved personnel within the following response times to discuss the problem:
"P-1" - respond within two (2) hours (subject to WGT's normal business hours) of
receipt of a P-1 problem and use all commercially reasonable and diligent efforts to create a fix or work-around as soon as practicable considering the nature of the problem.
"P-2" - respond within four (4) hours (subject to WGT's normal business hours) of receipt of a P-2 problem and use all commercially reasonable and diligent efforts to create a fix or work-around as soon as practicable considering the nature of the problem.
"P-3" - respond within twenty-four (24) hours (subject to WGT's normal business hours) of receipt of a P-3 problem and use all commercially reasonable efforts to create a fix or work-around which may be included in the next Update.
"P-4" - respond within five (5) business days (subject to WGT's normal business hours) of receipt of a P-4 problem and target a fix in a future Update.
WGT will make any corrections available to Distributor via BBS, FTP site or other reasonable means.
19
DISTRIBUTOR'S FORECAST EXHIBIT D
Quarter 1: ____________, 19__ through ____________, 19__ $__________
Quarter 2: ____________, 19__ through ____________, 19__ $__________
Quarter 3: ____________, 19__ through ____________, 19__ $__________
Quarter 4: ____________, 19__ through ____________, 19__ $__________
20 | Highlight the parts (if any) of this contract related to "Affiliate License-Licensee" that should be reviewed by a lawyer. Details: Does the contract contain a license grant to a licensee (incl. sublicensor) and the affiliates of such licensee/sublicensor? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Irrevocable Or Perpetual License" that should be reviewed by a lawyer. Details: Does the contract contain a license grant that is irrevocable or perpetual?
Context: Exhibit 10.4
INTELLECTUAL PROPERTY AGREEMENT
by and between
Nuance Communications, Inc.
and
Cerence Inc.
Dated as of September 30, 2019
Source: CERENCE INC., 8-K, 10/2/2019
TABLE OF CONTENTS Page ARTICLE I DEFINITIONS
Section 1.01. Definitions 1
ARTICLE II RECORDATION OF INTELLECTUAL PROPERTY RIGHTS ASSIGNMENT AGREEMENTS
Section 2.01. Intellectual Property Assignment Agreements 5 Section 2.02. Recordation 5 Section 2.03. Security Interests 5
ARTICLE III LICENSES AND COVENANTS FROM NUANCE TO SPINCO
Section 3.01. License Grants 6 Section 3.02. Other Covenants 7
ARTICLE IV LICENSES AND COVENANTS FROM SPINCO TO NUANCE
Section 4.01. License Grants 8 Section 4.02. Other Covenants 9
ARTICLE V ADDITIONAL INTELLECTUAL PROPERTY RELATED MATTERS
Section 5.01. Ownership 10 Section 5.02. Assignments and Licenses 10 Section 5.03. No Implied Rights 10 Section 5.04. No Obligation To Prosecute or Maintain Patents 10 Section 5.05. No Technical Assistance 10 Section 5.06. Group Members 10
ARTICLE VI CONFIDENTIAL INFORMATION
Section 6.01. Confidentiality 10 Section 6.02. Disclosure of Confidential Technical Information 11 Section 6.03. Compulsory Disclosure of Confidential Technical Information 11
ARTICLE VII LIMITATION OF LIABILITY AND WARRANTY DISCLAIMER i
Source: CERENCE INC., 8-K, 10/2/2019
Section 7.01. Limitation on Liability 11 Section 7.02. Disclaimer of Representations and Warranties 11
ARTICLE VIII TRANSFERABILITY AND ASSIGNMENT
Section 8.01. No Assignment or Transfer Without Consent 12 Section 8.02. Divested Businesses 12
ARTICLE IX TERMINATION
Section 9.01. Termination by Both Parties 13 Section 9.02. Termination prior to the Distribution 13 Section 9.03. Effect of Termination; Survival 13
ARTICLE X FURTHER ASSURANCES
Section 10.01. Further Assurances 13
ARTICLE XI MISCELLANEOUS
Section 11.01. Counterparts; Entire Agreement; Corporate Power 14 Section 11.02. Dispute Resolution 14 Section 11.03. Governing Law; Jurisdiction 15 Section 11.04. Waiver of Jury Trial 15 Section 11.05. Court-Ordered Interim Relief 15 Section 11.06. Specific Performance 16 Section 11.07. Third-Party Beneficiaries 16 Section 11.08. Notices 16 Section 11.09. Import and Export Control 17 Section 11.10. Bankruptcy 17 Section 11.11. Severability 18 Section 11.12. Expenses 18 Section 11.13. Headings 18 Section 11.14. Survival of Covenants 18 Section 11.15. Waivers of Default 18 Section 11.16. Amendments 18 Section 11.17. Interpretation 19 SCHEDULE A - Fields of Use SCHEDULE B - Nuance Data SCHEDULE C - SpinCo Data SCHEDULE D - SpinCo Patents SCHEDULE E - SpinCo IDs SCHEDULE F - SpinCo Trademarks ii
Source: CERENCE INC., 8-K, 10/2/2019
SCHEDULE G - SpinCo Domain Names SCHEDULE H - Technology Assets SCHEDULE I - OEM Technology
EXHIBIT A1 - Patent Assignment Agreement EXHIBIT A2 - Trademark Assignment Agreement EXHIBIT A3 - Domain Name Assignment Agreement EXHIBIT A4 - Invention Disclosure Assignment Agreement iii
Source: CERENCE INC., 8-K, 10/2/2019
INTELLECTUAL PROPERTY AGREEMENT, dated as of September 30, 2019 (this "Agreement"), by and between NUANCE COMMUNICATIONS, INC., a Delaware corporation ("Nuance"), and CERENCE INC., a Delaware corporation ("SpinCo").
RECITALS
WHEREAS, in connection with the contemplated Spin-Off of SpinCo and concurrently with the execution of this Agreement, Nuance and SpinCo are entering into a Separation and Distribution Agreement (the "Separation Agreement");
WHEREAS, pursuant to the Separation Agreement and the other Ancillary Agreements, as of the Distribution Date, the Nuance IP has been allocated to the Nuance Group and the SpinCo IP has been allocated to the SpinCo Group;
WHEREAS, the Parties wish to record the transfers of any registrations or applications of Nuance IP and SpinCo IP, as applicable, to the extent the ownership thereof has transferred from a member of the Nuance Group to a member of the SpinCo Group, or vice versa, pursuant to the Separation Agreement or any other Ancillary Agreement;
WHEREAS, pursuant to the Separation Agreement and the other Ancillary Agreements, as of the Distribution Date, the Nuance IP allocated to the Nuance Group includes the Nuance Patents, the Nuance Shared Technology Assets and the Nuance Data, and the SpinCo IP allocated to the SpinCo Group includes the SpinCo Patents, the SpinCo Shared Technology Assets and the SpinCo Data;
WHEREAS, it is the intent of the Parties that Nuance grant a license to SpinCo under the Nuance Patents and the Nuance Shared Technology Assets, and provide certain rights or services to the SpinCo Group with respect to the Nuance Data, in each case for the SpinCo Field of Use, subject to the terms and conditions set forth in this Agreement; and
WHEREAS, it is the intent of the Parties that SpinCo grant a license to Nuance under the SpinCo Patents and the SpinCo Shared Technology Assets, and provide certain rights or services to the Nuance Group with respect to certain of the SpinCo Data, in each case for the Nuance Field of Use, subject to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, the Parties, intending to be legally bound, hereby agree as follows:
ARTICLE I DEFINITIONS
Section 1.01. Definitions. As used in this Agreement, the following terms have the meanings set forth below and herein, and the terms defined in Schedules shall have the meanings set forth therein. Capitalized terms used, but not defined in this Agreement shall have the meanings ascribed to such terms in the Separation Agreement or any other Ancillary Agreement, as applicable.
Source: CERENCE INC., 8-K, 10/2/2019
"Bankruptcy Code" has the meaning set forth in Section 11.10.
"Confidential Technical Information" means, with respect to each Disclosing Party, any confidential Data, Trade Secrets or Technology source code within the Nuance IP or SpinCo IP, as applicable, that is in the Receiving Party's possession or that the Receiving Party obtains pursuant to the terms of this Agreement, together with any tangible or electronic expressions or embodiments thereof; provided, that "Confidential Technical Information" shall not include information that is or was (i) publicly known at the time of disclosure or thereafter without any breach of this Agreement by the Receiving Party or its Group or (ii) subsequently made known to the Receiving Party or its Group from a source unconnected with either Party or its Group.
"Copyrights" means copyrights, works of authorship (including all translations, adaptations, derivations and combinations thereof), mask works, designs and database rights, including, in each case, any registrations and applications therefor.
"Data" means all data, databases and collections and compilations of data, in any form or medium.
"Disclosing Party" means each Party in its capacity as the discloser of Confidential Technical Information, as applicable.
"Divested Entity" has the meaning set forth in Section 8.02.
"Domain Name Assignment Agreement" has the meaning set forth in Section 2.01.
"Domain Names" means Internet domain names, including top level domain names and global top level domain names, URLs, social media identifiers, handles and tags.
"Intellectual Property Assignment Agreements" has the meaning set forth in Section 2.01.
"Intellectual Property Rights" or "IPR" means any and all intellectual property rights existing anywhere in the world associated with any and all (i) Patents, (ii) Trademarks, (iii) Copyrights, (iv) Domain Names, (v) rights in Technology, (vi) rights in Trade Secrets, (vii) rights in Data, (viii) all tangible embodiments of the foregoing in whatever form or medium and (ix) any other legal protections and rights related to any of the foregoing. "Intellectual Property Rights" specifically excludes contractual rights (including license grants from third parties).
"Invention Disclosure Assignment Agreement" has the meaning set forth in Section 2.01.
"Nuance Data" means any Data that is (i) owned by a Third Party and licensed to the Nuance Group as of immediately prior to the Distribution pursuant to a Nuance Data Agreement or (ii) owned by the Nuance Group as of immediately prior to the Distribution but subject to a Nuance Data Agreement, in each case (i) and (ii), which Data is used in the SpinCo Business as of immediately prior to the Distribution. 2
Source: CERENCE INC., 8-K, 10/2/2019
"Nuance Data Agreement" means each Contract identified in Schedule B.
"Nuance Field of Use" has the meaning set forth in Schedule A.
"Nuance IP" means all Intellectual Property Rights owned by the Nuance Group or the SpinCo Group as of immediately prior to the Distribution, other than the SpinCo IP.
"Nuance Patents" means all Patents included within the Nuance IP.
"Nuance Shared Technology Assets" means (i) the Nuance Technology Assets identified on Schedule H-2 and (ii) any other Nuance Technology Assets not identified on Schedule H-2 that are used in the SpinCo Business as of immediately prior to the Distribution; provided that the "Nuance Shared Technology Assets" exclude any OEM Technology.
"Nuance Technology Assets" means all of the Technology owned by the Nuance Group or the SpinCo Group as of immediately prior to the Distribution, excluding the SpinCo Technology Assets. For the avoidance of doubt, the "Nuance Technology Assets" include the Technology identified on Schedule H-1.
"Nuance Trademarks" means the Trademarks included in the Nuance IP.
"OEM Technology" means the Technology identified on Schedule I, each of which shall be subject to a separate agreement.
"Party" means either party hereto, and "Parties" means both parties hereto.
"Patent Assignment Agreement" has the meaning set forth in Section 2.01.
"Patents" means patents (including all reissues, divisionals, continuations, continuations-in-part, reexaminations, supplemental examinations, inter partes review, post-grant oppositions, covered business methods reviews, substitutions and extensions thereof), patent registrations and applications, including provisional applications, statutory invention registrations, invention disclosures and inventions.
"Permitted Recipients" has the meaning set forth in Section 6.02.
"Receiving Party" means each Party in its capacity as the recipient of Confidential Technical Information, as applicable.
"Software" means any and all (i) computer programs and applications, including any and all software implementations of algorithms, models and methodologies, whether in source code, object code, human readable form or other form, including operating software, network software, firmware, middleware, design software, design tools, ASP, HTML, DHTML, SHTML and XML files, cgi and other scripts, APIs and web widgets, (ii) descriptions, flow charts and other work product used to design, plan, organize and develop any of the foregoing, screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons, (iii) all documentation including user manuals and other training documentation related to any of the foregoing and (iv) all tangible embodiments of the foregoing in whatever 3
Source: CERENCE INC., 8-K, 10/2/2019
form or medium now known or yet to be created, including all disks, diskettes and tapes; provided, that "Software" does not include Data.
"SpinCo Copyrights" means unregistered Copyrights that are owned by the Nuance Group or the SpinCo Group and exclusively related to the SpinCo Business as of immediately prior to the Distribution; provided, that the "SpinCo Copyrights" do not include any Technology or SpinCo Data.
"SpinCo Data" means any Data that is (i) owned by a Third Party and licensed to the Nuance Group or SpinCo Group as of immediately prior to the Distribution pursuant to a SpinCo Data Agreement or (ii) owned by the Nuance Group or SpinCo Group as of immediately prior to the Distribution but subject to a SpinCo Data Agreement and (iii) Data owned by the Nuance Group or SpinCo Group and exclusively related to the SpinCo Business as of immediately prior to the Distribution.
"SpinCo Data Agreement" means each Contract identified in Schedule C.
"SpinCo Domain Names" means the Domain Names identified on Schedule G, in each case excluding any Trademarks containing "Nuance" or any transliteration or translation thereof or any version of the "Nuance and Design" logo.
"SpinCo Field of Use" has the meaning set forth in Schedule A.
"SpinCo IDs" means the invention disclosures identified on Schedule E.
"SpinCo IP" means (i) the SpinCo Patents, (ii) the SpinCo Copyrights, (iii) the SpinCo Domain Names, (iv) the SpinCo Trade Secrets, (v) the SpinCo Trademarks, (vi) the SpinCo IDs, (vii) the SpinCo Technology Assets and (viii) the SpinCo Data.
"SpinCo Patents" means the Patents identified on Schedule D.
"SpinCo Shared Technology Assets" means the SpinCo Technology Assets identified on Schedule H-4. For the avoidance of doubt, the "SpinCo Shared Technology Assets" exclude any OEM Technology.
"SpinCo Technology Assets" means the Technology identified on Schedule H-3.
"SpinCo Trade Secrets" means the Trade Secrets known to the Parties that are owned by the Nuance Group or SpinCo Group and exclusively related to the SpinCo Business as of immediately prior to the Distribution; provided, that the "SpinCo Trade Secrets" do not include any Technology or SpinCo Data.
"SpinCo Trademarks" means the Trademarks identified on Schedule F.
"Technology" means Software, technical documentation, specifications, schematics, designs, user interfaces, test reports, bills of material, build instructions, lab notebooks, prototypes, samples, programs, routines, subroutines, tools, materials, apparatus, and all recordings, graphs, drawings, reports, analyses, other writings, disks, diskettes and tapes, 4
Source: CERENCE INC., 8-K, 10/2/2019
together with all Intellectual Property Rights (other than Patents and Trademarks) in the foregoing.
"Third Party" means any Person (including any Governmental Authority) who is not a member of the Nuance Group or the SpinCo Group.
"Trade Secrets" means all information, in any form or medium, to the extent that the owner thereof has taken reasonable measures to keep such information secret and the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, the public.
"Trademark Assignment Agreement" has the meaning set forth in Section 2.01.
"Trademarks" means trademarks, service marks, trade names, logos, slogans, trade dress or other source identifiers, including any registration or any application for registration therefor, together with all goodwill associated therewith.
ARTICLE II RECORDATION OF INTELLECTUAL PROPERTY RIGHTS ASSIGNMENT AGREEMENTS
Section 2.01. Intellectual Property Assignment Agreements. In order to carry out the intent of the Parties with respect to the recordation of the transfers of any registrations or applications of Nuance IP or SpinCo IP, as applicable, to the extent the ownership thereof has transferred from a member of the Nuance Group to a member of the SpinCo Group, or vice versa, pursuant to the Separation Agreement or any other Ancillary Agreement, the Parties shall execute intellectual property assignments in a form substantially similar to that attached as Exhibit A1 (the "Patent Assignment Agreement"), Exhibit A2 (the "Trademark Assignment Agreement"), Exhibit A3 (the "Domain Name Assignment Agreement") and Exhibit A4 (the "Invention Disclosure Assignment Agreement") as well as such additional case specific assignments as deemed appropriate or necessary under applicable Laws (collectively, the "Intellectual Property Assignment Agreements") for recordation with the appropriate Governmental Authority.
Section 2.02. Recordation. The relevant assignee Party shall have the sole responsibility, at its sole cost and expense, to file the Intellectual Property Assignment Agreements and any other forms or documents with the appropriate Governmental Authorities as required to record the transfer of any registrations or applications of Nuance IP or SpinCo IP that is allocated under the Separation Agreement, as applicable, and the relevant assignor Party hereby consents to such recordation.
Section 2.03. Security Interests. Prior to, on and after the Distribution Date, each Party shall cooperate with the other Party, without any further consideration and at no expense to the other Party, to obtain, cause to be obtained or properly record the release of any outstanding Security Interest attached to any Nuance IP or SpinCo IP that is subject to assignment from one Party or its Group to the other Party or its Group hereunder, as applicable, and to take, or cause to be taken, all actions as the other Party may reasonably be requested to take in order to obtain, cause to be obtained or properly record such release. 5
Source: CERENCE INC., 8-K, 10/2/2019
ARTICLE III LICENSES AND COVENANTS FROM NUANCE TO SPINCO
Section 3.01. License Grants.
(a) Patents. Subject to the terms and conditions of this Agreement, as of the Distribution Date, Nuance hereby grants to SpinCo and the members of the SpinCo Group a worldwide, non-exclusive, fully paid-up, perpetual and irrevocable, transferable (subject to ARTICLE VIII), sublicensable (subject to Section 3.01(g)) license under the Nuance Patents, solely to the extent that claims of the Nuance Patents cover products or services of the SpinCo Business in the SpinCo Field of Use, together with natural extensions and evolutions thereof, in each case to make, have made, use, sell, offer for sale, import and otherwise exploit such products and services, together with natural extensions and evolutions thereof.
(b) Technology. Subject to the terms and conditions of this Agreement, as of the Distribution Date, Nuance hereby grants to SpinCo and the members of the SpinCo Group a worldwide, non-exclusive, fully paid-up, perpetual and irrevocable, transferable (subject to ARTICLE VIII), sublicensable (subject to Section 3.01(g)) license to install, access, use, reproduce, perform, display, modify (including the right to create improvements and derivative works), further develop, sell, manufacture, distribute and market products and services based on, using or incorporating the Nuance Shared Technology Assets within the SpinCo Field of Use, together with natural extensions and evolutions thereof.
(c) Other Nuance Shared IP. Subject to the terms and conditions of this Agreement, as of the Distribution Date, Nuance hereby grants to SpinCo and the members of the SpinCo Group a worldwide, non-exclusive, fully paid-up, perpetual and irrevocable, transferable (subject to ARTICLE VIII), sublicensable (subject to Section 3.01(g)) license to continue to use any Nuance IP (other than Nuance Patents, Nuance Technology Assets, Nuance Trademarks and Nuance Data), in each case solely as and to the extent that it is used by the SpinCo Group in connection with products and services of the SpinCo Business within the SpinCo Field of Use, together with natural extensions and evolutions thereof.
(d) Trademarks. The Parties acknowledge and agree that no rights are granted to the SpinCo Group in this Agreement with respect to any Trademarks or Domain Names, provided that certain rights and obligations with respect to the use by the SpinCo Group of certain Nuance Trademarks and related Domain Names shall be set forth in the Transitional Trademark License Agreement. To the extent there is a conflict between the terms of this Agreement and the Transitional Trademark License Agreement, the terms of the Transitional Trademark License Agreement shall control.
(e) Nuance Data. The Parties acknowledge and agree that certain rights and obligations with respect to the use or benefit by the SpinCo Group of certain Nuance Data shall be as provided in Schedule B.
(f) OEM Technology. Notwithstanding the foregoing, the Parties acknowledge and agree that this Section 3.01 does not grant any rights or licenses to any OEM Technology, which is subject to certain separate agreements between the Parties, and to the 6
Source: CERENCE INC., 8-K, 10/2/2019
extent there is a conflict between this Agreement and such separate agreements, such separate agreements shall control.
(g) Sublicenses. The licenses granted in Sections 3.01(a), (b) and (c) to the SpinCo Group include the right to grant sublicenses within the scope of such licenses only to members of the SpinCo Group and, without any further right to sublicense, to their respective (i) contractors, distributors, manufacturers and resellers, in each case solely for the benefit of the SpinCo Business, and (ii) end users and customers, in each case solely in connection with the use of products and services of the SpinCo Business. Notwithstanding the forgoing, subject to Section 3.02(b) and ARTICLE VI, members of the SpinCo Group may only sublicense the Nuance Shared Technology Assets pursuant to terms and conditions as protective as those under which it licenses its own Technology of a similar nature and value, and in any event terms and conditions that provide for commercially reasonable protection for the source code, structure and other confidential and proprietary elements of the Nuance Shared Technology Assets. The SpinCo Group shall remain liable for any breach or default of the applicable terms and conditions of this Agreement by any of its sublicensees.
Section 3.02. Other Covenants.
(a) SpinCo hereby acknowledges Nuance's right, title and interest in and to the Nuance IP. SpinCo agrees that it will not (i) oppose, challenge, petition to cancel, contest or threaten in any way, or assist another party in opposing, challenging, petitioning to cancel, contesting or threatening in any way, any application or registration by Nuance or its Affiliates or their respective licensees for any Nuance IP, (ii) engage in any act, or purposefully omit to perform any act, that impairs or adversely affects the rights of Nuance or any member of the Nuance Group in and to any Nuance IP or (iii) apply for any registration (including federal, state and national registrations) with respect to the Nuance IP.
(b) With respect to the Nuance Shared Technology Assets, SpinCo agrees that it will not (i) engage in any act, or purposefully omit to perform any act, that impairs or adversely affects the rights of Nuance or any member of the Nuance Group in and to any Nuance Shared Technology Assets, (ii) use the Nuance Shared Technology Assets on a service bureau, time sharing or similar basis, or for the benefit of any other Person, (iii) remove any proprietary markings in the Nuance Shared Technology Assets, (iv) incorporate or otherwise combine or integrate any open source software with or into the Nuance Shared Technology Assets such that the Nuance Shared Technology Assets, or any part thereof, becomes subject to any "open source," "copyleft" or similar type of license terms (including, without limitation, any license that is or was recognized as an open source software license by the Open Source Initiative), (v) reverse engineer, reverse assemble or decompile the Nuance Shared Technology Assets or any software component of the Nuance Shared Technology Assets or (vi) disclose, distribute or otherwise provide or permit access to source code of any Nuance Shared 7
Source: CERENCE INC., 8-K, 10/2/2019
Technology Assets other than to commercial source code escrow providers who are only permitted to make such source code available to third parties that have entered into an escrow agreement with a member of the SpinCo Group and escrow provider.
ARTICLE IV LICENSES AND COVENANTS FROM SPINCO TO NUANCE
Section 4.01. License Grants.
(a) Patents. Subject to the terms and conditions of this Agreement, as of the Distribution Date, SpinCo hereby grants to Nuance and the members of the Nuance Group a worldwide, non-exclusive, fully paid-up, perpetual and irrevocable, transferable (subject to ARTICLE VIII), sublicensable (subject to Section 4.01(g)) license under the SpinCo Patents, solely to the extent that claims of the SpinCo Patents cover products or services of the Nuance Business in the Nuance Field of Use, together with natural extensions and evolutions thereof, in each case to make, have made use, sell, offer for sale, import and otherwise exploit such products and services, together with natural extensions and evolutions thereof.
(b) Technology. Subject to the terms and conditions of this Agreement, as of the Distribution Date, SpinCo hereby grants to Nuance and the members of the Nuance Group a worldwide, non-exclusive, fully paid-up, perpetual and irrevocable, transferable (subject to ARTICLE VIII), sublicensable (subject to Section 4.01(g)) license to install, access, use, reproduce, perform, display, modify (including the right to create improvements and derivative works), further develop, sell, manufacture, distribute and market products and services based on, using or incorporating the SpinCo Shared Technology Assets within the Nuance Field of Use, together with natural extensions and evolutions thereof.
(c) Other SpinCo Shared IP. Subject to the terms and conditions of this Agreement, as of the Distribution Date, SpinCo hereby grants to Nuance and the members of the Nuance Group a worldwide, non-exclusive, fully paid-up, perpetual and irrevocable, transferable (subject to ARTICLE VIII), sublicensable (subject to Section 4.01(g)) license to continue to use any SpinCo IP (other than SpinCo Patents, SpinCo Technology Assets, SpinCo Trademarks, SpinCo Domain Names and SpinCo Data), in each case solely as and to the extent that it is used by the Nuance Group in connection with products and services of the Nuance Business within the Nuance Field of Use, together with natural extensions and evolutions thereof.
(d) Trademarks. The Parties acknowledge and agree that no rights are granted to the Nuance Group in this Agreement with respect to any Trademarks or Domain Names.
(e) SpinCo Data. The Parties acknowledge and agree that certain rights and obligations with respect to the use or benefit of the Nuance Group of certain SpinCo Data shall be as provided in Schedule C.
(f) OEM Technology. Notwithstanding the foregoing, the Parties acknowledge and agree that this Section 4.01 does not grant any rights or licenses to any OEM Technology, which is subject to certain separate agreements between the Parties, and to the 8
Source: CERENCE INC., 8-K, 10/2/2019
extent there is a conflict between this Agreement and such separate agreements, such separate agreements shall control.
(g) Sublicenses. The licenses granted in Sections 4.01(a), (b) and (c) to the Nuance Group include the right to grant sublicenses within the scope of such licenses only to members of the Nuance Group and, without any further right to sublicense, to their respective (i) contractors, distributors, manufacturers and resellers, in each case solely for the benefit of the Nuance Business and (ii) end users and customers, in each case solely in connection with the use of products and services of the Nuance Business. Notwithstanding the forgoing, subject to Section 4.02(b) and ARTICLE VI, members of the Nuance Group may only sublicense the SpinCo Shared Technology Assets pursuant to terms and conditions as protective as those under which it licenses its own Technology of a similar nature and value, and in any event terms and conditions that provide for commercially reasonable protection for the source code, structure and other confidential and proprietary elements of the SpinCo Shared Technology Assets. The Nuance Group shall remain liable for any breach or default of the applicable terms and conditions of this Agreement by any of its sublicensees.
Section 4.02. Other Covenants.
(a) Nuance hereby acknowledges SpinCo's right, title and interest in and to the SpinCo IP. Nuance agrees that it will not (i) oppose, challenge, petition to cancel, contest or threaten in any way, or assist another party in opposing, challenging, petitioning to cancel, contesting or threatening in any way, any application or registration by SpinCo or its Affiliates or their respective licensees for any SpinCo IP, (ii) engage in any act, or purposefully omit to perform any act, that impairs or adversely affects the rights of SpinCo or any member of the SpinCo Group in and to any SpinCo IP or (iii) apply for any registration (including federal, state and national registrations) with respect to the SpinCo IP.
(b) With respect to the SpinCo Shared Technology Assets, Nuance agrees that it will not (i) engage in any act, or purposefully omit to perform any act, that impairs or adversely affects the rights of SpinCo or any member of the SpinCo Group in and to any SpinCo Shared Technology Assets, (ii) use the SpinCo Shared Technology Assets on a service bureau, time sharing or similar basis, or for the benefit of any other Person, (iii) remove any proprietary markings in the SpinCo Shared Technology Assets, (iv) incorporate or otherwise combine or integrate any open source software with or into the SpinCo Shared Technology Assets such that the SpinCo Shared Technology Assets, or any part thereof, becomes subject to any "open source," "copyleft" or similar type of license terms (including, without limitation, any license that is or was recognized as an open source software license by the Open Source Initiative), (v) reverse engineer, reverse assemble or decompile the SpinCo Shared Technology Assets or any software component of the SpinCo Shared Technology Assets or (vi) disclose, distribute or otherwise provide or permit access to source code of any SpinCo Shared 9
Source: CERENCE INC., 8-K, 10/2/2019
Technology Assets other than to commercial source code escrow providers who are only permitted to make such source code available to third parties that have entered into an escrow agreement with a member of the Nuance Group and escrow provider.
ARTICLE V ADDITIONAL INTELLECTUAL PROPERTY RELATED MATTERS
Section 5.01. Ownership. The Party receiving the license hereunder acknowledges and agrees that the Party (or the applicable member of its Group) granting the license is the sole and exclusive owner of the Intellectual Property Rights so licensed.
Section 5.02. Assignments and Licenses. Any assignment, other transfer or license by either Party or any member of its Group of any Intellectual Property Rights licensed to the other Party or any member of its Group pursuant to ARTICLE III or ARTICLE IV, respectively, shall be subject to the applicable licenses, covenants and restrictions set forth herein.
Section 5.03. No Implied Rights. Nothing contained in this Agreement shall be construed as conferring any rights (including the right to sublicense) by implication, estoppel or otherwise, under any Intellectual Property Rights, other than as expressly granted in this Agreement, and all other rights under any Intellectual Property Rights licensed to a Party or the members of its Group hereunder are expressly reserved by the Party granting the license.
Section 5.04. No Obligation To Prosecute or Maintain Patents. Except as expressly set forth in this Agreement, no Party or any member of its Group shall have any obligation to seek, perfect or maintain any protection for any of its Intellectual Property Rights. Without limiting the generality of the foregoing, except as expressly set forth in this Agreement, no Party or any member of its Group shall have any obligation to file any Patent application, to prosecute any Patent, or secure any Patent rights or to maintain any Patent in force.
Section 5.05. No Technical Assistance. Except as expressly set forth in this Agreement, in the Separation Agreement or any other mutually executed agreement between the Parties or any of the members of their respective Groups, no Party or any member of its Group shall be required to provide the other Party with any technical assistance or to furnish any other Party with, or obtain on their behalf, any Intellectual Property Rights-related documents, materials or other information or technology.
Section 5.06. Group Members. Each Party shall cause the members of its Group to comply with all applicable provisions of this Agreement.
ARTICLE VI CONFIDENTIAL INFORMATION
Section 6.01. Confidentiality. Without limiting Section 6.02, all confidential information of a Party disclosed to the other Party under this Agreement shall be deemed confidential and proprietary information of the disclosing Party, shall be subject to the provisions of Section 7.09 of the Separation Agreement and may be used by the Receiving Party pursuant to this Agreement for the sole and express purpose of effecting the licenses granted herein. 10
Source: CERENCE INC., 8-K, 10/2/2019
Section 6.02. Disclosure of Confidential Technical Information. Except as expressly permitted by this Agreement, including in Section 3.02(b)(vi) or Section 4.02(b)(vi), the Receiving Party shall not, and shall not permit any other Person to, disclose any Confidential Technical Information to any Person without prior written consent of the Disclosing Party, except that the Receiving Party may disclose the Confidential Technical Information solely to those employees and contractors of the Receiving Party who have a need to know the Confidential Technical Information in connection with designing, developing, distributing, marketing, testing and supporting any products or services of the Receiving Party within the Nuance Field of Use or SpinCo Field of Use, as applicable (collectively, the "Permitted Recipients"); provided, that prior to such disclosure the Receiving Party shall notify each such Permitted Recipient in writing of the use and disclosure restrictions set forth in this Agreement and ensure that such Permitted Recipient is bound by confidentiality obligations with respect thereto. The Receiving Party shall take, at its sole expense, all reasonable measures to prevent any prohibited or unauthorized disclosure or use of any Confidential Technical Information, including by its Permitted Recipients, and shall be liable for any breaches of this Agreement by any of its Permitted Recipients, in each case, as if committed by the Receiving Party.
Section 6.03. Compulsory Disclosure of Confidential Technical Information. If the Receiving Party receives a request to disclose any Confidential Technical Information pursuant to a subpoena or other order of a Governmental Authority: (i) the Receiving Party shall promptly notify in writing the Disclosing Party thereof and reasonably consult with and assist the Disclosing Party in seeking a protective order or other appropriate remedy to limit such disclosure, (ii) in the event that such protective order or remedy is not obtained, the Receiving Party shall disclose only that portion of the Confidential Technical Information which, in the written opinion of the Receiving Party's legal counsel, is legally required to be disclosed, and the Receiving Party shall use reasonable best efforts to ensure confidential treatment of any such disclosed Confidential Technical Information and (iii) the Disclosing Party shall be given an opportunity to review any such Confidential Technical Information prior to disclosure thereof. The Parties shall fully cooperate, to the extent permitted by Law, in any actions the Disclosing Party may take in seeking to prevent or limit such disclosure. Any Confidential Technical Information disclosed under this Section 6.03 shall continue to be deemed Confidential Technical Information for all purposes hereunder, notwithstanding such disclosure.
ARTICLE VII LIMITATION OF LIABILITY AND WARRANTY DISCLAIMER
Section 7.01. Limitation on Liability. Without limiting the terms set forth in Section 6.09 of the Separation Agreement, none of Nuance, SpinCo or any other member of either Group shall in any event have any Liability to the other or to any other member of the other's Group under this Agreement for any indirect, special, punitive or consequential damages, whether or not caused by or resulting from negligence or breach of obligations hereunder and whether or not informed of the possibility of the existence of such damages.
Section 7.02. Disclaimer of Representations and Warranties. Each of Nuance (on behalf of itself and each other member of the Nuance Group) and SpinCo (on behalf of itself and each other member of the SpinCo Group) understands and agrees that, except as expressly set forth in this Agreement, no Party is representing or warranting in any way, including any 11
Source: CERENCE INC., 8-K, 10/2/2019
implied warranties of merchantability, fitness for a particular purpose, title, registerability, allowability, enforceability or non-infringement, as to any Intellectual Property Rights licensed hereunder, as to the sufficiency of the Intellectual Property Rights licensed hereunder for the conduct and operations of the SpinCo Business or the Nuance Business, as applicable, as to the value or freedom from any Security Interests of, or any other matter concerning, any Intellectual Property Rights licensed hereunder, or as to the absence of any defenses or rights of setoff or freedom from counterclaim with respect to any claim or other Intellectual Property Rights of any such Party, or as to the legal sufficiency of any assignment, document or instrument delivered hereunder to convey title to any Intellectual Property Rights or thing of value upon the execution, delivery and filing hereof or thereof. Except as may expressly be set forth herein, any such Intellectual Property Rights are being licensed on an "as is," "where is" basis and the respective licensees shall bear the economic and legal risks related to the use of the Nuance IP in the SpinCo Business or the SpinCo IP in the Nuance Business, as applicable.
ARTICLE VIII TRANSFERABILITY AND ASSIGNMENT
Section 8.01. No Assignment or Transfer Without Consent. Except as expressly set forth in this Agreement, neither this Agreement nor any of the rights, interests or obligations under this Agreement, including the licenses granted pursuant to this Agreement, shall be assigned, in whole or in part, by operation of Law or otherwise by either Party without the prior written consent of the other Party. Any purported assignment without such consent shall be void. Notwithstanding the foregoing, if any Party to this Agreement (or any of its successors or permitted assigns) (a) shall enter into a consolidation or merger transaction in which such Party is not the surviving entity and the surviving entity acquires or assumes all or substantially all of such Party's assets, (b) shall transfer all or substantially all of such Party's assets to any Person or (c) shall assign this Agreement to such Party's Affiliates, then, in each such case, the assigning Party (or its successors or permitted assigns, as applicable) shall ensure that the assignee or successor-in-interest expressly assumes in writing all of the obligations of the assigning Party under this Agreement, and the assigning Party shall not be required to seek consent, but shall provide written notice and evidence of such assignment, assumption or succession to the non-assigning Party. Subject to the preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and assigns. No assignment permitted by this Section 8.01 shall release the assigning Party from liability for the full performance of its obligations under this Agreement. For the avoidance of doubt, in no event will the licenses granted in this Agreement extend to products, services or other activities of the assignee existing on or before the date of the transaction described in clauses (a) or (b) of the preceding sentence, except to the extent that they were licensed under the terms of this Agreement prior to such transaction.
Section 8.02. Divested Businesses. In the event a Party divests a line of business or line of products or services by (a) spinning off a member of its Group by its sale or other disposition to a Third Party, (b) reducing ownership or control in a member of its Group so that it no longer qualifiers as a member of its Group under this Agreement, (c) selling or otherwise transferring such line of business, products or services to a Third Party or (d) forming a joint venture with a Third Party with respect to such line of business, products or services (each such divested entity or line of business, products or services, a "Divested Entity"), the Divested Entity 12
Source: CERENCE INC., 8-K, 10/2/2019
shall retain those licenses granted to it under this Agreement, provided that the license shall be limited to the business, products or services (as applicable) of the Divested Entity as of the date of divestment and such natural development thereof within the Nuance Field of Use (where Nuance is the divesting Party) or SpinCo Field of Use (where SpinCo is the divesting party). The retention of any license grants are subject to the Divested Entity's and, in the event it is acquired by a Third Party, such Third Party's execution and delivery to the non-transferring Party, within 90 days of the effective date of such divestment, of a duly authorized, written undertaking, agreeing to be bound by the applicable terms of this Agreement. For the avoidance of doubt, (i) in no event will the licenses retained by a Divested Entity extend to products, services or other activities of a Third Party acquirer existing on or before the date of the divestment, except to the extent that they were licensed under the terms of this Agreement prior to such divestment, and (ii) in the event that a Divested Entity owns any Intellectual Property Rights licensed to the other Party under this Agreement, such Intellectual Property Rights may be transferred or assignment with such Divested Entity subject to the terms and conditions this Agreement.
ARTICLE IX TERMINATION
Section 9.01. Termination by Both Parties. Subject to Section 9.02, this Agreement may not be terminated except by an agreement in writing signed by a duly authorized officer of each of the Parties.
Section 9.02. Termination prior to the Distribution. This Agreement may be terminated by Nuance at any time, in its sole discretion, prior to the Distribution; provided, however, that this Agreement shall automatically terminate upon the termination of the Separation Agreement in accordance with its terms.
Section 9.03. Effect of Termination; Survival. In the event of any termination of this Agreement prior to the Distribution, neither Party (nor any member of their Group or any of their respective directors or officers) shall have any Liability or further obligation to the other Party or any member of its Group under this Agreement. Except with respect to termination of the Agreement under Section 9.02, notwithstanding anything in this Agreement to the contrary, ARTICLE I, ARTICLE VI, ARTICLE VII, this Section 9.03 and ARTICLE XI shall survive any termination of this Agreement.
ARTICLE X FURTHER ASSURANCES
Section 10.01. Further Assurances.
(a) In addition to the actions specifically provided for elsewhere in this Agreement, each of the Parties shall use reasonable best efforts, prior to, on and after the Distribution Date, to take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable Laws and agreements to consummate, and make effective, the transactions contemplated by this Agreement.
(b) Without limiting the foregoing, prior to, on and after the Distribution Date, each Party shall cooperate with the other Party, without any further 13
Source: CERENCE INC., 8-K, 10/2/2019
consideration, but at the expense of the requesting Party: (i) to execute and deliver, or use reasonable best efforts to execute and deliver, or cause to be executed and delivered, all instruments, including any instruments of conveyance, assignment and transfer as such Party may reasonably be requested to execute and deliver by the other Party; (ii) to make, or cause to be made, all filings with, and to obtain, or cause to be obtained, all Consents of any Governmental Authority or any other Person under any permit, license, Contract, indenture or other instrument; and (iii) to take, or cause to be taken, all such other actions as such Party may reasonably be requested to take by the other Party from time to time, consistent with the terms of this Agreement, in order to effectuate the provisions and purposes of this Agreement and any transfers of Intellectual Property Rights or assignments and assumptions of Liabilities related thereto as set forth in the Separation Agreement.
ARTICLE XI MISCELLANEOUS
Section 11.01. Counterparts; Entire Agreement; Corporate Power.
(a) This Agreement may be executed in one or more counterparts, all of which counterparts shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each Party and delivered to the other Party. This Agreement may be executed by facsimile or PDF signature and scanned and exchanged by electronic mail, and such facsimile or PDF signature or scanned and exchanged copies shall constitute an original for all purposes.
(b) This Agreement and the Exhibits and Schedules hereto contain the entire agreement between the Parties with respect to the subject matter hereof and supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings between the Parties with respect to the subject matter hereof other than those set forth or referred to herein or therein. In the event of conflict or inconsistency between the provisions of this Agreement or the Separation Agreement, the provisions of this Agreement shall prevail.
(c) Nuance represents on behalf of itself and each other member of the Nuance Group, and SpinCo represents on behalf of itself and each other member of the SpinCo Group, as follows:
(i) each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby; and
(ii) this Agreement has been duly executed and delivered by it and constitutes, or will constitute, a valid and binding agreement of it enforceable in accordance with the terms thereof.
Section 11.02. Dispute Resolution. In the event that either Party, acting reasonably, forms the view that another Party has caused a material breach of the terms of this Agreement, then the Party that forms such a view shall serve written notice of the alleged breach on the other Parties and the Parties shall work together in good faith to resolve any such alleged 14
Source: CERENCE INC., 8-K, 10/2/2019
breach within thirty (30) days of such notice (a "Dispute"). If any such alleged breach is not so resolved, then a senior executive of each Party shall, in good faith, attempt to resolve any such alleged breach within the following thirty (30) days of the referral of the matter to the senior executives. If no resolution is reached with respect to any such alleged breach in accordance with the procedures contained in this Section 11.02, then the Parties may seek to resolve such matter in accordance with Section 11.03, Section 11.04, Section 11.05 and Section 11.06
Section 11.03. Governing Law; Jurisdiction. Any disputes relating to, arising out of or resulting from this Agreement, including to its execution, performance, or enforcement, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, regardless of the Laws that might otherwise govern under applicable principles of conflicts of Laws thereof. Each Party irrevocably consents to the exclusive jurisdiction, forum and venue of the Delaware Court of Chancery (and if the Delaware Court of Chancery shall be unavailable, any Delaware State court or the federal court sitting in the State of Delaware) over any and all claims, disputes, controversies or disagreements between the Parties or any of their respective Affiliates, successors and assigns under or related to this Agreement or any of the transactions contemplated hereby, including their execution, performance or enforcement, whether in contract, tort or otherwise. Each of the Parties hereby agrees that it shall not assert, and shall hereby waive, any claim or right or defense that it is not subject to the jurisdiction of such courts, that the venue is improper, that the forum is inconvenient or any similar objection, claim or argument. Each Party agrees that a final judgment in any legal proceeding resolved in accordance with this Section 11.03, Section 11.04, Section 11.05 and Section 11.06 shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law.
Section 11.04. Waiver of Jury Trial. EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION RELATING TO, ARISING OUT OF OR RESULTING FROM THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING THEIR EXECUTION, PERFORMANCE OR ENFORCEMENT, WHETHER IN CONTRACT, TORT OR OTHERWISE. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS.
Section 11.05. Court-Ordered Interim Relief. In accordance with Section 11.03 and Section 11.04, at any time after giving notice of a Dispute, each Party shall be entitled to interim measures of protection duly granted by a court of competent jurisdiction: (1) to preserve the status quo pending resolution of the Dispute; (2) to prevent the destruction or loss of documents and other information or things relating to the Dispute; or (3) to prevent the transfer, disposition or hiding of assets. Any such interim measure (or a request therefor to a court of competent jurisdiction) shall not be deemed incompatible with the provisions of Section 11.02, Section 11.03 and Section 11.04. Until such Dispute is resolved in accordance with Section 11.02 or final judgment is rendered in accordance with Section 11.03 and Section 11.04, each 15
Source: CERENCE INC., 8-K, 10/2/2019
Party agrees that such Party shall continue to perform its obligations under this Agreement and that such obligations shall not be subject to any defense or setoff, counterclaim, recoupment or termination.
Section 11.06. Specific Performance. Subject to Section 11.02 and Section 11.05, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the affected Party shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement, in addition to any and all other rights and remedies at Law or in equity, and all such rights and remedies shall be cumulative. The other Party shall not oppose the granting of such relief on the basis that money damages are an adequate remedy. The Parties agree that the remedies at Law for any breach or threatened breach hereof, including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at Law would be adequate is waived. Any requirements for the securing or posting of any bond or similar security with such remedy are waived.
Section 11.07. Third-Party Beneficiaries. Except as otherwise expressly set forth herein or as otherwise may be provided in the Separation Agreement with respect to the rights of any Nuance Indemnitee or SpinCo Indemnitee, in his, her or its respective capacities as such, (a) the provisions of this Agreement are solely for the benefit of the Parties hereto and are not intended to confer upon any Person except the Parties hereto any rights or remedies hereunder and (b) there are no third-party beneficiaries of this Agreement and this Agreement shall not provide any third person with any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.
Section 11.08. Notices. All notices or other communications under this Agreement shall be in writing and shall be deemed to be duly given (a) when delivered in person, (b) on the date received, if sent by a nationally recognized delivery or courier service, (c) upon written confirmation of receipt after transmittal by electronic mail or (d) upon the earlier of confirmed receipt or the fifth (5t h) business day following the date of mailing if sent by registered or certified mail, return receipt requested, postage prepaid and addressed as follows:
If to Nuance, to:
Nuance Communications, Inc. 1 Wayside Road, Burlington, MA 01803 Attn: Wendy Cassity, EVP and Chief Legal Officer email: Wendy.cassity@nuance.com with a copy to: David Garfinkel, SVP Corporate Development email: David.garfinkel@nuance.com
and
Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY 10019-6064 Attn: Scott A. Barshay Steven J. Williams 16
Source: CERENCE INC., 8-K, 10/2/2019
Michael E. Vogel email: sbarshay@paulweiss.com swilliams@paulweiss.com mvogel@paulweiss.com Facsimile: 212-492-0040
If to SpinCo, to:
Cerence Inc. 15 Wayside Road, Burlington, MA 01803 Attn: Leanne Fitzgerald, General Counsel email: Leanne.Fitzgerald@cerence.com with a copy to: Mark Gallenberger, Chief Financial Officer email: Mark.Gallenberger@cerence.com
Either Party may, by notice to the other Party, change the address and identity of the Person to which such notices and copies of such notices are to be given. Each Party agrees that nothing in this Agreement shall affect the other Party's right to serve process in any other manner permitted by Law (including pursuant to the rules for foreign service of process authorized by the Hague Convention).
Section 11.09. Import and Export Control. Each Party agrees that it shall comply with all applicable national and international laws and regulations relating to import and/or export control in its country(ies), if any, involving any commodities, software, services or technology within the scope of this Agreement.
Section 11.10. Bankruptcy. The Parties acknowledge and agree that all rights and licenses granted by the other under or pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code, as amended (the "Bankruptcy Code"), licenses of rights to "intellectual property" as defined under Section 101 of the Bankruptcy Code. The Parties agree that, notwithstanding anything else in this Agreement, Nuance and the members of the Nuance Group and SpinCo and the members of the SpinCo Group, as licensees of such intellectual property rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code (including Nuance's and the Nuance Group members' and SpinCo's and the SpinCo Group members' right 17
Source: CERENCE INC., 8-K, 10/2/2019
to the continued enjoyment of the rights and licenses respectively granted by under this Agreement).
Section 11.11. Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances, or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either Party. Upon any such determination, any such provision, to the extent determined to be invalid, void or unenforceable, shall be deemed replaced by a provision that such court determines is valid and enforceable and that comes closest to expressing the intention of the invalid, void or unenforceable provision.
Section 11.12. Expenses. Except as set forth on Schedule XXIV to the Separation Agreement, as otherwise expressly provided in this Agreement or the Separation Agreement, (i) all third-party fees, costs and expenses incurred by either the Nuance Group or the SpinCo Group in connection with effecting the Spin-Off prior to or on the Distribution Date, whether payable prior to, on or following the Distribution Date (but excluding, for the avoidance of doubt, any financing fees or interest payable in respect of any indebtedness incurred by SpinCo in connection with the Spin-Off), will be borne and paid by Nuance and (ii) all third-party fees, costs and expenses incurred by either the Nuance Group or the SpinCo Group in connection with effecting the Spin-Off following the Distribution Date, whether payable prior to, on or following the Distribution Date, will be borne and paid by the Party incurring such fee, cost or expense. For the avoidance of doubt, this Section 11.12 shall not affect each Party's responsibility to indemnify Nuance Liabilities or SpinCo Liabilities, as applicable, arising from the transactions contemplated by the Distribution.
Section 11.13. Headings. The article, section and paragraph headings contained in this Agreement, including in the table of contents of this Agreement, are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
Section 11.14. Survival of Covenants. Except as expressly set forth in this Agreement, the covenants in this Agreement and the Liabilities for the breach of any obligations in this Agreement shall survive the Spin-Off and shall remain in full force and effect.
Section 11.15. Waivers of Default. No failure or delay of any Party (or the applicable member of its Group) in exercising any right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. Waiver by any Party of any default by the other Party of any provision of this Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default.
Section 11.16. Amendments. No provisions of this Agreement shall be deemed waived, amended, supplemented or modified by any Party, unless such waiver, amendment, 18
Source: CERENCE INC., 8-K, 10/2/2019
supplement or modification is in writing and signed by the authorized representative of each Party.
Section 11.17. Interpretation. Words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires. The terms "hereof," "herein," "herewith" and words of similar import, unless otherwise stated, shall be construed to refer to this Agreement as a whole (including all of the schedules hereto) and not to any particular provision of this Agreement. Article, Section or Schedule references are to the articles, sections and schedules of or to this Agreement unless otherwise specified. Any capitalized terms used in any Schedule to this Agreement but not otherwise defined therein shall have the meaning as defined in this Agreement. Any definition of or reference to any agreement, instrument or other document herein (including any reference herein to this Agreement) shall, unless otherwise stated, be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth therein, including in Section 11.16 above). The word "including" and words of similar import when used in this Agreement shall mean "including, without limitation," unless the context otherwise requires or unless otherwise specified. The word "or" shall not be exclusive. The word "extent" in the phrase "to the extent" shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply "if." All references to "$" or dollar amounts are to the lawful currency of the United States of America. In the event that an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring either Party by virtue of the authorship of any provisions hereof.
[SIGNATURE PAGES FOLLOW] 19
Source: CERENCE INC., 8-K, 10/2/2019
IN WITNESS WHEREOF, the Parties have caused this Intellectual Property Agreement to be executed by their duly authorized representatives. NUANCE COMMUNICATIONS, INC.
By: /s/ Wendy Cassity Name: Wendy Cassity Title: Executive Vice President and Chief Legal Officer
CERENCE INC.
By: /s/ Leanne Fitzgerald Name: Leanne Fitzgerald Title: Vice President and Secretary [Signature page to the Intellectual Property Agreement]
Source: CERENCE INC., 8-K, 10/2/2019 [/INST] ```json
{<answer_start>
"answer": "Subject to the terms and conditions of this Agreement, as of the Distribution Date, SpinCo hereby grants to Nuance and the members of the Nuance Group a worldwide, non-exclusive, fully paid-up, perpetual and irrevocable, transferable (subject to ARTICLE VIII), sublicensable (subject to Section 4.01(g)) license to continue to use any SpinCo IP (other than SpinCo Patents, SpinCo Technology Assets, SpinCo Trademarks, SpinCo Domain Names and SpinCo Data), in each case solely as and to the extent that it is used by the Nuance Group in connection with products and services of the Nuance Business within the Nuance Field of Use, together with natural extensions and evolutions thereof."
<answer_end>
}
``` </s> | Exhibit 10.4
INTELLECTUAL PROPERTY AGREEMENT
by and between
Nuance Communications, Inc.
and
Cerence Inc.
Dated as of September 30, 2019
Source: CERENCE INC., 8-K, 10/2/2019
TABLE OF CONTENTS Page ARTICLE I DEFINITIONS
Section 1.01. Definitions 1
ARTICLE II RECORDATION OF INTELLECTUAL PROPERTY RIGHTS ASSIGNMENT AGREEMENTS
Section 2.01. Intellectual Property Assignment Agreements 5 Section 2.02. Recordation 5 Section 2.03. Security Interests 5
ARTICLE III LICENSES AND COVENANTS FROM NUANCE TO SPINCO
Section 3.01. License Grants 6 Section 3.02. Other Covenants 7
ARTICLE IV LICENSES AND COVENANTS FROM SPINCO TO NUANCE
Section 4.01. License Grants 8 Section 4.02. Other Covenants 9
ARTICLE V ADDITIONAL INTELLECTUAL PROPERTY RELATED MATTERS
Section 5.01. Ownership 10 Section 5.02. Assignments and Licenses 10 Section 5.03. No Implied Rights 10 Section 5.04. No Obligation To Prosecute or Maintain Patents 10 Section 5.05. No Technical Assistance 10 Section 5.06. Group Members 10
ARTICLE VI CONFIDENTIAL INFORMATION
Section 6.01. Confidentiality 10 Section 6.02. Disclosure of Confidential Technical Information 11 Section 6.03. Compulsory Disclosure of Confidential Technical Information 11
ARTICLE VII LIMITATION OF LIABILITY AND WARRANTY DISCLAIMER i
Source: CERENCE INC., 8-K, 10/2/2019
Section 7.01. Limitation on Liability 11 Section 7.02. Disclaimer of Representations and Warranties 11
ARTICLE VIII TRANSFERABILITY AND ASSIGNMENT
Section 8.01. No Assignment or Transfer Without Consent 12 Section 8.02. Divested Businesses 12
ARTICLE IX TERMINATION
Section 9.01. Termination by Both Parties 13 Section 9.02. Termination prior to the Distribution 13 Section 9.03. Effect of Termination; Survival 13
ARTICLE X FURTHER ASSURANCES
Section 10.01. Further Assurances 13
ARTICLE XI MISCELLANEOUS
Section 11.01. Counterparts; Entire Agreement; Corporate Power 14 Section 11.02. Dispute Resolution 14 Section 11.03. Governing Law; Jurisdiction 15 Section 11.04. Waiver of Jury Trial 15 Section 11.05. Court-Ordered Interim Relief 15 Section 11.06. Specific Performance 16 Section 11.07. Third-Party Beneficiaries 16 Section 11.08. Notices 16 Section 11.09. Import and Export Control 17 Section 11.10. Bankruptcy 17 Section 11.11. Severability 18 Section 11.12. Expenses 18 Section 11.13. Headings 18 Section 11.14. Survival of Covenants 18 Section 11.15. Waivers of Default 18 Section 11.16. Amendments 18 Section 11.17. Interpretation 19 SCHEDULE A - Fields of Use SCHEDULE B - Nuance Data SCHEDULE C - SpinCo Data SCHEDULE D - SpinCo Patents SCHEDULE E - SpinCo IDs SCHEDULE F - SpinCo Trademarks ii
Source: CERENCE INC., 8-K, 10/2/2019
SCHEDULE G - SpinCo Domain Names SCHEDULE H - Technology Assets SCHEDULE I - OEM Technology
EXHIBIT A1 - Patent Assignment Agreement EXHIBIT A2 - Trademark Assignment Agreement EXHIBIT A3 - Domain Name Assignment Agreement EXHIBIT A4 - Invention Disclosure Assignment Agreement iii
Source: CERENCE INC., 8-K, 10/2/2019
INTELLECTUAL PROPERTY AGREEMENT, dated as of September 30, 2019 (this "Agreement"), by and between NUANCE COMMUNICATIONS, INC., a Delaware corporation ("Nuance"), and CERENCE INC., a Delaware corporation ("SpinCo").
RECITALS
WHEREAS, in connection with the contemplated Spin-Off of SpinCo and concurrently with the execution of this Agreement, Nuance and SpinCo are entering into a Separation and Distribution Agreement (the "Separation Agreement");
WHEREAS, pursuant to the Separation Agreement and the other Ancillary Agreements, as of the Distribution Date, the Nuance IP has been allocated to the Nuance Group and the SpinCo IP has been allocated to the SpinCo Group;
WHEREAS, the Parties wish to record the transfers of any registrations or applications of Nuance IP and SpinCo IP, as applicable, to the extent the ownership thereof has transferred from a member of the Nuance Group to a member of the SpinCo Group, or vice versa, pursuant to the Separation Agreement or any other Ancillary Agreement;
WHEREAS, pursuant to the Separation Agreement and the other Ancillary Agreements, as of the Distribution Date, the Nuance IP allocated to the Nuance Group includes the Nuance Patents, the Nuance Shared Technology Assets and the Nuance Data, and the SpinCo IP allocated to the SpinCo Group includes the SpinCo Patents, the SpinCo Shared Technology Assets and the SpinCo Data;
WHEREAS, it is the intent of the Parties that Nuance grant a license to SpinCo under the Nuance Patents and the Nuance Shared Technology Assets, and provide certain rights or services to the SpinCo Group with respect to the Nuance Data, in each case for the SpinCo Field of Use, subject to the terms and conditions set forth in this Agreement; and
WHEREAS, it is the intent of the Parties that SpinCo grant a license to Nuance under the SpinCo Patents and the SpinCo Shared Technology Assets, and provide certain rights or services to the Nuance Group with respect to certain of the SpinCo Data, in each case for the Nuance Field of Use, subject to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, the Parties, intending to be legally bound, hereby agree as follows:
ARTICLE I DEFINITIONS
Section 1.01. Definitions. As used in this Agreement, the following terms have the meanings set forth below and herein, and the terms defined in Schedules shall have the meanings set forth therein. Capitalized terms used, but not defined in this Agreement shall have the meanings ascribed to such terms in the Separation Agreement or any other Ancillary Agreement, as applicable.
Source: CERENCE INC., 8-K, 10/2/2019
"Bankruptcy Code" has the meaning set forth in Section 11.10.
"Confidential Technical Information" means, with respect to each Disclosing Party, any confidential Data, Trade Secrets or Technology source code within the Nuance IP or SpinCo IP, as applicable, that is in the Receiving Party's possession or that the Receiving Party obtains pursuant to the terms of this Agreement, together with any tangible or electronic expressions or embodiments thereof; provided, that "Confidential Technical Information" shall not include information that is or was (i) publicly known at the time of disclosure or thereafter without any breach of this Agreement by the Receiving Party or its Group or (ii) subsequently made known to the Receiving Party or its Group from a source unconnected with either Party or its Group.
"Copyrights" means copyrights, works of authorship (including all translations, adaptations, derivations and combinations thereof), mask works, designs and database rights, including, in each case, any registrations and applications therefor.
"Data" means all data, databases and collections and compilations of data, in any form or medium.
"Disclosing Party" means each Party in its capacity as the discloser of Confidential Technical Information, as applicable.
"Divested Entity" has the meaning set forth in Section 8.02.
"Domain Name Assignment Agreement" has the meaning set forth in Section 2.01.
"Domain Names" means Internet domain names, including top level domain names and global top level domain names, URLs, social media identifiers, handles and tags.
"Intellectual Property Assignment Agreements" has the meaning set forth in Section 2.01.
"Intellectual Property Rights" or "IPR" means any and all intellectual property rights existing anywhere in the world associated with any and all (i) Patents, (ii) Trademarks, (iii) Copyrights, (iv) Domain Names, (v) rights in Technology, (vi) rights in Trade Secrets, (vii) rights in Data, (viii) all tangible embodiments of the foregoing in whatever form or medium and (ix) any other legal protections and rights related to any of the foregoing. "Intellectual Property Rights" specifically excludes contractual rights (including license grants from third parties).
"Invention Disclosure Assignment Agreement" has the meaning set forth in Section 2.01.
"Nuance Data" means any Data that is (i) owned by a Third Party and licensed to the Nuance Group as of immediately prior to the Distribution pursuant to a Nuance Data Agreement or (ii) owned by the Nuance Group as of immediately prior to the Distribution but subject to a Nuance Data Agreement, in each case (i) and (ii), which Data is used in the SpinCo Business as of immediately prior to the Distribution. 2
Source: CERENCE INC., 8-K, 10/2/2019
"Nuance Data Agreement" means each Contract identified in Schedule B.
"Nuance Field of Use" has the meaning set forth in Schedule A.
"Nuance IP" means all Intellectual Property Rights owned by the Nuance Group or the SpinCo Group as of immediately prior to the Distribution, other than the SpinCo IP.
"Nuance Patents" means all Patents included within the Nuance IP.
"Nuance Shared Technology Assets" means (i) the Nuance Technology Assets identified on Schedule H-2 and (ii) any other Nuance Technology Assets not identified on Schedule H-2 that are used in the SpinCo Business as of immediately prior to the Distribution; provided that the "Nuance Shared Technology Assets" exclude any OEM Technology.
"Nuance Technology Assets" means all of the Technology owned by the Nuance Group or the SpinCo Group as of immediately prior to the Distribution, excluding the SpinCo Technology Assets. For the avoidance of doubt, the "Nuance Technology Assets" include the Technology identified on Schedule H-1.
"Nuance Trademarks" means the Trademarks included in the Nuance IP.
"OEM Technology" means the Technology identified on Schedule I, each of which shall be subject to a separate agreement.
"Party" means either party hereto, and "Parties" means both parties hereto.
"Patent Assignment Agreement" has the meaning set forth in Section 2.01.
"Patents" means patents (including all reissues, divisionals, continuations, continuations-in-part, reexaminations, supplemental examinations, inter partes review, post-grant oppositions, covered business methods reviews, substitutions and extensions thereof), patent registrations and applications, including provisional applications, statutory invention registrations, invention disclosures and inventions.
"Permitted Recipients" has the meaning set forth in Section 6.02.
"Receiving Party" means each Party in its capacity as the recipient of Confidential Technical Information, as applicable.
"Software" means any and all (i) computer programs and applications, including any and all software implementations of algorithms, models and methodologies, whether in source code, object code, human readable form or other form, including operating software, network software, firmware, middleware, design software, design tools, ASP, HTML, DHTML, SHTML and XML files, cgi and other scripts, APIs and web widgets, (ii) descriptions, flow charts and other work product used to design, plan, organize and develop any of the foregoing, screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons, (iii) all documentation including user manuals and other training documentation related to any of the foregoing and (iv) all tangible embodiments of the foregoing in whatever 3
Source: CERENCE INC., 8-K, 10/2/2019
form or medium now known or yet to be created, including all disks, diskettes and tapes; provided, that "Software" does not include Data.
"SpinCo Copyrights" means unregistered Copyrights that are owned by the Nuance Group or the SpinCo Group and exclusively related to the SpinCo Business as of immediately prior to the Distribution; provided, that the "SpinCo Copyrights" do not include any Technology or SpinCo Data.
"SpinCo Data" means any Data that is (i) owned by a Third Party and licensed to the Nuance Group or SpinCo Group as of immediately prior to the Distribution pursuant to a SpinCo Data Agreement or (ii) owned by the Nuance Group or SpinCo Group as of immediately prior to the Distribution but subject to a SpinCo Data Agreement and (iii) Data owned by the Nuance Group or SpinCo Group and exclusively related to the SpinCo Business as of immediately prior to the Distribution.
"SpinCo Data Agreement" means each Contract identified in Schedule C.
"SpinCo Domain Names" means the Domain Names identified on Schedule G, in each case excluding any Trademarks containing "Nuance" or any transliteration or translation thereof or any version of the "Nuance and Design" logo.
"SpinCo Field of Use" has the meaning set forth in Schedule A.
"SpinCo IDs" means the invention disclosures identified on Schedule E.
"SpinCo IP" means (i) the SpinCo Patents, (ii) the SpinCo Copyrights, (iii) the SpinCo Domain Names, (iv) the SpinCo Trade Secrets, (v) the SpinCo Trademarks, (vi) the SpinCo IDs, (vii) the SpinCo Technology Assets and (viii) the SpinCo Data.
"SpinCo Patents" means the Patents identified on Schedule D.
"SpinCo Shared Technology Assets" means the SpinCo Technology Assets identified on Schedule H-4. For the avoidance of doubt, the "SpinCo Shared Technology Assets" exclude any OEM Technology.
"SpinCo Technology Assets" means the Technology identified on Schedule H-3.
"SpinCo Trade Secrets" means the Trade Secrets known to the Parties that are owned by the Nuance Group or SpinCo Group and exclusively related to the SpinCo Business as of immediately prior to the Distribution; provided, that the "SpinCo Trade Secrets" do not include any Technology or SpinCo Data.
"SpinCo Trademarks" means the Trademarks identified on Schedule F.
"Technology" means Software, technical documentation, specifications, schematics, designs, user interfaces, test reports, bills of material, build instructions, lab notebooks, prototypes, samples, programs, routines, subroutines, tools, materials, apparatus, and all recordings, graphs, drawings, reports, analyses, other writings, disks, diskettes and tapes, 4
Source: CERENCE INC., 8-K, 10/2/2019
together with all Intellectual Property Rights (other than Patents and Trademarks) in the foregoing.
"Third Party" means any Person (including any Governmental Authority) who is not a member of the Nuance Group or the SpinCo Group.
"Trade Secrets" means all information, in any form or medium, to the extent that the owner thereof has taken reasonable measures to keep such information secret and the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, the public.
"Trademark Assignment Agreement" has the meaning set forth in Section 2.01.
"Trademarks" means trademarks, service marks, trade names, logos, slogans, trade dress or other source identifiers, including any registration or any application for registration therefor, together with all goodwill associated therewith.
ARTICLE II RECORDATION OF INTELLECTUAL PROPERTY RIGHTS ASSIGNMENT AGREEMENTS
Section 2.01. Intellectual Property Assignment Agreements. In order to carry out the intent of the Parties with respect to the recordation of the transfers of any registrations or applications of Nuance IP or SpinCo IP, as applicable, to the extent the ownership thereof has transferred from a member of the Nuance Group to a member of the SpinCo Group, or vice versa, pursuant to the Separation Agreement or any other Ancillary Agreement, the Parties shall execute intellectual property assignments in a form substantially similar to that attached as Exhibit A1 (the "Patent Assignment Agreement"), Exhibit A2 (the "Trademark Assignment Agreement"), Exhibit A3 (the "Domain Name Assignment Agreement") and Exhibit A4 (the "Invention Disclosure Assignment Agreement") as well as such additional case specific assignments as deemed appropriate or necessary under applicable Laws (collectively, the "Intellectual Property Assignment Agreements") for recordation with the appropriate Governmental Authority.
Section 2.02. Recordation. The relevant assignee Party shall have the sole responsibility, at its sole cost and expense, to file the Intellectual Property Assignment Agreements and any other forms or documents with the appropriate Governmental Authorities as required to record the transfer of any registrations or applications of Nuance IP or SpinCo IP that is allocated under the Separation Agreement, as applicable, and the relevant assignor Party hereby consents to such recordation.
Section 2.03. Security Interests. Prior to, on and after the Distribution Date, each Party shall cooperate with the other Party, without any further consideration and at no expense to the other Party, to obtain, cause to be obtained or properly record the release of any outstanding Security Interest attached to any Nuance IP or SpinCo IP that is subject to assignment from one Party or its Group to the other Party or its Group hereunder, as applicable, and to take, or cause to be taken, all actions as the other Party may reasonably be requested to take in order to obtain, cause to be obtained or properly record such release. 5
Source: CERENCE INC., 8-K, 10/2/2019
ARTICLE III LICENSES AND COVENANTS FROM NUANCE TO SPINCO
Section 3.01. License Grants.
(a) Patents. Subject to the terms and conditions of this Agreement, as of the Distribution Date, Nuance hereby grants to SpinCo and the members of the SpinCo Group a worldwide, non-exclusive, fully paid-up, perpetual and irrevocable, transferable (subject to ARTICLE VIII), sublicensable (subject to Section 3.01(g)) license under the Nuance Patents, solely to the extent that claims of the Nuance Patents cover products or services of the SpinCo Business in the SpinCo Field of Use, together with natural extensions and evolutions thereof, in each case to make, have made, use, sell, offer for sale, import and otherwise exploit such products and services, together with natural extensions and evolutions thereof.
(b) Technology. Subject to the terms and conditions of this Agreement, as of the Distribution Date, Nuance hereby grants to SpinCo and the members of the SpinCo Group a worldwide, non-exclusive, fully paid-up, perpetual and irrevocable, transferable (subject to ARTICLE VIII), sublicensable (subject to Section 3.01(g)) license to install, access, use, reproduce, perform, display, modify (including the right to create improvements and derivative works), further develop, sell, manufacture, distribute and market products and services based on, using or incorporating the Nuance Shared Technology Assets within the SpinCo Field of Use, together with natural extensions and evolutions thereof.
(c) Other Nuance Shared IP. Subject to the terms and conditions of this Agreement, as of the Distribution Date, Nuance hereby grants to SpinCo and the members of the SpinCo Group a worldwide, non-exclusive, fully paid-up, perpetual and irrevocable, transferable (subject to ARTICLE VIII), sublicensable (subject to Section 3.01(g)) license to continue to use any Nuance IP (other than Nuance Patents, Nuance Technology Assets, Nuance Trademarks and Nuance Data), in each case solely as and to the extent that it is used by the SpinCo Group in connection with products and services of the SpinCo Business within the SpinCo Field of Use, together with natural extensions and evolutions thereof.
(d) Trademarks. The Parties acknowledge and agree that no rights are granted to the SpinCo Group in this Agreement with respect to any Trademarks or Domain Names, provided that certain rights and obligations with respect to the use by the SpinCo Group of certain Nuance Trademarks and related Domain Names shall be set forth in the Transitional Trademark License Agreement. To the extent there is a conflict between the terms of this Agreement and the Transitional Trademark License Agreement, the terms of the Transitional Trademark License Agreement shall control.
(e) Nuance Data. The Parties acknowledge and agree that certain rights and obligations with respect to the use or benefit by the SpinCo Group of certain Nuance Data shall be as provided in Schedule B.
(f) OEM Technology. Notwithstanding the foregoing, the Parties acknowledge and agree that this Section 3.01 does not grant any rights or licenses to any OEM Technology, which is subject to certain separate agreements between the Parties, and to the 6
Source: CERENCE INC., 8-K, 10/2/2019
extent there is a conflict between this Agreement and such separate agreements, such separate agreements shall control.
(g) Sublicenses. The licenses granted in Sections 3.01(a), (b) and (c) to the SpinCo Group include the right to grant sublicenses within the scope of such licenses only to members of the SpinCo Group and, without any further right to sublicense, to their respective (i) contractors, distributors, manufacturers and resellers, in each case solely for the benefit of the SpinCo Business, and (ii) end users and customers, in each case solely in connection with the use of products and services of the SpinCo Business. Notwithstanding the forgoing, subject to Section 3.02(b) and ARTICLE VI, members of the SpinCo Group may only sublicense the Nuance Shared Technology Assets pursuant to terms and conditions as protective as those under which it licenses its own Technology of a similar nature and value, and in any event terms and conditions that provide for commercially reasonable protection for the source code, structure and other confidential and proprietary elements of the Nuance Shared Technology Assets. The SpinCo Group shall remain liable for any breach or default of the applicable terms and conditions of this Agreement by any of its sublicensees.
Section 3.02. Other Covenants.
(a) SpinCo hereby acknowledges Nuance's right, title and interest in and to the Nuance IP. SpinCo agrees that it will not (i) oppose, challenge, petition to cancel, contest or threaten in any way, or assist another party in opposing, challenging, petitioning to cancel, contesting or threatening in any way, any application or registration by Nuance or its Affiliates or their respective licensees for any Nuance IP, (ii) engage in any act, or purposefully omit to perform any act, that impairs or adversely affects the rights of Nuance or any member of the Nuance Group in and to any Nuance IP or (iii) apply for any registration (including federal, state and national registrations) with respect to the Nuance IP.
(b) With respect to the Nuance Shared Technology Assets, SpinCo agrees that it will not (i) engage in any act, or purposefully omit to perform any act, that impairs or adversely affects the rights of Nuance or any member of the Nuance Group in and to any Nuance Shared Technology Assets, (ii) use the Nuance Shared Technology Assets on a service bureau, time sharing or similar basis, or for the benefit of any other Person, (iii) remove any proprietary markings in the Nuance Shared Technology Assets, (iv) incorporate or otherwise combine or integrate any open source software with or into the Nuance Shared Technology Assets such that the Nuance Shared Technology Assets, or any part thereof, becomes subject to any "open source," "copyleft" or similar type of license terms (including, without limitation, any license that is or was recognized as an open source software license by the Open Source Initiative), (v) reverse engineer, reverse assemble or decompile the Nuance Shared Technology Assets or any software component of the Nuance Shared Technology Assets or (vi) disclose, distribute or otherwise provide or permit access to source code of any Nuance Shared 7
Source: CERENCE INC., 8-K, 10/2/2019
Technology Assets other than to commercial source code escrow providers who are only permitted to make such source code available to third parties that have entered into an escrow agreement with a member of the SpinCo Group and escrow provider.
ARTICLE IV LICENSES AND COVENANTS FROM SPINCO TO NUANCE
Section 4.01. License Grants.
(a) Patents. Subject to the terms and conditions of this Agreement, as of the Distribution Date, SpinCo hereby grants to Nuance and the members of the Nuance Group a worldwide, non-exclusive, fully paid-up, perpetual and irrevocable, transferable (subject to ARTICLE VIII), sublicensable (subject to Section 4.01(g)) license under the SpinCo Patents, solely to the extent that claims of the SpinCo Patents cover products or services of the Nuance Business in the Nuance Field of Use, together with natural extensions and evolutions thereof, in each case to make, have made use, sell, offer for sale, import and otherwise exploit such products and services, together with natural extensions and evolutions thereof.
(b) Technology. Subject to the terms and conditions of this Agreement, as of the Distribution Date, SpinCo hereby grants to Nuance and the members of the Nuance Group a worldwide, non-exclusive, fully paid-up, perpetual and irrevocable, transferable (subject to ARTICLE VIII), sublicensable (subject to Section 4.01(g)) license to install, access, use, reproduce, perform, display, modify (including the right to create improvements and derivative works), further develop, sell, manufacture, distribute and market products and services based on, using or incorporating the SpinCo Shared Technology Assets within the Nuance Field of Use, together with natural extensions and evolutions thereof.
(c) Other SpinCo Shared IP. Subject to the terms and conditions of this Agreement, as of the Distribution Date, SpinCo hereby grants to Nuance and the members of the Nuance Group a worldwide, non-exclusive, fully paid-up, perpetual and irrevocable, transferable (subject to ARTICLE VIII), sublicensable (subject to Section 4.01(g)) license to continue to use any SpinCo IP (other than SpinCo Patents, SpinCo Technology Assets, SpinCo Trademarks, SpinCo Domain Names and SpinCo Data), in each case solely as and to the extent that it is used by the Nuance Group in connection with products and services of the Nuance Business within the Nuance Field of Use, together with natural extensions and evolutions thereof.
(d) Trademarks. The Parties acknowledge and agree that no rights are granted to the Nuance Group in this Agreement with respect to any Trademarks or Domain Names.
(e) SpinCo Data. The Parties acknowledge and agree that certain rights and obligations with respect to the use or benefit of the Nuance Group of certain SpinCo Data shall be as provided in Schedule C.
(f) OEM Technology. Notwithstanding the foregoing, the Parties acknowledge and agree that this Section 4.01 does not grant any rights or licenses to any OEM Technology, which is subject to certain separate agreements between the Parties, and to the 8
Source: CERENCE INC., 8-K, 10/2/2019
extent there is a conflict between this Agreement and such separate agreements, such separate agreements shall control.
(g) Sublicenses. The licenses granted in Sections 4.01(a), (b) and (c) to the Nuance Group include the right to grant sublicenses within the scope of such licenses only to members of the Nuance Group and, without any further right to sublicense, to their respective (i) contractors, distributors, manufacturers and resellers, in each case solely for the benefit of the Nuance Business and (ii) end users and customers, in each case solely in connection with the use of products and services of the Nuance Business. Notwithstanding the forgoing, subject to Section 4.02(b) and ARTICLE VI, members of the Nuance Group may only sublicense the SpinCo Shared Technology Assets pursuant to terms and conditions as protective as those under which it licenses its own Technology of a similar nature and value, and in any event terms and conditions that provide for commercially reasonable protection for the source code, structure and other confidential and proprietary elements of the SpinCo Shared Technology Assets. The Nuance Group shall remain liable for any breach or default of the applicable terms and conditions of this Agreement by any of its sublicensees.
Section 4.02. Other Covenants.
(a) Nuance hereby acknowledges SpinCo's right, title and interest in and to the SpinCo IP. Nuance agrees that it will not (i) oppose, challenge, petition to cancel, contest or threaten in any way, or assist another party in opposing, challenging, petitioning to cancel, contesting or threatening in any way, any application or registration by SpinCo or its Affiliates or their respective licensees for any SpinCo IP, (ii) engage in any act, or purposefully omit to perform any act, that impairs or adversely affects the rights of SpinCo or any member of the SpinCo Group in and to any SpinCo IP or (iii) apply for any registration (including federal, state and national registrations) with respect to the SpinCo IP.
(b) With respect to the SpinCo Shared Technology Assets, Nuance agrees that it will not (i) engage in any act, or purposefully omit to perform any act, that impairs or adversely affects the rights of SpinCo or any member of the SpinCo Group in and to any SpinCo Shared Technology Assets, (ii) use the SpinCo Shared Technology Assets on a service bureau, time sharing or similar basis, or for the benefit of any other Person, (iii) remove any proprietary markings in the SpinCo Shared Technology Assets, (iv) incorporate or otherwise combine or integrate any open source software with or into the SpinCo Shared Technology Assets such that the SpinCo Shared Technology Assets, or any part thereof, becomes subject to any "open source," "copyleft" or similar type of license terms (including, without limitation, any license that is or was recognized as an open source software license by the Open Source Initiative), (v) reverse engineer, reverse assemble or decompile the SpinCo Shared Technology Assets or any software component of the SpinCo Shared Technology Assets or (vi) disclose, distribute or otherwise provide or permit access to source code of any SpinCo Shared 9
Source: CERENCE INC., 8-K, 10/2/2019
Technology Assets other than to commercial source code escrow providers who are only permitted to make such source code available to third parties that have entered into an escrow agreement with a member of the Nuance Group and escrow provider.
ARTICLE V ADDITIONAL INTELLECTUAL PROPERTY RELATED MATTERS
Section 5.01. Ownership. The Party receiving the license hereunder acknowledges and agrees that the Party (or the applicable member of its Group) granting the license is the sole and exclusive owner of the Intellectual Property Rights so licensed.
Section 5.02. Assignments and Licenses. Any assignment, other transfer or license by either Party or any member of its Group of any Intellectual Property Rights licensed to the other Party or any member of its Group pursuant to ARTICLE III or ARTICLE IV, respectively, shall be subject to the applicable licenses, covenants and restrictions set forth herein.
Section 5.03. No Implied Rights. Nothing contained in this Agreement shall be construed as conferring any rights (including the right to sublicense) by implication, estoppel or otherwise, under any Intellectual Property Rights, other than as expressly granted in this Agreement, and all other rights under any Intellectual Property Rights licensed to a Party or the members of its Group hereunder are expressly reserved by the Party granting the license.
Section 5.04. No Obligation To Prosecute or Maintain Patents. Except as expressly set forth in this Agreement, no Party or any member of its Group shall have any obligation to seek, perfect or maintain any protection for any of its Intellectual Property Rights. Without limiting the generality of the foregoing, except as expressly set forth in this Agreement, no Party or any member of its Group shall have any obligation to file any Patent application, to prosecute any Patent, or secure any Patent rights or to maintain any Patent in force.
Section 5.05. No Technical Assistance. Except as expressly set forth in this Agreement, in the Separation Agreement or any other mutually executed agreement between the Parties or any of the members of their respective Groups, no Party or any member of its Group shall be required to provide the other Party with any technical assistance or to furnish any other Party with, or obtain on their behalf, any Intellectual Property Rights-related documents, materials or other information or technology.
Section 5.06. Group Members. Each Party shall cause the members of its Group to comply with all applicable provisions of this Agreement.
ARTICLE VI CONFIDENTIAL INFORMATION
Section 6.01. Confidentiality. Without limiting Section 6.02, all confidential information of a Party disclosed to the other Party under this Agreement shall be deemed confidential and proprietary information of the disclosing Party, shall be subject to the provisions of Section 7.09 of the Separation Agreement and may be used by the Receiving Party pursuant to this Agreement for the sole and express purpose of effecting the licenses granted herein. 10
Source: CERENCE INC., 8-K, 10/2/2019
Section 6.02. Disclosure of Confidential Technical Information. Except as expressly permitted by this Agreement, including in Section 3.02(b)(vi) or Section 4.02(b)(vi), the Receiving Party shall not, and shall not permit any other Person to, disclose any Confidential Technical Information to any Person without prior written consent of the Disclosing Party, except that the Receiving Party may disclose the Confidential Technical Information solely to those employees and contractors of the Receiving Party who have a need to know the Confidential Technical Information in connection with designing, developing, distributing, marketing, testing and supporting any products or services of the Receiving Party within the Nuance Field of Use or SpinCo Field of Use, as applicable (collectively, the "Permitted Recipients"); provided, that prior to such disclosure the Receiving Party shall notify each such Permitted Recipient in writing of the use and disclosure restrictions set forth in this Agreement and ensure that such Permitted Recipient is bound by confidentiality obligations with respect thereto. The Receiving Party shall take, at its sole expense, all reasonable measures to prevent any prohibited or unauthorized disclosure or use of any Confidential Technical Information, including by its Permitted Recipients, and shall be liable for any breaches of this Agreement by any of its Permitted Recipients, in each case, as if committed by the Receiving Party.
Section 6.03. Compulsory Disclosure of Confidential Technical Information. If the Receiving Party receives a request to disclose any Confidential Technical Information pursuant to a subpoena or other order of a Governmental Authority: (i) the Receiving Party shall promptly notify in writing the Disclosing Party thereof and reasonably consult with and assist the Disclosing Party in seeking a protective order or other appropriate remedy to limit such disclosure, (ii) in the event that such protective order or remedy is not obtained, the Receiving Party shall disclose only that portion of the Confidential Technical Information which, in the written opinion of the Receiving Party's legal counsel, is legally required to be disclosed, and the Receiving Party shall use reasonable best efforts to ensure confidential treatment of any such disclosed Confidential Technical Information and (iii) the Disclosing Party shall be given an opportunity to review any such Confidential Technical Information prior to disclosure thereof. The Parties shall fully cooperate, to the extent permitted by Law, in any actions the Disclosing Party may take in seeking to prevent or limit such disclosure. Any Confidential Technical Information disclosed under this Section 6.03 shall continue to be deemed Confidential Technical Information for all purposes hereunder, notwithstanding such disclosure.
ARTICLE VII LIMITATION OF LIABILITY AND WARRANTY DISCLAIMER
Section 7.01. Limitation on Liability. Without limiting the terms set forth in Section 6.09 of the Separation Agreement, none of Nuance, SpinCo or any other member of either Group shall in any event have any Liability to the other or to any other member of the other's Group under this Agreement for any indirect, special, punitive or consequential damages, whether or not caused by or resulting from negligence or breach of obligations hereunder and whether or not informed of the possibility of the existence of such damages.
Section 7.02. Disclaimer of Representations and Warranties. Each of Nuance (on behalf of itself and each other member of the Nuance Group) and SpinCo (on behalf of itself and each other member of the SpinCo Group) understands and agrees that, except as expressly set forth in this Agreement, no Party is representing or warranting in any way, including any 11
Source: CERENCE INC., 8-K, 10/2/2019
implied warranties of merchantability, fitness for a particular purpose, title, registerability, allowability, enforceability or non-infringement, as to any Intellectual Property Rights licensed hereunder, as to the sufficiency of the Intellectual Property Rights licensed hereunder for the conduct and operations of the SpinCo Business or the Nuance Business, as applicable, as to the value or freedom from any Security Interests of, or any other matter concerning, any Intellectual Property Rights licensed hereunder, or as to the absence of any defenses or rights of setoff or freedom from counterclaim with respect to any claim or other Intellectual Property Rights of any such Party, or as to the legal sufficiency of any assignment, document or instrument delivered hereunder to convey title to any Intellectual Property Rights or thing of value upon the execution, delivery and filing hereof or thereof. Except as may expressly be set forth herein, any such Intellectual Property Rights are being licensed on an "as is," "where is" basis and the respective licensees shall bear the economic and legal risks related to the use of the Nuance IP in the SpinCo Business or the SpinCo IP in the Nuance Business, as applicable.
ARTICLE VIII TRANSFERABILITY AND ASSIGNMENT
Section 8.01. No Assignment or Transfer Without Consent. Except as expressly set forth in this Agreement, neither this Agreement nor any of the rights, interests or obligations under this Agreement, including the licenses granted pursuant to this Agreement, shall be assigned, in whole or in part, by operation of Law or otherwise by either Party without the prior written consent of the other Party. Any purported assignment without such consent shall be void. Notwithstanding the foregoing, if any Party to this Agreement (or any of its successors or permitted assigns) (a) shall enter into a consolidation or merger transaction in which such Party is not the surviving entity and the surviving entity acquires or assumes all or substantially all of such Party's assets, (b) shall transfer all or substantially all of such Party's assets to any Person or (c) shall assign this Agreement to such Party's Affiliates, then, in each such case, the assigning Party (or its successors or permitted assigns, as applicable) shall ensure that the assignee or successor-in-interest expressly assumes in writing all of the obligations of the assigning Party under this Agreement, and the assigning Party shall not be required to seek consent, but shall provide written notice and evidence of such assignment, assumption or succession to the non-assigning Party. Subject to the preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and assigns. No assignment permitted by this Section 8.01 shall release the assigning Party from liability for the full performance of its obligations under this Agreement. For the avoidance of doubt, in no event will the licenses granted in this Agreement extend to products, services or other activities of the assignee existing on or before the date of the transaction described in clauses (a) or (b) of the preceding sentence, except to the extent that they were licensed under the terms of this Agreement prior to such transaction.
Section 8.02. Divested Businesses. In the event a Party divests a line of business or line of products or services by (a) spinning off a member of its Group by its sale or other disposition to a Third Party, (b) reducing ownership or control in a member of its Group so that it no longer qualifiers as a member of its Group under this Agreement, (c) selling or otherwise transferring such line of business, products or services to a Third Party or (d) forming a joint venture with a Third Party with respect to such line of business, products or services (each such divested entity or line of business, products or services, a "Divested Entity"), the Divested Entity 12
Source: CERENCE INC., 8-K, 10/2/2019
shall retain those licenses granted to it under this Agreement, provided that the license shall be limited to the business, products or services (as applicable) of the Divested Entity as of the date of divestment and such natural development thereof within the Nuance Field of Use (where Nuance is the divesting Party) or SpinCo Field of Use (where SpinCo is the divesting party). The retention of any license grants are subject to the Divested Entity's and, in the event it is acquired by a Third Party, such Third Party's execution and delivery to the non-transferring Party, within 90 days of the effective date of such divestment, of a duly authorized, written undertaking, agreeing to be bound by the applicable terms of this Agreement. For the avoidance of doubt, (i) in no event will the licenses retained by a Divested Entity extend to products, services or other activities of a Third Party acquirer existing on or before the date of the divestment, except to the extent that they were licensed under the terms of this Agreement prior to such divestment, and (ii) in the event that a Divested Entity owns any Intellectual Property Rights licensed to the other Party under this Agreement, such Intellectual Property Rights may be transferred or assignment with such Divested Entity subject to the terms and conditions this Agreement.
ARTICLE IX TERMINATION
Section 9.01. Termination by Both Parties. Subject to Section 9.02, this Agreement may not be terminated except by an agreement in writing signed by a duly authorized officer of each of the Parties.
Section 9.02. Termination prior to the Distribution. This Agreement may be terminated by Nuance at any time, in its sole discretion, prior to the Distribution; provided, however, that this Agreement shall automatically terminate upon the termination of the Separation Agreement in accordance with its terms.
Section 9.03. Effect of Termination; Survival. In the event of any termination of this Agreement prior to the Distribution, neither Party (nor any member of their Group or any of their respective directors or officers) shall have any Liability or further obligation to the other Party or any member of its Group under this Agreement. Except with respect to termination of the Agreement under Section 9.02, notwithstanding anything in this Agreement to the contrary, ARTICLE I, ARTICLE VI, ARTICLE VII, this Section 9.03 and ARTICLE XI shall survive any termination of this Agreement.
ARTICLE X FURTHER ASSURANCES
Section 10.01. Further Assurances.
(a) In addition to the actions specifically provided for elsewhere in this Agreement, each of the Parties shall use reasonable best efforts, prior to, on and after the Distribution Date, to take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable Laws and agreements to consummate, and make effective, the transactions contemplated by this Agreement.
(b) Without limiting the foregoing, prior to, on and after the Distribution Date, each Party shall cooperate with the other Party, without any further 13
Source: CERENCE INC., 8-K, 10/2/2019
consideration, but at the expense of the requesting Party: (i) to execute and deliver, or use reasonable best efforts to execute and deliver, or cause to be executed and delivered, all instruments, including any instruments of conveyance, assignment and transfer as such Party may reasonably be requested to execute and deliver by the other Party; (ii) to make, or cause to be made, all filings with, and to obtain, or cause to be obtained, all Consents of any Governmental Authority or any other Person under any permit, license, Contract, indenture or other instrument; and (iii) to take, or cause to be taken, all such other actions as such Party may reasonably be requested to take by the other Party from time to time, consistent with the terms of this Agreement, in order to effectuate the provisions and purposes of this Agreement and any transfers of Intellectual Property Rights or assignments and assumptions of Liabilities related thereto as set forth in the Separation Agreement.
ARTICLE XI MISCELLANEOUS
Section 11.01. Counterparts; Entire Agreement; Corporate Power.
(a) This Agreement may be executed in one or more counterparts, all of which counterparts shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each Party and delivered to the other Party. This Agreement may be executed by facsimile or PDF signature and scanned and exchanged by electronic mail, and such facsimile or PDF signature or scanned and exchanged copies shall constitute an original for all purposes.
(b) This Agreement and the Exhibits and Schedules hereto contain the entire agreement between the Parties with respect to the subject matter hereof and supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings between the Parties with respect to the subject matter hereof other than those set forth or referred to herein or therein. In the event of conflict or inconsistency between the provisions of this Agreement or the Separation Agreement, the provisions of this Agreement shall prevail.
(c) Nuance represents on behalf of itself and each other member of the Nuance Group, and SpinCo represents on behalf of itself and each other member of the SpinCo Group, as follows:
(i) each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby; and
(ii) this Agreement has been duly executed and delivered by it and constitutes, or will constitute, a valid and binding agreement of it enforceable in accordance with the terms thereof.
Section 11.02. Dispute Resolution. In the event that either Party, acting reasonably, forms the view that another Party has caused a material breach of the terms of this Agreement, then the Party that forms such a view shall serve written notice of the alleged breach on the other Parties and the Parties shall work together in good faith to resolve any such alleged 14
Source: CERENCE INC., 8-K, 10/2/2019
breach within thirty (30) days of such notice (a "Dispute"). If any such alleged breach is not so resolved, then a senior executive of each Party shall, in good faith, attempt to resolve any such alleged breach within the following thirty (30) days of the referral of the matter to the senior executives. If no resolution is reached with respect to any such alleged breach in accordance with the procedures contained in this Section 11.02, then the Parties may seek to resolve such matter in accordance with Section 11.03, Section 11.04, Section 11.05 and Section 11.06
Section 11.03. Governing Law; Jurisdiction. Any disputes relating to, arising out of or resulting from this Agreement, including to its execution, performance, or enforcement, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, regardless of the Laws that might otherwise govern under applicable principles of conflicts of Laws thereof. Each Party irrevocably consents to the exclusive jurisdiction, forum and venue of the Delaware Court of Chancery (and if the Delaware Court of Chancery shall be unavailable, any Delaware State court or the federal court sitting in the State of Delaware) over any and all claims, disputes, controversies or disagreements between the Parties or any of their respective Affiliates, successors and assigns under or related to this Agreement or any of the transactions contemplated hereby, including their execution, performance or enforcement, whether in contract, tort or otherwise. Each of the Parties hereby agrees that it shall not assert, and shall hereby waive, any claim or right or defense that it is not subject to the jurisdiction of such courts, that the venue is improper, that the forum is inconvenient or any similar objection, claim or argument. Each Party agrees that a final judgment in any legal proceeding resolved in accordance with this Section 11.03, Section 11.04, Section 11.05 and Section 11.06 shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law.
Section 11.04. Waiver of Jury Trial. EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION RELATING TO, ARISING OUT OF OR RESULTING FROM THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING THEIR EXECUTION, PERFORMANCE OR ENFORCEMENT, WHETHER IN CONTRACT, TORT OR OTHERWISE. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS.
Section 11.05. Court-Ordered Interim Relief. In accordance with Section 11.03 and Section 11.04, at any time after giving notice of a Dispute, each Party shall be entitled to interim measures of protection duly granted by a court of competent jurisdiction: (1) to preserve the status quo pending resolution of the Dispute; (2) to prevent the destruction or loss of documents and other information or things relating to the Dispute; or (3) to prevent the transfer, disposition or hiding of assets. Any such interim measure (or a request therefor to a court of competent jurisdiction) shall not be deemed incompatible with the provisions of Section 11.02, Section 11.03 and Section 11.04. Until such Dispute is resolved in accordance with Section 11.02 or final judgment is rendered in accordance with Section 11.03 and Section 11.04, each 15
Source: CERENCE INC., 8-K, 10/2/2019
Party agrees that such Party shall continue to perform its obligations under this Agreement and that such obligations shall not be subject to any defense or setoff, counterclaim, recoupment or termination.
Section 11.06. Specific Performance. Subject to Section 11.02 and Section 11.05, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the affected Party shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement, in addition to any and all other rights and remedies at Law or in equity, and all such rights and remedies shall be cumulative. The other Party shall not oppose the granting of such relief on the basis that money damages are an adequate remedy. The Parties agree that the remedies at Law for any breach or threatened breach hereof, including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at Law would be adequate is waived. Any requirements for the securing or posting of any bond or similar security with such remedy are waived.
Section 11.07. Third-Party Beneficiaries. Except as otherwise expressly set forth herein or as otherwise may be provided in the Separation Agreement with respect to the rights of any Nuance Indemnitee or SpinCo Indemnitee, in his, her or its respective capacities as such, (a) the provisions of this Agreement are solely for the benefit of the Parties hereto and are not intended to confer upon any Person except the Parties hereto any rights or remedies hereunder and (b) there are no third-party beneficiaries of this Agreement and this Agreement shall not provide any third person with any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.
Section 11.08. Notices. All notices or other communications under this Agreement shall be in writing and shall be deemed to be duly given (a) when delivered in person, (b) on the date received, if sent by a nationally recognized delivery or courier service, (c) upon written confirmation of receipt after transmittal by electronic mail or (d) upon the earlier of confirmed receipt or the fifth (5t h) business day following the date of mailing if sent by registered or certified mail, return receipt requested, postage prepaid and addressed as follows:
If to Nuance, to:
Nuance Communications, Inc. 1 Wayside Road, Burlington, MA 01803 Attn: Wendy Cassity, EVP and Chief Legal Officer email: Wendy.cassity@nuance.com with a copy to: David Garfinkel, SVP Corporate Development email: David.garfinkel@nuance.com
and
Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY 10019-6064 Attn: Scott A. Barshay Steven J. Williams 16
Source: CERENCE INC., 8-K, 10/2/2019
Michael E. Vogel email: sbarshay@paulweiss.com swilliams@paulweiss.com mvogel@paulweiss.com Facsimile: 212-492-0040
If to SpinCo, to:
Cerence Inc. 15 Wayside Road, Burlington, MA 01803 Attn: Leanne Fitzgerald, General Counsel email: Leanne.Fitzgerald@cerence.com with a copy to: Mark Gallenberger, Chief Financial Officer email: Mark.Gallenberger@cerence.com
Either Party may, by notice to the other Party, change the address and identity of the Person to which such notices and copies of such notices are to be given. Each Party agrees that nothing in this Agreement shall affect the other Party's right to serve process in any other manner permitted by Law (including pursuant to the rules for foreign service of process authorized by the Hague Convention).
Section 11.09. Import and Export Control. Each Party agrees that it shall comply with all applicable national and international laws and regulations relating to import and/or export control in its country(ies), if any, involving any commodities, software, services or technology within the scope of this Agreement.
Section 11.10. Bankruptcy. The Parties acknowledge and agree that all rights and licenses granted by the other under or pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code, as amended (the "Bankruptcy Code"), licenses of rights to "intellectual property" as defined under Section 101 of the Bankruptcy Code. The Parties agree that, notwithstanding anything else in this Agreement, Nuance and the members of the Nuance Group and SpinCo and the members of the SpinCo Group, as licensees of such intellectual property rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code (including Nuance's and the Nuance Group members' and SpinCo's and the SpinCo Group members' right 17
Source: CERENCE INC., 8-K, 10/2/2019
to the continued enjoyment of the rights and licenses respectively granted by under this Agreement).
Section 11.11. Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances, or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either Party. Upon any such determination, any such provision, to the extent determined to be invalid, void or unenforceable, shall be deemed replaced by a provision that such court determines is valid and enforceable and that comes closest to expressing the intention of the invalid, void or unenforceable provision.
Section 11.12. Expenses. Except as set forth on Schedule XXIV to the Separation Agreement, as otherwise expressly provided in this Agreement or the Separation Agreement, (i) all third-party fees, costs and expenses incurred by either the Nuance Group or the SpinCo Group in connection with effecting the Spin-Off prior to or on the Distribution Date, whether payable prior to, on or following the Distribution Date (but excluding, for the avoidance of doubt, any financing fees or interest payable in respect of any indebtedness incurred by SpinCo in connection with the Spin-Off), will be borne and paid by Nuance and (ii) all third-party fees, costs and expenses incurred by either the Nuance Group or the SpinCo Group in connection with effecting the Spin-Off following the Distribution Date, whether payable prior to, on or following the Distribution Date, will be borne and paid by the Party incurring such fee, cost or expense. For the avoidance of doubt, this Section 11.12 shall not affect each Party's responsibility to indemnify Nuance Liabilities or SpinCo Liabilities, as applicable, arising from the transactions contemplated by the Distribution.
Section 11.13. Headings. The article, section and paragraph headings contained in this Agreement, including in the table of contents of this Agreement, are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
Section 11.14. Survival of Covenants. Except as expressly set forth in this Agreement, the covenants in this Agreement and the Liabilities for the breach of any obligations in this Agreement shall survive the Spin-Off and shall remain in full force and effect.
Section 11.15. Waivers of Default. No failure or delay of any Party (or the applicable member of its Group) in exercising any right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. Waiver by any Party of any default by the other Party of any provision of this Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default.
Section 11.16. Amendments. No provisions of this Agreement shall be deemed waived, amended, supplemented or modified by any Party, unless such waiver, amendment, 18
Source: CERENCE INC., 8-K, 10/2/2019
supplement or modification is in writing and signed by the authorized representative of each Party.
Section 11.17. Interpretation. Words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires. The terms "hereof," "herein," "herewith" and words of similar import, unless otherwise stated, shall be construed to refer to this Agreement as a whole (including all of the schedules hereto) and not to any particular provision of this Agreement. Article, Section or Schedule references are to the articles, sections and schedules of or to this Agreement unless otherwise specified. Any capitalized terms used in any Schedule to this Agreement but not otherwise defined therein shall have the meaning as defined in this Agreement. Any definition of or reference to any agreement, instrument or other document herein (including any reference herein to this Agreement) shall, unless otherwise stated, be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth therein, including in Section 11.16 above). The word "including" and words of similar import when used in this Agreement shall mean "including, without limitation," unless the context otherwise requires or unless otherwise specified. The word "or" shall not be exclusive. The word "extent" in the phrase "to the extent" shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply "if." All references to "$" or dollar amounts are to the lawful currency of the United States of America. In the event that an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring either Party by virtue of the authorship of any provisions hereof.
[SIGNATURE PAGES FOLLOW] 19
Source: CERENCE INC., 8-K, 10/2/2019
IN WITNESS WHEREOF, the Parties have caused this Intellectual Property Agreement to be executed by their duly authorized representatives. NUANCE COMMUNICATIONS, INC.
By: /s/ Wendy Cassity Name: Wendy Cassity Title: Executive Vice President and Chief Legal Officer
CERENCE INC.
By: /s/ Leanne Fitzgerald Name: Leanne Fitzgerald Title: Vice President and Secretary [Signature page to the Intellectual Property Agreement]
Source: CERENCE INC., 8-K, 10/2/2019 | Highlight the parts (if any) of this contract related to "Irrevocable Or Perpetual License" that should be reviewed by a lawyer. Details: Does the contract contain a license grant that is irrevocable or perpetual? | {
"answer_start": [
25427
],
"text": [
"Subject to the terms and conditions of this Agreement, as of the Distribution Date, SpinCo hereby grants to Nuance and the members of the Nuance Group a worldwide, non-exclusive, fully paid-up, perpetual and irrevocable, transferable (subject to ARTICLE VIII), sublicensable (subject to Section 4.01(g)) license to continue to use any SpinCo IP (other than SpinCo Patents, SpinCo Technology Assets, SpinCo Trademarks, SpinCo Domain Names and SpinCo Data), in each case solely as and to the extent that it is used by the Nuance Group in connection with products and services of the Nuance Business within the Nuance Field of Use, together with natural extensions and evolutions thereof."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Effective Date" that should be reviewed by a lawyer. Details: The date when the contract is effective
Context: Exhibit 4.14 SERVICE AGREEMENT This Service Agreement ("Agreement") is entered into on April. 1st 2019 ("Effective Date") by and between: PC Financial Services Private Limited, a India company with an address at Building RZ-2, Pole No.-3, G/F Kapashera, Near HDFC Bank, New Delhi ("PC Financial"), a registered Non-banking Financial Company (NBFC) in India; and Mobimagic Co., Ltd., a company Incorporated under the laws of the People 's Republic of China with its principal place of business at Room 1110-046, A District, No. 1 Building, No.18 East Road, Zhongguancun, Haidlan District, Beijing City ("Mobimagic"). PC Financial and Mobimagic are individually referred to herein each as a "Party" and collectively as the "Parties." In consideration of their mutual promises, the Parties hereby agree as follows: 1. DEFINITIONS 1.1 "Activity" means the offering of small, unsecured loans to businesses and individuals in the Territory by PC Financial. 1.2 "Business Data" means all end user data and user account details, as well as commercial records, relating to PC Financial operation of the Activity in the Territory 1.3 "Confidential Information" means non-public information that a Party or Its affiliates ("disclosing Party") discloses to the other Party or its affiliates ("receiving Party") which is designated as being 'proprietary' or 'confidential' or which by its nature or the circumstances reasonably ought to be treated as confidential. Confidential Information includes the disclosing Party's software end prototypes and information relating to the disclosing Party's business affairs, including business methods, marketing strategies, pricing, competitor Information, product development strategies, and financial results. Confidential Information does not include information which (a) is known by the receiving Party, free of any obligation to keep it confidential; (b) is at the time of disclosure, or thereafter becomes, publicly available through no wrongful act of the receiving Party; (c) Is independently developed by the receiving Party, without relying on or referring to the Confidential Information of disclosing Party; or (d) is approved for release by prior written authorization of the disclosing Party. 1.4 "Marks" means the trademarks and brand names used by the PC Financial to operate the Activity in the Territory. 1.5 "Service Period" means April. 1st 2019 through to March 30, 2020. 1.6 "Services" means the services to be performed by Mobimagic as stated in clause 2.2 of this Agreement in terms of this Agreement during the Service Period. 2. THE SERVICES 2.1 PC Financial hereby engages Mobimagic to provide Services to PC Financial during the Service Period, and Mobimagic hereby accepts such engagement in order to gain the income from the Territory. 1
2.2 Mobimagic will provide the system / platform maintenance services and data processing services to PC Financial. 2.3 where required, Mobimagic may assign its employees to India for short durations to support wont for facilitating the rendering of Services and the estimated presence days of those employees in any case will be less than 183 days in the aggregate in any 12 months. 3. WARRANTIES 3.1 Each Party represents and warrants that it has, and will retain during the Service Period hereof, all right, title and authority to enter into this Agreement, and to perform all of its obligations under this Agreement. 3.2 Mobimagic represents and warrants that, (a) Mobimagic is not subject to any Agreement or duty that would be breached by Mobimagic's entering into or performing Mobimagic's obligations under this Agreement or that is otherwise inconsistent with this Agreement; (b) the Services provided hereunder will not infringe any legal rights or interests of any potential customers or third parties, and will not violate any provision of laws and regulations; (c) the Services will be provided in a good and workmanlike manner with at least the same degree of skill and competence normally practiced by professionals providing the same or similar services: (d) Mobimagic shall not store or retain and shall not be required to store or retain any information belonging to the PC Financial (passed through the Services) pursuant to this Agreement at any time, save and except the metadata or hashed data collected in full compliance with applicable law and PC Financial's privacy policy and solely for the purpose of invoicing .and billing PC Financial; (e) on the Effective Date and during the Service Period of this Agreement it will conduct its business in accordance with applicable law and without violating the rights of any third party. (f) It will not intend to access to the data relating to Indian operations of the PC Financial except for the data passing through Services. (g) neither Mobimagic, nor any Individual holding any direct or indirect Interest in Mobimagic, is listed on the U.S. Specially Designated Nationals (SDN) List or Consolidated Sanction List (ref. https://sanctionssearch.ofac.treas.govn), nor is Mobimagic otherwise associated with any of the listed individuals or organizations; and (h) in connection with performance of the Services In the Territory, as well as its performance of this Agreement, Mobimagic and its affiliates will not violate any provision of the US Foreign Corrupt Practices Act, the UK Bribery Ad., or any anti- corruption related laws in the Territory. 3.3 PC Financial represents and warrants that on the Effective Date and during the Service Period of this Agreement: (a) it will conduct its business in Territory in accordance with applicable law and without violating the rights of any third party; and (b) in connection with the conduct of its business in Territory, as well as its performance of this Agreement, PC Financial and Its affiliates will not violate any provision of the US Foreign Corrupt Practices Act, the UK Bribery Act, or any anti-corruption related laws in the Territory. 2
3.4 Except as set forth in this Section 3, the Parties and their suppliers disclaim all warranties, either express or implied, statutory or otherwise, inducing without limitation warranties of functionality, merchantability, fitness for a particular purpose. 4. RIGHTS AND OBLIGATIONS 4.1 PC Financial shall pay a monthly Fee to Mobimagic in accordance with this Agreement and within the timeline as permitted under the prevailing India regulations. 4.2 PC Financial shall be responsible for acquiring the technical equipment necessary for receiving the Service, and shall also in other respects bear its own costs in the carrying out of any activities relating to its own products and software applications. 4.3 Mobimagic warrants that the Services provided hereunder will not infringe any legal rights and interests of any potential customers and third parties, and will not violate any provision of laws and regulations. The Services it provides pursuant to the Agreement will be provided in a good and workmanlike manner with at least the same degree of skill and competence normally practiced by professionals providing the same or similar services and PC Financial has the right to continuous review and assesses the Services provided by Mobimagic and give its necessary suggestions towards the Services. Mobimagic may take necessary corrective measures of its Services according to PC Financial's requirements. 4.4 PC Financial shall maintain an updated privacy policy and consent driven architecture, to ensure that it has adequate approvals from the concerned persons, entities and/or authorities as required by law to access, collect, store and transmit personal data of any entity using the Services. The Parties hereby agree and confirm, and Mobimagic. warrants, that Mobimagic shall not store or retain and shall not be required to store or retain any information belonging to the PC Financial (passed through the Services) pursuant to this Agreement at any time, save and except the records of transactions just for the purpose of Invoicing and billing the PC Financial. Mobimagic warrants that it will not take any action, or collect any data, which causes a breach of applicable law or PC Financial'& privacy policy and consent driven architecture. Subject to the foregoing as wen as Mobimagic's obligations under this Agreement, Mobimagic shall not in any manner be held or be responsible or liable for any unforeseen contingency, claims, liabilities, demands. losses, damages or expenses arising due to absence of storage or retention of any PC Financial data which shall be the sole responsibility of PC Financial . 4.5 According to this Agreement, the Services provided by the Mobimagic are only for PC Financial's reference, it does not constitute any recommendation or decision. Any judgments, inferences or views made by PC Financial on the basis of the Information provided by the Mobimagic do not represent the positions and opinions of the Mobimagic. PC Financial shall be responsible for data security management and confidentiality responsibilities. According to this agreement, Mobimagic shall not be responsible for the usage and consequences of the data information acquired by PC Financial. 4.6 PC Financial shall not, directly or Indirectly: (a) remove any proprietary notices or labels; (b) make the Services available to any third party without the prior written consent of the Mobimagic, other than the authorized users In furtherance of the Activity; (c) falsely imply any sponsorship or association with Mobimagic; (d) use the Services to send unsolicited communications junk mail, spam, pyramid schemes or other forms of duplicative or unsolicited messages; (e) use the Services to store or transmit any content that infringes upon any person's intellectual property rights (f) use the Services to knowingly post, transmit, upload, link to, send or store any viruses, malware, Trojan horses or any other similar harmful software; or (g) knowingly use the Services in violation of this Agreement. 3
4.7 Data protection. Each Party agrees to comply with all applicable data protection and privacy laws arising from its obligations, if any, under the Agreement and to reasonably co-operate with the other Party in order to allow the other Party to comply with any laws as deemed necessary from time to time. Each Party shall treat all data, information relating to Services, including but not limit to the customer personal data, as confidential. Each party warrants that it shall take appropriate technical and organizational measures against unauthorized or unlawful processing of personal data and against accidental loss or destruction of, or damage to, the personal data of the other party. 4.8 Both Parties acknowledge and confirm that the Reserve Bank of India (hereafter "RBI") or persons authorized by it has right to access and inspect the PC Financial's documents, records of Service transactions and other necessary information related to the Services or Activity given to, stored or processed by Mobimagic within a reasonable time. 5. INTELLECTUAL PROPERTY RIGHTS 5.1 Nothing in this Agreement shall be construed as transferring the Intellectual Property Rights of either Party or its suppliers to the other Party. For the avoidance of doubt: (a) all Intellectual Property Rights In and to the Marks and the Business Data shall remain the property of PC Financial or its Affiliates as the case may be. Mobimagic acknowledges that it shall acquire no proprietary rights whatsoever in and to the Marks used in the Activity or the Business Data generated by the Activity, which shall remain the sole and exclusive property of PC Financial and Its Affiliates for their unlimited exploitation and all use and acquired goodwill shall inure to PC Financial and its Affiliates' sole benefit. 6. COMPENSATION AND EXPENSES 6.1 Subject to the terms and conditions of this Agreement. PC Financial shall pay to Mobimagic a fixed service fee in the amount of 970,000 United States Dollars (USD 970,000) for each month (the "Fee") within the timeline as permitted under the prevailing India regulations. It is stipulated in this Agreement that Mobimagic will send an invoice to PC Financial on monthly basis according to the progress of the service. After PC Financial confirms that invoice contents are correct, PC Financial shall pay within 45 days after confirming thus. 6.2 The payment is effected by means of bank transfer to the account specified In Mobimagic's invoice. 6.3 The Fee provided is exclusive of Goods and Service Tax (GST) which may be levied under Reverse Charge Mechanism. Any respective taxes for each party will be the responsibility by each party. If law requires that taxes be withheld PC Financial shall (a) deduct those taxes from the Fee; (b) pay the taxes to the proper governmental body; (c) send evidence of the obligation and proof of tax payment to Mobimagic; (d) remit the Fee amount, after deductions and withholding; and (e) cooperate with Mobimagic to obtain refunds of such taxes if there Is any preferential tax treatment available. 6.4 The Fee may be changed by mutual agreement in writing between Mobimagic and PC Financial according to the service content, complexity of services involved or arm's length principles. 4
6.5 In case of any complaint about using the Services as set out in this Agreement PC Financial shall raise the problems within 20 business days after getting Mobimaigc's invoice. Both Parties shall engage in reasonable efforts to negotiate and solve the problems together. If the cause of the difference remains undetermined after the aforesaid efforts of the Parties, an independent third party, (e.g., external auditors) may be employed to give an inspection. The costs arising out of the third- party inspection shall be borne by the Parties according to their respective faults. 7. CONFIDENTIALITY & PUBLICITY Neither Party shall disclose the other Party's Confidential Information to any third party or use Confidential Information for any purpose other than fur the proper fulfillment of this Agreement. Each Party undertakes to safeguard the Confidential Information of the other Party with the same degree of care as it would apply to Its own Confidential Information and, in any case, with no less than reasonable care. Such obligations will survive the expiration of this Agreement for a period of five (5) years. 8. INDEMNIFICATION 8.1 PC Financial shall defend at its own expense and indemnify Mobimagic against any cost, loss or damage arising out of any claim, demand, suit or action ("Action") brought against Mobimagic by a third party to the extent that such Action is related to PC Financial's breach of this Agreement. Mobimagic will promptly inform PC Financial in writing of any such Action and will co-operate in the defence and/or settlement of the Action. PC Financial agrees that in negotiating any settlement, it shall act reasonably and shall obtain Mobimagic's prior, written consent which consent shall not be unreasonably withheld. 8.2 Mobimagic shall indemnify and hold harmless PC Financial and its officers, direct0l8 and Affiliates, ("PCF Indemnified Parties") against any cost, penalty, loss or damage arising out of or related to the Services, or Mobimagic's breach of this Agreement or applicable law. PC Financial will promptly inform Mobimagic in writing of any such Action and will co-operate in the defence and/or settlement of the Action. Mobimagic agrees that in negotiating any settlement, it shall act reasonably and shall obtain PC Financial's prior, written consent which consent shall not be unreasonably withheld. 8.3 Neither Party shall be liable to the other Party in contract, tort or otherwise, whatever the cause, for any loss of profit, business or goodwill or any indirect, incidental or consequential costs, damages or expenses of any kind, except for such loss attributable to breach of confidentiality. 9. TERM & TERMINATION 9.1 The Agreement shall commence on the Effective Date and continue in effect for the Service Period, unless terminated earlier as provided in this Section. This Agreement is a memorialization of an earlier oral Agreement and shall be deemed to apply for the entire Service Period. The Agreement may be extended or renewed by the Parties in a writing executed by authorized representatives of each of the Parties. 9.2 This Agreement may be terminated by either Party prior to the end of the Service Period if the other Party is in material breach of any tem, or condition of this Agreement and such breach la not remedied for a period of thirty (30) days after the Party in breach has been notified In writing of such breach by the other Party. 9.3 This Agreement terminates automatically, with no further act or action of either Party, if: (a) so required by applicable law or regulations; or (b) a receiver is appointed for a Party or its property, a Party makes an assignment for the benefit of its creditors, goes bankrupt or is liquidated or dissolved. 5
9.4 Upon termination or expiration of this Agreement (i) Each Party shall return to the other Party or destroy (If so authorized in writing by the other Party) any Confidential information in the Party's possession or control, and cause an officer to certify in writing to the other Party that it has done so; (ii) Each Party's rights to be paid and each Party's obligations to pay all amounts due hereunder, as well as Sections 3 through 10 shall survive termination of this Agreement. 10. MISCELLANEOUS 10.1 The Parties to this Agreement are independent contractors. Nothing in this Agreement is intended or should be construed to create an agency, partnership, Joint venture, or employer-employee relationship between PC Financial and Mobimagic. Either Party will represent itself to be an employee or agent of the other Party or enter into any agreement on the other Party's behalf or in the other Party's name. Each Party will retain full control over the manner and means by which it conducts its business and neither Party will be entitled to waive any entitlement to workers' compensation, disability, retirement, insurance, stock options or any other benefits afforded to its employees. 10.2 IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, EXEMPLARY, SPECIAL, OR INCIDENTAL DAMAGES ARISING FROM OR RELATING TO THIS AGREEMENT. NEITHER PARTIES' TOTAL CUMULATIVE LIABILITY IN CONNECTION WITH THIS AGREEMENT, WHETHER IN AGREEMENT OR TORT OR OTHERWISE, WILL NOT EXCEED THE AGGREGATE AMOUNT OF FEES AND EXPENSES OWED BY PC FINANCIAL TO MOBIMAGIC FOR SERVICES PERFORMED UNDER THIS AGREEMENT. 10.3 This Agreement (and any question about its subsistence, effect or termination) is to be interpreted in accordance with the laws of India, save for that body of law which governs the conflict of laws. The courts of New Delhi shall have exclusive jurisdiction to settle any dispute between the Parties whether arising In connection with this agreement or otherwise. In the event of any dispute with respect to the construction, execution and performance of the provisions of this Agreement, such dispute shall be settled by arbitration in accordance with the Arbitration and Conciliation Act, 1996 and rules made thereunder in force as on that date. The arbitration shall be carried out in English language and the venue/seat of arbitration shall be New Delhi. The Arbitration award shall be final and binding on the parties. 10.4 If any provision of this Agreement is, for any reason, held to be Invalid or unenforceable, the other provisions of this Agreement will be unimpaired and the invalid or unenforceable provision will be deemed modified so that it is valid and enforceable to the maximum extent permitted by law. 10.5 This Agreement may not be assigned, delegated, or otherwise transferred, in whole or in part, by operation of law or otherwise, by a Party without the other Party's express prior written consent. Any attempted assignment, delegation, or transfer in violation of the foregoing will be null and void. 10.6 All waivers must be in writing and signed by the Party to be charged. Any waiver or failure to enforce any provision of this Agreement on one occasion will not be deemed a waiver of any other provision or of such provision on any other occasion. 6
10.7 This Agreement is the final, complete, and exclusive agreement of the Parties with respect to the subject matter hereof and supersedes and merges all prior or contemporaneous communications and understandings between the Parties. No modification of or amendment to this Agreement will be effective unless in writing and signed by the Party to be charged. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date. PC Financial Services Private Limited Mobimagic Co., Ltd. Signed:/s/ Mars Zhang Signed:/s/ Jiaojiao Liu Name: Mars Zhang Name: Jiaojiao Liu Title: Chief Executive Officer Title: Authorized Signatory 7 [/INST] ```json
{<answer_start>
"answer": "April. 1st 2019"
<answer_end>
}
``` </s> | Exhibit 4.14 SERVICE AGREEMENT This Service Agreement ("Agreement") is entered into on April. 1st 2019 ("Effective Date") by and between: PC Financial Services Private Limited, a India company with an address at Building RZ-2, Pole No.-3, G/F Kapashera, Near HDFC Bank, New Delhi ("PC Financial"), a registered Non-banking Financial Company (NBFC) in India; and Mobimagic Co., Ltd., a company Incorporated under the laws of the People 's Republic of China with its principal place of business at Room 1110-046, A District, No. 1 Building, No.18 East Road, Zhongguancun, Haidlan District, Beijing City ("Mobimagic"). PC Financial and Mobimagic are individually referred to herein each as a "Party" and collectively as the "Parties." In consideration of their mutual promises, the Parties hereby agree as follows: 1. DEFINITIONS 1.1 "Activity" means the offering of small, unsecured loans to businesses and individuals in the Territory by PC Financial. 1.2 "Business Data" means all end user data and user account details, as well as commercial records, relating to PC Financial operation of the Activity in the Territory 1.3 "Confidential Information" means non-public information that a Party or Its affiliates ("disclosing Party") discloses to the other Party or its affiliates ("receiving Party") which is designated as being 'proprietary' or 'confidential' or which by its nature or the circumstances reasonably ought to be treated as confidential. Confidential Information includes the disclosing Party's software end prototypes and information relating to the disclosing Party's business affairs, including business methods, marketing strategies, pricing, competitor Information, product development strategies, and financial results. Confidential Information does not include information which (a) is known by the receiving Party, free of any obligation to keep it confidential; (b) is at the time of disclosure, or thereafter becomes, publicly available through no wrongful act of the receiving Party; (c) Is independently developed by the receiving Party, without relying on or referring to the Confidential Information of disclosing Party; or (d) is approved for release by prior written authorization of the disclosing Party. 1.4 "Marks" means the trademarks and brand names used by the PC Financial to operate the Activity in the Territory. 1.5 "Service Period" means April. 1st 2019 through to March 30, 2020. 1.6 "Services" means the services to be performed by Mobimagic as stated in clause 2.2 of this Agreement in terms of this Agreement during the Service Period. 2. THE SERVICES 2.1 PC Financial hereby engages Mobimagic to provide Services to PC Financial during the Service Period, and Mobimagic hereby accepts such engagement in order to gain the income from the Territory. 1
2.2 Mobimagic will provide the system / platform maintenance services and data processing services to PC Financial. 2.3 where required, Mobimagic may assign its employees to India for short durations to support wont for facilitating the rendering of Services and the estimated presence days of those employees in any case will be less than 183 days in the aggregate in any 12 months. 3. WARRANTIES 3.1 Each Party represents and warrants that it has, and will retain during the Service Period hereof, all right, title and authority to enter into this Agreement, and to perform all of its obligations under this Agreement. 3.2 Mobimagic represents and warrants that, (a) Mobimagic is not subject to any Agreement or duty that would be breached by Mobimagic's entering into or performing Mobimagic's obligations under this Agreement or that is otherwise inconsistent with this Agreement; (b) the Services provided hereunder will not infringe any legal rights or interests of any potential customers or third parties, and will not violate any provision of laws and regulations; (c) the Services will be provided in a good and workmanlike manner with at least the same degree of skill and competence normally practiced by professionals providing the same or similar services: (d) Mobimagic shall not store or retain and shall not be required to store or retain any information belonging to the PC Financial (passed through the Services) pursuant to this Agreement at any time, save and except the metadata or hashed data collected in full compliance with applicable law and PC Financial's privacy policy and solely for the purpose of invoicing .and billing PC Financial; (e) on the Effective Date and during the Service Period of this Agreement it will conduct its business in accordance with applicable law and without violating the rights of any third party. (f) It will not intend to access to the data relating to Indian operations of the PC Financial except for the data passing through Services. (g) neither Mobimagic, nor any Individual holding any direct or indirect Interest in Mobimagic, is listed on the U.S. Specially Designated Nationals (SDN) List or Consolidated Sanction List (ref. https://sanctionssearch.ofac.treas.govn), nor is Mobimagic otherwise associated with any of the listed individuals or organizations; and (h) in connection with performance of the Services In the Territory, as well as its performance of this Agreement, Mobimagic and its affiliates will not violate any provision of the US Foreign Corrupt Practices Act, the UK Bribery Ad., or any anti- corruption related laws in the Territory. 3.3 PC Financial represents and warrants that on the Effective Date and during the Service Period of this Agreement: (a) it will conduct its business in Territory in accordance with applicable law and without violating the rights of any third party; and (b) in connection with the conduct of its business in Territory, as well as its performance of this Agreement, PC Financial and Its affiliates will not violate any provision of the US Foreign Corrupt Practices Act, the UK Bribery Act, or any anti-corruption related laws in the Territory. 2
3.4 Except as set forth in this Section 3, the Parties and their suppliers disclaim all warranties, either express or implied, statutory or otherwise, inducing without limitation warranties of functionality, merchantability, fitness for a particular purpose. 4. RIGHTS AND OBLIGATIONS 4.1 PC Financial shall pay a monthly Fee to Mobimagic in accordance with this Agreement and within the timeline as permitted under the prevailing India regulations. 4.2 PC Financial shall be responsible for acquiring the technical equipment necessary for receiving the Service, and shall also in other respects bear its own costs in the carrying out of any activities relating to its own products and software applications. 4.3 Mobimagic warrants that the Services provided hereunder will not infringe any legal rights and interests of any potential customers and third parties, and will not violate any provision of laws and regulations. The Services it provides pursuant to the Agreement will be provided in a good and workmanlike manner with at least the same degree of skill and competence normally practiced by professionals providing the same or similar services and PC Financial has the right to continuous review and assesses the Services provided by Mobimagic and give its necessary suggestions towards the Services. Mobimagic may take necessary corrective measures of its Services according to PC Financial's requirements. 4.4 PC Financial shall maintain an updated privacy policy and consent driven architecture, to ensure that it has adequate approvals from the concerned persons, entities and/or authorities as required by law to access, collect, store and transmit personal data of any entity using the Services. The Parties hereby agree and confirm, and Mobimagic. warrants, that Mobimagic shall not store or retain and shall not be required to store or retain any information belonging to the PC Financial (passed through the Services) pursuant to this Agreement at any time, save and except the records of transactions just for the purpose of Invoicing and billing the PC Financial. Mobimagic warrants that it will not take any action, or collect any data, which causes a breach of applicable law or PC Financial'& privacy policy and consent driven architecture. Subject to the foregoing as wen as Mobimagic's obligations under this Agreement, Mobimagic shall not in any manner be held or be responsible or liable for any unforeseen contingency, claims, liabilities, demands. losses, damages or expenses arising due to absence of storage or retention of any PC Financial data which shall be the sole responsibility of PC Financial . 4.5 According to this Agreement, the Services provided by the Mobimagic are only for PC Financial's reference, it does not constitute any recommendation or decision. Any judgments, inferences or views made by PC Financial on the basis of the Information provided by the Mobimagic do not represent the positions and opinions of the Mobimagic. PC Financial shall be responsible for data security management and confidentiality responsibilities. According to this agreement, Mobimagic shall not be responsible for the usage and consequences of the data information acquired by PC Financial. 4.6 PC Financial shall not, directly or Indirectly: (a) remove any proprietary notices or labels; (b) make the Services available to any third party without the prior written consent of the Mobimagic, other than the authorized users In furtherance of the Activity; (c) falsely imply any sponsorship or association with Mobimagic; (d) use the Services to send unsolicited communications junk mail, spam, pyramid schemes or other forms of duplicative or unsolicited messages; (e) use the Services to store or transmit any content that infringes upon any person's intellectual property rights (f) use the Services to knowingly post, transmit, upload, link to, send or store any viruses, malware, Trojan horses or any other similar harmful software; or (g) knowingly use the Services in violation of this Agreement. 3
4.7 Data protection. Each Party agrees to comply with all applicable data protection and privacy laws arising from its obligations, if any, under the Agreement and to reasonably co-operate with the other Party in order to allow the other Party to comply with any laws as deemed necessary from time to time. Each Party shall treat all data, information relating to Services, including but not limit to the customer personal data, as confidential. Each party warrants that it shall take appropriate technical and organizational measures against unauthorized or unlawful processing of personal data and against accidental loss or destruction of, or damage to, the personal data of the other party. 4.8 Both Parties acknowledge and confirm that the Reserve Bank of India (hereafter "RBI") or persons authorized by it has right to access and inspect the PC Financial's documents, records of Service transactions and other necessary information related to the Services or Activity given to, stored or processed by Mobimagic within a reasonable time. 5. INTELLECTUAL PROPERTY RIGHTS 5.1 Nothing in this Agreement shall be construed as transferring the Intellectual Property Rights of either Party or its suppliers to the other Party. For the avoidance of doubt: (a) all Intellectual Property Rights In and to the Marks and the Business Data shall remain the property of PC Financial or its Affiliates as the case may be. Mobimagic acknowledges that it shall acquire no proprietary rights whatsoever in and to the Marks used in the Activity or the Business Data generated by the Activity, which shall remain the sole and exclusive property of PC Financial and Its Affiliates for their unlimited exploitation and all use and acquired goodwill shall inure to PC Financial and its Affiliates' sole benefit. 6. COMPENSATION AND EXPENSES 6.1 Subject to the terms and conditions of this Agreement. PC Financial shall pay to Mobimagic a fixed service fee in the amount of 970,000 United States Dollars (USD 970,000) for each month (the "Fee") within the timeline as permitted under the prevailing India regulations. It is stipulated in this Agreement that Mobimagic will send an invoice to PC Financial on monthly basis according to the progress of the service. After PC Financial confirms that invoice contents are correct, PC Financial shall pay within 45 days after confirming thus. 6.2 The payment is effected by means of bank transfer to the account specified In Mobimagic's invoice. 6.3 The Fee provided is exclusive of Goods and Service Tax (GST) which may be levied under Reverse Charge Mechanism. Any respective taxes for each party will be the responsibility by each party. If law requires that taxes be withheld PC Financial shall (a) deduct those taxes from the Fee; (b) pay the taxes to the proper governmental body; (c) send evidence of the obligation and proof of tax payment to Mobimagic; (d) remit the Fee amount, after deductions and withholding; and (e) cooperate with Mobimagic to obtain refunds of such taxes if there Is any preferential tax treatment available. 6.4 The Fee may be changed by mutual agreement in writing between Mobimagic and PC Financial according to the service content, complexity of services involved or arm's length principles. 4
6.5 In case of any complaint about using the Services as set out in this Agreement PC Financial shall raise the problems within 20 business days after getting Mobimaigc's invoice. Both Parties shall engage in reasonable efforts to negotiate and solve the problems together. If the cause of the difference remains undetermined after the aforesaid efforts of the Parties, an independent third party, (e.g., external auditors) may be employed to give an inspection. The costs arising out of the third- party inspection shall be borne by the Parties according to their respective faults. 7. CONFIDENTIALITY & PUBLICITY Neither Party shall disclose the other Party's Confidential Information to any third party or use Confidential Information for any purpose other than fur the proper fulfillment of this Agreement. Each Party undertakes to safeguard the Confidential Information of the other Party with the same degree of care as it would apply to Its own Confidential Information and, in any case, with no less than reasonable care. Such obligations will survive the expiration of this Agreement for a period of five (5) years. 8. INDEMNIFICATION 8.1 PC Financial shall defend at its own expense and indemnify Mobimagic against any cost, loss or damage arising out of any claim, demand, suit or action ("Action") brought against Mobimagic by a third party to the extent that such Action is related to PC Financial's breach of this Agreement. Mobimagic will promptly inform PC Financial in writing of any such Action and will co-operate in the defence and/or settlement of the Action. PC Financial agrees that in negotiating any settlement, it shall act reasonably and shall obtain Mobimagic's prior, written consent which consent shall not be unreasonably withheld. 8.2 Mobimagic shall indemnify and hold harmless PC Financial and its officers, direct0l8 and Affiliates, ("PCF Indemnified Parties") against any cost, penalty, loss or damage arising out of or related to the Services, or Mobimagic's breach of this Agreement or applicable law. PC Financial will promptly inform Mobimagic in writing of any such Action and will co-operate in the defence and/or settlement of the Action. Mobimagic agrees that in negotiating any settlement, it shall act reasonably and shall obtain PC Financial's prior, written consent which consent shall not be unreasonably withheld. 8.3 Neither Party shall be liable to the other Party in contract, tort or otherwise, whatever the cause, for any loss of profit, business or goodwill or any indirect, incidental or consequential costs, damages or expenses of any kind, except for such loss attributable to breach of confidentiality. 9. TERM & TERMINATION 9.1 The Agreement shall commence on the Effective Date and continue in effect for the Service Period, unless terminated earlier as provided in this Section. This Agreement is a memorialization of an earlier oral Agreement and shall be deemed to apply for the entire Service Period. The Agreement may be extended or renewed by the Parties in a writing executed by authorized representatives of each of the Parties. 9.2 This Agreement may be terminated by either Party prior to the end of the Service Period if the other Party is in material breach of any tem, or condition of this Agreement and such breach la not remedied for a period of thirty (30) days after the Party in breach has been notified In writing of such breach by the other Party. 9.3 This Agreement terminates automatically, with no further act or action of either Party, if: (a) so required by applicable law or regulations; or (b) a receiver is appointed for a Party or its property, a Party makes an assignment for the benefit of its creditors, goes bankrupt or is liquidated or dissolved. 5
9.4 Upon termination or expiration of this Agreement (i) Each Party shall return to the other Party or destroy (If so authorized in writing by the other Party) any Confidential information in the Party's possession or control, and cause an officer to certify in writing to the other Party that it has done so; (ii) Each Party's rights to be paid and each Party's obligations to pay all amounts due hereunder, as well as Sections 3 through 10 shall survive termination of this Agreement. 10. MISCELLANEOUS 10.1 The Parties to this Agreement are independent contractors. Nothing in this Agreement is intended or should be construed to create an agency, partnership, Joint venture, or employer-employee relationship between PC Financial and Mobimagic. Either Party will represent itself to be an employee or agent of the other Party or enter into any agreement on the other Party's behalf or in the other Party's name. Each Party will retain full control over the manner and means by which it conducts its business and neither Party will be entitled to waive any entitlement to workers' compensation, disability, retirement, insurance, stock options or any other benefits afforded to its employees. 10.2 IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, EXEMPLARY, SPECIAL, OR INCIDENTAL DAMAGES ARISING FROM OR RELATING TO THIS AGREEMENT. NEITHER PARTIES' TOTAL CUMULATIVE LIABILITY IN CONNECTION WITH THIS AGREEMENT, WHETHER IN AGREEMENT OR TORT OR OTHERWISE, WILL NOT EXCEED THE AGGREGATE AMOUNT OF FEES AND EXPENSES OWED BY PC FINANCIAL TO MOBIMAGIC FOR SERVICES PERFORMED UNDER THIS AGREEMENT. 10.3 This Agreement (and any question about its subsistence, effect or termination) is to be interpreted in accordance with the laws of India, save for that body of law which governs the conflict of laws. The courts of New Delhi shall have exclusive jurisdiction to settle any dispute between the Parties whether arising In connection with this agreement or otherwise. In the event of any dispute with respect to the construction, execution and performance of the provisions of this Agreement, such dispute shall be settled by arbitration in accordance with the Arbitration and Conciliation Act, 1996 and rules made thereunder in force as on that date. The arbitration shall be carried out in English language and the venue/seat of arbitration shall be New Delhi. The Arbitration award shall be final and binding on the parties. 10.4 If any provision of this Agreement is, for any reason, held to be Invalid or unenforceable, the other provisions of this Agreement will be unimpaired and the invalid or unenforceable provision will be deemed modified so that it is valid and enforceable to the maximum extent permitted by law. 10.5 This Agreement may not be assigned, delegated, or otherwise transferred, in whole or in part, by operation of law or otherwise, by a Party without the other Party's express prior written consent. Any attempted assignment, delegation, or transfer in violation of the foregoing will be null and void. 10.6 All waivers must be in writing and signed by the Party to be charged. Any waiver or failure to enforce any provision of this Agreement on one occasion will not be deemed a waiver of any other provision or of such provision on any other occasion. 6
10.7 This Agreement is the final, complete, and exclusive agreement of the Parties with respect to the subject matter hereof and supersedes and merges all prior or contemporaneous communications and understandings between the Parties. No modification of or amendment to this Agreement will be effective unless in writing and signed by the Party to be charged. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date. PC Financial Services Private Limited Mobimagic Co., Ltd. Signed:/s/ Mars Zhang Signed:/s/ Jiaojiao Liu Name: Mars Zhang Name: Jiaojiao Liu Title: Chief Executive Officer Title: Authorized Signatory 7 | Highlight the parts (if any) of this contract related to "Effective Date" that should be reviewed by a lawyer. Details: The date when the contract is effective | {
"answer_start": [
87
],
"text": [
"April. 1st 2019"
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Volume Restriction" that should be reviewed by a lawyer. Details: Is there a fee increase or consent requirement, etc. if one party’s use of the product/services exceeds certain threshold?
Context: EXHIBIT 10.2
DISTRIBUTOR AGREEMENT
EXHIBIT 10.2
EXCLUSIVE DISTRIBUTOR AGREEMENT
THIS EXCLUSIVE DISTRIBUTOR AGREEMENT (the "Agreement") shall be effective as of _Dec. 8, 2005 (hereinafter "Effective Date"), by and between LifeUSA/ Envision Health, Inc., a corporation (hereinafter collectively "ENVISION"), and Sierra Mountain Minerals, Inc., a Canadian company (hereinafter "SIERRA"), is made with reference to the following facts:
Recitals
A. SIERRA is the manufacture and producer of a joint health product called "SierraSil" (hereinafter "the Product") for human use.
B. ENVISION is the manufacturer of certain nutritional supplements and is desirous of becoming an exclusive distributor for the Product in any blend with Krill Oil (hereinafter "the Finished Product") in all distribution channels in the Territory on the terms and conditions set forth herein.
C. SIERRA is desirous of having ENVISION act as its exclusive distributor for the Product in any blend with Krill Oil in all distribution channels in the Territory on the terms and conditions set forth herein.
NOW, THEREFORE, it is hereby agreed as follows:
1. Incorporation of Recitals. The Recitals set forth in Paragraphs A through C, above, are incorporated herein as though set forth in full.
2. Appointment. SIERRA hereby appoints ENVISION as its exclusive distributor for the Product in any blend with Krill Oil within the Territory subject to ENVISION fulfilling the terms and conditions of the best efforts marketing requirements set forth herein in Sections 4, 5, and 9. SIERRA shall cease making sales to any customer or distributor who, during the term of this Agreement, violates ENVISION's exclusivity.
3. Territory. The Territory shall be the entire world.
4. Prices and Terms. The price for the Product as set forth in Section 9 herein, sold by SIERRA to ENVISION, shall be subject to change due to changes in manufacturing costs and so as to maximize profits; any changes in price for the Product shall not be applicable to previously accepted orders and shall be made with at least ninety (90) days advance notice in writing and in good faith by conference of the parties. ENVISION shall not resell the Product alone. Terms of payment will be 1/3 upon placement of order and 2/3 balance net thirty (30) days or as mutually agreed upon in writing between the parties. Delivery will be F.O.B. ENVISION shall be responsible for all costs of shipping from SIERRA to ENVISION.
5. Product Support. ENVISION will use its best efforts to market and sell the Finished Product throughout the Territory. The parties also agree that:
o If SIERRA customers are interested in purchasing the Product in any blend with Krill Oil, SIERRA will refer them to ENVISION.
o ENVISION will be responsible for all costs associated with developing and manufacturing the Finished Product.
6. Sales Disclosures. ENVISION will provide SIERRA with demand projections for the Product and SIERRA will produce enough Product to meet such demand projections. ENVISION will inform SIERRA of committed sales and SIERRA will increase or scale up its production of the Product accordingly. SIERRA will not unreasonably withhold the Product, but shall not be liable for unfulfilled or partially fulfilled orders given just cause for such action.
7. Term. The term of this Agreement shall be two (2) years from the Effective Date with automatic annual renewals thereafter provided either party does not provide sixty (60) days notice of termination prior to the renewal date or the Agreement is not otherwise terminated as set forth in Section 8.
8. Termination. (a) Upon the occurrence of a material breach or default as to any obligation, term or provision contained herein by either party and the failure of the breaching party to promptly pursue (within thirty (30) days after receiving written notice thereof from the non-breaching party) a reasonable remedy designed to cure (in the reasonable judgment of the non-breaching party) such material breach or default, this Agreement may be terminated by the non-breaching party by giving written notice of termination to the breaching party, such termination
being immediately effective upon the giving of such notice of termination.
(b) Upon the occurrence of bankruptcy of the other party, breach of confidentiality, government legislative interference, or force majeure extending beyond sixty (60) days, either party may immediately terminate the Agreement.
9. Purchase Requirements. During the term of this Agreement, ENVISION will exclusively purchase the Product from SIERRA. The parties mutually agree to the Purchase Price of:
Product Purchase Price ----------------------------------------------- A. SierraSil Per Sierra Sil's wholesale price list.
10. Intellectual Property. SIERRA is responsible for all Patent costs for the Product. SIERRA warrants it owns pending patents for the Product in the U.S. and internationally. SIERRA hereby grants ENVISION an exclusive, royalty-free sub-license of the Product's future patents, and patent applications to distribute, sell and market the Finished Product. SIERRA hereby agrees to indemnify, defend and hold ENVISION harmless from any claims that the Product infringes upon any other patent.
11. Trademarks SIERRA is the owner of the trademark&sbsp; "SierraSil". This Agreement grants ENVISION a non-exclusive and non-royalty bearing license to use the mark "SierraSil". SIERRA shall at all times be the owner of the trademark and ENVISION shall acquire no rights thereto. Upon termination, ENVISION shall have eighteen (18) months to exhaust any inventories, packaging and advertising materials bearing the "SierraSil" trademark and SIERRA shall have first option to buy back any inventory at ENVISION's net purchase price.
12. Independent Contractor Status. The parties acknowledge that ENVISION is an independent contractor and shall not be deemed to be an employee, agent, or joint venturer of SIERRA for any purpose, including federal tax purposes.
13. Warranty. SIERRA warrants that the Product shall be free from defects in material and workmanship for the reasonable shelf life of the Product. In the event of any breach of this warranty or in the event any user of Product makes a claim that the Product was the cause of personal injury or property damage (product liability claim), SIERRA shall indemnify, defend and hold ENVISION harmless from any liability occasioned by a breach of warranty or a product liability claim. SIERRA warrants that it carries general liability insurance of not less than $2 million per occurrence and product liability insurance of not less than $5 million per occurrence and that, upon the execution of this Agreement, it will name ENVISION as an additional insured on such policies. SIERRA further warrants that the Product will not be adulterated or misbranded within the meaning of any federal, state, or local law or regulation or other applicable law. SIERRA agrees to promptly notify ENVISION of any problem, anomaly, defect or condition which would reasonably cause ENVISION's concern relative to stability, reliability, form, fit, function or quality of the Product.
ENVISION warrants that the Finished Product will not be adulterated or misbranded within the meaning of any federal, state, or local law or regulation or other applicable law. In the event of any breach of this warranty or in the event any user of the Finished Product makes a claim that the Finished Product was the cause of personal injury or property damage (product liability claim), ENVISION shall indemnify, defend, and hold SIERRA harmless from any liability occasioned by a breach of warranty or a product liability claim. ENVISION warrants that it carries general liability insurance of $1 million per occurrence and product liability insurance of not less than $2 million per occurrence and that, upon execution of this Agreement, it will name SIERRA as an additional insured on such policies.
14. Confidential Information. The parties acknowledge that, during the term of this Agreement, each may receive certain Proprietary Information of the other. Proprietary Information includes, without limitation, formula, scientific studies, processes, plans, formulations, technical information, new product information, methods of product delivery, test procedures, product samples, specifications, scientific, clinical, commercial and other information or data, customer lists, customer contacts, and other distributors within the Territory which are considered confidential in nature whether communicated in writing or orally. The parties agree that each will treat such information as confidential. Neither party shall have the right to disclose the Proprietary Information to any third party without the express written consent of the disclosing party. Neither party may use the proprietary information except in furtherance of the goals of this Agreement and is further prohibited from utilizing the Proprietary Information directly nor indirectly to engage in any business activity which is competitive with the other.
15. Force Majeure. In no event shall any party be responsible for its failure to fulfill any of its obligations under this Agreement when such failure is due to fires, floods, riots, strikes, freight embargoes, acts of God or insurrection. In the event of a force majeure, the party affected thereby shall give immediate written notice to the other. If the event of force majeure continues for longer than
sixty (60) days, the party not so affected shall have the right to terminate this Agreement.
16. Non-Waiver of Default. The failure of either party at any time to require the performance by a party of any provision of this Agreement shall in no way affect the right to require performance at any time after such failure. The waiver of either party of a breach of any provision of this Agreement shall not be taken to be a waiver of any succeeding breach of the provision or as a waiver of the provision itself.
17. Attorney's Fees. In the event either party is required to institute litigation to enforce any provision of this Agreement, the prevailing party in such litigation shall be entitled to recover all costs including without limitation, reasonable attorney's fees and expenses incurred in connection with such enforcement and collection.
18. Venue. This Agreement is deemed to have been entered into in the State of Colorado, and its interpretation, construction, and the remedies for its enforcement or breach are to be applied pursuant to and in accordance with the laws of the State of Colorado.
19. Notices. Any and all notices or other communication required or permitted to be given pursuant to this Agreement shall be in writing and shall be construed as properly given if mailed first class, postage prepaid to the address specified herein. Either party may designate, in writing, a change of address or other place to which notices may be sent.
If to SIERRA: If to LIFEUSA/ENVISION: Mr. Michael Bentley Mr. Michael Schuett Sierra Mountain Minerals Inc. Envision Health, Inc. 1501 West Broadway, Suite 500 2475 Broadway, Suite 202 Vancouver BC V6J4Z6 Boulder, CO 80304 Canada
20. Amendment. This Agreement shall not be modified or amended except by a written agreement executed by both parties.
21. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter thereof and supersedes all prior agreements, whether written or oral.
22. Assignment. The parties shall have the right to assign all, or part, of its rights under this Agreement to any wholly owned subsidiary or affiliate without the consent of the other Party. Any other assignment by the parties, requires the prior written consent of the other Party.
ACKNOWLEDGEMENTS
Each party acknowledges that he or she has had an adequate opportunity to read and study this Agreement. The understanding of the aforesaid articles causes no difficulty whatsoever and each party has retained a copy of this agreement immediately after the signing of it by all parties.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date and year first written above.
SIERRA MOUNTAIN MINERALS LIFEUSA/ENVISION HEALTH
By: /s/ Michael Bentley By: /s/ Michael Schuett ----------------------- ------------------------- Michael Bentley Michael Schuett
December 8, 2005 December 7, 2005 ----------------------- ------------------------------ Date Date [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | EXHIBIT 10.2
DISTRIBUTOR AGREEMENT
EXHIBIT 10.2
EXCLUSIVE DISTRIBUTOR AGREEMENT
THIS EXCLUSIVE DISTRIBUTOR AGREEMENT (the "Agreement") shall be effective as of _Dec. 8, 2005 (hereinafter "Effective Date"), by and between LifeUSA/ Envision Health, Inc., a corporation (hereinafter collectively "ENVISION"), and Sierra Mountain Minerals, Inc., a Canadian company (hereinafter "SIERRA"), is made with reference to the following facts:
Recitals
A. SIERRA is the manufacture and producer of a joint health product called "SierraSil" (hereinafter "the Product") for human use.
B. ENVISION is the manufacturer of certain nutritional supplements and is desirous of becoming an exclusive distributor for the Product in any blend with Krill Oil (hereinafter "the Finished Product") in all distribution channels in the Territory on the terms and conditions set forth herein.
C. SIERRA is desirous of having ENVISION act as its exclusive distributor for the Product in any blend with Krill Oil in all distribution channels in the Territory on the terms and conditions set forth herein.
NOW, THEREFORE, it is hereby agreed as follows:
1. Incorporation of Recitals. The Recitals set forth in Paragraphs A through C, above, are incorporated herein as though set forth in full.
2. Appointment. SIERRA hereby appoints ENVISION as its exclusive distributor for the Product in any blend with Krill Oil within the Territory subject to ENVISION fulfilling the terms and conditions of the best efforts marketing requirements set forth herein in Sections 4, 5, and 9. SIERRA shall cease making sales to any customer or distributor who, during the term of this Agreement, violates ENVISION's exclusivity.
3. Territory. The Territory shall be the entire world.
4. Prices and Terms. The price for the Product as set forth in Section 9 herein, sold by SIERRA to ENVISION, shall be subject to change due to changes in manufacturing costs and so as to maximize profits; any changes in price for the Product shall not be applicable to previously accepted orders and shall be made with at least ninety (90) days advance notice in writing and in good faith by conference of the parties. ENVISION shall not resell the Product alone. Terms of payment will be 1/3 upon placement of order and 2/3 balance net thirty (30) days or as mutually agreed upon in writing between the parties. Delivery will be F.O.B. ENVISION shall be responsible for all costs of shipping from SIERRA to ENVISION.
5. Product Support. ENVISION will use its best efforts to market and sell the Finished Product throughout the Territory. The parties also agree that:
o If SIERRA customers are interested in purchasing the Product in any blend with Krill Oil, SIERRA will refer them to ENVISION.
o ENVISION will be responsible for all costs associated with developing and manufacturing the Finished Product.
6. Sales Disclosures. ENVISION will provide SIERRA with demand projections for the Product and SIERRA will produce enough Product to meet such demand projections. ENVISION will inform SIERRA of committed sales and SIERRA will increase or scale up its production of the Product accordingly. SIERRA will not unreasonably withhold the Product, but shall not be liable for unfulfilled or partially fulfilled orders given just cause for such action.
7. Term. The term of this Agreement shall be two (2) years from the Effective Date with automatic annual renewals thereafter provided either party does not provide sixty (60) days notice of termination prior to the renewal date or the Agreement is not otherwise terminated as set forth in Section 8.
8. Termination. (a) Upon the occurrence of a material breach or default as to any obligation, term or provision contained herein by either party and the failure of the breaching party to promptly pursue (within thirty (30) days after receiving written notice thereof from the non-breaching party) a reasonable remedy designed to cure (in the reasonable judgment of the non-breaching party) such material breach or default, this Agreement may be terminated by the non-breaching party by giving written notice of termination to the breaching party, such termination
being immediately effective upon the giving of such notice of termination.
(b) Upon the occurrence of bankruptcy of the other party, breach of confidentiality, government legislative interference, or force majeure extending beyond sixty (60) days, either party may immediately terminate the Agreement.
9. Purchase Requirements. During the term of this Agreement, ENVISION will exclusively purchase the Product from SIERRA. The parties mutually agree to the Purchase Price of:
Product Purchase Price ----------------------------------------------- A. SierraSil Per Sierra Sil's wholesale price list.
10. Intellectual Property. SIERRA is responsible for all Patent costs for the Product. SIERRA warrants it owns pending patents for the Product in the U.S. and internationally. SIERRA hereby grants ENVISION an exclusive, royalty-free sub-license of the Product's future patents, and patent applications to distribute, sell and market the Finished Product. SIERRA hereby agrees to indemnify, defend and hold ENVISION harmless from any claims that the Product infringes upon any other patent.
11. Trademarks SIERRA is the owner of the trademark&sbsp; "SierraSil". This Agreement grants ENVISION a non-exclusive and non-royalty bearing license to use the mark "SierraSil". SIERRA shall at all times be the owner of the trademark and ENVISION shall acquire no rights thereto. Upon termination, ENVISION shall have eighteen (18) months to exhaust any inventories, packaging and advertising materials bearing the "SierraSil" trademark and SIERRA shall have first option to buy back any inventory at ENVISION's net purchase price.
12. Independent Contractor Status. The parties acknowledge that ENVISION is an independent contractor and shall not be deemed to be an employee, agent, or joint venturer of SIERRA for any purpose, including federal tax purposes.
13. Warranty. SIERRA warrants that the Product shall be free from defects in material and workmanship for the reasonable shelf life of the Product. In the event of any breach of this warranty or in the event any user of Product makes a claim that the Product was the cause of personal injury or property damage (product liability claim), SIERRA shall indemnify, defend and hold ENVISION harmless from any liability occasioned by a breach of warranty or a product liability claim. SIERRA warrants that it carries general liability insurance of not less than $2 million per occurrence and product liability insurance of not less than $5 million per occurrence and that, upon the execution of this Agreement, it will name ENVISION as an additional insured on such policies. SIERRA further warrants that the Product will not be adulterated or misbranded within the meaning of any federal, state, or local law or regulation or other applicable law. SIERRA agrees to promptly notify ENVISION of any problem, anomaly, defect or condition which would reasonably cause ENVISION's concern relative to stability, reliability, form, fit, function or quality of the Product.
ENVISION warrants that the Finished Product will not be adulterated or misbranded within the meaning of any federal, state, or local law or regulation or other applicable law. In the event of any breach of this warranty or in the event any user of the Finished Product makes a claim that the Finished Product was the cause of personal injury or property damage (product liability claim), ENVISION shall indemnify, defend, and hold SIERRA harmless from any liability occasioned by a breach of warranty or a product liability claim. ENVISION warrants that it carries general liability insurance of $1 million per occurrence and product liability insurance of not less than $2 million per occurrence and that, upon execution of this Agreement, it will name SIERRA as an additional insured on such policies.
14. Confidential Information. The parties acknowledge that, during the term of this Agreement, each may receive certain Proprietary Information of the other. Proprietary Information includes, without limitation, formula, scientific studies, processes, plans, formulations, technical information, new product information, methods of product delivery, test procedures, product samples, specifications, scientific, clinical, commercial and other information or data, customer lists, customer contacts, and other distributors within the Territory which are considered confidential in nature whether communicated in writing or orally. The parties agree that each will treat such information as confidential. Neither party shall have the right to disclose the Proprietary Information to any third party without the express written consent of the disclosing party. Neither party may use the proprietary information except in furtherance of the goals of this Agreement and is further prohibited from utilizing the Proprietary Information directly nor indirectly to engage in any business activity which is competitive with the other.
15. Force Majeure. In no event shall any party be responsible for its failure to fulfill any of its obligations under this Agreement when such failure is due to fires, floods, riots, strikes, freight embargoes, acts of God or insurrection. In the event of a force majeure, the party affected thereby shall give immediate written notice to the other. If the event of force majeure continues for longer than
sixty (60) days, the party not so affected shall have the right to terminate this Agreement.
16. Non-Waiver of Default. The failure of either party at any time to require the performance by a party of any provision of this Agreement shall in no way affect the right to require performance at any time after such failure. The waiver of either party of a breach of any provision of this Agreement shall not be taken to be a waiver of any succeeding breach of the provision or as a waiver of the provision itself.
17. Attorney's Fees. In the event either party is required to institute litigation to enforce any provision of this Agreement, the prevailing party in such litigation shall be entitled to recover all costs including without limitation, reasonable attorney's fees and expenses incurred in connection with such enforcement and collection.
18. Venue. This Agreement is deemed to have been entered into in the State of Colorado, and its interpretation, construction, and the remedies for its enforcement or breach are to be applied pursuant to and in accordance with the laws of the State of Colorado.
19. Notices. Any and all notices or other communication required or permitted to be given pursuant to this Agreement shall be in writing and shall be construed as properly given if mailed first class, postage prepaid to the address specified herein. Either party may designate, in writing, a change of address or other place to which notices may be sent.
If to SIERRA: If to LIFEUSA/ENVISION: Mr. Michael Bentley Mr. Michael Schuett Sierra Mountain Minerals Inc. Envision Health, Inc. 1501 West Broadway, Suite 500 2475 Broadway, Suite 202 Vancouver BC V6J4Z6 Boulder, CO 80304 Canada
20. Amendment. This Agreement shall not be modified or amended except by a written agreement executed by both parties.
21. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter thereof and supersedes all prior agreements, whether written or oral.
22. Assignment. The parties shall have the right to assign all, or part, of its rights under this Agreement to any wholly owned subsidiary or affiliate without the consent of the other Party. Any other assignment by the parties, requires the prior written consent of the other Party.
ACKNOWLEDGEMENTS
Each party acknowledges that he or she has had an adequate opportunity to read and study this Agreement. The understanding of the aforesaid articles causes no difficulty whatsoever and each party has retained a copy of this agreement immediately after the signing of it by all parties.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date and year first written above.
SIERRA MOUNTAIN MINERALS LIFEUSA/ENVISION HEALTH
By: /s/ Michael Bentley By: /s/ Michael Schuett ----------------------- ------------------------- Michael Bentley Michael Schuett
December 8, 2005 December 7, 2005 ----------------------- ------------------------------ Date Date | Highlight the parts (if any) of this contract related to "Volume Restriction" that should be reviewed by a lawyer. Details: Is there a fee increase or consent requirement, etc. if one party’s use of the product/services exceeds certain threshold? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "License Grant" that should be reviewed by a lawyer. Details: Does the contract contain a license granted by one party to its counterparty?
Context: Exhibit 10.43
This is a translation of the original Chinese text
Contract No.: 151315UD0081
Cooperation Agreement
Party A: Beike Internet (Beijing) Security Technology Co., Ltd.
Party B: Baidu Online Network Technology (Beijing) Co., Ltd.
April 2013 1
This Cooperation Agreement is executed by and between the parties below in Haidian District, Beijing, the People's Republic of China (hereinafter referred to as "PRC"):
Party A: Beike Internet Security Technology Co., Ltd.
Address: Room 2101, 12/F, Fuxing International Center, No.237, North Chaoyang Road, Chaoyang District, Beijing.
Attention:
Tel:
E-mail:
Postcode:
Bank account:
Account No.:
Party B: Baidu Online Network Technology (Beijing) Co., Ltd.
Address: No.10, Shangdi Shi Jie, Haidian District, Beijing
Attention:
Tel:
E-mail:
Postcode:
Whereas,
1. Party A owns the Kingsoft internet site navigation website and the Cheetah Brower software (hereinafter referred to as Party A's Product). Website: 123.duba.net and www.duba.com. Party A has opened an account with Baidu Union website (http://union.baidu.com) and the account name is (translation: "Kingsoft Cheetah") and ksbrowser and is willing to comply with the terms of Baidu Union Membership Registration Agreement (http://union.baidu.com/regAgreement.html).
2. Party B is a leading network technology company in the field of search engine.
3. The parties wish to collaborate with each other leveraging their respective strengths.
Therefore, the parties agree: 2
Chapter 1 Definitions and Interpretations
1.1 Definitions
Except as otherwise defined in the context hereof, the terms shall have the following designated meanings:
1.1.1 PRC Laws: means any present and future promulgated laws, regulations, decrees and binding policies in PRC.
1.1.2 Trade Secrets: means any technology, financial, business or any other information owned by either party and / or its subsidiary oraffiliate and protected as trade secrets.
1.1.3 Effective Date: means the date on which this agreement is executed.
1.1.4 Force Majeure: means any event which is not reasonably controllable, foreseeable or avoidable even if foreseeable by the parties, which makes it impossible for either party to perform the whole or part of its obligations pursuant to this Agreement. Such event includes without limitation governmental actions, earthquakes, typhoon, flood, fire or any other natural disaster, wars or any other similar event. In respect of the special nature of the internet, Force Majeure also includes the following events which influence the normal operation of the internet: 1) hacker attacks; 2) material influence of the technical adjustments of the telecommunications department except for losses of one party resulting from its own mismanagement; 3) temporary suspension caused by governmental control, except for the governmental control on one party resulting from its own misconduct; 4) virus attacks.
1.1.5 Baidu website: means www.baidu.com.
1.1.6 Cooperation Term: means the term set forth in Chapter 3 hereof.
1.1.7 Actual revenues: means the revenues payable by Party B to Party A based on the amount of search traffic generated by Party A's website for Party B, less Party B's related costs and legal taxes and charges. The search traffic generated by Party A for Party B, which forms the basis for calculating the actual revenues, shall be determined by Party B based on its statistical data.
1.2 Interpretations
1.2.1 The date hereof shall mean the calendar day, the business day hereof shall mean the work day other than public holidays in PRC, and the month hereof shall mean the calendar month. 3
1.2.2 The headings hereof is for inference only and shall not otherwise affect the meaning and construction of any other part of this Agreement.
1.2.3 If needed in the context, use of plurals shall include its singulars, and vice versa.
1.2.4 All references to chapters, provisions and paragraphs shall mean the chapters, provisions and paragraphs herein.
Chapter 2 Representations and Warranties
2.1 Legal Status
Either party represents and warrants from the date hereof:
2.1.1 It has the qualification to conduct the transaction hereunder and such transaction is in compliance with the business scope;
2.1.2 It is eligible to enter into this Agreement and perform the obligations hereunder.
2.1.3 Its authorized representative has adequate authorization to execute this Agreement on its behalf (a copy of the authorization letter shall be delivered to the other party for record).
2.1.4 To its knowledge, it has disclosed all documents which may have a material adverse impact on its performance of obligations hereunder which are issued by the governmental agencies in the registered place or business place and known to it; and it is not the subject of any insolvency, dissolution or bankruptcy procedures.
2.2 Legal Effect
2.2.1 From the Effective Date, this Agreement is legally binding on each party.
2.2.2 Either Party warrants that the execution and performance hereof as well as the business transactions contemplated hereof will not violate any PRC Laws in any respects.
Chapter 3 Cooperation Term
3.1 Cooperation Term
The Cooperation Term of the parties shall be two years from May 1, 2013 to April 30, 2015. One month prior to the expiry of the Cooperation Term, the parties may further negotiate the cooperation forms, if fails, this Agreement will be terminated upon expiry.
3.1.1 This Agreement is effective on the day of May 1, 2013 and the effective term is the same as the Cooperation Term. The contracts of which the Parry A contract No. are KIS-Y-BJ120195 and KIS-Y-BJ120196 (Party B contract No. are 151215UD0118, 151215UD0119) are terminated on April 30, 2013. 4
Chapter 4 Liabilities of the Parties
4.1 Details of Cooperation
The parties use their respective strengths to cooperate on internet searches, and during the effective Cooperation Term, the parties are collaborative partners. The parties have complementary advantages in the aspects of information usage, promotion, marketing, technical support and services, and now form a strategic alliance to develop their respective businesses.
4.2 Party A's Obligations
4.2.1 Party A imports the search results provided by Party B to the search function in the Party A's Product by connecting its Product to the technical port provided by Party B. Party A shall also cooperate with Party B to market Baidu promotion services through the use of search engine. In other words, it is a technical service in which Party B displays the website of Party B's clients on the relevant page of Baidu website and/or on the pages and / or interfaces of any other Baidu union members.
4.2.2 Party A will display Party B's "search engine box" in the first screen of the homepage of "Kingsoft Navigation" website, and imports the search results provided by Party B to the search function in the Party A's Product by connecting its Product to the technical port provided by Party B. Party A shall also cooperate with Party B to market Baidu promotion services through the use of search engine. In other words, it is a technical service in which Party B displays the website of Party B's clients on the relevant page of Baidu website and/or on the pages and/or interfaces of any other Baidu union members. The form of "search engine box" is attached as Annex 2. Without Party B's confirmation in writing or via email, Party A shall not change the form, or otherwise Party A will be deemed to breach this Agreement.
4.2.3 Party A shall not put the Party B's search engine service on any other website, or change the codes which are used to import the search engine service of Party B. Party A's website(s) that correspond to Party B's codes are set forth in Annex 2. If Party A needs to add any website(s) or change the codes, it shall obtain the confirmation from Party B in writing or via email, or otherwise Party A will be deemed to breach this Agreement.
4.2.4 When Party A promotes websites by means of software installation, Party A needs to determine the homepage of the software users' browsers. In the event that the homepage of the software users' browsers is *.baidu.com or *.hao123.com, Party A shall not change the homepage of the users' browsers by means of the software being installed. 5
4.2.5 During the cooperation between the parties, Party A agrees not to enter into any form of cooperation with Qihoo 360, unless PartyA needs such cooperation with Qihoo 360 for business or technology and Party B has provided its prior consent.
4.2.6 Party A covenants that during the Cooperation Term, it will list Party B's search engine service as one of its search engine services, of which "Cheetah Browser" will list Party B's search engine service as the default search engine service. In the event that Party A breaches this covenant, Party B shall have the right to terminate this Agreement at any time and shall not pay any share of profits to Party A.
4.2.7 During the cooperation, Party A shall form a team composed of specialized personnel to carry out the related work so as to ensurethe smooth cooperation between the parties.
4.2.8 Party A shall not change the related functions and contents inherent to Party B's search engine box. If a change is necessray,consent shall first be obtained from Party B.
4.2.9 Party A shall not assign to any third party the functions and contents used in the website column(s) that are made the subject matter of this cooperation agreement. In addition, Party A shall not use the functions and information provided by Party B to carry out any commercial activities.
4.2.10 Party A undertakes to comply with the Business Cooperation Standard of Baidu Union published in http://union.baidu.com/regAgreement.html (see Annex 3), or otherwise Party A will be deemed to breach this Agreement. Party A also agrees to participate in the "Blue Sky 365" Action Plan and comply with Blue Sky 365 Action Plan Regulations (see Annex 4).
4.2.11 Party A warrants that it legally owns or otherwise holds the valid license to the intellectual property relating to the services or products provided pursuant to this agreement. Any disputes resulting from the Party A's technology or intellectual property shall be handled by Party A; any losses and costs of Party B resulting from the deficiency of Party A's services or products shall be borne by Party A. Party B has the discretion to terminate this Agreement from time to time in the event that (i) Party A has no legal right in respect of the services or products provided or, (ii) the services or products provided by Party A lead to any legal dispute or proceedings with third parties. 6
4.3 Party B's Obligations
4.3.1 Upon the effectiveness of this Agreement, Party B shall form a team composed of specialized personnel to carry out for the relatedwork so as to ensure the smooth cooperation between the parties.
4.3.2 Party B shall not publish any contents other than agreed hereof in the Party A's website column(s) that are made the subject matter of this cooperation agreement. In the event that Party B breaches this covenant, Party A has the right to terminate this Agreement at any time and require Party B to pay 30% of Party A's share of revenues as liquidated damages.
4.3.3 Party B will provide to Party A an account which will timely return the visiting traffic data for Party A's easy inquiry. At the same time, Party B ensures the completion, accuracy and truth of the visiting traffic data. If Party A finds the visiting traffic data abnormal, Party B shall issue a written explanation, and the actual revenues generated from the questionable traffic shall not be settled until there was a final confirmation.
4.3.4 Party B warrants that it legally owns or otherwise holds a valid license to the intellectual property relating to the services or products provided pursuant to this agreement. Any disputes resulting from the Party B's technology or intellectual property shall be handled by Party B; any losses and costs of Party A resulting from the deficiency of Party B's services or products shall be borne by Party B.
4.3.5 Party B has the right to penalize any acts of Party A , in whatever form, carried out in contravention with Party B's union cooperation policies. The penalties may include =the immediate suspension of Party A's account, termination of this Agreement, and taking any applicable civil or criminal remedial actions against fraud and any other legal causes. Party B shall have the right to final interpretation of this provision.
4.3.6 Party B retains the right to adjust the public price of the service and the service content, including but not limited to adding or reducing the service items, and raising or lowering the prices. In the event that Party B wishes to carry on such adjustment, it shall notify Party A in writing two weeks in advance. If Party A objects to such adjustment, it has the right to notify Party B to terminate this Agreement in writing within 2 weeks upon receipt of the notification. Within 3 working days upon termination of this Agreement, Party B shall settle with Party A. Failure to exercise such termination right is deemed that Party A agrees the adjustment of Party B.
4.3.7 With respect to the cooperation hereof, Party B has the discretion to assign to its affiliates all or part of its obligations hereunder without breaching this agreement. Party B's affiliates mean Party B's parent companies at different levels as well as the companies, owned or controlled, directly or indirectly, by the Party B's parent companies at different levels. 7
4.4 Exemption of Liabilities With Respect to the Search Engine (by Party B)
See Annex 1. The Parties agree that the exemption of liabilities in the annex is applicable to the transactions hereunder. Within the scope of exemption clause, Party B and its affiliates are not liable for any compensation or any other liabilities.
Chapter 5 Information Content Cooperation
5.1 The parties shall arrange an employee to be responsible for the coordination work so as to ensure the regular update and maintenance.
5.2 Fees
5.2.1 The parties will not charge each other any fees for the shared information content. Unless otherwise agreed hereof, the feesincurred shall be borne by each party respectively.
5.2.2 The Actual Revenues of the parties arising from the Baidu promotion services in the search results pages shall be dividedproportionately, and Party A shall bear the taxes payable on its own share of revenues:
(1) The address bar, search bar, homepage/blank page of Cheetah Browser shall use Baidu Search as default search engineservice;
(2) The default traffic shall mean the default traffic of the website address site and the traffic of the Cheetah Browser;
(3) The monthly average daily non-default traffic shall not exceed the default traffic. If it does, then the traffic in excess willnot form part of the basis for calculating the share of revenues;
(4) If the default traffic is lower than ***, the share of revenues for the non-default traffic is ***%, and the share of revenuesfor the default traffic is ***%;
(5) If the default traffic is more than ***, the share of revenues for the non-default traffic is ***%, and the share of revenuesfor the default traffic is ***%;
(6) If the default traffic is more than ***, the share of revenues for the non-default traffic is ***%, and the share of revenuesfor the default traffic is ***%; 8
(7) If the default traffic is more than ***, the share of revenues for the non-default traffic is ***%, and the share of revenuesfor the default traffic is ***%;
(8) If the default traffic is more than ***, the share of revenues for the non-default traffic is ***%, and the share of revenuesfor the default traffic is ***%; and
(9) If the default traffic is more than ***, the share of revenues for the non-default traffic is ***%, and the share of revenuesfor the default traffic is ***%.
If Party A objects to the Party B's revenue-sharing policy, it may terminate this Agreement. In the event that Party A continues to receive its share of revenues, it shall be deemed that Party A agrees with Party B's revenue-sharing. Party A shall bear the taxes payable on its own share of revenues.
5.2.3 Party B confirms the share of revenues of the preceding month payable to Party A on the first day of each calendar month (hereinafter referred to as (the "Reference Date," and postponed in the event of public holidays) according to the above Article 5.2.2. Upon the confirmation of the share of revenues of such month, it shall not be adjusted, unless there is sufficient proof evidencing the statistics is not correct.
5.2.4 The financial settlement between the parties will be carried out monthly.
Party A provides the invoice of the share of revenues in the preceding month within the first 5 working days in each month in advance, Party B warrants to pay the share of revenues to Party A prior to the 20t h day of each month (postponed in the event of public holidays) according to Article 4.1 hereof. In the event that Party A objects the payment from Party B, it shall propose within the first 5 working days in each month in writing, or it will be deemed as no objection. Party B shall review within three working days upon receipt of Party A's written objection and notify the results thereof to Party A.
5.2.5 After the effectiveness of this Agreement, in the event that the share of revenues payable to Party A in the preceding month is less than RMB 100, then it will be carried forward to the next month automatically and settled together according to the preceding provisions.
Chapter 6 License
6.1 The search results provided by Party B and the intellectual property of any related technology shall be owned by Party B, without authorization, Party A shall not amend, deduct, split or reverse Party B's technologies and programs. Party A shall not obtain the source codes of the programs of Party B with any methods. Without authorization, Party A shall not apply the service provided by Party B for other usage.
6.2 "baidu" and are all registered trademarks of Party B. During the cooperation, if Party A has to use Party B's trademarks, it shall obtain Party B's prior written consent. Nevertheless, if this Agreement is terminated or either party rescinds this Agreement, Party A shall no longer use "baidu", and any other registered trademarks of Party B in its product page and promotions of all kinds. 9
Chapter 7 Confidentiality
7.1 Any and all information acquired by the parties and their employees due to the execution or performance of this Agreement, including without limitation the scientific, business or internal information relating to technology, finance, marketing or management shall be the confidential information of the parties and their proprietary properties.
7.2 The parties mutually covenant that they will keep each other's confidential information in strict confidence, and will use only for the purpose of this Agreement, shall not use or permit others to use the confidential information or disclose such to any third parties except the following events:
7.2.1 Upon the written consent of the other party;
7.2.2 As according to the orders or requirements of the competent courts, any governmental agencies or administrative agencies;
7.2.3 Such information becomes known to the public not for any deliberation, recklessness or negligence of either party or its agents,officers or employees;
7.3 The parties are obliged to disclose the confidential information only to the employees necessary to know it and instruct such employees to be responsible for the confidential liability hereunder and be liable to the violation of the confidential liability of the employees.
Chapter 8 Breach
8.1 General Breach
In the event either party breaches its obligations hereunder, the breach party shall immediately suspend its breach upon the receipt of the non-breach party's written notice requiring it to rectify its breach, and pay all the losses to the non-breaching party arising from such breach within ten (10) days. If the breach party continue to carry on the breaching conduct or does not perform its obligations, the non- breaching party shall have the right to terminate this Agreement in addition to the compensation for the breach. 10
8.2 Breach Liabilities
If fault on both parties, they shall bear their respective liabilities according to their actual degree of fault.
Chapter 9 Termination
9.1 Termination Events
This Agreement will be terminated upon any of the following events:
9.1.1 The Cooperation Term is expired and the parties determine not to renew;
9.1.2 The non-breaching party terminates this Agreement according to Article 8.1 hereof;
9.1.3 Either party is under bankruptcy or enters into liquidation or dissolution procedures;
9.1.4 If the Force Majeure lasts consecutively for thirty (30) days and above, either party may terminate this Agreement by awritten notice according to Article 11.7 and terminate this Agreement on the receipt date as defined herein.
9.2 Matters after the Termination
9.2.1 Within fifteen (15) days upon the termination of this Agreement, the parties shall delete the links between their websites.
9.2.2 The termination of this Agreement shall not affect the unsettled payment hereunder or either party's payment obligation andother obligations or rights incurred before the termination.
9.2.3 Notwithstanding the termination of this Agreement, the obligations set forth in Chapter 7 and Chapter 10 are binding to bothparties.
Chapter 10 Governing Laws and Dispute Resolution
10.1 Governing Laws
The execution, validity, construction, enforcement and the settlement of any disputes herefrom shall be governed by PRC Laws.
10.2 Negotiation and Proceedings
10.2.1 Any dispute arising from the construction and enforcement of this Agreement shall be settled through friendly consultation ormediation by a neutral third party first.
10.2.2 If the dispute fails to be resolved within thirty (30) days by such method set forth above, either party shall submit to the court inthe location of Party B. 11
Chapter 11 Miscellaneous
11.1 Waiver
If either party fails to exercise or timely exercise its rights, power or preemptive rights hereunder, it shall not be deemed as a waiver; otherwise, any individual exercise or partially exercise any of its rights, power or preemptive rights shall not prejudice its exercise of such rights, power or preemptive rights thereafter.
11.2 Amendment
This Agreement may only be amended by mutual written agreement by the parties.
11.3 Marketing Supports
On the basis of the parties' acknowledgment, the parties will make and carry on necessary marketing measures to expand the reputation and influence of the parties cooperation.
11.4 Entire Agreement
This Agreement constitutes the entire agreement between the parties and supersedes all previous discussions, negotiations and agreements.
11.5 Notice
11.5.1 Any material notices or written letters between the parties shall be in Chinese and delivered by facsimile, in person(includingcourier) or by registered mail.
11.5.2 All the notices and letters shall be sent to the address in the preamble hereof unless otherwise notified in writing in advance;
11.5.3 If the notices and letters are sent by facsimile, then the delivery time shall be subject to the actual time displayed in the facsimile record, except that the sending time is after 17:00 pm of such date, or the time of the receiver's location is not a Business Day, then the delivery time shall be the following Business Day of the receiver's time; if sent via e-mail, the delivery time shall be subject to the time when the email enters into the email system designated by the receiver; if sent in person (including courier), it shall be subject to date the receiver's signing for receipt; if sent by registered letter, it shall be subject to the receipt issued by the post office and five (5) Business Days from the date of sending. 12
11.6 Successor
This Agreement is made for the benefit of and equally binding upon the parties and their respective successors and assignees.
11.7 Force Majeure
11.7.1 In the event of Force Majeure, the affected party shall notify the other party in respect of the nature, incurring date, anticipated lasting time and related details as fastest as reasonably possible and the degree of such event hindering the performance of its obligations of the notifying party hereunder.
11.7.2 During the consecutive period of the Force Majeure, the affected party shall regularly and timely keep the other party informed of the current status of the Force Majeure, in the event that the Force Majeure ends, it shall notify the other party in writing timely and continue to perform the obligations hereunder.
11.7.3 The party affected by the Force Majeure may temporarily suspend the performance hereunder until the influence of the Force Majeure is removed after it performs its obligations pursuant to Item 1 and 2 of this Article and need not to bear any breach liabilities; however, it shall use best efforts to conquer such event and minimize its adverse influence.
11.8 Language
This Agreement is made in Chinese and there are two originals which have the same legal effect and each party has one original.
11.9 Unmentioned Matters
Any other matters unmentioned hereof shall be subject to PRC Laws.
11.10 Other Matters
This Agreement is effective from the date of its date of signature and chop, and any other agreement between the parties regarding to matters which are similar to the cooperation contents hereunder shall be terminated automatically. Annexes are integral parts of this Agreement and have the same legal effect as the text hereof. 13
Party A: Beike Internet (Beijing) Security Technology Co., Ltd.
Authorized signatory: /s/ common seal
Title:
Date:
Party B: Baidu Online Network Technology (Beijing) Co., Ltd.
Authorized signatory: /s/ Guolin Ma /s/ common seal
Title:
Date: 14
Annex 1
Search Engine Exemption Clause
1. In addition to service clause indicated by Baidu, Baidu is not responsible for any other accident, negligence, breach, defamation, infringement to copyright or other intellectual property right and the loss occurred thereby (including by virus through download) arising from using search engine and will not undertake any legal liability.
2. Baidu is not responsible for the legality of link and information, product and service obtained from webpages through search engine which are searched automatically in accordance with users' search order, and will not undertake any legal liability.
3. All content of search engine does not represent Baidu's opinion.
4. User shall undertake the risk of using search engine by itself and Baidu will not guarantee in any form, including the result meeting users' requirement, service continuity, safety, accuracy, timeliness and legality of search result. Baidu will not undertake any legal liability for user's failure to normally use Baidu for technology reason such as internet status, communication line and etc.
5. Baidu respects and protects all search service users' personal privacy and their personal information such as registered user name and email address, etc., which will not be disclosed to the third party without user's consent or compulsorily required by law. The keywords used by users in search engine will not be regarded as personal privacy information.
6. Any website shall report to service website or Baidu, or add refusal mark to the webpage in accordance with the Robots Exclusion Protocol, if it does not want to be included by Baidu, otherwise it will be deemed as willing to be included.
7. Any unit or person shall report to Baidu or service website in written timely and provide ID card, ownership certificate and detailed violation evidence if it considers the content through Baidu search service or search link may be suspected of violating its legal right. Baidu will remove such suspected search service or search link as soon as possible after its receipt of legal documents above. 15
Annex 2
1. Display Format
2. Table of Fee-charging Code and Corresponding Website Fee-charging item Channel Display location Search box on the first page 16
Annex 3
Business Cooperation Standard of Baidu Union
In order to standardize the business cooperation of Baidu Union (hereinafter "Union") and maintain the fair and honest order, it is provided for the business cooperation of Union as follows and member of the Union shall comply with this standard strictly to maintain the smooth and healthy development of business cooperation.
[General Rules]
All act which may damage the right of user of Baidu promotion, damage user experience, disturb market cooperation order of the Union, adversely affect Baidu product and business reputation of Baidu, constitute unfair competition against Baidu or violate legal right of Baidu are forbidden by the Union, including but not limited to:
1. Click by itself
Repeat manual search, click by itself, incite others to search or click.
2. Compel to click
Compel user to click to get resource in return; or pop-up window of search result endlessly.
3. Program click
Simulate user's click through program or script, automatically click and search tool, the third party's click or search (such as paid click, auto- browse, clicker, IP click by agent servicer, fault IP click, mutual click and auto-refresh).
4. Illegal promotion
Promote by irregular means such as virus, compulsory first page, compulsory kidnap address bar, search engine cheating, exaggerate times. 17
5. Breach of exclusivity clause
Breach the exclusivity agreement with Baidu to engage in competing business.
6. Mix of competing business
Amend the pattern of the Union product or competing business to mislead users.
7. Other breach
Other act Baidu thought has damaged or may damage the right of user of Baidu, user experience, Baidu brand or business reputation of Baidu, constitutes unfair competition against Baidu or violates other legal right of Baidu.
[Search Promotion Cooperation]
8. Determine keyword
Determine keyword in search frame or direct link to search result page.
9. Amend search result page
9.1 Edit, amend or filtrate any promotion content or information contained in search result or amend the order by any means, or delete, hide or minimize any promotion content or search result, or add any other content to Baidu search result page of browser through software.
9.2 Re-direct the final user from any promotion page or search result page to others, or the promotion page or search result page provided is not the same version with that got by final user through directly visited.
9.3 Beyond the range permitted by this standard, directly or indirectly visit, launch and/or start promotion content or search result through any software, other website or any form other than member website, or combine promotion content or search result into it by other means.
9.4 Store or cache any or part of, copy of, derivative of information of search result through "capture", "spider", index or any other non-temporary ways. 18
10. Directly use of search result
Directly use any webpage of search result of final user through frame linked or other ways.
11. Breach of release page
11.1 Present business code on any wrong page, register page or "thanks" page (such as thanks page after user registers on relevant website) or any email, or any webpage or website with any pornographic content, hate mongering content or violence content.
11.2 Release code in non-configured domain name.
12. Induce to click
12.1 Introduce the search result with word such as "excellent recommendation", "relevant link" or "welcome to click".
12.2 Put graph of arrow, download instruction or other leading graph to the search result.
12.3 Award user's click.
13. Breach of release number
Release more than three search frames per page.
14. Flow kidnap
14.1 Falsify the charge index by software, plug-in or other ways, kidnap Baidu, hao123 and other Union member's flow.
14.2 Falsify other Union member's first page through any promotion way damaging user experience and other unfair competition. 19
14.3 Amend the first page of Baidu (www.baidu.com) or hao123 (www.hao123.com) set by user in any ways.
14.4 Amend the page of Baidu or hao123 in any ways.
15. Breach of binding with Baidu software
Binding with Baidu software without any indication, install compulsory; add functions other than that of Baidu software or delete original function, re-bind other software without any indication, misleading the act of other software as that of Baidu; set obstacle for user installed Baidu software through member website to uninstall.
[Union Promotion Cooperation]
16. Determine keyword
Stack keywords in webpage content, source code to affect normal theme matching.
17. Amend promotion content
17.1 Re-direct the promotion page clicked by user to others, which is not the same with that got by final user through directly visited.
17.2 Store or cache any part of, copy of, derivative of promotion content through "capture", "spider", index or any other non-temporary ways.
18. Breach of release page
18.1 Present promotion content on any wrong page, register page or "thanks" page (such as thanks page after user registers on relevant website) or any email, or popup window, or webpage or website with any pornographic content, hate mongering content or violence content.
18.2 Release theme promotion business on rubbish page with no essence for the purpose of presenting theme.
18.3 Release promotion content in non-configured domain name or software. 20
19. Induce to click
19.1 Introduce the promotion content with word such as "excellent recommendation", "relevant link" or "welcome to click".
19.2 Put graph of arrow, download instruction or other or misleading graph to the promotion content.
19.3 Award user's click of promotion content.
19.4 Promotion content is too close to the text or click zone (such as turn-page button, navigation button, video window and etc.) causing void click (recommending not to put the promotion content above or below the turn-page button).
19.5 Pretend the promotion content as the text of page which mix the promotion content with page content.
19.6 Hide or auto-block the window through js or other ways, causing user's failure to see the promotion after click.
19.7 Release code of special zone besides "patch promotion", amend code without authorization or patch through special ways.
19.8 Cover, hide any part of theme promotion zone or overlap page content with promotion content.
19.9 Float the promotion content or present in other ways.
20. Breach of release number
20.1 Release more than three product codes of "theme description" and "theme link" accumulatively per page. (not include the "patch promotion")
20.2 Release more than one code of "theme suspension" per page besides "theme description" and "theme link", release more than one form of "theme suspension" (side bar/button/window) per page.
20.3 Release more than one code of "patch promotion" per playing window, several playing windows on one webpage, more than three codes of "patch promotion" available. 21
21. Breach of using iframe
Use through amending code or other ways without authorization.
21.1 Use Union's "theme suspension" product through iframe.
21.2 Use "theme description", "theme link" and "patch promotion" product through iframe in illegal ways:
21.2.1 Release code of Union promotion business to more than two (including) layers of iframe;
21.2.2 Use more than two (include) business codes through iframe for one time;
21.2.3 Inset more than one iframe unit in one page;
21.2.4 Module presented by iframe is smaller than that used through iframe;
21.2.5 Present promotion content on charged website through non-charged website iframe.
[New Business Cooperation]
22. Breach of release page
Present promotion content on any wrong page, register page or "thanks" page (such as thanks page after user registers on relevant website) or any email, or webpage or website with any pornographic content, hate mongering content or violence content.
23. Induce
23.1 Introduce the cooperation promotion content with word such as "excellent recommendation", "relevant link" or "welcome to click". 22
23.2 Put graph of arrow, download instruction or other leading graph to the cooperation promotion content.
23.3 Put pornographic picture close to cooperation promotion content.
23.4 Award use's install, register, purchase and other act.
23.5 Simulate official website of cooperation promotion client.
24. Breach of release number
Present or release more than three cooperation promotion units per page.
25. Self-lead
Repeat manual install, register, purchase and etc., incite others to install, register, purchase and etc.
If any Union member does any illegal act above, Baidu has the power to punish. Baidu's data for investigating and punishing the Union member's illegal act shall prevail, including but not limited to void click data and flow kidnap data.
Appendix: Process method
Baidu may take one or more measures as follows to process the illegal act:
1. Deduct credit index
2. Deduct accumulated credit
3. Deduct share of revenues
4. Block illegal business
5. Stop sub-account authority
6. Limit register information
7. Expose illegal case 23
Baidu has the right of final explanation for this Business Cooperation Standard of Baidu Union. Baidu may update this Business Cooperation Standard of Baidu Union from time to time and all Baidu Union members are urged to pay continued attention to relevant content to learn and timely comply with the latest regulation. 24
Annex 4
Rules of "Blue Sky 365" Plan
Honesty is the basis for long-standing business. We could only make more profit, grow faster with stronger cooperation based on honesty.
Honesty is not only a promise but also an act. Hereby, Baidu Alliance, together with partner, build an alliance circle of honesty and health, a cooperation environment of self-discipline, fairness and honesty and comply with rules as follows strictly:
1. Agree that honesty is the base of alliance development;
2. Cooperate in line with the Business Cooperation Standard of Baidu Alliance strictly;
3. Dose not launch or engage in any illegal act such as click fraud, flow kidnap;
4. Report the illegal information actively and protect honesty;
5. Accept supervision and willing to undertake liability and result of illegal act.
The rules above shall be reflected every day. Let us build the "Blue Sky 365" of alliance circle together. 25 [/INST] ```json
{<answer_start>
"answer": "In addition, Party A shall not use the functions and information provided by Party B to carry out any commercial activities."
<answer_end>
}
``` </s> | Exhibit 10.43
This is a translation of the original Chinese text
Contract No.: 151315UD0081
Cooperation Agreement
Party A: Beike Internet (Beijing) Security Technology Co., Ltd.
Party B: Baidu Online Network Technology (Beijing) Co., Ltd.
April 2013 1
This Cooperation Agreement is executed by and between the parties below in Haidian District, Beijing, the People's Republic of China (hereinafter referred to as "PRC"):
Party A: Beike Internet Security Technology Co., Ltd.
Address: Room 2101, 12/F, Fuxing International Center, No.237, North Chaoyang Road, Chaoyang District, Beijing.
Attention:
Tel:
E-mail:
Postcode:
Bank account:
Account No.:
Party B: Baidu Online Network Technology (Beijing) Co., Ltd.
Address: No.10, Shangdi Shi Jie, Haidian District, Beijing
Attention:
Tel:
E-mail:
Postcode:
Whereas,
1. Party A owns the Kingsoft internet site navigation website and the Cheetah Brower software (hereinafter referred to as Party A's Product). Website: 123.duba.net and www.duba.com. Party A has opened an account with Baidu Union website (http://union.baidu.com) and the account name is (translation: "Kingsoft Cheetah") and ksbrowser and is willing to comply with the terms of Baidu Union Membership Registration Agreement (http://union.baidu.com/regAgreement.html).
2. Party B is a leading network technology company in the field of search engine.
3. The parties wish to collaborate with each other leveraging their respective strengths.
Therefore, the parties agree: 2
Chapter 1 Definitions and Interpretations
1.1 Definitions
Except as otherwise defined in the context hereof, the terms shall have the following designated meanings:
1.1.1 PRC Laws: means any present and future promulgated laws, regulations, decrees and binding policies in PRC.
1.1.2 Trade Secrets: means any technology, financial, business or any other information owned by either party and / or its subsidiary oraffiliate and protected as trade secrets.
1.1.3 Effective Date: means the date on which this agreement is executed.
1.1.4 Force Majeure: means any event which is not reasonably controllable, foreseeable or avoidable even if foreseeable by the parties, which makes it impossible for either party to perform the whole or part of its obligations pursuant to this Agreement. Such event includes without limitation governmental actions, earthquakes, typhoon, flood, fire or any other natural disaster, wars or any other similar event. In respect of the special nature of the internet, Force Majeure also includes the following events which influence the normal operation of the internet: 1) hacker attacks; 2) material influence of the technical adjustments of the telecommunications department except for losses of one party resulting from its own mismanagement; 3) temporary suspension caused by governmental control, except for the governmental control on one party resulting from its own misconduct; 4) virus attacks.
1.1.5 Baidu website: means www.baidu.com.
1.1.6 Cooperation Term: means the term set forth in Chapter 3 hereof.
1.1.7 Actual revenues: means the revenues payable by Party B to Party A based on the amount of search traffic generated by Party A's website for Party B, less Party B's related costs and legal taxes and charges. The search traffic generated by Party A for Party B, which forms the basis for calculating the actual revenues, shall be determined by Party B based on its statistical data.
1.2 Interpretations
1.2.1 The date hereof shall mean the calendar day, the business day hereof shall mean the work day other than public holidays in PRC, and the month hereof shall mean the calendar month. 3
1.2.2 The headings hereof is for inference only and shall not otherwise affect the meaning and construction of any other part of this Agreement.
1.2.3 If needed in the context, use of plurals shall include its singulars, and vice versa.
1.2.4 All references to chapters, provisions and paragraphs shall mean the chapters, provisions and paragraphs herein.
Chapter 2 Representations and Warranties
2.1 Legal Status
Either party represents and warrants from the date hereof:
2.1.1 It has the qualification to conduct the transaction hereunder and such transaction is in compliance with the business scope;
2.1.2 It is eligible to enter into this Agreement and perform the obligations hereunder.
2.1.3 Its authorized representative has adequate authorization to execute this Agreement on its behalf (a copy of the authorization letter shall be delivered to the other party for record).
2.1.4 To its knowledge, it has disclosed all documents which may have a material adverse impact on its performance of obligations hereunder which are issued by the governmental agencies in the registered place or business place and known to it; and it is not the subject of any insolvency, dissolution or bankruptcy procedures.
2.2 Legal Effect
2.2.1 From the Effective Date, this Agreement is legally binding on each party.
2.2.2 Either Party warrants that the execution and performance hereof as well as the business transactions contemplated hereof will not violate any PRC Laws in any respects.
Chapter 3 Cooperation Term
3.1 Cooperation Term
The Cooperation Term of the parties shall be two years from May 1, 2013 to April 30, 2015. One month prior to the expiry of the Cooperation Term, the parties may further negotiate the cooperation forms, if fails, this Agreement will be terminated upon expiry.
3.1.1 This Agreement is effective on the day of May 1, 2013 and the effective term is the same as the Cooperation Term. The contracts of which the Parry A contract No. are KIS-Y-BJ120195 and KIS-Y-BJ120196 (Party B contract No. are 151215UD0118, 151215UD0119) are terminated on April 30, 2013. 4
Chapter 4 Liabilities of the Parties
4.1 Details of Cooperation
The parties use their respective strengths to cooperate on internet searches, and during the effective Cooperation Term, the parties are collaborative partners. The parties have complementary advantages in the aspects of information usage, promotion, marketing, technical support and services, and now form a strategic alliance to develop their respective businesses.
4.2 Party A's Obligations
4.2.1 Party A imports the search results provided by Party B to the search function in the Party A's Product by connecting its Product to the technical port provided by Party B. Party A shall also cooperate with Party B to market Baidu promotion services through the use of search engine. In other words, it is a technical service in which Party B displays the website of Party B's clients on the relevant page of Baidu website and/or on the pages and / or interfaces of any other Baidu union members.
4.2.2 Party A will display Party B's "search engine box" in the first screen of the homepage of "Kingsoft Navigation" website, and imports the search results provided by Party B to the search function in the Party A's Product by connecting its Product to the technical port provided by Party B. Party A shall also cooperate with Party B to market Baidu promotion services through the use of search engine. In other words, it is a technical service in which Party B displays the website of Party B's clients on the relevant page of Baidu website and/or on the pages and/or interfaces of any other Baidu union members. The form of "search engine box" is attached as Annex 2. Without Party B's confirmation in writing or via email, Party A shall not change the form, or otherwise Party A will be deemed to breach this Agreement.
4.2.3 Party A shall not put the Party B's search engine service on any other website, or change the codes which are used to import the search engine service of Party B. Party A's website(s) that correspond to Party B's codes are set forth in Annex 2. If Party A needs to add any website(s) or change the codes, it shall obtain the confirmation from Party B in writing or via email, or otherwise Party A will be deemed to breach this Agreement.
4.2.4 When Party A promotes websites by means of software installation, Party A needs to determine the homepage of the software users' browsers. In the event that the homepage of the software users' browsers is *.baidu.com or *.hao123.com, Party A shall not change the homepage of the users' browsers by means of the software being installed. 5
4.2.5 During the cooperation between the parties, Party A agrees not to enter into any form of cooperation with Qihoo 360, unless PartyA needs such cooperation with Qihoo 360 for business or technology and Party B has provided its prior consent.
4.2.6 Party A covenants that during the Cooperation Term, it will list Party B's search engine service as one of its search engine services, of which "Cheetah Browser" will list Party B's search engine service as the default search engine service. In the event that Party A breaches this covenant, Party B shall have the right to terminate this Agreement at any time and shall not pay any share of profits to Party A.
4.2.7 During the cooperation, Party A shall form a team composed of specialized personnel to carry out the related work so as to ensurethe smooth cooperation between the parties.
4.2.8 Party A shall not change the related functions and contents inherent to Party B's search engine box. If a change is necessray,consent shall first be obtained from Party B.
4.2.9 Party A shall not assign to any third party the functions and contents used in the website column(s) that are made the subject matter of this cooperation agreement. In addition, Party A shall not use the functions and information provided by Party B to carry out any commercial activities.
4.2.10 Party A undertakes to comply with the Business Cooperation Standard of Baidu Union published in http://union.baidu.com/regAgreement.html (see Annex 3), or otherwise Party A will be deemed to breach this Agreement. Party A also agrees to participate in the "Blue Sky 365" Action Plan and comply with Blue Sky 365 Action Plan Regulations (see Annex 4).
4.2.11 Party A warrants that it legally owns or otherwise holds the valid license to the intellectual property relating to the services or products provided pursuant to this agreement. Any disputes resulting from the Party A's technology or intellectual property shall be handled by Party A; any losses and costs of Party B resulting from the deficiency of Party A's services or products shall be borne by Party A. Party B has the discretion to terminate this Agreement from time to time in the event that (i) Party A has no legal right in respect of the services or products provided or, (ii) the services or products provided by Party A lead to any legal dispute or proceedings with third parties. 6
4.3 Party B's Obligations
4.3.1 Upon the effectiveness of this Agreement, Party B shall form a team composed of specialized personnel to carry out for the relatedwork so as to ensure the smooth cooperation between the parties.
4.3.2 Party B shall not publish any contents other than agreed hereof in the Party A's website column(s) that are made the subject matter of this cooperation agreement. In the event that Party B breaches this covenant, Party A has the right to terminate this Agreement at any time and require Party B to pay 30% of Party A's share of revenues as liquidated damages.
4.3.3 Party B will provide to Party A an account which will timely return the visiting traffic data for Party A's easy inquiry. At the same time, Party B ensures the completion, accuracy and truth of the visiting traffic data. If Party A finds the visiting traffic data abnormal, Party B shall issue a written explanation, and the actual revenues generated from the questionable traffic shall not be settled until there was a final confirmation.
4.3.4 Party B warrants that it legally owns or otherwise holds a valid license to the intellectual property relating to the services or products provided pursuant to this agreement. Any disputes resulting from the Party B's technology or intellectual property shall be handled by Party B; any losses and costs of Party A resulting from the deficiency of Party B's services or products shall be borne by Party B.
4.3.5 Party B has the right to penalize any acts of Party A , in whatever form, carried out in contravention with Party B's union cooperation policies. The penalties may include =the immediate suspension of Party A's account, termination of this Agreement, and taking any applicable civil or criminal remedial actions against fraud and any other legal causes. Party B shall have the right to final interpretation of this provision.
4.3.6 Party B retains the right to adjust the public price of the service and the service content, including but not limited to adding or reducing the service items, and raising or lowering the prices. In the event that Party B wishes to carry on such adjustment, it shall notify Party A in writing two weeks in advance. If Party A objects to such adjustment, it has the right to notify Party B to terminate this Agreement in writing within 2 weeks upon receipt of the notification. Within 3 working days upon termination of this Agreement, Party B shall settle with Party A. Failure to exercise such termination right is deemed that Party A agrees the adjustment of Party B.
4.3.7 With respect to the cooperation hereof, Party B has the discretion to assign to its affiliates all or part of its obligations hereunder without breaching this agreement. Party B's affiliates mean Party B's parent companies at different levels as well as the companies, owned or controlled, directly or indirectly, by the Party B's parent companies at different levels. 7
4.4 Exemption of Liabilities With Respect to the Search Engine (by Party B)
See Annex 1. The Parties agree that the exemption of liabilities in the annex is applicable to the transactions hereunder. Within the scope of exemption clause, Party B and its affiliates are not liable for any compensation or any other liabilities.
Chapter 5 Information Content Cooperation
5.1 The parties shall arrange an employee to be responsible for the coordination work so as to ensure the regular update and maintenance.
5.2 Fees
5.2.1 The parties will not charge each other any fees for the shared information content. Unless otherwise agreed hereof, the feesincurred shall be borne by each party respectively.
5.2.2 The Actual Revenues of the parties arising from the Baidu promotion services in the search results pages shall be dividedproportionately, and Party A shall bear the taxes payable on its own share of revenues:
(1) The address bar, search bar, homepage/blank page of Cheetah Browser shall use Baidu Search as default search engineservice;
(2) The default traffic shall mean the default traffic of the website address site and the traffic of the Cheetah Browser;
(3) The monthly average daily non-default traffic shall not exceed the default traffic. If it does, then the traffic in excess willnot form part of the basis for calculating the share of revenues;
(4) If the default traffic is lower than ***, the share of revenues for the non-default traffic is ***%, and the share of revenuesfor the default traffic is ***%;
(5) If the default traffic is more than ***, the share of revenues for the non-default traffic is ***%, and the share of revenuesfor the default traffic is ***%;
(6) If the default traffic is more than ***, the share of revenues for the non-default traffic is ***%, and the share of revenuesfor the default traffic is ***%; 8
(7) If the default traffic is more than ***, the share of revenues for the non-default traffic is ***%, and the share of revenuesfor the default traffic is ***%;
(8) If the default traffic is more than ***, the share of revenues for the non-default traffic is ***%, and the share of revenuesfor the default traffic is ***%; and
(9) If the default traffic is more than ***, the share of revenues for the non-default traffic is ***%, and the share of revenuesfor the default traffic is ***%.
If Party A objects to the Party B's revenue-sharing policy, it may terminate this Agreement. In the event that Party A continues to receive its share of revenues, it shall be deemed that Party A agrees with Party B's revenue-sharing. Party A shall bear the taxes payable on its own share of revenues.
5.2.3 Party B confirms the share of revenues of the preceding month payable to Party A on the first day of each calendar month (hereinafter referred to as (the "Reference Date," and postponed in the event of public holidays) according to the above Article 5.2.2. Upon the confirmation of the share of revenues of such month, it shall not be adjusted, unless there is sufficient proof evidencing the statistics is not correct.
5.2.4 The financial settlement between the parties will be carried out monthly.
Party A provides the invoice of the share of revenues in the preceding month within the first 5 working days in each month in advance, Party B warrants to pay the share of revenues to Party A prior to the 20t h day of each month (postponed in the event of public holidays) according to Article 4.1 hereof. In the event that Party A objects the payment from Party B, it shall propose within the first 5 working days in each month in writing, or it will be deemed as no objection. Party B shall review within three working days upon receipt of Party A's written objection and notify the results thereof to Party A.
5.2.5 After the effectiveness of this Agreement, in the event that the share of revenues payable to Party A in the preceding month is less than RMB 100, then it will be carried forward to the next month automatically and settled together according to the preceding provisions.
Chapter 6 License
6.1 The search results provided by Party B and the intellectual property of any related technology shall be owned by Party B, without authorization, Party A shall not amend, deduct, split or reverse Party B's technologies and programs. Party A shall not obtain the source codes of the programs of Party B with any methods. Without authorization, Party A shall not apply the service provided by Party B for other usage.
6.2 "baidu" and are all registered trademarks of Party B. During the cooperation, if Party A has to use Party B's trademarks, it shall obtain Party B's prior written consent. Nevertheless, if this Agreement is terminated or either party rescinds this Agreement, Party A shall no longer use "baidu", and any other registered trademarks of Party B in its product page and promotions of all kinds. 9
Chapter 7 Confidentiality
7.1 Any and all information acquired by the parties and their employees due to the execution or performance of this Agreement, including without limitation the scientific, business or internal information relating to technology, finance, marketing or management shall be the confidential information of the parties and their proprietary properties.
7.2 The parties mutually covenant that they will keep each other's confidential information in strict confidence, and will use only for the purpose of this Agreement, shall not use or permit others to use the confidential information or disclose such to any third parties except the following events:
7.2.1 Upon the written consent of the other party;
7.2.2 As according to the orders or requirements of the competent courts, any governmental agencies or administrative agencies;
7.2.3 Such information becomes known to the public not for any deliberation, recklessness or negligence of either party or its agents,officers or employees;
7.3 The parties are obliged to disclose the confidential information only to the employees necessary to know it and instruct such employees to be responsible for the confidential liability hereunder and be liable to the violation of the confidential liability of the employees.
Chapter 8 Breach
8.1 General Breach
In the event either party breaches its obligations hereunder, the breach party shall immediately suspend its breach upon the receipt of the non-breach party's written notice requiring it to rectify its breach, and pay all the losses to the non-breaching party arising from such breach within ten (10) days. If the breach party continue to carry on the breaching conduct or does not perform its obligations, the non- breaching party shall have the right to terminate this Agreement in addition to the compensation for the breach. 10
8.2 Breach Liabilities
If fault on both parties, they shall bear their respective liabilities according to their actual degree of fault.
Chapter 9 Termination
9.1 Termination Events
This Agreement will be terminated upon any of the following events:
9.1.1 The Cooperation Term is expired and the parties determine not to renew;
9.1.2 The non-breaching party terminates this Agreement according to Article 8.1 hereof;
9.1.3 Either party is under bankruptcy or enters into liquidation or dissolution procedures;
9.1.4 If the Force Majeure lasts consecutively for thirty (30) days and above, either party may terminate this Agreement by awritten notice according to Article 11.7 and terminate this Agreement on the receipt date as defined herein.
9.2 Matters after the Termination
9.2.1 Within fifteen (15) days upon the termination of this Agreement, the parties shall delete the links between their websites.
9.2.2 The termination of this Agreement shall not affect the unsettled payment hereunder or either party's payment obligation andother obligations or rights incurred before the termination.
9.2.3 Notwithstanding the termination of this Agreement, the obligations set forth in Chapter 7 and Chapter 10 are binding to bothparties.
Chapter 10 Governing Laws and Dispute Resolution
10.1 Governing Laws
The execution, validity, construction, enforcement and the settlement of any disputes herefrom shall be governed by PRC Laws.
10.2 Negotiation and Proceedings
10.2.1 Any dispute arising from the construction and enforcement of this Agreement shall be settled through friendly consultation ormediation by a neutral third party first.
10.2.2 If the dispute fails to be resolved within thirty (30) days by such method set forth above, either party shall submit to the court inthe location of Party B. 11
Chapter 11 Miscellaneous
11.1 Waiver
If either party fails to exercise or timely exercise its rights, power or preemptive rights hereunder, it shall not be deemed as a waiver; otherwise, any individual exercise or partially exercise any of its rights, power or preemptive rights shall not prejudice its exercise of such rights, power or preemptive rights thereafter.
11.2 Amendment
This Agreement may only be amended by mutual written agreement by the parties.
11.3 Marketing Supports
On the basis of the parties' acknowledgment, the parties will make and carry on necessary marketing measures to expand the reputation and influence of the parties cooperation.
11.4 Entire Agreement
This Agreement constitutes the entire agreement between the parties and supersedes all previous discussions, negotiations and agreements.
11.5 Notice
11.5.1 Any material notices or written letters between the parties shall be in Chinese and delivered by facsimile, in person(includingcourier) or by registered mail.
11.5.2 All the notices and letters shall be sent to the address in the preamble hereof unless otherwise notified in writing in advance;
11.5.3 If the notices and letters are sent by facsimile, then the delivery time shall be subject to the actual time displayed in the facsimile record, except that the sending time is after 17:00 pm of such date, or the time of the receiver's location is not a Business Day, then the delivery time shall be the following Business Day of the receiver's time; if sent via e-mail, the delivery time shall be subject to the time when the email enters into the email system designated by the receiver; if sent in person (including courier), it shall be subject to date the receiver's signing for receipt; if sent by registered letter, it shall be subject to the receipt issued by the post office and five (5) Business Days from the date of sending. 12
11.6 Successor
This Agreement is made for the benefit of and equally binding upon the parties and their respective successors and assignees.
11.7 Force Majeure
11.7.1 In the event of Force Majeure, the affected party shall notify the other party in respect of the nature, incurring date, anticipated lasting time and related details as fastest as reasonably possible and the degree of such event hindering the performance of its obligations of the notifying party hereunder.
11.7.2 During the consecutive period of the Force Majeure, the affected party shall regularly and timely keep the other party informed of the current status of the Force Majeure, in the event that the Force Majeure ends, it shall notify the other party in writing timely and continue to perform the obligations hereunder.
11.7.3 The party affected by the Force Majeure may temporarily suspend the performance hereunder until the influence of the Force Majeure is removed after it performs its obligations pursuant to Item 1 and 2 of this Article and need not to bear any breach liabilities; however, it shall use best efforts to conquer such event and minimize its adverse influence.
11.8 Language
This Agreement is made in Chinese and there are two originals which have the same legal effect and each party has one original.
11.9 Unmentioned Matters
Any other matters unmentioned hereof shall be subject to PRC Laws.
11.10 Other Matters
This Agreement is effective from the date of its date of signature and chop, and any other agreement between the parties regarding to matters which are similar to the cooperation contents hereunder shall be terminated automatically. Annexes are integral parts of this Agreement and have the same legal effect as the text hereof. 13
Party A: Beike Internet (Beijing) Security Technology Co., Ltd.
Authorized signatory: /s/ common seal
Title:
Date:
Party B: Baidu Online Network Technology (Beijing) Co., Ltd.
Authorized signatory: /s/ Guolin Ma /s/ common seal
Title:
Date: 14
Annex 1
Search Engine Exemption Clause
1. In addition to service clause indicated by Baidu, Baidu is not responsible for any other accident, negligence, breach, defamation, infringement to copyright or other intellectual property right and the loss occurred thereby (including by virus through download) arising from using search engine and will not undertake any legal liability.
2. Baidu is not responsible for the legality of link and information, product and service obtained from webpages through search engine which are searched automatically in accordance with users' search order, and will not undertake any legal liability.
3. All content of search engine does not represent Baidu's opinion.
4. User shall undertake the risk of using search engine by itself and Baidu will not guarantee in any form, including the result meeting users' requirement, service continuity, safety, accuracy, timeliness and legality of search result. Baidu will not undertake any legal liability for user's failure to normally use Baidu for technology reason such as internet status, communication line and etc.
5. Baidu respects and protects all search service users' personal privacy and their personal information such as registered user name and email address, etc., which will not be disclosed to the third party without user's consent or compulsorily required by law. The keywords used by users in search engine will not be regarded as personal privacy information.
6. Any website shall report to service website or Baidu, or add refusal mark to the webpage in accordance with the Robots Exclusion Protocol, if it does not want to be included by Baidu, otherwise it will be deemed as willing to be included.
7. Any unit or person shall report to Baidu or service website in written timely and provide ID card, ownership certificate and detailed violation evidence if it considers the content through Baidu search service or search link may be suspected of violating its legal right. Baidu will remove such suspected search service or search link as soon as possible after its receipt of legal documents above. 15
Annex 2
1. Display Format
2. Table of Fee-charging Code and Corresponding Website Fee-charging item Channel Display location Search box on the first page 16
Annex 3
Business Cooperation Standard of Baidu Union
In order to standardize the business cooperation of Baidu Union (hereinafter "Union") and maintain the fair and honest order, it is provided for the business cooperation of Union as follows and member of the Union shall comply with this standard strictly to maintain the smooth and healthy development of business cooperation.
[General Rules]
All act which may damage the right of user of Baidu promotion, damage user experience, disturb market cooperation order of the Union, adversely affect Baidu product and business reputation of Baidu, constitute unfair competition against Baidu or violate legal right of Baidu are forbidden by the Union, including but not limited to:
1. Click by itself
Repeat manual search, click by itself, incite others to search or click.
2. Compel to click
Compel user to click to get resource in return; or pop-up window of search result endlessly.
3. Program click
Simulate user's click through program or script, automatically click and search tool, the third party's click or search (such as paid click, auto- browse, clicker, IP click by agent servicer, fault IP click, mutual click and auto-refresh).
4. Illegal promotion
Promote by irregular means such as virus, compulsory first page, compulsory kidnap address bar, search engine cheating, exaggerate times. 17
5. Breach of exclusivity clause
Breach the exclusivity agreement with Baidu to engage in competing business.
6. Mix of competing business
Amend the pattern of the Union product or competing business to mislead users.
7. Other breach
Other act Baidu thought has damaged or may damage the right of user of Baidu, user experience, Baidu brand or business reputation of Baidu, constitutes unfair competition against Baidu or violates other legal right of Baidu.
[Search Promotion Cooperation]
8. Determine keyword
Determine keyword in search frame or direct link to search result page.
9. Amend search result page
9.1 Edit, amend or filtrate any promotion content or information contained in search result or amend the order by any means, or delete, hide or minimize any promotion content or search result, or add any other content to Baidu search result page of browser through software.
9.2 Re-direct the final user from any promotion page or search result page to others, or the promotion page or search result page provided is not the same version with that got by final user through directly visited.
9.3 Beyond the range permitted by this standard, directly or indirectly visit, launch and/or start promotion content or search result through any software, other website or any form other than member website, or combine promotion content or search result into it by other means.
9.4 Store or cache any or part of, copy of, derivative of information of search result through "capture", "spider", index or any other non-temporary ways. 18
10. Directly use of search result
Directly use any webpage of search result of final user through frame linked or other ways.
11. Breach of release page
11.1 Present business code on any wrong page, register page or "thanks" page (such as thanks page after user registers on relevant website) or any email, or any webpage or website with any pornographic content, hate mongering content or violence content.
11.2 Release code in non-configured domain name.
12. Induce to click
12.1 Introduce the search result with word such as "excellent recommendation", "relevant link" or "welcome to click".
12.2 Put graph of arrow, download instruction or other leading graph to the search result.
12.3 Award user's click.
13. Breach of release number
Release more than three search frames per page.
14. Flow kidnap
14.1 Falsify the charge index by software, plug-in or other ways, kidnap Baidu, hao123 and other Union member's flow.
14.2 Falsify other Union member's first page through any promotion way damaging user experience and other unfair competition. 19
14.3 Amend the first page of Baidu (www.baidu.com) or hao123 (www.hao123.com) set by user in any ways.
14.4 Amend the page of Baidu or hao123 in any ways.
15. Breach of binding with Baidu software
Binding with Baidu software without any indication, install compulsory; add functions other than that of Baidu software or delete original function, re-bind other software without any indication, misleading the act of other software as that of Baidu; set obstacle for user installed Baidu software through member website to uninstall.
[Union Promotion Cooperation]
16. Determine keyword
Stack keywords in webpage content, source code to affect normal theme matching.
17. Amend promotion content
17.1 Re-direct the promotion page clicked by user to others, which is not the same with that got by final user through directly visited.
17.2 Store or cache any part of, copy of, derivative of promotion content through "capture", "spider", index or any other non-temporary ways.
18. Breach of release page
18.1 Present promotion content on any wrong page, register page or "thanks" page (such as thanks page after user registers on relevant website) or any email, or popup window, or webpage or website with any pornographic content, hate mongering content or violence content.
18.2 Release theme promotion business on rubbish page with no essence for the purpose of presenting theme.
18.3 Release promotion content in non-configured domain name or software. 20
19. Induce to click
19.1 Introduce the promotion content with word such as "excellent recommendation", "relevant link" or "welcome to click".
19.2 Put graph of arrow, download instruction or other or misleading graph to the promotion content.
19.3 Award user's click of promotion content.
19.4 Promotion content is too close to the text or click zone (such as turn-page button, navigation button, video window and etc.) causing void click (recommending not to put the promotion content above or below the turn-page button).
19.5 Pretend the promotion content as the text of page which mix the promotion content with page content.
19.6 Hide or auto-block the window through js or other ways, causing user's failure to see the promotion after click.
19.7 Release code of special zone besides "patch promotion", amend code without authorization or patch through special ways.
19.8 Cover, hide any part of theme promotion zone or overlap page content with promotion content.
19.9 Float the promotion content or present in other ways.
20. Breach of release number
20.1 Release more than three product codes of "theme description" and "theme link" accumulatively per page. (not include the "patch promotion")
20.2 Release more than one code of "theme suspension" per page besides "theme description" and "theme link", release more than one form of "theme suspension" (side bar/button/window) per page.
20.3 Release more than one code of "patch promotion" per playing window, several playing windows on one webpage, more than three codes of "patch promotion" available. 21
21. Breach of using iframe
Use through amending code or other ways without authorization.
21.1 Use Union's "theme suspension" product through iframe.
21.2 Use "theme description", "theme link" and "patch promotion" product through iframe in illegal ways:
21.2.1 Release code of Union promotion business to more than two (including) layers of iframe;
21.2.2 Use more than two (include) business codes through iframe for one time;
21.2.3 Inset more than one iframe unit in one page;
21.2.4 Module presented by iframe is smaller than that used through iframe;
21.2.5 Present promotion content on charged website through non-charged website iframe.
[New Business Cooperation]
22. Breach of release page
Present promotion content on any wrong page, register page or "thanks" page (such as thanks page after user registers on relevant website) or any email, or webpage or website with any pornographic content, hate mongering content or violence content.
23. Induce
23.1 Introduce the cooperation promotion content with word such as "excellent recommendation", "relevant link" or "welcome to click". 22
23.2 Put graph of arrow, download instruction or other leading graph to the cooperation promotion content.
23.3 Put pornographic picture close to cooperation promotion content.
23.4 Award use's install, register, purchase and other act.
23.5 Simulate official website of cooperation promotion client.
24. Breach of release number
Present or release more than three cooperation promotion units per page.
25. Self-lead
Repeat manual install, register, purchase and etc., incite others to install, register, purchase and etc.
If any Union member does any illegal act above, Baidu has the power to punish. Baidu's data for investigating and punishing the Union member's illegal act shall prevail, including but not limited to void click data and flow kidnap data.
Appendix: Process method
Baidu may take one or more measures as follows to process the illegal act:
1. Deduct credit index
2. Deduct accumulated credit
3. Deduct share of revenues
4. Block illegal business
5. Stop sub-account authority
6. Limit register information
7. Expose illegal case 23
Baidu has the right of final explanation for this Business Cooperation Standard of Baidu Union. Baidu may update this Business Cooperation Standard of Baidu Union from time to time and all Baidu Union members are urged to pay continued attention to relevant content to learn and timely comply with the latest regulation. 24
Annex 4
Rules of "Blue Sky 365" Plan
Honesty is the basis for long-standing business. We could only make more profit, grow faster with stronger cooperation based on honesty.
Honesty is not only a promise but also an act. Hereby, Baidu Alliance, together with partner, build an alliance circle of honesty and health, a cooperation environment of self-discipline, fairness and honesty and comply with rules as follows strictly:
1. Agree that honesty is the base of alliance development;
2. Cooperate in line with the Business Cooperation Standard of Baidu Alliance strictly;
3. Dose not launch or engage in any illegal act such as click fraud, flow kidnap;
4. Report the illegal information actively and protect honesty;
5. Accept supervision and willing to undertake liability and result of illegal act.
The rules above shall be reflected every day. Let us build the "Blue Sky 365" of alliance circle together. 25 | Highlight the parts (if any) of this contract related to "License Grant" that should be reviewed by a lawyer. Details: Does the contract contain a license granted by one party to its counterparty? | {
"answer_start": [
9606
],
"text": [
"In addition, Party A shall not use the functions and information provided by Party B to carry out any commercial activities."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Third Party Beneficiary" that should be reviewed by a lawyer. Details: Is there a non-contracting party who is a beneficiary to some or all of the clauses in the contract and therefore can enforce its rights against a contracting party?
Context: RECIPE DEVELOPMENT AGREEMENT This Recipe Development Agreement (this "Agreement") is made between Reed's, Inc., a Delaware corporation ("Reed's") and B C Marketing Concepts Inc., dba Full Sail Brewing Company, an Oregon corporation ("Company"), effective as of October 11, 2019 (the "Effective Date"). RECITALS Company is engaged in the business of developing recipes for and manufacturing alcohol beverage products. Reed's is engaged in the business of developing recipes for ginger-based non- alcohol beverage products. Reed's desires to engage Company, and Company desires to be engaged, to participate and assist in the development of formulas for ginger-based flavored alcohol beverage products for Reed's (the "Products") as identified in Exhibit A. AGREEMENT The parties agree as follows: 1. Definitions. Unless otherwise defined in this Agreement, words with initial capitalized letters shall have the meanings assigned to such words in this Section 1: (a) "Applicable Laws and Regulations" shall mean any law, statute, rule, regulation, ordinance or other binding pronouncements of any duly authorized court, tribunal, arbitrator, agency, commission, official or other instrumentality of any federal, state, province, county, city or other political subdivision (domestic or foreign) having the effect of law in the United States, any foreign country or territory or any domestic or foreign state, province, county, city or other political subdivision applicable to the Company or its business. (b) "Company Intellectual Property" means all Intellectual Property that: (i) was owned or developed by Company prior to the execution of this Agreement; and (ii) is or was independently developed or acquired by Company without contribution or assistance from Reed's, Reed's Confidential Information, or Reed's Intellectual Property. Company Intellectual Property includes but is not limited to Company's know-how and independently developed recipes and alcohol beverage production processes, including the Company's proprietary composition of or recipe for the neutral alcohol beverage base that contributes alcohol to the Products ("Neutral Alcohol Beverage Base"). (c) "Deliverables" means (a) any Recipe, (b) documentation, samples, prototypes and other tangible embodiments of or descriptions of Recipes, and (c) any other Intellectual Property created with during the term of this Agreement and required to be disclosed to the Development Committee as contemplated by Section 1(b) hereof. (d) "Intellectual Property" means any and all domestic and international rights in and to: (i) trademarks, service marks, trade dress, logos, trade names and Internet domain names, together with all goodwill associated therewith; (ii) patents, patent disclosures, patentable subject matter, inventions, any improvements thereto and know-how; (iii) copyrights, copyrightable works, derivative works thereof and moral rights; (iv) trade secrets and confidential information; (v) other intellectual proprietary property (of every kind and nature and however designated), whether arising by operation of law, contract, license or otherwise; and (vi) all registrations, applications, renewals, extensions, continuations, continuations-in-part, divisions or reissues of the foregoing now or hereafter in force or hereafter acquired or adopted.
Source: REED'S, INC., 10-Q, 11/13/2019
(e) "Recipe" means the ingredients and methods of combining and processing ingredients for the Products, provided that a Recipe will not include the composition of or recipe for the Neutral Alcohol Beverage Base (it being understood that the amount of Neutral Alcohol Beverage Base and the process for combining and processing it with other ingredients shall be included in the Recipe). (f) "Reed's Intellectual Property" means all Intellectual Property that: (i) was owned or developed by Reed's prior to the execution of this Agreement; (ii) was or is independently developed by Reed's without contribution or assistance from Company or Company's Intellectual Property; and (iii) the Recipe. (g) "Specifications" means the specifications for the Products to be developed by the Development Committee (as defined in Section 3). 2. Consideration. In exchange for Company's contributions and obligations under this Agreement, Reed's grants Company the exclusive right to manufacture, package, promote, sell and distribute the Products (if and to the extent approved by the Development Committee), subject to the terms and conditions of a separate Manufacturing and Distribution Agreement to be entered into by the parties concurrently with this Agreement, as it may be amended, modified, supplemented or restated from time to time (the "Manufacturing and Distribution Agreement"). Company shall be responsible for all costs relating to the development of the Recipes and Deliverables, except for costs and expenses relating to the involvement of Reed's personnel and contractors. 3. Development Committee. Representatives of Company and Reed's, as identified in Exhibit B, shall meet regularly to discuss and approve development milestones for the Products, the Recipes, Deliverables, Specifications and other topics as identified in Exhibit B (the "Development Committee"). The final Recipes, Deliverables and Specifications for the Products must be agreed to in writing by at least one member of the Development Committee from each of Reed's and Company. 4. Rights and Obligations. (a) The parties will collaborate to develop commercial production-ready Products according to the Specifications as may be developed by the Development Committee. Reed's shall have the right to visit the facilities used by Company to develop the Recipes and Deliverables, at such times as may be reasonably agreed to in advance by the parties. Company shall perform the work in connection with this Agreement in a timely, professional and workmanlike manner consistent with industry standards. Each party shall ensure that all persons performing work under this Agreement on its behalf shall have the requisite experience, training, skill and other qualifications needed to develop the Recipes, Deliverables and Specifications. Company shall keep the Development Committee informed of the progress of the development of the Recipes and Deliverables and such other matters as any member of the Development Committee may reasonably request from time to time. 2
Source: REED'S, INC., 10-Q, 11/13/2019
(b) Company shall promptly disclose to the Development Committee any prospective or actual new Intellectual Property related to the Products or Product-specific production processes, whether developed solely by Company or jointly by the Company and Reed's, except with regard to the Neutral Alcohol Beverage Base, and except with regard to the Company's general know-how and independently developed production processes not specifically related to the Products. 5. Representations and Warranties. (a) By Company. Company represents and warrants that (i) Company has obtained all authority, permits, licenses and approvals necessary to enter into and perform its obligations under this Agreement; (ii) the execution and delivery by Company of this Agreement and the performance of its obligations under this Agreement does not and will not violate the terms of any other contract, agreement, obligation or understanding of Company or any Applicable Laws and Regulations; (iii) the Deliverables will conform to the Specifications; and (iv) the Company's Intellectual Property does not infringe or violate the Intellectual Property of any third parties. (b) By Reed's. Reed's represents and warrants that (i) Reed's has obtained all authority and approvals necessary to enter into and perform its obligations under this Agreement; (ii) the execution and delivery by Company of this Agreement and the performance of its obligations under this Agreement does not and will not violate the terms of any other contract, agreement, obligation or understanding of Reed's or any law or regulation applicable to Reed's; and (iii) the Reed's Intellectual Property does not infringe or violate the Intellectual Property of any third parties. 6. Intellectual Property. (a) Ownership of Intellectual Property. (i) Company will create and provide to Reed's the Deliverables. Reed's will exclusively own all Deliverables. Company will and hereby does, without further consideration, irrevocably assign to Reed's any and all worldwide right, title or interest that Company may now or hereafter possess in or to the Deliverables in perpetuity (or the maximum period permitted by Applicable Laws and Regulations) and Reed's accepts such assignment. Company will execute and deliver documents reasonably requested by Reed's to register its Intellectual Property in the Deliverables. (ii) Company acknowledges that all rights of ownership of Reed's Intellectual Property, Deliverables and the goodwill symbolized thereby shall belong exclusively to and inure to the benefit of Reed's. Company shall not at any time acquire any rights, title or interest in Reed's Intellectual Property or Deliverables. Company agrees that it will not at any time contest the ownership or validity of any Reed's Intellectual Property or Deliverables, nor register or attempt to register any rights with respect to Reed's Intellectual Property, nor do anything that would jeopardize or diminish Reed's rights to or the value of Reed's Intellectual Property or Deliverables. (iii) Reed's acknowledges that all rights of ownership of Company's Intellectual Property and the goodwill symbolized thereby shall belong exclusively to and inure to the benefit of Company. Reed's shall not at any time acquire any rights, title or interest in Company's Intellectual Property. Reed's agrees that it will not at any time contest the ownership or validity of any Company Intellectual Property, nor register or attempt to register any rights with respect to Company Intellectual Property, nor do anything that would jeopardize or diminish Company's rights to or the value of Company Intellectual Property. 3
Source: REED'S, INC., 10-Q, 11/13/2019
(b) Work Product. Company acknowledges and agrees that all Intellectual Property created by Company, its affiliates, representatives, or agents in connection with or resulting from any work or services related to the Products, including the Deliverables ("Work Product"), but excluding the Neutral Alcohol Beverage Base and excluding the Company's general know-how and independently developed production processes not specifically related to the Products, have been specially ordered and commissioned by Reed's, are works-made-for-hire from the moment of creation and that all such Work Product is and will be the sole and exclusive property of Reed's. To the extent not a work-for- hire, Company, its employees, subcontractors and agents hereby sell, assign and transfer to Reed's all right, title and interest in and to the Work Product, including without limitation, all rights to Intellectual Property therein. Company agrees on behalf of itself, its employees, subcontractors and agents, not to file for or register any patents, trademarks, or copyrights in or to the Work Product. No rights of any kind in the Work Product are reserved to or by Company or will revert to Company. To the extent permitted by Applicable Laws and Regulations, Company forever waives and agrees never to assert any "moral rights" in any Work Product or any derivative of any Work Product. Company shall, without further compensation, execute and deliver such instruments and take such action as may be requested by Reed's to perfect, protect, enforce or evidence Reed's rights in the Work Product, Products and Deliverables and to carry out the assignments and waivers in this Section 6. (c) Use. Company shall not use the Work Product, Products or Deliverables during the term of this Agreement or after, in perpetuity, for any purpose whatsoever other than performing Company's obligations under this Agreement. The Deliverables shall be considered to be Confidential Information (as defined below) of Reed's. This Section 6 shall survive termination or expiration of this Agreement. 7. Confidentiality. Each of Reed's and Company (a "Receiving Party") shall hold in confidence and not make any commercial or other use of any or all Confidential Information conveyed, acquired or learned from the other party (the "Disclosing Party") at any time, except in association with this Agreement. Except as otherwise expressly permitted herein, Receiving Party shall not disclose such information to third persons without the prior written consent of the Disclosing Party. Receiving Party shall limit access to the Confidential Information to those of its directors, officers, employees, contractors, agents, attorneys and accountants (the "Representatives") with the need to know the same and shall advise such Representatives of, and hold them to, Receiving Party's obligations under the terms of this Section 7. Receiving Party and its Representatives shall be permitted to disclose Confidential Information as required by law, including to any judicial, regulatory, administrative or other governmental body (by interrogatories, investigative demands, requests for information or documents, subpoena, or other similar process), but must (to the extent legally permissible) promptly notify the disclosing party of the existence, terms and circumstances surrounding such requirement and give the disclosing party a reasonable opportunity to obtain a protective order or other appropriate remedy to resist or narrow such disclosure. "Confidential Information" means all information of Disclosing Party that is disclosed orally or in writing by Disclosing Party to Receiving Party that, at the time of disclosure, is designated as confidential (or like designation), is disclosed in circumstances of confidence, would be understood by the parties, exercising reasonable business judgment, to be confidential, or is not generally known to the public, whether of a business, technical, or other nature, and including, without limitation, designs, plans, drawings, know-how, recipes, and marketing and business plans. Upon the expiration or earlier termination of this Agreement, Receiving Party shall return to Disclosing Party all of Disclosing Party's Confidential Information or shall destroy the same at the option of Disclosing Party. The provisions of this Section 7 shall survive termination or expiration of this Agreement. The obligations in this Section 7 regarding trade secrets, in particular, will continue for so long as the information constitutes a trade secret under applicable law. If an unauthorized use or disclosure of a Disclosing Party's Confidential Information occurs, the Receiving Party shall promptly notify the Disclosing Party, and the Disclosing Party may take, at the Receiving Party's expense, all steps which are necessary to recover Confidential Information disclosed or used in breach of this Agreement and to prevent its subsequent unauthorized use or dissemination, including availing itself of actions for seizure and injunctive relief. 4
Source: REED'S, INC., 10-Q, 11/13/2019
8. Term; Termination. (a) Term. The term of this Agreement shall commence on the Effective Date and shall continue for the longer of the first anniversary of the Effective Date or the duration of the Manufacturing and Distribution Agreement (the "Term"). The Term may be extended by written agreement of the parties. (b) Early Termination. Either party may terminate this Agreement at any time if any of the following occur: (i) the other party fails to comply with any requirements or obligations under this Agreement, and such non-compliance is not cured within 30 days following written notice from the other party identifying the non-compliance; (ii) the other party becomes insolvent, reorganizes or liquidates; (iii) the other party makes any assignment for the benefit of Company's creditors; or (iv) a receiver is appointed for Company's property. Either party may terminate this Agreement upon written notice if the Manufacturing and Distribution Agreement terminates prior to the first anniversary of the Effective Date. 9. Indemnification. Each party will indemnify, defend and hold harmless the other party and its respective directors, officers, members, employees, licensees, agents and independent contractors, from and against any claim or action, liability, damages, and expense, including but not limited to attorney's fees, arising from or resulting from (i) the negligent act or omission of the party, its employees, agents or contractors, (ii) the party's breach of this Agreement, or (iii) the violation of any law by the party, its employees, agents, or contractors. Reed's will indemnify, defend and hold harmless Company and its directors, officers, members, employees, licensees, agents and independent contractors, from and against any claims for the breach of the intellectual property rights of a third party based on the Reed's Intellectual Property. Company will indemnify defend and hold harmless Reed's and its directors, officers, members, employees, licensees, agents and independent contractors, from and against any claims for the breach of the intellectual property rights of a third party based on the Company Intellectual Property, Deliverables and Work Product, except as such claims are solely based on or limited to the Reed's Intellectual Property. 10. Limitation of Liability. EXCEPT WITH RESPECT TO THE INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 9 WITH REGARD TO CLAIMS BY THIRD PARTIES, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR CONSEQUENTIAL, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE OR ENHANCED DAMAGES, LOST PROFITS OR REVENUES OR DIMINUTION IN VALUE ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH ANY BREACH OF THIS AGREEMENT OR CLAIM HEREUNDER, REGARDLESS OF (A) WHETHER SUCH DAMAGES WERE FORESEEABLE, (B) WHETHER OR NOT IT WAS ADVISED OF THE POSSIBLITY OF SUCH DAMAGES, AND (C) THE LEGAL OR EQUITABLE THEORY (CONTRACT, TORT OR OTHERWISE) UPON WHICH THE CLAIM IS BASED. 5
Source: REED'S, INC., 10-Q, 11/13/2019
11. Press Releases; Publicity. Reed's may issue or cause the publication of any press release or other public announcement with respect to this Agreement or the relationship of the parties, subject to Company's prior approval of any such press release or other public announcement which shall not be unreasonably withheld, conditioned or delayed, it being understood that such consent shall not be required in the case of any public announcement required by any law, regulation, regulatory body or the rules of any exchange to which Reed's is or may become subject. Company shall not publicly identify Reed's or use Reed's name in any manner in connection with this Agreement without Reed's prior written approval. 12. Independent Contractors. Company and Reed's agree that neither party has authority to bind the other party as its agent. Company and Reed's recognize and agree that Company is not an employee of Reed's and is furnishing services as an independent contractor. This Agreement does not constitute and shall not be construed as constituting a partnership or joint venture or grant of a franchise between Reed's and Company. Neither party shall have the right to bind the other party to any obligations to third parties. 13. Assignment. Company may not assign or transfer its rights or obligations under this Agreement, whether by operation of law, contract or otherwise, without the prior written consent of Reed's, which shall not be unreasonably withheld (it being understood that a purported assignment to a Reed's competitor identified or referred to in Exhibit D of the Manufacturing and Distribution Agreement shall be considered to be a reasonable basis for withholding consent). This Agreement shall be binding on and inure to the benefit of the parties and their heirs, personal representatives, successors, and assigns. 14. Governing Law; Venue. This Agreement shall be governed by, and any dispute arising hereunder shall be determined in accordance with, the laws of State of New York (without giving effect to conflict of laws principles) including all matters of construction, validity and performance. The parties agree that any claim or dispute arising under this Agreement shall be resolved by a court located in New York City, New York. 15. Force Majeure. No party shall be liable or responsible to the other party, nor be deemed to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement (except for any obligations to make payments to the other party hereunder), when and to the extent such failure or delay is caused by or results from the following force majeure events ("Force Majeure Events"): (a) acts of God; (b) flood, fire, earthquake or explosion; (c) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riot or other civil unrest; (d) government order or law; (e) actions, embargoes or blockades in effect on or after the date of this Agreement; (f) action by any governmental authority; (g) national or regional emergency; (h) strikes, labor stoppages or slowdowns or other industrial disturbances; (i) shortage of adequate power or transportation facilities; and (j) other similar events beyond the reasonable control of the party impacted by the Force Majeure Event (the "Impacted Party"). The Impacted Party shall give notice within seven (7) days of the Force Majeure Event to the other party, stating the period of time the occurrence is expected to continue. The Impacted Party shall use diligent efforts to end the failure or delay and ensure the effects of such Force Majeure Event are minimized. The Impacted Party shall resume the performance of its obligations as soon as reasonably practicable and to the greatest extent possible after the removal of the cause. In the event that the Impacted Party's failure or delay remains uncured for a period of thirty (30) days following written notice given by it under this Section 15, either party may thereafter terminate this Agreement upon thirty (30) days' written notice. 6
Source: REED'S, INC., 10-Q, 11/13/2019
16. Integration, Severability and Amendment. This Agreement (including the exhibits) sets forth the entire understanding of the parties with respect to the subject matter of this Agreement and supersedes any and all prior understandings and agreements, whether written or oral, between the parties with respect to such subject matter. This Agreement will be deemed severable, and the invalidity or unenforceability of any term or provision hereof will not affect the validity or enforceability of this Agreement or any other term herein. This Agreement may not be amended or otherwise modified except in a written agreement signed by each party. 17. Waiver. A provision of this Agreement may be waived only by a written instrument executed by the party waiving compliance. No waiver of any provision of this Agreement shall constitute a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. Failure of either party to exercise promptly any right, power or privilege granted by this Agreement, or to require strict performance of any obligation undertaken by the other party pursuant to this Agreement, will not be deemed to be a waiver of such right, power or privilege or of the right to demand subsequent performance of any and all such obligations undertaken by the other party. 18. Notice. Any notice, request or demand to be made under this Agreement shall be in writing and shall be deemed to have been duly made (a) upon delivery, if delivered personally (by courier service or otherwise), as evidenced by written receipt or other written proof of delivery (which may be a printout of the tracking information of a courier service that made such delivery), or (b) five (5) days after deposit in the mail, if sent by certified or registered mail with return receipt requested, postage prepaid, addressed to the party for whom intended at the address listed on the signature page. A party may change its address for the purposes of this Section 18 by written notice hereunder given to the other party. 19. Further Documentation. Each party agrees, at the reasonable request of the other, to promptly execute and deliver all such further documents, and to promptly take or forbear from all such action, as may be reasonably necessary or appropriate in order to more effectively confirm or carry out the provisions of this Agreement. 20. Survival. Sections 6, 7, 9, 10 and 14-24 of this Agreement shall survive the termination or expiration of this Agreement. To the extent that Company receives any trade secrets of Reed's, Company's obligation to protect such trade secrets and abide by the terms of Section 7 shall survive for so long as such information is a bona fine trade secret pursuant to the laws of the governing jurisdiction identified in Section 14. 21. Remedies. All rights and remedies of either party hereto are cumulative of each other and of every other right or remedy such party may otherwise have at law or in equity, and the exercise of one or more rights or remedies shall not prejudice or impair the concurrent or subsequent exercise of other rights or remedies. The parties acknowledge that any material breach, including without limitation the disclosure of Confidential Information, will cause irreparable injury. In addition to any other legal or equitable remedies that may be available, either party will be able to obtain immediate injunctive relief in the form of a temporary restraining order, preliminary injunction or permanent injunction against the other party to enforce the terms of this Agreement. 22. Fees and Expenses. Each party shall be responsible for its own fees and expenses in connection with the preparation and execution of this Agreement. 23. Headings. The headings contained in this Agreement are for the purposes of convenience only and are not intended to define or limit the contents of this Agreement. 24. Counterparts. This Agreement may be executed in more than one counterpart, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. [Signature Page immediately follows] 7
Source: REED'S, INC., 10-Q, 11/13/2019
The parties set forth below have executed this Agreement as of the Effective Date. REED'S: COMPANY: Reed's, Inc. B C Marketing Concepts Inc., dba Full Sail Brewing Company By: /s/ John Bello By: /s/ Cory Comstock Name: John Bello Name: Cory Comstock Title: CEO Title: CEO Address: Address: Reed's, Inc. B C Marketing Concepts Inc. dba Full Sail Attn: John Bello Brewing Company 201 Merritt 7 Attn: Cory Comstock Norwalk, CT 06851 506 Columbia Street Hood River, OR 97031 Amended and Restated Recipe Development Agreement - Signature Page 8
Source: REED'S, INC., 10-Q, 11/13/2019
EXHIBIT A Products 1. Ready-to-drink Mule: Specifications to be determined by the Development Committee 2. Ready-to-drink Hard Ginger Seltzer: Specifications to be determined by the Development Committee Amended and Restated Recipe Development Agreement - Exhibit A
Source: REED'S, INC., 10-Q, 11/13/2019
EXHIBIT B Development Committee Committee Members For Company: ● Brewmaster ● Director of Quality ● Director of Marketing For Reed's: ● Vice President, Marketing ● Vice President, Sales ● Vice President, Operations Committee Meetings Until the Products are initially launched on a commercial basis, the Development Committee will confer (in person at the Company's brewery, or by telephone) at least weekly, and thereafter will confer (in person at the Company's brewery, or by telephone) at least monthly or as otherwise agreed by the Development Committee. Topics and Responsibilities Topics and responsibilities for each meeting will be determined by Development Committee prior to a meeting. Amended and Restated Recipe Development Agreement - Exhibit B
Source: REED'S, INC., 10-Q, 11/13/2019
Source: REED'S, INC., 10-Q, 11/13/2019 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | RECIPE DEVELOPMENT AGREEMENT This Recipe Development Agreement (this "Agreement") is made between Reed's, Inc., a Delaware corporation ("Reed's") and B C Marketing Concepts Inc., dba Full Sail Brewing Company, an Oregon corporation ("Company"), effective as of October 11, 2019 (the "Effective Date"). RECITALS Company is engaged in the business of developing recipes for and manufacturing alcohol beverage products. Reed's is engaged in the business of developing recipes for ginger-based non- alcohol beverage products. Reed's desires to engage Company, and Company desires to be engaged, to participate and assist in the development of formulas for ginger-based flavored alcohol beverage products for Reed's (the "Products") as identified in Exhibit A. AGREEMENT The parties agree as follows: 1. Definitions. Unless otherwise defined in this Agreement, words with initial capitalized letters shall have the meanings assigned to such words in this Section 1: (a) "Applicable Laws and Regulations" shall mean any law, statute, rule, regulation, ordinance or other binding pronouncements of any duly authorized court, tribunal, arbitrator, agency, commission, official or other instrumentality of any federal, state, province, county, city or other political subdivision (domestic or foreign) having the effect of law in the United States, any foreign country or territory or any domestic or foreign state, province, county, city or other political subdivision applicable to the Company or its business. (b) "Company Intellectual Property" means all Intellectual Property that: (i) was owned or developed by Company prior to the execution of this Agreement; and (ii) is or was independently developed or acquired by Company without contribution or assistance from Reed's, Reed's Confidential Information, or Reed's Intellectual Property. Company Intellectual Property includes but is not limited to Company's know-how and independently developed recipes and alcohol beverage production processes, including the Company's proprietary composition of or recipe for the neutral alcohol beverage base that contributes alcohol to the Products ("Neutral Alcohol Beverage Base"). (c) "Deliverables" means (a) any Recipe, (b) documentation, samples, prototypes and other tangible embodiments of or descriptions of Recipes, and (c) any other Intellectual Property created with during the term of this Agreement and required to be disclosed to the Development Committee as contemplated by Section 1(b) hereof. (d) "Intellectual Property" means any and all domestic and international rights in and to: (i) trademarks, service marks, trade dress, logos, trade names and Internet domain names, together with all goodwill associated therewith; (ii) patents, patent disclosures, patentable subject matter, inventions, any improvements thereto and know-how; (iii) copyrights, copyrightable works, derivative works thereof and moral rights; (iv) trade secrets and confidential information; (v) other intellectual proprietary property (of every kind and nature and however designated), whether arising by operation of law, contract, license or otherwise; and (vi) all registrations, applications, renewals, extensions, continuations, continuations-in-part, divisions or reissues of the foregoing now or hereafter in force or hereafter acquired or adopted.
Source: REED'S, INC., 10-Q, 11/13/2019
(e) "Recipe" means the ingredients and methods of combining and processing ingredients for the Products, provided that a Recipe will not include the composition of or recipe for the Neutral Alcohol Beverage Base (it being understood that the amount of Neutral Alcohol Beverage Base and the process for combining and processing it with other ingredients shall be included in the Recipe). (f) "Reed's Intellectual Property" means all Intellectual Property that: (i) was owned or developed by Reed's prior to the execution of this Agreement; (ii) was or is independently developed by Reed's without contribution or assistance from Company or Company's Intellectual Property; and (iii) the Recipe. (g) "Specifications" means the specifications for the Products to be developed by the Development Committee (as defined in Section 3). 2. Consideration. In exchange for Company's contributions and obligations under this Agreement, Reed's grants Company the exclusive right to manufacture, package, promote, sell and distribute the Products (if and to the extent approved by the Development Committee), subject to the terms and conditions of a separate Manufacturing and Distribution Agreement to be entered into by the parties concurrently with this Agreement, as it may be amended, modified, supplemented or restated from time to time (the "Manufacturing and Distribution Agreement"). Company shall be responsible for all costs relating to the development of the Recipes and Deliverables, except for costs and expenses relating to the involvement of Reed's personnel and contractors. 3. Development Committee. Representatives of Company and Reed's, as identified in Exhibit B, shall meet regularly to discuss and approve development milestones for the Products, the Recipes, Deliverables, Specifications and other topics as identified in Exhibit B (the "Development Committee"). The final Recipes, Deliverables and Specifications for the Products must be agreed to in writing by at least one member of the Development Committee from each of Reed's and Company. 4. Rights and Obligations. (a) The parties will collaborate to develop commercial production-ready Products according to the Specifications as may be developed by the Development Committee. Reed's shall have the right to visit the facilities used by Company to develop the Recipes and Deliverables, at such times as may be reasonably agreed to in advance by the parties. Company shall perform the work in connection with this Agreement in a timely, professional and workmanlike manner consistent with industry standards. Each party shall ensure that all persons performing work under this Agreement on its behalf shall have the requisite experience, training, skill and other qualifications needed to develop the Recipes, Deliverables and Specifications. Company shall keep the Development Committee informed of the progress of the development of the Recipes and Deliverables and such other matters as any member of the Development Committee may reasonably request from time to time. 2
Source: REED'S, INC., 10-Q, 11/13/2019
(b) Company shall promptly disclose to the Development Committee any prospective or actual new Intellectual Property related to the Products or Product-specific production processes, whether developed solely by Company or jointly by the Company and Reed's, except with regard to the Neutral Alcohol Beverage Base, and except with regard to the Company's general know-how and independently developed production processes not specifically related to the Products. 5. Representations and Warranties. (a) By Company. Company represents and warrants that (i) Company has obtained all authority, permits, licenses and approvals necessary to enter into and perform its obligations under this Agreement; (ii) the execution and delivery by Company of this Agreement and the performance of its obligations under this Agreement does not and will not violate the terms of any other contract, agreement, obligation or understanding of Company or any Applicable Laws and Regulations; (iii) the Deliverables will conform to the Specifications; and (iv) the Company's Intellectual Property does not infringe or violate the Intellectual Property of any third parties. (b) By Reed's. Reed's represents and warrants that (i) Reed's has obtained all authority and approvals necessary to enter into and perform its obligations under this Agreement; (ii) the execution and delivery by Company of this Agreement and the performance of its obligations under this Agreement does not and will not violate the terms of any other contract, agreement, obligation or understanding of Reed's or any law or regulation applicable to Reed's; and (iii) the Reed's Intellectual Property does not infringe or violate the Intellectual Property of any third parties. 6. Intellectual Property. (a) Ownership of Intellectual Property. (i) Company will create and provide to Reed's the Deliverables. Reed's will exclusively own all Deliverables. Company will and hereby does, without further consideration, irrevocably assign to Reed's any and all worldwide right, title or interest that Company may now or hereafter possess in or to the Deliverables in perpetuity (or the maximum period permitted by Applicable Laws and Regulations) and Reed's accepts such assignment. Company will execute and deliver documents reasonably requested by Reed's to register its Intellectual Property in the Deliverables. (ii) Company acknowledges that all rights of ownership of Reed's Intellectual Property, Deliverables and the goodwill symbolized thereby shall belong exclusively to and inure to the benefit of Reed's. Company shall not at any time acquire any rights, title or interest in Reed's Intellectual Property or Deliverables. Company agrees that it will not at any time contest the ownership or validity of any Reed's Intellectual Property or Deliverables, nor register or attempt to register any rights with respect to Reed's Intellectual Property, nor do anything that would jeopardize or diminish Reed's rights to or the value of Reed's Intellectual Property or Deliverables. (iii) Reed's acknowledges that all rights of ownership of Company's Intellectual Property and the goodwill symbolized thereby shall belong exclusively to and inure to the benefit of Company. Reed's shall not at any time acquire any rights, title or interest in Company's Intellectual Property. Reed's agrees that it will not at any time contest the ownership or validity of any Company Intellectual Property, nor register or attempt to register any rights with respect to Company Intellectual Property, nor do anything that would jeopardize or diminish Company's rights to or the value of Company Intellectual Property. 3
Source: REED'S, INC., 10-Q, 11/13/2019
(b) Work Product. Company acknowledges and agrees that all Intellectual Property created by Company, its affiliates, representatives, or agents in connection with or resulting from any work or services related to the Products, including the Deliverables ("Work Product"), but excluding the Neutral Alcohol Beverage Base and excluding the Company's general know-how and independently developed production processes not specifically related to the Products, have been specially ordered and commissioned by Reed's, are works-made-for-hire from the moment of creation and that all such Work Product is and will be the sole and exclusive property of Reed's. To the extent not a work-for- hire, Company, its employees, subcontractors and agents hereby sell, assign and transfer to Reed's all right, title and interest in and to the Work Product, including without limitation, all rights to Intellectual Property therein. Company agrees on behalf of itself, its employees, subcontractors and agents, not to file for or register any patents, trademarks, or copyrights in or to the Work Product. No rights of any kind in the Work Product are reserved to or by Company or will revert to Company. To the extent permitted by Applicable Laws and Regulations, Company forever waives and agrees never to assert any "moral rights" in any Work Product or any derivative of any Work Product. Company shall, without further compensation, execute and deliver such instruments and take such action as may be requested by Reed's to perfect, protect, enforce or evidence Reed's rights in the Work Product, Products and Deliverables and to carry out the assignments and waivers in this Section 6. (c) Use. Company shall not use the Work Product, Products or Deliverables during the term of this Agreement or after, in perpetuity, for any purpose whatsoever other than performing Company's obligations under this Agreement. The Deliverables shall be considered to be Confidential Information (as defined below) of Reed's. This Section 6 shall survive termination or expiration of this Agreement. 7. Confidentiality. Each of Reed's and Company (a "Receiving Party") shall hold in confidence and not make any commercial or other use of any or all Confidential Information conveyed, acquired or learned from the other party (the "Disclosing Party") at any time, except in association with this Agreement. Except as otherwise expressly permitted herein, Receiving Party shall not disclose such information to third persons without the prior written consent of the Disclosing Party. Receiving Party shall limit access to the Confidential Information to those of its directors, officers, employees, contractors, agents, attorneys and accountants (the "Representatives") with the need to know the same and shall advise such Representatives of, and hold them to, Receiving Party's obligations under the terms of this Section 7. Receiving Party and its Representatives shall be permitted to disclose Confidential Information as required by law, including to any judicial, regulatory, administrative or other governmental body (by interrogatories, investigative demands, requests for information or documents, subpoena, or other similar process), but must (to the extent legally permissible) promptly notify the disclosing party of the existence, terms and circumstances surrounding such requirement and give the disclosing party a reasonable opportunity to obtain a protective order or other appropriate remedy to resist or narrow such disclosure. "Confidential Information" means all information of Disclosing Party that is disclosed orally or in writing by Disclosing Party to Receiving Party that, at the time of disclosure, is designated as confidential (or like designation), is disclosed in circumstances of confidence, would be understood by the parties, exercising reasonable business judgment, to be confidential, or is not generally known to the public, whether of a business, technical, or other nature, and including, without limitation, designs, plans, drawings, know-how, recipes, and marketing and business plans. Upon the expiration or earlier termination of this Agreement, Receiving Party shall return to Disclosing Party all of Disclosing Party's Confidential Information or shall destroy the same at the option of Disclosing Party. The provisions of this Section 7 shall survive termination or expiration of this Agreement. The obligations in this Section 7 regarding trade secrets, in particular, will continue for so long as the information constitutes a trade secret under applicable law. If an unauthorized use or disclosure of a Disclosing Party's Confidential Information occurs, the Receiving Party shall promptly notify the Disclosing Party, and the Disclosing Party may take, at the Receiving Party's expense, all steps which are necessary to recover Confidential Information disclosed or used in breach of this Agreement and to prevent its subsequent unauthorized use or dissemination, including availing itself of actions for seizure and injunctive relief. 4
Source: REED'S, INC., 10-Q, 11/13/2019
8. Term; Termination. (a) Term. The term of this Agreement shall commence on the Effective Date and shall continue for the longer of the first anniversary of the Effective Date or the duration of the Manufacturing and Distribution Agreement (the "Term"). The Term may be extended by written agreement of the parties. (b) Early Termination. Either party may terminate this Agreement at any time if any of the following occur: (i) the other party fails to comply with any requirements or obligations under this Agreement, and such non-compliance is not cured within 30 days following written notice from the other party identifying the non-compliance; (ii) the other party becomes insolvent, reorganizes or liquidates; (iii) the other party makes any assignment for the benefit of Company's creditors; or (iv) a receiver is appointed for Company's property. Either party may terminate this Agreement upon written notice if the Manufacturing and Distribution Agreement terminates prior to the first anniversary of the Effective Date. 9. Indemnification. Each party will indemnify, defend and hold harmless the other party and its respective directors, officers, members, employees, licensees, agents and independent contractors, from and against any claim or action, liability, damages, and expense, including but not limited to attorney's fees, arising from or resulting from (i) the negligent act or omission of the party, its employees, agents or contractors, (ii) the party's breach of this Agreement, or (iii) the violation of any law by the party, its employees, agents, or contractors. Reed's will indemnify, defend and hold harmless Company and its directors, officers, members, employees, licensees, agents and independent contractors, from and against any claims for the breach of the intellectual property rights of a third party based on the Reed's Intellectual Property. Company will indemnify defend and hold harmless Reed's and its directors, officers, members, employees, licensees, agents and independent contractors, from and against any claims for the breach of the intellectual property rights of a third party based on the Company Intellectual Property, Deliverables and Work Product, except as such claims are solely based on or limited to the Reed's Intellectual Property. 10. Limitation of Liability. EXCEPT WITH RESPECT TO THE INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 9 WITH REGARD TO CLAIMS BY THIRD PARTIES, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR CONSEQUENTIAL, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE OR ENHANCED DAMAGES, LOST PROFITS OR REVENUES OR DIMINUTION IN VALUE ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH ANY BREACH OF THIS AGREEMENT OR CLAIM HEREUNDER, REGARDLESS OF (A) WHETHER SUCH DAMAGES WERE FORESEEABLE, (B) WHETHER OR NOT IT WAS ADVISED OF THE POSSIBLITY OF SUCH DAMAGES, AND (C) THE LEGAL OR EQUITABLE THEORY (CONTRACT, TORT OR OTHERWISE) UPON WHICH THE CLAIM IS BASED. 5
Source: REED'S, INC., 10-Q, 11/13/2019
11. Press Releases; Publicity. Reed's may issue or cause the publication of any press release or other public announcement with respect to this Agreement or the relationship of the parties, subject to Company's prior approval of any such press release or other public announcement which shall not be unreasonably withheld, conditioned or delayed, it being understood that such consent shall not be required in the case of any public announcement required by any law, regulation, regulatory body or the rules of any exchange to which Reed's is or may become subject. Company shall not publicly identify Reed's or use Reed's name in any manner in connection with this Agreement without Reed's prior written approval. 12. Independent Contractors. Company and Reed's agree that neither party has authority to bind the other party as its agent. Company and Reed's recognize and agree that Company is not an employee of Reed's and is furnishing services as an independent contractor. This Agreement does not constitute and shall not be construed as constituting a partnership or joint venture or grant of a franchise between Reed's and Company. Neither party shall have the right to bind the other party to any obligations to third parties. 13. Assignment. Company may not assign or transfer its rights or obligations under this Agreement, whether by operation of law, contract or otherwise, without the prior written consent of Reed's, which shall not be unreasonably withheld (it being understood that a purported assignment to a Reed's competitor identified or referred to in Exhibit D of the Manufacturing and Distribution Agreement shall be considered to be a reasonable basis for withholding consent). This Agreement shall be binding on and inure to the benefit of the parties and their heirs, personal representatives, successors, and assigns. 14. Governing Law; Venue. This Agreement shall be governed by, and any dispute arising hereunder shall be determined in accordance with, the laws of State of New York (without giving effect to conflict of laws principles) including all matters of construction, validity and performance. The parties agree that any claim or dispute arising under this Agreement shall be resolved by a court located in New York City, New York. 15. Force Majeure. No party shall be liable or responsible to the other party, nor be deemed to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement (except for any obligations to make payments to the other party hereunder), when and to the extent such failure or delay is caused by or results from the following force majeure events ("Force Majeure Events"): (a) acts of God; (b) flood, fire, earthquake or explosion; (c) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riot or other civil unrest; (d) government order or law; (e) actions, embargoes or blockades in effect on or after the date of this Agreement; (f) action by any governmental authority; (g) national or regional emergency; (h) strikes, labor stoppages or slowdowns or other industrial disturbances; (i) shortage of adequate power or transportation facilities; and (j) other similar events beyond the reasonable control of the party impacted by the Force Majeure Event (the "Impacted Party"). The Impacted Party shall give notice within seven (7) days of the Force Majeure Event to the other party, stating the period of time the occurrence is expected to continue. The Impacted Party shall use diligent efforts to end the failure or delay and ensure the effects of such Force Majeure Event are minimized. The Impacted Party shall resume the performance of its obligations as soon as reasonably practicable and to the greatest extent possible after the removal of the cause. In the event that the Impacted Party's failure or delay remains uncured for a period of thirty (30) days following written notice given by it under this Section 15, either party may thereafter terminate this Agreement upon thirty (30) days' written notice. 6
Source: REED'S, INC., 10-Q, 11/13/2019
16. Integration, Severability and Amendment. This Agreement (including the exhibits) sets forth the entire understanding of the parties with respect to the subject matter of this Agreement and supersedes any and all prior understandings and agreements, whether written or oral, between the parties with respect to such subject matter. This Agreement will be deemed severable, and the invalidity or unenforceability of any term or provision hereof will not affect the validity or enforceability of this Agreement or any other term herein. This Agreement may not be amended or otherwise modified except in a written agreement signed by each party. 17. Waiver. A provision of this Agreement may be waived only by a written instrument executed by the party waiving compliance. No waiver of any provision of this Agreement shall constitute a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. Failure of either party to exercise promptly any right, power or privilege granted by this Agreement, or to require strict performance of any obligation undertaken by the other party pursuant to this Agreement, will not be deemed to be a waiver of such right, power or privilege or of the right to demand subsequent performance of any and all such obligations undertaken by the other party. 18. Notice. Any notice, request or demand to be made under this Agreement shall be in writing and shall be deemed to have been duly made (a) upon delivery, if delivered personally (by courier service or otherwise), as evidenced by written receipt or other written proof of delivery (which may be a printout of the tracking information of a courier service that made such delivery), or (b) five (5) days after deposit in the mail, if sent by certified or registered mail with return receipt requested, postage prepaid, addressed to the party for whom intended at the address listed on the signature page. A party may change its address for the purposes of this Section 18 by written notice hereunder given to the other party. 19. Further Documentation. Each party agrees, at the reasonable request of the other, to promptly execute and deliver all such further documents, and to promptly take or forbear from all such action, as may be reasonably necessary or appropriate in order to more effectively confirm or carry out the provisions of this Agreement. 20. Survival. Sections 6, 7, 9, 10 and 14-24 of this Agreement shall survive the termination or expiration of this Agreement. To the extent that Company receives any trade secrets of Reed's, Company's obligation to protect such trade secrets and abide by the terms of Section 7 shall survive for so long as such information is a bona fine trade secret pursuant to the laws of the governing jurisdiction identified in Section 14. 21. Remedies. All rights and remedies of either party hereto are cumulative of each other and of every other right or remedy such party may otherwise have at law or in equity, and the exercise of one or more rights or remedies shall not prejudice or impair the concurrent or subsequent exercise of other rights or remedies. The parties acknowledge that any material breach, including without limitation the disclosure of Confidential Information, will cause irreparable injury. In addition to any other legal or equitable remedies that may be available, either party will be able to obtain immediate injunctive relief in the form of a temporary restraining order, preliminary injunction or permanent injunction against the other party to enforce the terms of this Agreement. 22. Fees and Expenses. Each party shall be responsible for its own fees and expenses in connection with the preparation and execution of this Agreement. 23. Headings. The headings contained in this Agreement are for the purposes of convenience only and are not intended to define or limit the contents of this Agreement. 24. Counterparts. This Agreement may be executed in more than one counterpart, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. [Signature Page immediately follows] 7
Source: REED'S, INC., 10-Q, 11/13/2019
The parties set forth below have executed this Agreement as of the Effective Date. REED'S: COMPANY: Reed's, Inc. B C Marketing Concepts Inc., dba Full Sail Brewing Company By: /s/ John Bello By: /s/ Cory Comstock Name: John Bello Name: Cory Comstock Title: CEO Title: CEO Address: Address: Reed's, Inc. B C Marketing Concepts Inc. dba Full Sail Attn: John Bello Brewing Company 201 Merritt 7 Attn: Cory Comstock Norwalk, CT 06851 506 Columbia Street Hood River, OR 97031 Amended and Restated Recipe Development Agreement - Signature Page 8
Source: REED'S, INC., 10-Q, 11/13/2019
EXHIBIT A Products 1. Ready-to-drink Mule: Specifications to be determined by the Development Committee 2. Ready-to-drink Hard Ginger Seltzer: Specifications to be determined by the Development Committee Amended and Restated Recipe Development Agreement - Exhibit A
Source: REED'S, INC., 10-Q, 11/13/2019
EXHIBIT B Development Committee Committee Members For Company: ● Brewmaster ● Director of Quality ● Director of Marketing For Reed's: ● Vice President, Marketing ● Vice President, Sales ● Vice President, Operations Committee Meetings Until the Products are initially launched on a commercial basis, the Development Committee will confer (in person at the Company's brewery, or by telephone) at least weekly, and thereafter will confer (in person at the Company's brewery, or by telephone) at least monthly or as otherwise agreed by the Development Committee. Topics and Responsibilities Topics and responsibilities for each meeting will be determined by Development Committee prior to a meeting. Amended and Restated Recipe Development Agreement - Exhibit B
Source: REED'S, INC., 10-Q, 11/13/2019
Source: REED'S, INC., 10-Q, 11/13/2019 | Highlight the parts (if any) of this contract related to "Third Party Beneficiary" that should be reviewed by a lawyer. Details: Is there a non-contracting party who is a beneficiary to some or all of the clauses in the contract and therefore can enforce its rights against a contracting party? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Covenant Not To Sue" that should be reviewed by a lawyer. Details: Is a party restricted from contesting the validity of the counterparty’s ownership of intellectual property or otherwise bringing a claim against the counterparty for matters unrelated to the contract?
Context: Exhibit 99.01 JOINT VENTURE AGREEMENT THIS JOINT VENTURE AGREEMENT (the "Agreement") made and entered into this 27th day of November 2018 (the "Execution Date"),
BETWEEN: MJ Syndicated, Inc. a Florida Corporation of _______________________________, FL 33436 And
SIMPLY HERBALS, Nervanah Herbal Medicine Company of _______________________________TN 37660
(individually and collectively the Joint Venture Participants "JVP").
BACKGROUND:
The JVP wish to associate themselves in business of Selling a variety of Health- related products.
This Agreement sets out the terms and conditions that govern the Joint Venture.
IN CONSIDERATION OF and as a condition of the JVP entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the parties to this Agreement agree as follows:
Formation
By this Agreement the Participants enter into a general Joint Venture (the "Joint Venture") in accordance with the laws of The State of Florida. The rights and obligations of the JVP will be as stated in the applicable legislation of The State of Florida except as otherwise provided in this Agreement.
Name
A.
B.
1.
The firm name of the Joint Venture will be: TBD
Purpose
The purpose of the Joint Venture will be: Manufacturing and Selling Health Related products.
The Joint Venture is a fixed term Joint Venture beginning November 27, 2018 and ending November 30th, 2019 or as otherwise provided in this Agreement. Where the Joint Venture is entered for a fixed term and the Joint Venture continues after the expiration of that term then in the absence of an express new agreement, the rights and duties of the Participants remain the same as they were at the expiration of that term so far as those terms are consistent with a Joint Venture at will.
Place of Business
The principal office of the business of the Joint Venture will be located at__________________________, FL 33434 or such other place as the Participants may from time to time designate.
Capital Contributions
Each of the Participants will contribute to the capital of the Joint Venture, in cash or property in agreed upon value. All Participants will contribute their respective Contributions as agreed.
Withdrawal of Capital
No participant will withdraw any portion of their Contribution without the express written consent of the other Participant.
Additional Capital
Capital Contributions may be amended from time to time, according to the requirements of the Joint Venture provided that the interests of the Participants are not affected, except with the unanimous consent of the Participants. No Participant will be required
2.
3.
4.
5.
6.
7.
8.
to make Additional Capital Contributions. Whenever additional capital is determined to be required and an individual Participant is unwilling or unable to meet the additional contribution requirement within a reasonable period, as required by Joint Venture business obligations, remaining Participants may contribute in proportion to their existing Capital Contributions to resolve the amount in default. In such case the allocation of profits or losses among all the Participants will be adjusted to reflect the aggregate change in Capital Contributions by the Participants.
Any advance of money to the Joint Venture by any Participant in excess of the amounts provided for in th is Agreement or subsequently agreed to as Additional Capital Contribution will be deemed a debt owed by the Joint Venture and not an increase in Capital Contribution of the Participant. This liability will be repaid with interest at rates and times to be determined by a majority of the Participants within the limits of what is required or permitted in the Act. This liability will not entitle the lending Participant to any increased share of the Joint Venture's profits nor to a greater voting power. Such debts may have preference or priority over any other payments to Participants as may be determined by a majority of the Participants.
Capital Accounts
An individual capital account (the "Capital Accounts") will be maintained for each Participant and their Initial Capital Contribution will be credited to this account. Any Additional Capital Contributions made by any Participant will be credited to that Participant's individual Capital Account.
Interest on Capital
No borrowing charge or loan interest will be due or payable to any Participant on their agreed Capital Contribution inclusive of any agreed Additional Capital Contributions.
9.
10.
11.
Financial Decisions
Decisions regarding the distribution of profits, allocation of losses, and the requirement for Additional Capital Contributions as well as all other financial matters will be decided by a unanimous vote of the Participants.
Profit and Loss
Subject to any other provisions of this Agreement, the net profits and losses of the Joint Venture, for both accounting and tax purposes, will accrue to and be borne by the Participants in proportion to the Participants' Capital Contributions inclusive of any Additional Capital Contributions (the "Profit and Loss Distribution").
Books of Account
Accurate and complete books of account of the transactions of the Joint Venture will be kept in accordance with generally accepted accounting principles (GAAP) and at all reasonable times will be available and open to inspection and examination by any Participant. The books and records of the Joint Venture will reflect all the Joint Venture's transactions and will be appropriate and adequate for the business conducted by the Joint Venture.
Annual Report
As soon as practicable after the close of each fiscal year, the Joint Venture will furnish to each Participant an annual report showing a full and complete account of the condition of the Joint Venture. This report will consist of at least the following documents:
a statement of all information as will be necessary for the preparation of each Participant's income or other tax returns;
a copy of the Joint Venture's federal income tax returns for that fiscal year;
12.
13.
14.
15.
a.
b.
supporting income statement;
a balance sheet;
a cash flow statement;
a breakdown of the profit and loss attributable to each Participant; and
any additional information that the Participants may require.
Banking and Joint Venture Funds
The funds of the Joint Venture will be placed in such investments and banking accounts as will be designated by the Participants. Joint Venture funds will be held in the name of the Joint Venture and will not be commingled with those of any other person or entity.
Fiscal Year
The fiscal year will end on the 31st day of December of each year.
Audit
Any of the Participants will have the right to request an audit of the Joint Venture books. The cost of the audit will be borne by the Joint Venture. The audit will be performed by an accounting firm acceptable to all the Participants. Not more than one (1) audit will be required by any or all of the Participants for any fiscal year.
Management
Except as all of the Participants may otherwise agree in writing, all actions and decisions respecting the management, operation and control of the Joint Venture and its business will be decided by a majority vote of the Participants.
c.
d.
e.
f.
g.
16.
17.
18.
19.
Contract Binding Authority
All actions and decisions with respect to binding the Joint Venture in contract requires the consent of a majority of the Participants.
Tax Matters Participant
The tax matters Participant will be MJ Syndicated Inc. (the "Tax Matters Participant"). The Tax Matters Participant will prepare, or cause to be prepared, all tax returns and reports for the Joint Venture and make any related elections that the Participants deem advisable.
A Tax Matters Participant can voluntarily withdraw from the position of Tax Matters Participant or can be appointed or replaced by a majority vote of the other Participants. In the event of a withdrawal of the Tax Matters Participant from the Joint Venture, the remaining Participants will appoint a successor as soon as practicable.
Meetings
Regular meetings of the Participants will be held quarterly.
Any Participant can call a special meeting to resolve issues that require a vote, as indicated by this Agreement, by providing all Participants with reasonable notice. In the case of a special vote, the meeting will be restricted to the specific purpose for which the meeting was held.
All meetings will be held at a time and in a location that is reasonable, convenient and practical considering the situation of all Participants.
Admitting a New Participant
A new Participant may only be admitted to the Joint Venture with a unanimous vote of the existing Participants.
20.
21.
22.
23.
24.
25.
26.
Any new Participant agrees to be bound by all the covenants, terms, and conditions of this Agreement, inclusive of all current and future amendments. Further, a new Participant will execute such documents as are needed to affect the admission of the new Participant. Any new Participant will receive such business interest in the Joint Venture as determined by a unanimous decision of the other Participants.
Voluntary Withdrawal of a Participant
Any Participant will have the right to voluntarily withdraw from the Joint Venture at any time. Written notice of intention to withdraw must be served in writing upon the remaining Participants at least Thirty (30) business days prior to the withdrawal date.
The voluntary withdrawal of a Participant will result in the dissolution of the Joint Venture.
A Dissociated Participant will only exercise the right to withdraw in good faith and will act to minimize any present or future harm done to the remaining Participants as a result of the withdrawal.
Involuntary Withdrawal of a Participant
Events resulting in the involuntary withdrawal of a Participant from the Joint Venture will include, but not be limited to: death of a Participant; Participant mental incapacity; Participant disability preventing reasonable participation in the Joint Venture; Participant incompetence; breach of fiduciary duties by a Participant; criminal conviction of a Participant; Expulsion of a Participant; Operation of Law against a Participant; or any act or omission of a Participant that can reasonably be expected to bring the business or societal reputation of the Joint Venture into disrepute.
The involuntary withdrawal of a Participant will result in the dissolution of the Joint Venture.
27.
28.
29.
30.
31.
32.
A trustee in bankruptcy or similar third party who may acquire that Dissociated Participant's interest in the Joint Venture will only acquire that Participant's economic rights and interests and will not acquire any other rights of that Participant or be admitted as a Participant of the Joint Venture or have the right to exercise any management or voting interests.
Dissociation of a Participant
Where the dissociation of a Participant for any reason results in the dissolution of the Joint Venture then the Joint Venture will proceed in a reasonable and timely manner to dissolve the Joint Venture, with all debts being paid first, prior to any distribution of the remaining funds. Valuation and distribution will be determined as described in the Valuation of Interest section of this Agreement.
The remaining Participants retain the right to seek damages from a Dissociated Participant where the dissociation resulted from a malicious or criminal act by the Dissociated Participant or where the Dissociated Participant had breached their fiduciary duty to the Joint Venture or was in breach of this Agreement or had acted in a way that could reasonably be foreseen to bring harm or damage to the Joint Venture or to the reputation of the Joint Venture.
Dissolution
Except as otherwise provided in this Agreement, the Joint Venture may be dissolved only with the unanimous consent of all Participants.
Distribution of Property on Dissolution of Joint Venture
In the event of the dissolution of the Joint Venture, each Participant will share in any remaining assets or liabilities of the Joint Venture in proportion to the Participants' Capital Contributions inclusive of any Additional Capital Contributions (the "Dissolution Distribution").
33.
34.
35.
36.
37.
Upon Dissolution of the Joint Venture and liquidation of Joint Venture Property, and after payment of all selling costs and expenses, the liquidator will distribute the Joint Venture assets to the following groups according to the following order of priority:
in satisfaction of liabilities to creditors except Joint Venture obligations to current Participants;
in satisfaction of Joint Venture debt obligations to current Participants; and then
to the Participants according to the Dissolution Distribution described above.
The claims of each priority group will be satisfied in full before satisfying any claims of a lower priority group. Any excess of Joint Venture assets after liabilities or any insufficiency in Joint Venture assets in resolving liabilities under this section will be shared by the Participants according to the Dissolution Distribution described above.
Valuation of Interest
In the absence of a written agreement setting a value, the value of the Joint Venture will be based on the fair market value appraisal of all Joint Venture assets (less liabilities) determined in accordance with generally accepted accounting principles (GAAP). This appraisal will be conducted by an independent accounting firm agreed to by all Participants. An appraiser will be appointed within a reasonable period of the date of withdrawal or dissolution. The results of the appraisal will be binding on all Participants. A withdrawing Part ic ipant 's interest wi l l be based on that Participant's proportion of the Dissolution Distribution described above, less any outstanding liabilities the withdrawing Participant may have to the Joint Venture. The intent of this section is to ensure the survival of the Joint Venture despite the withdrawal of any individual Participant.
38.
a.
b.
c.
39.
40.
No allowance will be made for goodwill, trade name, patents or other intangible assets, except where those assets have been reflected on the Joint Venture books immediately prior to valuation.
Goodwill
The goodwill of the Joint Venture business will be assessed at an amount to be determined by appraisal using generally accepted accounting principles (GAAP).
Title to Joint Venture Property
Title to all Joint Venture Property will remain in the name of the Joint Venture. No Participant or group of Participants will have any ownership interest in such Joint Venture Property in whole or in part.
Voting
Any vote required by the Joint Venture will be assessed where each Participant receives one vote carrying equal weight.
Force Majeure
A Participant will be free of liability to the Joint Venture where the Participant is prevented from executing their obligations under this Agreement in whole or in part due to force majeure, such as earthquake, typhoon, flood, fire, and war or any other unforeseen and uncontrollable event where the Participant has communicated the circumstance of said event to any and all other Participants and taken any and all appropriate action to mitigate said event.
Duty of Loyalty
No Participant will engage in any business, venture or transaction, whether directly or indirectly, that might be competitive with the business of the Joint Venture or that would be in direct conflict of
41.
42.
43.
44.
45.
46.
interest to the Joint Venture without the unanimous written consent of the remaining Participants. Any and all businesses, ventures or transactions with any appearance of conflict of interest must be fully disclosed to all other Participants. Failure to comply with any of the terms of this clause will be deemed an Involuntary Withdrawal of the offending Participant and may be treated accordingly by the remaining Participants.
Duty of Accountability for Private Profits
Each Participant must account to the Joint Venture for any benefit derived by that Participant without the consent of the other Participants from any transaction concerning the Joint Venture or any use by that Participant of the Joint Venture property, name or business connection. This duty continues to apply to any transactions undertaken after the Joint Venture has been dissolved but before the affairs of the Joint Venture have been completely wound up by the surviving Participant or Participants or their agent or agents.
Duty to Devote Time
Each Participant will devote such time and attention to the business of the Joint Venture as the majority of the Participants will from time to time reasonably determine for the conduct of the Joint Venture business.
Actions Requiring Unanimous Consent of the Participants
The following list of actions will require the unanimous consent of all Participants:
committing the Joint Venture to new liabilities or obligations totaling To Be Determined;
and
incurring single expenditures that exceed "To Be Determined".
47.
48.
49.
a.
b.
Any losses incurred as a result of a violation of this section will be charged to and collected from the individual Participant that acted without unanimous consent and caused the loss.
Forbidden Acts
No Participant may do any act in contravention of this Agreement.
No Participant may permit, intentionally or unintentionally, the assignment of express, implied or apparent authority to a third party that is not a Participant in the Joint Venture.
No Participant may do any act that would make it impossible to carry on the ordinary business of the Joint Venture.
No Participant may confess a judgment against the Joint Venture.
No Participant will have the right or authority to bind or obligate the Joint Venture to any extent with regard to any matter outside the intended purpose of the Joint Venture.
Any violation of the above Forbidden Acts will be deemed an Involuntary Withdrawal of the offending Participant and may be treated accordingly by the remaining Participants.
Indemnification
All Participants will be indemnified and held harmless by the Joint Venture from and against any and all claims of any nature, whatsoever, arising out of a Participant's participation in Joint Venture affairs. A Participant will not be entitled to indemnification under this section for liability arising out of gross negligence or wil l ful misconduct of the Participant or the breach by the Participant of any provisions of this Agreement.
Liability
50.
51.
52.
53.
54.
55.
56.
57.
A Participant will not be liable to the Joint Venture, or to any other Participant, for any mistake or error in judgment or for any act or omission done in good faith and believed to be within the scope of authority conferred or implied by this Agreement or the Joint Venture.
Liability Insurance
The Joint Venture may acquire insurance on behalf of any Participant, employee, agent or other person engaged in the business interest of the Joint Venture against any liability asserted against them or incurred by them while acting in good faith on behalf of the Joint Venture.
Amendments
This Agreement may not be amended in whole or in part without the unanimous written consent of all Participants.
Jurisdiction
The Participants submit to the jurisdiction of the courts of The State of Florida for the enforcement of this Agreement or any arbitration award or decision arising from this Agreement.
Definitions
For the purpose of this Agreement, the following terms are defined as follows:
"Additional Capital Contributions" means Capital Contributions, other than Initial Capital Contributions, made by Participants to the Joint Venture.
"Capital Contribution" means the total amount of cash or Property contributed to the Joint Venture by any one Participant.
58.
59.
60.
61.
a.
b.
"Dissociated Participant" means any Participant who is removed from the Joint Venture through a voluntary or involuntary withdrawal as provided in this Agreement.
"Expulsion of a Participant" can occur on application by the Joint Venture or another Participant, where it has been determined that the Participant:
has engaged in wrongful conduct that adversely and materially affected the Joint Venture's business;
has willfully or persistently committed a material breach of this Agreement or of a duty owed to the Joint Venture or to the other Participants; or
has engaged in conduct relating to the Joint Venture's business that makes it not reasonably practicable to carry on the business with the Participant.
"Initial Capital Contribution" means Capital Contributions made by any Participant to acquire an interest in the Joint Venture.
"Operation of Law" means rights or duties that are cast upon a party by the law, without any act or agreement on the part of the individual including, but not limited to, an assignment for the benefit of creditors, a divorce, or a bankruptcy.
Miscellaneous
Time is of the essence in this Agreement.
This Agreement may be executed in counterpart.
Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the
c.
d.
i.
ii.
iii.
e.
f.
62.
63.
64.
masculine gender include the feminine gender and vice versa. Words in the neuter gender include the masculine gender and the feminine gender and vice versa.
If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected, impaired or invalidated as a result.
This Agreement contains the entire agreement between the parties. All negotiations and understandings have been included in this Agreement. Statements or representations which may have been made by any party to this Agreement in the negotiation stages of this Agreement may in some way be inconsistent with this final written Agreement. All such statements are declared to be of no value in this Agreement. Only the written terms of this Agreement will bind the parties.
This Agreement and the terms and conditions contained in this Agreement apply to and are binding upon the Participant's successors, assigns, executors, administrators, beneficiaries, and representatives.
Any notices or delivery required here will be deemed completed when hand-delivered, delivered by agent, or seven (7) days after being placed in the post, postage prepaid, to the parties at the addresses contained in this Agreement or as the parties may later designate in writing.
All of the rights, remedies and benefits provided by this Agreement will be cumulative and will not be exclusive of any other such rights, remedies and benefits allowed by law.
IN WITNESS WHEREOF the Participants have duly affixed their signatures under hand on this 27th day of November 2018.
65.
66.
67.
68.
69.
Simply Herbals
Per: ____________________
CEO: MJ Syndicated, Inc CEO: Simply Herbals, Inc.
MJ Syndicated, Inc.
Per: __/s/ Maxine Pierson________ [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 99.01 JOINT VENTURE AGREEMENT THIS JOINT VENTURE AGREEMENT (the "Agreement") made and entered into this 27th day of November 2018 (the "Execution Date"),
BETWEEN: MJ Syndicated, Inc. a Florida Corporation of _______________________________, FL 33436 And
SIMPLY HERBALS, Nervanah Herbal Medicine Company of _______________________________TN 37660
(individually and collectively the Joint Venture Participants "JVP").
BACKGROUND:
The JVP wish to associate themselves in business of Selling a variety of Health- related products.
This Agreement sets out the terms and conditions that govern the Joint Venture.
IN CONSIDERATION OF and as a condition of the JVP entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the parties to this Agreement agree as follows:
Formation
By this Agreement the Participants enter into a general Joint Venture (the "Joint Venture") in accordance with the laws of The State of Florida. The rights and obligations of the JVP will be as stated in the applicable legislation of The State of Florida except as otherwise provided in this Agreement.
Name
A.
B.
1.
The firm name of the Joint Venture will be: TBD
Purpose
The purpose of the Joint Venture will be: Manufacturing and Selling Health Related products.
The Joint Venture is a fixed term Joint Venture beginning November 27, 2018 and ending November 30th, 2019 or as otherwise provided in this Agreement. Where the Joint Venture is entered for a fixed term and the Joint Venture continues after the expiration of that term then in the absence of an express new agreement, the rights and duties of the Participants remain the same as they were at the expiration of that term so far as those terms are consistent with a Joint Venture at will.
Place of Business
The principal office of the business of the Joint Venture will be located at__________________________, FL 33434 or such other place as the Participants may from time to time designate.
Capital Contributions
Each of the Participants will contribute to the capital of the Joint Venture, in cash or property in agreed upon value. All Participants will contribute their respective Contributions as agreed.
Withdrawal of Capital
No participant will withdraw any portion of their Contribution without the express written consent of the other Participant.
Additional Capital
Capital Contributions may be amended from time to time, according to the requirements of the Joint Venture provided that the interests of the Participants are not affected, except with the unanimous consent of the Participants. No Participant will be required
2.
3.
4.
5.
6.
7.
8.
to make Additional Capital Contributions. Whenever additional capital is determined to be required and an individual Participant is unwilling or unable to meet the additional contribution requirement within a reasonable period, as required by Joint Venture business obligations, remaining Participants may contribute in proportion to their existing Capital Contributions to resolve the amount in default. In such case the allocation of profits or losses among all the Participants will be adjusted to reflect the aggregate change in Capital Contributions by the Participants.
Any advance of money to the Joint Venture by any Participant in excess of the amounts provided for in th is Agreement or subsequently agreed to as Additional Capital Contribution will be deemed a debt owed by the Joint Venture and not an increase in Capital Contribution of the Participant. This liability will be repaid with interest at rates and times to be determined by a majority of the Participants within the limits of what is required or permitted in the Act. This liability will not entitle the lending Participant to any increased share of the Joint Venture's profits nor to a greater voting power. Such debts may have preference or priority over any other payments to Participants as may be determined by a majority of the Participants.
Capital Accounts
An individual capital account (the "Capital Accounts") will be maintained for each Participant and their Initial Capital Contribution will be credited to this account. Any Additional Capital Contributions made by any Participant will be credited to that Participant's individual Capital Account.
Interest on Capital
No borrowing charge or loan interest will be due or payable to any Participant on their agreed Capital Contribution inclusive of any agreed Additional Capital Contributions.
9.
10.
11.
Financial Decisions
Decisions regarding the distribution of profits, allocation of losses, and the requirement for Additional Capital Contributions as well as all other financial matters will be decided by a unanimous vote of the Participants.
Profit and Loss
Subject to any other provisions of this Agreement, the net profits and losses of the Joint Venture, for both accounting and tax purposes, will accrue to and be borne by the Participants in proportion to the Participants' Capital Contributions inclusive of any Additional Capital Contributions (the "Profit and Loss Distribution").
Books of Account
Accurate and complete books of account of the transactions of the Joint Venture will be kept in accordance with generally accepted accounting principles (GAAP) and at all reasonable times will be available and open to inspection and examination by any Participant. The books and records of the Joint Venture will reflect all the Joint Venture's transactions and will be appropriate and adequate for the business conducted by the Joint Venture.
Annual Report
As soon as practicable after the close of each fiscal year, the Joint Venture will furnish to each Participant an annual report showing a full and complete account of the condition of the Joint Venture. This report will consist of at least the following documents:
a statement of all information as will be necessary for the preparation of each Participant's income or other tax returns;
a copy of the Joint Venture's federal income tax returns for that fiscal year;
12.
13.
14.
15.
a.
b.
supporting income statement;
a balance sheet;
a cash flow statement;
a breakdown of the profit and loss attributable to each Participant; and
any additional information that the Participants may require.
Banking and Joint Venture Funds
The funds of the Joint Venture will be placed in such investments and banking accounts as will be designated by the Participants. Joint Venture funds will be held in the name of the Joint Venture and will not be commingled with those of any other person or entity.
Fiscal Year
The fiscal year will end on the 31st day of December of each year.
Audit
Any of the Participants will have the right to request an audit of the Joint Venture books. The cost of the audit will be borne by the Joint Venture. The audit will be performed by an accounting firm acceptable to all the Participants. Not more than one (1) audit will be required by any or all of the Participants for any fiscal year.
Management
Except as all of the Participants may otherwise agree in writing, all actions and decisions respecting the management, operation and control of the Joint Venture and its business will be decided by a majority vote of the Participants.
c.
d.
e.
f.
g.
16.
17.
18.
19.
Contract Binding Authority
All actions and decisions with respect to binding the Joint Venture in contract requires the consent of a majority of the Participants.
Tax Matters Participant
The tax matters Participant will be MJ Syndicated Inc. (the "Tax Matters Participant"). The Tax Matters Participant will prepare, or cause to be prepared, all tax returns and reports for the Joint Venture and make any related elections that the Participants deem advisable.
A Tax Matters Participant can voluntarily withdraw from the position of Tax Matters Participant or can be appointed or replaced by a majority vote of the other Participants. In the event of a withdrawal of the Tax Matters Participant from the Joint Venture, the remaining Participants will appoint a successor as soon as practicable.
Meetings
Regular meetings of the Participants will be held quarterly.
Any Participant can call a special meeting to resolve issues that require a vote, as indicated by this Agreement, by providing all Participants with reasonable notice. In the case of a special vote, the meeting will be restricted to the specific purpose for which the meeting was held.
All meetings will be held at a time and in a location that is reasonable, convenient and practical considering the situation of all Participants.
Admitting a New Participant
A new Participant may only be admitted to the Joint Venture with a unanimous vote of the existing Participants.
20.
21.
22.
23.
24.
25.
26.
Any new Participant agrees to be bound by all the covenants, terms, and conditions of this Agreement, inclusive of all current and future amendments. Further, a new Participant will execute such documents as are needed to affect the admission of the new Participant. Any new Participant will receive such business interest in the Joint Venture as determined by a unanimous decision of the other Participants.
Voluntary Withdrawal of a Participant
Any Participant will have the right to voluntarily withdraw from the Joint Venture at any time. Written notice of intention to withdraw must be served in writing upon the remaining Participants at least Thirty (30) business days prior to the withdrawal date.
The voluntary withdrawal of a Participant will result in the dissolution of the Joint Venture.
A Dissociated Participant will only exercise the right to withdraw in good faith and will act to minimize any present or future harm done to the remaining Participants as a result of the withdrawal.
Involuntary Withdrawal of a Participant
Events resulting in the involuntary withdrawal of a Participant from the Joint Venture will include, but not be limited to: death of a Participant; Participant mental incapacity; Participant disability preventing reasonable participation in the Joint Venture; Participant incompetence; breach of fiduciary duties by a Participant; criminal conviction of a Participant; Expulsion of a Participant; Operation of Law against a Participant; or any act or omission of a Participant that can reasonably be expected to bring the business or societal reputation of the Joint Venture into disrepute.
The involuntary withdrawal of a Participant will result in the dissolution of the Joint Venture.
27.
28.
29.
30.
31.
32.
A trustee in bankruptcy or similar third party who may acquire that Dissociated Participant's interest in the Joint Venture will only acquire that Participant's economic rights and interests and will not acquire any other rights of that Participant or be admitted as a Participant of the Joint Venture or have the right to exercise any management or voting interests.
Dissociation of a Participant
Where the dissociation of a Participant for any reason results in the dissolution of the Joint Venture then the Joint Venture will proceed in a reasonable and timely manner to dissolve the Joint Venture, with all debts being paid first, prior to any distribution of the remaining funds. Valuation and distribution will be determined as described in the Valuation of Interest section of this Agreement.
The remaining Participants retain the right to seek damages from a Dissociated Participant where the dissociation resulted from a malicious or criminal act by the Dissociated Participant or where the Dissociated Participant had breached their fiduciary duty to the Joint Venture or was in breach of this Agreement or had acted in a way that could reasonably be foreseen to bring harm or damage to the Joint Venture or to the reputation of the Joint Venture.
Dissolution
Except as otherwise provided in this Agreement, the Joint Venture may be dissolved only with the unanimous consent of all Participants.
Distribution of Property on Dissolution of Joint Venture
In the event of the dissolution of the Joint Venture, each Participant will share in any remaining assets or liabilities of the Joint Venture in proportion to the Participants' Capital Contributions inclusive of any Additional Capital Contributions (the "Dissolution Distribution").
33.
34.
35.
36.
37.
Upon Dissolution of the Joint Venture and liquidation of Joint Venture Property, and after payment of all selling costs and expenses, the liquidator will distribute the Joint Venture assets to the following groups according to the following order of priority:
in satisfaction of liabilities to creditors except Joint Venture obligations to current Participants;
in satisfaction of Joint Venture debt obligations to current Participants; and then
to the Participants according to the Dissolution Distribution described above.
The claims of each priority group will be satisfied in full before satisfying any claims of a lower priority group. Any excess of Joint Venture assets after liabilities or any insufficiency in Joint Venture assets in resolving liabilities under this section will be shared by the Participants according to the Dissolution Distribution described above.
Valuation of Interest
In the absence of a written agreement setting a value, the value of the Joint Venture will be based on the fair market value appraisal of all Joint Venture assets (less liabilities) determined in accordance with generally accepted accounting principles (GAAP). This appraisal will be conducted by an independent accounting firm agreed to by all Participants. An appraiser will be appointed within a reasonable period of the date of withdrawal or dissolution. The results of the appraisal will be binding on all Participants. A withdrawing Part ic ipant 's interest wi l l be based on that Participant's proportion of the Dissolution Distribution described above, less any outstanding liabilities the withdrawing Participant may have to the Joint Venture. The intent of this section is to ensure the survival of the Joint Venture despite the withdrawal of any individual Participant.
38.
a.
b.
c.
39.
40.
No allowance will be made for goodwill, trade name, patents or other intangible assets, except where those assets have been reflected on the Joint Venture books immediately prior to valuation.
Goodwill
The goodwill of the Joint Venture business will be assessed at an amount to be determined by appraisal using generally accepted accounting principles (GAAP).
Title to Joint Venture Property
Title to all Joint Venture Property will remain in the name of the Joint Venture. No Participant or group of Participants will have any ownership interest in such Joint Venture Property in whole or in part.
Voting
Any vote required by the Joint Venture will be assessed where each Participant receives one vote carrying equal weight.
Force Majeure
A Participant will be free of liability to the Joint Venture where the Participant is prevented from executing their obligations under this Agreement in whole or in part due to force majeure, such as earthquake, typhoon, flood, fire, and war or any other unforeseen and uncontrollable event where the Participant has communicated the circumstance of said event to any and all other Participants and taken any and all appropriate action to mitigate said event.
Duty of Loyalty
No Participant will engage in any business, venture or transaction, whether directly or indirectly, that might be competitive with the business of the Joint Venture or that would be in direct conflict of
41.
42.
43.
44.
45.
46.
interest to the Joint Venture without the unanimous written consent of the remaining Participants. Any and all businesses, ventures or transactions with any appearance of conflict of interest must be fully disclosed to all other Participants. Failure to comply with any of the terms of this clause will be deemed an Involuntary Withdrawal of the offending Participant and may be treated accordingly by the remaining Participants.
Duty of Accountability for Private Profits
Each Participant must account to the Joint Venture for any benefit derived by that Participant without the consent of the other Participants from any transaction concerning the Joint Venture or any use by that Participant of the Joint Venture property, name or business connection. This duty continues to apply to any transactions undertaken after the Joint Venture has been dissolved but before the affairs of the Joint Venture have been completely wound up by the surviving Participant or Participants or their agent or agents.
Duty to Devote Time
Each Participant will devote such time and attention to the business of the Joint Venture as the majority of the Participants will from time to time reasonably determine for the conduct of the Joint Venture business.
Actions Requiring Unanimous Consent of the Participants
The following list of actions will require the unanimous consent of all Participants:
committing the Joint Venture to new liabilities or obligations totaling To Be Determined;
and
incurring single expenditures that exceed "To Be Determined".
47.
48.
49.
a.
b.
Any losses incurred as a result of a violation of this section will be charged to and collected from the individual Participant that acted without unanimous consent and caused the loss.
Forbidden Acts
No Participant may do any act in contravention of this Agreement.
No Participant may permit, intentionally or unintentionally, the assignment of express, implied or apparent authority to a third party that is not a Participant in the Joint Venture.
No Participant may do any act that would make it impossible to carry on the ordinary business of the Joint Venture.
No Participant may confess a judgment against the Joint Venture.
No Participant will have the right or authority to bind or obligate the Joint Venture to any extent with regard to any matter outside the intended purpose of the Joint Venture.
Any violation of the above Forbidden Acts will be deemed an Involuntary Withdrawal of the offending Participant and may be treated accordingly by the remaining Participants.
Indemnification
All Participants will be indemnified and held harmless by the Joint Venture from and against any and all claims of any nature, whatsoever, arising out of a Participant's participation in Joint Venture affairs. A Participant will not be entitled to indemnification under this section for liability arising out of gross negligence or wil l ful misconduct of the Participant or the breach by the Participant of any provisions of this Agreement.
Liability
50.
51.
52.
53.
54.
55.
56.
57.
A Participant will not be liable to the Joint Venture, or to any other Participant, for any mistake or error in judgment or for any act or omission done in good faith and believed to be within the scope of authority conferred or implied by this Agreement or the Joint Venture.
Liability Insurance
The Joint Venture may acquire insurance on behalf of any Participant, employee, agent or other person engaged in the business interest of the Joint Venture against any liability asserted against them or incurred by them while acting in good faith on behalf of the Joint Venture.
Amendments
This Agreement may not be amended in whole or in part without the unanimous written consent of all Participants.
Jurisdiction
The Participants submit to the jurisdiction of the courts of The State of Florida for the enforcement of this Agreement or any arbitration award or decision arising from this Agreement.
Definitions
For the purpose of this Agreement, the following terms are defined as follows:
"Additional Capital Contributions" means Capital Contributions, other than Initial Capital Contributions, made by Participants to the Joint Venture.
"Capital Contribution" means the total amount of cash or Property contributed to the Joint Venture by any one Participant.
58.
59.
60.
61.
a.
b.
"Dissociated Participant" means any Participant who is removed from the Joint Venture through a voluntary or involuntary withdrawal as provided in this Agreement.
"Expulsion of a Participant" can occur on application by the Joint Venture or another Participant, where it has been determined that the Participant:
has engaged in wrongful conduct that adversely and materially affected the Joint Venture's business;
has willfully or persistently committed a material breach of this Agreement or of a duty owed to the Joint Venture or to the other Participants; or
has engaged in conduct relating to the Joint Venture's business that makes it not reasonably practicable to carry on the business with the Participant.
"Initial Capital Contribution" means Capital Contributions made by any Participant to acquire an interest in the Joint Venture.
"Operation of Law" means rights or duties that are cast upon a party by the law, without any act or agreement on the part of the individual including, but not limited to, an assignment for the benefit of creditors, a divorce, or a bankruptcy.
Miscellaneous
Time is of the essence in this Agreement.
This Agreement may be executed in counterpart.
Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the
c.
d.
i.
ii.
iii.
e.
f.
62.
63.
64.
masculine gender include the feminine gender and vice versa. Words in the neuter gender include the masculine gender and the feminine gender and vice versa.
If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected, impaired or invalidated as a result.
This Agreement contains the entire agreement between the parties. All negotiations and understandings have been included in this Agreement. Statements or representations which may have been made by any party to this Agreement in the negotiation stages of this Agreement may in some way be inconsistent with this final written Agreement. All such statements are declared to be of no value in this Agreement. Only the written terms of this Agreement will bind the parties.
This Agreement and the terms and conditions contained in this Agreement apply to and are binding upon the Participant's successors, assigns, executors, administrators, beneficiaries, and representatives.
Any notices or delivery required here will be deemed completed when hand-delivered, delivered by agent, or seven (7) days after being placed in the post, postage prepaid, to the parties at the addresses contained in this Agreement or as the parties may later designate in writing.
All of the rights, remedies and benefits provided by this Agreement will be cumulative and will not be exclusive of any other such rights, remedies and benefits allowed by law.
IN WITNESS WHEREOF the Participants have duly affixed their signatures under hand on this 27th day of November 2018.
65.
66.
67.
68.
69.
Simply Herbals
Per: ____________________
CEO: MJ Syndicated, Inc CEO: Simply Herbals, Inc.
MJ Syndicated, Inc.
Per: __/s/ Maxine Pierson________ | Highlight the parts (if any) of this contract related to "Covenant Not To Sue" that should be reviewed by a lawyer. Details: Is a party restricted from contesting the validity of the counterparty’s ownership of intellectual property or otherwise bringing a claim against the counterparty for matters unrelated to the contract? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Non-Disparagement" that should be reviewed by a lawyer. Details: Is there a requirement on a party not to disparage the counterparty?
Context: EXHIBIT 10.18
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED WITH "[***]", HAS BEEN EXCLUDED BECAUSE IT IS NOT MATERIAL AND WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.
MASTER SUPPLY AGREEMENT
THIS MASTER SUPPLY AGREEMENT ("Agreement") is made as of 31 October 2019 ("Effective Date") by and between Premier Nutrition Company, LLC, a Delaware limited liability company with its headquarters located at 1222 67th Street, Suite 210, Emeryville, CA 94608 ("Buyer" or "PNC"), and Fonterra (USA) Inc., a California corporation with its principal place of business located at 8700 W. Bryn Mawr Avenue, Suite 500N, Chicago, IL 60631 ("Supplier" or "Fonterra") (each a "Party", collectively "Parties").
WHEREAS PNC produces, distributes, markets and sells products including ready to drink protein shakes and beverages, powdered protein shakes, nutrition bars, and dietary supplements (the "Finished Products"); and
WHEREAS Supplier produces raw materials including protein powders used by PNC to produce at least some of the Finished Products;
NOW THEREFORE in consideration of their respective rights and obligations as set forth in this Agreement, and for other good and valuable consideration, the adequacy and receipt of which are acknowledged, PNC and Supplier agree as follows:
1 Supply of Ingredients
1.1 Supplier will provide such materials to PNC or its Third Party Manufacturers ("TPMs") as are specified in any Master Purchase Commitment or any other purchase orders that the Parties may execute from time to time during the term of this Agreement ("Ingredients"). Ingredients will be produced at Supplier's facilities listed in a Master Purchase Commitment, or any other of Supplier's facilities approved in advance, in writing by PNC.
1.2 PNC or its TPMs will place specific orders for Ingredients from Supplier by issuing a purchase order that specifies, at minimum, the item, quantities, price, delivery dates, and delivery and payment terms (each a "Purchase Order").
1.3 PNC and Supplier may enter certain Master Purchase Commitments from time to time during the Term of this Master Supply Agreement. Such Master Purchase Commitments and any Purchase Orders issued against such Commitments shall be subject exclusively to the terms and conditions of this Agreement. In the event the terms of any Master Purchase Commitment conflicts with the terms of this Agreement, the terms of the Master Purchase Commitment shall control.
1.4 Supplier will receive Purchase Orders by telephone, USPS, overnight courier, email, and fax transmission, Monday through Friday except on state or nationally recognized bank holidays. Purchase Orders not received by 3:00 p.m. Eastern Time are considered to be received on the following
Page 1
business day. Supplier will confirm or reject Purchase Orders within [***] of receipt of the Purchase Order. Orders not rejected in writing within such time will be deemed confirmed and accepted by Supplier. Each Purchase Order issued by PNC or its TPMs and accepted by Supplier shall be governed by the terms and conditions of this Agreement. Additional terms included in acknowledgments, standard terms and conditions, or any other documents or communications exchanged by the Parties in connection with the sale or purchase of any Ingredients shall be void and of no force or effect. The Parties may only modify, add to or amend any of the terms or conditions of this Agreement by a writing signed by authorized representatives of both Parties.
1.5 Supplier represents and warrants that at the time and date of delivery, the Ingredients will comply with all specifications ("Specifications"), a copy of which will be attached to the relevant Master Purchase Commitment or Purchase Order accordingly. A Specification may be updated from time to time by PNC in its sole discretion, provided PNC provides Supplier with reasonable prior notice on any updates ("Change Notification"). Within [***] from receipt of the Change Notification, Supplier will either: (1) accept the Specification change at the current price and terms; or (2) submit to PNC a proposal ("Proposal") setting forth the conditions of acceptance that may include a change in price and/or other terms, including documentation to support same. Within [***] the Parties will discuss the Proposal in good faith and exercise their best efforts to agree on the appropriate adjustment if any. PNC will not issue any Purchase Orders, nor be required to issue any Purchase Orders to Supplier until PNC and Supplier have agreed on required Ingredient Specifications and any associated price and/or term adjustment. In the event the Parties fail to agree on required Ingredient Specifications or price and/or term adjustments despite their best good faith efforts, neither Party will have any further obligation with regard to purchase or supply of those Ingredients under any Master Purchase Commitments except that PNC shall take and pay for [***] of Ingredient inventory manufactured according to the then-current Specification.
1.6 Supplier will provide a Certificate of Analysis ("COA") completed in accordance with the Specifications with any shipment of Ingredients.
1.7 INTENTIONALLY LEFT BLANK
1.8 This Agreement is nonexclusive and sets forth the terms and conditions under which the Parties will supply and purchase Ingredients from the other Party. Nothing herein is intended to, nor does, guarantee that either Party will supply or purchase any specific, item, in any specific quantity, or conclude any business transaction with the other.
1.9 Supplier Performance metrics will be identified and tracked periodically through Supplier Performance Review meetings no more frequently than each calendar quarter during the Term. [***] Metric targets will be established by PNC and agreed by Fonterra and updated as needed. The ultimate goal is zero defects for quality and administrative compliance issues.
1.10 Supplier agrees to make a good faith effort to provide Advance Ship Notices ("ASN") with bar-coded pallet labels; Invoices, Purchase Orders and other business transactions, as may be advised by PNC, for each Ingredient shipment. Supplier will provide, itself or through a third-party provider, the information via Electronic Data Interface ("EDI") if and as requested by PNC. The technical specifications for all required EDI transactions will be provided by PNC.
2
2 Quality and Food Safety
2.1 For the purposes set forth in Section 303(c) of the Federal Food, Drug, and Cosmetic Act (the "Act"), Supplier guarantees to PNC that as of the time and date of delivery, all Ingredients will not be adulterated or misbranded within the meaning of the Act, nor will any Ingredients constitute an article that may not, under the provisions of Sections 404 and 505 of the Act, be introduced into interstate commerce. The Supplier further guarantees that as of the time and date of delivery, all of the Ingredients will be in compliance with all applicable laws, regulations, requirements and programs including those administered by the Food and Drug Administration (the "FDA"), the United States Department of Agriculture (the "USDA") and any state or local food or drug laws then in effect. This guarantee specifically includes Proposition 65 (California Safe Drinking Water and Toxic Enforcement Act), and Supplier hereby certifies that the Ingredients will not contain any non-naturally occurring chemicals subject to Proposition 65 or that any such chemicals pose "no significant risk" or cause "no observable effect" as set forth in the California Health and Safety Code, 22 CCR §§ 12701 et seq. and 22 CCR §§ 12801 et seq., as amended. Supplier shall comply with all applicable regulatory requirements for determining and documenting that all Ingredients are at or below no significant risk levels and no observable effect levels, as applicable.
2.2 Supplier shall develop and maintain a food safety/food defense program as required under the Food Safety Modernization Act 21 USC §301 et seq and shall submit a copy of such plan (and any changes thereto) to PNC upon PNC's request. Supplier will conduct [***] third-party food safety/food defense audits (the "Audits") in compliance with, and consistent with, relevant audit schemes approved by the Global Food Safety Initiatives, AIB International, Silliker, or GMA SAFE. Supplier will submit summaries of audit reports to PNC's Quality Manager at [***] upon request. Failure to comply with the requirements of this Section 2.2 will constitute a material breach of this Agreement.
2.3 Supplier will notify PNC immediately, by person-to-person voice communication or equivalent means, if any of the Ingredients contain, or are reasonably suspected to contain, material hazardous to human health, including but not limited to, chemical, physical or biological hazards.
2.4 PNC shall notify Supplier in writing if it determines any Ingredient fails to meet the Specifications. Supplier shall be given an opportunity to and will promptly inspect and/or test such Ingredients to confirm compliance to Specification. If after any reasonable, good faith inspection and testing it is confirmed that certain Ingredients fail to meet the Specifications [***].
2.5 Subject to the occurring of a Force Majeure Event, if Supplier fails to deliver the Ingredients in accordance with the Specifications, including within the time specified on the Purchase Order, in addition to any other remedies available, PNC may terminate the Purchase Order in whole or in part. In the event of such a termination, Supplier shall continue performance of any nonterminated portion of the Purchase Order, or any nonterminated Purchase Orders, and the quantity of Ingredient ordered and so terminated shall be deducted against any relevant Master Purchase Commitment.
2.6 PNC or its contracted third-party auditors may enter and audit/inspect Supplier's facilities where the Ingredients are produced, stored, packaged or otherwise processed [***] unless food safety is at issue or PNC has a good faith reason to believe the Ingredients are being stored, packaged, or processed
3
in a way that is inconsistent with the Specifications, in which case an audit may be performed at any time during the Term. For routine visits and audits, PNC will provide [***] if facilities located in the US and with [***] if facilities are located [***], provided that such examination will be conducted during Supplier's normal business hours and in such a manner as to reasonably minimize disruption to Supplier's business, unless food safety is at issue, in which case such examination may be conducted at any time. Supplier shall cooperate in good faith with PNC during all such inspections. During qualification processes and on-site inspections, Supplier will present necessary documentation to ensure compliance with all applicable programs specified under 21 CFR Part 117 Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventative Controls for Human Food. Records of environmental monitoring activities by the Supplier, following Supplier's established environmental monitoring program and standard operating procedures will be made available upon request to PNC. Supplier will notify Buyer immediately via person-to- person voice communication in the event that any pathogen is found, or reasonably suspected, in the plant environment during any environmental monitoring activity that could have an impact on the quality or safety of PNC's Ingredients. In the event of an actual or suspected food safety concern, Supplier shall conduct sampling in all relevant areas and promptly provide results of such tests to PNC. If PNC or its representatives find that any of Supplier's facilities, processes, inventory, procedures or equipment are not in accordance or compliance with the requirements of this Agreement or applicable law or regulation, PNC will give notice to Supplier, and Supplier shall promptly take all reasonable steps to correct such deficiency as soon as possible. If correction of the deficiency cannot be affected within [***] of such notice, then Supplier shall promptly notify PNC with its plan to correct the deficiency including an estimated schedule. If the deficiency cannot be corrected within [***], unless otherwise agreed, then PNC shall have the right to terminate any Purchase Orders then outstanding, along with any Master Purchase Commitment related thereto.
3 Business Continuity/Continuous Supply Assurances. Supplier will develop and maintain a business continuity plan that identifies critical pathways and potential crisis situations that could interrupt the supply of Ingredients to PNC and establish contingency plans for dealing with each crisis situation. Upon PNC's written request, Supplier will submit the business continuity plan to PNC for PNC's review.
4 Intellectual Property. 4.1 Each Party shall retain ownership of all Intellectual Property Rights (as defined below): (1) owned or licensed by that Party prior to the commencement date of this Agreement; or (2) developed or acquired independently of this Agreement by that Party or its licensors other than in connection with this Agreement. 4.2 Ownership in the Intellectual Property Rights, if any, of any developments and/or modifications to the Ingredients during the Term shall be [***]. 4.3 For purposes of this Section 4, the term "Intellectual Property Rights" shall mean all statutory, common law and proprietary intellectual property rights, including rights in know-how, confidential information, copyright works, designs, inventions, patents, plant varieties, trademarks and all other rights, whether registered or unregistered (including applications for such rights).
5 Confidential Information. "Confidential Information" means all business, financial and technical information of the Parties, or of a third- party as to whom a Party has an obligation of confidentiality, whether disclosed before or after the Effective Date and whether disclosed in writing, orally, by electronic delivery, or by inspection of tangible objects. Confidential Information includes, without limitation, trade secrets, ideas,
4
processes, formulae (including formula and specifications for Ingredients and Finished Products), computer software (including source code), algorithms, data, data structures, know-how, copyrightable material, improvements, inventions (whether or not patentable), techniques, strategies, business and product development plans, timetables, forecasts, customer and supplier information, and information relating to product designs, specifications and schematics, product costs, product prices, product names, financial information, marketing plans, business opportunities, personnel, research, development and know-how. Confidential Information includes that which is marked or otherwise identified as confidential, as well as that which by its nature and the circumstances of its disclosure are reasonably understood to be confidential.
5.1 Maintenance of Confidentiality and Limitations on Use. Each Party will hold in strict confidence and keep confidential all Confidential Information disclosed to it by the other. The Parties will use at least the same degree of care to avoid publication or dissemination of such Confidential Information as it uses with respect to similarly confidential information of its own, but in no event less than reasonable care. Use of such Confidential Information by such Party will be strictly limited to activities directly in support of its activities under this Agreement. The Parties will disclose such Confidential Information on a need-to-know basis only, and in all events only to such employees and independent contractors who are informed of the confidential nature of the Confidential Information and are bound by obligations substantially similar to those set forth herein applicable to such Confidential Information. Each Party hereby guarantees the performance of the provisions hereof by each person obtaining disclosure of such Confidential Information directly or indirectly from such Party.
5.2 Copying and Return of Confidential Information. Each Party shall not make any copies or extracts of Confidential Information, or include such Confidential Information in its own materials except as reasonably required directly in support of its activities under this Agreement. When a Party no longer has need thereof in support of its activities under this Agreement or upon request of the other Party, whichever occurs first, such Party shall promptly cease using and shall return or destroy (and, if requested, certify destruction of) all such Confidential Information along with all tangible and electronic copies which it may have made, provided, however, that a Party is not obligated to remove Confidential Information from back up devices that have been made and are maintained in accordance with a corporate records retention policy.
5.3 Certain Exceptions. Information will not be, or will cease being, Confidential Information, as the case may be, if Supplier can show:
5.3.1 that such information entered the public domain other than by breach of this Agreement on the part of any Party obligated to confidentiality hereunder; 5.3.2 it is rightfully known to the receiving Party without obligation of confidentiality to any third-party prior to receipt of same from the disclosing Party as evidenced by bona fide written, dated documents; 5.3.3 it is independently developed by personnel of the receiving Party who have not had access to Confidential Information of the disclosing Party; and, 5.3.4 that it is generally made available to third-parties by the disclosing Party without obligation of confidentiality.
5.4 Legally Required Disclosure. A Party shall not be in breach hereof if it discloses Confidential Information pursuant to a judicial or governmental order, or as required by applicable law or the rules
5
of a recognized stock exchange, but any such disclosure shall be made only to the extent so ordered or required. In any such event, the Party (i) shall timely notify the other Party so that it may intervene in response to such order or take action to protect its interests (in which event such Party will cooperate in such effort), or (ii) if timely notice cannot be given, shall seek to obtain a protective order or confidential treatment from the court or government for such information.
5.5 Defend Trade Secrets Act. Notwithstanding anything in this agreement to the contrary, a receiving Party is hereby notified in accordance with the US Defend Trade Secrets Act of 2016 that it will not be held criminally or civilly liable under any US federal or state trade secret law for the disclosure of a trade secret that: (x) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (y) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.
5.6 Trading in Securities. Supplier acknowledges that it is aware, and agrees to advise its directors, officers, employees, agents and representatives who are informed as to the matters which are the subject of this Agreement, that the United States securities laws prohibit any person who has material, non-public information concerning PNC, its parent and affiliate companies including BellRing Brands, Inc. and Post Holdings, Inc. from purchasing or selling securities of those companies or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.
5.7 Title. As between the Parties, title or right to possess Confidential Information of PNC, except as otherwise provided herein, shall remain in PNC. Nothing in this Agreement shall be construed as granting or conferring any rights to any Confidential Information, except as otherwise explicitly stated in this Agreement.
5.8 No Representation or Warranty. Except as expressly set forth herein, neither Party makes any representations or warranties of any nature whatsoever with respect to any Confidential Information it may provide, including, without limitation, any warranties of merchantability, fitness for a particular purpose or accuracy. All Confidential Information is provided on an "as-is" basis, and the recipient assumes all responsibility for its use thereof or reliance thereon. Further, each Party understands and acknowledges that any confidential information received from the other Party concerning future plans may be tentative and may not represent firm decisions concerning such plans, and neither Party shall be liable to the other Party for inaccuracies in Confidential Information under any theory of liability.
6 Term and Termination.
6.1 This Agreement will commence on the Effective Date and continue for an Initial Term of five (5) years, and will automatically renew for additional periods of five (5) years unless one Party notifies the other of its intention not to renew, no less than 12 months prior to the expiration of the then-current term, unless terminated as permitted under this Agreement.
6.2 Either Party may terminate this Agreement for cause if the other Party fails to perform any material provision of this Agreement or commits a material breach of this Agreement which is not corrected within [***] after receiving written notice of the failure or breach. except that if the default is by
6
Supplier that creates an immediate public food safety risk, PNC may terminate this Agreement immediately without regard to any period for correction.
6.3 This Agreement will automatically terminate if either Party becomes insolvent or files a petition in bankruptcy, if a Party makes an assignment for the benefit of a creditor, if a receiver is appointed to take possession of any part of a Party's assets or if a Party becomes unable generally to pay its debts as they become due, or otherwise ceases to do business.
6.4 On the termination of this Agreement for any reason, all rights granted to Supplier under this Agreement will immediately cease, and Supplier must deliver to PNC all written or recorded materials relating to the Confidential Information of PNC in the possession or control of Supplier or any of its related party, subject to Section 5.2.
7 Indemnification and Insurance. 7.1 Each Party will defend and hold harmless the other Party and its subsidiaries, affiliates, officers, directors, employees, attorneys, insurers, shareholders, representatives and agents from and against any and all liabilities, losses, damages, claims, actions, proceedings, suits, costs or expenses, including reasonable attorney fees for counsel retained by the indemnified Party, brought by a Third Party, arising out of or in connection with: 7.1.1 any negligent or intentional act or omission of the indemnifying Party, its agents or employees; 7.1.2 any breach in or default by the indemnifying Party of its obligations under this Agreement; 7.1.3 any other loss, damage or injury caused by or arising out of the indemnifying Party's or its agents' or employees' on-site visits to the indemnified Party's premises; or any claims relating directly to trademark, patent or copyright infringement arising out of a Party's use of the other Party's (or its licensors') trademarks, patents or copyrights as permitted hereunder. 7.1.4 For purposes of this Section 7.1, "Third Party" means any individual, corporation, partnership, trust, cooperative, or other business organization or entity, and any other recognized organization, other than the Parties or their affiliates.
7.2 Except for a Party's gross negligence or intentional acts or omissions and its obligations of indemnity under this Agreement, under no circumstances will either Party be liable to the other Party for [***].
7.3 Supplier agrees to indemnify and hold PNC harmless from any and all employment-related claims, payments, entitlements, taxes, interest and penalties assessed against or obtained from PNC by any individual or authority as a consequence of or related to the performance by any agent or employee of Supplier.
7.4 Supplier shall maintain insurance with an insurance company with an equivalent of an A.M. Best rating of "A" or better, of the following kinds and in the following amounts during the term of this Agreement: 7.5 7.5.1 Comprehensive General Liability (CGL) Insurance with limits of not less than [***] each occurrence and [***] in the aggregate, including Contractual, Completed-Operations and
7
Product-Liability Coverage's with limits of not less than [***] for each occurrence, covering both bodily injury and property damage liability. 7.5.2 Umbrella/Excess Liability with limits of not less than [***]. 7.5.3 Workers' Compensation Coverage plus Occupational Disease Insurance if Occupational Disease coverage is required by the laws of the state where the Facility is located or work is to be performed. Employers Liability $500,000 each accident 7.5.4 Auto Liability $1,000,000 combined single limit.
7.6 Supplier shall have Buyer named as an additional insured on its insurance policies in subparts 7.5.1 and 7.5.2 above. Supplier shall furnish Buyer with a certificate from its insurer verifying that it has the above insurance in effect during the duration of this Agreement and that insurer acknowledges (a) the contractual liability assumed by Supplier in this Agreement and (b) that Buyer is an additional insured on such policies and (c) Supplier's CGL policy is primary and Buyer's CGL policy is non-contributory and (d) a waiver of subrogation shall be provided in favor of Buyer on the CGL, Workers' Compensation and Auto policies. Said certificate of insurance shall require Supplier's insurance carrier to give Buyer no less than ten (10) days written notice of any cancellation or change in coverage. Failure to secure such insurance as of the date of execution of this Agreement shall constitute a breach of this Agreement. Supplier shall provide to PNC a certificate evidencing such insurance within thirty (30) days of a request for same from PNC.
7.7 Supplier shall, at its own expense, maintain throughout the term of this Agreement, all insurance required by law or regulation in all countries in which this Agreement will be performed.
8 Recall. If Ingredients provided by Supplier under this Agreement are misbranded, contaminated, or otherwise unfit for human consumption at the time they are delivered to PNC or its TPM ("Defect"), PNC in its sole discretion will make a determination of the necessity of a recall, market withdrawal, inventory retrieval, or other action designed to prevent the distribution or sale of the affected Finished Products, plus the type, extent, method of handling, disposition of the Finished Products as well as any affected work in progress, and all other particulars involved in such an action (a "Recall"), and PNC will execute any Recall. Supplier, in its sole discretion, will make a determination of the necessity of a recall, market withdrawal, inventory retrieval or other action designed to prevent the distribution or sale of the Ingredients. Subject to Section 9.1, Supplier shall bear the complete responsibility for a Recall occasioned by a Defect in the Ingredient and shall indemnify PNC for [***] resulting from or related to the Recall. Any Recall occasioned by PNC labels or by tampering with the Ingredients after they have left Supplier's control, or by improper storing or handling by PNC, will not be considered a Defect.
9 Limitation of Liability.
9.1 The maximum liability of one Party to the other Party and its affiliates in relation to this Agreement will be [***] ("Liability Cap"), provided however that:
8
9.1.1 The Liability Cap will not apply to any (1) material confidentiality breach under Section 5, and/or (2) indemnification obligations under Section 7.1. 9.1.2 The Liability Cap will not apply to intentional misconduct and/or gross negligence.
9.2 For the purpose of this Section, "liability" means liability for any and all claims, causes of action, judgments, costs and expenses (including but not limited to reasonable attorney fees and expenses), reimbursements, losses, and any and all other liabilities and damages of any kind, whether in contract, tort (including negligence), equity, statute or otherwise arising out of, in relation to or as a result of this Agreement.
10 Force Majeure.
10.1 Neither Party will be liable for any breach of its obligations under this Agreement resulting from causes beyond its reasonable control, including, but not limited to, an act of nature, drought, outbreak of foot and mouth disease, port and other transport strikes, war, fires, quarantine restrictions, insurrections or riots, energy shortages, embargo or the inability to obtain supplies or raw materials because of a global shortage or governmental action (a "Force Majeure Event"). Notwithstanding anything herein to the contrary, in the event of a Force Majeure Event, or any other circumstance that limits Fonterra's ability to produce or deliver product, Supplier will exercise its best efforts to comply with its obligations hereunder, mitigate the adverse impact on and not disfavor PNC, and will treat it in parity with its other customers.
10.2 Any obligation of either Party under this Agreement will be postponed until the cause underlying the Force Majeure Event has been eliminated, at which time the obligation will again be in effect. Any loss of time by the Force Majeure Event will not be held against the Party who was unable to comply with its obligations under this Agreement because of the Force Majeure Event. The Party unable to comply with its obligations under this Agreement will immediately notify the other Party in writing that a Force Majeure Event has delayed its performance and will state, to the best of its knowledge, the revised date for performance. If a Force Majeure Event persists for longer than [***], the Party not directly affected by the Force Majeure Event may terminate this Agreement with regard to any relevant Master Purchase Commitments or Purchase Orders.
10.3 Should Supplier be unable to comply with its obligations under this Agreement because of a Force Majeure Event, PNC may obtain elsewhere the Ingredients the Supplier was unable to deliver because of the Force Majeure Event and those Ingredients will be credited against any relevant Minimum Purchase Commitment. PNC will not be obligated to purchase those Ingredients from Supplier at a later time.
11 Notices. Notices contemplated by this Agreement must be in writing and may be sent by registered or certified mail, postage prepaid, to the address specified in the first paragraph of this Agreement or to any other address designated by prior written notice.
12 Governing Law; Dispute Resolution.
9
12.1 This Agreement will be governed by the laws of the State of Delaware without regard to its conflicts of law principles.
12.2 The Parties consent to, acknowledge, and agree that any dispute arising out of or relating to this Agreement, including the breach, termination or validity thereof, shall be brought exclusively before the state and federal courts in and for the City of Wilmington and County of New Castle, Delaware Each Party waives any objection based on forum non conveniens.
13 Assignment. Neither Party may transfer or assign any of its rights or obligations under this Agreement without the prior written consent of the other Party, except that either Party may assign this Agreement to any entity controlled by it, its parents, subsidiaries, or affiliates, or to any purchaser of the business to which this Agreement relates subject to the other Parties consent which will not be unreasonably withheld or delayed.
14 Supplier Conduct. Supplier agrees to engage in responsible and ethical business practices and conduct itself in full compliance with all applicable laws, rules, and regulations in every country in which it does business.
15 California Transparency Act. PNC does not accept or support the use of illegal, abusive, or forced labor in our own facilities. Within its supply chain, Supplier will comply with all laws of the country they are doing business in and are subject to.
16 U.S. Government Affirmative Action Regulations. During the performance of this contract or any purchase order issued hereunder, the Supplier agrees to comply with all applicable Federal, state and local laws respecting discrimination in employment and non-segregation of facilities including, but not limited to, requirements set out at 41 CFR §60-1.4, 41 CFR §61-300.10, 29 CFR Part 471 Appendix A to Subpart A, 41 CFR §60-300.5 and 41 CFR §60-741.5, which specific clauses are herein incorporated by reference into all covered contracts and subcontracts as required by Federal law. This Supplier and any applicable subcontractor shall abide by the requirements of 41 CFR §60- 300.5(a) and §60-741.5(a) to the extent applicable. These regulations prohibit discrimination against qualified individuals on the basis of protected veteran status or disability, and require affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified protected veterans and individuals with disabilities.
17 Fair Labor Practices.
17.1 Supplier shall provide workers with clean, safe and healthy work environments; recognize and respect the right of employees to free association and collective bargaining in accordance with law; comply with all applicable wage and hour laws; and properly verify the employment eligibility of its employees.
17.2 Forced Labor. Suppliers will not employ, use or otherwise benefit from involuntary labor, forced labor, or labor that results from slavery or human trafficking. Supplier hereby certifies that: (i) it is in compliance with this paragraph; and (ii) all materials incorporated into its products comply with all applicable laws addressing slavery, human trafficking and other forms of forced labor. Supplier shall provide PNC with documentation establishing compliance with this paragraph upon [***] notice.
10
17.3 Child Labor. Supplier will not employ anyone under the legal working age defined by local law. Supplier will comply with all applicable laws addressing the working requirements and conditions for child workers.
17.4 Respectful Workplace. Supplier shall prohibit all forms of unlawful discrimination, abuse, harassment, violence and retaliation.
18 Gifts and Entertainment. Supplier will not offer any gift to a PNC employee, contractor, or agent that is: (i) more than a nominal value; (ii) more than an infrequent occurrence; (iii) cash or cash equivalents; or (iv) illegal, sexually oriented, offensive or otherwise inappropriate.
19 Environment & Sustainability. Supplier will comply with all applicable environmental laws and reporting obligations, maintain all required permits, and strive to responsibly manage the impacts of their operations on the environment.
20 Anticorruption. Suppliers will not, directly or indirectly, offer improper gifts to government employees, engage in bribery or fraud, or take any other action that would cause a violation of the U.S. Foreign Corrupt Practices Act, the UK Bribery Act or any other applicable anti- corruption law.
21 Miscellaneous.
21.1 If any provision of this Agreement is determined to be illegal or unenforceable, all other provisions will continue in full force and effect.
21.2 This Agreement may be executed concurrently by original or facsimile signature in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
21.3 Each right and remedy of each Party described in this Agreement is cumulative and in addition to every other right or remedy, express or implied, now or hereafter arising, available to such Party, at law or in equity, or under any other agreement. No delay or omission by either Party in the exercise of any right or remedy arising under this Agreement will impair any such right or remedy or the right of such Party to resort thereto at a later date or be construed to be a waiver of any default under this Agreement. The indemnities, representations and warranties of each Party will survive termination of this Agreement.
21.4 This Agreement, together with any schedules and exhibits and any Purchase Orders, Specifications and COAs, constitutes the complete agreement between the Parties and supersedes all prior agreements between the Parties regarding this subject matter. The Parties hereby agree that any such prior agreements are hereby terminated. No other contracts, warranties, promises or representations, either oral or in writing, relating to this Agreement will bind either Party except for the Purchase Orders, Specifications and COAs. This Agreement may not be amended or modified except by a writing signed by an authorized representative of the Party against whom such amendment or modification is asserted. This Agreement will be binding upon, and will inure to the benefit of, the parties, their successors and permitted assigns.
(signature page follows)
11
Agreed to and executed effective as of the date first above written.
Fonterra (USA) Inc. Premier Nutrition Company, LLC
By: [***] By: /s/ Paul Rode Title: President Title: CFO
12
Agreed to and executed effective as of the date first above written.
Fonterra (USA) Inc. Premier Nutrition Company, LLC
By: By: /s/ Paul Rode
Title: Title: CFO [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | EXHIBIT 10.18
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED WITH "[***]", HAS BEEN EXCLUDED BECAUSE IT IS NOT MATERIAL AND WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.
MASTER SUPPLY AGREEMENT
THIS MASTER SUPPLY AGREEMENT ("Agreement") is made as of 31 October 2019 ("Effective Date") by and between Premier Nutrition Company, LLC, a Delaware limited liability company with its headquarters located at 1222 67th Street, Suite 210, Emeryville, CA 94608 ("Buyer" or "PNC"), and Fonterra (USA) Inc., a California corporation with its principal place of business located at 8700 W. Bryn Mawr Avenue, Suite 500N, Chicago, IL 60631 ("Supplier" or "Fonterra") (each a "Party", collectively "Parties").
WHEREAS PNC produces, distributes, markets and sells products including ready to drink protein shakes and beverages, powdered protein shakes, nutrition bars, and dietary supplements (the "Finished Products"); and
WHEREAS Supplier produces raw materials including protein powders used by PNC to produce at least some of the Finished Products;
NOW THEREFORE in consideration of their respective rights and obligations as set forth in this Agreement, and for other good and valuable consideration, the adequacy and receipt of which are acknowledged, PNC and Supplier agree as follows:
1 Supply of Ingredients
1.1 Supplier will provide such materials to PNC or its Third Party Manufacturers ("TPMs") as are specified in any Master Purchase Commitment or any other purchase orders that the Parties may execute from time to time during the term of this Agreement ("Ingredients"). Ingredients will be produced at Supplier's facilities listed in a Master Purchase Commitment, or any other of Supplier's facilities approved in advance, in writing by PNC.
1.2 PNC or its TPMs will place specific orders for Ingredients from Supplier by issuing a purchase order that specifies, at minimum, the item, quantities, price, delivery dates, and delivery and payment terms (each a "Purchase Order").
1.3 PNC and Supplier may enter certain Master Purchase Commitments from time to time during the Term of this Master Supply Agreement. Such Master Purchase Commitments and any Purchase Orders issued against such Commitments shall be subject exclusively to the terms and conditions of this Agreement. In the event the terms of any Master Purchase Commitment conflicts with the terms of this Agreement, the terms of the Master Purchase Commitment shall control.
1.4 Supplier will receive Purchase Orders by telephone, USPS, overnight courier, email, and fax transmission, Monday through Friday except on state or nationally recognized bank holidays. Purchase Orders not received by 3:00 p.m. Eastern Time are considered to be received on the following
Page 1
business day. Supplier will confirm or reject Purchase Orders within [***] of receipt of the Purchase Order. Orders not rejected in writing within such time will be deemed confirmed and accepted by Supplier. Each Purchase Order issued by PNC or its TPMs and accepted by Supplier shall be governed by the terms and conditions of this Agreement. Additional terms included in acknowledgments, standard terms and conditions, or any other documents or communications exchanged by the Parties in connection with the sale or purchase of any Ingredients shall be void and of no force or effect. The Parties may only modify, add to or amend any of the terms or conditions of this Agreement by a writing signed by authorized representatives of both Parties.
1.5 Supplier represents and warrants that at the time and date of delivery, the Ingredients will comply with all specifications ("Specifications"), a copy of which will be attached to the relevant Master Purchase Commitment or Purchase Order accordingly. A Specification may be updated from time to time by PNC in its sole discretion, provided PNC provides Supplier with reasonable prior notice on any updates ("Change Notification"). Within [***] from receipt of the Change Notification, Supplier will either: (1) accept the Specification change at the current price and terms; or (2) submit to PNC a proposal ("Proposal") setting forth the conditions of acceptance that may include a change in price and/or other terms, including documentation to support same. Within [***] the Parties will discuss the Proposal in good faith and exercise their best efforts to agree on the appropriate adjustment if any. PNC will not issue any Purchase Orders, nor be required to issue any Purchase Orders to Supplier until PNC and Supplier have agreed on required Ingredient Specifications and any associated price and/or term adjustment. In the event the Parties fail to agree on required Ingredient Specifications or price and/or term adjustments despite their best good faith efforts, neither Party will have any further obligation with regard to purchase or supply of those Ingredients under any Master Purchase Commitments except that PNC shall take and pay for [***] of Ingredient inventory manufactured according to the then-current Specification.
1.6 Supplier will provide a Certificate of Analysis ("COA") completed in accordance with the Specifications with any shipment of Ingredients.
1.7 INTENTIONALLY LEFT BLANK
1.8 This Agreement is nonexclusive and sets forth the terms and conditions under which the Parties will supply and purchase Ingredients from the other Party. Nothing herein is intended to, nor does, guarantee that either Party will supply or purchase any specific, item, in any specific quantity, or conclude any business transaction with the other.
1.9 Supplier Performance metrics will be identified and tracked periodically through Supplier Performance Review meetings no more frequently than each calendar quarter during the Term. [***] Metric targets will be established by PNC and agreed by Fonterra and updated as needed. The ultimate goal is zero defects for quality and administrative compliance issues.
1.10 Supplier agrees to make a good faith effort to provide Advance Ship Notices ("ASN") with bar-coded pallet labels; Invoices, Purchase Orders and other business transactions, as may be advised by PNC, for each Ingredient shipment. Supplier will provide, itself or through a third-party provider, the information via Electronic Data Interface ("EDI") if and as requested by PNC. The technical specifications for all required EDI transactions will be provided by PNC.
2
2 Quality and Food Safety
2.1 For the purposes set forth in Section 303(c) of the Federal Food, Drug, and Cosmetic Act (the "Act"), Supplier guarantees to PNC that as of the time and date of delivery, all Ingredients will not be adulterated or misbranded within the meaning of the Act, nor will any Ingredients constitute an article that may not, under the provisions of Sections 404 and 505 of the Act, be introduced into interstate commerce. The Supplier further guarantees that as of the time and date of delivery, all of the Ingredients will be in compliance with all applicable laws, regulations, requirements and programs including those administered by the Food and Drug Administration (the "FDA"), the United States Department of Agriculture (the "USDA") and any state or local food or drug laws then in effect. This guarantee specifically includes Proposition 65 (California Safe Drinking Water and Toxic Enforcement Act), and Supplier hereby certifies that the Ingredients will not contain any non-naturally occurring chemicals subject to Proposition 65 or that any such chemicals pose "no significant risk" or cause "no observable effect" as set forth in the California Health and Safety Code, 22 CCR §§ 12701 et seq. and 22 CCR §§ 12801 et seq., as amended. Supplier shall comply with all applicable regulatory requirements for determining and documenting that all Ingredients are at or below no significant risk levels and no observable effect levels, as applicable.
2.2 Supplier shall develop and maintain a food safety/food defense program as required under the Food Safety Modernization Act 21 USC §301 et seq and shall submit a copy of such plan (and any changes thereto) to PNC upon PNC's request. Supplier will conduct [***] third-party food safety/food defense audits (the "Audits") in compliance with, and consistent with, relevant audit schemes approved by the Global Food Safety Initiatives, AIB International, Silliker, or GMA SAFE. Supplier will submit summaries of audit reports to PNC's Quality Manager at [***] upon request. Failure to comply with the requirements of this Section 2.2 will constitute a material breach of this Agreement.
2.3 Supplier will notify PNC immediately, by person-to-person voice communication or equivalent means, if any of the Ingredients contain, or are reasonably suspected to contain, material hazardous to human health, including but not limited to, chemical, physical or biological hazards.
2.4 PNC shall notify Supplier in writing if it determines any Ingredient fails to meet the Specifications. Supplier shall be given an opportunity to and will promptly inspect and/or test such Ingredients to confirm compliance to Specification. If after any reasonable, good faith inspection and testing it is confirmed that certain Ingredients fail to meet the Specifications [***].
2.5 Subject to the occurring of a Force Majeure Event, if Supplier fails to deliver the Ingredients in accordance with the Specifications, including within the time specified on the Purchase Order, in addition to any other remedies available, PNC may terminate the Purchase Order in whole or in part. In the event of such a termination, Supplier shall continue performance of any nonterminated portion of the Purchase Order, or any nonterminated Purchase Orders, and the quantity of Ingredient ordered and so terminated shall be deducted against any relevant Master Purchase Commitment.
2.6 PNC or its contracted third-party auditors may enter and audit/inspect Supplier's facilities where the Ingredients are produced, stored, packaged or otherwise processed [***] unless food safety is at issue or PNC has a good faith reason to believe the Ingredients are being stored, packaged, or processed
3
in a way that is inconsistent with the Specifications, in which case an audit may be performed at any time during the Term. For routine visits and audits, PNC will provide [***] if facilities located in the US and with [***] if facilities are located [***], provided that such examination will be conducted during Supplier's normal business hours and in such a manner as to reasonably minimize disruption to Supplier's business, unless food safety is at issue, in which case such examination may be conducted at any time. Supplier shall cooperate in good faith with PNC during all such inspections. During qualification processes and on-site inspections, Supplier will present necessary documentation to ensure compliance with all applicable programs specified under 21 CFR Part 117 Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventative Controls for Human Food. Records of environmental monitoring activities by the Supplier, following Supplier's established environmental monitoring program and standard operating procedures will be made available upon request to PNC. Supplier will notify Buyer immediately via person-to- person voice communication in the event that any pathogen is found, or reasonably suspected, in the plant environment during any environmental monitoring activity that could have an impact on the quality or safety of PNC's Ingredients. In the event of an actual or suspected food safety concern, Supplier shall conduct sampling in all relevant areas and promptly provide results of such tests to PNC. If PNC or its representatives find that any of Supplier's facilities, processes, inventory, procedures or equipment are not in accordance or compliance with the requirements of this Agreement or applicable law or regulation, PNC will give notice to Supplier, and Supplier shall promptly take all reasonable steps to correct such deficiency as soon as possible. If correction of the deficiency cannot be affected within [***] of such notice, then Supplier shall promptly notify PNC with its plan to correct the deficiency including an estimated schedule. If the deficiency cannot be corrected within [***], unless otherwise agreed, then PNC shall have the right to terminate any Purchase Orders then outstanding, along with any Master Purchase Commitment related thereto.
3 Business Continuity/Continuous Supply Assurances. Supplier will develop and maintain a business continuity plan that identifies critical pathways and potential crisis situations that could interrupt the supply of Ingredients to PNC and establish contingency plans for dealing with each crisis situation. Upon PNC's written request, Supplier will submit the business continuity plan to PNC for PNC's review.
4 Intellectual Property. 4.1 Each Party shall retain ownership of all Intellectual Property Rights (as defined below): (1) owned or licensed by that Party prior to the commencement date of this Agreement; or (2) developed or acquired independently of this Agreement by that Party or its licensors other than in connection with this Agreement. 4.2 Ownership in the Intellectual Property Rights, if any, of any developments and/or modifications to the Ingredients during the Term shall be [***]. 4.3 For purposes of this Section 4, the term "Intellectual Property Rights" shall mean all statutory, common law and proprietary intellectual property rights, including rights in know-how, confidential information, copyright works, designs, inventions, patents, plant varieties, trademarks and all other rights, whether registered or unregistered (including applications for such rights).
5 Confidential Information. "Confidential Information" means all business, financial and technical information of the Parties, or of a third- party as to whom a Party has an obligation of confidentiality, whether disclosed before or after the Effective Date and whether disclosed in writing, orally, by electronic delivery, or by inspection of tangible objects. Confidential Information includes, without limitation, trade secrets, ideas,
4
processes, formulae (including formula and specifications for Ingredients and Finished Products), computer software (including source code), algorithms, data, data structures, know-how, copyrightable material, improvements, inventions (whether or not patentable), techniques, strategies, business and product development plans, timetables, forecasts, customer and supplier information, and information relating to product designs, specifications and schematics, product costs, product prices, product names, financial information, marketing plans, business opportunities, personnel, research, development and know-how. Confidential Information includes that which is marked or otherwise identified as confidential, as well as that which by its nature and the circumstances of its disclosure are reasonably understood to be confidential.
5.1 Maintenance of Confidentiality and Limitations on Use. Each Party will hold in strict confidence and keep confidential all Confidential Information disclosed to it by the other. The Parties will use at least the same degree of care to avoid publication or dissemination of such Confidential Information as it uses with respect to similarly confidential information of its own, but in no event less than reasonable care. Use of such Confidential Information by such Party will be strictly limited to activities directly in support of its activities under this Agreement. The Parties will disclose such Confidential Information on a need-to-know basis only, and in all events only to such employees and independent contractors who are informed of the confidential nature of the Confidential Information and are bound by obligations substantially similar to those set forth herein applicable to such Confidential Information. Each Party hereby guarantees the performance of the provisions hereof by each person obtaining disclosure of such Confidential Information directly or indirectly from such Party.
5.2 Copying and Return of Confidential Information. Each Party shall not make any copies or extracts of Confidential Information, or include such Confidential Information in its own materials except as reasonably required directly in support of its activities under this Agreement. When a Party no longer has need thereof in support of its activities under this Agreement or upon request of the other Party, whichever occurs first, such Party shall promptly cease using and shall return or destroy (and, if requested, certify destruction of) all such Confidential Information along with all tangible and electronic copies which it may have made, provided, however, that a Party is not obligated to remove Confidential Information from back up devices that have been made and are maintained in accordance with a corporate records retention policy.
5.3 Certain Exceptions. Information will not be, or will cease being, Confidential Information, as the case may be, if Supplier can show:
5.3.1 that such information entered the public domain other than by breach of this Agreement on the part of any Party obligated to confidentiality hereunder; 5.3.2 it is rightfully known to the receiving Party without obligation of confidentiality to any third-party prior to receipt of same from the disclosing Party as evidenced by bona fide written, dated documents; 5.3.3 it is independently developed by personnel of the receiving Party who have not had access to Confidential Information of the disclosing Party; and, 5.3.4 that it is generally made available to third-parties by the disclosing Party without obligation of confidentiality.
5.4 Legally Required Disclosure. A Party shall not be in breach hereof if it discloses Confidential Information pursuant to a judicial or governmental order, or as required by applicable law or the rules
5
of a recognized stock exchange, but any such disclosure shall be made only to the extent so ordered or required. In any such event, the Party (i) shall timely notify the other Party so that it may intervene in response to such order or take action to protect its interests (in which event such Party will cooperate in such effort), or (ii) if timely notice cannot be given, shall seek to obtain a protective order or confidential treatment from the court or government for such information.
5.5 Defend Trade Secrets Act. Notwithstanding anything in this agreement to the contrary, a receiving Party is hereby notified in accordance with the US Defend Trade Secrets Act of 2016 that it will not be held criminally or civilly liable under any US federal or state trade secret law for the disclosure of a trade secret that: (x) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (y) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.
5.6 Trading in Securities. Supplier acknowledges that it is aware, and agrees to advise its directors, officers, employees, agents and representatives who are informed as to the matters which are the subject of this Agreement, that the United States securities laws prohibit any person who has material, non-public information concerning PNC, its parent and affiliate companies including BellRing Brands, Inc. and Post Holdings, Inc. from purchasing or selling securities of those companies or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.
5.7 Title. As between the Parties, title or right to possess Confidential Information of PNC, except as otherwise provided herein, shall remain in PNC. Nothing in this Agreement shall be construed as granting or conferring any rights to any Confidential Information, except as otherwise explicitly stated in this Agreement.
5.8 No Representation or Warranty. Except as expressly set forth herein, neither Party makes any representations or warranties of any nature whatsoever with respect to any Confidential Information it may provide, including, without limitation, any warranties of merchantability, fitness for a particular purpose or accuracy. All Confidential Information is provided on an "as-is" basis, and the recipient assumes all responsibility for its use thereof or reliance thereon. Further, each Party understands and acknowledges that any confidential information received from the other Party concerning future plans may be tentative and may not represent firm decisions concerning such plans, and neither Party shall be liable to the other Party for inaccuracies in Confidential Information under any theory of liability.
6 Term and Termination.
6.1 This Agreement will commence on the Effective Date and continue for an Initial Term of five (5) years, and will automatically renew for additional periods of five (5) years unless one Party notifies the other of its intention not to renew, no less than 12 months prior to the expiration of the then-current term, unless terminated as permitted under this Agreement.
6.2 Either Party may terminate this Agreement for cause if the other Party fails to perform any material provision of this Agreement or commits a material breach of this Agreement which is not corrected within [***] after receiving written notice of the failure or breach. except that if the default is by
6
Supplier that creates an immediate public food safety risk, PNC may terminate this Agreement immediately without regard to any period for correction.
6.3 This Agreement will automatically terminate if either Party becomes insolvent or files a petition in bankruptcy, if a Party makes an assignment for the benefit of a creditor, if a receiver is appointed to take possession of any part of a Party's assets or if a Party becomes unable generally to pay its debts as they become due, or otherwise ceases to do business.
6.4 On the termination of this Agreement for any reason, all rights granted to Supplier under this Agreement will immediately cease, and Supplier must deliver to PNC all written or recorded materials relating to the Confidential Information of PNC in the possession or control of Supplier or any of its related party, subject to Section 5.2.
7 Indemnification and Insurance. 7.1 Each Party will defend and hold harmless the other Party and its subsidiaries, affiliates, officers, directors, employees, attorneys, insurers, shareholders, representatives and agents from and against any and all liabilities, losses, damages, claims, actions, proceedings, suits, costs or expenses, including reasonable attorney fees for counsel retained by the indemnified Party, brought by a Third Party, arising out of or in connection with: 7.1.1 any negligent or intentional act or omission of the indemnifying Party, its agents or employees; 7.1.2 any breach in or default by the indemnifying Party of its obligations under this Agreement; 7.1.3 any other loss, damage or injury caused by or arising out of the indemnifying Party's or its agents' or employees' on-site visits to the indemnified Party's premises; or any claims relating directly to trademark, patent or copyright infringement arising out of a Party's use of the other Party's (or its licensors') trademarks, patents or copyrights as permitted hereunder. 7.1.4 For purposes of this Section 7.1, "Third Party" means any individual, corporation, partnership, trust, cooperative, or other business organization or entity, and any other recognized organization, other than the Parties or their affiliates.
7.2 Except for a Party's gross negligence or intentional acts or omissions and its obligations of indemnity under this Agreement, under no circumstances will either Party be liable to the other Party for [***].
7.3 Supplier agrees to indemnify and hold PNC harmless from any and all employment-related claims, payments, entitlements, taxes, interest and penalties assessed against or obtained from PNC by any individual or authority as a consequence of or related to the performance by any agent or employee of Supplier.
7.4 Supplier shall maintain insurance with an insurance company with an equivalent of an A.M. Best rating of "A" or better, of the following kinds and in the following amounts during the term of this Agreement: 7.5 7.5.1 Comprehensive General Liability (CGL) Insurance with limits of not less than [***] each occurrence and [***] in the aggregate, including Contractual, Completed-Operations and
7
Product-Liability Coverage's with limits of not less than [***] for each occurrence, covering both bodily injury and property damage liability. 7.5.2 Umbrella/Excess Liability with limits of not less than [***]. 7.5.3 Workers' Compensation Coverage plus Occupational Disease Insurance if Occupational Disease coverage is required by the laws of the state where the Facility is located or work is to be performed. Employers Liability $500,000 each accident 7.5.4 Auto Liability $1,000,000 combined single limit.
7.6 Supplier shall have Buyer named as an additional insured on its insurance policies in subparts 7.5.1 and 7.5.2 above. Supplier shall furnish Buyer with a certificate from its insurer verifying that it has the above insurance in effect during the duration of this Agreement and that insurer acknowledges (a) the contractual liability assumed by Supplier in this Agreement and (b) that Buyer is an additional insured on such policies and (c) Supplier's CGL policy is primary and Buyer's CGL policy is non-contributory and (d) a waiver of subrogation shall be provided in favor of Buyer on the CGL, Workers' Compensation and Auto policies. Said certificate of insurance shall require Supplier's insurance carrier to give Buyer no less than ten (10) days written notice of any cancellation or change in coverage. Failure to secure such insurance as of the date of execution of this Agreement shall constitute a breach of this Agreement. Supplier shall provide to PNC a certificate evidencing such insurance within thirty (30) days of a request for same from PNC.
7.7 Supplier shall, at its own expense, maintain throughout the term of this Agreement, all insurance required by law or regulation in all countries in which this Agreement will be performed.
8 Recall. If Ingredients provided by Supplier under this Agreement are misbranded, contaminated, or otherwise unfit for human consumption at the time they are delivered to PNC or its TPM ("Defect"), PNC in its sole discretion will make a determination of the necessity of a recall, market withdrawal, inventory retrieval, or other action designed to prevent the distribution or sale of the affected Finished Products, plus the type, extent, method of handling, disposition of the Finished Products as well as any affected work in progress, and all other particulars involved in such an action (a "Recall"), and PNC will execute any Recall. Supplier, in its sole discretion, will make a determination of the necessity of a recall, market withdrawal, inventory retrieval or other action designed to prevent the distribution or sale of the Ingredients. Subject to Section 9.1, Supplier shall bear the complete responsibility for a Recall occasioned by a Defect in the Ingredient and shall indemnify PNC for [***] resulting from or related to the Recall. Any Recall occasioned by PNC labels or by tampering with the Ingredients after they have left Supplier's control, or by improper storing or handling by PNC, will not be considered a Defect.
9 Limitation of Liability.
9.1 The maximum liability of one Party to the other Party and its affiliates in relation to this Agreement will be [***] ("Liability Cap"), provided however that:
8
9.1.1 The Liability Cap will not apply to any (1) material confidentiality breach under Section 5, and/or (2) indemnification obligations under Section 7.1. 9.1.2 The Liability Cap will not apply to intentional misconduct and/or gross negligence.
9.2 For the purpose of this Section, "liability" means liability for any and all claims, causes of action, judgments, costs and expenses (including but not limited to reasonable attorney fees and expenses), reimbursements, losses, and any and all other liabilities and damages of any kind, whether in contract, tort (including negligence), equity, statute or otherwise arising out of, in relation to or as a result of this Agreement.
10 Force Majeure.
10.1 Neither Party will be liable for any breach of its obligations under this Agreement resulting from causes beyond its reasonable control, including, but not limited to, an act of nature, drought, outbreak of foot and mouth disease, port and other transport strikes, war, fires, quarantine restrictions, insurrections or riots, energy shortages, embargo or the inability to obtain supplies or raw materials because of a global shortage or governmental action (a "Force Majeure Event"). Notwithstanding anything herein to the contrary, in the event of a Force Majeure Event, or any other circumstance that limits Fonterra's ability to produce or deliver product, Supplier will exercise its best efforts to comply with its obligations hereunder, mitigate the adverse impact on and not disfavor PNC, and will treat it in parity with its other customers.
10.2 Any obligation of either Party under this Agreement will be postponed until the cause underlying the Force Majeure Event has been eliminated, at which time the obligation will again be in effect. Any loss of time by the Force Majeure Event will not be held against the Party who was unable to comply with its obligations under this Agreement because of the Force Majeure Event. The Party unable to comply with its obligations under this Agreement will immediately notify the other Party in writing that a Force Majeure Event has delayed its performance and will state, to the best of its knowledge, the revised date for performance. If a Force Majeure Event persists for longer than [***], the Party not directly affected by the Force Majeure Event may terminate this Agreement with regard to any relevant Master Purchase Commitments or Purchase Orders.
10.3 Should Supplier be unable to comply with its obligations under this Agreement because of a Force Majeure Event, PNC may obtain elsewhere the Ingredients the Supplier was unable to deliver because of the Force Majeure Event and those Ingredients will be credited against any relevant Minimum Purchase Commitment. PNC will not be obligated to purchase those Ingredients from Supplier at a later time.
11 Notices. Notices contemplated by this Agreement must be in writing and may be sent by registered or certified mail, postage prepaid, to the address specified in the first paragraph of this Agreement or to any other address designated by prior written notice.
12 Governing Law; Dispute Resolution.
9
12.1 This Agreement will be governed by the laws of the State of Delaware without regard to its conflicts of law principles.
12.2 The Parties consent to, acknowledge, and agree that any dispute arising out of or relating to this Agreement, including the breach, termination or validity thereof, shall be brought exclusively before the state and federal courts in and for the City of Wilmington and County of New Castle, Delaware Each Party waives any objection based on forum non conveniens.
13 Assignment. Neither Party may transfer or assign any of its rights or obligations under this Agreement without the prior written consent of the other Party, except that either Party may assign this Agreement to any entity controlled by it, its parents, subsidiaries, or affiliates, or to any purchaser of the business to which this Agreement relates subject to the other Parties consent which will not be unreasonably withheld or delayed.
14 Supplier Conduct. Supplier agrees to engage in responsible and ethical business practices and conduct itself in full compliance with all applicable laws, rules, and regulations in every country in which it does business.
15 California Transparency Act. PNC does not accept or support the use of illegal, abusive, or forced labor in our own facilities. Within its supply chain, Supplier will comply with all laws of the country they are doing business in and are subject to.
16 U.S. Government Affirmative Action Regulations. During the performance of this contract or any purchase order issued hereunder, the Supplier agrees to comply with all applicable Federal, state and local laws respecting discrimination in employment and non-segregation of facilities including, but not limited to, requirements set out at 41 CFR §60-1.4, 41 CFR §61-300.10, 29 CFR Part 471 Appendix A to Subpart A, 41 CFR §60-300.5 and 41 CFR §60-741.5, which specific clauses are herein incorporated by reference into all covered contracts and subcontracts as required by Federal law. This Supplier and any applicable subcontractor shall abide by the requirements of 41 CFR §60- 300.5(a) and §60-741.5(a) to the extent applicable. These regulations prohibit discrimination against qualified individuals on the basis of protected veteran status or disability, and require affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified protected veterans and individuals with disabilities.
17 Fair Labor Practices.
17.1 Supplier shall provide workers with clean, safe and healthy work environments; recognize and respect the right of employees to free association and collective bargaining in accordance with law; comply with all applicable wage and hour laws; and properly verify the employment eligibility of its employees.
17.2 Forced Labor. Suppliers will not employ, use or otherwise benefit from involuntary labor, forced labor, or labor that results from slavery or human trafficking. Supplier hereby certifies that: (i) it is in compliance with this paragraph; and (ii) all materials incorporated into its products comply with all applicable laws addressing slavery, human trafficking and other forms of forced labor. Supplier shall provide PNC with documentation establishing compliance with this paragraph upon [***] notice.
10
17.3 Child Labor. Supplier will not employ anyone under the legal working age defined by local law. Supplier will comply with all applicable laws addressing the working requirements and conditions for child workers.
17.4 Respectful Workplace. Supplier shall prohibit all forms of unlawful discrimination, abuse, harassment, violence and retaliation.
18 Gifts and Entertainment. Supplier will not offer any gift to a PNC employee, contractor, or agent that is: (i) more than a nominal value; (ii) more than an infrequent occurrence; (iii) cash or cash equivalents; or (iv) illegal, sexually oriented, offensive or otherwise inappropriate.
19 Environment & Sustainability. Supplier will comply with all applicable environmental laws and reporting obligations, maintain all required permits, and strive to responsibly manage the impacts of their operations on the environment.
20 Anticorruption. Suppliers will not, directly or indirectly, offer improper gifts to government employees, engage in bribery or fraud, or take any other action that would cause a violation of the U.S. Foreign Corrupt Practices Act, the UK Bribery Act or any other applicable anti- corruption law.
21 Miscellaneous.
21.1 If any provision of this Agreement is determined to be illegal or unenforceable, all other provisions will continue in full force and effect.
21.2 This Agreement may be executed concurrently by original or facsimile signature in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
21.3 Each right and remedy of each Party described in this Agreement is cumulative and in addition to every other right or remedy, express or implied, now or hereafter arising, available to such Party, at law or in equity, or under any other agreement. No delay or omission by either Party in the exercise of any right or remedy arising under this Agreement will impair any such right or remedy or the right of such Party to resort thereto at a later date or be construed to be a waiver of any default under this Agreement. The indemnities, representations and warranties of each Party will survive termination of this Agreement.
21.4 This Agreement, together with any schedules and exhibits and any Purchase Orders, Specifications and COAs, constitutes the complete agreement between the Parties and supersedes all prior agreements between the Parties regarding this subject matter. The Parties hereby agree that any such prior agreements are hereby terminated. No other contracts, warranties, promises or representations, either oral or in writing, relating to this Agreement will bind either Party except for the Purchase Orders, Specifications and COAs. This Agreement may not be amended or modified except by a writing signed by an authorized representative of the Party against whom such amendment or modification is asserted. This Agreement will be binding upon, and will inure to the benefit of, the parties, their successors and permitted assigns.
(signature page follows)
11
Agreed to and executed effective as of the date first above written.
Fonterra (USA) Inc. Premier Nutrition Company, LLC
By: [***] By: /s/ Paul Rode Title: President Title: CFO
12
Agreed to and executed effective as of the date first above written.
Fonterra (USA) Inc. Premier Nutrition Company, LLC
By: By: /s/ Paul Rode
Title: Title: CFO | Highlight the parts (if any) of this contract related to "Non-Disparagement" that should be reviewed by a lawyer. Details: Is there a requirement on a party not to disparage the counterparty? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Effective Date" that should be reviewed by a lawyer. Details: The date when the contract is effective
Context: Exhibit 10.7
CONSULTING AGREEMENT
Aduro Biotech, Inc., with a place of business at 740 Heinz Avenue, Berkeley, CA 94710 ("Aduro") and IREYA B.V having an address at Staalwijkstraat 16, 2313 XR Leiden, the Netherlands, represented by Andrea van Elsas, ("Consultant") agree to all terms and conditions of this Consulting Agreement ("Agreement") dated June 1, 2020, effective as of July 1, 2020 ("Effective Date").
1. Services. At the request and direction of Aduro and the agreement of Consultant, Consultant will provide advice and consultation to Aduro with respect to its research, clinical development programs and other business matters as requested by Aduro from time to time.
2. Compensation and Expenses. Aduro shall pay Consultant for the Services at the rate of €500 per hour. On a monthly basis, Consultant shall submit to Aduro an invoice for the hours worked along with itemized documentation and receipts and other information for pre-approved travel and/or out-of- pocket expenses as Aduro reasonably requests at the time reimbursement is requested. Consultant will not incur any travel and/or other out-of-pocket expenses of more than €5,000 individually or €20,000 in the aggregate without the prior written consent of Aduro. Aduro shall pay Consultant any amounts due that are not reasonably disputed by Aduro, by check or direct bank deposit, within thirty days after receiving the invoice. Consultant's sole compensation for the Services shall be the amounts set forth above in this Section 2. Invoices shall be sent to the attention of:
ap@aduro.com Attn: Accounts Payable
3. Term of Agreement. This Agreement shall begin on the Effective Date and shall continue until December 31, 2020, unless extended or earlier terminated. Either party may terminate this Agreement at any time on prior written notice to the other. This Agreement may be extended upon mutual written agreement of the parties.
4. Confidential Information.
(a) "Confidential Information" means any information, materials or methods in whatever form or embodiment that has not been made available by Aduro to the general public and any information, materials or methods in the possession or control of Consultant on the Effective Date or developed in the performance of the Services, except that Confidential Information shall not include any information, material or method that (i) at the time of disclosure is in, or after disclosure becomes part of the public domain, through no improper act on the part of Consultant or any of its employees; (ii) was in Consultant's possession at the time of disclosure, as shown by written evidence, and was not acquired, directly or indirectly, from work with Aduro; or (iii) Consultant receives from a third party, provided that such Confidential Information was not obtained by such third party, directly or indirectly, from Aduro.
Specific information disclosed as part of the Confidential Information shall not be deemed to be in the public domain or in the prior possession of Consultant merely because it is encompassed or contemplated by more general information in the public domain or in the prior possession of the Consultant. Failure to mark any of the Confidential Information as confidential or proprietary shall not affect its status as Confidential Information under the terms of this Agreement.
(b) Consultant shall keep all Confidential Information confidential, and Consultant shall not disclose, disseminate, publish, reproduce or use Confidential Information except to perform the Services. If Consultant is required by judicial or administrative process to disclose Confidential Information, Consultant shall promptly notify Aduro to allow Aduro a reasonable time to oppose such process and Consultant shall reasonably cooperate in Aduro's efforts.
(c) On Aduro's request, or upon the termination or expiration of this Agreement, Consultant shall immediately: (i) stop using Confidential Information; (ii) return all materials provided by Aduro to Consultant that contain Confidential Information, except for one copy that may be retained by Consultant's legal counsel to confirm compliance with the obligations under this Agreement; (iii) destroy all copies of Confidential Information in any form including Confidential Information contained in computer memory or data storage apparatus or materials prepared by or for Consultant; and (iv) provide a written warranty to Aduro that Consultant has taken all the actions described in the foregoing Subparagraphs 4(c)(i-iii).
(d) Any breach of this Paragraph 4 by an employee or agent of Consultant shall be deemed to be a breach by Consultant.
(e) Defend Trade Secrets Act Notice: Nothing herein shall prevent Consultant from reporting possible violations of federal or state law or regulation to any governmental agency or entity, or making other disclosures that are protected under the whistleblower provisions of federal or state law or regulation. Consultant does not need the prior authorization of Aduro to make any such reports or disclosures and is not required to notify Aduro that it has made such reports or disclosures. In addition, as set forth in 18 U.S.C. §1833(b), Consultant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, and that is made solely for the purpose of reporting or investigating a suspected violation of law, or that is made in a complaint or other document filed in a lawsuit or other proceeding if such filing is made under seal.
5. Independent Contractor. Consultant's relationship to Aduro shall be that of an independent contractor. Consultant shall be responsible for the timely payment of his or her own self-employment and income taxes. Neither party shall have any authority to bind the other.
6. Intellectual Property. Aduro shall be the sole and exclusive owner of, and Consultant hereby assigns to Aduro, any and all writings, documents, work product, inventions, developments, improvements, discoveries, know-how, processes, chemical entities, compounds, plans, memoranda, tests, research, designs, specifications, models and data that Consultant makes, conceives, discovers or develops, either solely or jointly with any other person in performance of the Services (collectively, "Work Product"). Consultant shall promptly disclose to Aduro all information relating to Work Product as appropriate as part of the Services and at the request of Aduro. To the extent, if any, that Consultant has rights in or to any Work Product or any data or inventions developed in connection with work under this Agreement ("Aduro IP"), Consultant hereby irrevocably assigns and transfers to Aduro, and to the extent that an executory assignment is not enforceable, Consultant hereby agrees to assign and transfer to Aduro, in writing, from time to time, upon request, any and all right, title, or interest that Consultant has or may obtain in any Work Product and/or Aduro IP without the necessity of further consideration. Aduro shall be entitled to obtain and hold in its own name all copyrights, patents, trade secrets and trademarks with respect thereto. At Aduro's request and expense, Consultant shall assist Aduro in acquiring and maintaining its right in and title to, any Work Product. Such assistance may include, but will not be limited to, signing applications and other documents, cooperating in legal proceedings, and taking any other steps considered necessary or desirable by Aduro.
7. Nonsolicitation. From the Effective Date and for twelve (12) months after the termination of this Agreement (the "Restricted Period"), Consultant shall not, without Aduro's prior written consent, directly or indirectly, solicit or encourage any employee or contractor of Aduro or its affiliates to terminate employment with, or cease providing Services to, Aduro or its affiliates. In the event of a breach of this Paragraph 7 by Consultant, Aduro shall be entitled to entry of injunctive relief. Such injunctive remedy shall be nonexclusive and shall be in addition to any and all other remedies which may be available to it at law or in equity, including without limitation, the recovery of direct, indirect, incidental, consequential and/or punitive damages.
8. Representations. Consultant represents as follows:
(a) Consultant is not subject to any other agreement that Consultant will violate by signing this Agreement;
(b) Consultant has and shall continue to have the knowledge, experience, qualifications and required skill to perform, and shall perform, the Services in a professional manner;
(c) Consultant to perform the Services in accordance with all Applicable Law; and
(d) During the term of this Agreement, Consultant will not, directly or indirectly (whether for compensation or without compensation) engage in or provide consulting services, or enter into any agreement either written or oral, that would present a material conflict with any of the provisions of this Agreement, or would preclude Consultant from complying with the terms and conditions hereof. If during the term of this Agreement any situation or circumstance arises that might reasonably be expected to present a conflict of interest, or if Consultant might be unable to render Services or otherwise participate in such work without risk of breaching an obligation of confidentiality to another party, Consultant will promptly advise the Company's General Counsel of the situation and Company and Consultant shall, in good faith, attempt to resolve any such conflicts(s). If requested by the Company's General Counsel, Consultant will recuse herself from providing Services for the duration of the conflict.
9. Material Non-Public Information. Consultant may have access to, or learn, "material non-public information" about Aduro or companies working with Aduro during the course of performing Services under this Agreement. Consultant acknowledges that it is illegal to buy or sell Aduro's stock or the stock of companies working with Aduro, on the basis of "material non-public information." It is also illegal to pass such information on to others who use it to buy or sell Aduro stock. Consultant is subject to and will comply with Aduro's Insider Trading and Trading Window Policy.
10. Miscellaneous. This Agreement shall be construed and enforced in accordance with the laws of the State of California, without regard to the conflict of law principles of California or any other jurisdiction. This Agreement contains the entire agreement and understanding of the parties relating to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of every nature between them with respect to the subject matter hereof. For the avoidance of doubt, this Agreement does not supersede or in modify in anyway any other written agreement between the parties. This Agreement may not be changed or modified, except by an agreement in writing signed by both of the parties hereto. The obligations of Consultant as set forth herein, other than Consultant's obligations to perform the Project, shall survive the termination of Consultant's engagement with Aduro. If any provision of this Agreement is found to be illegal or unenforceable, the other provisions of this Agreement shall remain effective and enforceable to the greatest extent permitted by law. This Agreement shall not be assignable by Consultant. This Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement.
ADURO BIOTECH, INC. CONSULTANT
By: /s/ Stephen T. Isaacs By: /s/ Andrea van Elsas Name: Stephen T. Isaacs Name: Andrea van Elsas Title: President and Chief Executive Officer Title: Chief Scientific Officer [/INST] ```json
{<answer_start>
"answer": "July 1, 2020"
<answer_end>
}
``` </s> | Exhibit 10.7
CONSULTING AGREEMENT
Aduro Biotech, Inc., with a place of business at 740 Heinz Avenue, Berkeley, CA 94710 ("Aduro") and IREYA B.V having an address at Staalwijkstraat 16, 2313 XR Leiden, the Netherlands, represented by Andrea van Elsas, ("Consultant") agree to all terms and conditions of this Consulting Agreement ("Agreement") dated June 1, 2020, effective as of July 1, 2020 ("Effective Date").
1. Services. At the request and direction of Aduro and the agreement of Consultant, Consultant will provide advice and consultation to Aduro with respect to its research, clinical development programs and other business matters as requested by Aduro from time to time.
2. Compensation and Expenses. Aduro shall pay Consultant for the Services at the rate of €500 per hour. On a monthly basis, Consultant shall submit to Aduro an invoice for the hours worked along with itemized documentation and receipts and other information for pre-approved travel and/or out-of- pocket expenses as Aduro reasonably requests at the time reimbursement is requested. Consultant will not incur any travel and/or other out-of-pocket expenses of more than €5,000 individually or €20,000 in the aggregate without the prior written consent of Aduro. Aduro shall pay Consultant any amounts due that are not reasonably disputed by Aduro, by check or direct bank deposit, within thirty days after receiving the invoice. Consultant's sole compensation for the Services shall be the amounts set forth above in this Section 2. Invoices shall be sent to the attention of:
ap@aduro.com Attn: Accounts Payable
3. Term of Agreement. This Agreement shall begin on the Effective Date and shall continue until December 31, 2020, unless extended or earlier terminated. Either party may terminate this Agreement at any time on prior written notice to the other. This Agreement may be extended upon mutual written agreement of the parties.
4. Confidential Information.
(a) "Confidential Information" means any information, materials or methods in whatever form or embodiment that has not been made available by Aduro to the general public and any information, materials or methods in the possession or control of Consultant on the Effective Date or developed in the performance of the Services, except that Confidential Information shall not include any information, material or method that (i) at the time of disclosure is in, or after disclosure becomes part of the public domain, through no improper act on the part of Consultant or any of its employees; (ii) was in Consultant's possession at the time of disclosure, as shown by written evidence, and was not acquired, directly or indirectly, from work with Aduro; or (iii) Consultant receives from a third party, provided that such Confidential Information was not obtained by such third party, directly or indirectly, from Aduro.
Specific information disclosed as part of the Confidential Information shall not be deemed to be in the public domain or in the prior possession of Consultant merely because it is encompassed or contemplated by more general information in the public domain or in the prior possession of the Consultant. Failure to mark any of the Confidential Information as confidential or proprietary shall not affect its status as Confidential Information under the terms of this Agreement.
(b) Consultant shall keep all Confidential Information confidential, and Consultant shall not disclose, disseminate, publish, reproduce or use Confidential Information except to perform the Services. If Consultant is required by judicial or administrative process to disclose Confidential Information, Consultant shall promptly notify Aduro to allow Aduro a reasonable time to oppose such process and Consultant shall reasonably cooperate in Aduro's efforts.
(c) On Aduro's request, or upon the termination or expiration of this Agreement, Consultant shall immediately: (i) stop using Confidential Information; (ii) return all materials provided by Aduro to Consultant that contain Confidential Information, except for one copy that may be retained by Consultant's legal counsel to confirm compliance with the obligations under this Agreement; (iii) destroy all copies of Confidential Information in any form including Confidential Information contained in computer memory or data storage apparatus or materials prepared by or for Consultant; and (iv) provide a written warranty to Aduro that Consultant has taken all the actions described in the foregoing Subparagraphs 4(c)(i-iii).
(d) Any breach of this Paragraph 4 by an employee or agent of Consultant shall be deemed to be a breach by Consultant.
(e) Defend Trade Secrets Act Notice: Nothing herein shall prevent Consultant from reporting possible violations of federal or state law or regulation to any governmental agency or entity, or making other disclosures that are protected under the whistleblower provisions of federal or state law or regulation. Consultant does not need the prior authorization of Aduro to make any such reports or disclosures and is not required to notify Aduro that it has made such reports or disclosures. In addition, as set forth in 18 U.S.C. §1833(b), Consultant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, and that is made solely for the purpose of reporting or investigating a suspected violation of law, or that is made in a complaint or other document filed in a lawsuit or other proceeding if such filing is made under seal.
5. Independent Contractor. Consultant's relationship to Aduro shall be that of an independent contractor. Consultant shall be responsible for the timely payment of his or her own self-employment and income taxes. Neither party shall have any authority to bind the other.
6. Intellectual Property. Aduro shall be the sole and exclusive owner of, and Consultant hereby assigns to Aduro, any and all writings, documents, work product, inventions, developments, improvements, discoveries, know-how, processes, chemical entities, compounds, plans, memoranda, tests, research, designs, specifications, models and data that Consultant makes, conceives, discovers or develops, either solely or jointly with any other person in performance of the Services (collectively, "Work Product"). Consultant shall promptly disclose to Aduro all information relating to Work Product as appropriate as part of the Services and at the request of Aduro. To the extent, if any, that Consultant has rights in or to any Work Product or any data or inventions developed in connection with work under this Agreement ("Aduro IP"), Consultant hereby irrevocably assigns and transfers to Aduro, and to the extent that an executory assignment is not enforceable, Consultant hereby agrees to assign and transfer to Aduro, in writing, from time to time, upon request, any and all right, title, or interest that Consultant has or may obtain in any Work Product and/or Aduro IP without the necessity of further consideration. Aduro shall be entitled to obtain and hold in its own name all copyrights, patents, trade secrets and trademarks with respect thereto. At Aduro's request and expense, Consultant shall assist Aduro in acquiring and maintaining its right in and title to, any Work Product. Such assistance may include, but will not be limited to, signing applications and other documents, cooperating in legal proceedings, and taking any other steps considered necessary or desirable by Aduro.
7. Nonsolicitation. From the Effective Date and for twelve (12) months after the termination of this Agreement (the "Restricted Period"), Consultant shall not, without Aduro's prior written consent, directly or indirectly, solicit or encourage any employee or contractor of Aduro or its affiliates to terminate employment with, or cease providing Services to, Aduro or its affiliates. In the event of a breach of this Paragraph 7 by Consultant, Aduro shall be entitled to entry of injunctive relief. Such injunctive remedy shall be nonexclusive and shall be in addition to any and all other remedies which may be available to it at law or in equity, including without limitation, the recovery of direct, indirect, incidental, consequential and/or punitive damages.
8. Representations. Consultant represents as follows:
(a) Consultant is not subject to any other agreement that Consultant will violate by signing this Agreement;
(b) Consultant has and shall continue to have the knowledge, experience, qualifications and required skill to perform, and shall perform, the Services in a professional manner;
(c) Consultant to perform the Services in accordance with all Applicable Law; and
(d) During the term of this Agreement, Consultant will not, directly or indirectly (whether for compensation or without compensation) engage in or provide consulting services, or enter into any agreement either written or oral, that would present a material conflict with any of the provisions of this Agreement, or would preclude Consultant from complying with the terms and conditions hereof. If during the term of this Agreement any situation or circumstance arises that might reasonably be expected to present a conflict of interest, or if Consultant might be unable to render Services or otherwise participate in such work without risk of breaching an obligation of confidentiality to another party, Consultant will promptly advise the Company's General Counsel of the situation and Company and Consultant shall, in good faith, attempt to resolve any such conflicts(s). If requested by the Company's General Counsel, Consultant will recuse herself from providing Services for the duration of the conflict.
9. Material Non-Public Information. Consultant may have access to, or learn, "material non-public information" about Aduro or companies working with Aduro during the course of performing Services under this Agreement. Consultant acknowledges that it is illegal to buy or sell Aduro's stock or the stock of companies working with Aduro, on the basis of "material non-public information." It is also illegal to pass such information on to others who use it to buy or sell Aduro stock. Consultant is subject to and will comply with Aduro's Insider Trading and Trading Window Policy.
10. Miscellaneous. This Agreement shall be construed and enforced in accordance with the laws of the State of California, without regard to the conflict of law principles of California or any other jurisdiction. This Agreement contains the entire agreement and understanding of the parties relating to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of every nature between them with respect to the subject matter hereof. For the avoidance of doubt, this Agreement does not supersede or in modify in anyway any other written agreement between the parties. This Agreement may not be changed or modified, except by an agreement in writing signed by both of the parties hereto. The obligations of Consultant as set forth herein, other than Consultant's obligations to perform the Project, shall survive the termination of Consultant's engagement with Aduro. If any provision of this Agreement is found to be illegal or unenforceable, the other provisions of this Agreement shall remain effective and enforceable to the greatest extent permitted by law. This Agreement shall not be assignable by Consultant. This Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement.
ADURO BIOTECH, INC. CONSULTANT
By: /s/ Stephen T. Isaacs By: /s/ Andrea van Elsas Name: Stephen T. Isaacs Name: Andrea van Elsas Title: President and Chief Executive Officer Title: Chief Scientific Officer | Highlight the parts (if any) of this contract related to "Effective Date" that should be reviewed by a lawyer. Details: The date when the contract is effective | {
"answer_start": [
381
],
"text": [
"July 1, 2020"
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Notice Period To Terminate Renewal" that should be reviewed by a lawyer. Details: What is the notice period required to terminate renewal?
Context: 1 EXHIBIT 10.4
SPONSORSHIP AGREEMENT ---------------------
This Sponsorship Agreement is made between National Processing Company ("NPC") and National City Bank of Kentucky ("NCB") effective June 30, 1996 ("Effective Date").
WITNESSETH:
WHEREAS, NCB is a member in good standing of Visa U.S.A., Inc. ("Visa") and a member in good standing of MasterCard International, Incorporated ("MasterCard"); and
WHEREAS, NPC, pursuant to its arrangements with NCB, a member of Visa and MasterCard, provides data processing, settlement and authorization services for merchants who participate in the Visa and MasterCard bankcard programs (such activities being referred to as "Merchant Bankcard Business"); and
WHEREAS, NPC and NCB have concluded that it is in their mutual best interests for NPC to continue to act as an agent of NCB for purposes of providing data processing, settlement and authorization services for merchants with respect to their Visa and MasterCard transactions and in connection with such agency arrangement, for NPC to continue to use NCB for certain banking relationships; and
WHEREAS, the parties desire to formalize the terms and conditions on which NPC will act as agent of NCB, and NPC will perform certain functions, for purposes of conducting Merchant Bankcard Business;
NOW, THEREFORE, in consideration of the premises, the representations, acknowledgments, and mutual agreements set out in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are acknowledged by the parties, NPC and NCB represent, acknowledge and agree as follows:
ARTICLE I - MERCHANT PROCESSING, SETTLEMENT AND AUTHORIZATION SERVICES ----------------------------------------------------------------------
1.1 APPOINTMENT AS AGENT. NCB appoints NPC, and NPC agrees to serve, as NCB's sole agent (i) to provide authorization, processing and settlement services with respect to Visa and MasterCard transactions ("Merchant Processing Services") to merchants who desire to receive Merchant Processing Services from NCB or NPC ("Merchants") and (ii) to enter into contracts with merchants ("Merchant Contracts") for the provision of Merchant Processing Services as agent of NCB; provided, however, that nothing herein shall limit NPC's right to provide, as agent for other members of Visa and MasterCard, Merchant Processing Services to merchants who desire to receive such services from NCB or others. NCB agrees that NPC may use NCB's name and its BIN, ICA and any other Visa and MasterCard identification numbers to the extent necessary or appropriate to perform the Merchant Processing Services.
1.2 PERFORMANCE BY NPC. NPC shall have full responsibility for the proper performance of the Merchant Processing Services under each Merchant Contract except for the obligations and responsibilities which NCB assumes hereunder. Without limiting the foregoing, NPC shall provide authorization services to the Merchants, perform data capture services with respect to all credit card transactions by the Merchants, submit such data to the applicable Interchange, process retrievals and chargebacks, and direct the settlement of such transactions. In providing Merchant Processing Services, NPC agrees to comply with: (i) all Visa and MasterCard Bylaws, Manuals, Operating Regulations and other written materials as they may from time to time be amended which bind or apply to NCB as a member of Visa and MasterCard with respect to Merchant Processing Services or to NPC as a third party processor with respect to Merchant Processing Services ("Rules"), (ii) all agreements between Merchants and NCB with respect to Merchant Processing Services, and (iii) all applicable laws and regulations, whether state or federal. NPC agrees to enter into any agreements with Visa and MasterCard necessary to perform this Agreement
1 2
in accordance with its terms, subject to the rights of NPC to terminate this Agreement pursuant to Section 6.2. Without in any way limiting the foregoing, NPC agrees as follows: (a) any material containing any of the Visa Card Program Marks used by it in performing this Agreement will prominently identify NCB by name and city adjacent to such marks and, in identifying NPC, will specify that NPC is acting as agent or representative of NCB; (b) any solicitation material used by NPC shall clearly disclose that NPC is acting as agent or representative of NCB; and (c) NPC acknowledges that it does not have authority to permit the use of Visa Card Program Marks by any of its own agents. NPC and NCB agree that the foregoing clauses shall be deemed modified from time to time to reflect any changes in Visa's requirements applicable to NPC's use of Visa Card Program Marks and solicitation material or to the terms required herein.
1.3 MERCHANT CONTRACTS. NPC, as agent of NCB, shall be responsible for establishing the terms and conditions of the Merchant Contracts, including all changes thereunder, subject to Section 1.7 below. Without in any way limiting the authority granted in Section 1.1, NCB hereby authorizes NPC to use NCB's name to the extent necessary or appropriate in accordance with the terms of this Agreement to enter into and to renew Merchant Contracts, to modify Merchant Contracts to the extent necessary to assign them to NCB, to perform the Merchant Contracts and to take other necessary or appropriate actions with respect to the Merchant Contracts, all in accordance with requirements of Visa and MasterCard. As between NPC and NCB, NPC shall be responsible for all credit, fraud and other risks associated with each Merchant Contract.
1.4 AUTHORIZATION SERVICES. NPC, or its designated third parties, shall provide the Merchants with telephonic or electronic authorization for all Visa and MasterCard transactions exceeding any floor amount specified pursuant to such Merchant's contract.
1.5 PROCESSING AND SUBMISSION TO INTERCHANGE. NPC shall process all data received by it reflecting the Visa and MasterCard sales transactions and any related return credits by the Merchants and shall submit to the applicable Visa or MasterCard interchange networks ("Interchange") "Settlement Files" reflecting such transactions and directing the applicable Interchange to pay the net amount due to an account established by NCB for the purpose of receiving all settlement amounts paid by Visa and MasterCard with respect to the transactions processed by NPC pursuant to this Agreement and effecting appropriate payments to the Merchants and NPC in accordance with this Agreement ("the NCB Account").
1.6 ACCOUNT SETTLEMENT.
(a) PAYMENT INSTRUCTIONS. NPC shall prepare and transmit to NCB, in a mutually acceptable format, instructions specifying the payments to be made from the NCB Account to the Merchants and to NPC pursuant to this Agreement (the "Payment Instructions"). Payment Instructions shall be delivered to NCB in accordance with the schedule and procedures established from time to time by the parties.
(b) PAYMENT. In accordance with the Payment Instructions, NCB shall pay the Merchants on a timely basis the net settlement amounts due to them and shall credit NPC's account at NCB for the fees due to NPC hereunder. Such payments to Merchants shall be effected through mutually acceptable procedures which are consistent with the payment procedures established pursuant to the Merchant Contracts. NPC shall perform on NCB's behalf all of the administrative and bookkeeping functions necessary to effect payment in such manner.
1.7 DUE DILIGENCE BY NCB; NPC'S STANDARDS.
(a) DUE DILIGENCE PRIOR TO EXECUTION OF AGREEMENT. Senior management officials of NPC have met with senior management officials of NCB and have discussed with the NCB officials the credit and financial review procedures and standards used by NPC in deciding whether to accept or retain Merchants as customers for Merchant Processing Services, as well as NPC's experience with respect to any losses resulting from financial failures or fraud by its merchant customers. Schedule A attached hereto outlines the credit and financial review procedures and standards currently used by NPC. NPC represents
2 3
to NCB, and has provided NCB's senior management with financial information showing, that for 1994 and 1995 combined, the losses incurred by NPC as a result of financial failures or fraud by its merchant customers have averaged less than .60% of NPC's net revenues from Merchant Processing Services.
(b) CONTINUING DUE DILIGENCE: NPC'S RISK STANDARDS. NPC shall keep NCB's senior management advised of any material changes in the credit and financial review procedures and standards and of any material exceptions to such procedures and standards which may from time to time be made with respect to particular Merchants. NPC shall not make any such changes or exceptions until its management committee has approved such changes or exceptions after carefully evaluating the relative advantages and disadvantages expected to result from such changes or exceptions. NPC also shall continue to advise senior management officials of NCB on a timely basis with respect to any substantial loss (meaning any loss of $1,000,000 or more with respect to a single Merchant or $3,000,000 or more in the aggregate in any twelve month period) incurred by NPC as a result of any financial failures or fraud by its merchant customers. If NCB's senior management officials reasonably determine from time to time that any changes are needed in NPC's credit and financial review procedures and standards or in the implementation thereof in order to avoid any significant increase in NPC's losses from financial failures or fraud by its merchant customers, then NCB shall so notify NPC in writing, and NPC and NCB shall mutually agree upon, and NPC shall implement appropriate changes.
(c) DUE DILIGENCE BY NCB FOR NPC PRICING STANDARDS. Senior management officials of NPC have met with senior management officials of NCB and have discussed with the NCB officials the pricing procedures and standards used for Merchants as customers for Merchant Processing Services. NPC shall keep NCB's senior management advised of any
material changes in its pricing procedures and standards and of any material exceptions to such procedures and standards which may from time to time be made with respect to particular Merchants. NPC shall not make any such changes or exceptions until its management committee has approved such changes or exceptions after carefully evaluating the relative advantages and disadvantages expected to result from such changes or exceptions. If NCB's senior management officials reasonably determine from time to time that any changes are needed in NPC's pricing procedures and standards or in the implementation thereof, then NCB shall so notify NPC in writing, and NPC and NCB shall mutually agree upon, and NPC shall implement appropriate changes.
ARTICLE II - AUTHORITY OF JOINT OFFICERS ----------------------------------------
2.1 JOINT OFFICERS. In order to enhance NPC's effectiveness as an agent of NCB, the parties agree and acknowledge that it is desirable for one or more officers of NPC to serve also as an officer of NCB (the "Joint Officers") so that such persons shall have clear authority to represent NCB on matters relating to Merchant Processing Services. Accordingly, the Board of Directors of NCB shall elect the NPC officers named in Schedule B as Contracting Officers of NCB only with respect to matters pertaining to Merchant Processing Services. From time to time during the term of this Agreement, the Board of Directors of NCB may elect other officers of NPC as officers of NCB in addition to or in lieu of the Joint Officers. The authority of each Joint Officer to act as an officer of NCB shall terminate immediately upon termination of this Agreement or the termination or suspension of employment of that person by NPC for whatever reason or the removal of that person by the Board of Directors of NCB as an officer of NCB.
2.2 AUTHORITY TO REPRESENT NCB. Each Joint Officer or its designated representative shall have authority to be the designated recipient of all letters, correspondence and other material from Visa and MasterCard to NCB as a member which relate to Merchant Processing Services, to attend as NCB's representative those meetings for members of Visa and MasterCard which relate to Merchant Processing Services, to maintain on behalf of NCB copies of all Merchant Contracts to which NCB is a party, to act generally as the NCB representative with respect to Merchant Processing Services in discussions, meetings and otherwise between NCB as a member and Visa or MasterCard, and to take such other actions on behalf of NCB That may be required by applicable Visa or MasterCard rules to be performed by a member and that are necessary or appropriate in order to perform this Agreement and effect the parties' intent with respect to this Agreement. NPC shall keep NCB, or such other person
3 4
as may be designated by NCB, advised of all material, non-routine actions taken on behalf of NCB by any of the Joint Officers and shall consult in advance with NCB or such other designated person with respect to any material, non-routine actions to be taken by any of the Joint Officers on behalf of NCB.
2.3 COMPENSATION. Except to the extent NCB and NPC otherwise agree, all compensation of the Joint Officers shall be paid by NPC, and NCB shall have no obligation to compensate any of the Joint Officers.
ARTICLE III - BANKING SERVICES ------------------------------
3.1 MERCHANT PROCESSING - BANKING SERVICES. As soon as practicable after the Effective Date NPC shall enter into agreements or make other mutually acceptable arrangements with NCB pursuant to which NCB will provide those banking services which are necessary for NPC to provide the Merchant Processing Services and which the parties wish NCB to provide.
3.2 AUTHORITY TO ESTABLISH BANK ACCOUNTS. Each Joint Officer shall have authority to establish at NCB or any other mutually acceptable financial institution any deposit accounts on behalf of NCB as may be necessary to provide some or all of the Merchant Processing Services contemplated by this Agreement for such periods as NCB and NPC agree. No provision of this Agreement authorizes or shall be construed to authorize any Joint Officer or NPC to incur any debt to NCB or any other financial institution, or to create any overdraft, which NCB is obligated directly or indirectly to repay.
3.3 LOANS AND OVERDRAFTS. Nothing in this Agreement shall be deemed to create any obligation on the part of NCB to loan or advance to NPC any amounts in connection with Merchant Processing Services for any period of time.
ARTICLE IV - FEES AND EXPENSES ------------------------------
4.1 CHARGES TO MERCHANTS. As between NPC and NCB, NPC shall receive all fees, discounts and other amounts payable by Merchants for Merchant Processing Services with respect to Merchant Contracts.
4.2 EXPENSES. NPC shall bear all expenses of maintaining facilities and connections necessary to provide Merchant Processing Services except for the facilities and connection maintained by NCB for purposes of effecting payments pursuant to Section 1.6(b). In addition, NPC agrees to pay or reimburse NCB in full all interchange or issuer reimbursement fees on outgoing
merchant sales volume, as well as all fee assessments or charges imposed on NCB by Visa or MasterCard as a result of the Merchant Processing Services performed by NPC. Such fees shall be paid by NPC directly when due or shall be paid by NPC to NCB on the banking day immediately prior to the day on which NCB must pay such fees. All such fees, assessments and charges for which NCB seeks payment by NPC shall, upon request, be documented to NPC's reasonable satisfaction as being attributable to NPC's Merchant Processing Services.
ARTICLE V - INDEMNIFICATION ---------------------------
5.1 INDEMNIFICATION. NPC agrees to indemnify, defend and save NCB, its directors, officers and employees harmless from all losses, claims, judgments, awards, penalties, expenses and other amounts of any nature arising out of:
(a) NPC's failure to perform this Agreement in accordance with its terms, including, but not limited to, the failure to pay expenses, charges and other amounts in accordance with the provisions of this Agreement,
4 5
(b) The negligent exercise of or the exceeding by any Joint Officer of the authority granted pursuant to this Agreement to act as an officer of NCB, or,
(c) NCB's grant of authority to NPC pursuant to this Agreement,
including, but not limited to, all court costs, investigation expenses and the reasonable fees and expenses of separate counsel for NCB selected by NCB, provided, however, that NCB shall not be entitled to indemnification as to amounts arising from the negligence or willful misconduct of NCB.
ARTICLE VI - COMPLIANCE MODIFICATIONS -------------------------------------
6.1 COMPLIANCE MODIFICATIONS. In the event that:
(a) the laws, rules and/or regulations or any official interpretations thereof applicable to NCB as a National Bank or the Visa or MasterCard rules and/or regulations or any official interpretations thereof applicable to NCB and the matters covered by this Agreement are modified such that
(i) any modifications in the relationship or transactions contemplated hereby between NCB and NPC or in the provisions of this Agreement are needed to comply with any such laws, rules, regulations or official interpretations thereof, or
(ii) some or all of the activities contemplated by this Agreement are prohibited, or
(b) Visa or MasterCard requires, as a condition to performance of this Agreement, that NPC enter into an agreement with Visa or MasterCard that NPC considers unacceptable,
then at NPC's request, NCB will cooperate in making any modifications to this Agreement and to the parties' relationship hereunder to the extent any such modifications will permit NPC to continue processing, settling and authorizing bankcard transactions (or continue performing some of such functions) in compliance with the laws, rules, regulations or any official interpretations thereof applicable to NCB as a National Bank and the Visa and MasterCard rules, regulations, and interpretations thereof and any contractual terms required by Visa or MasterCard and acceptable to NPC (any such modifications being referred to as "Compliance Modifications") provided that such Compliance Modifications are reasonable and are not unduly burdensome to NCB, and NPC reimburses NCB for any additional costs reasonably incurred by NCB in connection with such Compliance Modifications.
6.2 FAILURE TO MAKE COMPLIANCE MODIFICATION. If NPC does not request any Compliance Modifications or the parties cannot agree upon the terms of any Compliance Modifications, then either party may terminate this Agreement upon prior written notice to the other party effective at the later of: (a) the deadline imposed by Visa or MasterCard for complying with any such rule, regulation, official interpretation or contract requirement or (b) 120 days after actual notice to NPC of such rule, regulation, interpretation or contract requirement.
ARTICLE VII - TERM AND TERMINATION ----------------------------------
7.1 TERM. The term of this Agreement shall be five years commencing on the Effective Date and ending at the close of business on the fifth anniversary of the Effective Date. This Agreement shall automatically renew for successive one-year terms unless one party gives the other party written notice of non-renewal at least six months prior to automatic renewal.
5 6
7.2 TERMINATION. Either party may terminate this Agreement without penalty and without prejudice to any claims arising prior to termination as follows:
(a) Upon the written agreement of both parties.
(b) Upon the other party's breach of this Agreement provided the terminating party has given written notice of the breach to the other party specifying the breach, the action necessary to cure the breach and the breaching party has not cured the breach within five business days after notice is given of any failure by NPC to provide any funds required hereunder to be provided by NPC to pay Merchants or within thirty business days after notice is given of any other breach.
(c) By NCB immediately upon NPC's voluntary filing of any petition or complaint seeking relief under any federal or state bankruptcy or other debt relief statute or upon an involuntary petition in bankruptcy being filed against NPC if such petition is not dismissed within sixty days after it is filed.
(d) By NPC immediately in the event that any agreements between NCB and Visa and/or MasterCard or NCB's membership in either such bankcard association shall be terminated or materially limited which termination or material limitation would impair the ability of NPC to authorize, process or settle merchant bankcard transactions.
7.3 SURVIVAL. The provisions of Sections 3.3, 4.2, 5.1, 8.1 and 10.6 of this Agreement shall survive any termination. No termination shall prejudice any claim or rights of any party which accrued prior to termination.
ARTICLE VIII - CONFIDENTIALITY ------------------------------
8.1 CONFIDENTIALITY. In performing this Agreement, each party will have access to confidential information of the other. Each party agrees to hold in confidence and to instruct its employees and agents to hold in confidence all information and materials, in whatever form, reasonably designated as confidential by the party requesting confidentiality. NPC agrees to comply with all laws and regulations relating to confidentiality of customer lists and other information which are applicable to NCB and its agents or to NPC. NCB agrees to comply with all contractual obligations of NPC actually known to NCB and all laws and regulations applicable to NCB or NPC relating to confidentiality of customer lists and other information.
ARTICLE IX - NOTICES --------------------
9.1 NOTICES. All notices which are required or permitted by this Agreement shall be in writing and shall be (i) delivered personally to the designated addressee, (ii) sent by the United States Mail addressed to the designated person by certified mail, return receipt requested, all postage prepaid, or (iii) sent by overnight delivery service addressed to the designated person, all charges prepaid, or (iv) by other means such as facsimile machine if the designated addressee acknowledges receipt in writing. Notices shall be addressed as follows:
If to NPC: Louis Parker Executive Vice President National City Processing Company 1231 Durrett Lane Louisville, KY 40285-0001
6 7
with copies to: Kurt Knipp Executive Vice President National City Processing Company 1231 Durrett Lane Louisville, KY 40285-0001
If to NCB: Peter J. Barrick Senior Vice President National City Bank of Kentucky 101 S. 5th Street Louisville, KY 40202
with copies to: Curtis M. Jacobs Senior Vice President and Counsel National City Bank of Kentucky 101 S. 5th Street Louisville, KY 40202
Notices personally delivered are given when received. Notices sent by United States Mail, certified mail, return receipt requested, are given five business days after delivery to the United States Postal Service unless prior actual receipt by the addressee is proven. Notice sent by overnight delivery service is deemed given one business day after delivery to and acceptance by overnight delivery service for next day delivery. Notices sent by other means and acknowledged are deemed given when acknowledged in writing.
ARTICLE X - MISCELLANEOUS -------------------------
10.1 HEADINGS. The headings are for information and are not part of this Agreement.
10.2 ENTIRE AGREEMENT, MODIFICATION. This Agreement and the attachments to it represent the entire agreement of the parties with respect to the subject matter of the Agreement. This Agreement may not be modified except by a written agreement which expressly refers to the Agreement and is signed by both parties.
10.3 SEVERABILITY. If any section of this Agreement is deemed void, illegal or unenforceable, that section shall be severed and the balance shall remain in effect.
10.4 GOVERNING LAW. This Agreement and its interpretation shall be governed by the laws of the United States and, to the extent not inconsistent therewith, by the laws of the Commonwealth of Kentucky without regard to conflicts of laws rules.
10.5 BINDING AGREEMENT, ASSIGNMENT PROHIBITED. This Agreement shall bind the parties, their successors and permitted assigns. Neither party shall assign this Agreement or any rights under it except with the prior written consent of the other.
10.6 MONITORING BY NCB. NPC shall admit properly identified and authorized NCB employees and agents onto its premises for purposes of monitoring NPC's compliance with this Agreement. It is understood that such monitoring will occur during normal business hours, will be preceded by reasonable notification to NPC, and must not interfere with NPC's normal operations.
7 8
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers as of the Effective Date.
NATIONAL PROCESSING COMPANY
By: /s/ Mark D. Schatz -------------------------------- Name: Mark D. Schatz ------------------------------ Title: Vice President -----------------------------
NATIONAL CITY BANK OF KENTUCKY By: /s/ Peter J. Barrick -------------------------------- Name: Peter J. Barrick ------------------------------ Title: Senior Vice President -----------------------------
8 9
SCHEDULE A to the SPONSORSHIP AGREEMENT BETWEEN NCB and NPC dated June 30, 1996
1. BUSINESSES GENERALLY NOT SOLICITED. NPC does not generally solicit customers engaged in any of the following businesses, but in special circumstances it sometimes accepts customers engaged in one of these businesses. Such exceptions occur primarily when NPC acquires another processor's customer base or when NPC enters into a processing agreement with an ISO/MSP which maintains merchant customers engaged in such businesses. - Telemarketing (In-bound or out-bound)
- Pawn Shops - Door-to-Door Sales - Massage Parlors - Bail & Bond Payments - Business operated out of Residence - Flea Markets - Fulfillment Houses - Timesharing - Travel Clubs/Packages
2. DOCUMENTATION REQUIRED FOR MERCHANT CUSTOMERS - Merchant Application - all pertinent personal and business information, including previous processor - Site Visitation Report (when applicable) - Bankcard Agreement - signed by Principal/Officer - Personal Guarantee - signed by Principal (when applicable) - Business Financial Statements (when applicable) - Business and/or Personal Income Tax Filings if Financial Statements unavailable (when applicable) - Catalogues, Advertising Copy, etc. - as needed
3. CREDIT REVIEW PROCEDURES. The following credit review procedures are completed by NPC before a Merchant is accepted as a new customer. These procedures may be repeated with respect to any existing Merchant customer if such Merchant has unusual credit card activity, unusual or higher than normal chargebacks, or if other circumstances arise which, in the judgment of NPC's management, warrant a new or on-going credit review. - Inquire against Terminated Merchant File - Obtain and Review Personal Credit Reports on Principal(s) (when applicable) - Obtain and Review Dun & Bradstreet Report (when applicable) - Review of Financial Statements, Tax Returns and all other pertinent data (when applicable) - Investigation of previous processing relationship
4. REASONS FOR DECLINING A MERCHANT. - Listed on the terminated merchant file - Insufficient credit history established - Significant derogatory credit - personal or business - Poor financial condition of business - Derogatory report from previous processor - Unacceptable line of business
9 10
SCHEDULE B to the SPONSORSHIP AGREEMENT BETWEEN NCB and NPC dated June 30, 1996
NAME NCB TITLE ---- --------- Tony G. Holcombe Contracting Officer
Kurt S. Knipp Contracting Officer
Wayne A. Chatham, Jr. Contracting Officer
10 [/INST] ```json
{<answer_start>
"answer": "This Agreement shall automatically renew for successive one-year terms unless one party gives the other party written notice of non-renewal at least six months prior to automatic renewal."
<answer_end>
}
``` </s> | 1 EXHIBIT 10.4
SPONSORSHIP AGREEMENT ---------------------
This Sponsorship Agreement is made between National Processing Company ("NPC") and National City Bank of Kentucky ("NCB") effective June 30, 1996 ("Effective Date").
WITNESSETH:
WHEREAS, NCB is a member in good standing of Visa U.S.A., Inc. ("Visa") and a member in good standing of MasterCard International, Incorporated ("MasterCard"); and
WHEREAS, NPC, pursuant to its arrangements with NCB, a member of Visa and MasterCard, provides data processing, settlement and authorization services for merchants who participate in the Visa and MasterCard bankcard programs (such activities being referred to as "Merchant Bankcard Business"); and
WHEREAS, NPC and NCB have concluded that it is in their mutual best interests for NPC to continue to act as an agent of NCB for purposes of providing data processing, settlement and authorization services for merchants with respect to their Visa and MasterCard transactions and in connection with such agency arrangement, for NPC to continue to use NCB for certain banking relationships; and
WHEREAS, the parties desire to formalize the terms and conditions on which NPC will act as agent of NCB, and NPC will perform certain functions, for purposes of conducting Merchant Bankcard Business;
NOW, THEREFORE, in consideration of the premises, the representations, acknowledgments, and mutual agreements set out in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are acknowledged by the parties, NPC and NCB represent, acknowledge and agree as follows:
ARTICLE I - MERCHANT PROCESSING, SETTLEMENT AND AUTHORIZATION SERVICES ----------------------------------------------------------------------
1.1 APPOINTMENT AS AGENT. NCB appoints NPC, and NPC agrees to serve, as NCB's sole agent (i) to provide authorization, processing and settlement services with respect to Visa and MasterCard transactions ("Merchant Processing Services") to merchants who desire to receive Merchant Processing Services from NCB or NPC ("Merchants") and (ii) to enter into contracts with merchants ("Merchant Contracts") for the provision of Merchant Processing Services as agent of NCB; provided, however, that nothing herein shall limit NPC's right to provide, as agent for other members of Visa and MasterCard, Merchant Processing Services to merchants who desire to receive such services from NCB or others. NCB agrees that NPC may use NCB's name and its BIN, ICA and any other Visa and MasterCard identification numbers to the extent necessary or appropriate to perform the Merchant Processing Services.
1.2 PERFORMANCE BY NPC. NPC shall have full responsibility for the proper performance of the Merchant Processing Services under each Merchant Contract except for the obligations and responsibilities which NCB assumes hereunder. Without limiting the foregoing, NPC shall provide authorization services to the Merchants, perform data capture services with respect to all credit card transactions by the Merchants, submit such data to the applicable Interchange, process retrievals and chargebacks, and direct the settlement of such transactions. In providing Merchant Processing Services, NPC agrees to comply with: (i) all Visa and MasterCard Bylaws, Manuals, Operating Regulations and other written materials as they may from time to time be amended which bind or apply to NCB as a member of Visa and MasterCard with respect to Merchant Processing Services or to NPC as a third party processor with respect to Merchant Processing Services ("Rules"), (ii) all agreements between Merchants and NCB with respect to Merchant Processing Services, and (iii) all applicable laws and regulations, whether state or federal. NPC agrees to enter into any agreements with Visa and MasterCard necessary to perform this Agreement
1 2
in accordance with its terms, subject to the rights of NPC to terminate this Agreement pursuant to Section 6.2. Without in any way limiting the foregoing, NPC agrees as follows: (a) any material containing any of the Visa Card Program Marks used by it in performing this Agreement will prominently identify NCB by name and city adjacent to such marks and, in identifying NPC, will specify that NPC is acting as agent or representative of NCB; (b) any solicitation material used by NPC shall clearly disclose that NPC is acting as agent or representative of NCB; and (c) NPC acknowledges that it does not have authority to permit the use of Visa Card Program Marks by any of its own agents. NPC and NCB agree that the foregoing clauses shall be deemed modified from time to time to reflect any changes in Visa's requirements applicable to NPC's use of Visa Card Program Marks and solicitation material or to the terms required herein.
1.3 MERCHANT CONTRACTS. NPC, as agent of NCB, shall be responsible for establishing the terms and conditions of the Merchant Contracts, including all changes thereunder, subject to Section 1.7 below. Without in any way limiting the authority granted in Section 1.1, NCB hereby authorizes NPC to use NCB's name to the extent necessary or appropriate in accordance with the terms of this Agreement to enter into and to renew Merchant Contracts, to modify Merchant Contracts to the extent necessary to assign them to NCB, to perform the Merchant Contracts and to take other necessary or appropriate actions with respect to the Merchant Contracts, all in accordance with requirements of Visa and MasterCard. As between NPC and NCB, NPC shall be responsible for all credit, fraud and other risks associated with each Merchant Contract.
1.4 AUTHORIZATION SERVICES. NPC, or its designated third parties, shall provide the Merchants with telephonic or electronic authorization for all Visa and MasterCard transactions exceeding any floor amount specified pursuant to such Merchant's contract.
1.5 PROCESSING AND SUBMISSION TO INTERCHANGE. NPC shall process all data received by it reflecting the Visa and MasterCard sales transactions and any related return credits by the Merchants and shall submit to the applicable Visa or MasterCard interchange networks ("Interchange") "Settlement Files" reflecting such transactions and directing the applicable Interchange to pay the net amount due to an account established by NCB for the purpose of receiving all settlement amounts paid by Visa and MasterCard with respect to the transactions processed by NPC pursuant to this Agreement and effecting appropriate payments to the Merchants and NPC in accordance with this Agreement ("the NCB Account").
1.6 ACCOUNT SETTLEMENT.
(a) PAYMENT INSTRUCTIONS. NPC shall prepare and transmit to NCB, in a mutually acceptable format, instructions specifying the payments to be made from the NCB Account to the Merchants and to NPC pursuant to this Agreement (the "Payment Instructions"). Payment Instructions shall be delivered to NCB in accordance with the schedule and procedures established from time to time by the parties.
(b) PAYMENT. In accordance with the Payment Instructions, NCB shall pay the Merchants on a timely basis the net settlement amounts due to them and shall credit NPC's account at NCB for the fees due to NPC hereunder. Such payments to Merchants shall be effected through mutually acceptable procedures which are consistent with the payment procedures established pursuant to the Merchant Contracts. NPC shall perform on NCB's behalf all of the administrative and bookkeeping functions necessary to effect payment in such manner.
1.7 DUE DILIGENCE BY NCB; NPC'S STANDARDS.
(a) DUE DILIGENCE PRIOR TO EXECUTION OF AGREEMENT. Senior management officials of NPC have met with senior management officials of NCB and have discussed with the NCB officials the credit and financial review procedures and standards used by NPC in deciding whether to accept or retain Merchants as customers for Merchant Processing Services, as well as NPC's experience with respect to any losses resulting from financial failures or fraud by its merchant customers. Schedule A attached hereto outlines the credit and financial review procedures and standards currently used by NPC. NPC represents
2 3
to NCB, and has provided NCB's senior management with financial information showing, that for 1994 and 1995 combined, the losses incurred by NPC as a result of financial failures or fraud by its merchant customers have averaged less than .60% of NPC's net revenues from Merchant Processing Services.
(b) CONTINUING DUE DILIGENCE: NPC'S RISK STANDARDS. NPC shall keep NCB's senior management advised of any material changes in the credit and financial review procedures and standards and of any material exceptions to such procedures and standards which may from time to time be made with respect to particular Merchants. NPC shall not make any such changes or exceptions until its management committee has approved such changes or exceptions after carefully evaluating the relative advantages and disadvantages expected to result from such changes or exceptions. NPC also shall continue to advise senior management officials of NCB on a timely basis with respect to any substantial loss (meaning any loss of $1,000,000 or more with respect to a single Merchant or $3,000,000 or more in the aggregate in any twelve month period) incurred by NPC as a result of any financial failures or fraud by its merchant customers. If NCB's senior management officials reasonably determine from time to time that any changes are needed in NPC's credit and financial review procedures and standards or in the implementation thereof in order to avoid any significant increase in NPC's losses from financial failures or fraud by its merchant customers, then NCB shall so notify NPC in writing, and NPC and NCB shall mutually agree upon, and NPC shall implement appropriate changes.
(c) DUE DILIGENCE BY NCB FOR NPC PRICING STANDARDS. Senior management officials of NPC have met with senior management officials of NCB and have discussed with the NCB officials the pricing procedures and standards used for Merchants as customers for Merchant Processing Services. NPC shall keep NCB's senior management advised of any
material changes in its pricing procedures and standards and of any material exceptions to such procedures and standards which may from time to time be made with respect to particular Merchants. NPC shall not make any such changes or exceptions until its management committee has approved such changes or exceptions after carefully evaluating the relative advantages and disadvantages expected to result from such changes or exceptions. If NCB's senior management officials reasonably determine from time to time that any changes are needed in NPC's pricing procedures and standards or in the implementation thereof, then NCB shall so notify NPC in writing, and NPC and NCB shall mutually agree upon, and NPC shall implement appropriate changes.
ARTICLE II - AUTHORITY OF JOINT OFFICERS ----------------------------------------
2.1 JOINT OFFICERS. In order to enhance NPC's effectiveness as an agent of NCB, the parties agree and acknowledge that it is desirable for one or more officers of NPC to serve also as an officer of NCB (the "Joint Officers") so that such persons shall have clear authority to represent NCB on matters relating to Merchant Processing Services. Accordingly, the Board of Directors of NCB shall elect the NPC officers named in Schedule B as Contracting Officers of NCB only with respect to matters pertaining to Merchant Processing Services. From time to time during the term of this Agreement, the Board of Directors of NCB may elect other officers of NPC as officers of NCB in addition to or in lieu of the Joint Officers. The authority of each Joint Officer to act as an officer of NCB shall terminate immediately upon termination of this Agreement or the termination or suspension of employment of that person by NPC for whatever reason or the removal of that person by the Board of Directors of NCB as an officer of NCB.
2.2 AUTHORITY TO REPRESENT NCB. Each Joint Officer or its designated representative shall have authority to be the designated recipient of all letters, correspondence and other material from Visa and MasterCard to NCB as a member which relate to Merchant Processing Services, to attend as NCB's representative those meetings for members of Visa and MasterCard which relate to Merchant Processing Services, to maintain on behalf of NCB copies of all Merchant Contracts to which NCB is a party, to act generally as the NCB representative with respect to Merchant Processing Services in discussions, meetings and otherwise between NCB as a member and Visa or MasterCard, and to take such other actions on behalf of NCB That may be required by applicable Visa or MasterCard rules to be performed by a member and that are necessary or appropriate in order to perform this Agreement and effect the parties' intent with respect to this Agreement. NPC shall keep NCB, or such other person
3 4
as may be designated by NCB, advised of all material, non-routine actions taken on behalf of NCB by any of the Joint Officers and shall consult in advance with NCB or such other designated person with respect to any material, non-routine actions to be taken by any of the Joint Officers on behalf of NCB.
2.3 COMPENSATION. Except to the extent NCB and NPC otherwise agree, all compensation of the Joint Officers shall be paid by NPC, and NCB shall have no obligation to compensate any of the Joint Officers.
ARTICLE III - BANKING SERVICES ------------------------------
3.1 MERCHANT PROCESSING - BANKING SERVICES. As soon as practicable after the Effective Date NPC shall enter into agreements or make other mutually acceptable arrangements with NCB pursuant to which NCB will provide those banking services which are necessary for NPC to provide the Merchant Processing Services and which the parties wish NCB to provide.
3.2 AUTHORITY TO ESTABLISH BANK ACCOUNTS. Each Joint Officer shall have authority to establish at NCB or any other mutually acceptable financial institution any deposit accounts on behalf of NCB as may be necessary to provide some or all of the Merchant Processing Services contemplated by this Agreement for such periods as NCB and NPC agree. No provision of this Agreement authorizes or shall be construed to authorize any Joint Officer or NPC to incur any debt to NCB or any other financial institution, or to create any overdraft, which NCB is obligated directly or indirectly to repay.
3.3 LOANS AND OVERDRAFTS. Nothing in this Agreement shall be deemed to create any obligation on the part of NCB to loan or advance to NPC any amounts in connection with Merchant Processing Services for any period of time.
ARTICLE IV - FEES AND EXPENSES ------------------------------
4.1 CHARGES TO MERCHANTS. As between NPC and NCB, NPC shall receive all fees, discounts and other amounts payable by Merchants for Merchant Processing Services with respect to Merchant Contracts.
4.2 EXPENSES. NPC shall bear all expenses of maintaining facilities and connections necessary to provide Merchant Processing Services except for the facilities and connection maintained by NCB for purposes of effecting payments pursuant to Section 1.6(b). In addition, NPC agrees to pay or reimburse NCB in full all interchange or issuer reimbursement fees on outgoing
merchant sales volume, as well as all fee assessments or charges imposed on NCB by Visa or MasterCard as a result of the Merchant Processing Services performed by NPC. Such fees shall be paid by NPC directly when due or shall be paid by NPC to NCB on the banking day immediately prior to the day on which NCB must pay such fees. All such fees, assessments and charges for which NCB seeks payment by NPC shall, upon request, be documented to NPC's reasonable satisfaction as being attributable to NPC's Merchant Processing Services.
ARTICLE V - INDEMNIFICATION ---------------------------
5.1 INDEMNIFICATION. NPC agrees to indemnify, defend and save NCB, its directors, officers and employees harmless from all losses, claims, judgments, awards, penalties, expenses and other amounts of any nature arising out of:
(a) NPC's failure to perform this Agreement in accordance with its terms, including, but not limited to, the failure to pay expenses, charges and other amounts in accordance with the provisions of this Agreement,
4 5
(b) The negligent exercise of or the exceeding by any Joint Officer of the authority granted pursuant to this Agreement to act as an officer of NCB, or,
(c) NCB's grant of authority to NPC pursuant to this Agreement,
including, but not limited to, all court costs, investigation expenses and the reasonable fees and expenses of separate counsel for NCB selected by NCB, provided, however, that NCB shall not be entitled to indemnification as to amounts arising from the negligence or willful misconduct of NCB.
ARTICLE VI - COMPLIANCE MODIFICATIONS -------------------------------------
6.1 COMPLIANCE MODIFICATIONS. In the event that:
(a) the laws, rules and/or regulations or any official interpretations thereof applicable to NCB as a National Bank or the Visa or MasterCard rules and/or regulations or any official interpretations thereof applicable to NCB and the matters covered by this Agreement are modified such that
(i) any modifications in the relationship or transactions contemplated hereby between NCB and NPC or in the provisions of this Agreement are needed to comply with any such laws, rules, regulations or official interpretations thereof, or
(ii) some or all of the activities contemplated by this Agreement are prohibited, or
(b) Visa or MasterCard requires, as a condition to performance of this Agreement, that NPC enter into an agreement with Visa or MasterCard that NPC considers unacceptable,
then at NPC's request, NCB will cooperate in making any modifications to this Agreement and to the parties' relationship hereunder to the extent any such modifications will permit NPC to continue processing, settling and authorizing bankcard transactions (or continue performing some of such functions) in compliance with the laws, rules, regulations or any official interpretations thereof applicable to NCB as a National Bank and the Visa and MasterCard rules, regulations, and interpretations thereof and any contractual terms required by Visa or MasterCard and acceptable to NPC (any such modifications being referred to as "Compliance Modifications") provided that such Compliance Modifications are reasonable and are not unduly burdensome to NCB, and NPC reimburses NCB for any additional costs reasonably incurred by NCB in connection with such Compliance Modifications.
6.2 FAILURE TO MAKE COMPLIANCE MODIFICATION. If NPC does not request any Compliance Modifications or the parties cannot agree upon the terms of any Compliance Modifications, then either party may terminate this Agreement upon prior written notice to the other party effective at the later of: (a) the deadline imposed by Visa or MasterCard for complying with any such rule, regulation, official interpretation or contract requirement or (b) 120 days after actual notice to NPC of such rule, regulation, interpretation or contract requirement.
ARTICLE VII - TERM AND TERMINATION ----------------------------------
7.1 TERM. The term of this Agreement shall be five years commencing on the Effective Date and ending at the close of business on the fifth anniversary of the Effective Date. This Agreement shall automatically renew for successive one-year terms unless one party gives the other party written notice of non-renewal at least six months prior to automatic renewal.
5 6
7.2 TERMINATION. Either party may terminate this Agreement without penalty and without prejudice to any claims arising prior to termination as follows:
(a) Upon the written agreement of both parties.
(b) Upon the other party's breach of this Agreement provided the terminating party has given written notice of the breach to the other party specifying the breach, the action necessary to cure the breach and the breaching party has not cured the breach within five business days after notice is given of any failure by NPC to provide any funds required hereunder to be provided by NPC to pay Merchants or within thirty business days after notice is given of any other breach.
(c) By NCB immediately upon NPC's voluntary filing of any petition or complaint seeking relief under any federal or state bankruptcy or other debt relief statute or upon an involuntary petition in bankruptcy being filed against NPC if such petition is not dismissed within sixty days after it is filed.
(d) By NPC immediately in the event that any agreements between NCB and Visa and/or MasterCard or NCB's membership in either such bankcard association shall be terminated or materially limited which termination or material limitation would impair the ability of NPC to authorize, process or settle merchant bankcard transactions.
7.3 SURVIVAL. The provisions of Sections 3.3, 4.2, 5.1, 8.1 and 10.6 of this Agreement shall survive any termination. No termination shall prejudice any claim or rights of any party which accrued prior to termination.
ARTICLE VIII - CONFIDENTIALITY ------------------------------
8.1 CONFIDENTIALITY. In performing this Agreement, each party will have access to confidential information of the other. Each party agrees to hold in confidence and to instruct its employees and agents to hold in confidence all information and materials, in whatever form, reasonably designated as confidential by the party requesting confidentiality. NPC agrees to comply with all laws and regulations relating to confidentiality of customer lists and other information which are applicable to NCB and its agents or to NPC. NCB agrees to comply with all contractual obligations of NPC actually known to NCB and all laws and regulations applicable to NCB or NPC relating to confidentiality of customer lists and other information.
ARTICLE IX - NOTICES --------------------
9.1 NOTICES. All notices which are required or permitted by this Agreement shall be in writing and shall be (i) delivered personally to the designated addressee, (ii) sent by the United States Mail addressed to the designated person by certified mail, return receipt requested, all postage prepaid, or (iii) sent by overnight delivery service addressed to the designated person, all charges prepaid, or (iv) by other means such as facsimile machine if the designated addressee acknowledges receipt in writing. Notices shall be addressed as follows:
If to NPC: Louis Parker Executive Vice President National City Processing Company 1231 Durrett Lane Louisville, KY 40285-0001
6 7
with copies to: Kurt Knipp Executive Vice President National City Processing Company 1231 Durrett Lane Louisville, KY 40285-0001
If to NCB: Peter J. Barrick Senior Vice President National City Bank of Kentucky 101 S. 5th Street Louisville, KY 40202
with copies to: Curtis M. Jacobs Senior Vice President and Counsel National City Bank of Kentucky 101 S. 5th Street Louisville, KY 40202
Notices personally delivered are given when received. Notices sent by United States Mail, certified mail, return receipt requested, are given five business days after delivery to the United States Postal Service unless prior actual receipt by the addressee is proven. Notice sent by overnight delivery service is deemed given one business day after delivery to and acceptance by overnight delivery service for next day delivery. Notices sent by other means and acknowledged are deemed given when acknowledged in writing.
ARTICLE X - MISCELLANEOUS -------------------------
10.1 HEADINGS. The headings are for information and are not part of this Agreement.
10.2 ENTIRE AGREEMENT, MODIFICATION. This Agreement and the attachments to it represent the entire agreement of the parties with respect to the subject matter of the Agreement. This Agreement may not be modified except by a written agreement which expressly refers to the Agreement and is signed by both parties.
10.3 SEVERABILITY. If any section of this Agreement is deemed void, illegal or unenforceable, that section shall be severed and the balance shall remain in effect.
10.4 GOVERNING LAW. This Agreement and its interpretation shall be governed by the laws of the United States and, to the extent not inconsistent therewith, by the laws of the Commonwealth of Kentucky without regard to conflicts of laws rules.
10.5 BINDING AGREEMENT, ASSIGNMENT PROHIBITED. This Agreement shall bind the parties, their successors and permitted assigns. Neither party shall assign this Agreement or any rights under it except with the prior written consent of the other.
10.6 MONITORING BY NCB. NPC shall admit properly identified and authorized NCB employees and agents onto its premises for purposes of monitoring NPC's compliance with this Agreement. It is understood that such monitoring will occur during normal business hours, will be preceded by reasonable notification to NPC, and must not interfere with NPC's normal operations.
7 8
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers as of the Effective Date.
NATIONAL PROCESSING COMPANY
By: /s/ Mark D. Schatz -------------------------------- Name: Mark D. Schatz ------------------------------ Title: Vice President -----------------------------
NATIONAL CITY BANK OF KENTUCKY By: /s/ Peter J. Barrick -------------------------------- Name: Peter J. Barrick ------------------------------ Title: Senior Vice President -----------------------------
8 9
SCHEDULE A to the SPONSORSHIP AGREEMENT BETWEEN NCB and NPC dated June 30, 1996
1. BUSINESSES GENERALLY NOT SOLICITED. NPC does not generally solicit customers engaged in any of the following businesses, but in special circumstances it sometimes accepts customers engaged in one of these businesses. Such exceptions occur primarily when NPC acquires another processor's customer base or when NPC enters into a processing agreement with an ISO/MSP which maintains merchant customers engaged in such businesses. - Telemarketing (In-bound or out-bound)
- Pawn Shops - Door-to-Door Sales - Massage Parlors - Bail & Bond Payments - Business operated out of Residence - Flea Markets - Fulfillment Houses - Timesharing - Travel Clubs/Packages
2. DOCUMENTATION REQUIRED FOR MERCHANT CUSTOMERS - Merchant Application - all pertinent personal and business information, including previous processor - Site Visitation Report (when applicable) - Bankcard Agreement - signed by Principal/Officer - Personal Guarantee - signed by Principal (when applicable) - Business Financial Statements (when applicable) - Business and/or Personal Income Tax Filings if Financial Statements unavailable (when applicable) - Catalogues, Advertising Copy, etc. - as needed
3. CREDIT REVIEW PROCEDURES. The following credit review procedures are completed by NPC before a Merchant is accepted as a new customer. These procedures may be repeated with respect to any existing Merchant customer if such Merchant has unusual credit card activity, unusual or higher than normal chargebacks, or if other circumstances arise which, in the judgment of NPC's management, warrant a new or on-going credit review. - Inquire against Terminated Merchant File - Obtain and Review Personal Credit Reports on Principal(s) (when applicable) - Obtain and Review Dun & Bradstreet Report (when applicable) - Review of Financial Statements, Tax Returns and all other pertinent data (when applicable) - Investigation of previous processing relationship
4. REASONS FOR DECLINING A MERCHANT. - Listed on the terminated merchant file - Insufficient credit history established - Significant derogatory credit - personal or business - Poor financial condition of business - Derogatory report from previous processor - Unacceptable line of business
9 10
SCHEDULE B to the SPONSORSHIP AGREEMENT BETWEEN NCB and NPC dated June 30, 1996
NAME NCB TITLE ---- --------- Tony G. Holcombe Contracting Officer
Kurt S. Knipp Contracting Officer
Wayne A. Chatham, Jr. Contracting Officer
10 | Highlight the parts (if any) of this contract related to "Notice Period To Terminate Renewal" that should be reviewed by a lawyer. Details: What is the notice period required to terminate renewal? | {
"answer_start": [
21374
],
"text": [
"This Agreement shall automatically renew for successive one-year terms unless one party gives the other party written notice of non-renewal at least six months prior to automatic renewal."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Competitive Restriction Exception" that should be reviewed by a lawyer. Details: This category includes the exceptions or carveouts to Non-Compete, Exclusivity and No-Solicit of Customers above.
Context: Attachment C to Master Franchise Agreement MULTI-STATE ADDENDUM CALIFORNIA APPENDIX 1. California Business and Professions Code Sections 20000 through 20043 provide rights to you concerning termination or non-renewal of a franchise. If the Master Franchise Agreement contains provisions that are inconsistent with the law, the law will control.
2. The Master Franchise Agreement provides for termination upon bankruptcy. This provision may not be enforceable under Federal Bankruptcy Law (11 U.S.C.A. Sec. 101 et seq. ).
3. The Master Franchise Agreement contains covenants not to compete which extend beyond the termination of the agreement. These provisions may not be enforceable under California law.
4. Section 31125 of the California Corporation Code requires the franchisor to provide you with a disclosure document before asking you to agree to a material modification of an existing franchise.
5. Neither the franchisor, any person or franchise broker in Item 2 of the Disclosure Document is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 79a et seq., suspending or expelling such persons from membership in such association or exchange.
6. The Master Franchise Agreement requires non-binding mediation. The mediation will occur in New York with the costs being borne by equally by the parties. Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5 and Code of Civil Procedure Section 1281) to any provisions of a franchise agreement restricting venue to a forum outside the State of California.
7. The Master Franchise Agreement requires application of the laws of New York. This provision may not be enforceable under California law.
8. You must sign a general release if you renew or transfer your franchise. California Corporation Code 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code 31000 through 31516). Business and Professions Code 20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code 20000 through 20043).
9. THE CALIFORNIA FRANCHISE INVESTMENT LAW REQUIRES THAT A COPY OF ALL PROPOSED AGREEMENTS RELATING TO THE SALE OF THE FRANCHISE BE DELIVERED TOGETHER WITH THE DISCLOSURE DOCUMENT.
10. The Master Franchise Agreement contains a liquidated damages clause. Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.
11. OUR WEBSITE, www.originalsoupman.com, HAS NOT BEEN REVIEWED OR APPROVED BY THE CALIFORNIA DEPARTMENT OF BUSINESS OVERSIGHT. ANY COMPLAINTS CONCERNING THE CONTENT OF THIS WEBSITE MAY BE DIRECTED TO THE CALIFORNIA DEPARTMENT OF BUSINESS OVERSIGHT at www.dbo.ca.gov.
Source: SOUPMAN, INC., 8-K, 8/14/2015 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Attachment C to Master Franchise Agreement MULTI-STATE ADDENDUM CALIFORNIA APPENDIX 1. California Business and Professions Code Sections 20000 through 20043 provide rights to you concerning termination or non-renewal of a franchise. If the Master Franchise Agreement contains provisions that are inconsistent with the law, the law will control.
2. The Master Franchise Agreement provides for termination upon bankruptcy. This provision may not be enforceable under Federal Bankruptcy Law (11 U.S.C.A. Sec. 101 et seq. ).
3. The Master Franchise Agreement contains covenants not to compete which extend beyond the termination of the agreement. These provisions may not be enforceable under California law.
4. Section 31125 of the California Corporation Code requires the franchisor to provide you with a disclosure document before asking you to agree to a material modification of an existing franchise.
5. Neither the franchisor, any person or franchise broker in Item 2 of the Disclosure Document is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 79a et seq., suspending or expelling such persons from membership in such association or exchange.
6. The Master Franchise Agreement requires non-binding mediation. The mediation will occur in New York with the costs being borne by equally by the parties. Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5 and Code of Civil Procedure Section 1281) to any provisions of a franchise agreement restricting venue to a forum outside the State of California.
7. The Master Franchise Agreement requires application of the laws of New York. This provision may not be enforceable under California law.
8. You must sign a general release if you renew or transfer your franchise. California Corporation Code 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code 31000 through 31516). Business and Professions Code 20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code 20000 through 20043).
9. THE CALIFORNIA FRANCHISE INVESTMENT LAW REQUIRES THAT A COPY OF ALL PROPOSED AGREEMENTS RELATING TO THE SALE OF THE FRANCHISE BE DELIVERED TOGETHER WITH THE DISCLOSURE DOCUMENT.
10. The Master Franchise Agreement contains a liquidated damages clause. Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.
11. OUR WEBSITE, www.originalsoupman.com, HAS NOT BEEN REVIEWED OR APPROVED BY THE CALIFORNIA DEPARTMENT OF BUSINESS OVERSIGHT. ANY COMPLAINTS CONCERNING THE CONTENT OF THIS WEBSITE MAY BE DIRECTED TO THE CALIFORNIA DEPARTMENT OF BUSINESS OVERSIGHT at www.dbo.ca.gov.
Source: SOUPMAN, INC., 8-K, 8/14/2015 | Highlight the parts (if any) of this contract related to "Competitive Restriction Exception" that should be reviewed by a lawyer. Details: This category includes the exceptions or carveouts to Non-Compete, Exclusivity and No-Solicit of Customers above. | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Audit Rights" that should be reviewed by a lawyer. Details: Does a party have the right to audit the books, records, or physical locations of the counterparty to ensure compliance with the contract?
Context: Exhibit 6.2 NON-EXCLUSIVE LICENSE AGREEMENT BETWEEN THE JOHNS HOPKINS UNIVERSITY & VIRTUOSO SURGICAL, INC.
JHU Agreement: A29889
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
1
May 3, 2016 NON-EXCLUSIVE LICENSE AGREEMENT- FOR SALES This Non-Exclusive License Agreement (hereinafter "Agreement") is entered into by and between The Johns Hopkins University (hereinafter "JHU"), a corporation of the State of Maryland, having a principal place of business 3400 N. Charles Street, Baltimore, Maryland 21218- 2695 and, Virtuoso Surgical, Inc. (hereinafter "Company"), a Tennessee corporation having an address at 5701 Old Harding Pike; Suite 200; Nashville, TN 37205. The parties hereto agree as follows: 1. BACKGROUND 1.1 In the course of a fundamental research program at JHU, a valuable invention entitled Active Cannulas for Bio-Sensing and Surgical Intervention (JHU Ref. C04873) was developed by Drs. Robert Webster, III, Noah Cowan, Allison Okamura, and Russell Taylor (hereinafter "Inventors"). 1.2 JHU has acquired all right, title and interest, with the exception of certain retained rights by the United States government, in said invention but is without the capacity to commercially develop, manufacture and distribute products and methods which embody the invention. 1.3 Company is interested in providing such commercial products and methods to third parties on a non-exclusive basis and agrees to comply with the terms and conditions in this Agreement. 1.4 All references to particular Exhibits or Paragraphs shall mean the Exhibits to, and Paragraphs of, this Agreement, unless otherwise specified. 2. DEFINITIONS 2.1 "EFFECTIVE DATE" of this Agreement shall mean the date the last party hereto has executed this Agreement. 2.2 "LICENSED FIELD" shall mean Cannulated Surgical Intervention. 2.3 "LICENSED PRODUCT(S)" as used herein in either singular or plural shall mean any material, compositions, or other product, the manufacture, use or sale of which would constitute, but for the license granted to Company pursuant to this Agreement, an infringement of a claim of PATENT RIGHT(S) (infringement shall include, but is not limited to, direct, contributory, or inducement to infringe). 2.4 "LICENSED SERVICE(S)" as used herein in either singular or plural shall mean the performance on behalf of a third party of any method including cannulated surgical intervention or the manufacture of any product or the use of any product which would constitute, but for the license granted to Company pursuant to this Agreement, an infringement of a claim of the PATENT RIGHT(S), (infringement shall include, but not be limited to, direct, contributory or inducement to infringe).
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
2
May 3, 2016 2.5 "NET SALES" shall mean gross sales revenues and fees billed by Company from the sale of LICENSED PRODUCT(S) less trade discounts allowed, refunds, returns and recalls, and sales taxes. In the event that Company sells a LICENSED PRODUCT(S) in combination with other ingredients or substances or as part of a kit, the NET SALES for purposes of royalty payments shall be based on the sales revenues and fees received from the entire combination or kit. 2.6 "NET SERVICE REVENUES" shall mean gross service revenues and fees billed by Company for the performance of LICENSED SERVICE(S) less sales and/or use taxes imposed upon and with specific reference to the LICENSED SERVICE(S). In the event that Company sells a LICENSED SERVICE(S) in combination with other services or substances or as part of a kit, the NET SERVICE REVENUES for purposes of royalty payments shall be based on the sales revenues and fees received from the entire combination. 2.7 "PATENT RIGHT(S)" shall mean, collectively, JHU's interest in those set forth in EXHIBIT C of this Agreement and the inventions disclosed and claimed therein, and all continuations, divisions, and reissues based thereof, and any corresponding foreign patent applications, and any patents, or other equivalent foreign PATENT RIGHT(S) issuing, granted or registered thereon. 3. GRANT 3.1 License Granted: Subject to the terms and conditions of this Agreement and to non-exclusive license agreements executed prior to the EFFECTIVE DATE, JHU hereby grants to the Company a non-exclusive, non-transferable license to make, have made, import, offer for sale and sell the LICENSED PRODUCT(S) and the LICENSED SERVICE(S) in the United States and worldwide under the PATENT RIGHT(S) in the LICENSED FIELD. 3.2 No Sublicensing: Company shall not sublicense to others under this Agreement, nor extend the rights granted hereunder to any affiliated company. 4. PAYMENTS, ROYALTY AND REPORTING 4.1 License Fee: As consideration for JHU's grant of a License to Company under this Agreement, Company shall pay to JHU a license fee, cash and equity, as set forth in Exhibit A within thirty (30) days of the EFFECTIVE DATE. The license fee is nonrefundable and shall not be credited against royalties or other fees. 4.2 Minimum Annual Royalties: Company shall pay to JHU minimum annual royalties as set forth in Exhibit A. These minimum annual royalties shall be due within thirty (30) days of each anniversary of the EFFECTIVE DATE beginning with the first anniversary. Running royalties accrued under Paragraph 4.3 and paid to JHU during the one year period preceding an anniversary of the EFFECTIVE DATE shall be credited against the minimum annual royalties due on that anniversary date.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
3
May 3, 2016 4.3 Running Royalties: Company shall pay to JHU, a running royalty as set forth in Exhibit A, for each LICENSED PRODUCT(S) sold and each LICENSED SERVICE(S) provided, based upon NET SALES and NET SERVICE REVENUES respectively, for the term of this Agreement. Such payments shall be made within thirty (30) days of the end of each calendar quarter following first commercial sale of LICENSED PRODUCT or providing LICENSED SERVICES. All non-US taxes related to LICENSED PRODUCT(S) and LICENSED SERVICE(S) sold under this Agreement shall be paid by Company and shall not be deducted from royalty or other payments due to JHU. 4.4 Reporting and Payments: Upon achieving first commercial sale of LICENSED PRODUCTS and LICENSED SERVICES, Company shall provide a quarterly royalty report, substantially in the format of Exhibit B, accompanying each royalty payment as required in Paragraph 4.3. Royalty reports shall disclose the amount of LICENSED PRODUCT(S) and LICENSED SERVICE(S) sold, the total NET SALES and NET SERVICE REVENUES of such LICENSED PRODUCT(S) and LICENSED SERVICE(S), and the running royalties due to JHU as a result of NET SALES and NET SERVICE REVENUES by Company. In lieu of sending quarterly royalty reports to JHU via mail or courier, Company may provide all required reports in electronic format to the email address specified by JHU. 4.5 Late Payments: In the event that any payment due hereunder is not made when due, the payment shall accrue interest beginning on the tenth day following the due date thereof, calculated at the annual rate of six percent (6%), the interest being compounded on the last day of each calendar year. Each such royalty payment when made shall be accompanied by all interest so accrued. Said interest and the payment and acceptance thereof shall not negate or waive the right of JHU to seek any other remedy, legal or equitable, to which it may be entitled because of the delinquency of any payment. 4.6 Records: The Company shall make and retain, for a period of three (3) years following the period of each report required by Paragraph 4.4, true and accurate records, files and books of account containing all the data reasonably required for the full computation and verification of sales and other information required in Paragraph 4.4. Such books and records shall be in accordance with generally accepted accounting principles consistently applied. The Company shall permit the inspection and copying of such records, files and books of account by JHU or its agents during regular business hours upon ten (10) business days' written notice to the Company. Such inspection shall not be made more than once each calendar year. All costs of such inspection and copying shall be paid by JHU, provided that if any such inspection shall reveal that an error has been made in the amount equal to five percent (5%) or more of such payment, such costs shall be borne by the Company.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
4
May 3, 2016 4.7 Non-Arms Length Transactions: In order to insure JHU the full royalty payments contemplated hereunder, the Company agrees that in the event any LICENSED PRODUCT(S) shall be sold to an affiliated company or to a corporation, firm or association with which Company shall have any agreement, understanding or arrangement with respect to consideration (such as, among other things, an option to purchase stock or actual stock ownership, or an arrangement involving division of profits or special rebates or allowances) the royalties to be paid hereunder for such LICENSED PRODUCT(S) shall be based upon the greater of: 1) the net selling price at which the purchaser of LICENSED PRODUCT(S) resells such product to the end user, 2) the NET SERVICE REVENUE received from using the LICENSED PRODUCT(S) in providing a service, 3) the fair market value of the LICENSED PRODUCT(S) or 4) the net selling price of LICENSED PRODUCT(S) paid by the purchaser. 4.8 Method of Payment: All payments under this Agreement shall be made in U.S. Dollars by either check or wire transfer. 4.9 Payment Information. All check payments from Company to JHU shall be sent to: Director Johns Hopkins Technology Ventures The Johns Hopkins University 100 N. Charles Street, 5t h Floor Baltimore, MD 21201 Reference: JHU Agreement A29889 or such other addresses which JHU may designate in writing from time to time. Checks are to be made payable to "The Johns Hopkins University". Wire transfers may be made through: ACH for U.S. Payments Johns Hopkins University Central Lockbox Bank of America 1400 Best Plaza Drive Richmond, VA 23227 Transit/routing/ABA number: 052001633 Account number: Type of account: depository CTX format is preferred; CCD+ is also accepted Reference: JHU Tech Transfer (JHU Agreement A29889) FED WIRE for International Payments Johns Hopkins University Central Lockbox Bank of America 100 West 33rd Street New York, NY 10001 SWIFT code: BOFAUS3N Account number: Type of account: depository
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
5
May 3, 2016 Reference: JHU Tech Transfer (JHU Agreement A29889) Company shall be responsible for any and all costs associated with wire transfers. Company shall provide JHU with the date of wire transfer payment and ACH confirmation number upon completion of such payment. 4.10 Invoices. Any invoice for payment sent by JHU to Company may be electronically provided by e-mail service. JHU will send invoices to an e-mail address provided by Company. Company will provide JHU with any updates to this e-mail address. 5. PATENT MATTERS 5.1 Prosecution & Maintenance: JHU, at its sole option and discretion, shall file, prosecute and maintain all patents and patent applications specified under PATENT RIGHT(S). Title to all such patents and patent applications shall reside in JHU. JHU shall have full and complete control over all patent matters in connection therewith under the PATENT RIGHT(S). 5.2 Right to Enforce: JHU shall have the first right to enforce the PATENT RIGHTS against any infringement or alleged infringement thereof in the LICENSED FIELD OF USE. 6. TERM AND TERMINATION 6.1 Expiration: This term of this Agreement shall commence on the EFFECTIVE DATE and shall continue, in each country, until the date of expiration of the last to expire patent within PATENT RIGHT(S) in that country. 6.2 Termination by Company: Company may terminate this Agreement and the license granted herein, for any reason, upon giving JHU sixty (60) days written notice under Paragraph 8.1. 6.3 Termination by JHU: JHU, at its option, may terminate this Agreement and the license granted herein if Company has not made any sales of LICENSED PRODUCT(S) or LICENSED SERVICE(S) in any period of four consecutive quarters, after the initial commercial sale of the PRODUCT(S) or LICENSED SERVICE(S). 6.4 Unpaid Royalty/Reversion of Rights: Termination or expiration of this Agreement shall not affect JHU's right to recover unpaid royalties accrued prior to termination or expiration. Upon termination or expiration of this Agreement, all rights in and to the licensed technology shall revert to JHU at no cost to JHU. 6.5 Survival: All applicable provisions, including but not limited to Paragraphs 4.1 (License Fee), 9.3 (Severability), 9.4 (Use of Name), 9.6 (Disclaimer of Warranties), 9.7 (Indemnification), 9.8 (Product Liability), 9.13 (Binding Effect) and 9.14 (Governing Law) shall survive termination or expiration of this Agreement.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
6
May 3, 2016 7. DEFAULT 7.1 Default & Termination: Upon breach or default of any term or condition of this Agreement by either party, the defaulting party shall be given written notice of such default in writing by the party not in default. The defaulting party shall have a period of sixty (60) days after receipt of such notice to correct the default or breach. If the default or breach is not corrected within said sixty (60) day period, the party not in default shall have the right to terminate this Agreement. 8. NOTICES 8.1 Notice Information: All notices and/or other communications pertaining to this Agreement shall be in writing and sent by registered mail or certified mail, return receipt requested, or sent by overnight courier, such as Federal Express, to the parties at the following addresses or such other address as such party shall have furnished in writing to the other party in accordance with this Paragraph 8.1: FOR JHU: Director Johns Hopkins Technology Ventures The Johns Hopkins University 100 N. Charles Street, 5t h Floor Baltimore, MD 21201 Reference: JHU Agreement A29889 FOR Company: VIRTUOSO SURGICAL, INC. 5701 Old Harding Pike; Suite 200 Nashville, TN 37205 9. MISCELLANEOUS 9.1 Audit: JHU shall have the right to audit any and all Company records related to this Agreement. 9.2 Assignment: This Agreement is binding upon and shall inure to the benefit of JHU, its successors and assignees and shall not be assignable to another party, except that the Company shall have the right to assign this Agreement to another party in the case of the sale or transfer by the Company of all, or substantially all, of its assets relating to the LICENSED PRODUCT(S), LICENSED SERVICE(S) or PATENT RIGHT(S), to that party.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
7
May 3, 2016 9.3 Severability: In the event that any one or more of the provisions of this Agreement should for any reason be held by any court or authority having jurisdiction over this Agreement, or over any of the parties hereto to be invalid, illegal or unenforceable, such provision or provisions shall be reformed to approximate as nearly as possible the intent of the parties, and if unreformable, shall be divisible and deleted in such jurisdictions; elsewhere, this Agreement shall not be affected. 9.4 Use of Name: The Company shall not use the name of The Johns Hopkins University or The Johns Hopkins Health System or any of its constituent parts, such as the Johns Hopkins Hospital or any contraction thereof or the name of Inventors in any advertising, promotional, sales literature or fundraising documents without prior written consent from an authorized representative of JHU. Company shall allow at least seven (7) business days notice of any proposed public disclosure for JHU's review and comment or to provide written consent. 9.5 Duties of the Parties: JHU is not a commercial organization. It is an institute of research and education. Therefore, JHU has no ability to evaluate the commercial potential of any PATENT RIGHT(S), LICENSED PRODUCT(S), LICENSED SERVICE(S) or other license or rights granted in this Agreement. It is therefore incumbent upon Company to evaluate the rights and products in question, to examine the materials and information provided by JHU, and to determine for itself the validity of any PATENT RIGHT(S), its freedom to operate, and the value of any LICENSED PRODUCT(S) or LICENSED SERVICE(S) or other rights granted. 9.6 Disclaimer of Warranties: JHU does not warrant the validity of any patents or that the practice under such patents, or the manufacture, use, sale or import of LICENSED PRODUCT(S) or LICENSED SERVICE(S), shall be free from patent infringement. EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH 9.6, COMPANY AGREES THAT THE PATENT RIGHT(S) ARE PROVIDED "AS IS", AND THAT JHU MAKES NO REPRESENTATION OR WARRANTY WITH RESPECT TO THE PERFORMANCE OF LICENSED PRODUCTS OR LICENSED SERVICES INCLUDING THEIR SAFETY, EFFECTIVENESS, OR COMMERCIAL VIABILITY. JHU DISCLAIMS ALL WARRANTIES WITH REGARD TO LICENSED PRODUCTS AND LICENSED SERVICES UNDER THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ALL WARRANTIES, EXPRESS OR IMPLIED, OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, JHU ADDITIONALLY DISCLAIMS ALL OBLIGATIONS AND LIABILITIES ON THE PART OF JHU AND INVENTORS, FOR DAMAGES, INCLUDING, BUT NOT LIMITED TO, DIRECT, INDIRECT, SPECIAL, AND CONSEQUENTIAL DAMAGES, ATTORNEYS' AND EXPERTS' FEES, AND COURT COSTS (EVEN IF JHU HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, FEES OR COSTS), ARISING OUT OF OR IN CONNECTION WITH THE MANUFACTURE, USE, OR SALE OF THE LICENSED PRODUCTS AND LICENSED SERVICES UNDER THIS AGREEMENT. COMPANY ASSUMES ALL RESPONSIBILITY AND LIABILITY FOR LOSS OR DAMAGE CAUSED BY ANY PRODUCT OR SERVICE MANUFACTURED, USED, OR SOLD BY COMPANY WHICH IS A LICENSED PRODUCT OR LICENSED SERVICE AS DEFINED IN THIS AGREEMENT.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
8
May 3, 2016 9.7 Indemnification: JHU and the Inventors will have no legal liability exposure to third parties if JHU does not license the LICENSED PRODUCT(S) and LICENSED SERVICE(S), and any royalties JHU and the Inventors may receive is not adequate compensation for such legal liability exposure. Therefore, JHU requires Company to protect JHU and Inventors from such exposure to the same manner and extent to which insurance, if available, would protect JHU and Inventors. JHU and the Inventors will not, under the provisions of this Agreement or otherwise, have control over the manner in which Company or those operating for its account or third parties who purchase LICENSED PRODUCT(S) or LICENSED SERVICE(S) from any of the foregoing entities, practice the inventions of LICENSED PRODUCT(S) and LICENSED SERVICE(S). The Company shall indemnify, defend with counsel reasonably acceptable to JHU, and hold JHU, The Johns Hopkins Health Systems, their representatives including but not limited to present and former, trustees, officers, Inventors, agents, faculty, employees and students harmless as against any judgments, fees, expenses, or other costs arising from or incidental to any product liability or other lawsuit, claim, demand or other action brought as a consequence of the practice of said inventions by any of the foregoing entities, whether or not JHU or said Inventors, either jointly or severally, is/are named as a party defendant in any such lawsuit. Practice of the inventions covered by LICENSED PRODUCT(S) or LICENSED SERVICE(S) by an agent or a third party on behalf of or for the account of the Company, or by a third party who purchases LICENSED PRODUCT(S) or LICENSED SERVICE(S) from the Company, shall be considered the Company's practice of said inventions for purposes of this Paragraph 9.7. The obligation of the Company to defend and indemnify as set out in this Paragraph 9.7 shall survive the termination of this Agreement and shall not be limited by any other limitation of liability elsewhere in the Agreement. 9.8 Product Liability: Prior to first commercial sale of any LICENSED PRODUCT(S) or LICENSED SERVICE(S) as the case may be in any particular country, Company shall establish and maintain, in each country in which Company shall sell LICENSED PRODUCT(S) or LICENSED SERVICE(S), product liability or other appropriate insurance coverage appropriate to the risks involved in marketing LICENSED PRODUCT(S) and/or LICENSED SERVICE(S) and will annually present evidence to JHU that such coverage is being maintained. Upon JHU's request, Company will furnish JHU with a Certificate of Insurance of each product liability insurance policy obtained. JHU shall be listed as an additional insured in Company's said insurance policies. If such Product Liability insurance is underwritten on a 'claims made' basis, Company agrees that any change in underwriters during the term of this Agreement will require the purchase of 'prior acts' coverage to ensure that coverage will be continuous throughout the term of this Agreement. 9.9 Entire Agreement: This Agreement constitutes the entire understanding between the parties with respect to the obligations of the parties with respect to the subject matter hereof, and supersedes and replaces all prior agreements, understandings, writings, and discussions between the parties relating to said subject matter.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
9
May 3, 2016 9.10 Amendment & Waiver: This Agreement may be amended and any of its terms or conditions may be waived only by a written instrument executed by the authorized officials of the parties or, in the case of a waiver, by the party waiving compliance. The failure of either party at any time or times to require performance of any provision hereof shall in no manner affect its right at a later time to enforce the same. No waiver by either party of any condition or term in any one or more instances shall be construed as a further or continuing waiver of such condition or term or of any other condition or term. 9.11 Binding Effect: This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. 9.12 Governing Law: This Agreement shall be construed, and legal relations between the parties hereto shall be determined, in accordance with the laws of the State of Maryland applicable to contracts solely executed and wholly to be performed within the State of Maryland without giving effect to the principles of conflicts of laws. Any disputes between the parties to the Agreement shall be brought in the state or federal courts of Maryland. Both parties agree to waive their right to a jury trial. 9.13 Headings: Article headings are for convenient reference and are not a part of this Agreement. All Exhibits are incorporated herein by this reference. 9.14 Use of Name: Nothing contained in this Agreement confers any right to either party hereto to use in advertising, publicity, or other promotional activities any name, trade name, trademark, or other designation of the other party hereto (including any contraction, abbreviation or simulation of any of the foregoing). Unless otherwise required by law, LICENSEE is prohibited from using the name "The Johns Hopkins University" or the name of any affiliate of the Johns Hopkins University, including but not limited to The Johns Hopkins Health System Corporation, or any of its hospitals or affiliates, or the names of any of their respective faculty, employees, students or INVENTORS, in advertising, publicity, or other promotional activities, without JHU's prior written approval of such use. JHU may disclose to all INVENTORS the terms and conditions of this Agreement upon their request. JHU may acknowledge to third parties the existence of this Agreement and the extent of the licenses granted to LICENSEE and AFFILIATES under Section 3 hereof, but JHU shall not disclose the financial terms of this Agreement to third parties, except where JHU is required by law to do so. LICENSEE hereby grants JHU permission to include LICENSEE's name and a link to LICENSEE's website in JHU's annual reports and on JHU's website to showcase technology transfer-related stories. JHU shall have the right to list LICENSEE and display the logotype or symbol of LICENSEE on JHU's website and on JHU publications as a licensee startup company based upon JHU technology.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
10
May 3, 2016 IN WITNESS WHEREOF the respective parties hereto have executed this Agreement by their duly authorized officers on the date appearing below their signatures. THE JOHNS HOPKINS UNIVERSITY VIRTUOSO SURGICAL, INC. By: /s/ Neil Veloso By: /s/ C. Mark Pickrell Neil Veloso Name:C. Mark Pickrell Executive Director Title: Attorney-in-Fact Johns Hopkins Technology Ventures Date:5/11/2016 Date:: 5/4/2016
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
11
May 3, 2016 EXHIBIT A LICENSE FEES and ROYALTY 1. LICENSE FEE 1.1 The license fee due under Paragraph 4.1 is two-thousand dollars ($2000). 1.2 In addition, COMPANY shall issue to JHU that number of shares of common stock representing five percent (5%) of the outstanding common and preferred shares on a fully diluted basis of COMPANY pursuant to an agreed upon stock purchase agreement between COMPANY and JHU. The stock purchase agreement shall contain provisions protecting JHU against dilution of its equity interest in the event the post-money valuation of any equity investment is less than two million dollars ($2,000,000), and it will also contain a provision for the piggy-back registration of common shares with any other class of stock in an initial public offering. If COMPANY proposes to sell any equity securities or securities that are convertible into equity securities of COMPANY (collectively, "Equity Securities") in any new round of financing, then COMPANY shall offer JHU and/or its Assignee (as defined below) an opportunity to purchase either: (i) up to that portion of the Equity Securities that equals JHU's then current, fully-diluted percentage ownership interest in COMPANY, or (ii) if the percentage offered for sale by COMPANY is less, then up to five percent (5%) of the Equity Securities offered for sale. Such offer to purchase shall be on the same terms and conditions as are offered with respect to such Equity Securities sold in such financing. For purposes of this section 7 of Exhibit A, the term "Assignee" means: (a) any entity to which JHU's preemptive rights have been assigned either by JHU or by another entity, or (b) any entity that is controlled by JHU. 2. EARNED ROYALTY 2.1 Annual Earned Royalty. COMPANY shall pay an annual EARNED ROYALTY as follows: 2.1.1 Four percent (4%) of the sum of NET REVENUES. 2.2 Royalty Stacking. If COMPANY is required to pay running royalties on any patent rights not licensed hereunder ("Other Royalties") in order to make, use or sell a particular LICENSED PRODUCT or LICENSED SERVICE, COMPANY shall be entitled to credit half (50%) of such Other Royalties against the Earned Royalty due, but the Earned Royalties shall not be reduced below fifty percent (50%) of those that would otherwise be due JHU for that LICENSED PRODUCT or LICENSED SERVICE.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
12
May 3, 2016 2.3 Least Developed Countries. EARNED ROYALTY shall not be due and payable to JHU on NET REVENUES generated from: (i) LICENSED PRODUCTS sold in Least Developed Countries as defined by the United Nations Country Classification in the most recent United Nations' publication "Statistical Annex" ("LEAST DEVELOPED COUNTRIES"); or (ii) LICENSED PRODUCTS sold to the Public Sector providing LICENSED PRODUCTS at a Cost-Based Price in such Least Developed Countries, but only if COMPANY sells such LICENSED PRODUCTS at COMPANY's cost of production thereof. 3. MINIMUM ANNUAL ROYALTIES 3.1 The minimum annual royalties pursuant to the Agreement are: 1st anniversary of the EFFECTIVE DATE and each subsequent anniversary of the EFFECTIVE DATE during the term: Three-thousand dollars ($3000) 3.2 Earned Royalties payable for each calendar year are creditable on a non-cumulative basis against MINIMUM ANNUAL ROYALTIES for that year only. 4. LIQUIDITY EVENT 4.1 COMPANY will pay JHU a fee equal one percent (1%) of the Aggregate Consideration received by the COMPANY, or the total amount received by stockholders of COMPANY, upon the occurrence of a Liquidity Event. Such fee shall be paid after only the first to occur of either a Liquidation Event or an Initial Public Offering. The respective fees, when and if payable, shall be paid upon closing; except that if there are additional contingent amounts ("Trailing Consideration") payable upon the occurrence of subsequent events, then the Trailing Consideration shall be due and payable to JHU within thirty (30) days after receipt thereof by COMPANY. 4.2 For a Liquidity Event, the fee required under Section 4.1 of this Exhibit A above shall be payable to JHU by COMPANY in the same form as the proceeds paid or payable to either COMPANY or its security holders, whether in cash, securities or other property, and in the same proportion as such form of consideration is paid or payable to COMPANY or its security holders. Notwithstanding the foregoing, in the event the form of consideration paid or payable includes securities for which there is not an active public market, in lieu of paying that portion of the fee with such securities COMPANY will make a cash payment to JHU equal to the fair market value of such securities. The valuation of such securities shall be determined in accordance with the definition of "Aggregate Consideration" set forth below. 4.3 For an Initial Public Offering, the fee shall be payable in the form of cash, and shall be based upon the Pre Money Valuation.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
13
May 3, 2016 4.4 "Aggregate Consideration" means the amount equal to: 4.4.1 In the case of an Asset Sale, the sum of: (a) all cash, and the fair market value of all securities or other property transferred to COMPANY at the time of the transaction, less all current and long-term liabilities (but not contingent liabilities) of COMPANY that are not discharged or assumed by the buyer (or its affiliates) in connection with the Asset Sale; and (b) all cash, and the fair market value of all securities and other property for Trailing Consideration payable to COMPANY, when and if actually paid; or 4.4.2 In the case of a Merger or Stock Sale, the sum of: (a) all cash, and the fair market value of all securities and other property transferred to the stockholders of COMPANY (and any option holders or warrant holders) in return for their stock (or options or warrants) in COMPANY at the time of the transaction, and (b) all cash, and the fair market value of all securities and other property transferred to the stockholders of COMPANY (and any option holders or warrant holders) for Trailing Consideration payable to the holders of COMPANY's securities, when and if actually paid. 4.4.3 The valuation of any securities or other property shall be determined by reference to the operative transaction agreement for a respective Merger, Stock Sale or Asset Sale, provided that, if no such valuation is readily determinable from such operative transaction agreement, then for securities for which there is an active public market: (a) If traded on a securities exchange or the NASDAQ Stock Market, the value shall be deemed to be the average of the closing prices of the securities on such exchange or market over the thirty day (30) period ending three (3) days prior to the closing of such transaction; or (b) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid prices over the thirty day (30) period ending three (3) days prior to the closing of such transaction. (c) The method of valuation of securities subject to investment letters or other similar restrictions on free marketability shall take into account an appropriate discount from the market value as determined pursuant to clause (a) or (b) above so as to reflect the approximate fair market value thereof. (d) For securities for which there is no active public market, the value shall be the fair market value thereof as either: (i) determined in good faith by the Board of Directors of COMPANY; (ii) approved by JHU, such approval not to be unreasonably withheld; or (iii) determined by a third party appraiser appointed and paid for by COMPANY.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
14
May 3, 2016 4.5 "Pre-Money Valuation" means the amount equal to the product of: (i) the price per share of common stock sold in the Initial Public Offering, and (ii) the total number of outstanding shares of common stock of COMPANY immediately prior to the closing of the Initial Public Offering, determined on a fully diluted, as converted into common stock basis, giving effect to any stock split, stock dividend, stock combination, recapitalization or similar action impacting COMPANY's capitalization that occurs, or is deemed to occur, upon consummation of the Initial Public Offering.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
15
May 3, 2016 EXHIBIT B QUARTERLY SALES & ROYALTY REPORT FOR NON-EXCLUSIVE LICENSE AGREEMENT A29889 BETWEEN VIRTUOSO SURGICAL, INC. AND THE JOHNS HOPKINS UNIVERSITY EFFECTIVE DATE OF AGREEMENT _________________ FOR PERIOD OF _________ TO _________ TOTAL ROYALTIES DUE FOR THIS PERIOD$_________
PRODUCT ID NO. PRODUCT NAME
*JHU REF NO.
PT COMMERCIAL SALE DATE TOTAL NE SALES/SERVICES ROYALTY RATE AMOUNT DUE
* Please provide the JHU Ref. C04873 This report format is to be used to report quarterly royalty statements to JHU. It should be placed on Company letterhead and accompany any royalty payments due for the reporting period. This report shall be submitted even if no sales are reported.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
16
May 3, 2016 EXHIBIT C JHU Ref Number Technology Title Inventors Country/#
C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor
Japan 2008-541319
C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor
European Patent Office 06844376.1
C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor
Canada 2,630,061
C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor
Japan 2012-139088 5550682
C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor
Japan 2015-094824
C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor
Japan 2014-000372
C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor
China 200680050046.8 ZL 200680050046.8
C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor
United States 8,152,756
C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor
United States 8,715,226
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019 [/INST] ```json
{<answer_start>
"answer": "JHU shall have the right to audit any and all Company records related to this Agreement."
<answer_end>
}
``` </s> | Exhibit 6.2 NON-EXCLUSIVE LICENSE AGREEMENT BETWEEN THE JOHNS HOPKINS UNIVERSITY & VIRTUOSO SURGICAL, INC.
JHU Agreement: A29889
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
1
May 3, 2016 NON-EXCLUSIVE LICENSE AGREEMENT- FOR SALES This Non-Exclusive License Agreement (hereinafter "Agreement") is entered into by and between The Johns Hopkins University (hereinafter "JHU"), a corporation of the State of Maryland, having a principal place of business 3400 N. Charles Street, Baltimore, Maryland 21218- 2695 and, Virtuoso Surgical, Inc. (hereinafter "Company"), a Tennessee corporation having an address at 5701 Old Harding Pike; Suite 200; Nashville, TN 37205. The parties hereto agree as follows: 1. BACKGROUND 1.1 In the course of a fundamental research program at JHU, a valuable invention entitled Active Cannulas for Bio-Sensing and Surgical Intervention (JHU Ref. C04873) was developed by Drs. Robert Webster, III, Noah Cowan, Allison Okamura, and Russell Taylor (hereinafter "Inventors"). 1.2 JHU has acquired all right, title and interest, with the exception of certain retained rights by the United States government, in said invention but is without the capacity to commercially develop, manufacture and distribute products and methods which embody the invention. 1.3 Company is interested in providing such commercial products and methods to third parties on a non-exclusive basis and agrees to comply with the terms and conditions in this Agreement. 1.4 All references to particular Exhibits or Paragraphs shall mean the Exhibits to, and Paragraphs of, this Agreement, unless otherwise specified. 2. DEFINITIONS 2.1 "EFFECTIVE DATE" of this Agreement shall mean the date the last party hereto has executed this Agreement. 2.2 "LICENSED FIELD" shall mean Cannulated Surgical Intervention. 2.3 "LICENSED PRODUCT(S)" as used herein in either singular or plural shall mean any material, compositions, or other product, the manufacture, use or sale of which would constitute, but for the license granted to Company pursuant to this Agreement, an infringement of a claim of PATENT RIGHT(S) (infringement shall include, but is not limited to, direct, contributory, or inducement to infringe). 2.4 "LICENSED SERVICE(S)" as used herein in either singular or plural shall mean the performance on behalf of a third party of any method including cannulated surgical intervention or the manufacture of any product or the use of any product which would constitute, but for the license granted to Company pursuant to this Agreement, an infringement of a claim of the PATENT RIGHT(S), (infringement shall include, but not be limited to, direct, contributory or inducement to infringe).
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
2
May 3, 2016 2.5 "NET SALES" shall mean gross sales revenues and fees billed by Company from the sale of LICENSED PRODUCT(S) less trade discounts allowed, refunds, returns and recalls, and sales taxes. In the event that Company sells a LICENSED PRODUCT(S) in combination with other ingredients or substances or as part of a kit, the NET SALES for purposes of royalty payments shall be based on the sales revenues and fees received from the entire combination or kit. 2.6 "NET SERVICE REVENUES" shall mean gross service revenues and fees billed by Company for the performance of LICENSED SERVICE(S) less sales and/or use taxes imposed upon and with specific reference to the LICENSED SERVICE(S). In the event that Company sells a LICENSED SERVICE(S) in combination with other services or substances or as part of a kit, the NET SERVICE REVENUES for purposes of royalty payments shall be based on the sales revenues and fees received from the entire combination. 2.7 "PATENT RIGHT(S)" shall mean, collectively, JHU's interest in those set forth in EXHIBIT C of this Agreement and the inventions disclosed and claimed therein, and all continuations, divisions, and reissues based thereof, and any corresponding foreign patent applications, and any patents, or other equivalent foreign PATENT RIGHT(S) issuing, granted or registered thereon. 3. GRANT 3.1 License Granted: Subject to the terms and conditions of this Agreement and to non-exclusive license agreements executed prior to the EFFECTIVE DATE, JHU hereby grants to the Company a non-exclusive, non-transferable license to make, have made, import, offer for sale and sell the LICENSED PRODUCT(S) and the LICENSED SERVICE(S) in the United States and worldwide under the PATENT RIGHT(S) in the LICENSED FIELD. 3.2 No Sublicensing: Company shall not sublicense to others under this Agreement, nor extend the rights granted hereunder to any affiliated company. 4. PAYMENTS, ROYALTY AND REPORTING 4.1 License Fee: As consideration for JHU's grant of a License to Company under this Agreement, Company shall pay to JHU a license fee, cash and equity, as set forth in Exhibit A within thirty (30) days of the EFFECTIVE DATE. The license fee is nonrefundable and shall not be credited against royalties or other fees. 4.2 Minimum Annual Royalties: Company shall pay to JHU minimum annual royalties as set forth in Exhibit A. These minimum annual royalties shall be due within thirty (30) days of each anniversary of the EFFECTIVE DATE beginning with the first anniversary. Running royalties accrued under Paragraph 4.3 and paid to JHU during the one year period preceding an anniversary of the EFFECTIVE DATE shall be credited against the minimum annual royalties due on that anniversary date.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
3
May 3, 2016 4.3 Running Royalties: Company shall pay to JHU, a running royalty as set forth in Exhibit A, for each LICENSED PRODUCT(S) sold and each LICENSED SERVICE(S) provided, based upon NET SALES and NET SERVICE REVENUES respectively, for the term of this Agreement. Such payments shall be made within thirty (30) days of the end of each calendar quarter following first commercial sale of LICENSED PRODUCT or providing LICENSED SERVICES. All non-US taxes related to LICENSED PRODUCT(S) and LICENSED SERVICE(S) sold under this Agreement shall be paid by Company and shall not be deducted from royalty or other payments due to JHU. 4.4 Reporting and Payments: Upon achieving first commercial sale of LICENSED PRODUCTS and LICENSED SERVICES, Company shall provide a quarterly royalty report, substantially in the format of Exhibit B, accompanying each royalty payment as required in Paragraph 4.3. Royalty reports shall disclose the amount of LICENSED PRODUCT(S) and LICENSED SERVICE(S) sold, the total NET SALES and NET SERVICE REVENUES of such LICENSED PRODUCT(S) and LICENSED SERVICE(S), and the running royalties due to JHU as a result of NET SALES and NET SERVICE REVENUES by Company. In lieu of sending quarterly royalty reports to JHU via mail or courier, Company may provide all required reports in electronic format to the email address specified by JHU. 4.5 Late Payments: In the event that any payment due hereunder is not made when due, the payment shall accrue interest beginning on the tenth day following the due date thereof, calculated at the annual rate of six percent (6%), the interest being compounded on the last day of each calendar year. Each such royalty payment when made shall be accompanied by all interest so accrued. Said interest and the payment and acceptance thereof shall not negate or waive the right of JHU to seek any other remedy, legal or equitable, to which it may be entitled because of the delinquency of any payment. 4.6 Records: The Company shall make and retain, for a period of three (3) years following the period of each report required by Paragraph 4.4, true and accurate records, files and books of account containing all the data reasonably required for the full computation and verification of sales and other information required in Paragraph 4.4. Such books and records shall be in accordance with generally accepted accounting principles consistently applied. The Company shall permit the inspection and copying of such records, files and books of account by JHU or its agents during regular business hours upon ten (10) business days' written notice to the Company. Such inspection shall not be made more than once each calendar year. All costs of such inspection and copying shall be paid by JHU, provided that if any such inspection shall reveal that an error has been made in the amount equal to five percent (5%) or more of such payment, such costs shall be borne by the Company.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
4
May 3, 2016 4.7 Non-Arms Length Transactions: In order to insure JHU the full royalty payments contemplated hereunder, the Company agrees that in the event any LICENSED PRODUCT(S) shall be sold to an affiliated company or to a corporation, firm or association with which Company shall have any agreement, understanding or arrangement with respect to consideration (such as, among other things, an option to purchase stock or actual stock ownership, or an arrangement involving division of profits or special rebates or allowances) the royalties to be paid hereunder for such LICENSED PRODUCT(S) shall be based upon the greater of: 1) the net selling price at which the purchaser of LICENSED PRODUCT(S) resells such product to the end user, 2) the NET SERVICE REVENUE received from using the LICENSED PRODUCT(S) in providing a service, 3) the fair market value of the LICENSED PRODUCT(S) or 4) the net selling price of LICENSED PRODUCT(S) paid by the purchaser. 4.8 Method of Payment: All payments under this Agreement shall be made in U.S. Dollars by either check or wire transfer. 4.9 Payment Information. All check payments from Company to JHU shall be sent to: Director Johns Hopkins Technology Ventures The Johns Hopkins University 100 N. Charles Street, 5t h Floor Baltimore, MD 21201 Reference: JHU Agreement A29889 or such other addresses which JHU may designate in writing from time to time. Checks are to be made payable to "The Johns Hopkins University". Wire transfers may be made through: ACH for U.S. Payments Johns Hopkins University Central Lockbox Bank of America 1400 Best Plaza Drive Richmond, VA 23227 Transit/routing/ABA number: 052001633 Account number: Type of account: depository CTX format is preferred; CCD+ is also accepted Reference: JHU Tech Transfer (JHU Agreement A29889) FED WIRE for International Payments Johns Hopkins University Central Lockbox Bank of America 100 West 33rd Street New York, NY 10001 SWIFT code: BOFAUS3N Account number: Type of account: depository
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
5
May 3, 2016 Reference: JHU Tech Transfer (JHU Agreement A29889) Company shall be responsible for any and all costs associated with wire transfers. Company shall provide JHU with the date of wire transfer payment and ACH confirmation number upon completion of such payment. 4.10 Invoices. Any invoice for payment sent by JHU to Company may be electronically provided by e-mail service. JHU will send invoices to an e-mail address provided by Company. Company will provide JHU with any updates to this e-mail address. 5. PATENT MATTERS 5.1 Prosecution & Maintenance: JHU, at its sole option and discretion, shall file, prosecute and maintain all patents and patent applications specified under PATENT RIGHT(S). Title to all such patents and patent applications shall reside in JHU. JHU shall have full and complete control over all patent matters in connection therewith under the PATENT RIGHT(S). 5.2 Right to Enforce: JHU shall have the first right to enforce the PATENT RIGHTS against any infringement or alleged infringement thereof in the LICENSED FIELD OF USE. 6. TERM AND TERMINATION 6.1 Expiration: This term of this Agreement shall commence on the EFFECTIVE DATE and shall continue, in each country, until the date of expiration of the last to expire patent within PATENT RIGHT(S) in that country. 6.2 Termination by Company: Company may terminate this Agreement and the license granted herein, for any reason, upon giving JHU sixty (60) days written notice under Paragraph 8.1. 6.3 Termination by JHU: JHU, at its option, may terminate this Agreement and the license granted herein if Company has not made any sales of LICENSED PRODUCT(S) or LICENSED SERVICE(S) in any period of four consecutive quarters, after the initial commercial sale of the PRODUCT(S) or LICENSED SERVICE(S). 6.4 Unpaid Royalty/Reversion of Rights: Termination or expiration of this Agreement shall not affect JHU's right to recover unpaid royalties accrued prior to termination or expiration. Upon termination or expiration of this Agreement, all rights in and to the licensed technology shall revert to JHU at no cost to JHU. 6.5 Survival: All applicable provisions, including but not limited to Paragraphs 4.1 (License Fee), 9.3 (Severability), 9.4 (Use of Name), 9.6 (Disclaimer of Warranties), 9.7 (Indemnification), 9.8 (Product Liability), 9.13 (Binding Effect) and 9.14 (Governing Law) shall survive termination or expiration of this Agreement.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
6
May 3, 2016 7. DEFAULT 7.1 Default & Termination: Upon breach or default of any term or condition of this Agreement by either party, the defaulting party shall be given written notice of such default in writing by the party not in default. The defaulting party shall have a period of sixty (60) days after receipt of such notice to correct the default or breach. If the default or breach is not corrected within said sixty (60) day period, the party not in default shall have the right to terminate this Agreement. 8. NOTICES 8.1 Notice Information: All notices and/or other communications pertaining to this Agreement shall be in writing and sent by registered mail or certified mail, return receipt requested, or sent by overnight courier, such as Federal Express, to the parties at the following addresses or such other address as such party shall have furnished in writing to the other party in accordance with this Paragraph 8.1: FOR JHU: Director Johns Hopkins Technology Ventures The Johns Hopkins University 100 N. Charles Street, 5t h Floor Baltimore, MD 21201 Reference: JHU Agreement A29889 FOR Company: VIRTUOSO SURGICAL, INC. 5701 Old Harding Pike; Suite 200 Nashville, TN 37205 9. MISCELLANEOUS 9.1 Audit: JHU shall have the right to audit any and all Company records related to this Agreement. 9.2 Assignment: This Agreement is binding upon and shall inure to the benefit of JHU, its successors and assignees and shall not be assignable to another party, except that the Company shall have the right to assign this Agreement to another party in the case of the sale or transfer by the Company of all, or substantially all, of its assets relating to the LICENSED PRODUCT(S), LICENSED SERVICE(S) or PATENT RIGHT(S), to that party.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
7
May 3, 2016 9.3 Severability: In the event that any one or more of the provisions of this Agreement should for any reason be held by any court or authority having jurisdiction over this Agreement, or over any of the parties hereto to be invalid, illegal or unenforceable, such provision or provisions shall be reformed to approximate as nearly as possible the intent of the parties, and if unreformable, shall be divisible and deleted in such jurisdictions; elsewhere, this Agreement shall not be affected. 9.4 Use of Name: The Company shall not use the name of The Johns Hopkins University or The Johns Hopkins Health System or any of its constituent parts, such as the Johns Hopkins Hospital or any contraction thereof or the name of Inventors in any advertising, promotional, sales literature or fundraising documents without prior written consent from an authorized representative of JHU. Company shall allow at least seven (7) business days notice of any proposed public disclosure for JHU's review and comment or to provide written consent. 9.5 Duties of the Parties: JHU is not a commercial organization. It is an institute of research and education. Therefore, JHU has no ability to evaluate the commercial potential of any PATENT RIGHT(S), LICENSED PRODUCT(S), LICENSED SERVICE(S) or other license or rights granted in this Agreement. It is therefore incumbent upon Company to evaluate the rights and products in question, to examine the materials and information provided by JHU, and to determine for itself the validity of any PATENT RIGHT(S), its freedom to operate, and the value of any LICENSED PRODUCT(S) or LICENSED SERVICE(S) or other rights granted. 9.6 Disclaimer of Warranties: JHU does not warrant the validity of any patents or that the practice under such patents, or the manufacture, use, sale or import of LICENSED PRODUCT(S) or LICENSED SERVICE(S), shall be free from patent infringement. EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH 9.6, COMPANY AGREES THAT THE PATENT RIGHT(S) ARE PROVIDED "AS IS", AND THAT JHU MAKES NO REPRESENTATION OR WARRANTY WITH RESPECT TO THE PERFORMANCE OF LICENSED PRODUCTS OR LICENSED SERVICES INCLUDING THEIR SAFETY, EFFECTIVENESS, OR COMMERCIAL VIABILITY. JHU DISCLAIMS ALL WARRANTIES WITH REGARD TO LICENSED PRODUCTS AND LICENSED SERVICES UNDER THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ALL WARRANTIES, EXPRESS OR IMPLIED, OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, JHU ADDITIONALLY DISCLAIMS ALL OBLIGATIONS AND LIABILITIES ON THE PART OF JHU AND INVENTORS, FOR DAMAGES, INCLUDING, BUT NOT LIMITED TO, DIRECT, INDIRECT, SPECIAL, AND CONSEQUENTIAL DAMAGES, ATTORNEYS' AND EXPERTS' FEES, AND COURT COSTS (EVEN IF JHU HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, FEES OR COSTS), ARISING OUT OF OR IN CONNECTION WITH THE MANUFACTURE, USE, OR SALE OF THE LICENSED PRODUCTS AND LICENSED SERVICES UNDER THIS AGREEMENT. COMPANY ASSUMES ALL RESPONSIBILITY AND LIABILITY FOR LOSS OR DAMAGE CAUSED BY ANY PRODUCT OR SERVICE MANUFACTURED, USED, OR SOLD BY COMPANY WHICH IS A LICENSED PRODUCT OR LICENSED SERVICE AS DEFINED IN THIS AGREEMENT.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
8
May 3, 2016 9.7 Indemnification: JHU and the Inventors will have no legal liability exposure to third parties if JHU does not license the LICENSED PRODUCT(S) and LICENSED SERVICE(S), and any royalties JHU and the Inventors may receive is not adequate compensation for such legal liability exposure. Therefore, JHU requires Company to protect JHU and Inventors from such exposure to the same manner and extent to which insurance, if available, would protect JHU and Inventors. JHU and the Inventors will not, under the provisions of this Agreement or otherwise, have control over the manner in which Company or those operating for its account or third parties who purchase LICENSED PRODUCT(S) or LICENSED SERVICE(S) from any of the foregoing entities, practice the inventions of LICENSED PRODUCT(S) and LICENSED SERVICE(S). The Company shall indemnify, defend with counsel reasonably acceptable to JHU, and hold JHU, The Johns Hopkins Health Systems, their representatives including but not limited to present and former, trustees, officers, Inventors, agents, faculty, employees and students harmless as against any judgments, fees, expenses, or other costs arising from or incidental to any product liability or other lawsuit, claim, demand or other action brought as a consequence of the practice of said inventions by any of the foregoing entities, whether or not JHU or said Inventors, either jointly or severally, is/are named as a party defendant in any such lawsuit. Practice of the inventions covered by LICENSED PRODUCT(S) or LICENSED SERVICE(S) by an agent or a third party on behalf of or for the account of the Company, or by a third party who purchases LICENSED PRODUCT(S) or LICENSED SERVICE(S) from the Company, shall be considered the Company's practice of said inventions for purposes of this Paragraph 9.7. The obligation of the Company to defend and indemnify as set out in this Paragraph 9.7 shall survive the termination of this Agreement and shall not be limited by any other limitation of liability elsewhere in the Agreement. 9.8 Product Liability: Prior to first commercial sale of any LICENSED PRODUCT(S) or LICENSED SERVICE(S) as the case may be in any particular country, Company shall establish and maintain, in each country in which Company shall sell LICENSED PRODUCT(S) or LICENSED SERVICE(S), product liability or other appropriate insurance coverage appropriate to the risks involved in marketing LICENSED PRODUCT(S) and/or LICENSED SERVICE(S) and will annually present evidence to JHU that such coverage is being maintained. Upon JHU's request, Company will furnish JHU with a Certificate of Insurance of each product liability insurance policy obtained. JHU shall be listed as an additional insured in Company's said insurance policies. If such Product Liability insurance is underwritten on a 'claims made' basis, Company agrees that any change in underwriters during the term of this Agreement will require the purchase of 'prior acts' coverage to ensure that coverage will be continuous throughout the term of this Agreement. 9.9 Entire Agreement: This Agreement constitutes the entire understanding between the parties with respect to the obligations of the parties with respect to the subject matter hereof, and supersedes and replaces all prior agreements, understandings, writings, and discussions between the parties relating to said subject matter.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
9
May 3, 2016 9.10 Amendment & Waiver: This Agreement may be amended and any of its terms or conditions may be waived only by a written instrument executed by the authorized officials of the parties or, in the case of a waiver, by the party waiving compliance. The failure of either party at any time or times to require performance of any provision hereof shall in no manner affect its right at a later time to enforce the same. No waiver by either party of any condition or term in any one or more instances shall be construed as a further or continuing waiver of such condition or term or of any other condition or term. 9.11 Binding Effect: This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. 9.12 Governing Law: This Agreement shall be construed, and legal relations between the parties hereto shall be determined, in accordance with the laws of the State of Maryland applicable to contracts solely executed and wholly to be performed within the State of Maryland without giving effect to the principles of conflicts of laws. Any disputes between the parties to the Agreement shall be brought in the state or federal courts of Maryland. Both parties agree to waive their right to a jury trial. 9.13 Headings: Article headings are for convenient reference and are not a part of this Agreement. All Exhibits are incorporated herein by this reference. 9.14 Use of Name: Nothing contained in this Agreement confers any right to either party hereto to use in advertising, publicity, or other promotional activities any name, trade name, trademark, or other designation of the other party hereto (including any contraction, abbreviation or simulation of any of the foregoing). Unless otherwise required by law, LICENSEE is prohibited from using the name "The Johns Hopkins University" or the name of any affiliate of the Johns Hopkins University, including but not limited to The Johns Hopkins Health System Corporation, or any of its hospitals or affiliates, or the names of any of their respective faculty, employees, students or INVENTORS, in advertising, publicity, or other promotional activities, without JHU's prior written approval of such use. JHU may disclose to all INVENTORS the terms and conditions of this Agreement upon their request. JHU may acknowledge to third parties the existence of this Agreement and the extent of the licenses granted to LICENSEE and AFFILIATES under Section 3 hereof, but JHU shall not disclose the financial terms of this Agreement to third parties, except where JHU is required by law to do so. LICENSEE hereby grants JHU permission to include LICENSEE's name and a link to LICENSEE's website in JHU's annual reports and on JHU's website to showcase technology transfer-related stories. JHU shall have the right to list LICENSEE and display the logotype or symbol of LICENSEE on JHU's website and on JHU publications as a licensee startup company based upon JHU technology.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
10
May 3, 2016 IN WITNESS WHEREOF the respective parties hereto have executed this Agreement by their duly authorized officers on the date appearing below their signatures. THE JOHNS HOPKINS UNIVERSITY VIRTUOSO SURGICAL, INC. By: /s/ Neil Veloso By: /s/ C. Mark Pickrell Neil Veloso Name:C. Mark Pickrell Executive Director Title: Attorney-in-Fact Johns Hopkins Technology Ventures Date:5/11/2016 Date:: 5/4/2016
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
11
May 3, 2016 EXHIBIT A LICENSE FEES and ROYALTY 1. LICENSE FEE 1.1 The license fee due under Paragraph 4.1 is two-thousand dollars ($2000). 1.2 In addition, COMPANY shall issue to JHU that number of shares of common stock representing five percent (5%) of the outstanding common and preferred shares on a fully diluted basis of COMPANY pursuant to an agreed upon stock purchase agreement between COMPANY and JHU. The stock purchase agreement shall contain provisions protecting JHU against dilution of its equity interest in the event the post-money valuation of any equity investment is less than two million dollars ($2,000,000), and it will also contain a provision for the piggy-back registration of common shares with any other class of stock in an initial public offering. If COMPANY proposes to sell any equity securities or securities that are convertible into equity securities of COMPANY (collectively, "Equity Securities") in any new round of financing, then COMPANY shall offer JHU and/or its Assignee (as defined below) an opportunity to purchase either: (i) up to that portion of the Equity Securities that equals JHU's then current, fully-diluted percentage ownership interest in COMPANY, or (ii) if the percentage offered for sale by COMPANY is less, then up to five percent (5%) of the Equity Securities offered for sale. Such offer to purchase shall be on the same terms and conditions as are offered with respect to such Equity Securities sold in such financing. For purposes of this section 7 of Exhibit A, the term "Assignee" means: (a) any entity to which JHU's preemptive rights have been assigned either by JHU or by another entity, or (b) any entity that is controlled by JHU. 2. EARNED ROYALTY 2.1 Annual Earned Royalty. COMPANY shall pay an annual EARNED ROYALTY as follows: 2.1.1 Four percent (4%) of the sum of NET REVENUES. 2.2 Royalty Stacking. If COMPANY is required to pay running royalties on any patent rights not licensed hereunder ("Other Royalties") in order to make, use or sell a particular LICENSED PRODUCT or LICENSED SERVICE, COMPANY shall be entitled to credit half (50%) of such Other Royalties against the Earned Royalty due, but the Earned Royalties shall not be reduced below fifty percent (50%) of those that would otherwise be due JHU for that LICENSED PRODUCT or LICENSED SERVICE.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
12
May 3, 2016 2.3 Least Developed Countries. EARNED ROYALTY shall not be due and payable to JHU on NET REVENUES generated from: (i) LICENSED PRODUCTS sold in Least Developed Countries as defined by the United Nations Country Classification in the most recent United Nations' publication "Statistical Annex" ("LEAST DEVELOPED COUNTRIES"); or (ii) LICENSED PRODUCTS sold to the Public Sector providing LICENSED PRODUCTS at a Cost-Based Price in such Least Developed Countries, but only if COMPANY sells such LICENSED PRODUCTS at COMPANY's cost of production thereof. 3. MINIMUM ANNUAL ROYALTIES 3.1 The minimum annual royalties pursuant to the Agreement are: 1st anniversary of the EFFECTIVE DATE and each subsequent anniversary of the EFFECTIVE DATE during the term: Three-thousand dollars ($3000) 3.2 Earned Royalties payable for each calendar year are creditable on a non-cumulative basis against MINIMUM ANNUAL ROYALTIES for that year only. 4. LIQUIDITY EVENT 4.1 COMPANY will pay JHU a fee equal one percent (1%) of the Aggregate Consideration received by the COMPANY, or the total amount received by stockholders of COMPANY, upon the occurrence of a Liquidity Event. Such fee shall be paid after only the first to occur of either a Liquidation Event or an Initial Public Offering. The respective fees, when and if payable, shall be paid upon closing; except that if there are additional contingent amounts ("Trailing Consideration") payable upon the occurrence of subsequent events, then the Trailing Consideration shall be due and payable to JHU within thirty (30) days after receipt thereof by COMPANY. 4.2 For a Liquidity Event, the fee required under Section 4.1 of this Exhibit A above shall be payable to JHU by COMPANY in the same form as the proceeds paid or payable to either COMPANY or its security holders, whether in cash, securities or other property, and in the same proportion as such form of consideration is paid or payable to COMPANY or its security holders. Notwithstanding the foregoing, in the event the form of consideration paid or payable includes securities for which there is not an active public market, in lieu of paying that portion of the fee with such securities COMPANY will make a cash payment to JHU equal to the fair market value of such securities. The valuation of such securities shall be determined in accordance with the definition of "Aggregate Consideration" set forth below. 4.3 For an Initial Public Offering, the fee shall be payable in the form of cash, and shall be based upon the Pre Money Valuation.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
13
May 3, 2016 4.4 "Aggregate Consideration" means the amount equal to: 4.4.1 In the case of an Asset Sale, the sum of: (a) all cash, and the fair market value of all securities or other property transferred to COMPANY at the time of the transaction, less all current and long-term liabilities (but not contingent liabilities) of COMPANY that are not discharged or assumed by the buyer (or its affiliates) in connection with the Asset Sale; and (b) all cash, and the fair market value of all securities and other property for Trailing Consideration payable to COMPANY, when and if actually paid; or 4.4.2 In the case of a Merger or Stock Sale, the sum of: (a) all cash, and the fair market value of all securities and other property transferred to the stockholders of COMPANY (and any option holders or warrant holders) in return for their stock (or options or warrants) in COMPANY at the time of the transaction, and (b) all cash, and the fair market value of all securities and other property transferred to the stockholders of COMPANY (and any option holders or warrant holders) for Trailing Consideration payable to the holders of COMPANY's securities, when and if actually paid. 4.4.3 The valuation of any securities or other property shall be determined by reference to the operative transaction agreement for a respective Merger, Stock Sale or Asset Sale, provided that, if no such valuation is readily determinable from such operative transaction agreement, then for securities for which there is an active public market: (a) If traded on a securities exchange or the NASDAQ Stock Market, the value shall be deemed to be the average of the closing prices of the securities on such exchange or market over the thirty day (30) period ending three (3) days prior to the closing of such transaction; or (b) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid prices over the thirty day (30) period ending three (3) days prior to the closing of such transaction. (c) The method of valuation of securities subject to investment letters or other similar restrictions on free marketability shall take into account an appropriate discount from the market value as determined pursuant to clause (a) or (b) above so as to reflect the approximate fair market value thereof. (d) For securities for which there is no active public market, the value shall be the fair market value thereof as either: (i) determined in good faith by the Board of Directors of COMPANY; (ii) approved by JHU, such approval not to be unreasonably withheld; or (iii) determined by a third party appraiser appointed and paid for by COMPANY.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
14
May 3, 2016 4.5 "Pre-Money Valuation" means the amount equal to the product of: (i) the price per share of common stock sold in the Initial Public Offering, and (ii) the total number of outstanding shares of common stock of COMPANY immediately prior to the closing of the Initial Public Offering, determined on a fully diluted, as converted into common stock basis, giving effect to any stock split, stock dividend, stock combination, recapitalization or similar action impacting COMPANY's capitalization that occurs, or is deemed to occur, upon consummation of the Initial Public Offering.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
15
May 3, 2016 EXHIBIT B QUARTERLY SALES & ROYALTY REPORT FOR NON-EXCLUSIVE LICENSE AGREEMENT A29889 BETWEEN VIRTUOSO SURGICAL, INC. AND THE JOHNS HOPKINS UNIVERSITY EFFECTIVE DATE OF AGREEMENT _________________ FOR PERIOD OF _________ TO _________ TOTAL ROYALTIES DUE FOR THIS PERIOD$_________
PRODUCT ID NO. PRODUCT NAME
*JHU REF NO.
PT COMMERCIAL SALE DATE TOTAL NE SALES/SERVICES ROYALTY RATE AMOUNT DUE
* Please provide the JHU Ref. C04873 This report format is to be used to report quarterly royalty statements to JHU. It should be placed on Company letterhead and accompany any royalty payments due for the reporting period. This report shall be submitted even if no sales are reported.
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019
16
May 3, 2016 EXHIBIT C JHU Ref Number Technology Title Inventors Country/#
C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor
Japan 2008-541319
C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor
European Patent Office 06844376.1
C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor
Canada 2,630,061
C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor
Japan 2012-139088 5550682
C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor
Japan 2015-094824
C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor
Japan 2014-000372
C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor
China 200680050046.8 ZL 200680050046.8
C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor
United States 8,152,756
C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor
United States 8,715,226
Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019 | Highlight the parts (if any) of this contract related to "Audit Rights" that should be reviewed by a lawyer. Details: Does a party have the right to audit the books, records, or physical locations of the counterparty to ensure compliance with the contract? | {
"answer_start": [
14321
],
"text": [
"JHU shall have the right to audit any and all Company records related to this Agreement."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Most Favored Nation" that should be reviewed by a lawyer. Details: Is there a clause that if a third party gets better terms on the licensing or sale of technology/goods/services described in the contract, the buyer of such technology/goods/services under the contract shall be entitled to those better terms?
Context: Exhibit 10.16
MARKETING AFFILIATE AGREEMENT
This Agreement is made this 1s t day of October 2008, (the "Effective Date"), by and between Equidata, Inc., a corporation organized under the laws of Virginia with its principal place of business at 724 Thimble Shoals Boulevard Newport News, Virginia 23606 ("Equidata"), and National Credit Report.com, LLC a Corporation organized under the laws of Florida, with its principal place of business at 7700 N. Congress Ave, Suite 3113, Boca Raton FL33487 ("Marketing Affiliate").
RECITALS
Therefore, if accepted all parties agree that the following shall constitute a marketing agreement between the parties.
TERMS AND CONDITIONS
Permission. Subject to the terms and conditions of this Agreement, Marketing Affiliate may display Marketing Materials at its principal place(s) of business, or at the principal place(s) of its third party partners, together with a link from the Marketing Affiliate Web Site to Fquidata (and its partners) Web Site. Marketing Materials may also be used in the marketing of potential customers through direct mail and personal solicitation as well as inbound and outbound telemarketing. Marketing Affiliate may not otherwise offer for sale, market, sell or distribute the Services of Equidata without express written permission.
1. Equidata provides certain personal credit, fraud detection, credit scoring services and credit monitoring for consumers, the ("Services"). 2. Marketing Affiliate and Equidata wish to enter into an agreement under which Marketing Affiliate may market the Services. 3. Marketing Affiliate wishes to market the Services indirectly through third party programs, direct mail, Internet and both inbound and outbound telemarketing. In addition, each may own and operate a web site utilizing direct access to the Services through Internet links.
1. Compensation. Marketing Affiliate shall be responsible for collecting all amounts due directly from the Consumer and shall bear sole responsibility for non-payment of any fees charged to the Consumer. Marketing Affiliate shall pay to Equidata, as compensation for its providing of Services under this agreement, such amounts as outlined and detailed in Exhibit A attached hereto. Such amounts shall be billed on a bi-monthly basis by Equidata and are due and payable in full by Marketing Affiliate 30 days from the invoice date. The prices set forth in Exhibit A do not include regulatory fees, sales tax, excise tax or any other fees or taxes that may be charged by states or local taxing authorities nor does it include additional fees or surcharges, including specific area Affiliate charges that may be accessed by the Credit Reporting Agencies (CRA's). Said amounts charged to Equidata will be billed separately to Marketing Affiliate and are due immediately upon receipt. Marketing Affiliate agrees to reimburse Equidata all costs of collecting any past due amounts from Marketing Affiliate by reason of non payment, including reasonable attorney fees and disbursements. Equidata reserves the right to increase the base cost of Services. Notice will be given to Marketing Affiliate in writing no less than 30 days prior to such increase taking affect. A development fee, yet To Be Determined and outlined in Exhibit A, is due upon a signed agreement of project scope. Marketing Affiliate agrees to pay promptly and in full all charges incurred through services rendered when billed. When paying by credit card, the Marketing Affiliate agrees to pay for all items that are revoked or disputed by the credit card company or the card holder along with any charges or fees charged by the credit card company including fees associated with processing the credit card transaction and that the Marketing Affiliate will be billed for those items in accordance with Equidata standard practices. Marketing Affiliate and the undersigned principal, partner or owner further agree that this Agreement will serve as a personal guaranty by the undersigned principal, partner or owner of the company, and the undersigned principal, partner or owner will become responsible for any unpaid balance past due on any invoice. The Marketing Affiliate agrees to pay a late charge of 1 l/2% per month on the unpaid, past-due amount as well as a returned check fee of not less than $35.00 per returned item. In addition, the Marketing Affiliate agrees to pay 25% attorney's fees plus court cost in the event that the Marketing Affiliate's account is referred to an attorney for collection. 2. Disputes. In the case of disputed charge, defined as a non-payment of an invoice for which notice of dispute has been given in writing by Marketing Affiliate to Equidata, Equidata or Marketing Affiliate may choose arbitration and Marketing Affiliate and Equidata shall be obligated by the terms agreed upon by arbitration and all monies determined owed shall be considered due and payable immediately. Such arbitration does not relieve Marketing Affiliate from its obligation to promptly pay for undisputed charges in accordance with the terms of this Agreement. Such disputes shall be settled by arbitration in the City of Newport News, Virginia. Marketing Affiliate shall give Equidata written demand of dispute within 10 days of the due date of the invoice. The demand shall set forth a statement for the nature of the dispute and the amount involved. If Equidata and Marketing Affiliate can not resolve the dispute on their own within 10 days after Equidata receive said dispute, the parties shall jointly select an arbitrator. Initials: /s/ IP
Source: STEEL VAULT CORP, 10-K, 12/24/2008
If the parties do not agree on the selection of an arbitrator, each party will select an arbitrator of their choosing, and the two arbitrators will jointly select a third arbitrator(s). Not later than 5 calendar days after the arbitrator(s) have been selected, the arbitrator(s) shall schedule the arbitration hearing to commence on a mutually convenient date. The hearing shall commence no later than 25 calendar days after Equidata receives receipt of dispute from Marketing Affiliate and shall continue from day to day until completed. The arbitrator(s) shall issue an award in writing no later than 10 calendar days after the conclusion of the hearing. The arbitration award shall be final and binding on both parties. 3. Operational Specifications. Marketing Affiliate and Equidata shall agree upon Operational Specifications pertaining to the methodology and logistics of data transfer and database coordination. Upon mutual agreement as to the Operational Specifications, they shall be deemed to be a part of this Agreement by way of an Exhibit. Both parties must agree upon any changes to the Operational Specifications in writing. Any such changes will be deemed to be a part of the Operational Specifications. 4. Non-solicitation of Clients. Marketing Affiliate shall not directly or indirectly solicit an existing business customer of Equidata during the term and condition of this Agreement other than for joint marketing purposes. Further, Marketing Affiliate shall not market similar products from competing companies on any Web Site Landing Page containing the Equidata or Marketing Affiliate Web link as long as this Agreement is in effect. 5. Compliance. Marketing Affiliate nor Equidata, shall engage in any practice or activity that is not in compliance with the Fair Credit Reporting Act (FCRA), the Fair Debt Collection Practices Act (FDCPA) and the Health Insurance Portability and Accountability Act (HIPAA) as well as, but not limited to, any practice or activity that:
5.1. Violates any applicable law or regulation; including but not limited to the sale of illegal goods or the violation of export control or obscenity laws; that invade the privacy of any third party; that are in any way connected with the transmission of "junk mail", "spam" or the unsolicited mass distribution of e-mail, or with any unethical marketing practices. 5.2. Is misleading, deceptive, confusing or abusive as outlined in the Telemarketing Fraud Prevention Act; 5.3. Makes any representation or statement, or grants any warranty or creates any other obligation with respect to the Services, that is in addition to or otherwise inconsistent with any representation, statement or warranty stated expressly by Equidata. 5.4. Uses Marketing Materials, media or methods that are not approved, including, but nor limited to telemarketing scripts. Such approval shall not be unreasonably withheld and shall be completed within 48 hours of receipt of Marketing Materials for review. 5.5. Does not meet the standards for good industry practices for the direct marketing industry. 5.6. Further guidelines and requirements are provided in Exhibit B and C.
6. Audit. Equidata may audit, at Equidata's expense, the Marketing Affiliate's marketing, practices and activities for the purpose of assuring compliance with this Agreement. Equidata reserves the right to site inspect Marketing Affiliate's physical location of business at any time. 7. Term and Termination. This Agreement commences on the Effective Date, and terminates, along with all licenses and authorizations granted under it, upon the earliest of termination in accordance with the following.
7.1. This Agreement shall be for the term of one year; thereafter, the Agreement shall renew automatically under these same terms and agreements unless superceded by future agreements. 7.2. This Agreement may be terminated by either party with cause upon thirty (30) days written notice. Upon Marketing Affiliate's default in payment or other breach of this Agreement, Equidata may terminate this Agreement without notice to Marketing Affiliate. Upon termination for any reason, Equidata reserves the right to deactivate Marketing Affiliate's access to the services including the Equidata Web Site. Termination does not release Marketing Affiliate from paying all amounts owed to Equidata. 7.3. At time of Agreement termination, Marketing Affiliate shall immediately remove all URL related data pertaining to said Agreement; and if data is not voluntarily removed, Equidata reserves the right to use all available legal resources to force the removal of Equidata URL related data and Marketing Affiliate agrees to be liable for the cost of such action, including but not limited to reasonable attorney fees. 7.4. Equidata reserves the right to terminate this Agreement immediately for cause if Experian, Equifax and/or TransUnion (Credit Reporting Agencies — CRAs) decline to render Services to Marketing Affiliate for any reason or if Equidata is notified by any of the CRAs to cease rendering Services to Marketing Affiliate.
8. Representations and Warranties. Marketing Affiliate represents and warrants that:
8.1 Marketing Affiliate does not engage in any business with respect to, and the Marketing Affiliate Web Site will not be used, or display any materials, in any form or medium, in connection with a credit clinic, credit repair or restoration, credit counseling firm, financial counseling firm, detective agency, private investigation, security services, practice of law, news reporting or journalism, or fraudulent or unethical conduct. 8.2. The information regarding Marketing Affiliate set forth in this Agreement, and the information provided to Equidata with respect to Marketing Affiliate and the Marketing Affiliate Web Site, is accurate; and 8.3. Marketing Affiliate's business, including without limitation any business conducted in connection with the Marketing
Source: STEEL VAULT CORP, 10-K, 12/24/2008
Affiliate Web Site, does not violate any applicable law, regulation, court order or material agreement to which Marketing Affiliate is subject. 8.4. Equidata warrants that it is an authorized provider of the Services as outlined in this Agreement and that it has the ability to provide said Services in the manner described herein. Page 2 of 3 Initials: /s/ IP
Source: STEEL VAULT CORP, 10-K, 12/24/2008
Accepted and Agreed: Executive two (2) copies and return executed copies to:
9. Indemnification. Equidata and Marketing Affiliate each hereby agree to defend, indemnify and hold harmless each other and each of its employees, agents, officers, directors and shareholders from and against any claims, suits, demand or actions arising from breach of any warranties under this Agreement or failure to provide Services under this Agreement. 10. Proprietary Information. Marketing Affiliate and Equidata mutually acknowledge that from time to time Confidential Information may be received by each. Confidential Information, includes, but is not limited to, Customer names and lists. The Receiving Party may not disclose or use the Disclosing Party's Confidential and Proprietary Information for any reason other than in the performance of this Agreement. It is agreed any information received or collected by Marketing Affiliate about its Customers or potential Customers, including information used to enroll Customers is Proprietary as defined by this section and will not be used by Equidata in any manner other than as outlined herein. 11. Liability. MARKETING AFFILIATE ACKNOWLEDGES AND AGREES THAT ANY PRODUCT, SERVICE, LICENSE OR PERMISSION PROVIDED BY EQUIDATA UNDER THIS AGREEMENT IS PROVIDED ON AN "AS IS" BASIS. EQUIDATA EXPRESSLY DISCLAIMS ANY WARRANTY OF ANY KIND WHATSOEVER, WHETHER EXPRESS, IMPLIED, STATUTORY, OR ARISING FROM COURSE OF DEALING OR PERFORMANCE, AND HEREBY DISCLAIMS AND EXCLUDES FROM THIS AGREEMENT ALL IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, NONINTERFERENCE WITH DATA, ACCURACY, OR THAT THE SERVICE IS ERROR FREE. IN NO EVENT WILL EQUIDATA BE LIABLE FOR ANY INDIRECT, EXEMPLARY, PUNITIVE, SPECIAL, OR CONSEQUENTIAL DAMAGES INCLUDING WITHOUT LIMITATION LOST PROFITS OR OTHER ECONOMIC LOSS, LOST REIMBURSEMENTS, AND LOST DATA, OR FOR ANY CLAIM BY ANY THIRD PARTY. EVEN IF EQUIDATA, MARKETING AFFILIATE OR BOTH HAD BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR CLAIM, MARKETING AFFILIATE AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS EQUIDATA, AND EACH OF ITS EMPLOYEES, AGENTS, OFFICERS AND DIRECTORS, FROM AND AGAINST ANY CLAIM, SUIT, DEMAND, OR ACTION, INCLUDING WITHOUT LIMITATION ATTORNEY FEES, ARISING FROM (A) BREACH OF THIS AGREEMENT BY MARKETING AFFILIATE, (B) THE MARKETING AFFILIATE WEB SITE, OR (C) MARKETING AFFILIATE'S BUSINESS. 12. Miscellaneous. This Agreement binds and inures to the benefit of each party's permitted successors, assigns and legal representatives, including the purchasers of the stock or assets of either party hereto. No delegation by either party of any duty hereunder shall be deemed an assignment of this Agreement, nor shall any change in control or an assignment of by operation of law by either party be deemed an assignment hereunder. Any failure or delay in exercising, or any single or partial exercise of, any right or remedy by either party may not be deemed a waiver of any further, prior, or future right or remedy hereunder. This Agreement is governed by and construed in accordance with the laws of the State of Virginia. All notices required to be given in writing must be sent by overnight delivery service to the name and address designated in this Agreement or to such other address that the receiving party may in advance designate by written notice. Notice is deemed effective on the day after delivery by the overnight carrier. If any provision of this Agreement is declared invalid, the other provisions remain in full force and effect and this Agreement is deemed to be amended to replace, to the extent legally possible, the rights and obligations contained in the invalid provision. The invalidity of any provision is not a failure of consideration. The Parties shall operate as Independent Contractors in performing their obligations under the Agreement and shall have exclusive control of the manner and means of performing such obligations. Each party shall be solely responsible for supervision, daily direction and control of its employees and payment of their salaries, worker's compensation, disability and other benefits. Nothing in the Agreement shall be construed as making either party the agent of the other party, as granting to the other party the right to enter into any contract on behalf of the other party, or as establishing an association, franchise, joint venture or partnership between the Parties. Under no circumstances shall the employees of one party be deemed to be employees of the other for any purpose. This Agreement constitutes the entire understanding of the parties with respect to the subject matter hereof, and supersedes all prior or contemporaneous agreements, statements and representations, oral or written, between the parties relating to the subject matter of the Agreement. No representation or promise, or modification or amendment to this Agreement is binding on either party unless in writing signed by authorized representatives of both parties.
Company Name: Equidata, Inc. Marketing Affiliate Name: National Credit Report LLC Address: 724 Thimble Shoals Blvd. Newport News, VA 23606 Address: 7700 N Congress AVE, Suite 3113 Boca Raton, FL 33487 Phone Numbers: 757-873-0519 / 800-288-9809 Fax: 757-873-1224 Phone Numbers: 561-910 8900
Email Address: Kchase@equidata.com Email Address: ivan.posniak@nationalcreditreport.com Print Name: Kitty Chase Print Name: Ivan Posniak Title: SVP Title: CEO Signature: /s/ Kitty Chase Signature: /s/ Ivan Posniak
Page 3 of 3 Initials: /s/ IP
Source: STEEL VAULT CORP, 10-K, 12/24/2008 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 10.16
MARKETING AFFILIATE AGREEMENT
This Agreement is made this 1s t day of October 2008, (the "Effective Date"), by and between Equidata, Inc., a corporation organized under the laws of Virginia with its principal place of business at 724 Thimble Shoals Boulevard Newport News, Virginia 23606 ("Equidata"), and National Credit Report.com, LLC a Corporation organized under the laws of Florida, with its principal place of business at 7700 N. Congress Ave, Suite 3113, Boca Raton FL33487 ("Marketing Affiliate").
RECITALS
Therefore, if accepted all parties agree that the following shall constitute a marketing agreement between the parties.
TERMS AND CONDITIONS
Permission. Subject to the terms and conditions of this Agreement, Marketing Affiliate may display Marketing Materials at its principal place(s) of business, or at the principal place(s) of its third party partners, together with a link from the Marketing Affiliate Web Site to Fquidata (and its partners) Web Site. Marketing Materials may also be used in the marketing of potential customers through direct mail and personal solicitation as well as inbound and outbound telemarketing. Marketing Affiliate may not otherwise offer for sale, market, sell or distribute the Services of Equidata without express written permission.
1. Equidata provides certain personal credit, fraud detection, credit scoring services and credit monitoring for consumers, the ("Services"). 2. Marketing Affiliate and Equidata wish to enter into an agreement under which Marketing Affiliate may market the Services. 3. Marketing Affiliate wishes to market the Services indirectly through third party programs, direct mail, Internet and both inbound and outbound telemarketing. In addition, each may own and operate a web site utilizing direct access to the Services through Internet links.
1. Compensation. Marketing Affiliate shall be responsible for collecting all amounts due directly from the Consumer and shall bear sole responsibility for non-payment of any fees charged to the Consumer. Marketing Affiliate shall pay to Equidata, as compensation for its providing of Services under this agreement, such amounts as outlined and detailed in Exhibit A attached hereto. Such amounts shall be billed on a bi-monthly basis by Equidata and are due and payable in full by Marketing Affiliate 30 days from the invoice date. The prices set forth in Exhibit A do not include regulatory fees, sales tax, excise tax or any other fees or taxes that may be charged by states or local taxing authorities nor does it include additional fees or surcharges, including specific area Affiliate charges that may be accessed by the Credit Reporting Agencies (CRA's). Said amounts charged to Equidata will be billed separately to Marketing Affiliate and are due immediately upon receipt. Marketing Affiliate agrees to reimburse Equidata all costs of collecting any past due amounts from Marketing Affiliate by reason of non payment, including reasonable attorney fees and disbursements. Equidata reserves the right to increase the base cost of Services. Notice will be given to Marketing Affiliate in writing no less than 30 days prior to such increase taking affect. A development fee, yet To Be Determined and outlined in Exhibit A, is due upon a signed agreement of project scope. Marketing Affiliate agrees to pay promptly and in full all charges incurred through services rendered when billed. When paying by credit card, the Marketing Affiliate agrees to pay for all items that are revoked or disputed by the credit card company or the card holder along with any charges or fees charged by the credit card company including fees associated with processing the credit card transaction and that the Marketing Affiliate will be billed for those items in accordance with Equidata standard practices. Marketing Affiliate and the undersigned principal, partner or owner further agree that this Agreement will serve as a personal guaranty by the undersigned principal, partner or owner of the company, and the undersigned principal, partner or owner will become responsible for any unpaid balance past due on any invoice. The Marketing Affiliate agrees to pay a late charge of 1 l/2% per month on the unpaid, past-due amount as well as a returned check fee of not less than $35.00 per returned item. In addition, the Marketing Affiliate agrees to pay 25% attorney's fees plus court cost in the event that the Marketing Affiliate's account is referred to an attorney for collection. 2. Disputes. In the case of disputed charge, defined as a non-payment of an invoice for which notice of dispute has been given in writing by Marketing Affiliate to Equidata, Equidata or Marketing Affiliate may choose arbitration and Marketing Affiliate and Equidata shall be obligated by the terms agreed upon by arbitration and all monies determined owed shall be considered due and payable immediately. Such arbitration does not relieve Marketing Affiliate from its obligation to promptly pay for undisputed charges in accordance with the terms of this Agreement. Such disputes shall be settled by arbitration in the City of Newport News, Virginia. Marketing Affiliate shall give Equidata written demand of dispute within 10 days of the due date of the invoice. The demand shall set forth a statement for the nature of the dispute and the amount involved. If Equidata and Marketing Affiliate can not resolve the dispute on their own within 10 days after Equidata receive said dispute, the parties shall jointly select an arbitrator. Initials: /s/ IP
Source: STEEL VAULT CORP, 10-K, 12/24/2008
If the parties do not agree on the selection of an arbitrator, each party will select an arbitrator of their choosing, and the two arbitrators will jointly select a third arbitrator(s). Not later than 5 calendar days after the arbitrator(s) have been selected, the arbitrator(s) shall schedule the arbitration hearing to commence on a mutually convenient date. The hearing shall commence no later than 25 calendar days after Equidata receives receipt of dispute from Marketing Affiliate and shall continue from day to day until completed. The arbitrator(s) shall issue an award in writing no later than 10 calendar days after the conclusion of the hearing. The arbitration award shall be final and binding on both parties. 3. Operational Specifications. Marketing Affiliate and Equidata shall agree upon Operational Specifications pertaining to the methodology and logistics of data transfer and database coordination. Upon mutual agreement as to the Operational Specifications, they shall be deemed to be a part of this Agreement by way of an Exhibit. Both parties must agree upon any changes to the Operational Specifications in writing. Any such changes will be deemed to be a part of the Operational Specifications. 4. Non-solicitation of Clients. Marketing Affiliate shall not directly or indirectly solicit an existing business customer of Equidata during the term and condition of this Agreement other than for joint marketing purposes. Further, Marketing Affiliate shall not market similar products from competing companies on any Web Site Landing Page containing the Equidata or Marketing Affiliate Web link as long as this Agreement is in effect. 5. Compliance. Marketing Affiliate nor Equidata, shall engage in any practice or activity that is not in compliance with the Fair Credit Reporting Act (FCRA), the Fair Debt Collection Practices Act (FDCPA) and the Health Insurance Portability and Accountability Act (HIPAA) as well as, but not limited to, any practice or activity that:
5.1. Violates any applicable law or regulation; including but not limited to the sale of illegal goods or the violation of export control or obscenity laws; that invade the privacy of any third party; that are in any way connected with the transmission of "junk mail", "spam" or the unsolicited mass distribution of e-mail, or with any unethical marketing practices. 5.2. Is misleading, deceptive, confusing or abusive as outlined in the Telemarketing Fraud Prevention Act; 5.3. Makes any representation or statement, or grants any warranty or creates any other obligation with respect to the Services, that is in addition to or otherwise inconsistent with any representation, statement or warranty stated expressly by Equidata. 5.4. Uses Marketing Materials, media or methods that are not approved, including, but nor limited to telemarketing scripts. Such approval shall not be unreasonably withheld and shall be completed within 48 hours of receipt of Marketing Materials for review. 5.5. Does not meet the standards for good industry practices for the direct marketing industry. 5.6. Further guidelines and requirements are provided in Exhibit B and C.
6. Audit. Equidata may audit, at Equidata's expense, the Marketing Affiliate's marketing, practices and activities for the purpose of assuring compliance with this Agreement. Equidata reserves the right to site inspect Marketing Affiliate's physical location of business at any time. 7. Term and Termination. This Agreement commences on the Effective Date, and terminates, along with all licenses and authorizations granted under it, upon the earliest of termination in accordance with the following.
7.1. This Agreement shall be for the term of one year; thereafter, the Agreement shall renew automatically under these same terms and agreements unless superceded by future agreements. 7.2. This Agreement may be terminated by either party with cause upon thirty (30) days written notice. Upon Marketing Affiliate's default in payment or other breach of this Agreement, Equidata may terminate this Agreement without notice to Marketing Affiliate. Upon termination for any reason, Equidata reserves the right to deactivate Marketing Affiliate's access to the services including the Equidata Web Site. Termination does not release Marketing Affiliate from paying all amounts owed to Equidata. 7.3. At time of Agreement termination, Marketing Affiliate shall immediately remove all URL related data pertaining to said Agreement; and if data is not voluntarily removed, Equidata reserves the right to use all available legal resources to force the removal of Equidata URL related data and Marketing Affiliate agrees to be liable for the cost of such action, including but not limited to reasonable attorney fees. 7.4. Equidata reserves the right to terminate this Agreement immediately for cause if Experian, Equifax and/or TransUnion (Credit Reporting Agencies — CRAs) decline to render Services to Marketing Affiliate for any reason or if Equidata is notified by any of the CRAs to cease rendering Services to Marketing Affiliate.
8. Representations and Warranties. Marketing Affiliate represents and warrants that:
8.1 Marketing Affiliate does not engage in any business with respect to, and the Marketing Affiliate Web Site will not be used, or display any materials, in any form or medium, in connection with a credit clinic, credit repair or restoration, credit counseling firm, financial counseling firm, detective agency, private investigation, security services, practice of law, news reporting or journalism, or fraudulent or unethical conduct. 8.2. The information regarding Marketing Affiliate set forth in this Agreement, and the information provided to Equidata with respect to Marketing Affiliate and the Marketing Affiliate Web Site, is accurate; and 8.3. Marketing Affiliate's business, including without limitation any business conducted in connection with the Marketing
Source: STEEL VAULT CORP, 10-K, 12/24/2008
Affiliate Web Site, does not violate any applicable law, regulation, court order or material agreement to which Marketing Affiliate is subject. 8.4. Equidata warrants that it is an authorized provider of the Services as outlined in this Agreement and that it has the ability to provide said Services in the manner described herein. Page 2 of 3 Initials: /s/ IP
Source: STEEL VAULT CORP, 10-K, 12/24/2008
Accepted and Agreed: Executive two (2) copies and return executed copies to:
9. Indemnification. Equidata and Marketing Affiliate each hereby agree to defend, indemnify and hold harmless each other and each of its employees, agents, officers, directors and shareholders from and against any claims, suits, demand or actions arising from breach of any warranties under this Agreement or failure to provide Services under this Agreement. 10. Proprietary Information. Marketing Affiliate and Equidata mutually acknowledge that from time to time Confidential Information may be received by each. Confidential Information, includes, but is not limited to, Customer names and lists. The Receiving Party may not disclose or use the Disclosing Party's Confidential and Proprietary Information for any reason other than in the performance of this Agreement. It is agreed any information received or collected by Marketing Affiliate about its Customers or potential Customers, including information used to enroll Customers is Proprietary as defined by this section and will not be used by Equidata in any manner other than as outlined herein. 11. Liability. MARKETING AFFILIATE ACKNOWLEDGES AND AGREES THAT ANY PRODUCT, SERVICE, LICENSE OR PERMISSION PROVIDED BY EQUIDATA UNDER THIS AGREEMENT IS PROVIDED ON AN "AS IS" BASIS. EQUIDATA EXPRESSLY DISCLAIMS ANY WARRANTY OF ANY KIND WHATSOEVER, WHETHER EXPRESS, IMPLIED, STATUTORY, OR ARISING FROM COURSE OF DEALING OR PERFORMANCE, AND HEREBY DISCLAIMS AND EXCLUDES FROM THIS AGREEMENT ALL IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, NONINTERFERENCE WITH DATA, ACCURACY, OR THAT THE SERVICE IS ERROR FREE. IN NO EVENT WILL EQUIDATA BE LIABLE FOR ANY INDIRECT, EXEMPLARY, PUNITIVE, SPECIAL, OR CONSEQUENTIAL DAMAGES INCLUDING WITHOUT LIMITATION LOST PROFITS OR OTHER ECONOMIC LOSS, LOST REIMBURSEMENTS, AND LOST DATA, OR FOR ANY CLAIM BY ANY THIRD PARTY. EVEN IF EQUIDATA, MARKETING AFFILIATE OR BOTH HAD BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR CLAIM, MARKETING AFFILIATE AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS EQUIDATA, AND EACH OF ITS EMPLOYEES, AGENTS, OFFICERS AND DIRECTORS, FROM AND AGAINST ANY CLAIM, SUIT, DEMAND, OR ACTION, INCLUDING WITHOUT LIMITATION ATTORNEY FEES, ARISING FROM (A) BREACH OF THIS AGREEMENT BY MARKETING AFFILIATE, (B) THE MARKETING AFFILIATE WEB SITE, OR (C) MARKETING AFFILIATE'S BUSINESS. 12. Miscellaneous. This Agreement binds and inures to the benefit of each party's permitted successors, assigns and legal representatives, including the purchasers of the stock or assets of either party hereto. No delegation by either party of any duty hereunder shall be deemed an assignment of this Agreement, nor shall any change in control or an assignment of by operation of law by either party be deemed an assignment hereunder. Any failure or delay in exercising, or any single or partial exercise of, any right or remedy by either party may not be deemed a waiver of any further, prior, or future right or remedy hereunder. This Agreement is governed by and construed in accordance with the laws of the State of Virginia. All notices required to be given in writing must be sent by overnight delivery service to the name and address designated in this Agreement or to such other address that the receiving party may in advance designate by written notice. Notice is deemed effective on the day after delivery by the overnight carrier. If any provision of this Agreement is declared invalid, the other provisions remain in full force and effect and this Agreement is deemed to be amended to replace, to the extent legally possible, the rights and obligations contained in the invalid provision. The invalidity of any provision is not a failure of consideration. The Parties shall operate as Independent Contractors in performing their obligations under the Agreement and shall have exclusive control of the manner and means of performing such obligations. Each party shall be solely responsible for supervision, daily direction and control of its employees and payment of their salaries, worker's compensation, disability and other benefits. Nothing in the Agreement shall be construed as making either party the agent of the other party, as granting to the other party the right to enter into any contract on behalf of the other party, or as establishing an association, franchise, joint venture or partnership between the Parties. Under no circumstances shall the employees of one party be deemed to be employees of the other for any purpose. This Agreement constitutes the entire understanding of the parties with respect to the subject matter hereof, and supersedes all prior or contemporaneous agreements, statements and representations, oral or written, between the parties relating to the subject matter of the Agreement. No representation or promise, or modification or amendment to this Agreement is binding on either party unless in writing signed by authorized representatives of both parties.
Company Name: Equidata, Inc. Marketing Affiliate Name: National Credit Report LLC Address: 724 Thimble Shoals Blvd. Newport News, VA 23606 Address: 7700 N Congress AVE, Suite 3113 Boca Raton, FL 33487 Phone Numbers: 757-873-0519 / 800-288-9809 Fax: 757-873-1224 Phone Numbers: 561-910 8900
Email Address: Kchase@equidata.com Email Address: ivan.posniak@nationalcreditreport.com Print Name: Kitty Chase Print Name: Ivan Posniak Title: SVP Title: CEO Signature: /s/ Kitty Chase Signature: /s/ Ivan Posniak
Page 3 of 3 Initials: /s/ IP
Source: STEEL VAULT CORP, 10-K, 12/24/2008 | Highlight the parts (if any) of this contract related to "Most Favored Nation" that should be reviewed by a lawyer. Details: Is there a clause that if a third party gets better terms on the licensing or sale of technology/goods/services described in the contract, the buyer of such technology/goods/services under the contract shall be entitled to those better terms? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Revenue/Profit Sharing" that should be reviewed by a lawyer. Details: Is one party required to share revenue or profit with the counterparty for any technology, goods, or services?
Context: DISTRIBUTOR AGREEMENT
This Agreement is made and entered into this 7th day of April, 2003 (the "Effective Date"), by and between Wireless Links Inc, a Pennsylvania corporation having its principal place of business at 1050 Wall Street, Suite 202, Lyndhurst, New Jersey 07071 (hereinafter called "WLI"), and Jaguar Investments, Inc. and its affiliates, a Nevada corporation, having its principal place of business at 10400 Griffin Rd., Suite 101, Ft. Lauderdale, Florida 33328 (hereinafter called "Power2Ship") with reference to the following facts:
Whereas WLI is engaged in the design and development, manufacture, importation, distribution, resale, service and support of mobile data and GPS based information products and services;
Whereas Power2Ship is engaged in the business of collecting, processing and disseminating logistics information and providing other transportation-related products and services to shippers and carriers of freight and
Whereas Power2Ship desires to become a distributor of certain of WLI's products and services on the terms and conditions hereinafter set forth.
NOW, THEREFORE; in consideration of the mutual covenants and agreements hereinafter set forth, the parties hereto do hereby agree as follows:
1. APPOINTMENT
1.1. WLI hereby grants to Power2Ship the non-exclusive right and license to distribute certain WLI's products and services (the "Products" or "Units") and software programs ("Licensed Programs") to Power2Ship's customers (which are end users) located in North America. "Products" or "Units" in this Agreement are limited to WLI's G3001 GPSLink mobile terminal as defined in Section 1.2. "Licensed Programs" in this Agreement are limited to WLI's MidLink Middleware software and G3001 programming tools. Further, Power2Ship shall also be authorized to resell other WLI products, services and support programs subject to separate written amendments to be made by the parties to this Agreement. WLI reserves the right to add additional products and to delete obsolete or superseded products at any time during the term of this Agreement upon sixty (60) days prior written notice to Power2Ship.
1.2. G3001 GPSLink is a fully functional device including GPS receiver with an integrated CDPD or GPRS modem including 4 dry contact alarm inputs and one contact output and a DB9 connector for serial connection to a PDA. When integrated with MidLink middleware the G3001 can integrate to any third party software application subject to specifications published from time to time by WLI and available for download from the WLI web site.
1.3. The Products and Licensed Programs shall be sold by Power2Ship to its customers pursuant to WLI's standard warranty and software license agreements.
1.4. Power2Ship may, at any time during the term of this Agreement, assign its rights and obligations under this Agreement to one or more of its subsidiaries in which it owns at least 50.1% of the actual equity of the subsidiary on a fully diluted basis and as long as Power2Ship remains the guarantor for the payments and terms and conditions of this Agreement (individually, a "Subsidiary"). Each Subsidiary shall thereafter have the rights and obligations of Power2Ship hereunder with respect to all terms and conditions of this agreement as if such Subsidiary had entered into this Agreement directly with WLI.
1.5. If Power2Ship merges with another company and/or changes its name, this Agreement will survive the merger and/or name change and the new entity will assume all the rights and obligations of Power2Ship pursuant to this Agreement.
1.6. WLI may, at any time during the term of this Agreement, assign its rights and obligations under this Agreement to any subsidiary in which it owns at least 50.1% of the equity on a fully diluted basis.
1.7. Power2Ship acknowledges that it has already integrated the G3001 packaged with the MidLink middleware into its application tested it and found it to meet its requirements.
2. TERM
2.1. Unless otherwise terminated as provided herein, the initial term of this Agreement shall be three (3) years from the Effective Date and shall thereafter be automatically renewed for subsequent one (1) year periods unless either party notifies the other in writing of its election not to renew the Agreement at least one hundred twenty (120) days prior to the expiration of the then-current term. Should this Agreement be terminated by either party for any reason, the obligations of the parties to each other as set forth herein will survive any termination.
3. PRICES
3.1. Subject to Section 3.6 below the price of the Product, excluding the Licensed Programs, is $[*] per Unit. The total price for both of the Licensed Programs together is $[*] per month per Product ("License Fee"). The License Fee shall begin on the date the Product is shipped to a customer and shall be paid by Power2Ship to WLI by the 7th of each month for the prior month (prorated if the Unit was shipped during the prior month) and shall continue for as long as the Product is active on any wireless network. Notwithstanding the foregoing, Power2Ship is obligated to pay the License Fee to WLI for a minimum of 36 months.
3.2. Once the monthly License Fee for a particular Unit has started, it will continue for a minimum of 36 consecutive months with the only exception being that should Power2Ship uninstall a particular Unit from one customer and install it at another customer, Power2Ship is permitted to suspend the monthly License Fee for that particular Unit for a maximum of 2 months during the life of this Agreement. This suspension of the License Fee is permitted only once per a particular Unit during the life of the Agreement (i.e., the suspension can't occur in two non-consecutive months). Units that are suspended for less than thirty consecutive days are not considered suspended.
3.3. Once Power2Ship has paid WLI the License Fee for a minimum of 36 months for a particular Unit, Power2Ship may discontinue paying the month License Fee only if that particular Unit has been deactivated from the wireless network. If a Unit is deactivated after 36 months and subsequently is reactivated, Power2Ship must restart the payment of the License Fee for as long as that particular Unit remains active on the wireless network.
3.4. The $[*] hardware price per Unit is based on a single order of a minimum of 1000 Units and manufacturing of a minimum 500 Units. At the time of placing the order with WLI, Power2Ship must pay the full purchase price of $[*] per Unit. The delivery time is 8-10 weeks starting with the date the payment is received by WLI.
-------- ------- RH JS 6/7/2002 Page 1 of 9
3.5. To shorten the delivery time to 3-4 weeks, Power2Ship has the option to purchase all the key components for $[*] per Unit and have them stored at no charge by WLI on behalf of Power2Ship so they can be available for immediate manufacturing when Power2Ship places an order. If this option is exercised, when Power2ship places an order to authorize Units to be manufactured it will pay with the $[*] balance per Unit at the time of such order.
3.6. Power2ship has the option to order Units in lower quantities at higher Unit prices as follows: 100 to 299 Unit at $[*]; 300 to 499 Units at $[*] and; 500 to 999 Units at $[*]. The only exception to this will be the first order of 100 Units at a Unit price of $[*] if the order is placed no later than April 4, 2003.
3.7. The Unit prices and monthly License Fees of $[*] can't be increased by WLI under the terms of this Agreement.
3.8. Unless otherwise stated in writing by WLI, all prices quoted shall be exclusive of state and local use, sales and property taxes. Power2Ship agrees to be responsible for any such taxes incurred as a result of its purchase of Products from WLI, unless Power2Ship shall have presented WLI with an exemption certificate.
3.9. Power2Ship may purchase dual antennas with a " screw for the Units from WLI at the following unit prices: $[*] when purchased in quantities of 100 to 499; $[*] when purchased in quantities of 500 to 999 and; $[*] when purchased in quantities of 1000 or more. Terms of payment for the antennas are [*]% upon placing the order with WLI and the balance when the antennas are ready to be shipped to Power2Ship. A lead time of at least four weeks is required for delivery.
3.10. Power2Ship will pay WLI 10% of any activation commissions ("Unit Commissions"), if any, it receives as a result of any Unit activated on a specific wireless network. The payment will be paid on the 7th of every month for any Unit Commissions received by Power2Ship during the previous month. Power2Ship will provide with the payment a report of the total number of activations during the month and the amount received per activation.
3.11. All prices are FOB WLI offices in NJ.
4. RESERVATION OF TITLE; COPYRIGHT; CONFIDENTIALITY
4.1. Licensed Programs are provided solely in executable files. This Agreement does not provide Power2Ship with title or ownership of the Licensed Programs, but only a limited right to sub-license the Licensed Programs. The Licensed Programs are, and shall remain, the property of WLI and certain third-party licensors who have authorized WLI to incorporate their software into the Licensed Programs.
4.2. Power2Ship acknowledges that the programs, software information, and user materials included in the Licensed Programs contain confidential information and trade secrets, which WLI has entrusted to Power2Ship in confidence to use only as expressly permitted by this Agreement. Power2Ship acknowledges that WLI claims and reserves all rights and benefits afforded under federal law in the programs, software information, and user materials included in the Licensed Programs as copyrighted works.
4.3. The MidLink software is licensed to Power2Ship for the exclusive use with WLI's products. Power2ship commits not to connect to WLI's MidLink software using any other wireless devices and /or terminal (s) and /or GPS devices other than WLI branded products.
4.4. Power2Ship shall protect the programs, software information, and user materials included in the Licensed Programs as confidential information and trade secrets. Power2Ship shall not, at any time, disclose such confidential information and trade secrets to any other person, firm, organization, or employee that does not (consistent with Power2Ship's right of use hereunder)
need to obtain access to the Licensed Programs. Power2Ship shall devote its best efforts to ensure that all Power2Ship's personnel and all other persons afforded access to the Licensed Programs by Power2Ship protect the Licensed Programs as trade secrets and confidential information and refrain from any use or disclosure in any manner not expressly permitted by this Agreement. These restrictions shall not apply to information (1) generally known to the public or obtainable from public sources; (2) readily apparent from the keyboard operation, visual display, or output reports of the Licensed Programs; (3) previously in the possession of Power2Ship or subsequently developed or acquired without reliance on the Licensed Programs; or (4) approved by WLI for release without restriction.
4.5. Restrictions on Use of Licensed Programs and Products. The programs, software information and user materials included in the Licensed Programs and Products may not be decomposed, reverse engineered, reprinted, transcribed, extracted or reproduced, in whole or in part, without the prior written consent of WLI. Power2Ship shall not in any way modify or alter the Licensed Programs without the prior written consent of WLI.
4.6. Survival of Obligations. Power2Ship's obligations under Section 4 of this Agreement shall survive the termination of this Agreement.
4.7. Specific Performance and Injunctive Relief. Power2Ship agrees and acknowledges that, in the event of any breach directly or indirectly by Power2Ship of any provision of this Section 4, monetary damages will not afford WLI an adequate remedy, and irreparable harm may be presumed. Accordingly, WLI shall be entitled to receive injunctive relief from a court of competent jurisdiction for any such breach by Power2Ship.
4.8. Confidentiality. Power2Ship acknowledges that the Licensed Programs and all copies thereof are proprietary, confidential and a trade secret of WLI and the exclusive title shall remain with WLI. All applicable rights to copyrights, patents, trademarks, trade names, logos and identifying slogans and other intellectual property rights in the products are the exclusive property of WLI and Power2Ship shall not contest such ownership. Power2Ship is committing directly or indirectly not to copy and/or not to reverse engineer any of WLI's software and/or hardware products. Power2Ship shall be responsible for any breach of this Section by its employees, agents, subcontractors or consultants. WLI acknowledges that the conceptual functionality of its Unit is in the public domain and this paragraph does not cover the Unit's actual functionality. But this Section 4.8 shall apply to the proprietary WLI implementation and technology.
5. ORDER PROCEDURE AND MANDATORY REPORTS BY POWER2SHIP
5.1. Power2Ship shall place individual written purchase orders for Products from time to time during the term of this Agreement. Each purchase order placed by Power2Ship shall contain the following minimum information: (i) identification of each Product ordered by model number, quantity and price; (ii) shipping instructions and destinations; and (iii) requested delivery date for each Product. Power2Ship will pay for shipping cost from WLI offices in NJ to any destination.
-------- ------- RH JS Page 2
5.2. Any Units shipped by WLI directly to a customer of Power2ship as per Power2Ship's instruction is considered activated at the date of the shipment and the $[*] monthly License Fee will start as of that date .
5.3. Once an order is placed by Power2Ship, such order can't be cancelled and delivery dates for Units can't be rescheduled.
5.4. When Products are ordered for the GPRS network, Power2Ship must provide one SIM card for every Unit ordered within a maximum of two weeks from the date of order. The Sim Cards have to be placed and tested in the Unit as they are being manufactured at the factory. Failure to provide the SIM cards in time will require re-opening and re-test of the Units in the US at a cost of $[*] per Unit to be paid by Power2Ship.
5.5. Every Unit has a serial number. Power2Ship must provide WLI with a weekly report listing the serial number of every Unit shipped to a customer during the prior week.
5.6. Power2Ship must provide a separate weekly report to WLI that lists the serial number of any Units suspended during the prior week and that includes the SIM # and ID, date of return, name of returning customer and reason for return.
5.7. Power2Ship must provide a separate weekly report to WLI that lists the serial number of any Units reactivated (i.e., after having previously been suspended) during the prior week.
5.8. The weekly reports in Section 5.5, 5.6 and 5.7 must be sent to WLI every Monday. The weekly reports are to be sent in Excel file format via e-mail. The report must be sent even if there is no activity during the prior week.
5.9. Power2Ship must provide WLI with a complete copy of its monthly airtime bill for the Units as received by the respective wireless operators (T-Mobile, Verizon, AT&T, etc.). Power2Ship is required to keep all the WLI Unit activations on every wireless network on a separate account from any other vendor's brand used by Power2Ship. Every such monthly invoice (one per operator) must be submitted to WLI within 7 days from the date it is received by Power2Ship and the invoice must include all pages listed on the invoice (example 7of 7 pages). Power2Ship's Chief Executive Officer or Chief Financial Officer
must confirm in writing to WLI every quarter that the account numbers under which the WLI Units are being activated on the various networks are the only accounts under which the WLI units are activated.
6. DELIVERY, TITLE AND RISK OF LOSS
6.1. Delivery shall be F.O.B. WLI's facility in Lyndhurst, New Jersey. WLI shall use its reasonable efforts to deliver Products to Power2Ship on the date of delivery specified by Power2Ship. WLI will use its reasonable efforts to notify Power2Ship of any delays in scheduled delivery dates.
6.2. Title to the Products and the risk of loss or damage shall pass to Power2Ship upon delivery of the Products to Power2Ship or its shipping company of choice. In the event of any loss of or damage to the Products following delivery to the carrier, WLI shall, upon request, cooperate with Power2Ship in connection with the proof of loss claim presented by Power2Ship to the carrier and/or insurer.
6.3. Power2Ship shall bear the entire risk of loss or damage to the Units and any other equipment purchased from WLI (collectively the "Equipment") after installation of the Equipment in the customers' vehicles. The occurrence of any such loss or damage shall not permit Power2Ship to delay or reduce the payment of any fees prescribed under this agreement unless Power2Ship presents WLI with proof of a claim to an insurance company and, in such case, Power2Ship should replace the lost or damaged Equipment within a maximum of 60 days and resume the payment of monthly License Fees to WLI. Power2Ship is advised to obtain and maintain property and casualty insurance for the Equipment against all risks of loss or damage. The amount of such insurance shall not be less than the replacement cost of the Equipment.
6.4. Power2Ship is responsible for maintaining and storing in a safe and secure location backup copies of all data files Power2Ship may place in the System. In no event shall WLI be liable for loss or destruction of Power2Ship's data files for any reason.
7. PAYMENT
7.1. Power2Ship must pay WLI for the Products in full on the day it submits a PO (i.e., the PO is not valid unless accompanied by payment in full).
7.2. The payment of the optional antenna is 50% with the purchase order and 50% when the antennas are ready to be shipped to Power2Ship.
7.3. Monthly License Fees must be paid no later then the 7th of the month for all Units active during the previous month. For example, on the 7th of July Power2Ship will pay for Units that were active in June.
7.4. The purchase price for the Unit does not include repair beyond the first year limited warranty. The renewal of the limited warranty after the first year is at the option of the customer, but in any case, Unit failure does not relieve Power2Ship of its obligation to pay the monthly License Fees to WLI for that Unit. The first year limited warranty starts on the day of the activation of the Unit on a wireless network. As a distributor, Power2Ship should keep a minimum number of Units in stock for immediate replacement for its customers.
7.5. This Agreement is separate and apart from the contract between Power2Ship and its customer. Failure of the customer to pay Power2Ship, for whatever reason, does not affect the obligation of Power2Ship to pay its contractual obligations to WLI.
7.6. If an invoice is past due by more than 30 days, WLI may discontinue providing technical support to Power2Ship until the invoice is paid. If Power2Ship does not make payment of any amount due and payable hereunder within 60 days of the date of invoice, WLI (without prejudice to any other remedy) shall be entitled to interest on all past due amounts at the lower of eighteen percent (18%) per annum or the highest rate permitted by law, plus reimbursement of all costs incurred in collecting such amounts, including court costs and reasonable attorney fees.
8. LICENSED SOFTWARE ACCESS AND AUDIT
8.1. Should a dispute occur concerning the number of Units that Power2Ship has activated with its customer, WLI may designate an independent certified public accountant who may audit Power2Ship's books and records concerning sales of Units and of Licensed Software under this Agreement. Said examination shall be at WLI's sole cost and expense during normal business hours and upon reasonable notice, and may not be conducted more than once annually; provided, however, -------- ------- that if such audit reveals an underpayment by Power2Ship of more than 10% for the period audited, Power2Ship shall pay WLI's actual costs and expenses for performing such audit.
8.2. WLI, at its own discretion, may visit Power2Ship's warehouse at normal business hours to verify the actual number of Units in inventory and/or the number of Units suspended.
-------- ------- RH JS Page 3
8.3. Power2Ship commits to allow WLI free access to its MidLink software via the Internet for ongoing maintenance and updates.
9. PRODUCT INFORMATION OBLIGATIONS
9.1. Product Descriptions and Technical Support Requirements. WLI shall provide Power2Ship with integration documentation and programming information for its Unit.
9.2. Warranty Return Procedure. WLI's warranty return procedure is set forth in Exhibit A.
10. TECHNICAL INFORMATION AND SERVICES
10.1. WLI shall provide, at no cost to Power2Ship, reasonable training, including but not limited to, training of Power2Ship's sales and technical personnel, to enable Power2Ship to meets its obligations under this Agreement, including its obligation to provide service or support to end-users following termination of this Agreement.
10.2. Power2Ship is committed to provide technical support and service for WLI's Products sold by Power2Ship to its customers.
10.3. Power2Ship will receive the first customer call and will have to maintain a minimum inventory level of spare Units to service its customers within 48 hours. WLI will support an end-user only upon Power2Ship's request and only after Power2Ship has tried to provide the support and has failed to fix the problem. WLI will not be involved in any end-user training.
10.4. Power2Ship will maintain a minimum level of inventory of the Product for service purposes, which the parties estimate to be 1% of the aggregate number of Units active on any wireless network at any given time.
11. WARRANTY AND INDEMNIFICATION
11.1. WLI warrants the Products pursuant to the terms of its hardware limited warranty and limited software warranty set forth in Exhibit B hereto. Subject to the terms and conditions of Exhibit A, WLI agrees, in its sole discretion, to repair or replace at its sole cost and expense, any defective Products or parts thereof which are returned to it within the applicable warranty period, provided that the Products have not been altered or repaired other than with authorization from WLI and by its approved procedures; that the Products have not been subjected to misuse, improper maintenance, negligence or accident; that the Products have not been damaged by excessive physical or electrical stress; and that the Products have not had their serial number or any part thereof altered, defaced or removed.
11.2. The warranty and remedies set forth in Exhibit B are exclusive and in lieu of any other warranties or remedies, express or implied, including the implied warranties of merchantability and fitness for intended or particular purpose. The liability of WLI to Power2Ship for any claim whatsoever related to the Products or the Licensed Programs or this Agreement, including any cause of action in contract, tort, or strict liability, shall not exceed the total amount payable under this Agreement by Power2Ship to WLI within the most recent six-month period for the Licensed Programs (if such claim relates to the Licensed Programs), or for the WLI Products (if such claim relates to the WLI Products). Under no circumstances shall WLI be liable to Power2Ship or to any other person or entity for any incidental, special or consequential damages whether arising out of breach of warranty, breach of contract or otherwise even if WLI has been advised of the possibility of such claims or demands.
11.3. To the extent not otherwise provided herein, WLI agrees to defend, indemnify and hold harmless Power2Ship from and against (a) any claim by a third party that a Product supplied hereunder did not conform to WLI's warranty when received by Power2Ship or that WLI failed on request to provide warranty service in accordance with WLI's applicable warranty statement or (b) any claim arising under Section 14 of this Agreement. Power2Ship shall be reimbursed for any actual loss, liability or damage suffered or incurred by Power2Ship and for all reasonable costs and expenses (including reasonable attorneys' fees) incurred by Power2Ship in connection with any action, suit, proceeding, demand, assessment or judgment incident to any of the matters indemnified against in this provision provided that Power2Ship immediately notifies WLI as to the institution of such suit, gives or obtains for WLI such authority as may be necessary for WLI to defend same, and supplies WLI such further information and assistance for the defense thereof as WLI may reasonably require and request. WLI shall have no obligation under this section, and shall have no liability to Power2Ship, if such claim arises due to the alteration or modification of any Product without the prior written consent of WLI.
11.4. Power2Ship shall defend, indemnify and hold harmless WLI from all liability and claims whatsoever for any injury to persons or property or for any loss, expense, or damage incurred by any of Power2Ship's personnel or invitees or by any other person or party (except agents or employees of WLI) arising as a result of or in connection with Power2Ship's acquisition or use of the Products and Licensed Programs or WLI 's performance of its obligations or exercise of its rights hereunder except for those claims which are the result of the willful acts or gross negligence of WLI.
12. INTELLECTUAL PROPERTY RIGHTS INDEMNIFICATION
12.1. WLI represents and warrants that: (i) it owns all right, title and interest in and to the Products necessary to enter into and perform its obligations to Power2Ship hereunder, and (ii) no Product or Licensed Programs sold to Power2Ship during the term of this Agreement, nor the use of any such Product or Licensed Program, nor anything in or contemplated by this Agreement, infringes upon the Intellectual Rights (as defined herein) of any other person or entity, and no suit or proceeding is pending or threatened alleging that any Product or Licensed program, or the use thereof, infringes upon any Intellectual Rights. As used herein, the term "Intellectual Right" means any rights relating to any trademark, trade name, service mark, copyright, patent, trade secret or other proprietary right.
13. USE OF TRADEMARKS
13.1. Power2Ship shall not acquire any right to or interest in any trademark or trade name owned or used by WLI. Power2Ship may use for purposes of this Agreement such trademarks and trade names as appear on the Products and on promotional materials therefore when received by Power2Ship from WLI.
13.2. Power2Ship acknowledges that WLI and its affiliates are the owners and/or licensees of the trademarks, service marks, commercial symbols and trade names used by WLI. Power2Ship shall not contest the right of WLI and its affiliates to the use of any trademarks, service marks, commercial symbols or trade names used or claimed by WLI.
13.3. All WLI's use of Power2Ship's company name, logos, trademarks or other registered identifiers must meet Power2Ship's corporate communications standards and must have Power2Ship's written approval prior to such use by WLI. All Power2Ship's use of WLI's company name, logos, trademarks or other registered identifiers must meet WLI's corporate communications standards and must have WLI's written approval prior to such use by WLI.
-------- ------- RH JS Page 4
13.4. Power2Ship shall have the right to place its trademarks on the Products but shall not obscure any WLI trademarks.
14. TERMINATION
14.1. Termination for Cause by WLI WLI may, upon written notice, terminate this Agreement at any time in the event that (a) Power2Ship defaults or otherwise fails to perform any obligation, warranty, duty, responsibility or other term or condition of this Agreement, including failure to make a payment when due and such default or failure continues unremedied for a period fifteen (15) days after such notice; (b) Power2Ship ceases permanently to carry on its present business, except as a result of a bona fide reorganization in the course of which the Agreement is transferred to a successor company of equal or greater financial resources carrying on substantially the same business; (c) Power2Ship makes an assignment for the benefit of creditors; or admits in writing its inability to pay debts as they mature; or a trustee or receiver of Power2Ship, or of any substantial part of Power2Ship's assets, is appointed by any court; or a proceeding is instituted by or against Power2Ship under any provision of the United States Bankruptcy Code or any other law affecting the rights of creditors and such proceeding is acquiesced in or is not dismissed within sixty (60) days; or (d) WLI's continued performance under this Agreement would cause it to be in violation of (i) any order of any court or regulatory agency having jurisdiction over WLI, or (ii) any law, statute, ordinance or regulation to which WLI is subject.
14.2. Termination for Cause by Power2Ship. Power2Ship may, upon written notice, terminate this Agreement at any time in the event that (a) WLI defaults or otherwise fails to perform any obligation, warranty, duty, responsibility or other term or condition of this Agreement, including failure to pay a refund when due and such default or failure continues unremedied for a period fifteen (15) days after such notice; (b) WLI ceases permanently to carry on its present business, except as a result of a bona fide reorganization in the course of which the Agreement is transferred to a successor company of equal or greater financial resources carrying on substantially the same business; (c) WLI makes an assignment for the benefit of creditors; or admits in writing its inability to pay debts as they mature; or a trustee or receiver of WLI, or of any substantial part of WLI's assets, is appointed by any court; or a proceeding is instituted by or against WLI under any provision of the United States Bankruptcy Code or any other law affecting the rights of creditors and such proceeding is acquiesced in or is not dismissed within sixty (60) days; or (d) Power2Ship's continued performance under this Agreement would cause it to be in violation of (i) any order of any court or regulatory agency having jurisdiction over Power2Ship, or (ii) any law, statute, ordinance or regulation to which Power2Ship is subject.
14.3. Termination of this Agreement shall not release either party from the obligation to pay any sums to the other party whether then or thereafter due or operate to discharge any liability which has been incurred prior to the effective date of such termination.
14.4. Upon expiration of this Agreement or termination by either party, Power2Ship may sell off any remaining inventory of the Products or Licensed Software acquired prior to termination.
14.5. Neither party shall be liable to the other party for any special, incidental, or consequential damages arising in connection with, or out of termination of, this agreement.
15. NOTICES
Any notice or communication given pursuant to this Agreement shall be in writing, delivered in person or may be telegraphed, telexed, sent by facsimile transmission or United States certified, registered or express mail, Federal Express or other private courier, postage prepaid, return receipt requested in the event of delivery by mail. In the event notice shall be given by facsimile transmission an original of such notice shall simultaneously be deposited in United States mail, postage prepaid, or sent by Federal Express or other private courier, addressed as hereinafter required. Notices shall be given to the parties addressed as set forth in the first paragraph of the Agreement or at such other address as the parties may from time to time designate by notice hereunder. Notices shall be given when delivered personally, or when
telegraphed, telexed or sent by facsimile transmission if sent during regular business hours of the recipient and if not, on the next following business day or if mailed, at midnight on the third business day after the date of mailing or if sent by Federal Express or by other private courier on the next following business day.
If to WLI: Wireless Links, Inc. Attention: Joe Shayovitch 1050 Wall Street Suite 320 Lyndhurst, New Jersey 07071 Facsimile No. 201-531-9795
If to Power2Ship: Freight Rate, Inc. Attention: Richard Hersh 10400 Griffin Rd., Suite 101 Ft. Lauderdale, FL 33328
16. GENERAL
16.1. This Agreement, its interpretation and construction, and the remedies for its enforcement or breach are to be applied in accordance with the laws of the State of New Jersey.
16.2. Failure on any occasion by WLI or Power2Ship to enforce any term or condition of this Agreement shall not prevent or bar enforcement on any other occasion.
16.3. Neither party shall be deemed to be in default of any provision hereof or be liable for any delay, failure in performance or interruption of service resulting directly or indirectly from act of war, act of God, act of civil or military authority, civil disturbance or any other cause beyond its reasonable control.
16.4. The relationship between WLI and Power2Ship is that of independent contractors. Neither party, nor its agents or its employees shall be deemed to be the agent of the other party. Neither party shall have the right to bind the other party, transact any business in the other party's name or in its behalf or incur any liability for or on behalf of the other party.
16.5. Neither WLI nor Power2Ship shall intentionally disclose, and each party shall use reasonable efforts to prohibit, the unintentional disclosure to any third party of any confidential or proprietary information of the other party during the term of this Agreement and for a period of one (1) year thereafter.
16.6. The headings to the paragraphs of this Agreement are included merely for convenience of reference and shall not affect the meaning of the language included therein.
16.7. No provisions of this Agreement may be altered or amended unless such alteration or amendment is in writing and executed by duly authorized officers of both parties, except where otherwise specifically provided for in this Agreement.
16.8. The covenants contained in this Agreement which, by their terms, require or contemplate performance by the parties after the expiration or termination of this Agreement shall be enforceable notwithstanding said expiration or termination.
16.9. This Agreement (including all Exhibits hereto), constitutes the entire Agreement and understanding between the parties relating to the subject matter hereof, supersedes all other agreements, oral or written, heretofore made between the parties with respect to such subject matter, supersedes the standard terms and conditions in Power2Ship's purchase order form and WLI's quotation, invoice or acknowledgment form, and supersedes any other terms or conditions of purchase proposed by Power2Ship or WLI. This Agreement may not be assigned by either party without the prior written consent of the other party. If any provision in this Agreement should be held illegal or unenforceable, no other provision of this Agreement shall be affected.
-------- ------- RH JS Page 5
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.
Wireless Links, Inc. Jaguar Investments, Inc.
By: By: ------------------------- ----------------------------- Its: Its: Chief Executive Officer ------------------------ ----------------------------
-------- ------- RH JS Page 6
EXHIBIT A
PRODUCT WARRANTY INFORMATION
WARRANTY
A) HARDWARE LIMITED WARRANTY - WLI will provide a one year limited warranty for its hardware products as per the terms and conditions described in "Attachment B". The first year warranty starts with the date of shipment and terminates on the anniversary of the first year.
B) Extended limited warranty beyond the first year is available at the same terms and conditions described in "Attachment B ". The second year Limited warranty price will be determined between the parties based on the total number of units to be under warranty in a particular year.
- The Warranty is a limited warranty that does not cover damage caused by improper use, abuse or use for other than intended purposes. The Warranty does not cover LCD screen or batteries. See Attachment B, Limited Warranty for the Acknowledger(TM) and related accessories.
- The parties understand and agree that WLI does not warrant any part of the Peripheral equipment that is not sold directly by WLI
- Within 14 days from discovery of a defect, the Integrator shall notify WLI in writing of said defect. Said notice of defect shall contain a reasonably detailed description of the defect as determinable by the Integrator. Said notice shall also indicate the serial numbers of all Acknowledgers and the release levels of software in which the defect was discovered.
C) DEFECTIVE EQUIPMENT RETURN. Defective equipment will be returned promptly to WLI's repair centre at the Power2Ship cost. The integrator will return for repair products under warranty and will pay the shipping cost to WLI and will carry the risk of loss until the package has been delivered to WLI. WLI will pay the shipping cost back via standard "UPS ground" and will carry the risk of loss until the package is delivered to the integrator.
For each unit, prior to return Power2Ship must send WLI a description of the problem including the serial number and date of shipping and date of purchase. Every return must have a Return Merchandise Authorisation number (RMA) as issued by WLI. Replacement or repaired units will be returned to the Integrator within 14 working days of receipt of a defective unit at WLI's cost.
D) LIMITED WARRANTY OF LICENSED PROGRAMS. WLI warrants, for the benefit of the Integrator only, that at the time Integrator's license of Licensed Programs commences, WLI has the right and authority to license the Licensed Programs to Integrator, and the Licensed Programs conform in all material respects to any specifications supplied to Integrator in writing by WLI. WLI does not warrant that the Licensed Programs can be used without interruption or that they are error-free.
Any implied warranties of the Licensed Software are LIMITED to one year starting from the date it was shipped to the integrator or starting with the date specified as the starting date in the leasing and / or purchase agreement with the Integrator. If the date is different then the shipping date to the integrator the integrator has to provide a copy of the agreement with the Integrator to verify the start of warranty.
E) CORRECTIONS AND UPDATES OF LICENSED PROGRAMS.
WLI shall maintain the accuracy of the Licensed Programs by making a reasonable attempt to correct any programming or database errors that Integrator brings to WLI attention. In addition, WLI from time to time may furnish Integrator with further releases of the Licensed Programs to provide corrections of significant programming or database errors and updates of database information. WLI obtains the information contained in the database of the Licensed Programs from established outside sources, and WLI makes every effort to keep the information up-to-date, but it cannot guarantee absolute accuracy and timeliness. After the expiration of the initial term of this Agreement, WLI shall provide any correction and update assistance only on mutually acceptable terms at WLI's customary rates then in effect. WLI reserves the right to make modifications and enhancements of the Licensed Programs (other than simple corrections and updates
-------- ------- RH JS Page 7
EXHIBIT B End User Warranty
LIMITED WARRANTY FOR THE ACKNOWLEDGER(TM) AND RELATED ACCESSORIES ----------------------------------------------------------------- Wireless Links (WLI) warrants to the original end user purchaser ("You") that the Equipment will be free from defects in workmanship and materials ("Limited Warranty") for a period of one (1) year from the date of the purchase of the Equipment (the "Warranty Period"). This limited warranty does not&sbsp;apply to normal wear and tear and does not cover repair or replacement of Equipment damaged by misuse, accident, abuse, neglect, misapplication, alteration of any kind (including upgrades and expansions)' disaster or defects due to repairs or modifications made by anyone other than the Manufacturer or its authorized service representative. In addition, this limited warranty does not apply to physical damage of any nature whatsoever to the surface of the display, to the surface of the signature pad of the Equipment or to any data stored within the Equipment. WLI shall not have any liability whatsoever with respect to any data stored within the Equipment. Before returning any Equipment under this limited warranty, call WLI and request a return merchandise authorization number (RMA - number)' then ship the Equipment in the original packaging or its equivalent to the location designated by WLI accompanied by proof of purchase, a brief written explanation of the defects, the RMA Number and a return shipment address. WLI at
its discretion will repair or replace the Equipment in accordance with the terms of this limited warranty and send it back to you. You are responsible for the cost of shipping the Equipment to the location designated by WLI and the risk of loss or damage in transit. WLI will bear the cost of return shipment to you and the risk of loss or damage during such return shipment. REPAIR OR REPLACEMENT BY WLI AS PROVIDED IN THIS LIMITED WARRANTY IS YOUR EXCLUSIVE REMEDY UNDER THIS LIMITED WARRANTY. WLI SHALL NOT BE LIABLE FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES. WLI DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, OR STATUTORY INCLUDING BUT NOT LIMITED TO, ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY WARRANTY ARISING OUT OF ANY PROPOSAL, SPECIFICATION OR SAMPLE. ANY SOFTWARE PROVIDED WITH THE EQUIPMENT IS PROVIDED UNDER A SEPARATE SOFTWARE LICENSE AGREEMENT.
-------- ------- RH JS Page 8
EXHIBIT C-2 END-USER PROGRAM LICENSE AGREEMENT
WIRELESS LINKS (WLI) SOFTWARE LICENSE AGREEMENT ----------------------------------------------------
Licensed Programs are provided solely in executable files and consist of the following programs: MidLink (WLI's middleware), MapLink, and all G3001 related programming tools,
1. RESERVATION OF TITLE. This Agreement does not provide the Power2Ship (you) with title or ownership of the Licensed Programs, but only a right of limited use of one copy per software package per license. The Licensed Programs are, and shall remain, the property of Wireless Links and certain third-party licensers who have authorized Wireless Links to incorporate their software into the System. Subject to a distribution agreement the Power2Ship (you) can redistribute the licensed products but you can't reproduce the Licensed Programs.
2. COPYRIGHT PROTECTION. Power2Ship acknowledges that the programs, software information, and user materials included in the Licensed Programs contain confidential information and trade secrets, which WLI(TM) has entrusted to Power2Ship in confidence to use only as expressly permitted by this Agreement. Power2Ship acknowledges that Wireless Links claims and reserves all rights and benefits afforded under federal law in the programs, database information, and user materials included in the Licensed Programs as copyrighted works.
3. PRESERVATION OF SECRECY AND CONFIDENTIALITY. Power2Ship shall protect the programs, database information, and user materials include din the Licensed Programs as confidential information and trade secrets. Power2Ship shall not, at any time, disclose such confidential information and trade secrets to any other person, firm, organization, or employee that does not (consistent with Power2Ship's right of use hereunder) need to obtain access to the Licensed Programs. Power2Ship shall devote its best efforts to ensure that all Power2Ship's personnel and all other persons afforded access to the Licensed Programs by Power2Ship protect the Licensed Programs as trade secrets and confidential information and refrain from any use of disclosure in any manner not expressly permitted by this Agreement. These restrictions shall not apply to information (1) generally know to the public of obtainable from public sources; (2) readily apparent from the keyboard operation, visual display, or output reports of the Licensed Program; (3) previously in the possession of Power2Ship or subsequently developed or acquired without reliance on the Licensed programs; or (4) approved by WLI for release without restriction.
4. RESTRICTIONS ON USE OF LICENSED PROGRAMS. The programs, software information, and user materials included in the Licensed Programs may not be decompiled, reverse engineered, reprinted, transcribed, extracted, or reproduced, in whole or in part, without the prior written consent of WLI. Power2Ship shall not in any way modify or alter the Licensed Programs without the prior written consent of WLI.
5. SURVIVALS OF OBLIGATIONS; RETURN OF PROGRAMS. Power2Ship's obligations under this Agreement shall remain in effect for as long as Power2Ship continues to use the Licensed Programs. Power2Ship shall promptly return all materials and documentation relating to the Licensed Programs provided by WLI upon (1) termination of either this Agreement of Power2Ship's license of the Licensed Programs, for any reason, or (2) discontinuance or abandonment of Power2Ship's use or control of the Licensed Programs.
6. POWER2SHIP'S DATA FILES. Power2Ship is responsible for maintaining and storing in a safe and secure location backup copies of all data files Power2Ship may place in the System. In no event shall WLI(TM) be liable for loss or destruction of Power2Ship's data files for any reason.
7. LIMITED WARRANTY ON LICENSED PROGRAMS. WLI(TM) warrants, for the benefit of Power2Ship only, that at the time Power2Ship's license of Licensed Programs commences, WLI(TM) has the right and authority to license the Licensed Programs to Power2Ship, and the Licensed Programs conform in all material respects to any specification supplied to Power2Ship in writing by WLI(TM). WLI(TM) does not warrant that the Licensed Programs can be used without interruption or that they are error-free. Any implied warranties of the Licensed Software are LIMITED to one year starting from the date of purchase or for the period described in the contractual agreement with the Power2Ship. For best and fast service WLI recommends to Power2Ship to install on the server NT computer a modem fax with PC-Anywhere software and a dedicated phone line to allow WLI to dial in for routine maintenance.
8. CORRECTIONS AND UPDATES OF LICENSED PROGRAMS. WLI shall maintain the accuracy of the Licensed Programs by using its best endeavors to correct any programming or database errors that Power2Ship brings to WLI(TM)'s attention. In addition, during the warranty period and/or duration of this agreement WLI from time to time may furnish Power2Ship with further releases of the Licensed Programs to provide corrections of significant programming or software errors. After the expiration of this agreement, WLI shall provide any correction and update assistance only on mutually acceptable terms at WLI's customary rates then in effect. WLI(TM) reserves the right to make optional modifications and enhancements of the Licensed Programs (other than simple corrections and updates) available only at additional charges.
-------- ------- RH JS Page 9 [/INST] ```json
{<answer_start>
"answer": "Power2Ship will pay WLI 10% of any activation commissions ("Unit Commissions"), if any, it receives as a result of any Unit activated on a specific wireless network."
<answer_end>
}
``` </s> | DISTRIBUTOR AGREEMENT
This Agreement is made and entered into this 7th day of April, 2003 (the "Effective Date"), by and between Wireless Links Inc, a Pennsylvania corporation having its principal place of business at 1050 Wall Street, Suite 202, Lyndhurst, New Jersey 07071 (hereinafter called "WLI"), and Jaguar Investments, Inc. and its affiliates, a Nevada corporation, having its principal place of business at 10400 Griffin Rd., Suite 101, Ft. Lauderdale, Florida 33328 (hereinafter called "Power2Ship") with reference to the following facts:
Whereas WLI is engaged in the design and development, manufacture, importation, distribution, resale, service and support of mobile data and GPS based information products and services;
Whereas Power2Ship is engaged in the business of collecting, processing and disseminating logistics information and providing other transportation-related products and services to shippers and carriers of freight and
Whereas Power2Ship desires to become a distributor of certain of WLI's products and services on the terms and conditions hereinafter set forth.
NOW, THEREFORE; in consideration of the mutual covenants and agreements hereinafter set forth, the parties hereto do hereby agree as follows:
1. APPOINTMENT
1.1. WLI hereby grants to Power2Ship the non-exclusive right and license to distribute certain WLI's products and services (the "Products" or "Units") and software programs ("Licensed Programs") to Power2Ship's customers (which are end users) located in North America. "Products" or "Units" in this Agreement are limited to WLI's G3001 GPSLink mobile terminal as defined in Section 1.2. "Licensed Programs" in this Agreement are limited to WLI's MidLink Middleware software and G3001 programming tools. Further, Power2Ship shall also be authorized to resell other WLI products, services and support programs subject to separate written amendments to be made by the parties to this Agreement. WLI reserves the right to add additional products and to delete obsolete or superseded products at any time during the term of this Agreement upon sixty (60) days prior written notice to Power2Ship.
1.2. G3001 GPSLink is a fully functional device including GPS receiver with an integrated CDPD or GPRS modem including 4 dry contact alarm inputs and one contact output and a DB9 connector for serial connection to a PDA. When integrated with MidLink middleware the G3001 can integrate to any third party software application subject to specifications published from time to time by WLI and available for download from the WLI web site.
1.3. The Products and Licensed Programs shall be sold by Power2Ship to its customers pursuant to WLI's standard warranty and software license agreements.
1.4. Power2Ship may, at any time during the term of this Agreement, assign its rights and obligations under this Agreement to one or more of its subsidiaries in which it owns at least 50.1% of the actual equity of the subsidiary on a fully diluted basis and as long as Power2Ship remains the guarantor for the payments and terms and conditions of this Agreement (individually, a "Subsidiary"). Each Subsidiary shall thereafter have the rights and obligations of Power2Ship hereunder with respect to all terms and conditions of this agreement as if such Subsidiary had entered into this Agreement directly with WLI.
1.5. If Power2Ship merges with another company and/or changes its name, this Agreement will survive the merger and/or name change and the new entity will assume all the rights and obligations of Power2Ship pursuant to this Agreement.
1.6. WLI may, at any time during the term of this Agreement, assign its rights and obligations under this Agreement to any subsidiary in which it owns at least 50.1% of the equity on a fully diluted basis.
1.7. Power2Ship acknowledges that it has already integrated the G3001 packaged with the MidLink middleware into its application tested it and found it to meet its requirements.
2. TERM
2.1. Unless otherwise terminated as provided herein, the initial term of this Agreement shall be three (3) years from the Effective Date and shall thereafter be automatically renewed for subsequent one (1) year periods unless either party notifies the other in writing of its election not to renew the Agreement at least one hundred twenty (120) days prior to the expiration of the then-current term. Should this Agreement be terminated by either party for any reason, the obligations of the parties to each other as set forth herein will survive any termination.
3. PRICES
3.1. Subject to Section 3.6 below the price of the Product, excluding the Licensed Programs, is $[*] per Unit. The total price for both of the Licensed Programs together is $[*] per month per Product ("License Fee"). The License Fee shall begin on the date the Product is shipped to a customer and shall be paid by Power2Ship to WLI by the 7th of each month for the prior month (prorated if the Unit was shipped during the prior month) and shall continue for as long as the Product is active on any wireless network. Notwithstanding the foregoing, Power2Ship is obligated to pay the License Fee to WLI for a minimum of 36 months.
3.2. Once the monthly License Fee for a particular Unit has started, it will continue for a minimum of 36 consecutive months with the only exception being that should Power2Ship uninstall a particular Unit from one customer and install it at another customer, Power2Ship is permitted to suspend the monthly License Fee for that particular Unit for a maximum of 2 months during the life of this Agreement. This suspension of the License Fee is permitted only once per a particular Unit during the life of the Agreement (i.e., the suspension can't occur in two non-consecutive months). Units that are suspended for less than thirty consecutive days are not considered suspended.
3.3. Once Power2Ship has paid WLI the License Fee for a minimum of 36 months for a particular Unit, Power2Ship may discontinue paying the month License Fee only if that particular Unit has been deactivated from the wireless network. If a Unit is deactivated after 36 months and subsequently is reactivated, Power2Ship must restart the payment of the License Fee for as long as that particular Unit remains active on the wireless network.
3.4. The $[*] hardware price per Unit is based on a single order of a minimum of 1000 Units and manufacturing of a minimum 500 Units. At the time of placing the order with WLI, Power2Ship must pay the full purchase price of $[*] per Unit. The delivery time is 8-10 weeks starting with the date the payment is received by WLI.
-------- ------- RH JS 6/7/2002 Page 1 of 9
3.5. To shorten the delivery time to 3-4 weeks, Power2Ship has the option to purchase all the key components for $[*] per Unit and have them stored at no charge by WLI on behalf of Power2Ship so they can be available for immediate manufacturing when Power2Ship places an order. If this option is exercised, when Power2ship places an order to authorize Units to be manufactured it will pay with the $[*] balance per Unit at the time of such order.
3.6. Power2ship has the option to order Units in lower quantities at higher Unit prices as follows: 100 to 299 Unit at $[*]; 300 to 499 Units at $[*] and; 500 to 999 Units at $[*]. The only exception to this will be the first order of 100 Units at a Unit price of $[*] if the order is placed no later than April 4, 2003.
3.7. The Unit prices and monthly License Fees of $[*] can't be increased by WLI under the terms of this Agreement.
3.8. Unless otherwise stated in writing by WLI, all prices quoted shall be exclusive of state and local use, sales and property taxes. Power2Ship agrees to be responsible for any such taxes incurred as a result of its purchase of Products from WLI, unless Power2Ship shall have presented WLI with an exemption certificate.
3.9. Power2Ship may purchase dual antennas with a " screw for the Units from WLI at the following unit prices: $[*] when purchased in quantities of 100 to 499; $[*] when purchased in quantities of 500 to 999 and; $[*] when purchased in quantities of 1000 or more. Terms of payment for the antennas are [*]% upon placing the order with WLI and the balance when the antennas are ready to be shipped to Power2Ship. A lead time of at least four weeks is required for delivery.
3.10. Power2Ship will pay WLI 10% of any activation commissions ("Unit Commissions"), if any, it receives as a result of any Unit activated on a specific wireless network. The payment will be paid on the 7th of every month for any Unit Commissions received by Power2Ship during the previous month. Power2Ship will provide with the payment a report of the total number of activations during the month and the amount received per activation.
3.11. All prices are FOB WLI offices in NJ.
4. RESERVATION OF TITLE; COPYRIGHT; CONFIDENTIALITY
4.1. Licensed Programs are provided solely in executable files. This Agreement does not provide Power2Ship with title or ownership of the Licensed Programs, but only a limited right to sub-license the Licensed Programs. The Licensed Programs are, and shall remain, the property of WLI and certain third-party licensors who have authorized WLI to incorporate their software into the Licensed Programs.
4.2. Power2Ship acknowledges that the programs, software information, and user materials included in the Licensed Programs contain confidential information and trade secrets, which WLI has entrusted to Power2Ship in confidence to use only as expressly permitted by this Agreement. Power2Ship acknowledges that WLI claims and reserves all rights and benefits afforded under federal law in the programs, software information, and user materials included in the Licensed Programs as copyrighted works.
4.3. The MidLink software is licensed to Power2Ship for the exclusive use with WLI's products. Power2ship commits not to connect to WLI's MidLink software using any other wireless devices and /or terminal (s) and /or GPS devices other than WLI branded products.
4.4. Power2Ship shall protect the programs, software information, and user materials included in the Licensed Programs as confidential information and trade secrets. Power2Ship shall not, at any time, disclose such confidential information and trade secrets to any other person, firm, organization, or employee that does not (consistent with Power2Ship's right of use hereunder)
need to obtain access to the Licensed Programs. Power2Ship shall devote its best efforts to ensure that all Power2Ship's personnel and all other persons afforded access to the Licensed Programs by Power2Ship protect the Licensed Programs as trade secrets and confidential information and refrain from any use or disclosure in any manner not expressly permitted by this Agreement. These restrictions shall not apply to information (1) generally known to the public or obtainable from public sources; (2) readily apparent from the keyboard operation, visual display, or output reports of the Licensed Programs; (3) previously in the possession of Power2Ship or subsequently developed or acquired without reliance on the Licensed Programs; or (4) approved by WLI for release without restriction.
4.5. Restrictions on Use of Licensed Programs and Products. The programs, software information and user materials included in the Licensed Programs and Products may not be decomposed, reverse engineered, reprinted, transcribed, extracted or reproduced, in whole or in part, without the prior written consent of WLI. Power2Ship shall not in any way modify or alter the Licensed Programs without the prior written consent of WLI.
4.6. Survival of Obligations. Power2Ship's obligations under Section 4 of this Agreement shall survive the termination of this Agreement.
4.7. Specific Performance and Injunctive Relief. Power2Ship agrees and acknowledges that, in the event of any breach directly or indirectly by Power2Ship of any provision of this Section 4, monetary damages will not afford WLI an adequate remedy, and irreparable harm may be presumed. Accordingly, WLI shall be entitled to receive injunctive relief from a court of competent jurisdiction for any such breach by Power2Ship.
4.8. Confidentiality. Power2Ship acknowledges that the Licensed Programs and all copies thereof are proprietary, confidential and a trade secret of WLI and the exclusive title shall remain with WLI. All applicable rights to copyrights, patents, trademarks, trade names, logos and identifying slogans and other intellectual property rights in the products are the exclusive property of WLI and Power2Ship shall not contest such ownership. Power2Ship is committing directly or indirectly not to copy and/or not to reverse engineer any of WLI's software and/or hardware products. Power2Ship shall be responsible for any breach of this Section by its employees, agents, subcontractors or consultants. WLI acknowledges that the conceptual functionality of its Unit is in the public domain and this paragraph does not cover the Unit's actual functionality. But this Section 4.8 shall apply to the proprietary WLI implementation and technology.
5. ORDER PROCEDURE AND MANDATORY REPORTS BY POWER2SHIP
5.1. Power2Ship shall place individual written purchase orders for Products from time to time during the term of this Agreement. Each purchase order placed by Power2Ship shall contain the following minimum information: (i) identification of each Product ordered by model number, quantity and price; (ii) shipping instructions and destinations; and (iii) requested delivery date for each Product. Power2Ship will pay for shipping cost from WLI offices in NJ to any destination.
-------- ------- RH JS Page 2
5.2. Any Units shipped by WLI directly to a customer of Power2ship as per Power2Ship's instruction is considered activated at the date of the shipment and the $[*] monthly License Fee will start as of that date .
5.3. Once an order is placed by Power2Ship, such order can't be cancelled and delivery dates for Units can't be rescheduled.
5.4. When Products are ordered for the GPRS network, Power2Ship must provide one SIM card for every Unit ordered within a maximum of two weeks from the date of order. The Sim Cards have to be placed and tested in the Unit as they are being manufactured at the factory. Failure to provide the SIM cards in time will require re-opening and re-test of the Units in the US at a cost of $[*] per Unit to be paid by Power2Ship.
5.5. Every Unit has a serial number. Power2Ship must provide WLI with a weekly report listing the serial number of every Unit shipped to a customer during the prior week.
5.6. Power2Ship must provide a separate weekly report to WLI that lists the serial number of any Units suspended during the prior week and that includes the SIM # and ID, date of return, name of returning customer and reason for return.
5.7. Power2Ship must provide a separate weekly report to WLI that lists the serial number of any Units reactivated (i.e., after having previously been suspended) during the prior week.
5.8. The weekly reports in Section 5.5, 5.6 and 5.7 must be sent to WLI every Monday. The weekly reports are to be sent in Excel file format via e-mail. The report must be sent even if there is no activity during the prior week.
5.9. Power2Ship must provide WLI with a complete copy of its monthly airtime bill for the Units as received by the respective wireless operators (T-Mobile, Verizon, AT&T, etc.). Power2Ship is required to keep all the WLI Unit activations on every wireless network on a separate account from any other vendor's brand used by Power2Ship. Every such monthly invoice (one per operator) must be submitted to WLI within 7 days from the date it is received by Power2Ship and the invoice must include all pages listed on the invoice (example 7of 7 pages). Power2Ship's Chief Executive Officer or Chief Financial Officer
must confirm in writing to WLI every quarter that the account numbers under which the WLI Units are being activated on the various networks are the only accounts under which the WLI units are activated.
6. DELIVERY, TITLE AND RISK OF LOSS
6.1. Delivery shall be F.O.B. WLI's facility in Lyndhurst, New Jersey. WLI shall use its reasonable efforts to deliver Products to Power2Ship on the date of delivery specified by Power2Ship. WLI will use its reasonable efforts to notify Power2Ship of any delays in scheduled delivery dates.
6.2. Title to the Products and the risk of loss or damage shall pass to Power2Ship upon delivery of the Products to Power2Ship or its shipping company of choice. In the event of any loss of or damage to the Products following delivery to the carrier, WLI shall, upon request, cooperate with Power2Ship in connection with the proof of loss claim presented by Power2Ship to the carrier and/or insurer.
6.3. Power2Ship shall bear the entire risk of loss or damage to the Units and any other equipment purchased from WLI (collectively the "Equipment") after installation of the Equipment in the customers' vehicles. The occurrence of any such loss or damage shall not permit Power2Ship to delay or reduce the payment of any fees prescribed under this agreement unless Power2Ship presents WLI with proof of a claim to an insurance company and, in such case, Power2Ship should replace the lost or damaged Equipment within a maximum of 60 days and resume the payment of monthly License Fees to WLI. Power2Ship is advised to obtain and maintain property and casualty insurance for the Equipment against all risks of loss or damage. The amount of such insurance shall not be less than the replacement cost of the Equipment.
6.4. Power2Ship is responsible for maintaining and storing in a safe and secure location backup copies of all data files Power2Ship may place in the System. In no event shall WLI be liable for loss or destruction of Power2Ship's data files for any reason.
7. PAYMENT
7.1. Power2Ship must pay WLI for the Products in full on the day it submits a PO (i.e., the PO is not valid unless accompanied by payment in full).
7.2. The payment of the optional antenna is 50% with the purchase order and 50% when the antennas are ready to be shipped to Power2Ship.
7.3. Monthly License Fees must be paid no later then the 7th of the month for all Units active during the previous month. For example, on the 7th of July Power2Ship will pay for Units that were active in June.
7.4. The purchase price for the Unit does not include repair beyond the first year limited warranty. The renewal of the limited warranty after the first year is at the option of the customer, but in any case, Unit failure does not relieve Power2Ship of its obligation to pay the monthly License Fees to WLI for that Unit. The first year limited warranty starts on the day of the activation of the Unit on a wireless network. As a distributor, Power2Ship should keep a minimum number of Units in stock for immediate replacement for its customers.
7.5. This Agreement is separate and apart from the contract between Power2Ship and its customer. Failure of the customer to pay Power2Ship, for whatever reason, does not affect the obligation of Power2Ship to pay its contractual obligations to WLI.
7.6. If an invoice is past due by more than 30 days, WLI may discontinue providing technical support to Power2Ship until the invoice is paid. If Power2Ship does not make payment of any amount due and payable hereunder within 60 days of the date of invoice, WLI (without prejudice to any other remedy) shall be entitled to interest on all past due amounts at the lower of eighteen percent (18%) per annum or the highest rate permitted by law, plus reimbursement of all costs incurred in collecting such amounts, including court costs and reasonable attorney fees.
8. LICENSED SOFTWARE ACCESS AND AUDIT
8.1. Should a dispute occur concerning the number of Units that Power2Ship has activated with its customer, WLI may designate an independent certified public accountant who may audit Power2Ship's books and records concerning sales of Units and of Licensed Software under this Agreement. Said examination shall be at WLI's sole cost and expense during normal business hours and upon reasonable notice, and may not be conducted more than once annually; provided, however, -------- ------- that if such audit reveals an underpayment by Power2Ship of more than 10% for the period audited, Power2Ship shall pay WLI's actual costs and expenses for performing such audit.
8.2. WLI, at its own discretion, may visit Power2Ship's warehouse at normal business hours to verify the actual number of Units in inventory and/or the number of Units suspended.
-------- ------- RH JS Page 3
8.3. Power2Ship commits to allow WLI free access to its MidLink software via the Internet for ongoing maintenance and updates.
9. PRODUCT INFORMATION OBLIGATIONS
9.1. Product Descriptions and Technical Support Requirements. WLI shall provide Power2Ship with integration documentation and programming information for its Unit.
9.2. Warranty Return Procedure. WLI's warranty return procedure is set forth in Exhibit A.
10. TECHNICAL INFORMATION AND SERVICES
10.1. WLI shall provide, at no cost to Power2Ship, reasonable training, including but not limited to, training of Power2Ship's sales and technical personnel, to enable Power2Ship to meets its obligations under this Agreement, including its obligation to provide service or support to end-users following termination of this Agreement.
10.2. Power2Ship is committed to provide technical support and service for WLI's Products sold by Power2Ship to its customers.
10.3. Power2Ship will receive the first customer call and will have to maintain a minimum inventory level of spare Units to service its customers within 48 hours. WLI will support an end-user only upon Power2Ship's request and only after Power2Ship has tried to provide the support and has failed to fix the problem. WLI will not be involved in any end-user training.
10.4. Power2Ship will maintain a minimum level of inventory of the Product for service purposes, which the parties estimate to be 1% of the aggregate number of Units active on any wireless network at any given time.
11. WARRANTY AND INDEMNIFICATION
11.1. WLI warrants the Products pursuant to the terms of its hardware limited warranty and limited software warranty set forth in Exhibit B hereto. Subject to the terms and conditions of Exhibit A, WLI agrees, in its sole discretion, to repair or replace at its sole cost and expense, any defective Products or parts thereof which are returned to it within the applicable warranty period, provided that the Products have not been altered or repaired other than with authorization from WLI and by its approved procedures; that the Products have not been subjected to misuse, improper maintenance, negligence or accident; that the Products have not been damaged by excessive physical or electrical stress; and that the Products have not had their serial number or any part thereof altered, defaced or removed.
11.2. The warranty and remedies set forth in Exhibit B are exclusive and in lieu of any other warranties or remedies, express or implied, including the implied warranties of merchantability and fitness for intended or particular purpose. The liability of WLI to Power2Ship for any claim whatsoever related to the Products or the Licensed Programs or this Agreement, including any cause of action in contract, tort, or strict liability, shall not exceed the total amount payable under this Agreement by Power2Ship to WLI within the most recent six-month period for the Licensed Programs (if such claim relates to the Licensed Programs), or for the WLI Products (if such claim relates to the WLI Products). Under no circumstances shall WLI be liable to Power2Ship or to any other person or entity for any incidental, special or consequential damages whether arising out of breach of warranty, breach of contract or otherwise even if WLI has been advised of the possibility of such claims or demands.
11.3. To the extent not otherwise provided herein, WLI agrees to defend, indemnify and hold harmless Power2Ship from and against (a) any claim by a third party that a Product supplied hereunder did not conform to WLI's warranty when received by Power2Ship or that WLI failed on request to provide warranty service in accordance with WLI's applicable warranty statement or (b) any claim arising under Section 14 of this Agreement. Power2Ship shall be reimbursed for any actual loss, liability or damage suffered or incurred by Power2Ship and for all reasonable costs and expenses (including reasonable attorneys' fees) incurred by Power2Ship in connection with any action, suit, proceeding, demand, assessment or judgment incident to any of the matters indemnified against in this provision provided that Power2Ship immediately notifies WLI as to the institution of such suit, gives or obtains for WLI such authority as may be necessary for WLI to defend same, and supplies WLI such further information and assistance for the defense thereof as WLI may reasonably require and request. WLI shall have no obligation under this section, and shall have no liability to Power2Ship, if such claim arises due to the alteration or modification of any Product without the prior written consent of WLI.
11.4. Power2Ship shall defend, indemnify and hold harmless WLI from all liability and claims whatsoever for any injury to persons or property or for any loss, expense, or damage incurred by any of Power2Ship's personnel or invitees or by any other person or party (except agents or employees of WLI) arising as a result of or in connection with Power2Ship's acquisition or use of the Products and Licensed Programs or WLI 's performance of its obligations or exercise of its rights hereunder except for those claims which are the result of the willful acts or gross negligence of WLI.
12. INTELLECTUAL PROPERTY RIGHTS INDEMNIFICATION
12.1. WLI represents and warrants that: (i) it owns all right, title and interest in and to the Products necessary to enter into and perform its obligations to Power2Ship hereunder, and (ii) no Product or Licensed Programs sold to Power2Ship during the term of this Agreement, nor the use of any such Product or Licensed Program, nor anything in or contemplated by this Agreement, infringes upon the Intellectual Rights (as defined herein) of any other person or entity, and no suit or proceeding is pending or threatened alleging that any Product or Licensed program, or the use thereof, infringes upon any Intellectual Rights. As used herein, the term "Intellectual Right" means any rights relating to any trademark, trade name, service mark, copyright, patent, trade secret or other proprietary right.
13. USE OF TRADEMARKS
13.1. Power2Ship shall not acquire any right to or interest in any trademark or trade name owned or used by WLI. Power2Ship may use for purposes of this Agreement such trademarks and trade names as appear on the Products and on promotional materials therefore when received by Power2Ship from WLI.
13.2. Power2Ship acknowledges that WLI and its affiliates are the owners and/or licensees of the trademarks, service marks, commercial symbols and trade names used by WLI. Power2Ship shall not contest the right of WLI and its affiliates to the use of any trademarks, service marks, commercial symbols or trade names used or claimed by WLI.
13.3. All WLI's use of Power2Ship's company name, logos, trademarks or other registered identifiers must meet Power2Ship's corporate communications standards and must have Power2Ship's written approval prior to such use by WLI. All Power2Ship's use of WLI's company name, logos, trademarks or other registered identifiers must meet WLI's corporate communications standards and must have WLI's written approval prior to such use by WLI.
-------- ------- RH JS Page 4
13.4. Power2Ship shall have the right to place its trademarks on the Products but shall not obscure any WLI trademarks.
14. TERMINATION
14.1. Termination for Cause by WLI WLI may, upon written notice, terminate this Agreement at any time in the event that (a) Power2Ship defaults or otherwise fails to perform any obligation, warranty, duty, responsibility or other term or condition of this Agreement, including failure to make a payment when due and such default or failure continues unremedied for a period fifteen (15) days after such notice; (b) Power2Ship ceases permanently to carry on its present business, except as a result of a bona fide reorganization in the course of which the Agreement is transferred to a successor company of equal or greater financial resources carrying on substantially the same business; (c) Power2Ship makes an assignment for the benefit of creditors; or admits in writing its inability to pay debts as they mature; or a trustee or receiver of Power2Ship, or of any substantial part of Power2Ship's assets, is appointed by any court; or a proceeding is instituted by or against Power2Ship under any provision of the United States Bankruptcy Code or any other law affecting the rights of creditors and such proceeding is acquiesced in or is not dismissed within sixty (60) days; or (d) WLI's continued performance under this Agreement would cause it to be in violation of (i) any order of any court or regulatory agency having jurisdiction over WLI, or (ii) any law, statute, ordinance or regulation to which WLI is subject.
14.2. Termination for Cause by Power2Ship. Power2Ship may, upon written notice, terminate this Agreement at any time in the event that (a) WLI defaults or otherwise fails to perform any obligation, warranty, duty, responsibility or other term or condition of this Agreement, including failure to pay a refund when due and such default or failure continues unremedied for a period fifteen (15) days after such notice; (b) WLI ceases permanently to carry on its present business, except as a result of a bona fide reorganization in the course of which the Agreement is transferred to a successor company of equal or greater financial resources carrying on substantially the same business; (c) WLI makes an assignment for the benefit of creditors; or admits in writing its inability to pay debts as they mature; or a trustee or receiver of WLI, or of any substantial part of WLI's assets, is appointed by any court; or a proceeding is instituted by or against WLI under any provision of the United States Bankruptcy Code or any other law affecting the rights of creditors and such proceeding is acquiesced in or is not dismissed within sixty (60) days; or (d) Power2Ship's continued performance under this Agreement would cause it to be in violation of (i) any order of any court or regulatory agency having jurisdiction over Power2Ship, or (ii) any law, statute, ordinance or regulation to which Power2Ship is subject.
14.3. Termination of this Agreement shall not release either party from the obligation to pay any sums to the other party whether then or thereafter due or operate to discharge any liability which has been incurred prior to the effective date of such termination.
14.4. Upon expiration of this Agreement or termination by either party, Power2Ship may sell off any remaining inventory of the Products or Licensed Software acquired prior to termination.
14.5. Neither party shall be liable to the other party for any special, incidental, or consequential damages arising in connection with, or out of termination of, this agreement.
15. NOTICES
Any notice or communication given pursuant to this Agreement shall be in writing, delivered in person or may be telegraphed, telexed, sent by facsimile transmission or United States certified, registered or express mail, Federal Express or other private courier, postage prepaid, return receipt requested in the event of delivery by mail. In the event notice shall be given by facsimile transmission an original of such notice shall simultaneously be deposited in United States mail, postage prepaid, or sent by Federal Express or other private courier, addressed as hereinafter required. Notices shall be given to the parties addressed as set forth in the first paragraph of the Agreement or at such other address as the parties may from time to time designate by notice hereunder. Notices shall be given when delivered personally, or when
telegraphed, telexed or sent by facsimile transmission if sent during regular business hours of the recipient and if not, on the next following business day or if mailed, at midnight on the third business day after the date of mailing or if sent by Federal Express or by other private courier on the next following business day.
If to WLI: Wireless Links, Inc. Attention: Joe Shayovitch 1050 Wall Street Suite 320 Lyndhurst, New Jersey 07071 Facsimile No. 201-531-9795
If to Power2Ship: Freight Rate, Inc. Attention: Richard Hersh 10400 Griffin Rd., Suite 101 Ft. Lauderdale, FL 33328
16. GENERAL
16.1. This Agreement, its interpretation and construction, and the remedies for its enforcement or breach are to be applied in accordance with the laws of the State of New Jersey.
16.2. Failure on any occasion by WLI or Power2Ship to enforce any term or condition of this Agreement shall not prevent or bar enforcement on any other occasion.
16.3. Neither party shall be deemed to be in default of any provision hereof or be liable for any delay, failure in performance or interruption of service resulting directly or indirectly from act of war, act of God, act of civil or military authority, civil disturbance or any other cause beyond its reasonable control.
16.4. The relationship between WLI and Power2Ship is that of independent contractors. Neither party, nor its agents or its employees shall be deemed to be the agent of the other party. Neither party shall have the right to bind the other party, transact any business in the other party's name or in its behalf or incur any liability for or on behalf of the other party.
16.5. Neither WLI nor Power2Ship shall intentionally disclose, and each party shall use reasonable efforts to prohibit, the unintentional disclosure to any third party of any confidential or proprietary information of the other party during the term of this Agreement and for a period of one (1) year thereafter.
16.6. The headings to the paragraphs of this Agreement are included merely for convenience of reference and shall not affect the meaning of the language included therein.
16.7. No provisions of this Agreement may be altered or amended unless such alteration or amendment is in writing and executed by duly authorized officers of both parties, except where otherwise specifically provided for in this Agreement.
16.8. The covenants contained in this Agreement which, by their terms, require or contemplate performance by the parties after the expiration or termination of this Agreement shall be enforceable notwithstanding said expiration or termination.
16.9. This Agreement (including all Exhibits hereto), constitutes the entire Agreement and understanding between the parties relating to the subject matter hereof, supersedes all other agreements, oral or written, heretofore made between the parties with respect to such subject matter, supersedes the standard terms and conditions in Power2Ship's purchase order form and WLI's quotation, invoice or acknowledgment form, and supersedes any other terms or conditions of purchase proposed by Power2Ship or WLI. This Agreement may not be assigned by either party without the prior written consent of the other party. If any provision in this Agreement should be held illegal or unenforceable, no other provision of this Agreement shall be affected.
-------- ------- RH JS Page 5
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.
Wireless Links, Inc. Jaguar Investments, Inc.
By: By: ------------------------- ----------------------------- Its: Its: Chief Executive Officer ------------------------ ----------------------------
-------- ------- RH JS Page 6
EXHIBIT A
PRODUCT WARRANTY INFORMATION
WARRANTY
A) HARDWARE LIMITED WARRANTY - WLI will provide a one year limited warranty for its hardware products as per the terms and conditions described in "Attachment B". The first year warranty starts with the date of shipment and terminates on the anniversary of the first year.
B) Extended limited warranty beyond the first year is available at the same terms and conditions described in "Attachment B ". The second year Limited warranty price will be determined between the parties based on the total number of units to be under warranty in a particular year.
- The Warranty is a limited warranty that does not cover damage caused by improper use, abuse or use for other than intended purposes. The Warranty does not cover LCD screen or batteries. See Attachment B, Limited Warranty for the Acknowledger(TM) and related accessories.
- The parties understand and agree that WLI does not warrant any part of the Peripheral equipment that is not sold directly by WLI
- Within 14 days from discovery of a defect, the Integrator shall notify WLI in writing of said defect. Said notice of defect shall contain a reasonably detailed description of the defect as determinable by the Integrator. Said notice shall also indicate the serial numbers of all Acknowledgers and the release levels of software in which the defect was discovered.
C) DEFECTIVE EQUIPMENT RETURN. Defective equipment will be returned promptly to WLI's repair centre at the Power2Ship cost. The integrator will return for repair products under warranty and will pay the shipping cost to WLI and will carry the risk of loss until the package has been delivered to WLI. WLI will pay the shipping cost back via standard "UPS ground" and will carry the risk of loss until the package is delivered to the integrator.
For each unit, prior to return Power2Ship must send WLI a description of the problem including the serial number and date of shipping and date of purchase. Every return must have a Return Merchandise Authorisation number (RMA) as issued by WLI. Replacement or repaired units will be returned to the Integrator within 14 working days of receipt of a defective unit at WLI's cost.
D) LIMITED WARRANTY OF LICENSED PROGRAMS. WLI warrants, for the benefit of the Integrator only, that at the time Integrator's license of Licensed Programs commences, WLI has the right and authority to license the Licensed Programs to Integrator, and the Licensed Programs conform in all material respects to any specifications supplied to Integrator in writing by WLI. WLI does not warrant that the Licensed Programs can be used without interruption or that they are error-free.
Any implied warranties of the Licensed Software are LIMITED to one year starting from the date it was shipped to the integrator or starting with the date specified as the starting date in the leasing and / or purchase agreement with the Integrator. If the date is different then the shipping date to the integrator the integrator has to provide a copy of the agreement with the Integrator to verify the start of warranty.
E) CORRECTIONS AND UPDATES OF LICENSED PROGRAMS.
WLI shall maintain the accuracy of the Licensed Programs by making a reasonable attempt to correct any programming or database errors that Integrator brings to WLI attention. In addition, WLI from time to time may furnish Integrator with further releases of the Licensed Programs to provide corrections of significant programming or database errors and updates of database information. WLI obtains the information contained in the database of the Licensed Programs from established outside sources, and WLI makes every effort to keep the information up-to-date, but it cannot guarantee absolute accuracy and timeliness. After the expiration of the initial term of this Agreement, WLI shall provide any correction and update assistance only on mutually acceptable terms at WLI's customary rates then in effect. WLI reserves the right to make modifications and enhancements of the Licensed Programs (other than simple corrections and updates
-------- ------- RH JS Page 7
EXHIBIT B End User Warranty
LIMITED WARRANTY FOR THE ACKNOWLEDGER(TM) AND RELATED ACCESSORIES ----------------------------------------------------------------- Wireless Links (WLI) warrants to the original end user purchaser ("You") that the Equipment will be free from defects in workmanship and materials ("Limited Warranty") for a period of one (1) year from the date of the purchase of the Equipment (the "Warranty Period"). This limited warranty does not&sbsp;apply to normal wear and tear and does not cover repair or replacement of Equipment damaged by misuse, accident, abuse, neglect, misapplication, alteration of any kind (including upgrades and expansions)' disaster or defects due to repairs or modifications made by anyone other than the Manufacturer or its authorized service representative. In addition, this limited warranty does not apply to physical damage of any nature whatsoever to the surface of the display, to the surface of the signature pad of the Equipment or to any data stored within the Equipment. WLI shall not have any liability whatsoever with respect to any data stored within the Equipment. Before returning any Equipment under this limited warranty, call WLI and request a return merchandise authorization number (RMA - number)' then ship the Equipment in the original packaging or its equivalent to the location designated by WLI accompanied by proof of purchase, a brief written explanation of the defects, the RMA Number and a return shipment address. WLI at
its discretion will repair or replace the Equipment in accordance with the terms of this limited warranty and send it back to you. You are responsible for the cost of shipping the Equipment to the location designated by WLI and the risk of loss or damage in transit. WLI will bear the cost of return shipment to you and the risk of loss or damage during such return shipment. REPAIR OR REPLACEMENT BY WLI AS PROVIDED IN THIS LIMITED WARRANTY IS YOUR EXCLUSIVE REMEDY UNDER THIS LIMITED WARRANTY. WLI SHALL NOT BE LIABLE FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES. WLI DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, OR STATUTORY INCLUDING BUT NOT LIMITED TO, ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY WARRANTY ARISING OUT OF ANY PROPOSAL, SPECIFICATION OR SAMPLE. ANY SOFTWARE PROVIDED WITH THE EQUIPMENT IS PROVIDED UNDER A SEPARATE SOFTWARE LICENSE AGREEMENT.
-------- ------- RH JS Page 8
EXHIBIT C-2 END-USER PROGRAM LICENSE AGREEMENT
WIRELESS LINKS (WLI) SOFTWARE LICENSE AGREEMENT ----------------------------------------------------
Licensed Programs are provided solely in executable files and consist of the following programs: MidLink (WLI's middleware), MapLink, and all G3001 related programming tools,
1. RESERVATION OF TITLE. This Agreement does not provide the Power2Ship (you) with title or ownership of the Licensed Programs, but only a right of limited use of one copy per software package per license. The Licensed Programs are, and shall remain, the property of Wireless Links and certain third-party licensers who have authorized Wireless Links to incorporate their software into the System. Subject to a distribution agreement the Power2Ship (you) can redistribute the licensed products but you can't reproduce the Licensed Programs.
2. COPYRIGHT PROTECTION. Power2Ship acknowledges that the programs, software information, and user materials included in the Licensed Programs contain confidential information and trade secrets, which WLI(TM) has entrusted to Power2Ship in confidence to use only as expressly permitted by this Agreement. Power2Ship acknowledges that Wireless Links claims and reserves all rights and benefits afforded under federal law in the programs, database information, and user materials included in the Licensed Programs as copyrighted works.
3. PRESERVATION OF SECRECY AND CONFIDENTIALITY. Power2Ship shall protect the programs, database information, and user materials include din the Licensed Programs as confidential information and trade secrets. Power2Ship shall not, at any time, disclose such confidential information and trade secrets to any other person, firm, organization, or employee that does not (consistent with Power2Ship's right of use hereunder) need to obtain access to the Licensed Programs. Power2Ship shall devote its best efforts to ensure that all Power2Ship's personnel and all other persons afforded access to the Licensed Programs by Power2Ship protect the Licensed Programs as trade secrets and confidential information and refrain from any use of disclosure in any manner not expressly permitted by this Agreement. These restrictions shall not apply to information (1) generally know to the public of obtainable from public sources; (2) readily apparent from the keyboard operation, visual display, or output reports of the Licensed Program; (3) previously in the possession of Power2Ship or subsequently developed or acquired without reliance on the Licensed programs; or (4) approved by WLI for release without restriction.
4. RESTRICTIONS ON USE OF LICENSED PROGRAMS. The programs, software information, and user materials included in the Licensed Programs may not be decompiled, reverse engineered, reprinted, transcribed, extracted, or reproduced, in whole or in part, without the prior written consent of WLI. Power2Ship shall not in any way modify or alter the Licensed Programs without the prior written consent of WLI.
5. SURVIVALS OF OBLIGATIONS; RETURN OF PROGRAMS. Power2Ship's obligations under this Agreement shall remain in effect for as long as Power2Ship continues to use the Licensed Programs. Power2Ship shall promptly return all materials and documentation relating to the Licensed Programs provided by WLI upon (1) termination of either this Agreement of Power2Ship's license of the Licensed Programs, for any reason, or (2) discontinuance or abandonment of Power2Ship's use or control of the Licensed Programs.
6. POWER2SHIP'S DATA FILES. Power2Ship is responsible for maintaining and storing in a safe and secure location backup copies of all data files Power2Ship may place in the System. In no event shall WLI(TM) be liable for loss or destruction of Power2Ship's data files for any reason.
7. LIMITED WARRANTY ON LICENSED PROGRAMS. WLI(TM) warrants, for the benefit of Power2Ship only, that at the time Power2Ship's license of Licensed Programs commences, WLI(TM) has the right and authority to license the Licensed Programs to Power2Ship, and the Licensed Programs conform in all material respects to any specification supplied to Power2Ship in writing by WLI(TM). WLI(TM) does not warrant that the Licensed Programs can be used without interruption or that they are error-free. Any implied warranties of the Licensed Software are LIMITED to one year starting from the date of purchase or for the period described in the contractual agreement with the Power2Ship. For best and fast service WLI recommends to Power2Ship to install on the server NT computer a modem fax with PC-Anywhere software and a dedicated phone line to allow WLI to dial in for routine maintenance.
8. CORRECTIONS AND UPDATES OF LICENSED PROGRAMS. WLI shall maintain the accuracy of the Licensed Programs by using its best endeavors to correct any programming or database errors that Power2Ship brings to WLI(TM)'s attention. In addition, during the warranty period and/or duration of this agreement WLI from time to time may furnish Power2Ship with further releases of the Licensed Programs to provide corrections of significant programming or software errors. After the expiration of this agreement, WLI shall provide any correction and update assistance only on mutually acceptable terms at WLI's customary rates then in effect. WLI(TM) reserves the right to make optional modifications and enhancements of the Licensed Programs (other than simple corrections and updates) available only at additional charges.
-------- ------- RH JS Page 9 | Highlight the parts (if any) of this contract related to "Revenue/Profit Sharing" that should be reviewed by a lawyer. Details: Is one party required to share revenue or profit with the counterparty for any technology, goods, or services? | {
"answer_start": [
8484
],
"text": [
"Power2Ship will pay WLI 10% of any activation commissions (\"Unit Commissions\"), if any, it receives as a result of any Unit activated on a specific wireless network."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Exclusivity" that should be reviewed by a lawyer. Details: Is there an exclusive dealing commitment with the counterparty? This includes a commitment to procure all “requirements” from one party of certain technology, goods, or services or a prohibition on licensing or selling technology, goods or services to third parties, or a prohibition on collaborating or working with other parties), whether during the contract or after the contract ends (or both).
Context: 1.
2.
2.1
2.2
3.
3.1
3.2
4.
4.1
EXHIBIT 1.1 Strategic Alliance Agreement
This Agreement is made and entered into this 30th day of June 2017,
Between: Turnkey Capital Inc., having its office located at 2929 E. Commercial Blvd, Suite PH-D, Ft. Lauderdale, Florida, hereinafter referred to as "TKCI";
And:
A Seminole Indian Company to be formed by Former Seminole Tribal Chairman James E. Billie and Craig Talesman, having an office located at 1800 Frank Huff Road, Seminole Reservation, Okeechobee, FL 34974, hereinafter referred to as "SIC".
Overview
The purpose and intent of this strategic alliance is to combine the resources and talents of, TKCI and SIC, in order to take advantage of every opportunity permitted by tribal sovereignty to create revenue streams in multiple areas in conjunction with operating partners that have existing marketing and customers in place, thereby limiting the capital requirements and risk. New marketing advantages based upon competitive pricing, cross marketing and new revenue streams from expansion into other industries will grow the business beyond anything previously imagined. The structure may also be used for additional compatible acquisitions which will also fuel growth. TKCI believes that structuring operations with Tribal Sovereignty will deliver the financial advantages of operating in a tax free environment with limited liability, plus other benefits such as permit and zoning ease, supporting an ideal structure for investment capital and successful entrepreneurial ventures.
Term
The term of this Agreement is twenty-four (24) months. The Agreement may be renewed, subject to mutual written approval.
Notwithstanding the completion, expiration or termination of this Agreement, the indemnities warranties and undertakings contained or referred to in this Agreement shall continue to subsist for as long as may be necessary for the purpose of giving effect to each one and every one of them.
TKCI Committments
TKCI shall establish a wholly-owned subsidiary (the "Holding Company") for the sole purpose of conducting and developing business on behalf of this alliance. The utilization of this subsidiary will provide for separate record keeping, reporting and tracking of all business related to this agreement.
In addition to capital recruitment functions, TKCI shall perform all of the functions and accept all of the responsibilities of the position of Chief Financial Officer including but not limited to management of accounts receivable and accounts payable, interfacing with Holding Company accountants on tax matters, interfacing with Holding Company accountants and lawyers on regulatory and compliance matters, and all other tasks typically and reasonably associated with the post and position of Chief Financial Officer.
Committments and Rights of SIC
SIC acknowledges and agrees that the ability of TKCI to render its services is uniquely dependent upon
4.2
4.3
4.4
4.5
4.6
4.7
5.
5.1
5.1.1
5.1.2
5.2
5.5.1
5.5.2
5.3
5.4
the cooperation and provision of information to TKCI by Chief James E. Billie and Craig Talesman for SIC. In the event that information is required, it shall be provided in writing.
SIC, represented by Chief James E. Billie and Craig Talesman, will assist in the closing of the transactions by: 1) participating in meetings with key decision makers, providing process overview, and describing case histories of similarly situated projects; and 2) providing advice on issues such as i) location; (ii) deal structure; (iii) funding; (iv) timing/phasing; (v) cash flow/revenue collection issues; and (vi) other major implementation issues.
SIC shall allow TKCI to review and analyze all business opportunities that could be mutually beneficial to TKCI and SIC within the time frame of this alliance.
SIC, represented by Chief James E. Billie and Craig Talesman, will assist in the finalization of project structuring plans geared toward maximizing all available revenue streams.
SIC, represented by Chief James E. Billie and Craig Talesman, will provide access to other opportunities.
The decision to join this alliance is at the absolute discretion of Chief James E. Billie and Craig Talesman. TKCI affirms that it shall not have any claim towards SIC if the management decides not to sign the agreement in the investigation stage, and before any agreements are signed, for any reasons whatsoever.
SIC may try to locate, or authorize others to locate potential investors who are not Reserved Investors (or Rejected Investors), and SIC may accept investments from such other investors, without incurring any liability towards TKCI
Fees and Financial Structuring
A wholly-owned subsidiary (the "Holding Company") shall be established by TKCI to accomplish the following:
To hold the assets and liabilities of the TKCI/SIC alliance and provide for separate management of the alliance business operations.
Operating capital may be raised and a growing shareholder base may be established to support future expansion.
Net revenue from business operations created by Holding Company for the alliance will be distributed by Holding Company equally - 50/50 - to TKCI and SIC:
SIC's original business concepts and plans, as well as opportunities brought to the table through its connections, and third-party contracts, are ways that we anticipate business could be generated, and revenues created; TKCI's advisory and management services and capital resources will provide the critical structure and business mechanism to carry concepts through to revenue. Turnkey Capital Inc. (TKCI) will reserve ten percent (10%) of the shares of TKCI for SIC. These shares will be issued once an exclusivity agreement is reached. Once the Holding Company is raising funds and generating revenue, the parties will negotiate a monthly fee.
6
7.
8. 8.1
8.2
9. 9.1
9.2
9.3
Confidentiality and non-compete During the term of this Agreement and for one (1) year thereafter, TKCI will keep in confidence, not reveal, not use and not allow or assist others to use, any information marked "Confidential" received from or through SIC in the context of its activities hereunder, except as authorized in writing by SIC. However, TKCI may assume that unless SIC specifically advises it to the contrary, in writing, with respect to an item of information, it may reasonably make such information available to third parties that TKCI is attempting to introduce to SIC. Such information includes, but is not limited to SIC's business plans and proprietary disclosures. The above provisions will survive the termination of this Agreement, except they will not apply to information that (i) is in the public domain or later becomes available to the public through no breach of this Agreement by either party; (ii) is obtained by either party from a third party who had the legal right to disclose the information to that party; (iii) is already in the possession of the receiving party on the date this Agreement becomes effective; (iv) is independently developed by either party or (v) is required to be disclosed by law, government regulation, or court order.
Termination This Agreement may be terminated early if mutually agreed to by both parties in writing, or for cause, which is defined as conviction of either party of a criminal offense, actions in bad faith, and knowing or intentional misconduct, failure to perform as determined by SIC, or a material breach of this Agreement. The expiration or early termination of this Agreement shall not affect any of its provisions which are expressed to operate or have an effect afterwards or any right of action already accrued to either party in respect of any breach by the other party.
Warranties and Indemnification SIC represents and warrants to TKCI that the undersigned are duly authorized to execute and enter into this Agreement, and that all information relating to SIC furnished by Chief James E. Billie and Craig Talesman, or its other representatives, to TKCI will be complete, accurate and not misleading.
Each party ("the Defaulting party") shall indemnify the other party ("the Innocent party") and keep the Innocent Party indemnified and harmless from and against any claims brought against the Innocent Party as a result of any acts or omissions of the Defaulting Party, whether such acts or omissions relate to the Defaulting Party's tasks under this Agreement or not. The Defaulting Party's liability under this provision shall extend to legal fees and to court and/or arbitration expenses, as the case may be as well as any other expenses incurred by the Innocent Party in the course of defending and/or handling and/or settling such claim.
Strategic Alliance TKCI is performing under this Agreement as a Strategic Alliance member and is not a legal or implied agent or employee of SIC. This Agreement does not create agency or employment relationship between the parties hereto.
TKCI shall not, by reason of this Agreement or the performance of the services delineated herein, be or be deemed to be, an employee of SIC, and TKCI shall have no power to enter into any agreement on behalf of, or otherwise bind SIC. Without limiting the foregoing, TKCI shall not enter into any contract or commitment on behalf of SIC.
SIC acknowledges and agrees that TKCI shall have no liability resulting from TKCI's failure to obtain any financing for any of its programs or business concepts. Neither party shall have any claim whatsoever against the other if an investment or a sales opportunity was lost because of any of the other party's acts or omissions.
9.4
9.5
10. 10.1 10.2
10.3
11. 11.1
11.2
11.3
11.4
11.5
SIC understands that TKCI is not acting as a broker-dealer or dealer in securities with respect to any transaction contemplated hereunder, and that any securities which may be sold in respect to any such transaction are being sold directly by or to SIC, to or by TKCI parties to such transaction. SIC acknowledges and agrees that no liability will be attributed to TKCI in connection with the issuance of any equity or securities. Any fees due to TKCI are to be paid solely as finder's fee and as remuneration for other services provided for under this Agreement.
TKCI will have First Right of Refusal with regard to any sale or disposition of any part or the whole of companies or projects developed in relationship with this alliance.
Arbitration This Agreement shall be governed by the laws of the State of Florida. Any disputes arising under or in connection with the validity, interpretation and performance of this Agreement that cannot be resolved amicably by the parties shall be settled in arbitration before a single arbitrator. If arbitration fails to render a mutually agreement resolution the Courts of the State of Florida will be deemed to have jurisdiction. In addition to all other remedies provided in this Agreement, the prevailing party shall be entitled to all costs and expenses reasonably incurred as a result of said breach, including arbitration and court costs, and reasonable attorney's fees.
Miscellaneous This Agreement, together with any added Appendices, constitutes the entire agreement between the parties with respect to its subject matter and supersedes any prior agreement. This Agreement may be changed only by mutual agreement between the parties, expressed in writing.
All notices under this Agreement shall be in writing and shall be deemed given if delivered to the party personally, or five (5) days after sent by registered airmail or by an express courier, as well as delivery by confirmed facsimile transmission or confirmed electronic mail. The addresses for notices given under this Agreement shall be those provided above.
If any provision of this Agreement is held by an arbitrator to be invalid, void or unenforceable, the remaining provisions shall nevertheless continue in full force, and the stricken provision shall be replaced by a valid, legal and enforceable provision having as nearly as possible the same economic and practical effect.
This Agreement shall be binding on all parties' respective assigns and successors.
Facsimile copies of this Agreement, with signatures, shall be given the same legal effect as an original with original signatures.
And in witness, the parties sign on the day and date first above written:
For Chief James E. Billie Craig Talesman Turnkey Capital Inc. Sign: /s/ Chief James E. Billie /s/ Craig Talesman /s/ Neil Swartz Name: Craig Talesman Neil Swartz Title: Chief Executive Officer [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | 1.
2.
2.1
2.2
3.
3.1
3.2
4.
4.1
EXHIBIT 1.1 Strategic Alliance Agreement
This Agreement is made and entered into this 30th day of June 2017,
Between: Turnkey Capital Inc., having its office located at 2929 E. Commercial Blvd, Suite PH-D, Ft. Lauderdale, Florida, hereinafter referred to as "TKCI";
And:
A Seminole Indian Company to be formed by Former Seminole Tribal Chairman James E. Billie and Craig Talesman, having an office located at 1800 Frank Huff Road, Seminole Reservation, Okeechobee, FL 34974, hereinafter referred to as "SIC".
Overview
The purpose and intent of this strategic alliance is to combine the resources and talents of, TKCI and SIC, in order to take advantage of every opportunity permitted by tribal sovereignty to create revenue streams in multiple areas in conjunction with operating partners that have existing marketing and customers in place, thereby limiting the capital requirements and risk. New marketing advantages based upon competitive pricing, cross marketing and new revenue streams from expansion into other industries will grow the business beyond anything previously imagined. The structure may also be used for additional compatible acquisitions which will also fuel growth. TKCI believes that structuring operations with Tribal Sovereignty will deliver the financial advantages of operating in a tax free environment with limited liability, plus other benefits such as permit and zoning ease, supporting an ideal structure for investment capital and successful entrepreneurial ventures.
Term
The term of this Agreement is twenty-four (24) months. The Agreement may be renewed, subject to mutual written approval.
Notwithstanding the completion, expiration or termination of this Agreement, the indemnities warranties and undertakings contained or referred to in this Agreement shall continue to subsist for as long as may be necessary for the purpose of giving effect to each one and every one of them.
TKCI Committments
TKCI shall establish a wholly-owned subsidiary (the "Holding Company") for the sole purpose of conducting and developing business on behalf of this alliance. The utilization of this subsidiary will provide for separate record keeping, reporting and tracking of all business related to this agreement.
In addition to capital recruitment functions, TKCI shall perform all of the functions and accept all of the responsibilities of the position of Chief Financial Officer including but not limited to management of accounts receivable and accounts payable, interfacing with Holding Company accountants on tax matters, interfacing with Holding Company accountants and lawyers on regulatory and compliance matters, and all other tasks typically and reasonably associated with the post and position of Chief Financial Officer.
Committments and Rights of SIC
SIC acknowledges and agrees that the ability of TKCI to render its services is uniquely dependent upon
4.2
4.3
4.4
4.5
4.6
4.7
5.
5.1
5.1.1
5.1.2
5.2
5.5.1
5.5.2
5.3
5.4
the cooperation and provision of information to TKCI by Chief James E. Billie and Craig Talesman for SIC. In the event that information is required, it shall be provided in writing.
SIC, represented by Chief James E. Billie and Craig Talesman, will assist in the closing of the transactions by: 1) participating in meetings with key decision makers, providing process overview, and describing case histories of similarly situated projects; and 2) providing advice on issues such as i) location; (ii) deal structure; (iii) funding; (iv) timing/phasing; (v) cash flow/revenue collection issues; and (vi) other major implementation issues.
SIC shall allow TKCI to review and analyze all business opportunities that could be mutually beneficial to TKCI and SIC within the time frame of this alliance.
SIC, represented by Chief James E. Billie and Craig Talesman, will assist in the finalization of project structuring plans geared toward maximizing all available revenue streams.
SIC, represented by Chief James E. Billie and Craig Talesman, will provide access to other opportunities.
The decision to join this alliance is at the absolute discretion of Chief James E. Billie and Craig Talesman. TKCI affirms that it shall not have any claim towards SIC if the management decides not to sign the agreement in the investigation stage, and before any agreements are signed, for any reasons whatsoever.
SIC may try to locate, or authorize others to locate potential investors who are not Reserved Investors (or Rejected Investors), and SIC may accept investments from such other investors, without incurring any liability towards TKCI
Fees and Financial Structuring
A wholly-owned subsidiary (the "Holding Company") shall be established by TKCI to accomplish the following:
To hold the assets and liabilities of the TKCI/SIC alliance and provide for separate management of the alliance business operations.
Operating capital may be raised and a growing shareholder base may be established to support future expansion.
Net revenue from business operations created by Holding Company for the alliance will be distributed by Holding Company equally - 50/50 - to TKCI and SIC:
SIC's original business concepts and plans, as well as opportunities brought to the table through its connections, and third-party contracts, are ways that we anticipate business could be generated, and revenues created; TKCI's advisory and management services and capital resources will provide the critical structure and business mechanism to carry concepts through to revenue. Turnkey Capital Inc. (TKCI) will reserve ten percent (10%) of the shares of TKCI for SIC. These shares will be issued once an exclusivity agreement is reached. Once the Holding Company is raising funds and generating revenue, the parties will negotiate a monthly fee.
6
7.
8. 8.1
8.2
9. 9.1
9.2
9.3
Confidentiality and non-compete During the term of this Agreement and for one (1) year thereafter, TKCI will keep in confidence, not reveal, not use and not allow or assist others to use, any information marked "Confidential" received from or through SIC in the context of its activities hereunder, except as authorized in writing by SIC. However, TKCI may assume that unless SIC specifically advises it to the contrary, in writing, with respect to an item of information, it may reasonably make such information available to third parties that TKCI is attempting to introduce to SIC. Such information includes, but is not limited to SIC's business plans and proprietary disclosures. The above provisions will survive the termination of this Agreement, except they will not apply to information that (i) is in the public domain or later becomes available to the public through no breach of this Agreement by either party; (ii) is obtained by either party from a third party who had the legal right to disclose the information to that party; (iii) is already in the possession of the receiving party on the date this Agreement becomes effective; (iv) is independently developed by either party or (v) is required to be disclosed by law, government regulation, or court order.
Termination This Agreement may be terminated early if mutually agreed to by both parties in writing, or for cause, which is defined as conviction of either party of a criminal offense, actions in bad faith, and knowing or intentional misconduct, failure to perform as determined by SIC, or a material breach of this Agreement. The expiration or early termination of this Agreement shall not affect any of its provisions which are expressed to operate or have an effect afterwards or any right of action already accrued to either party in respect of any breach by the other party.
Warranties and Indemnification SIC represents and warrants to TKCI that the undersigned are duly authorized to execute and enter into this Agreement, and that all information relating to SIC furnished by Chief James E. Billie and Craig Talesman, or its other representatives, to TKCI will be complete, accurate and not misleading.
Each party ("the Defaulting party") shall indemnify the other party ("the Innocent party") and keep the Innocent Party indemnified and harmless from and against any claims brought against the Innocent Party as a result of any acts or omissions of the Defaulting Party, whether such acts or omissions relate to the Defaulting Party's tasks under this Agreement or not. The Defaulting Party's liability under this provision shall extend to legal fees and to court and/or arbitration expenses, as the case may be as well as any other expenses incurred by the Innocent Party in the course of defending and/or handling and/or settling such claim.
Strategic Alliance TKCI is performing under this Agreement as a Strategic Alliance member and is not a legal or implied agent or employee of SIC. This Agreement does not create agency or employment relationship between the parties hereto.
TKCI shall not, by reason of this Agreement or the performance of the services delineated herein, be or be deemed to be, an employee of SIC, and TKCI shall have no power to enter into any agreement on behalf of, or otherwise bind SIC. Without limiting the foregoing, TKCI shall not enter into any contract or commitment on behalf of SIC.
SIC acknowledges and agrees that TKCI shall have no liability resulting from TKCI's failure to obtain any financing for any of its programs or business concepts. Neither party shall have any claim whatsoever against the other if an investment or a sales opportunity was lost because of any of the other party's acts or omissions.
9.4
9.5
10. 10.1 10.2
10.3
11. 11.1
11.2
11.3
11.4
11.5
SIC understands that TKCI is not acting as a broker-dealer or dealer in securities with respect to any transaction contemplated hereunder, and that any securities which may be sold in respect to any such transaction are being sold directly by or to SIC, to or by TKCI parties to such transaction. SIC acknowledges and agrees that no liability will be attributed to TKCI in connection with the issuance of any equity or securities. Any fees due to TKCI are to be paid solely as finder's fee and as remuneration for other services provided for under this Agreement.
TKCI will have First Right of Refusal with regard to any sale or disposition of any part or the whole of companies or projects developed in relationship with this alliance.
Arbitration This Agreement shall be governed by the laws of the State of Florida. Any disputes arising under or in connection with the validity, interpretation and performance of this Agreement that cannot be resolved amicably by the parties shall be settled in arbitration before a single arbitrator. If arbitration fails to render a mutually agreement resolution the Courts of the State of Florida will be deemed to have jurisdiction. In addition to all other remedies provided in this Agreement, the prevailing party shall be entitled to all costs and expenses reasonably incurred as a result of said breach, including arbitration and court costs, and reasonable attorney's fees.
Miscellaneous This Agreement, together with any added Appendices, constitutes the entire agreement between the parties with respect to its subject matter and supersedes any prior agreement. This Agreement may be changed only by mutual agreement between the parties, expressed in writing.
All notices under this Agreement shall be in writing and shall be deemed given if delivered to the party personally, or five (5) days after sent by registered airmail or by an express courier, as well as delivery by confirmed facsimile transmission or confirmed electronic mail. The addresses for notices given under this Agreement shall be those provided above.
If any provision of this Agreement is held by an arbitrator to be invalid, void or unenforceable, the remaining provisions shall nevertheless continue in full force, and the stricken provision shall be replaced by a valid, legal and enforceable provision having as nearly as possible the same economic and practical effect.
This Agreement shall be binding on all parties' respective assigns and successors.
Facsimile copies of this Agreement, with signatures, shall be given the same legal effect as an original with original signatures.
And in witness, the parties sign on the day and date first above written:
For Chief James E. Billie Craig Talesman Turnkey Capital Inc. Sign: /s/ Chief James E. Billie /s/ Craig Talesman /s/ Neil Swartz Name: Craig Talesman Neil Swartz Title: Chief Executive Officer | Highlight the parts (if any) of this contract related to "Exclusivity" that should be reviewed by a lawyer. Details: Is there an exclusive dealing commitment with the counterparty? This includes a commitment to procure all “requirements” from one party of certain technology, goods, or services or a prohibition on licensing or selling technology, goods or services to third parties, or a prohibition on collaborating or working with other parties), whether during the contract or after the contract ends (or both). | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Non-Disparagement" that should be reviewed by a lawyer. Details: Is there a requirement on a party not to disparage the counterparty?
Context: EXHIBIT B
COOPERATION AGREEMENT
This Agreement dated March 13, 2014 is by and between JANA Partners LLC ("JANA") and URS Corporation (the "Company"). In consideration of and reliance upon the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1. Representations and Warranties of the Company. The Company represents and warrants to JANA that this Agreement has been duly authorized, executed and delivered by the Company, and is a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.
2. Representations and Warranties of JANA. JANA represents and warrants to the Company that this Agreement has been duly authorized, executed and delivered by JANA, and is a valid and binding obligation of JANA, enforceable against JANA in accordance with its terms. As of the date of this Agreement, JANA beneficially owns 6,745,623 shares of the Company's common stock and has voting authority over such shares.
3. Board Nomination and Other Company Matters.
(a) In accordance with the Company's ByLaws and Delaware law, the Company agrees that, effective as of the next meeting (the "March Board Meeting") of the Board of Directors of the Company (the "Board"), which shall be held not later than March 27, 2014, and prior to taking any other formal action at such meeting, the Board will:
(1) increase the size of the Board to fourteen (14) members; and
(2) appoint Diane C. Creel, William H. Schumann, III, David N. Siegel and V. Paul Unruh (together, the "JANA Nominees") (other than in the case of the refusal or inability of any such person to serve, in which case, the Board shall appoint his/her substitute chosen in accordance with Section 3(c)) as Company directors to fill the vacancies created thereby and to have the same rights of participation in all other matters undertaken at the March Board Meeting as the other Company directors; provided, however, that as a condition to the appointment of each JANA Nominee, such JANA Nominee shall have completed and executed the Company's 2014 Questionnaire for Potential Director Nominees and the Director Nominee Representation and Agreement, provided that such documents have not been amended in any material respect from the versions provided to JANA prior to the date of this Agreement, and have agreed to comply with all policies, codes of conduct, confidentiality obligations and codes of ethics applicable to all of the Company's directors, including the Company's Code of Business Conduct, to provide the information regarding themselves that is required to be disclosed for candidates for directors and directors in a proxy statement under the federal securities laws of the United States of America and/or applicable New York Stock Exchange rules and regulations, and to provide such other customary information as reasonably requested by the Company; and provided, further that any JANA Nominee may participate in the March Board Meeting telephonically if unable to attend in person.
(b) The Company agrees that:
(1) the Board will not approve any material new transactions prior to the March Board Meeting;
(2) at the 2014 annual meeting of the Company's shareholders (the "2014 Annual Meeting"), the Board will nominate the JANA Nominees (other than in the case of the resignation, refusal or inability of any such person to serve, in which case, the Board shall nominate his/her substitute chosen in accordance with Section 3(c)), together with the other persons included in the Company's slate of nominees for election as director at the 2014 Annual Meeting in accordance with Section 3(d), as directors of the Company, in each case with a term expiring at the 2015 annual meeting of the Company's shareholders (the "2015 Annual Meeting");
(3) the Board will recommend that the shareholders of the Company vote to elect the JANA Nominees as directors of the Company at the 2014 Annual Meeting;
(4) the Company shall use its reasonable best efforts (which shall include the solicitation of proxies) to obtain the election of the JANA Nominees at the 2014 Annual Meeting (it being understood that such efforts shall be not less than the efforts used by the Company to obtain the election of any other independent (as determined under Section 303A of the New York Stock Exchange's Listed Company Manual) director nominee nominated by it to serve as a director on the Board at the 2014 Annual Meeting); and
(5) two individuals who are Company directors as of the date of this Agreement (other than Martin M. Koffel, or in addition to Mr. Koffel if applicable under Section 4(b) of this Agreement) will not seek re-election to the Board at the 2014 Annual Meeting, and the Company shall not seek to fill such vacancies.
(c) The Company agrees that if any of the JANA Nominees resigns as a director or otherwise refuses to or is unable to serve as a director at any time prior to the 2015 Annual Meeting, including as a result of death or disability, JANA shall be entitled to designate a replacement director who shall be independent of JANA, would be considered an independent director of the Company under Section 303A of the New York Stock Exchange's Listed Company Manual, is reasonably acceptable to the Board as a replacement director and has a comparable amount of business experience, although such experience need not be in the same industry or industries, and is in equally good standing in all material respects, as the JANA Nominee being replaced. For the avoidance of doubt, the substitute director shall thereafter be deemed a JANA Nominee for purposes of this Agreement and be entitled to the same rights and subject to the same requirements under this Agreement applicable to the resigning JANA Nominee prior to his or her resignation, and such person shall be appointed to the Board to serve the unexpired term, if any, of such JANA Nominee.
(d) Other than the JANA Nominees, the Board will only nominate eight (8) individuals for election at the 2014 Annual Meeting, including Mr. Koffel subject to Section 4(b) of this Agreement.
(e) Promptly following the 2014 Annual Meeting, the Board will decrease the size of the Board to twelve (12) members. Until the 2015 Annual Meeting, the Company shall not increase the size of the Board in excess of twelve (12) members, and shall not decrease the size of the Board if such decrease would require the resignation of one or more of the JANA Nominees. Other than for vacancies filled pursuant to Section 3(c) or arising as a result of a breach of this Agreement by the Company, nothing in this Agreement shall prevent the Company from filling all vacancies in accordance with the By-Laws of the Company.
(f) The Company will take appropriate action so that, prior to the 2015 Annual Meeting, its director change of position policy does not require a JANA Nominee to resign by reason of any material change in his or her primary job responsibility or position held at the time such JANA Nominee was appointed to the Board.
4. CEO Succession.
(a) At the March Board Meeting, the Company shall appoint two JANA Nominees chosen by JANA to the CEO Succession Committee of the Board (the "CEO Succession Committee") and shall appoint such JANA Nominees to any other committee currently or in the future designated to review or oversee the selection process for a successor to Mr. Koffel as chief executive officer or substantially similar position (the "New CEO"), and shall not otherwise increase the size of the CEO Succession Committee or any such other committee. In the event of the replacement as set forth in Section 3(c) of any JANA Nominee appointed to the CEO Succession Committee pursuant to this Section 5, his or her successor shall be promptly appointed to the committee seat vacated by such former director to serve until the 2015 Annual Meeting. The CEO Succession Committee and any other committee currently or in the future designated to review or oversee the selection process for the New CEO shall not take any material action prior to the March Board Meeting.
(b) In order to ensure an orderly transition, Mr. Koffel may in his sole discretion continue (including, for the avoidance of doubt, after the 2014 Annual Meeting) as the Chief Executive Officer, Chairman of the Board and a director of the Company during the selection process for the New CEO until the Board shall appoint the New CEO, which shall not be later than the earlier of December 31, 2014, or Mr. Koffel's voluntary resignation from such positions; provided that Mr. Koffel will resign as a director of the Company and the Chairman of the Board upon the effectiveness of the Board's appointment of the New CEO; provided, further, that nothing contained herein is intended to modify any employment agreement, equity award, retirement plan or other pre-existing obligation of the Company to Martin Koffel or to impose any additional obligations on Martin Koffel (beyond the obligation to resign as provided in this Section 4(b)). The Board shall appoint the New CEO as a director of the Company with a term expiring at the Company's next annual meeting after his or her appointment.
5. Compensation Committee. At the March Board Meeting, the Company shall appoint one JANA Nominee chosen by JANA (provided that such JANA Nominee must have prior experience serving on the Compensation Committee of a public company incorporated in the United States and listed for trading on the New York Stock Exchange or NASDAQ) to the Compensation Committee of the Board (the "Compensation Committee"), and shall not otherwise increase the size of the Compensation Committee until the 2015 Annual Meeting. In the event of the replacement as set forth in Section 3(c) of any JANA Nominee appointed to the Compensation Committee pursuant to this Section 5, his or her successor shall be promptly appointed to the committee seat vacated by such former director to serve until the 2015 Annual Meeting. The Compensation Committee and any other committee currently or in the future designated to review or oversee compensation shall not take any material action prior to the March Board Meeting.
6. Value Creation Committee and Other Matters.
(a) At the March Board Meeting, the Board shall establish a new committee of the Board (the "Value Creation Committee"), whose purpose will be to evaluate all options for enhancing shareholder value, including by (i) engaging Bank of America Merrill Lynch, or if Bank of America Merrill Lynch is unavailable or the Company is unable to reach acceptable terms with Merrill Lynch Bank of America despite using reasonable best efforts to do so, another investment bank mutually agreeable to the Company and JANA, as promptly as practicable, to review all options for enhancing value, including by conducting a strategic review of the Company's business, operations and capital
structure; (ii) engaging a cost consultant, mutually agreeable to the Company and JANA, to conduct a cost review commencing with the completion of the investment banker review described in clause (ii) above; and (iii) reviewing the Company's management compensation structure to enhance alignment with shareholder value creation. There shall be four (4) members of the Value Creation Committee, two (2) of whom shall be JANA Nominees chosen by JANA, and the Board shall not increase the size of the Value Creation Committee until the 2015 Annual Meeting, if still in existence at such time. In the event of the replacement as set forth in Section 3(c) of any JANA Nominee appointed to the Value Creation Committee pursuant to this Section 5, his or her successor shall be promptly appointed to the committee seat vacated by such former director to serve until the 2015 Annual Meeting
(b) The Company hereby agrees that it will not make any acquisitions during the Cooperation Period, except for ordinary course acquisitions individually under $10 million (not to exceed $30 million in the aggregate) or acquisitions that a majority of the JANA Nominees have recommended.
7. Cooperation.
(a) JANA agrees that, from the date of this Agreement until the earliest of (i) the date that is thirty (30) calendar days prior to any applicable deadline by which a shareholder must give notice to the Company of its intention to nominate a director for election at or bring other business before the 2015 Annual Meeting under the Company's ByLaws and (ii) any material breach of this Agreement by the Company (provided that the Company shall have three (3) business days following written notice from JANA of material breach to remedy such material breach if capable of remedy) (such period, the "Cooperation Period"), neither it nor any of its Affiliates or Associates will in any manner, directly or indirectly, make, or cause to be made, or in any way encourage any other person to make or cause to be made, any statement or announcement that relates to and constitutes an ad hominem attack on, or relates to and otherwise disparages, the Company, any of its officers or directors or any person who has served as an officer or director of the Company, including: (i) in any document or report filed with or furnished to the Securities and Exchange Commission (the "SEC") or any other governmental agency, (ii) in any press release or other publicly available format or (iii) to any journalist or member of the media (including without limitation, in a television, radio, newspaper or magazine interview), or otherwise; provided, that if the Company makes any material announcement prior to the March Board Meeting, JANA will be permitted to make objective statements that solely reflect JANA's view, as a shareholder, with respect to such announcement.
(b) The Company agrees that, from the date of this Agreement until the earliest of (i) the date that is thirty (30) calendar days prior to any applicable deadline by which a shareholder must give notice to the Company of its intention to nominate a director for election at or bring other business before the 2015 Annual Meeting under the Company's ByLaws and (ii) any material breach of this Agreement by JANA (provided that JANA shall have three (3) business days following written notice from the Company of material breach to remedy such material breach if capable of remedy), neither it nor any of its Affiliates or Associates will in any manner, directly or indirectly make, or cause to be made, or in any way encourage any other person to make or cause to be made, any statement or announcement that relates to and constitutes an ad hominem attack on, or relates to and otherwise disparages, JANA, any of its members, officers or directors or any person who has served as a member, officer or director of JANA, including: (i) in any document or report filed with or furnished to the SEC or any other governmental agency, (ii) in any press release or other publicly available format or (iii) to any journalist or member of the media (including without limitation, in a television, radio, newspaper or magazine interview), or otherwise.
(c) The limitations set forth in Sections 7(a) and 7(b) shall not prevent either party from responding to any public statement made by the other party of the nature described in Sections 7(a) and 7(b) if such statement by the other party was made in breach of this Agreement.
(d) During the Cooperation Period, JANA shall cause all shares of the Company's capital stock ("Shares") beneficially owned, directly or indirectly, by it, or by any of its Affiliates or Associates (including without limitation all Shares beneficially owned as of the respective record dates for the 2014 Annual Meeting and as of the record dates for any special meeting of shareholders) over which it exercises or has voting authority, to be present for quorum purposes and to be voted, at such meetings or at any adjournments or postponements thereof, in favor of the current members of the Board (including the JANA Nominees) that will be up for election at such meetings, and not to submit any proposal for consideration at, or bring any other business before, the 2014 Annual Meeting or initiate, encourage or participate in any "withhold" or similar campaign with respect to the election of directors at the 2014 Annual Meeting and shall not permit any of its Affiliates or Associates to do any of the foregoing or publicly or privately encourage or support any other stockholder to take any such actions.
(e) During the Cooperation Period, JANA will not, and shall cause its Affiliates and Associates to not, directly or indirectly, without the prior written consent of the Company: (i) acquire, seek or propose (publicly or otherwise) to acquire, beneficial ownership, directly or indirectly, of any additional Shares or rights or options to acquire any additional Shares if such acquisition would cause JANA's beneficial ownership to exceed 14.9% of the Company's common stock; (ii) publicly seek or propose to influence or control the management or policies of the Company, seek or propose (publicly or otherwise) to obtain representation on the Board (except as set forth herein), or solicit, or participate in the solicitation of, any proxies or consents with respect to any securities of the Company, or publicly request permission to do any of the foregoing, or take any action which would, or would reasonably be expected to, require public disclosure regarding any of the types of matters set forth in this clause (ii); (iii) submit (publicly or otherwise) a proposal for, or offer of (with or without conditions) any extraordinary transaction (including a tender offer, exchange offer, merger, acquisition or consolidation) involving the Company or its securities or assets or take any action which would, or would reasonably be expected to, require public disclosure regarding any of the types of matters set forth in this clause (iii); (iv) request (publicly or otherwise) a special meeting of the Company's shareholders or submit, or participate in, any shareholder proposal to the Company or any "shareholder access" proposal that may be adopted by the SEC; or (v) encourage, assist or enter into any discussions, negotiations, arrangements or understandings with any third party with respect to any of the foregoing, or otherwise form, join or in any way participate in a "group" (as defined in Section 13(d)(3) of the Exchange Act) in connection with any of the foregoing. JANA also agrees not to, and to cause its Affiliates and Associates not to, request during the Cooperation Period that the Company (or its directors, officers, employees or agents), directly or indirectly, amend or waive any provision of this Section (including this sentence), publicly or in a manner that would require public disclosure of such request.
(f) Nothing in this Agreement shall be deemed to limit JANA's ability to provide its views privately to the Board on any matter or to privately request a waiver of any provision of this Agreement, provided that such actions are not reasonably expected to require public disclosure of such actions.
8. Public Announcement and SEC Filing.
(a) JANA and the Company shall announce this Agreement and the material terms hereof including the terms of Section 6 by means of a joint press release in the form attached hereto as Exhibit A (the "Press Release") as soon as practicable but in no event later than 9:00 a.m., New York City time, on March 17, 2014.
(b) JANA shall promptly prepare and file an amendment (the "13D Amendment") to its Schedule 13D with respect to the Company filed with the SEC on February 27, 2014 reporting the entry into this Agreement and amending applicable items to conform to its obligations hereunder. The 13D Amendment shall be consistent with the Press Release and the terms of this Agreement. JANA shall provide the Company with reasonable opportunity to review and comment upon the 13D Amendment prior to filing, and shall consider in good faith any changes proposed by the Company necessary to cause such 13D Amendment to comply with this Agreement.
9. Definitions. For purposes of this Agreement:
(a) the terms "Affiliate" and "Associate" shall have the respective meanings set forth in Rule 12b2 promulgated by the SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act");
(b) the terms "beneficial owner" and "beneficially own" shall have the same meanings as set forth in Rule 13d3 promulgated by the SEC under the Exchange Act except that a person shall also be deemed to be the beneficial owner of all Shares which such person has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to the exercise of any rights in connection with any securities or any agreement, arrangement or understanding (whether or not in writing), regardless of when such rights may be exercised and whether they are conditional, and all Shares which such person or any of such person's Affiliates or Associates has or shares the right to vote or dispose; and
(c) the terms "person" or "persons" shall mean any individual, corporation (including notforprofit), general or limited partnership, limited liability or unlimited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature.
10. Notices. All notices, consents, requests, instructions, approvals and other communications provided for herein and all legal process in regard hereto shall be in writing and shall be deemed validly given, made or served, if (a) given by telecopy and email, when such telecopy is transmitted to the telecopy number set forth below and sent to the email address set forth below and the appropriate confirmation is received or (b) if given by any other means, when actually received during normal business hours at the address specified in this Section:
if to the Company: URS Corporation 600 Montgomery Street, 26th Floor San Francisco, California 94111 Attention: General Counsel Facsimile: (415) 834-1506 Email: joseph.masters@urs.com with a copy to: Wachtell, Lipton, Rosen & Katz 51 W. 52nd Street New York, NY 10019 Attention: David E. Shapiro Facsimile: (212) 403-2000 Email: DEShapiro@wlrk.com
if to JANA: JANA Partners LLC 767 Fifth Avenue, 8th Floor New York, New York 10153 Attention: General Counsel Facsimile: (212) 455-0901 Email: jennifer.fanjiang@janapartners.com with a copy to: Schulte Roth & Zabel 919 Third Avenue New York, NY 10022 Attention: Marc Weingarten Facsimile: (212) 593-5955 Email: marc.weingarten@srz.com
11. Specific Performance; Remedies.
(a) In furtherance and not in limitation of Section 11(b), the parties hereto shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in addition to any other remedy to which they are entitled at law or in equity. FURTHERMORE, EACH OF THE PARTIES HERETO (A) IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY AND (B) AGREES TO WAIVE ANY BONDING REQUIREMENT UNDER ANY APPLICABLE LAW, IN THE CASE ANY OTHER PARTY SEEKS TO ENFORCE THE TERMS BY WAY OF EQUITABLE RELIEF. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES OF SUCH STATE.
(b) Notwithstanding any other Section in this Agreement and without limiting any other remedies the Company may have in law or equity, in the event that JANA (or any Affiliate or Associate of JANA) fails to perform or otherwise fulfill its obligations set forth in Section 7 in any material respect, and shall not have remedied such failure or non-fulfillment if capable of being remedied or fulfilled within three (3) business days following written notice from the Company of such failure or non-fulfillment, the Company shall not be required to perform or fulfill its obligations set forth in Sections 3, 4, 5 or 7 and the JANA Nominees shall each promptly tender their resignation as a member of the Board effective immediately upon its acceptance by the Company. As a condition to nomination and/or appointment to the Board pursuant to this Agreement, each JANA Nominee shall have executed an irrevocable letter agreement with the Company in which each such JANA Nominee shall agree to resign if required in accordance with the immediately preceding sentence.
12. Severability. If at any time subsequent to the date hereof, any provision of this Agreement shall be held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality or unenforceability of such provision shall have no effect upon the legality or enforceability of any other provision of this Agreement.
13. Termination. This Agreement shall terminate on the expiry of the Cooperation Period.
14. Counterparts. This Agreement may be executed in two (2) or more counterparts which together shall constitute a single agreement.
15. No Third Party Beneficiaries. This Agreement is solely for the benefit of the parties hereto and is not enforceable by any other persons.
16. No Waiver. No failure or delay by either party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial waiver thereof preclude any other or further exercise thereof or the exercise of any other right or remedy hereunder.
17. Entire Understanding. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and may be amended only by an agreement in writing executed by the parties hereto.
18. Interpretation and Construction.
(a) The Company acknowledges that its Board is bound by the obligations of the Company hereunder.
(b) Each of the parties hereto acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said counsel. Each party and its counsel cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted or prepared it is of no application and is hereby expressly waived by each of the parties hereto, and any controversy over interpretations of this Agreement shall be decided without regard to events of drafting or preparation.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized signatories of the parties as of the date hereof.
URS CORPORATION By: /s/ Martin M. Koffel Name: Martin M. Koffel Title: Chairman of the Board and Chief Executive Officer
JANA PARTNERS LLC By: /s/ Barry Rosenstein Name: Barry Rosenstein Title: Managing Partner
EXHIBIT A
URS CORPORATION ADDS FOUR NEW INDEPENDENT DIRECTORS TO BOARD JANA Partners Agrees to Support All Nominees at 2014 Annual Meeting Board to Establish Value Creation Committee
SAN FRANCISCO, CA - March [XX], 2014 - URS Corporation (NYSE: URS) today announced that it will add four new independent directors to its Board of Directors, effective March 27, 2014. These four directors will be on URS' slate of directors nominated for election to the Board of Directors at the Company's 2014 Annual Meeting, along with eight incumbents, pursuant to an agreement with JANA Partners LLC. The four new directors will be: Diane C. Creel, William H. Schumann, III,
David N. Siegel and V. Paul Unruh. Biographical information on the new directors is provided below.
Current directors [A] and [B] have advised the Company that they do not plan to stand for re-election at the 2014
Annual Meeting. Therefore, from March 27, 2014 until the Annual Meeting, the Board will increase to fourteen members from the
current ten, but will be comprised of twelve directors following the 2014 Annual Meeting.
Under the agreement with JANA, URS will also form a Value Creation Committee of the Board that will evaluate all
options for enhancing shareholder value, including by engaging an investment bank to conduct a strategic review of the
Company's business segments, operations and capital structure, and reviewing the Company's management compensation structure to enhance alignment with shareholder value creation. The Committee will be comprised of four members, two of whom
will be new directors.
Martin M. Koffel, Chairman and Chief Executive Officer of URS, stated: "[A] and [B] are superb directors and have contributed much to our success, but each has decided for his own reasons not to stand for re-election. I and their fellow board
members look forward to continuing to work with them until the Annual Meeting but will take this opportunity to express our
gratitude for their service, sound counsel and friendship." Koffel continued: "With [A]'s and [B]'s decisions to stand down and the expansion of our Board, we are adding four new, highly qualified independent directors to the Board on March 27 and we will nominate these directors for election at the
2014 Annual Meeting. All are accomplished business leaders with experience
relevant to the URS enterprise, and we are confident that they will prove to be valuable additions as we continue working to build
value for our stockholders." As previously disclosed, the URS Board has been engaged in succession planning for the Company's Chief Executive Officer position and has appointed a CEO Succession Committee comprised of independent directors. Two of the new directors
will promptly be appointed to this Committee. One of the new directors will also be appointed to the Compensation Committee.
Said Koffel, "Having led URS for more than 25 years, I had previously communicated to the Board that it was important to have my successor in place in 2014, and our goal is to do just that. The Board has asked me to remain as Chairman and Chief
Executive Officer until a successor is named, which I expect to do unless circumstances change." Barry Rosenstein, Managing Partner of JANA Partners, said, "We have appreciated our constructive dialogue with Martin Koffel and his team. We share their view that the Company is significantly undervalued, particularly given its strong cash
flows and the valuable work Martin and his team have done over many years to ensure that URS is well-positioned to meet the
needs of its clients. I am confident that the addition of four highly-qualified directors and the formation of the Value Creation
Committee will help unlock this value for all shareholders." JANA Partners currently owns approximately 9.7 percent of the Company's common shares outstanding. URS' incumbent directors expected to be nominated for reelection at the 2014 Annual Meeting are: [C]; [D]; [E]; [F]; [G]; [H]; [I]; and [J].
The director nominations will be included in the Company's 2014 proxy statement and submitted for stockholder approval at the Company's 2014 Annual Meeting, [to be held on [date]]. The Company expects to file its proxy materials for the
2014 Annual Meeting [in the near future] and encourages stockholders to review the proxy materials when they become available.
The agreement between URS and JANA Partners will be filed on Form 8-K with the Securities and Exchange
Commission. The agreement includes certain standstill restrictions that will be in effect until 30 days prior to the deadline by which
a shareholder must give notice to the Company of its intention to nominate a director at or bring other business before the 2015
Annual Meeting. JANA Partners has committed to
vote the shares that it controls in support of URS' twelve director nominees at the Company's 2014 Annual Meeting. Wachtell, Lipton, Rosen & Katz and Cooley LLP are serving as legal advisors to URS.
Biographical Information on New Director Nominees
Diane Creel, 65
Ms. Diane Creel retired as Chairman, Chief Executive Officer and President of Ecovation, Inc., a subsidiary of Ecolab
Inc. and a waste stream technology company using patented technologies, in September 2008. Ms. Creel had held such positions
since 2003. Previously, Ms. Creel served as Chief Executive Officer and President of Earth Tech, an international consulting
engineering firm, which is now part of AECOM, from 1992 to 2003. Ms. Creel has served on the ATI Board of Directors since
1996 and as Lead Independent Director since the position was established in September 2011. Ms. Creel is also a member of
the Boards of Directors of The Timken Company (since 2012) and Enpro Industries, Inc. (since 2009). She also served on the
Board of Directors of Goodrich Corporation from 1997 to 2012 and Foster Wheeler Ltd. until 2008.
William H. Schumann, III, 63
Mr. William H. Schumann, III, has served as the non-executive Chairman of the Board of Directors of Avnet, Inc., a
distributor of electronic components, since November 2012 and has been on the board since 2010. He retired in August 2012 as
Executive Vice President of FMC Technologies, Inc., a provider of technology solutions for the energy industry. He served as
Chief Financial Officer of FMC Technologies from 2001 to 2011 and Chief Financial Officer of FMC Corporation (the
predecessor to FMC Technologies) from 1999 to 2001. Mr. Schumann served on the board of UAP Holdings, an agricultural
chemical distributor, from 2005 to 2008 and Great Lakes Advisors, a registered investment advisor, from 1992 to 2011. Mr.
Schumann has been a director of AMCOL International Corporation, a producer of specialty materials and related products and
services for industrial and consumer markets, since 2012 and McDermott International, Inc., an engineering and construction
company, since 2012.
David N. Siegel, 52
David N. Siegel is President & CEO of Frontier Airlines and serves on its board of directors. He was a Director of
Republic Airways, from October 2009 to December 2013, including serving as Lead Independent Director from May 2011 until
January 2012 when he was appointed President & CEO of Frontier, at the time a wholly-owned subsidiary of Republic. Prior to
joining Frontier, Mr. Siegel was Chairman & CEO of XOJET, a private aviation company, controlled by TPG Capital. From June
2004 to May 2008, Mr. Siegel was Chairman and Chief Executive Officer, and from June 2008 to April 2009 Chairman, of
gategroup Holding AG, the world's largest independent airline catering, hospitality and logistics company. Prior to that, Mr. Siegel
served as President, Chief Executive Officer and member of the Board of US Airways Group, Inc., and US Airways, Inc., the
airline operating unit. Prior to US Airways, Mr. Siegel was Chairman and Chief Executive Officer of Avis Rent A Car System,
Inc., a subsidiary of Cendant Corp. Mr. Siegel also spent seven years at Continental Airlines in various senior management roles,
including President of its Continental Express subsidiary. Mr. Siegel is currently a member of the board of directors of gategroup
Holding AG, having served since June 2004.
V. Paul Unruh, 65
Mr. V. Paul Unruh retired as vice chairman of Bechtel Group, Inc. in June 2003. During his 25-year tenure he held a
number of management positions including treasurer, controller, and chief financial officer. He also served as president of Bechtel
Enterprises, the finance, development, and ownership arm, from 1997 to 2001. Unruh is also a certified public accountant. Mr.
Unruh is currently a member of the board of directors of Symantec Corporation, a provider of security, backup and availability
solutions, Move, Inc., a provider of real estate media and technology solutions, and Heidrick & Struggles International, Inc., a
provider of executive search and leadership consulting services. He also serves on the boards of two private companies.
URS Corporation (NYSE: URS) is a leading provider of engineering, construction, and technical services for public
agencies and private sector companies around the world. The Company offers a full range of program management; planning,
design and engineering;
systems engineering and technical assistance; construction and construction management; operations and maintenance; information
technology; and decommissioning and closure services. URS provides services for federal, oil and gas, infrastructure, power, and
industrial projects and programs. Headquartered in San Francisco, URS Corporation has more than 50,000 employees in a
network of offices in nearly 50 countries (www.urs.com).
[add FLS Tag]
# # # [/INST] ```json
{<answer_start>
"answer": "The Company agrees that, from the date of this Agreement until the earliest of (i) the date that is thirty (30) calendar days prior to any applicable deadline by which a shareholder must give notice to the Company of its intention to nominate a director for election at or bring other business before the 2015 Annual Meeting under the Company's ByLaws and (ii) any material breach of this Agreement by JANA (provided that JANA shall have three (3) business days following written notice from the Company of material breach to remedy such material breach if capable of remedy), neither it nor any of its Affiliates or Associates will in any manner, directly or indirectly make, or cause to be made, or in any way encourage any other person to make or cause to be made, any statement or announcement that relates to and constitutes an ad hominem attack on, or relates to and otherwise disparages, JANA, any of its members, officers or directors or any person who has served as a member, officer or director of JANA, including: (i) in any document or report filed with or furnished to the SEC or any other governmental agency, (ii) in any press release or other publicly available format or (iii) to any journalist or member of the media (including without limitation, in a television, radio, newspaper or magazine interview), or otherwise."
<answer_end>
}
``` </s> | EXHIBIT B
COOPERATION AGREEMENT
This Agreement dated March 13, 2014 is by and between JANA Partners LLC ("JANA") and URS Corporation (the "Company"). In consideration of and reliance upon the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1. Representations and Warranties of the Company. The Company represents and warrants to JANA that this Agreement has been duly authorized, executed and delivered by the Company, and is a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.
2. Representations and Warranties of JANA. JANA represents and warrants to the Company that this Agreement has been duly authorized, executed and delivered by JANA, and is a valid and binding obligation of JANA, enforceable against JANA in accordance with its terms. As of the date of this Agreement, JANA beneficially owns 6,745,623 shares of the Company's common stock and has voting authority over such shares.
3. Board Nomination and Other Company Matters.
(a) In accordance with the Company's ByLaws and Delaware law, the Company agrees that, effective as of the next meeting (the "March Board Meeting") of the Board of Directors of the Company (the "Board"), which shall be held not later than March 27, 2014, and prior to taking any other formal action at such meeting, the Board will:
(1) increase the size of the Board to fourteen (14) members; and
(2) appoint Diane C. Creel, William H. Schumann, III, David N. Siegel and V. Paul Unruh (together, the "JANA Nominees") (other than in the case of the refusal or inability of any such person to serve, in which case, the Board shall appoint his/her substitute chosen in accordance with Section 3(c)) as Company directors to fill the vacancies created thereby and to have the same rights of participation in all other matters undertaken at the March Board Meeting as the other Company directors; provided, however, that as a condition to the appointment of each JANA Nominee, such JANA Nominee shall have completed and executed the Company's 2014 Questionnaire for Potential Director Nominees and the Director Nominee Representation and Agreement, provided that such documents have not been amended in any material respect from the versions provided to JANA prior to the date of this Agreement, and have agreed to comply with all policies, codes of conduct, confidentiality obligations and codes of ethics applicable to all of the Company's directors, including the Company's Code of Business Conduct, to provide the information regarding themselves that is required to be disclosed for candidates for directors and directors in a proxy statement under the federal securities laws of the United States of America and/or applicable New York Stock Exchange rules and regulations, and to provide such other customary information as reasonably requested by the Company; and provided, further that any JANA Nominee may participate in the March Board Meeting telephonically if unable to attend in person.
(b) The Company agrees that:
(1) the Board will not approve any material new transactions prior to the March Board Meeting;
(2) at the 2014 annual meeting of the Company's shareholders (the "2014 Annual Meeting"), the Board will nominate the JANA Nominees (other than in the case of the resignation, refusal or inability of any such person to serve, in which case, the Board shall nominate his/her substitute chosen in accordance with Section 3(c)), together with the other persons included in the Company's slate of nominees for election as director at the 2014 Annual Meeting in accordance with Section 3(d), as directors of the Company, in each case with a term expiring at the 2015 annual meeting of the Company's shareholders (the "2015 Annual Meeting");
(3) the Board will recommend that the shareholders of the Company vote to elect the JANA Nominees as directors of the Company at the 2014 Annual Meeting;
(4) the Company shall use its reasonable best efforts (which shall include the solicitation of proxies) to obtain the election of the JANA Nominees at the 2014 Annual Meeting (it being understood that such efforts shall be not less than the efforts used by the Company to obtain the election of any other independent (as determined under Section 303A of the New York Stock Exchange's Listed Company Manual) director nominee nominated by it to serve as a director on the Board at the 2014 Annual Meeting); and
(5) two individuals who are Company directors as of the date of this Agreement (other than Martin M. Koffel, or in addition to Mr. Koffel if applicable under Section 4(b) of this Agreement) will not seek re-election to the Board at the 2014 Annual Meeting, and the Company shall not seek to fill such vacancies.
(c) The Company agrees that if any of the JANA Nominees resigns as a director or otherwise refuses to or is unable to serve as a director at any time prior to the 2015 Annual Meeting, including as a result of death or disability, JANA shall be entitled to designate a replacement director who shall be independent of JANA, would be considered an independent director of the Company under Section 303A of the New York Stock Exchange's Listed Company Manual, is reasonably acceptable to the Board as a replacement director and has a comparable amount of business experience, although such experience need not be in the same industry or industries, and is in equally good standing in all material respects, as the JANA Nominee being replaced. For the avoidance of doubt, the substitute director shall thereafter be deemed a JANA Nominee for purposes of this Agreement and be entitled to the same rights and subject to the same requirements under this Agreement applicable to the resigning JANA Nominee prior to his or her resignation, and such person shall be appointed to the Board to serve the unexpired term, if any, of such JANA Nominee.
(d) Other than the JANA Nominees, the Board will only nominate eight (8) individuals for election at the 2014 Annual Meeting, including Mr. Koffel subject to Section 4(b) of this Agreement.
(e) Promptly following the 2014 Annual Meeting, the Board will decrease the size of the Board to twelve (12) members. Until the 2015 Annual Meeting, the Company shall not increase the size of the Board in excess of twelve (12) members, and shall not decrease the size of the Board if such decrease would require the resignation of one or more of the JANA Nominees. Other than for vacancies filled pursuant to Section 3(c) or arising as a result of a breach of this Agreement by the Company, nothing in this Agreement shall prevent the Company from filling all vacancies in accordance with the By-Laws of the Company.
(f) The Company will take appropriate action so that, prior to the 2015 Annual Meeting, its director change of position policy does not require a JANA Nominee to resign by reason of any material change in his or her primary job responsibility or position held at the time such JANA Nominee was appointed to the Board.
4. CEO Succession.
(a) At the March Board Meeting, the Company shall appoint two JANA Nominees chosen by JANA to the CEO Succession Committee of the Board (the "CEO Succession Committee") and shall appoint such JANA Nominees to any other committee currently or in the future designated to review or oversee the selection process for a successor to Mr. Koffel as chief executive officer or substantially similar position (the "New CEO"), and shall not otherwise increase the size of the CEO Succession Committee or any such other committee. In the event of the replacement as set forth in Section 3(c) of any JANA Nominee appointed to the CEO Succession Committee pursuant to this Section 5, his or her successor shall be promptly appointed to the committee seat vacated by such former director to serve until the 2015 Annual Meeting. The CEO Succession Committee and any other committee currently or in the future designated to review or oversee the selection process for the New CEO shall not take any material action prior to the March Board Meeting.
(b) In order to ensure an orderly transition, Mr. Koffel may in his sole discretion continue (including, for the avoidance of doubt, after the 2014 Annual Meeting) as the Chief Executive Officer, Chairman of the Board and a director of the Company during the selection process for the New CEO until the Board shall appoint the New CEO, which shall not be later than the earlier of December 31, 2014, or Mr. Koffel's voluntary resignation from such positions; provided that Mr. Koffel will resign as a director of the Company and the Chairman of the Board upon the effectiveness of the Board's appointment of the New CEO; provided, further, that nothing contained herein is intended to modify any employment agreement, equity award, retirement plan or other pre-existing obligation of the Company to Martin Koffel or to impose any additional obligations on Martin Koffel (beyond the obligation to resign as provided in this Section 4(b)). The Board shall appoint the New CEO as a director of the Company with a term expiring at the Company's next annual meeting after his or her appointment.
5. Compensation Committee. At the March Board Meeting, the Company shall appoint one JANA Nominee chosen by JANA (provided that such JANA Nominee must have prior experience serving on the Compensation Committee of a public company incorporated in the United States and listed for trading on the New York Stock Exchange or NASDAQ) to the Compensation Committee of the Board (the "Compensation Committee"), and shall not otherwise increase the size of the Compensation Committee until the 2015 Annual Meeting. In the event of the replacement as set forth in Section 3(c) of any JANA Nominee appointed to the Compensation Committee pursuant to this Section 5, his or her successor shall be promptly appointed to the committee seat vacated by such former director to serve until the 2015 Annual Meeting. The Compensation Committee and any other committee currently or in the future designated to review or oversee compensation shall not take any material action prior to the March Board Meeting.
6. Value Creation Committee and Other Matters.
(a) At the March Board Meeting, the Board shall establish a new committee of the Board (the "Value Creation Committee"), whose purpose will be to evaluate all options for enhancing shareholder value, including by (i) engaging Bank of America Merrill Lynch, or if Bank of America Merrill Lynch is unavailable or the Company is unable to reach acceptable terms with Merrill Lynch Bank of America despite using reasonable best efforts to do so, another investment bank mutually agreeable to the Company and JANA, as promptly as practicable, to review all options for enhancing value, including by conducting a strategic review of the Company's business, operations and capital
structure; (ii) engaging a cost consultant, mutually agreeable to the Company and JANA, to conduct a cost review commencing with the completion of the investment banker review described in clause (ii) above; and (iii) reviewing the Company's management compensation structure to enhance alignment with shareholder value creation. There shall be four (4) members of the Value Creation Committee, two (2) of whom shall be JANA Nominees chosen by JANA, and the Board shall not increase the size of the Value Creation Committee until the 2015 Annual Meeting, if still in existence at such time. In the event of the replacement as set forth in Section 3(c) of any JANA Nominee appointed to the Value Creation Committee pursuant to this Section 5, his or her successor shall be promptly appointed to the committee seat vacated by such former director to serve until the 2015 Annual Meeting
(b) The Company hereby agrees that it will not make any acquisitions during the Cooperation Period, except for ordinary course acquisitions individually under $10 million (not to exceed $30 million in the aggregate) or acquisitions that a majority of the JANA Nominees have recommended.
7. Cooperation.
(a) JANA agrees that, from the date of this Agreement until the earliest of (i) the date that is thirty (30) calendar days prior to any applicable deadline by which a shareholder must give notice to the Company of its intention to nominate a director for election at or bring other business before the 2015 Annual Meeting under the Company's ByLaws and (ii) any material breach of this Agreement by the Company (provided that the Company shall have three (3) business days following written notice from JANA of material breach to remedy such material breach if capable of remedy) (such period, the "Cooperation Period"), neither it nor any of its Affiliates or Associates will in any manner, directly or indirectly, make, or cause to be made, or in any way encourage any other person to make or cause to be made, any statement or announcement that relates to and constitutes an ad hominem attack on, or relates to and otherwise disparages, the Company, any of its officers or directors or any person who has served as an officer or director of the Company, including: (i) in any document or report filed with or furnished to the Securities and Exchange Commission (the "SEC") or any other governmental agency, (ii) in any press release or other publicly available format or (iii) to any journalist or member of the media (including without limitation, in a television, radio, newspaper or magazine interview), or otherwise; provided, that if the Company makes any material announcement prior to the March Board Meeting, JANA will be permitted to make objective statements that solely reflect JANA's view, as a shareholder, with respect to such announcement.
(b) The Company agrees that, from the date of this Agreement until the earliest of (i) the date that is thirty (30) calendar days prior to any applicable deadline by which a shareholder must give notice to the Company of its intention to nominate a director for election at or bring other business before the 2015 Annual Meeting under the Company's ByLaws and (ii) any material breach of this Agreement by JANA (provided that JANA shall have three (3) business days following written notice from the Company of material breach to remedy such material breach if capable of remedy), neither it nor any of its Affiliates or Associates will in any manner, directly or indirectly make, or cause to be made, or in any way encourage any other person to make or cause to be made, any statement or announcement that relates to and constitutes an ad hominem attack on, or relates to and otherwise disparages, JANA, any of its members, officers or directors or any person who has served as a member, officer or director of JANA, including: (i) in any document or report filed with or furnished to the SEC or any other governmental agency, (ii) in any press release or other publicly available format or (iii) to any journalist or member of the media (including without limitation, in a television, radio, newspaper or magazine interview), or otherwise.
(c) The limitations set forth in Sections 7(a) and 7(b) shall not prevent either party from responding to any public statement made by the other party of the nature described in Sections 7(a) and 7(b) if such statement by the other party was made in breach of this Agreement.
(d) During the Cooperation Period, JANA shall cause all shares of the Company's capital stock ("Shares") beneficially owned, directly or indirectly, by it, or by any of its Affiliates or Associates (including without limitation all Shares beneficially owned as of the respective record dates for the 2014 Annual Meeting and as of the record dates for any special meeting of shareholders) over which it exercises or has voting authority, to be present for quorum purposes and to be voted, at such meetings or at any adjournments or postponements thereof, in favor of the current members of the Board (including the JANA Nominees) that will be up for election at such meetings, and not to submit any proposal for consideration at, or bring any other business before, the 2014 Annual Meeting or initiate, encourage or participate in any "withhold" or similar campaign with respect to the election of directors at the 2014 Annual Meeting and shall not permit any of its Affiliates or Associates to do any of the foregoing or publicly or privately encourage or support any other stockholder to take any such actions.
(e) During the Cooperation Period, JANA will not, and shall cause its Affiliates and Associates to not, directly or indirectly, without the prior written consent of the Company: (i) acquire, seek or propose (publicly or otherwise) to acquire, beneficial ownership, directly or indirectly, of any additional Shares or rights or options to acquire any additional Shares if such acquisition would cause JANA's beneficial ownership to exceed 14.9% of the Company's common stock; (ii) publicly seek or propose to influence or control the management or policies of the Company, seek or propose (publicly or otherwise) to obtain representation on the Board (except as set forth herein), or solicit, or participate in the solicitation of, any proxies or consents with respect to any securities of the Company, or publicly request permission to do any of the foregoing, or take any action which would, or would reasonably be expected to, require public disclosure regarding any of the types of matters set forth in this clause (ii); (iii) submit (publicly or otherwise) a proposal for, or offer of (with or without conditions) any extraordinary transaction (including a tender offer, exchange offer, merger, acquisition or consolidation) involving the Company or its securities or assets or take any action which would, or would reasonably be expected to, require public disclosure regarding any of the types of matters set forth in this clause (iii); (iv) request (publicly or otherwise) a special meeting of the Company's shareholders or submit, or participate in, any shareholder proposal to the Company or any "shareholder access" proposal that may be adopted by the SEC; or (v) encourage, assist or enter into any discussions, negotiations, arrangements or understandings with any third party with respect to any of the foregoing, or otherwise form, join or in any way participate in a "group" (as defined in Section 13(d)(3) of the Exchange Act) in connection with any of the foregoing. JANA also agrees not to, and to cause its Affiliates and Associates not to, request during the Cooperation Period that the Company (or its directors, officers, employees or agents), directly or indirectly, amend or waive any provision of this Section (including this sentence), publicly or in a manner that would require public disclosure of such request.
(f) Nothing in this Agreement shall be deemed to limit JANA's ability to provide its views privately to the Board on any matter or to privately request a waiver of any provision of this Agreement, provided that such actions are not reasonably expected to require public disclosure of such actions.
8. Public Announcement and SEC Filing.
(a) JANA and the Company shall announce this Agreement and the material terms hereof including the terms of Section 6 by means of a joint press release in the form attached hereto as Exhibit A (the "Press Release") as soon as practicable but in no event later than 9:00 a.m., New York City time, on March 17, 2014.
(b) JANA shall promptly prepare and file an amendment (the "13D Amendment") to its Schedule 13D with respect to the Company filed with the SEC on February 27, 2014 reporting the entry into this Agreement and amending applicable items to conform to its obligations hereunder. The 13D Amendment shall be consistent with the Press Release and the terms of this Agreement. JANA shall provide the Company with reasonable opportunity to review and comment upon the 13D Amendment prior to filing, and shall consider in good faith any changes proposed by the Company necessary to cause such 13D Amendment to comply with this Agreement.
9. Definitions. For purposes of this Agreement:
(a) the terms "Affiliate" and "Associate" shall have the respective meanings set forth in Rule 12b2 promulgated by the SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act");
(b) the terms "beneficial owner" and "beneficially own" shall have the same meanings as set forth in Rule 13d3 promulgated by the SEC under the Exchange Act except that a person shall also be deemed to be the beneficial owner of all Shares which such person has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to the exercise of any rights in connection with any securities or any agreement, arrangement or understanding (whether or not in writing), regardless of when such rights may be exercised and whether they are conditional, and all Shares which such person or any of such person's Affiliates or Associates has or shares the right to vote or dispose; and
(c) the terms "person" or "persons" shall mean any individual, corporation (including notforprofit), general or limited partnership, limited liability or unlimited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature.
10. Notices. All notices, consents, requests, instructions, approvals and other communications provided for herein and all legal process in regard hereto shall be in writing and shall be deemed validly given, made or served, if (a) given by telecopy and email, when such telecopy is transmitted to the telecopy number set forth below and sent to the email address set forth below and the appropriate confirmation is received or (b) if given by any other means, when actually received during normal business hours at the address specified in this Section:
if to the Company: URS Corporation 600 Montgomery Street, 26th Floor San Francisco, California 94111 Attention: General Counsel Facsimile: (415) 834-1506 Email: joseph.masters@urs.com with a copy to: Wachtell, Lipton, Rosen & Katz 51 W. 52nd Street New York, NY 10019 Attention: David E. Shapiro Facsimile: (212) 403-2000 Email: DEShapiro@wlrk.com
if to JANA: JANA Partners LLC 767 Fifth Avenue, 8th Floor New York, New York 10153 Attention: General Counsel Facsimile: (212) 455-0901 Email: jennifer.fanjiang@janapartners.com with a copy to: Schulte Roth & Zabel 919 Third Avenue New York, NY 10022 Attention: Marc Weingarten Facsimile: (212) 593-5955 Email: marc.weingarten@srz.com
11. Specific Performance; Remedies.
(a) In furtherance and not in limitation of Section 11(b), the parties hereto shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in addition to any other remedy to which they are entitled at law or in equity. FURTHERMORE, EACH OF THE PARTIES HERETO (A) IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY AND (B) AGREES TO WAIVE ANY BONDING REQUIREMENT UNDER ANY APPLICABLE LAW, IN THE CASE ANY OTHER PARTY SEEKS TO ENFORCE THE TERMS BY WAY OF EQUITABLE RELIEF. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES OF SUCH STATE.
(b) Notwithstanding any other Section in this Agreement and without limiting any other remedies the Company may have in law or equity, in the event that JANA (or any Affiliate or Associate of JANA) fails to perform or otherwise fulfill its obligations set forth in Section 7 in any material respect, and shall not have remedied such failure or non-fulfillment if capable of being remedied or fulfilled within three (3) business days following written notice from the Company of such failure or non-fulfillment, the Company shall not be required to perform or fulfill its obligations set forth in Sections 3, 4, 5 or 7 and the JANA Nominees shall each promptly tender their resignation as a member of the Board effective immediately upon its acceptance by the Company. As a condition to nomination and/or appointment to the Board pursuant to this Agreement, each JANA Nominee shall have executed an irrevocable letter agreement with the Company in which each such JANA Nominee shall agree to resign if required in accordance with the immediately preceding sentence.
12. Severability. If at any time subsequent to the date hereof, any provision of this Agreement shall be held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality or unenforceability of such provision shall have no effect upon the legality or enforceability of any other provision of this Agreement.
13. Termination. This Agreement shall terminate on the expiry of the Cooperation Period.
14. Counterparts. This Agreement may be executed in two (2) or more counterparts which together shall constitute a single agreement.
15. No Third Party Beneficiaries. This Agreement is solely for the benefit of the parties hereto and is not enforceable by any other persons.
16. No Waiver. No failure or delay by either party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial waiver thereof preclude any other or further exercise thereof or the exercise of any other right or remedy hereunder.
17. Entire Understanding. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and may be amended only by an agreement in writing executed by the parties hereto.
18. Interpretation and Construction.
(a) The Company acknowledges that its Board is bound by the obligations of the Company hereunder.
(b) Each of the parties hereto acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said counsel. Each party and its counsel cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted or prepared it is of no application and is hereby expressly waived by each of the parties hereto, and any controversy over interpretations of this Agreement shall be decided without regard to events of drafting or preparation.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized signatories of the parties as of the date hereof.
URS CORPORATION By: /s/ Martin M. Koffel Name: Martin M. Koffel Title: Chairman of the Board and Chief Executive Officer
JANA PARTNERS LLC By: /s/ Barry Rosenstein Name: Barry Rosenstein Title: Managing Partner
EXHIBIT A
URS CORPORATION ADDS FOUR NEW INDEPENDENT DIRECTORS TO BOARD JANA Partners Agrees to Support All Nominees at 2014 Annual Meeting Board to Establish Value Creation Committee
SAN FRANCISCO, CA - March [XX], 2014 - URS Corporation (NYSE: URS) today announced that it will add four new independent directors to its Board of Directors, effective March 27, 2014. These four directors will be on URS' slate of directors nominated for election to the Board of Directors at the Company's 2014 Annual Meeting, along with eight incumbents, pursuant to an agreement with JANA Partners LLC. The four new directors will be: Diane C. Creel, William H. Schumann, III,
David N. Siegel and V. Paul Unruh. Biographical information on the new directors is provided below.
Current directors [A] and [B] have advised the Company that they do not plan to stand for re-election at the 2014
Annual Meeting. Therefore, from March 27, 2014 until the Annual Meeting, the Board will increase to fourteen members from the
current ten, but will be comprised of twelve directors following the 2014 Annual Meeting.
Under the agreement with JANA, URS will also form a Value Creation Committee of the Board that will evaluate all
options for enhancing shareholder value, including by engaging an investment bank to conduct a strategic review of the
Company's business segments, operations and capital structure, and reviewing the Company's management compensation structure to enhance alignment with shareholder value creation. The Committee will be comprised of four members, two of whom
will be new directors.
Martin M. Koffel, Chairman and Chief Executive Officer of URS, stated: "[A] and [B] are superb directors and have contributed much to our success, but each has decided for his own reasons not to stand for re-election. I and their fellow board
members look forward to continuing to work with them until the Annual Meeting but will take this opportunity to express our
gratitude for their service, sound counsel and friendship." Koffel continued: "With [A]'s and [B]'s decisions to stand down and the expansion of our Board, we are adding four new, highly qualified independent directors to the Board on March 27 and we will nominate these directors for election at the
2014 Annual Meeting. All are accomplished business leaders with experience
relevant to the URS enterprise, and we are confident that they will prove to be valuable additions as we continue working to build
value for our stockholders." As previously disclosed, the URS Board has been engaged in succession planning for the Company's Chief Executive Officer position and has appointed a CEO Succession Committee comprised of independent directors. Two of the new directors
will promptly be appointed to this Committee. One of the new directors will also be appointed to the Compensation Committee.
Said Koffel, "Having led URS for more than 25 years, I had previously communicated to the Board that it was important to have my successor in place in 2014, and our goal is to do just that. The Board has asked me to remain as Chairman and Chief
Executive Officer until a successor is named, which I expect to do unless circumstances change." Barry Rosenstein, Managing Partner of JANA Partners, said, "We have appreciated our constructive dialogue with Martin Koffel and his team. We share their view that the Company is significantly undervalued, particularly given its strong cash
flows and the valuable work Martin and his team have done over many years to ensure that URS is well-positioned to meet the
needs of its clients. I am confident that the addition of four highly-qualified directors and the formation of the Value Creation
Committee will help unlock this value for all shareholders." JANA Partners currently owns approximately 9.7 percent of the Company's common shares outstanding. URS' incumbent directors expected to be nominated for reelection at the 2014 Annual Meeting are: [C]; [D]; [E]; [F]; [G]; [H]; [I]; and [J].
The director nominations will be included in the Company's 2014 proxy statement and submitted for stockholder approval at the Company's 2014 Annual Meeting, [to be held on [date]]. The Company expects to file its proxy materials for the
2014 Annual Meeting [in the near future] and encourages stockholders to review the proxy materials when they become available.
The agreement between URS and JANA Partners will be filed on Form 8-K with the Securities and Exchange
Commission. The agreement includes certain standstill restrictions that will be in effect until 30 days prior to the deadline by which
a shareholder must give notice to the Company of its intention to nominate a director at or bring other business before the 2015
Annual Meeting. JANA Partners has committed to
vote the shares that it controls in support of URS' twelve director nominees at the Company's 2014 Annual Meeting. Wachtell, Lipton, Rosen & Katz and Cooley LLP are serving as legal advisors to URS.
Biographical Information on New Director Nominees
Diane Creel, 65
Ms. Diane Creel retired as Chairman, Chief Executive Officer and President of Ecovation, Inc., a subsidiary of Ecolab
Inc. and a waste stream technology company using patented technologies, in September 2008. Ms. Creel had held such positions
since 2003. Previously, Ms. Creel served as Chief Executive Officer and President of Earth Tech, an international consulting
engineering firm, which is now part of AECOM, from 1992 to 2003. Ms. Creel has served on the ATI Board of Directors since
1996 and as Lead Independent Director since the position was established in September 2011. Ms. Creel is also a member of
the Boards of Directors of The Timken Company (since 2012) and Enpro Industries, Inc. (since 2009). She also served on the
Board of Directors of Goodrich Corporation from 1997 to 2012 and Foster Wheeler Ltd. until 2008.
William H. Schumann, III, 63
Mr. William H. Schumann, III, has served as the non-executive Chairman of the Board of Directors of Avnet, Inc., a
distributor of electronic components, since November 2012 and has been on the board since 2010. He retired in August 2012 as
Executive Vice President of FMC Technologies, Inc., a provider of technology solutions for the energy industry. He served as
Chief Financial Officer of FMC Technologies from 2001 to 2011 and Chief Financial Officer of FMC Corporation (the
predecessor to FMC Technologies) from 1999 to 2001. Mr. Schumann served on the board of UAP Holdings, an agricultural
chemical distributor, from 2005 to 2008 and Great Lakes Advisors, a registered investment advisor, from 1992 to 2011. Mr.
Schumann has been a director of AMCOL International Corporation, a producer of specialty materials and related products and
services for industrial and consumer markets, since 2012 and McDermott International, Inc., an engineering and construction
company, since 2012.
David N. Siegel, 52
David N. Siegel is President & CEO of Frontier Airlines and serves on its board of directors. He was a Director of
Republic Airways, from October 2009 to December 2013, including serving as Lead Independent Director from May 2011 until
January 2012 when he was appointed President & CEO of Frontier, at the time a wholly-owned subsidiary of Republic. Prior to
joining Frontier, Mr. Siegel was Chairman & CEO of XOJET, a private aviation company, controlled by TPG Capital. From June
2004 to May 2008, Mr. Siegel was Chairman and Chief Executive Officer, and from June 2008 to April 2009 Chairman, of
gategroup Holding AG, the world's largest independent airline catering, hospitality and logistics company. Prior to that, Mr. Siegel
served as President, Chief Executive Officer and member of the Board of US Airways Group, Inc., and US Airways, Inc., the
airline operating unit. Prior to US Airways, Mr. Siegel was Chairman and Chief Executive Officer of Avis Rent A Car System,
Inc., a subsidiary of Cendant Corp. Mr. Siegel also spent seven years at Continental Airlines in various senior management roles,
including President of its Continental Express subsidiary. Mr. Siegel is currently a member of the board of directors of gategroup
Holding AG, having served since June 2004.
V. Paul Unruh, 65
Mr. V. Paul Unruh retired as vice chairman of Bechtel Group, Inc. in June 2003. During his 25-year tenure he held a
number of management positions including treasurer, controller, and chief financial officer. He also served as president of Bechtel
Enterprises, the finance, development, and ownership arm, from 1997 to 2001. Unruh is also a certified public accountant. Mr.
Unruh is currently a member of the board of directors of Symantec Corporation, a provider of security, backup and availability
solutions, Move, Inc., a provider of real estate media and technology solutions, and Heidrick & Struggles International, Inc., a
provider of executive search and leadership consulting services. He also serves on the boards of two private companies.
URS Corporation (NYSE: URS) is a leading provider of engineering, construction, and technical services for public
agencies and private sector companies around the world. The Company offers a full range of program management; planning,
design and engineering;
systems engineering and technical assistance; construction and construction management; operations and maintenance; information
technology; and decommissioning and closure services. URS provides services for federal, oil and gas, infrastructure, power, and
industrial projects and programs. Headquartered in San Francisco, URS Corporation has more than 50,000 employees in a
network of offices in nearly 50 countries (www.urs.com).
[add FLS Tag]
# # # | Highlight the parts (if any) of this contract related to "Non-Disparagement" that should be reviewed by a lawyer. Details: Is there a requirement on a party not to disparage the counterparty? | {
"answer_start": [
13897
],
"text": [
"The Company agrees that, from the date of this Agreement until the earliest of (i) the date that is thirty (30) calendar days prior to any applicable deadline by which a shareholder must give notice to the Company of its intention to nominate a director for election at or bring other business before the 2015 Annual Meeting under the Company's ByLaws and (ii) any material breach of this Agreement by JANA (provided that JANA shall have three (3) business days following written notice from the Company of material breach to remedy such material breach if capable of remedy), neither it nor any of its Affiliates or Associates will in any manner, directly or indirectly make, or cause to be made, or in any way encourage any other person to make or cause to be made, any statement or announcement that relates to and constitutes an ad hominem attack on, or relates to and otherwise disparages, JANA, any of its members, officers or directors or any person who has served as a member, officer or director of JANA, including: (i) in any document or report filed with or furnished to the SEC or any other governmental agency, (ii) in any press release or other publicly available format or (iii) to any journalist or member of the media (including without limitation, in a television, radio, newspaper or magazine interview), or otherwise."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Cap On Liability" that should be reviewed by a lawyer. Details: Does the contract include a cap on liability upon the breach of a party’s obligation? This includes time limitation for the counterparty to bring claims or maximum amount for recovery.
Context: Exhibit 10.19
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM IF PUBLICLY DISCLOSED.
SUPPLY AGREEMENT
This SUPPLY AGREEMENT ("Supply Agreement") is made as of May 29, 2018 (the "Effective Date") by and between SutroVax, Inc., a Delaware corporation having principal offices at 353 Hatch Dr., Foster City, CA 94404 ("SutroVax") and Sutro Biopharma, Inc., a Delaware corporation, having principal offices at 310 Utah Ave, Suite 150, South San Francisco, CA, 94080 ("Sutro"). SutroVax and Sutro may be referred to herein by name or individually, as a "Party" and collectively, as the "Parties."
BACKGROUND
A. Sutro controls certain proprietary technology which permits cell-free expression of proteins, and Sutro licensed such technology to SutroVax under that certain Amended and Restated SutroVax Agreement dated as of October 12, 2015 (the "License Agreement").
B. SutroVax is a vaccine company primarily in the business of developing, manufacturing and marketing vaccine products; and
C. SutroVax desires to purchase from Sutro, and Sutro desires to supply to SutroVax, the Extracts and Custom Reagents (as defined below) upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the covenants, conditions and undertakings hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:
AGREEMENT
ARTICLE 1
DEFINITIONS/ INTERPRETATION
For the purposes of this Supply Agreement, the following capitalized words and phrases shall have the following meanings:
1.1 "Affiliate" means, with respect to either Party, any business entity controlling, controlled by, or under common control with such Party. For the purpose of this definition only, "control" means (i) the possession, directly or indirectly, of the power to direct the management or policies of a business entity, whether through the ownership of voting securities, by contract or otherwise, or (ii) the ownership, directly or indirectly, of at least fifty percent (50%) of the voting securities or other ownership interest of a business entity. Notwithstanding the above, in no event shall Sutro (or any entity that would be an Affiliate of SutroVax solely because it is an Affiliate of Sutro) be deemed an Affiliate of SutroVax, or SutroVax (or any entity that would be an Affiliate of Sutro solely because it is an Affiliate of SutroVax) an Affiliate of Sutro.
1.2 "Applicable Law" means all laws, ordinances, rules, rulings, directives and regulations of any Governmental Authority that apply to the development, manufacture or supply of any Product or the other activities contemplated under this Supply Agreement, including (i) all applicable federal, state and local laws, rules and regulations; (ii) the U.S. Federal Food, Drug and Cosmetic Act; (iii) regulations and guidelines of the FDA and other Regulatory Authorities, including cGMPs, if applicable; and (iv) any applicable non-U.S. equivalents of any of the foregoing, including guidelines of the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use (as amended from time to time).
1.3 "cGMPs" means current good manufacturing practices and standards as set forth (and as amended from time to time) in the current Good Manufacturing Practice Regulations of the U.S. Code of Federal Regulations, including 21 C.F.R. Sections 210 and 211, the European Community Directive 2003/94/EC and the ICH Harmonised Tripartite Guideline, Good Manufacturing Practice Guides for Active Pharmaceutical Ingredients (Q7).
1.4 "Components" means any product or material used in the Manufacture of the Products including the packaging materials.
1.5 "Extract" means Sutro's extract derived from strains of E. coli identified on Schedule 1 attached hereto, as may be amended from time to time in accordance with Section 12.7, and any new versions and improvements thereof that may be included in Schedule 1 by written agreement of the Parties in accordance with Section 12.7.
1.6 "Facility" or "Facilities" means the facilities where Product will be Manufactured as set forth in Schedule 1. Schedule 1 may be amended from time to time in accordance with this Supply Agreement to add or remove facilities.
1.7 "FDA" means the United States Food and Drug Administration, or any successor agency thereto performing similar functions.
1.8 "Fully Burdened Manufacturing Costs" means, with respect to a Product, Sutro's costs of manufacturing such Product, which manufacturing costs shall mean: (a) [***], and (b) [***], in each case to the extent directly allocated to and incurred in the manufacture by Sutro of such Product supplied to SutroVax, its Affiliates and Sublicensees. Fully Burdened Manufacturing Costs shall not include any [***] and shall be calculated in accordance with the foregoing, GAAP and Sutro's policies and procedures for its other products, in each case consistently applied (and such plant operations and support services costs shall be allocated consistent with GAAP and other products of Sutro in that facility).
1.9 "Governmental Authority" means any court, agency, department, authority or other instrumentality of any nation, state, country, city or other political subdivision, including any Regulatory Authority.
1.10 "Manufacture" or "Manufacturing" means the processes and procedures for the supply of the Products, including, (a) the supply and quality control of the Components; (b) the manufacture of the Products in bulk; (c) the Packaging and labeling of the Products; (d) the quality control of the Products; and (e) the storage of the Products until shipment.
1.11 "Package" or "Packaging" means packaging Product(s) in accordance with applicable Specifications.
1.12 "Person" means an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency thereof.
1.13 "Price" means the price to be paid by SutroVax for each Product as set forth on Schedule 1 of this Supply Agreement and as may be modified from time to time in accordance with Section 3.2.
1.14 "Product(s)" means the Extract and Custom Reagents.
1.15 "Custom Reagents" means Sutro's custom reagents identified on Schedule 1 attached hereto, and any new versions and improvements thereof that may be included in Schedule 1 by written agreement of the Parties in accordance with Section 12.7.
1.16 "Regulatory Approval" means, with respect to a product, all approvals, licenses, registrations or authorizations necessary to market and sell such product in a particular jurisdiction in the Territory (including applicable approvals of labeling, price and reimbursement for such product in such jurisdiction).
1.17 "Regulatory Authority" means any federal, national, multinational, state, provincial or local regulatory agency, department, bureau or other governmental entity, including the FDA, with authority over the development, Manufacture or commercialization (including approval of Regulatory Approvals) of any Product(s) in any jurisdiction in the Territory.
1.18 "Regulatory Materials" means regulatory applications, submissions, notifications, communications, correspondence, registrations, Regulatory Approvals and/or other filings made to, received from or otherwise conducted with a Regulatory Authority (including minutes of meeting with Regulatory Authorities) that are necessary or reasonably desirable to access in connection with the development, manufacture, marketing, sale or other commercialization of any Product in a particular country or regulatory jurisdiction. Regulatory Materials include, without limitation, INDs, NDAs, BLAs, clinical trial applications, marketing approval applications and applications for pricing approvals.
1.19 "Required Standards" means Applicable Law, the Specifications, and the warranties given by Sutro in Section 7.3, provided that Required Standards shall not include compliance with cGMPs for Custom Reagents, Extract identified as "research grade" Extract or Other Extracts.
1.20 "Specifications" means, with respect to a Product or applicable Component thereof, all written product, regulatory, Manufacturing, release criterion, quality control and quality assurance procedures, processes, practices, standards, instructions and specifications applicable to the Manufacture of such Product or Component, as agreed to by the Parties in writing from time to time. The initial Specifications for the Products are attached hereto as Schedule 2.
1.21 "SutroVax CMO" means any contract manufacturer responsible for supplying or manufacturing a Vaccine Composition on behalf of SutroVax or its Affiliates, selected in accordance with Section .2.
1.22 "Territory" means worldwide.
1.23 "Third Party" means any Person other than SutroVax, Sutro, or their respective Affiliates.
1.24 Additional Definitions. Each of the following terms shall have the meaning described in the corresponding Section of this Supply Agreement indicated below:
1.25 Interpretation. The captions and headings to this Supply Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Supply Agreement. Unless specified to the contrary, references to Articles, Sections, Schedules or Exhibits mean the particular Articles, Sections, Schedules or Exhibits to this Supply Agreement and references to this Supply Agreement include all Schedules and Exhibits hereto. Unless context clearly requires otherwise, whenever used in this Supply Agreement: (i) the words "include" or "including" shall be construed as incorporating, also, "but not limited to" or "without limitation;" (ii) the word "or" shall have its inclusive meaning of "and/or;" (iii) the word "notice" shall require notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other written communications contemplated under this Supply Agreement; (iv) the words "hereof," "herein," "hereunder," "hereby" and derivative or similar words refer to this Supply Agreement (including any Schedules and
Term Section Defined Alternate Supplier 2.15 Acceptance Period 4.2 COA/COC 4.1 CMC 6.2 CMO 2.15 Delivery Time Period 2.9.2 Disputed Matter 11.4 Drug Master File 6.2 Effective Date Preamble Force Majeure 12.3 Forecast 2.3 Indemnify 9.1.1 Laboratory 4.3 Latent Defect 4.2 Liabilities 9.1.1 License Agreement Background Manufacturing Change 6.6 MSDS 4.1 Other Extract 2.16 Party or Parties Preamble
Term Section Defined Phase 3/Commercial Supply Agreement 2.14 Q1, Q2 or Q3 2.3 Quality Agreement 6.7 Senior Management 11.2 Short Dated Product 2.11 Sutro Preamble Sutro Activity Criteria 4.1 Sutro Activity Test 4.1 Sutro Indemnitees 9.1.2 SutroVax Preamble SutroVax Activity Criteria 4.1 SutroVax Activity Test 4.1 SutroVax Indemnitees 9.1.1 Supply Agreement Preamble Term 10.1 Third-Party Claim 9.1.1 Transfer Addendum 2.15 Work Order 2.3
Exhibits); (v) provisions that require that a Party or the Parties "agree," "consent" or "approve" or the like shall require that such agreement, consent or approval be specific and in writing; (vi) words of any gender include the other gender; (vii) words using the singular or plural number also include the plural or singular number, respectively; (viii) references to any specific law, or article, section or other division thereof, shall be deemed to include the then-current amendments thereto or any replacement thereof; (ix) neither Party shall be deemed to be acting "under the authority" of the other Party; and (x) any capitalized terms used and not defined in this Supply Agreement shall have the meaning set forth in the License Agreement.
ARTICLE 2 SUPPLY
2.1 Supply. Pursuant to the terms and conditions of this Supply Agreement, Sutro agrees that it will Manufacture the Product(s) at the Facility(ies) for SutroVax and shall supply the Product(s) to SutroVax, its Affiliates, and any SutroVax CMO, for purposes of production of Vaccine Compositions (including development of processes for the production of Vaccine Compositions), solely for non-clinical research purposes or in Phase I or Phase II clinical trials of such Vaccine Compositions..
2.2 Transfer of Product. Subject to Section 2.1, SutroVax may transfer Products to SutroVax CMOs selected by SutroVax and that are reasonably acceptable to Sutro (the acceptance of which by Sutro not to be unreasonably withheld, conditioned or delayed) or previously approved by Sutro.
2.3 Work Orders. From time to time, Sutro and SutroVax may execute one or more work orders, that describe the Product to be Manufactured, the quantities of each Product to be Manufactured and supplied to SutroVax, the Price to be charged by Sutro (which shall be as set forth in Section 3.2) and paid by SutroVax for the Product, and the delivery date(s) for such Product, (as executed, a "Work Order"). Each Work Order will expressly refer to this Supply Agreement, will form a part of this Supply Agreement, and will be subject to the terms and conditions contained herein. Sutro shall not unreasonably withhold its agreement to any proposed Work Order requested by SutroVax. Sutro shall be obligated to execute proposed Work Orders requested by SutroVax (except with respect to Other Extracts) with respect to quantities in such proposed Work Order for delivery at least [***] months after SutroVax's request to the extent such quantities of Product (when added to the quantities of such Product in Work Orders previously agreed between the Parties for delivery within the one (1) calendar year period prior to the requested delivery date of the proposed Work Order) are less than (a) [***] liters with respect to Extract or (b) a corresponding amount of each Custom Reagent to support use of [***] liters of Extract. Sutro shall notify SutroVax as soon as possible if Sutro believes it will be unable to deliver Product in accordance with the applicable Work Order. Sutro's providing of such notification shall not be interpreted in any manner as relieving Sutro of its obligations under this Supply Agreement, nor shall it prevent SutroVax from pursuing any and all rights and remedies SutroVax may have based on Sutro's failure to be able to deliver any Product in accordance with the terms of this Supply Agreement.
2.4 Orders.
2.4.1 Purchase Orders. Once both parties have executed a Work Order, SutroVax shall place a purchase order for the amounts of Products to be purchased under such Work Order with delivery dates for such amounts consistent with such Work Order. Additionally, SutroVax may from time to time place purchase orders for additional quantities specifying requested delivery dates in accordance with reasonable delivery schedules and lead times; in each case, as may be agreed upon from time to time by the Parties. Each purchase order placed by SutroVax shall specify the quantity of Product, destination(s) and requested delivery dates. Sutro shall promptly accept all purchase orders with respect to the amounts of Products to be purchased under the applicable Work Order and shall accept or reject any amount in the purchase order in excess of the amounts of Products to be purchased under the applicable Work Order and all other purchase orders for Product submitted by SutroVax in accordance with this Article 2 within [***] days from receipt of the order; provided however that Sutro shall use Commercially Reasonable Efforts to accept such amounts and purchase orders. Accepted purchase orders may not be cancelled without the prior written agreement of both Parties except as set forth in Sections 2.5. Unless otherwise directed by SutroVax, Sutro shall fill all accepted purchase orders for Product in accordance with the requested due dates as set forth in further detail in Section 2.9.2.
2.4.2 No Conflicting Terms. The terms and conditions of this Supply Agreement shall be controlling over any conflicting terms and conditions stated in SutroVax's purchase order or Sutro's invoice, confirmation or other standardized document. Any purchase order, order acknowledgement, invoice, proposal or other document which conflicts with or adds to the terms and conditions of this Supply Agreement with respect to the Manufacture and supply of Product for the Territory is hereby rejected, unless the Parties mutually agree to the contrary in writing.
2.4.3 Initial Order. Notwithstanding Section 2.3 or this Section 2.4, Sutro accepts and agrees to fulfil the order previously placed by or on behalf of SutroVax (or to be placed by or on behalf of SutroVax, if no already placed) for the quantities of Product set forth in Schedule 3 by the delivery date set forth therein (the "Initial Order").
2.5 Cancellation. Notwithstanding anything herein to the contrary, SutroVax may not modify or cancel purchase orders with respect to the amounts of Product to be purchased under the applicable Work Order, however SutroVax may modify or cancel other purchase orders (including amounts in a purchase order in excess of the amounts of Product to be purchased under the applicable Work Order) for the Products provided that such modification or change is made further in advance of the originally requested delivery date than the required lead time, where the agreed required lead time for the applicable purchase order has been evidenced in writing (including, for example, by email) between the Parties.
2.6 Delivery and Risk of Loss. Sutro shall mark Product for delivery to the destination(s) specified by SutroVax. All shipments of Product(s) shall be delivered [***] (lncoterms 2010) Sutro Facility. Title and risk of loss and damage to the Product(s) shall remain with Sutro until the Product(s) are delivered in accordance with the foregoing, at which time title and risk ofloss and damage to the Product(s) shall pass to SutroVax. SutroVax will arrange for shipping from Sutro's Facility to the destination specified by SutroVax at SutroVax's cost and expense.
2.7 Packaging. Sutro shall provide the Product to SutroVax in Packaged form in accordance with the Required Standards.
2.8 Conformance to Required Standards. Sutro shall Manufacture the Product(s) in accordance with the Required Standards, as the same may be amended or supplemented from time to time. Each Party shall keep the other promptly and fully advised of any new requirements of the applicable Regulatory Authority or Applicable Law of which it becomes aware and Sutro shall promptly implement such requirements as described in Section 6.6.
2.9 Supply and Delivery.
2.9.1 Shortage. Sutro shall use reasonable efforts to promptly notify SutroVax in writing in the event that Sutro is unable or anticipates that it will be unable to supply compliant Product in accordance with the requirements of this Supply Agreement, including the Quality Agreement and all Required Standards, and each Work Order. Sutro shall use Commercially Reasonable Efforts to overcome any inability or anticipated inability to so supply compliant Product to SutroVax.
2.9.2 Delivery Delays. Subject to Section 2.4.1 (including applicable lead times agreed upon in accordance with Section 2.4.1) Sutro shall make deliveries of Product(s) in accordance with Section 2.6, no more than [***] days before or [***] after the delivery dates specified by SutroVax in the relevant purchase order (provided that such delivery date is in accordance with the applicable Work Order or such purchase order was otherwise accepted by Sutro) (the "Delivery Time Period"). For any failure to supply compliant Product(s) in the later of the Delivery Time Period and the period ending [***] after the delivery date specified under the Work Order, without limiting SutroVax's other remedies, subject to this Section 2.9.2 and Section 9.3 (Limitation of Liability), Sutro shall be liable for any non-cancelable Third Party penalties, costs and expenses incurred by SutroVax as a result of Sutro's failure to supply Product(s) as aforesaid, subject to receipt by Sutro of appropriate documentary evidence of such penalties, costs and expenses to the extent such evidence of such amounts may be provided by SutroVax without breaching SutroVax's or its Affiliates' duties of confidentiality to such Third Party (and provided that SutroVax shall use commercially reasonable efforts to (i) minimize or eliminate such penalties, costs and expenses and (ii) where provision of such evidence to Sutro would result in a breach of such duties of confidentiality, to obtain the consent of the applicable Third Party to the provision of such evidence to Sutro). In the event that Sutro makes a Manufacturing Change and is not able to Manufacture and supply Product in conformance with the Required Standards within [***] days of the delivery date identified on the applicable purchase order, Sutro shall Manufacture such Product without such Manufacturing Change. The rights of SutroVax set forth in this paragraph are in addition to any other rights set forth in this Supply Agreement.
2.10 Allocation. Without limiting any other rights or remedies available to SutroVax, if the demand for a Product in aggregate exceeds available supply or Sutro otherwise concludes that it may be unable to supply a Product in accordance with the requirements of this Supply Agreement in the quantities and within the time periods specified in each Work Order and the corresponding purchase orders that have been accepted by Sutro, Sutro shall immediately notify SutroVax of such shortfall (or anticipated shortfall), and shall use Commercially Reasonable
Efforts to procure Components and capacity adequate to meet accepted purchase orders and supply compliant Product in accordance with the requirements of this Supply Agreement. Sutro shall allocate its available Components and manufacturing capacity to provide SutroVax with quantities of such Product at least equal to the greater of (a) [***] of the amount of Product (or products equivalent to Product) that Sutro allocates for itself and its Affiliates (but in no event less than [***] liters of Extract per month and the minimum allocation volume set out in Schedule 1 of each Custom Reagent per month), provided that SutroVax demonstrates actual need for the applicable quantities of Extract, and (b) the [***]. Without limiting the foregoing, if there is a shortage of supply of Product, Sutro shall provide Product to SutroVax for any quantities of Product ordered by SutroVax in accordance with the applicable Work Order or purchase order in priority to any subsequent Third Party purchase orders, but not in priority to any Third Party purchase orders or other binding commitment placed before placement of the applicable SutroVax Work Order or purchase order.
2.11 Short Dated Product. Sutro agrees to ship all Product(s) so that they are delivered to SutroVax and will remain compliant with the Specifications for at least [***] months from the date of delivery in accordance with this Supply Agreement.
2.12 Subcontracting by Sutro. Sutro shall (a) ensure that any subcontractor or delegatee of Sutro's obligations under this Supply Agreement has and maintains all appropriate qualifications; (b) enter into a quality agreement with each such subcontractor and delegatee which terms are similar to the terms of the Quality Agreement between SutroVax and Sutro; and (c) be responsible for each subcontractor's and delegatee's performance hereunder (including performance or non-performance by such subcontractor or delegatee that would constitute a breach of this Supply Agreement or such quality agreement if conducted by Sutro) as if Sutro were itself performing such activities. Sutro shall not subcontract the Manufacture of Product to a Third Party without SutroVax's prior consent other than to an Alternate Supplier as expressly set forth in Section 2.15.
2.13 CMOs. Notwithstanding anything to the contrary in this Supply Agreement, SutroVax shall have the rights to purchase Available Extracts and Extracts from CMOs (as defined in the License Agreement) to the extent provided in section 3.1 of the License Agreement.
2.14 Phase 3/Commercial Supply Agreement. If requested by SutroVax in writing (which request shall not be made prior to [***]), the Parties shall negotiate in good faith reasonable terms and conditions of an agreement for the supply by Sutro of the Products for the production of Vaccine Compositions for use in phase 3 clinical studies and for commercial purposes ("Phase 3/Commercial Supply Agreement"). The price for the Products Manufactured by Sutro under the Phase 3/Commercial Supply Agreement shall not exceed [***] of the Fully Burdened Manufacturing Cost thereof. If the Parties have not entered into the Phase 3/Commercial Supply Agreement within [***] after SutroVax's request to negotiate the Phase 3/Commercial Supply Agreement, upon either Party's request by written notice to the other Party the terms and conditions of the Phase 3/Commercial Supply Agreement shall be determined by binding arbitration in accordance with the procedures set forth in Section 11.4. Upon the selection of one draft Phase 3/Commercial Supply Agreement by the arbitrator pursuant to Section 11.4, unless SutroVax elects not to enter into such Phase 3/Commercial Supply
Agreement by written notice thereof to Sutro within [***] days after such selection, the Parties shall execute the definitive Phase 3/Commercial Supply Agreement selected by the arbitrator (but excluding, for clarity, any provision granting to SutroVax or its Affiliates or Sublicensees any right to obtain or use any Sutro Core Know-How); and if SutroVax elects to not enter into the Phase 3/Commercial Supply Agreement selected by the arbitrator by providing notice thereof within such [***] day period, then neither Party shall be obligated to enter into the Phase 3/Commercial Supply Agreement.
2.15 Qualification of Alternate Supplier.
2.15.1 Transfer Addendum.
(a) Transfer Addendum. Upon SutroVax' written request, the Parties agree to negotiate in good faith an addendum to this Supply Agreement setting forth the terms and conditions pursuant to which Sutro will conduct a Process Transfer to a Third Party contract manufacturer ("CMO") and/or engage such CMO to establish Capacity to Manufacture Extract (as Process Transfer and Capacity are defined below), in each case for the Manufacture and supply of such Extract for SutroVax' (or its Affiliate's or SutroVax CMO's) use to manufacture Vaccine Compositions, consistent with the remainder of this Section 2.15 (such addendum, a "Transfer Addendum"). As requested by SutroVax, this procedure may also be used in the event that SutroVax wishes Sutro to conduct a Process Transfer to a Third Party CMO in order to establish Capacity to Manufacture Custom Reagents. In connection with such request, SutroVax shall provide to Sutro a description of the desired Process Transfer and/or Capacity, including timing and other requirements thereof. Such Transfer Addendum shall:
(i) include a plan and budget for the conduct of the Process Transfer and/or establishment of such Capacity, which shall include amounts charged by the CMO (as defined further below, the "Alternate Supplier") to receive and conduct such Process Transfer and/or establish such Capacity, as well as reasonable FTE costs for Sutro personnel performing and managing technology transfer activities in accordance with the Transfer Addendum·
(ii) require SutroVax to fund the costs incurred by Sutro to conduct Process Transfer and/or establish such Capacity in accordance with such budget;
(iii) provide for initiation and completion of the Process Transfer and establishment of Capacity as requested by SutroVax, to the extent possible;
(iv) to the extent requested by SutroVax, be designed to enable the Alternate Supplier to Manufacture Extract of suitable quality for use in Phase 3 clinical trials and commercialization of a Vaccine Composition at a capacity to support SutroVax' projected commercial requirements for Extract (or other capacity identified by SutroVax in connection with the negotiation of the Transfer Addendum), as requested by SutroVax;
(v) require the Parties to fully cooperate to verify that the Extract supplied by the Alternate Supplier meets the Specifications, to validate the Manufacturing process implemented at the Alternate Supplier and to qualify the Alternate Supplier, in each case to supply Extract for SutroVax' use in Phase 3 clinical trials and commercialization of a Vaccine Composition (collectively, with respect to Capacity established, "Validating" such Capacity);
(vi) include mechanisms for keeping SutroVax fully informed, at scheduled intervals not to exceed once per quarter, of the progress of the Process Transfer and establishing such Capacity, as applicable, including with respect to the anticipated date for qualifying the Alternate Supplier and any changes to such anticipated date;
(vii) provide a right for SutroVax to modify the timing of or terminate the Process Transfer, Capacity or specified aspects thereof on reasonable notice, subject to SutroVax' agreement to bear any resulting termination or cancellation fees charged by the Alternative Supplier; and
(viii) include a mechanism for Sutro to cooperate with SutroVax and keep SutroVax reasonably informed with respect to Sutro's negotiation of an agreement with a potential Alternate Supplier for a Process Transfer and/or establishment of Capacity, including with respect to pricing for Extract from the Alternate Supplier to Sutro and any commitments to purchase quantities of Extract from the Alternate Supplier that SutroVax would be obligated to assume (e.g., in connection with establishing Capacity), if any, and require Sutro to obtain SutroVax' approval (not to be withheld unreasonably) of the terms of such agreement prior to entering into such agreement to the extent that the terms apply to SutroVax (it being understood that Sutro may redact any terms that are not relevant to SutroVax).
(b) Scope. As used above, "Process Transfer" means a technology transfer of Sutro's know-how and information as is necessary or useful for the Third Party CMO to Manufacture in its own facilities Extract that meets SutroVax' requirements, including any such information and know-how as would be needed for such CMO to scale up such Manufacture to the requested commercial volumes. To establish "Capacity" means that the CMO would take such actions as are necessary (including validation and if necessary adapting or reserving existing facilities, establishing new facilities and/or procuring necessary equipment) to Manufacture Extract meeting SutroVax' requirements for Phase 3 and commercial supply in such quantities as SutroVax designates. It is understood that SutroVax may request that the Process Transfer and establishment of Capacity be undertaken in separate steps, for example by undertaking an initial Process Transfer to demonstrate the CMO's ability to Manufacture Extract, and then later establishing Capacity for Phase 3 and commercial supply, as requested by SutroVax in accordance with Section 2.15.1(a) (i.e., in separate requests).
(c) Selection of Alternate Supplier. The "Alternate Supplier" will be selected by Sutro, provided that Sutro must select an "Alternate Supplier" that is substantially similar to those CMOs identified on Schedule 2.15.1 hereto and provided further that SutroVax shall have the right to veto such selection based only on a genuine and material conflict of interest between SutroVax and the Alternate Supplier. Additional CMOs may be added to Schedule 2.15.1 by Sutro with SutroVax's approval (not to be withheld unreasonably).
(d) Alternate Supplier as Subcontractor. It is understood that the Alternate Supplier established under the Transfer Addendum shall operate as a subcontractor of Sutro under this Supply Agreement and the Phase 3/Commercial Supply Agreement, and as such SutroVax will order from Sutro thereunder any Extract to be Manufactured by such Alternate Supplier. Subject to the foregoing, the Transfer Addendum and the Phase 3/Commercial Supply Agreement will include reasonable and customary rights for SutroVax to conduct audits/inspections, site visits, quarterly meetings, each such audit/inspection, site visit and quarterly meeting to be coordinated by Sutro and to occur in the presence of a representative for Sutro and SutroVax, in connection with the Alternate Supplier's manufacture of Extract for supply to SutroVax. For clarity, SutroVax shall not conduct any business discussions for the supply of Extract with the Alternate Supplier in a manner that induces the Alternate Supplier to breach its agreement with Sutro. Notwithstanding the foregoing, in the event Sutro undergoes a Change of Control or Sutro permits any third party to acquire Extract directly from an Alternate Supplier established under the Transfer Addendum, then SutroVax shall thereafter have the right to establish a supply agreement with and obtain supply of Extract directly from such Alternate Supplier.
(e) Quotations. Upon SutroVax's request (which request, for clarity, may be before a request to negotiate a Transfer Addendum), Sutro shall seek quotations from one or more Third Party CMO(s) for such a Process Transfer and/or establishment of such Capacity, in each case as requested by SutroVax, and the Parties shall reasonably cooperate to establish requests for quotations for such purposes.
(f) Arbitration. If the Parties have not agreed upon a Transfer Addendum within [***] after SutroVax' request, upon SutroVax' request by written notice to Sutro, the terms and conditions of the Transfer Addendum shall be determined by binding arbitration in accordance with the procedures set forth in Section 11.4. For clarity, however, it is understood that a Transfer Addendum shall not include any provision granting to SutroVax or its Affiliates or Sublicens.ee s any right to obtain or use any Sutro Core Know-How.
2.15.2 Source of Supply. It is understood that after the Alternate Supplier is qualified, SutroVax shall have the right under this Supply Agreement and the Phase 3/Commercial Supply Agreement to specify whether Extract ordered from Sutro pursuant to this Agreement or the Phase 3/Commercial Supply Agreement will be Manufactured at Sutro's Facility or at the Alternate Supplier's facilities (and to the extent Extract from the Alternate Supplier is ordered under this Supply Agreement or the Phase 3/Commercial Supply Agreement, the facility of the Alternate Supplier shall be deemed a Facility for purposes of this Supply Agreement and the Phase 3/Commercial Supply Agreement). Notwithstanding the foregoing, to the extent the FDA and EMA have confirmed that Extract manufactured at Sutro's Facility and the Alternate Supplier's Facility are interchangeable and can be supplied from either such Facility without any additional regulatory requirements or regulatory delay with respect to the applicable Vaccine Composition, and such Extract otherwise meets SutroVax' requirements, then with SutroVax' consent (not to be withheld unreasonably) Sutro may supply Extract from either Sutro's Facility or the Alternate Supplier's Facility.
2.15.3 Price. To the extent Sutro or its Affiliate Manufactures Extract supplied to SutroVax, the Price (per unit volume or unit weight) under this Supply Agreement and the Phase 3/Commercial Supply Agreement for such Extract shall not exceed [***] of the Fully Burdened Manufacturing Costs of such Extract; and to the extent the Extract to be supplied to SutroVax is Manufactured by a Third Party (including the Alternate Supplier), the Price to be
charged to SutroVax under this Supply Agreement and the Phase 3/Commercial Supply Agreement for such Extract shall equal the amount Sutro paid such Third Party for such Extract ("OOP Cost") plus an amount reasonably calculated to cover Sutro's FTE costs to procure and manage the relationship with such Third Party, such amount not to exceed [***] of the OOP Cost for such Extract. To the extent that Sutro or its Affiliate receives any portion of the amounts paid to such Third Party to Manufacture Extract (e.g., as a profit share or otherwise), the Price to be charged SutroVax shall be the lesser of i) [***], or ii) [***]; in either case, [***]. For clarity, Section 3.4 of the License Agreement shall apply with respect to the Alternate Supplier.
2.15.4 Sutro/Third Party use of Alternate Supplier. Once the Alternate Supplier is qualified pursuant to this Section 2.15, SutroVax shall have the first right (as between SutroVax and Sutro or Third Parties supplied or authorized by Sutro) to obtain Extract Manufactured by the Alternate Supplier up to the Capacity established pursuant to the Transfer Addendum for a period ending the later of [***] or [***], and provided SutroVax commits to [***] or [***].
2.16 Other Extracts. From time-to-time, subject to an agreed-upon Work Order, SutroVax may place purchase orders for quantities of research grade extract derived from strains of E. Coli other than that set forth on Schedule 1 attached hereto (each an "Other Extract"). Sutro shall use Commercially Reasonable Efforts to accept such purchase orders (and shall accept such purchase orders placed consistent with an agreed-upon Work Order) and manufacture and supply to SutroVax such Other Extracts. For the purpose of calculating the Price for Other Extracts in accordance with this Section, the Price will be the cost of materials and Sutro's labor at an FTE rate of [***] per year for Sutro laboratory scientists. Upon Sutro's acceptance of a purchase order for Other Extract, such Other Extract in such purchase order shall be deemed Extract for purposes of Sections 2.1, 2.2, 2.3, 2.4.1 (solely with respect to the last two sentences thereof), 2.5, 2.6, 2.7, 2.8, 2.9.1 , 3.1, 4, 5, 6, 7 and 9.
2.17 Manufacture of Custom Reagents. For clarity, SutroVax may Manufacture Custom Reagents itself or obtain supply thereof through a Third Party independent of this Supply Agreement and nothing in this Supply Agreement is intended to restrict SutroVax from doing so. Upon SutroVax's request, and subject to the remainder of the terms of this Section 2.17, Sutro shall (a) transfer to SutroVax or a contract manufacturer designated by SutroVax (which contract manufacturer is reasonably acceptable to Sutro, the approval of which shall not be unreasonably withheld, conditions or delayed by Sutro) as soon as reasonably practicable the process to Manufacture each Custom Reagent and the items of Sutro Know-How reasonably necessary for SutroVax or its designee to Manufacture each Custom Reagent, including cell lines, standard operating procedures, protocols, batch records, analytical method standard operating procedures and analytical method transfer protocols and (b) make Sutro Personnel reasonably available to SutroVax or its designee for scientific and technical explanations and on-site support that may reasonably be requested by SutroVax or its designee to Manufacture the Custom Reagents; provided however, that SutroVax shall fully reimburse Sutro for all documented time spent by Sutro's personnel to perform such transfer (on an FTE basis, each such FTE charged at an annual rate of [***]) and out-of-pocket costs incurred by Sutro in connection with all of the activities under the preceding sub-clauses (a) and (b), in accordance with a budget reasonably approved in advance by SutroVax. Upon such SutroVax request, Sutro and SutroVax shall, within [***] days, agree on a scope of work for such transfer, including
scale, timeline, estimated budget, and required materials; both parties shall use reasonable efforts to complete the transfer as soon as reasonably practical. If requested by SutroVax (including if such request is prior to agreement on a scope of work), Sutro shall promptly transfer to SutroVax or its designee the cell lines, manufacturing instructions and analytical methods used for Manufacture of each Custom Reagent. For clarity, SutroVax shall have the right to enter into an agreement directly with such designee for the Manufacture and supply of Custom Reagents directly to SutroVax, its Affiliates, and any SutroVax CMO and, upon SutroVax's request, to the extent necessary, Sutro shall authorize such designee to enter into such agreement with SutroVax and perform such activities. For further clarity, Sutro shall not be responsible for any damages resulting from delay or failure in establishing the processes for Manufacture of Custom Reagents at SutroVax's designee resulting from action or inaction on the part of the designee or to the extent beyond Sutro's control. SutroVax shall have the right to obtain from such designee such items of Sutro Know-How transferred to such designee and use such items in connection with the exercise of its rights pursuant to the License Agreement, including for the Manufacture of Custom Reagents and the management of such designee. SutroVax shall use such Sutro Know-How transferred under this Section 2.17 (to the extent it is Discloser's Information of Sutro and does not meet one or more the criteria in clause (a) through (e) of Section 10.1 of the License Agreement) only for the Manufacture of Custom Reagents or otherwise within the scope of rights and licenses granted SutroVax in the License Agreement. In case of such a transfer to SutroVax or its designee, SutroVax will share with Sutro (i) the proposed process for manufacture of Custom Reagents through a Third Party so that Sutro may provide feedback and ensure that the process and Specifications are consistent with Sutro's process, and (ii) all regulatory submissions (including DMFs with respect to Custom Reagents) at least [***] days in advance of their intended date of submission to a Regulatory Authority in the Territory, and shall take into account Sutro's feedback to ensure alignment with Sutro's regulatory submissions and Regulatory Approvals with respect to Custom Reagents. Following completion of the transfer set forth above, Sutro shall provide reasonable support for the use of Third Party Custom Reagents in conjunction with Extract supplied by or on behalf of Sutro. In addition, Extract supplied by Sutro that conforms to the Required Standards when tested with Custom Reagents supplied by Sutro but not with Custom Reagents manufactured under this Section shall be deemed to conform to the Required Standards and SutroVax may not reject such Extract as a result of such non-conformance to the Required Standards when tested with Custom Reagents. SutroVax shall not prevent Sutro from separately contracting with the contract manufacturer for Manufacture of Custom Reagents for use on its own behalf or on behalf of other third parties.
2.18 Sutro Core Know-How. Notwithstanding anything to the contrary, except as set forth in Section 15.3 of the License Agreement, in no event shall SutroVax, its Affiliates or Sublicensees have the right to access any Sutro Core Know-How (as defined in the License Agreement), whether directly from Sutro or its Affiliates or through a CMO or otherwise, and SutroVax, its Affiliates and Sublicensees shall not require, request or solicit any CMO to deliver any Sutro Core Know-How to SutroVax, its Affiliates and/or its Sublicensees, and no agreement between any CMO and Sutro, its Affiliates and Subsidiaries shall contain any provision granting to SutroVax or its Affiliates or Sublicensees any right to obtain or use any Sutro Core Know-How. Without limiting the foregoing, in the event any item of Sutro Core Know-How is delivered to SutroVax, its Affiliates and/or its Sublicensees (except as set forth in Section 15.3 of the License Agreement), SutroVax, its Affiliates and Sublicensees shall immediately return such item to Sutro. Notwithstanding the foregoing, to the extent SutroVax or any of its Affiliates
or Sublicensees is required by a Regulatory Authority (or Applicable Law) in the United States, Europe or Japan to confidentially disclose, as part of the applicable regulatory filings with respect to a Vaccine Composition, any Sutro Core Know-How (for clarity, excluding any tangible embodiments of such Sutro Core Know-How other than information and documentation), Sutro shall, upon SutroVax's written request, confidentially disclose such Sutro Core Know-How as part of the applicable regulatory filings, subject to the payment obligations set forth in Section 5.4 of the License Agreement.
2.19 Express Rights. Except as expressly set forth in this Supply Agreement, no rights or licenses are granted to SutroVax under this Supply Agreement.
2.20 Extract Requirements. SutroVax agrees to purchase all its requirements of Extract from Sutro in accordance with this Agreement, except to the extent SutroVax is allowed to purchase Extract from (a) Alternate Suppliers engaged by Sutro in accordance with Section 2.15 of this Agreement; (b) a CMO engaged or established and authorized by Sutro under Section 3.l(d) of the License Agreement; or (c) a CMO authorized by Sutro under Section 3.l(e) of the License Agreement. Manufacturing of Extracts in breach of this Section 2.20 shall be deemed a material breach of this Agreement and the License Agreement by SutroVax.
ARTICLE 3 PRICING AND PAYMENT
3.1 Invoices. Sutro shall invoice SutroVax at the time of each shipment of Product(s) for the Price for such shipment. SutroVax will pay such invoices within [***] days of receipt of invoice (including all required documentation) by SutroVax.
3.2 Prices. The Prices for the Products shall not exceed [***] of the Fully Burdened Manufacturing Costs of such Product at the time such Product is manufactured and shall be set forth in the applicable Work Order. Upon SutroVax's request from time-to-time, Sutro shall disclose to SutroVax the then- current Price for Product. The Price for the Products as of the Effective Date is set forth in Schedule 1.
3.3 Recordkeeping. During the Term and for [***] years thereafter, or for such longer period as may be required by Applicable Law, Sutro shall prepare and retain, and shall cause its subcontractors to prepare and retain, accurate books and records related to transactions made pursuant to this Supply Agreement and Prices. Such records shall be made available for reasonable review, audit and inspection upon reasonable notice and with reasonable frequency, upon SutroVax's request for the purpose of verifying Sutro's calculations of amounts due hereunder, the basis for such calculations (including Sutro's calculation of the Fully Burdened Manufacturing Costs) or payments and Sutro's compliance with the terms and conditions of this Supply Agreement. Audits and inspections may be conducted by SutroVax's own personnel or retained consultant(s), subject to the confidentiality obligations set forth in this Supply Agreement.
3.4 Taxes. The Prices are exclusive of all Taxes. SutroVax will pay all taxes and duties that are assessed by any national, federal, state or local governmental authority on SutroVax's purchase or use of the Products, including, without limitation, sales, use, excise, value-added and withholding taxes, but excluding any taxes based on Sutro's income or gross receipts (collectively, "Taxes"). Sutro will separately identify all such Taxes on Sutro's invoice.
ARTICLE 4 PRODUCT TESTING
4.1 Product Testing and Inspections. Each shipment of Product shall be accompanied by a certificate of analysis describing all current requirements of the Specifications and results of tests performed on such Product and a certificate of conformity certifying that the quantities of Product supplied have been Manufactured, controlled and released according to the Required Standards ("COA/COC") as set forth in the applicable Quality Agreement (subject to SutroVax's conduct of the SutroVax Activity Test to confirm Extract meets the SutroVax Activity Criteria). The COA/COC acceptance criteria for each Product shall be set forth in the Specification for such Product. Two of the tests and corresponding COA/COC acceptance criteria for the Extract shall be the performance of a productivity (Activity) test of the applicable Sutro protein (the "Sutro Activity Test" and "Sutro Activity Criteria") and the performance of a productivity (activity) test of the applicable Vaccine Composition (the "SutroVax Activity Test" and "SutroVax Activity Criteria"). Sutro shall perform the Sutro Activity Test to confirm that all shipments of Extract meet the Sutro Activity Criteria and SutroVax (or its designee) shall perform the SutroVax Activity Test to confirm that all shipments of Extract meet the SutroVax Activity Criteria. Sutro will also provide SutroVax with Material Safety Data Sheets ("MSDS") or an equivalent instrument recognized by the applicable Regulatory Authority as required for the Product(s), and updates of the same as necessary.
4.2 Acceptance/Rejection of Non-Conforming Goods. SutroVax or its designee shall have a period of [***] calendar days from the date of delivery of the Product(s) in accordance with Section 2.6 and the COA/COCs or the equivalent instrument recognized by the applicable Regulatory Authority for such Product(s) ("Acceptance Period"), to inspect any shipment of Product(s) and conduct the SutroVax Activity Test to determine whether such shipment conforms to the Required Standards. If SutroVax determines that the Product(s) do not conform to the Required Standards, it hall notify Sutro within the Acceptance Period, and, if requested by Sutro, SutroVax shall ship a sample of such non-conforming Product(s) to Sutro at Sutro's expense. SutroVax's failure to notify Sutro of the non-conformity within the Acceptance Period will be deemed for purposes of this Supply Agreement to constitute SutroVax's acceptance of such shipment, provided, however, that such acceptance shall be subject to SutroVax's right to reject Product(s) until [***] days from the delivery date of the applicable Product, in each case, due to discovery by SutroVax or SutroVax's Affiliates or designees that the applicable Product does not conform to the Required Standards and such non-conformance could not reasonably be discovered within the Acceptance Period ("Latent Defects") provided that SutroVax gives Sutro with written notice of such Latent Defect within [***] days of SutroVax or any SutroVax Affiliate or designee becoming aware of such defect.
4.3 Disputes Regarding Conformance to Required Standards. If Sutro does not agree with SutroVax's determination that Product fails to conform to the Required Standards, then Sutro shall so notify SutroVax in writing within [***] days of its receipt of SutroVax's notice of non-conformity with respect to such Product and (if requested) Product sample. Sutro and SutroVax shall use reasonable efforts to resolve such disagreement as promptly as possible.
Without limiting the foregoing, Sutro and SutroVax shall discuss in good faith mutually acceptable testing procedures pursuant to which both Sutro and SutroVax will re-test a sample of the disputed Product to determine whether such Product meets the Required Standards. Notwithstanding the foregoing, in the event that Sutro and SutroVax are unable to resolve such disagreement within [***] days of the date of the applicable rejection notice, either Party may submit a sample of the allegedly non-conforming Product for testing and a determination as to whether or not such Product conforms to the Required Standards to an independent testing organization, or to a consultant of recognized repute within the United States pharmaceutical industry, in either case mutually agreed upon by the Parties (such organization or consultant, the "Laboratory"), the appointment of which shall not be unreasonably withheld or delayed by either Party. The determination of the Laboratory with respect to all or part of any shipment of Product shall be final and binding upon the Parties. The fees and expenses of the Laboratory making such determination shall be borne by Sutro, in the event that the Laboratory determines that the Product was non-conforming and by SutroVax, in the event that the Laboratory determines that the Product did conform to the Required Standards.
4.4 Return and Replacement of Non-Conforming Goods. Product that is either rejected by SutroVax as not meeting the Required Standards, or that is determined by the Laboratory not to meet such Required Standards, shall, [***], be returned by SutroVax to Sutro, or destroyed pursuant to Applicable Law, at Sutro's reasonable expense. Sutro shall replace any non-conforming Product(s) within the shortest possible time. SutroVax shall have no responsibility to Sutro for the amounts invoiced for non-conforming Product(s), and shall be credited for any amounts paid, but shall pay Sutro the applicable Price for the replacement Product(s) under the terms of Section 3.1.
ARTICLE 5 INSPECTION
5.1 Right to Audit. During the Term and the [***] period thereafter, SutroVax or a SutroVax Affiliate may, during normal working hours and upon reasonable advance notice perform site audits and inspect, or request information relating to, Sutro's or its subcontractor's Facilities and records directly or indirectly involved in the performance of this Supply Agreement or related to the Product(s). Such requests should be made in writing and Sutro will allow for such audits or inspection to occur within [***] days from request (excepting for cause audits) for Sutro's Facilities and within [***] days' from request (excepting for cause audits) for Sutro's subcontractor's facilities. Reasonable advance notice for audits for cause shall not require more than [***] advance notice. During such an inspection or request for information the inspectors may inquire about the progress of the work being carried out by Sutro or its subcontractor, and are in particular but not exclusively authorized to:
5.1.1 Inspect the Facilities, documents and equipment used, or to be used, in the Manufacture of the Product(s);
5.1.2 Verify the qualifications of the employees and subcontractors carrying out such work and their use of the relevant equipment;
5.1.3 Evaluate all scientific techniques used by Sutro, its subcontractors and their respective employees in the performance of this Supply Agreement and the procedures used in the creation and storage of samples of the Product(s), provided that nothing in this Section 5.1.3 shall require Sutroto disclose any Sutro Core Know-How;
5.1.4 Verify and evaluate information relating to the utilization of the Manufacturing capacity of Sutro's Facilities or its subcontractor's Facilities;
5.1.5 Review correspondence, reports, filings and other documents from Regulatory Authorities to the extent related to the Manufacturing activities hereunder;
5.1.6 Evaluate the implementation of all Manufacturing and process changes made with respect to the Product, including pursuant to any corrective action plan; and
5.1.7 Ascertain compliance with Applicable Laws, the Specifications and this Supply Agreement.
5.2 Access. Sutro shall provide SutroVax's and its Affiliate's and Sublicensee's inspectors with access to its Facilities, and information related to such Facilities, in order that the inspectors may carry out the inspections or inquiries referred to in the provisions of this Article 5. For the avoidance of doubt, neither SutroVax nor any of its Affiliates or Sublicensees (or their respective inspectors) shall have the right to observe the Manufacture of the Extract or be present at Sutro and its subcontractors' Facilities at such times when Extract is being Manufactured. Sutro shall use Commercially Reasonable Efforts to obtain from its subcontractors commitments similar to those contemplated in this Section 5.2. Audits and inspections may be conducted by SutroVax's own personnel or retained consultant(s), subject to the confidentiality obligations set forth in this Supply Agreement.
5.3 Sutro Audits. Without limiting the foregoing; Sutro is responsible for auditing the facilities of the suppliers of Components, if any, periodically, and Sutro agrees to provide SutroVax, upon SutroVax's request with a current copy of the audit report of such facilities and to incorporate SutroVax's comments with respect to any corrective action plan related to the Product.
ARTICLE 6 REGULATORY AND QUALITY RESPONSIBILITIES
6.1 Regulatory Responsibilities. Sutro shall obtain and maintain any and all regulatory and governmental permits, licenses and approvals that are necessary for Sutro to Manufacture the Product(s) for SutroVax or its Affiliates in accordance with the terms of this Supply Agreement and Applicable Law. As between the Parties, SutroVax shall have the sole responsibility for all Regulatory Approvals of the Vaccine Compositions.
6.2 Right of Reference; Drug Master Files. Sutro shall (a) file Drug Master File(s) for the Products with the FDA as requested by SutroVax, and with Regulatory Authorities in the European Union (including the United Kingdom) and Japan in accordance with timelines to be mutually agreed upon (such agreement not to be unreasonably withheld by either Party) (provided at SutroVax's request, Sutro shall do so within [***] of SutroVax's request using
Regulatory Filings that comprise versions of the DMF(s) filed with the FDA that have been reformatted to comply with EU and Japanese requirements), and (b) provide the appropriate authorizations to such Regulatory Authority(ies) allowing the Regulatory Authority the right to review and SutroVax or its designee to reference such Drug Master File(s) in support of (and other Regulatory Materials, to the extent necessary to support) an application for Regulatory Approval submitted by SutroVax (or its permitted designee) for any Vaccine Composition produced using the Product the subject of the applicable Drug Master File (it being understood that SutroVax, its Affiliates· and Sublicensees shall not have access to the information contained in such Drug Master Files (or other confidential Regulatory Materials submitted for a similar purpose as a Drug Master File (e.g., a clinical trial application for such purpose in the European Union)) as a result of such authorization and right to reference). Sutro shall file such Drug Master File in coordination with SutroVax's efforts to file and prosecute the applicable regulatory filings to such Regulatory Authority and Sutro shall be responsible, at SutroVax's sole expense (subject to a budget reasonably approved in advance by SutroVax), for providing the applicable Regulatory Authorities with such additional data as they may request (which may in some cases require Sutro to conduct additional studies), and for correcting any deficiencies of such Drug Master File identified by such Regulatory Authority, in each case in a reasonably prompt and efficient manner so as to prevent any delay in obtaining Regulatory Approvals for any Vaccine Composition based on such Drug Master File. In addition, Sutro shall be responsible for maintaining such Drug Master File in accordance with applicable Laws as necessary to support filing and prosecuting the applicable regulatory filing(s) and obtaining and maintaining the applicable Regulatory Approval(s) for Vaccine Compositions produced using the Products. For further clarity, to the extent Sutro discloses. Sutro Know- How to SutroVax, SutroVax shall have the right to include (and authorize the inclusion of) such Sutro Know-How in Regulatory Materials to the extent it is necessary or useful for the purpose of obtaining Regulatory Approval of a Vaccine Composition. Sutro's obligations under this Section 6.2 shall [***]. Sutro shall cause its personnel to record time spent performing such activities to a job code specific to such activities. For purposes of this Article 6 "Drug Master File" or "DMF" means a submission to a Regulatory Authority of information concerning the chemistry, manufacturing and controls ("CMC") of the Products to permit such Regulatory Authority to review this information in support of any application for Regulatory Approval for a product submitted by a party that has been granted a right to reference such submission without disclosing the contents of such submission to such party. Sutro shall file DMF(s) for the Products with other Regulatory Authorities in the Territory in accordance with the terms and conditions of the Phase 3/Commercial Supply Agreement referenced in Section 2.14 (and, for clarity, shall file DMF(s) for the Products with Regulatory Authorities in the European Union (including the United Kingdom) and Japan as necessary to comply with the requirements of such Regulatory Authorities, to the extent not filed under this Supply Agreement).
6.2.1 Compliance. Subject to the foregoing, Sutro shall provide the information set forth under this Section 6.2 in a timely manner and compliant with the reporting requirements of the Regulatory Authorities.
6.2.2 Safety Data. Each Party understands and acknowledges that the other Party and its Affiliates and respective licensees or sublicensees may need to access and utilize and include certain safety data (e.g., adverse event reports) pertaining to product made using Products that is generated or received by such Party and its Affiliates and respective licensees or sublicensees in its Regulatory Materials in its respective Territory as required by applicable Laws. Each Party shall have the right to share any and all such safety data generated by the other Party or the other Party's Affiliates or licensees or sublicensees with its Affiliates and Third Parties (including its licensees and sublicensees) as permitted under section 10.2 of the License Agreement.
6.2.3 Cooperation. Each Party agrees to (i) make its personnel reasonably available at their respective places of employment to consult with the other Party on issues related to the activities conducted in accordance with this Article 6 or otherwise relating to the development of the Products or Vaccine Compositions and thereafter in connection with any request from any Regulatory Authority, including with respect to regulatory, scientific, technical and clinical testing issues, or otherwise, throughout the Term, and (ii) otherwise provide such assistance as may be reasonably requested by the other from time-to-time in connection with the activities to be conducted under this Article 6 or otherwise relating to the development of the Vaccine Compositions or Products.
6.3 Recalls. Each of SutroVax and Sutro will immediately inform the other in writing if it believes one or more lots of any Product(s), or any products made by Sutro or its licensees using the Products (to the extent such products are made using Products from the same batch provided to SutroVax), or any Vaccine Compositions should be subject to recall from distribution, withdrawal or some other field action, or that potential adulteration, misbranding, and/or other issues have arisen that relate to the safety or efficacy of such Product. SutroVax shall have the final decision-making authority as to any such recall or field action and the sole right to initiate any such recall or field action with respect to Vaccine Compositions made using the Products. Sutro shall cooperate in the conduct of any recall or field action with respect to the Vaccine Compositions as reasonably requested by SutroVax. In the event it is determined that such a recall resulted from a breach by either Party of any of its representations, warranties, duties or obligations under this Supply Agreement, such Party shall be responsible for the costs of the recall and shall reimburse the other Party as necessary; provided that if both Parties share responsibility with respect to such recall, the costs shall be shared in the ratio of the Parties' contributory responsibility.
6.4 Retention of Samples. Sutro shall prepare and retain, and shall cause its subcontractors to prepare and retain, such samples and records in respect of the Product(s) and the Manufacture thereof as are required by Applicable Law (including, as applicable, cGMPs).
6.5 Regulatory Authority Inspections and Correspondence. Sutro shall permit Regulatory Authorities to conduct such inspections of any Facility at which any of the Manufacturing activities relating to the Product(s) are performed, as such Regulatory Authorities may request, including pre-approval inspections,· and shall cooperate with such Regulatory Authorities with respect to such inspections and any related matters, in each case that is related to the Manufacture of Product(s). Sutro shall give SutroVax or its Affiliates prior written notice of any such inspections, and shall keep SutroVax informed about the results and conclusions of each such regulatory inspection, including actions taken by Sutro to remedy conditions cited in such inspections. Sutro shall provide SutroVax with copies of any written inspection reports issued by anyRegulatory Authority and all correspondence between Sutro and any Regulatory Authority with respect thereto, including any notices of observation and all related
correspondence, in each case relating to the Product(s) or its Manufacture or to general manufacturing concerns (e.g., facility compliance or the like) that are reasonably likely to impact the Product(s) to the extent such general manufacturing matters would be reasonably expected to have a material effect on the manufacture of Vaccine Compositions; provided that Sutro may redact from any such report and correspondence any Sutro Core Know-How and any information subject to an obligation of confidentiality to a Third Party. In addition, Sutro agrees to promptly notify and provide SutroVax copies of any material request, directive, or other written communication to or from Regulatory Authorities related to the Product or its Manufacture that would reasonably be expected to have a material effect on the manufacture of Vaccine Compositions (it being understood that SutroVax, its Affiliates and Sublicensees shall not have access to Sutro Core Know How (which Sutro may redact from such reports or correspondence provided to SutroVax) or Sutro's Drug Master Files or other confidential Regulatory Materials submitted for a similar purpose as a Drug Master File). Sutro shall provide SutroVax with a copy of the applicable portion of any correspondence made by Sutro to a Regulatory Authority for review and comment prior to submission to the applicable Regulatory Authority solely to the extent such correspondence made by Sutro is related to SutroVax or is in response to a request, directive or correspondence from the applicable Regulatory Authority regarding SutroVax or a Vaccine Composition (e.g., in response to a report regarding a pre- approval inspection for SutroVax). Sutro will consider in good faith any comments received from SutroVax within the time period indicated by Sutro (which shall not be less than [***], to the extent consistent with the require timeline for Sutro's response) with respect to any matter that relates to SutroVax. In addition, Sutro shall notify SutroVax of any occurrences or information that arise out of Sutro's Manufacturing activities that have, or could reasonably be expected to have, adverse regulatory compliance or reporting consequences concerning any Product(s) or which might otherwise be reasonably expected to adversely affect the supply by Sutro of Product(s) to SutroVax.
6.6 Changes or Modifications in Manufacturing Activities. Sutro shall not make any changes to the Specifications, processes, Facilities, raw materials, raw material suppliers or any other item that would affect the Manufacturing activities related to the Product (a "Manufacturing Change") that (a) would require a change to the applicable Drug Master File, (b) would be reasonably expected to cause SutroVax to be materially delayed obtaining any Regulatory Approval with respect to Vaccine Compositions or (c) causes the Product to not meet the Specification therefor (including the Activity Test with respect to Extract); without SutroVax's prior written consent (not to be unreasonably withheld, conditioned or delated). Notwithstanding the foregoing, Sutro shall promptly make and implement such changes as are required by Applicable Law provided that, prior to implementation, Sutro shall provide notice thereof to SutroVax and confer with SutroVax with respect to its timelines, estimated effect on Price and other issues regarding such implementation. Sutro shall provide SutroVax at least [***] days' written notice prior to implementing any Manufacturing Change. Sutro shall not make any change to the Specification for a Product without SutroVax's prior written consent. In addition, SutroVax shall have the right to request changes in or modifications to the Specifications and Sutro will consider in good faith any such requested changes or modifications. All such changes or modifications shall be documented in writing and shall be signed by an authorized representative of SutroVax and Sutro. If such changes or modifications result in a material change in Sutro's Manufacturing costs or lead times, the Parties shall agree upon an appropriate adjustment to the Price or in the delivery schedules, as the case may be, for Product(s) to be provided by Sutro hereunder. Sutro shall promptly implement any agreed upon changes to the Specifications.
6.7 Quality Agreement. As soon as reasonably practicable after the Effective Date, the Parties shall enter into a quality agreement governing Sutro's supply of Products (the "Quality Agreement"), which Quality Agreement shall include the Specifications for the Product(s) consistent with the Specifications set forth in Schedule 2. Accordingly, to permit the Quality Agreement to be finalized within such period, Sutro shall provide SutroVax or its designee access to Sutro's Facilities and records to enable SutroVax or its designee to complete an audit pursuant to Section 5.1 within [***] days after the Effective Date.
ARTICLE 7 REPRESENTATION AND WARRANTIES
7.1 SutroVax Warranties and Representations. SutroVax represents and warrants the following:
7.1.1 SutroVax is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.
7.1.2 SutroVax has all requisite power and authority to enter into this Supply Agreement. The person signing this Supply Agreement has the necessary corporate authority to legally bind SutroVax to the terms set forth herein.
7.1.3 SutroVax's execution of this Supply Agreement and performance of the terms set forth herein will not cause SutroVax to be in conflict with or constitute a breach of its organizational documents nor any other agreement, court order, consent decree or other arrangement, whether written or oral, by which it is bound.
7.1.4 SutroVax's execution of this Supply Agreement and performance hereunder are in, and will be in, compliance with any Applicable Law in all material respects.
7.1.5 This Supply Agreement is its legal, valid and binding obligation, enforceable against SutroVax in accordance with the terms and conditions hereof, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally or by the principles governing the availability of equitable remedies.
7.2 Sutro Warranties and Representations. Sutro represents and warrants the following:
7.2.1 Sutro is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.
7.2.2 Sutro has all requisite power and authority to enter into this Supply Agreement and has the requisite skill, knowledge, staffing, financial resources, capacity and ability to carry out its obligations hereunder. The person signing this Supply Agreement has the necessary authority to legally bind Sutro to the terms set forth herein.
7.2.3 Sutro's execution of this Supply Agreement and performance of the terms set forth herein will not cause Sutro to be in conflict with or constitute a breach of its organizational documents nor any other agreement, court order, consent decree or other arrangement, whether written or oral, by which it is bound.
7.2.4 Sutro's execution of this Supply Agreement and performance hereunder are in, and will be in, compliance with any Applicable Law in all material respects.
7.2.5 Sutro has and will maintain throughout the Term all permits, licenses, registrations and other forms of governmental authorization. and approval as required by Applicable Law in order for Sutro to execute and deliver this Supply Agreement and to perform its obligations hereunder in accordance with all Applicable Law.
7.2.6 as of the Effective Date, to the best of Sutro's knowledge, the practice of the Sutro Platform, including the use of the Products, does not infringe any Third Party patents.
7.2.7 7.2.7 Sutro is not debarred and Sutro has not and will not use in any capacity the services of any person debarred under subsection 306(a) or (b) of the U.S. Generic Drug Enforcement Act of 1992, or other Applicable Law, nor have debarment proceedings against Sutro or any of its employees or permitted subcontractors been commenced.
7.2.8 This Supply Agreement is its legal, valid and binding obligation, enforceable against Sutro in accordance with the terms and conditions hereof, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally or by the principles governing the availability of equitable remedies.
7.2.9 As of the Effective Date, there are no claims, judgments or settlements against or owed by Sutro or its Affiliates, or pending or, to the best of Sutro's knowledge, threatened claims or litigation, relating to the Product(s).
7.3 Product Warranties. Sutro represents and warrants that:
7.3.1 Sutro's Facility and all Product (as delivered in accordance with Section 2.1 and until the expiration date thereof) supplied hereunder (and the Manufacture thereof) shall comply with this Supply Agreement, all Applicable Law (including cGMPs, if applicable),·be free from defects in material and workmanship, and meet all Specifications.
7.3.2 Title to all Product(s) provided under this Supply Agreement shall pass to SutroVax as set forth in Section 2.6, free and clear of any security interest, lien, or other encumbrance.
7.4 Disclaimer. EACH PARTY AGREES AND ACKNOWLEDGES THAT, EXCEPT AS SET FORTH IN THIS ARTICLE 7, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, IMPLIED OR STATUTORY, AND EACH PARTY HEREBY EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, IMPLIED OR STATUTORY, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AGAINST NON-INFRINGEMENT OR THE LIKE, OR ARISING FROM COURSE OF PERFORMANCE.
ARTICLE 8 CONFIDENTIALITY
8.1 Article 10 of the License Agreement (Confidentiality) is hereby incorporated into this Supply Agreement by reference. The terms and provisions of this Supply Agreement (which shall be the Discloser's Information of both Parties) and all other information and data, including all notes, books, papers, diagrams, documents, reports, e-mail, memoranda, visual observations, oral communications and all other data or information in whatever form, that one Party or any of its Affiliates or representatives supplies or otherwise makes available to the other Party or its Affiliates or representatives pursuant to this Supply Agreement shall be deemed Discloser's Information pursuant to Article 10 of the License Agreement.
ARTICLE 9 INDEMNIFICATION AND INSURANCE
9.1 Indemnification.
9.1.1 Indemnification by Sutro. Sutro hereby agrees, at its sole cost and expense, to defend, hold harmless and indemnify, to the extent permitted by Applicable Law, (collectively, "Indemnify") SutroVax and its Affiliates and their respective agents, directors, officers and employees of such Persons and the respective successors and assigns of any of the foregoing (the "SutroVax Indemnitees") from and against any and all liabilities, damages, penalties, fines, costs and expenses (including, reasonable attorneys' fees and other expenses of litigation) (collectively, "Liabilities") resulting from suits, claims, actions and demands, in each case brought by a Third Party (each, a "Third-Party Claim") against any SutroVax Indemnitee and arising from or occurring as a result of: [***]. Sutro's obligation to Indemnify the SutroVax Indemnitees pursuant to this Section 9.1.1 shall not apply to the extent that any such Liabilities are the result of a material breach by SutroVax of its obligations, representations, warranties or covenants under this Supply Agreement or the License Agreement or any SutroVax Indemnitee' s negligence or willful misconduct.
9.1.2 Indemnification by SutroVax. SutroVax hereby agrees to Indemnify Sutro and its agents, directors, officers and employees and the respective successors and assigns of any of the foregoing (the "Sutro lndemnitees") from and against any and all Liabilities resulting from Third-Party Claims against any Sutro Indemnitee arising from or occurring as a result of: [***]. SutroVax's obligation to Indemnify the Sutro Indemnitees pursuant to this Section 9.1.2 shall not apply to the extent that any such Liabilities are the result of a material breach by Sutro of its obligations, representations, warranties or covenants under this Supply Agreement or the License Agreement or any Sutro Indemnitee's negligence or willful misconduct.
9.1.3 Procedure. To be eligible to be Indemnified hereunder, the indemnified Person shall provide the indemnifying Party with prompt written notice of the Third-Party Claim giving rise to the indemnification obligation pursuant to this Section 9.1 and the right to control the defense (with the reasonable cooperation of the indemnified Person) or settlement any such claim; provided, however, that the indemnifying Party shall not enter into any settlement that admits fault, wrongdoing or damages without the indemnified Person's written consent, such consent not to be unreasonably withheld or delayed. The indemnified Person shall have the right to join, but not to control, at its own expense and with counsel of its choice, the defense of any claim or suit that has been assumed by the indemnifying Party.
9.2 Insurance. Each Party shall procure and maintain insurance, including clinical trials and product liability insurance, adequate to cover its obligations hereunder and consistent with normal business practices of prudent companies similarly situated at all times during which any Product or Vaccine Compositions is being clinically tested in human subjects or commercially distributed or sold by such Party. It is understood that such insurance shall not be construed to create a limit of either Party's liability or indemnification obligations under this Article 9, or that the maintenance of such insurance shall not be construed to relieve either Party of its other obligations under this Supply Agreement. Each Party shall provide the other with written evidence of such insurance upon request. Each Party shall provide the other with written notice at least [***] days prior to the cancellation, non renewal or material change in such insurance.
9.3 LIMITATION OF LIABILITY. EXCEPT (I) WITH RESPECT TO ANY BREACH OF ARTICLE 8 (CONFIDENTIALITY), (II) FOR THIRD PARTY PENALTIES, COSTS AND EXPENSES AS SET FORTH IN SECTION 2.9, OR (III) FOR [***], TO THE MAXIMUM EXTENT PERMITTED BY LAW, (A) NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES, WHETHER LIABILITY IS ASSERTED IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR ANY OTHER THEORY OR FORM OF ACTION, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY THEREOF; AND (B) EACH PARTY'S TOTAL LIABILITY TO THE OTHER PARTY UNDER THIS SUPPLY AGREEMENT SHALL NOT EXCEED [***]. SUTRO'S LIABITY TO SUTROVAX FOR THIRD PARTY PENALTIES, COSTS AND EXPENSES UNDER SECTION 2.9 SHALL NOT EXCEED [***].
ARTICLE 10 TERM AND TERMINATION
10.1 Term. The term of this Supply Agreement shall begin on the Effective Date first set forth above and shall remain in effect until the later of (a) July 31, 2021 or (b) the date that the Parties enter into the Phase 3/Commercial Supply Agreement and Sutro is supplying to SutroVax each Product under the Phase 3/Commercial Supply Agreement (the "Term"), unless it is terminated earlier in accordance with Section 10.2.
10.2 Termination. Notwithstanding anything to the contrary in this Supply Agreement, this Supply Agreement may be terminated:
10.2.1 in its entirety or with respect to one or more Products, on a Product-by-Product basis, by mutual written consent of Sutro and SutroVax;
10.2.2 in its entirety by a Party if the other Party materially breaches any of the material terms, conditions or agreements contained in this Supply Agreement to be kept, observed or performed by the other Party, by giving the Party who committed the breach [***] days' prior written notice, unless the notified Party shall have cured the breach within such [***]-day period; and
10.2.3 in its entirety or with respect to one or more Products, on a Product-by-Product basis, by SutroVax upon [***] days' prior written notice to Sutro for any reason.
10.3 Effects of Termination. Upon the expiration of the Term or termination of this Supply Agreement, in its entirety or with respect to one or more Products, this Supply Agreement shall, except as otherwise provided in this Section 10.3 or Section 10.5, be of no further force or effect; provided, however, that (a) in the event this Supply Agreement is terminated by SutroVax pursuant to Section 10.2.3 and there are outstanding Work Orders or other purchase orders accepted by Sutro that would not be fulfilled as a result of such termination, SutroVax shall reimburse Sutro for all supplies and materials purchased by Sutro and time incurred by Sutro personnel (to the extent incurred solely for manufacture of Product for SutroVax) for the manufacture, or preparation for the manufacture, of Products for any Work Orders placed by SutroVax and any other purchase orders accepted by Sutro prior to such expiration or termination, in each case to the extent Sutro cannot otherwise reasonably mitigate such the costs and expenses of such supplies, materials and time (e.g., by use of resulting supplies, materials and work-in-progress Product for other purposes); provided that to the extent SutroVax pays for any supplies or materials, upon SutroVax's request Sutro shall promptly transfer and deliver such supplies and materials to SutroVax; and (b) if this Supply Agreement is terminated with respect to one or more Products, but not all Products, then this Supply Agreement shall continue in full force and effect with respect to the applicable Product(s) for which it is not terminated.
10.4 Nonexclusive Remedy. Exercise of any right of termination afforded to either Party under this Supply Agreement (i) shall not prejudice any other legal rights or remedies either Party have against the other in respect of any breach of the terms and conditions of this Supply Agreement, and (ii) shall be without any obligation or liability arising from such termination other than such obligations expressly arising from termination of this Supply Agreement.
10.5 Survival. Expiration of the Term or termination of this Supply Agreement (for any reason) shall not affect any accrued rights or liabilities of either Party. Article 4 (Product Testing), Article 5 (Inspection), Article 8 (Confidentiality), Article 9 (Indemnification and Insurance), Article 11 (Disputes), Article 12 (Miscellaneous), and Sections 2.2 (Transfer of Product), 2.14 (Phase 3/Commercial Supply Agreement), 2.15 (Qualification of Alternate Supplier), 2.17 (Manufacture of Custom Reagents), 3.3 (Recordkeeping), 3.4 (Taxes), 6.2 (Right of Reference; Drug Master Files), 6.3 (Recalls), 6.4 (Retention of Samples), 6.5 Regulatory Authority Inspections and Correspondence), 7.3 (Product Warranties), 7.4 (Disclaimer), 10.3 (Effects of Termination), 10.4 (Nonexclusive Remedy), and 10.5 (Survival) shall survive any expiration of the Term or termination of this Supply Agreement.
ARTICLE 11 DISPUTE RESOLUTION
11.1 Principal Contacts. Each Party will appoint an individual employed by it to serve as its "Principal Contact" for purposes of this Supply Agreement. Either Party may from time to time replace its Principal Contact with a different employee, but unless required due to events beyond its control, neither Party will replace its Principal Contact without at least [***] days prior notice to the other Party. The two Principal Contacts shall communicate with each other regularly during the Term as the Parties may agree or as the Principal Contacts shall mutually determine to be useful.
11.2 Escalation. The Parties intend that, to the maximum extent practicable, they shall reach decisions hereunder cooperatively through discussions among the Principal Contacts and by mutual consent of the Parties. In situations in which that does not occur, disputes or differences arising out of or in connection with this Supply Agreement shall initially be referred for review by the Parties' respective Senior Managements (as defined below). Such Senior Managements shall discuss the proposed dispute or difference, and shall meet with respect thereto if either of them believes a meeting or meetings are likely to be useful. If the Senior Managements do not resolve the dispute or difference within [***] days (or such lesser or longer period as they may agree is a useful period for their discussions), then either Party may pursue its other available remedies, consistent with this Supply Agreement. As used herein, Sutro's "Senior Management" means its then-current CEO, and SutroVax's "Senior Management" means its then-current CEO. For clarity, there shall be no obligation for any Disputed Matter arising out of Section 2.14 or 2.15 to be referred to the Senior Management to review prior to such matters being resolved by arbitration pursuant to Sections 11.3 and 11.4.
11.3 Arbitration. If the Senior Managements are not able to resolve such dispute referred to them under Section 11.2 within such [***] day period, then such dispute shall be resolved by final and binding arbitration as follows: The Parties shall select a mutually agreeable arbitrator who has significant relevant experience in the subject matter of the disputed issue and no affiliation or pre-existing relationship with either Party. If the Parties cannot agree on an arbitrator within [***] days after the end of the [***] day period referred in Section 11.2 (or with respect to a Disputed Matter described in Section 11.4, after referral by a Party of such Disputed Matter to arbitration), either Party may request the Judicial and Mediation Services ("JAMS") in San Francisco, CA to appoint an arbitrator on behalf of the Parties in accordance with the commercial arbitration rules of JAMS, and the proceeding shall be conducted in accordance with JAMS rules. The arbitrator may decide any issue as to whether, or as to the extent to which, any dispute is subject to the arbitration and other dispute resolution provisions in this Supply Agreement. The arbitrator must base the award on the provisions of this Supply Agreement and must render the award in a writing which must include an explanation of the reasons for such award. Judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. The arbitrator's fees and expenses shall be shared equally by the Parties, unless the arbitrator in the award assesses such fees and expenses against one of the Parties or allocates such fees and expenses other than equally between the Parties. Each Party shall bear and pay its own expenses incurred in connection with any dispute resolution under this Section 11.3. Notwithstanding the foregoing, either Party shall have the right, without waiving any right or remedy available to such Party under this Supply Agreement or otherwise, to seek and obtain from any court of competent jurisdiction any interim or provisional relief that is necessary or desirable to protect the rights or property of such Party, pending the selection of the arbitrator hereunder or pending the arbitrator's decision of the dispute subject to arbitration.
11.4 Baseball Arbitration. In the event (a) the Parties do not enter into a Phase 3/Commercial Supply Agreement as described in Section 2.14 or (b) the Parties do not enter into a Transfer Addendum as described in Section 2.15 ("Disputed Matter"), then upon either Party's request with respect to the Disputed Matter in clause (a) or SutroVax's request with respect to the Disputed Matter in clause (b), such Disputed Matter shall be resolved by binding arbitration conducted pursuant to Section 11.3, except that the procedures for the conduct of such arbitration shall be as follows:
11.4.1 Each Party shall provide the arbitrator and the other Party with a written report setting forth its position with respect to the substance of such Disputed Matter and a full draft Phase 3/Commercial Supply Agreement or Transfer Addendum, as applicable, and may submit a revised report, position and draft Phase 3/Commercial Supply Agreement or Transfer Addendum, as applicable, to the arbitrator within [***] days of receiving the other Party's report and draft Phase 3/Commercial Supply Agreement or Transfer Addendum, as applicable. If so requested by the arbitrator, each Party shall make oral and/or other written submissions to the arbitrator in accordance with procedures to be established by the arbitrator; provided that other Party shall have the right to be present during any oral submissions. The arbitrator shall select one of the Party's draft Phase 3/Commercial Supply Agreement or Transfer Addendum, as applicable, as his or her decision, based on what is most reasonable and equitable to each of the Parties under the circumstances and reflective of reasonable and customary terms in the biopharmaceutical industry for agreements of this type and most closely reflects the Parties' intent as expressed in this Supply Agreement and the License Agreement, and shall not have the authority to render any substantive decision other than to so select the draft Phase 3/Commercial Supply Agreement or Transfer Addendum, as applicable, of Sutro or SutroVax (as initially submitted, or as revised in accordance with the foregoing, as applicable). For clarity, it is understood that the Parties intend the arbitration under this Section 11.4 to be a "baseball arbitration" type proceeding; and the arbitrator may fashion such detailed procedures as the arbitrator considers appropriate to implement this intent. Notwithstanding anything to the contrary, in no event shall the Phase 3/Commercial Supply Agreement or Transfer Addendum contain any provision granting to SutroVax or its Affiliates or Sublicensees any right to obtain or use any Sutro Core Know-How.
11.4.2 In any arbitration under this Section 11.4, the arbitrator and the Parties shall use their best efforts to resolve such Disputed Matter within [***] days after the selection of the arbitrator, or as soon thereafter as is practicable.
ARTICLE 12 MISCELLANEOUS
12.1 Expenses. Except as otherwise expressly provided herein, each Party shall bear its own costs, fees and expenses incurred by such Party in connection with this Supply Agreement.
12.2 Licenses and Permits. Each Party shall, at its sole cost and expense, maintain in full force and affect all necessary licenses, permits, and other authorizations required by Applicable Law in order to carry out its duties and obligations hereunder.
12.3 Force Majeure. No Party shall be liable for a failure or delay in performing any of its obligations under this Supply Agreement if, but only to the extent that such failure or delay is due to causes beyond the reasonable control of the affected Party, including: (a) acts of God; (b) fire, explosion, or unusually severe weather; (c) war, invasion, riot, terrorism, or other civil unrest; (d) governmental laws, orders, restrictions, actions, embargo or blockages; (e) national or regional emergency; (f) strikes or industrial disputes at a national level which directly impact the affected Party's performance under this Supply Agreement; or (g) other similar cause outside of the reasonable control of such Party ("Force Majeure"); provided that the Party affected shall promptly notify the other of the Force Majeure condition and shall use reasonable efforts to eliminate, cure or overcome any such causes and resume performance of its obligations as soon as possible. If the performance of any obligation of a Party under this Supply Agreement is delayed owing to such a Force Majeure for any continuous period of more than [***] days, the other Party shall have the right to terminate this Supply Agreement.
12.4 Neither Party may assign or transfer this Supply Agreement, including by merger, operation of law, or otherwise, without the other Party's prior written consent (which shall not be withheld unreasonably) except each Party may assign this Supply Agreement without the other Party's consent in the case of assignment or transfer to a Third Party that succeeds to all or substantially all of the assigning Party's business and assets relating to the subject matter of this Supply Agreement, whether by sale, merger, operation of law or otherwise. Any attempted assignment by a Party in violation of this Section without the written consent of the other Party will be null and void. Except as above limited, this Supply Agreement is binding upon and will inure to the benefit of each of the Parties, its successors and assigns. Without limiting the foregoing, in the event that a Party is acquired, the acquiring Party shall agree in writing to abide by the terms of this Supply Agreement. Sutro agrees that if it assigns the License Agreement to any successor as allowed under section 15.1 of the License Agreement, it will also assign to such successor this Supply Agreement in accordance with this Section 12.4.
12.5 This Supply Agreement incorporates the Exhibits referenced herein. This Supply Agreement, together with the License Agreement, constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the Parties hereto with respect to its subject matter. To the extent of any conflict between this Agreement and the License Agreement, the License Agreement shall govern and control.
12.6 All notices, requests or other communication provided for or permitted hereunder shall be given in writing and shall be hand delivered or sent by confirmed facsimile, reputable courier or by registered or certified mail, postage prepaid, return receipt requested, to the address set forth below, or to such other address of which either Party may inform the other in writing. Notices will be deemed delivered on the earliest of transmission by facsimile, actual receipt or [***] days after mailing as described herein.
If to Sutro: Sutro Biopharma, Inc. 310 Utah Ave., Suite 150 South San Francisco, CA 94080 Attention: Chief Executive Officer
If to SutroVax: SutroVax, Inc. 353 Hatch Dr. Foster City, CA 94404 Attention: Chief Executive Officer
12.7 This Supply Agreement may be amended, modified or waived only in a writing signed by the Party or Parties to be bound thereby.
12.8 If any provision of this Supply Agreement shall be held invalid, illegal or unenforceable, such provision shall be enforced to the maximum extent permitted by law and the Parties' fundamental intentions hereunder, and the remaining provisions shall not be affected or impaired.
12.9 Nothing herein contained shall constitute this a joint venture agreement and nothing herein shall constitute any Party as a partner, principal or agent of any other, this being an agreement between independent contracting entities. Except as expressly set forth herein, no Party shall have the authority to bind any other in any respect whatsoever to Third Parties. Except as provided herein, nothing contained in this Supply Agreement shall be construed as conferring any right on any Party to use any name, trade name, trademark or other designation of any other Party hereto, unless the express, written permission of such other Party has been obtained.
12.10 This Supply Agreement has been submitted to the scrutiny of, and has been negotiated by, both Parties and their counsel, and shall be given a fair and reasonable interpretation in accordance with its terms, without consideration or weight being given to any such term's having been drafted by any Party or its counsel.
12.11 This Supply Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California, without regard to any conflict of laws rules to the contrary.
12.12 Each Party acknowledges that the other Party may likely suffer irreparable harm from such Party's breach or threatened breach of this Agreement and the other Party, in such cases, would therefore be entitled, without waiving any other right or remedy available to, to injunctive relief (including specific performance) without the requirement to post a bond, provided the waiver by such Party of the other Party's requirement to post a bond shall expire on the Change of Control of the other Party, and each party agrees that the arbitrator selected under Section 11.3 shall have the power to grant such injunctive relief (or order specific performance). The Parties shall comply with any such injunctive relief (including specific performance) ordered by the arbitrator and agree that such order may, to the extent not precluded by applicable law, be enforceable as a final award in any court of competent jurisdiction.
12.13 This Supply Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile and other electronically scanned signatures shall have the same effect as their originals.
[The remainder of this page is left intentionally blank]
IN WITNESS WHEREOF, the Parties have caused this Supply Agreement to be executed by their respective duly authorized officers as of the Effective Date, each copy of which will for all purposes be deemed to be an original. SUTRO BIOPHARMA, INC. SUTROVAX, INC.
By: /s/ William J. Newell By: /s/ Grant E. Pickering Name: William J. Newell Name: Grant E. Pickering Title: CEO Title: President & CEO
SCHEDULE 1
PRODUCTS AND PRICE
[***]
SCHEDULE2
SPECIFICATIONS
{6 pages omitted}
[***]
SCHEDULE3
INITIAL ORDER
[***]
SCHEDULE 2.15.1
REPRESENTATIVE CMOS
[***] [/INST] ```json
{<answer_start>
"answer": "For any failure to supply compliant Product(s) in the later of the Delivery Time Period and the period ending [***] after the delivery date specified under the Work Order, without limiting SutroVax's other remedies, subject to this Section 2.9.2 and Section 9.3 (Limitation of Liability), Sutro shall be liable for any non-cancelable Third Party penalties, costs and expenses incurred by SutroVax as a result of Sutro's failure to supply Product(s) as aforesaid, subject to receipt by Sutro of appropriate documentary evidence of such penalties, costs and expenses to the extent such evidence of such amounts may be provided by SutroVax without breaching SutroVax's or its Affiliates' duties of confidentiality to such Third Party (and provided that SutroVax shall use commercially reasonable efforts to (i) minimize or eliminate such penalties, costs and expenses and (ii) where provision of such evidence to Sutro would result in a breach of such duties of confidentiality, to obtain the consent of the applicable Third Party to the provision of such evidence to Sutro)."
<answer_end>
}
``` </s> | Exhibit 10.19
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM IF PUBLICLY DISCLOSED.
SUPPLY AGREEMENT
This SUPPLY AGREEMENT ("Supply Agreement") is made as of May 29, 2018 (the "Effective Date") by and between SutroVax, Inc., a Delaware corporation having principal offices at 353 Hatch Dr., Foster City, CA 94404 ("SutroVax") and Sutro Biopharma, Inc., a Delaware corporation, having principal offices at 310 Utah Ave, Suite 150, South San Francisco, CA, 94080 ("Sutro"). SutroVax and Sutro may be referred to herein by name or individually, as a "Party" and collectively, as the "Parties."
BACKGROUND
A. Sutro controls certain proprietary technology which permits cell-free expression of proteins, and Sutro licensed such technology to SutroVax under that certain Amended and Restated SutroVax Agreement dated as of October 12, 2015 (the "License Agreement").
B. SutroVax is a vaccine company primarily in the business of developing, manufacturing and marketing vaccine products; and
C. SutroVax desires to purchase from Sutro, and Sutro desires to supply to SutroVax, the Extracts and Custom Reagents (as defined below) upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the covenants, conditions and undertakings hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:
AGREEMENT
ARTICLE 1
DEFINITIONS/ INTERPRETATION
For the purposes of this Supply Agreement, the following capitalized words and phrases shall have the following meanings:
1.1 "Affiliate" means, with respect to either Party, any business entity controlling, controlled by, or under common control with such Party. For the purpose of this definition only, "control" means (i) the possession, directly or indirectly, of the power to direct the management or policies of a business entity, whether through the ownership of voting securities, by contract or otherwise, or (ii) the ownership, directly or indirectly, of at least fifty percent (50%) of the voting securities or other ownership interest of a business entity. Notwithstanding the above, in no event shall Sutro (or any entity that would be an Affiliate of SutroVax solely because it is an Affiliate of Sutro) be deemed an Affiliate of SutroVax, or SutroVax (or any entity that would be an Affiliate of Sutro solely because it is an Affiliate of SutroVax) an Affiliate of Sutro.
1.2 "Applicable Law" means all laws, ordinances, rules, rulings, directives and regulations of any Governmental Authority that apply to the development, manufacture or supply of any Product or the other activities contemplated under this Supply Agreement, including (i) all applicable federal, state and local laws, rules and regulations; (ii) the U.S. Federal Food, Drug and Cosmetic Act; (iii) regulations and guidelines of the FDA and other Regulatory Authorities, including cGMPs, if applicable; and (iv) any applicable non-U.S. equivalents of any of the foregoing, including guidelines of the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use (as amended from time to time).
1.3 "cGMPs" means current good manufacturing practices and standards as set forth (and as amended from time to time) in the current Good Manufacturing Practice Regulations of the U.S. Code of Federal Regulations, including 21 C.F.R. Sections 210 and 211, the European Community Directive 2003/94/EC and the ICH Harmonised Tripartite Guideline, Good Manufacturing Practice Guides for Active Pharmaceutical Ingredients (Q7).
1.4 "Components" means any product or material used in the Manufacture of the Products including the packaging materials.
1.5 "Extract" means Sutro's extract derived from strains of E. coli identified on Schedule 1 attached hereto, as may be amended from time to time in accordance with Section 12.7, and any new versions and improvements thereof that may be included in Schedule 1 by written agreement of the Parties in accordance with Section 12.7.
1.6 "Facility" or "Facilities" means the facilities where Product will be Manufactured as set forth in Schedule 1. Schedule 1 may be amended from time to time in accordance with this Supply Agreement to add or remove facilities.
1.7 "FDA" means the United States Food and Drug Administration, or any successor agency thereto performing similar functions.
1.8 "Fully Burdened Manufacturing Costs" means, with respect to a Product, Sutro's costs of manufacturing such Product, which manufacturing costs shall mean: (a) [***], and (b) [***], in each case to the extent directly allocated to and incurred in the manufacture by Sutro of such Product supplied to SutroVax, its Affiliates and Sublicensees. Fully Burdened Manufacturing Costs shall not include any [***] and shall be calculated in accordance with the foregoing, GAAP and Sutro's policies and procedures for its other products, in each case consistently applied (and such plant operations and support services costs shall be allocated consistent with GAAP and other products of Sutro in that facility).
1.9 "Governmental Authority" means any court, agency, department, authority or other instrumentality of any nation, state, country, city or other political subdivision, including any Regulatory Authority.
1.10 "Manufacture" or "Manufacturing" means the processes and procedures for the supply of the Products, including, (a) the supply and quality control of the Components; (b) the manufacture of the Products in bulk; (c) the Packaging and labeling of the Products; (d) the quality control of the Products; and (e) the storage of the Products until shipment.
1.11 "Package" or "Packaging" means packaging Product(s) in accordance with applicable Specifications.
1.12 "Person" means an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency thereof.
1.13 "Price" means the price to be paid by SutroVax for each Product as set forth on Schedule 1 of this Supply Agreement and as may be modified from time to time in accordance with Section 3.2.
1.14 "Product(s)" means the Extract and Custom Reagents.
1.15 "Custom Reagents" means Sutro's custom reagents identified on Schedule 1 attached hereto, and any new versions and improvements thereof that may be included in Schedule 1 by written agreement of the Parties in accordance with Section 12.7.
1.16 "Regulatory Approval" means, with respect to a product, all approvals, licenses, registrations or authorizations necessary to market and sell such product in a particular jurisdiction in the Territory (including applicable approvals of labeling, price and reimbursement for such product in such jurisdiction).
1.17 "Regulatory Authority" means any federal, national, multinational, state, provincial or local regulatory agency, department, bureau or other governmental entity, including the FDA, with authority over the development, Manufacture or commercialization (including approval of Regulatory Approvals) of any Product(s) in any jurisdiction in the Territory.
1.18 "Regulatory Materials" means regulatory applications, submissions, notifications, communications, correspondence, registrations, Regulatory Approvals and/or other filings made to, received from or otherwise conducted with a Regulatory Authority (including minutes of meeting with Regulatory Authorities) that are necessary or reasonably desirable to access in connection with the development, manufacture, marketing, sale or other commercialization of any Product in a particular country or regulatory jurisdiction. Regulatory Materials include, without limitation, INDs, NDAs, BLAs, clinical trial applications, marketing approval applications and applications for pricing approvals.
1.19 "Required Standards" means Applicable Law, the Specifications, and the warranties given by Sutro in Section 7.3, provided that Required Standards shall not include compliance with cGMPs for Custom Reagents, Extract identified as "research grade" Extract or Other Extracts.
1.20 "Specifications" means, with respect to a Product or applicable Component thereof, all written product, regulatory, Manufacturing, release criterion, quality control and quality assurance procedures, processes, practices, standards, instructions and specifications applicable to the Manufacture of such Product or Component, as agreed to by the Parties in writing from time to time. The initial Specifications for the Products are attached hereto as Schedule 2.
1.21 "SutroVax CMO" means any contract manufacturer responsible for supplying or manufacturing a Vaccine Composition on behalf of SutroVax or its Affiliates, selected in accordance with Section .2.
1.22 "Territory" means worldwide.
1.23 "Third Party" means any Person other than SutroVax, Sutro, or their respective Affiliates.
1.24 Additional Definitions. Each of the following terms shall have the meaning described in the corresponding Section of this Supply Agreement indicated below:
1.25 Interpretation. The captions and headings to this Supply Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Supply Agreement. Unless specified to the contrary, references to Articles, Sections, Schedules or Exhibits mean the particular Articles, Sections, Schedules or Exhibits to this Supply Agreement and references to this Supply Agreement include all Schedules and Exhibits hereto. Unless context clearly requires otherwise, whenever used in this Supply Agreement: (i) the words "include" or "including" shall be construed as incorporating, also, "but not limited to" or "without limitation;" (ii) the word "or" shall have its inclusive meaning of "and/or;" (iii) the word "notice" shall require notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other written communications contemplated under this Supply Agreement; (iv) the words "hereof," "herein," "hereunder," "hereby" and derivative or similar words refer to this Supply Agreement (including any Schedules and
Term Section Defined Alternate Supplier 2.15 Acceptance Period 4.2 COA/COC 4.1 CMC 6.2 CMO 2.15 Delivery Time Period 2.9.2 Disputed Matter 11.4 Drug Master File 6.2 Effective Date Preamble Force Majeure 12.3 Forecast 2.3 Indemnify 9.1.1 Laboratory 4.3 Latent Defect 4.2 Liabilities 9.1.1 License Agreement Background Manufacturing Change 6.6 MSDS 4.1 Other Extract 2.16 Party or Parties Preamble
Term Section Defined Phase 3/Commercial Supply Agreement 2.14 Q1, Q2 or Q3 2.3 Quality Agreement 6.7 Senior Management 11.2 Short Dated Product 2.11 Sutro Preamble Sutro Activity Criteria 4.1 Sutro Activity Test 4.1 Sutro Indemnitees 9.1.2 SutroVax Preamble SutroVax Activity Criteria 4.1 SutroVax Activity Test 4.1 SutroVax Indemnitees 9.1.1 Supply Agreement Preamble Term 10.1 Third-Party Claim 9.1.1 Transfer Addendum 2.15 Work Order 2.3
Exhibits); (v) provisions that require that a Party or the Parties "agree," "consent" or "approve" or the like shall require that such agreement, consent or approval be specific and in writing; (vi) words of any gender include the other gender; (vii) words using the singular or plural number also include the plural or singular number, respectively; (viii) references to any specific law, or article, section or other division thereof, shall be deemed to include the then-current amendments thereto or any replacement thereof; (ix) neither Party shall be deemed to be acting "under the authority" of the other Party; and (x) any capitalized terms used and not defined in this Supply Agreement shall have the meaning set forth in the License Agreement.
ARTICLE 2 SUPPLY
2.1 Supply. Pursuant to the terms and conditions of this Supply Agreement, Sutro agrees that it will Manufacture the Product(s) at the Facility(ies) for SutroVax and shall supply the Product(s) to SutroVax, its Affiliates, and any SutroVax CMO, for purposes of production of Vaccine Compositions (including development of processes for the production of Vaccine Compositions), solely for non-clinical research purposes or in Phase I or Phase II clinical trials of such Vaccine Compositions..
2.2 Transfer of Product. Subject to Section 2.1, SutroVax may transfer Products to SutroVax CMOs selected by SutroVax and that are reasonably acceptable to Sutro (the acceptance of which by Sutro not to be unreasonably withheld, conditioned or delayed) or previously approved by Sutro.
2.3 Work Orders. From time to time, Sutro and SutroVax may execute one or more work orders, that describe the Product to be Manufactured, the quantities of each Product to be Manufactured and supplied to SutroVax, the Price to be charged by Sutro (which shall be as set forth in Section 3.2) and paid by SutroVax for the Product, and the delivery date(s) for such Product, (as executed, a "Work Order"). Each Work Order will expressly refer to this Supply Agreement, will form a part of this Supply Agreement, and will be subject to the terms and conditions contained herein. Sutro shall not unreasonably withhold its agreement to any proposed Work Order requested by SutroVax. Sutro shall be obligated to execute proposed Work Orders requested by SutroVax (except with respect to Other Extracts) with respect to quantities in such proposed Work Order for delivery at least [***] months after SutroVax's request to the extent such quantities of Product (when added to the quantities of such Product in Work Orders previously agreed between the Parties for delivery within the one (1) calendar year period prior to the requested delivery date of the proposed Work Order) are less than (a) [***] liters with respect to Extract or (b) a corresponding amount of each Custom Reagent to support use of [***] liters of Extract. Sutro shall notify SutroVax as soon as possible if Sutro believes it will be unable to deliver Product in accordance with the applicable Work Order. Sutro's providing of such notification shall not be interpreted in any manner as relieving Sutro of its obligations under this Supply Agreement, nor shall it prevent SutroVax from pursuing any and all rights and remedies SutroVax may have based on Sutro's failure to be able to deliver any Product in accordance with the terms of this Supply Agreement.
2.4 Orders.
2.4.1 Purchase Orders. Once both parties have executed a Work Order, SutroVax shall place a purchase order for the amounts of Products to be purchased under such Work Order with delivery dates for such amounts consistent with such Work Order. Additionally, SutroVax may from time to time place purchase orders for additional quantities specifying requested delivery dates in accordance with reasonable delivery schedules and lead times; in each case, as may be agreed upon from time to time by the Parties. Each purchase order placed by SutroVax shall specify the quantity of Product, destination(s) and requested delivery dates. Sutro shall promptly accept all purchase orders with respect to the amounts of Products to be purchased under the applicable Work Order and shall accept or reject any amount in the purchase order in excess of the amounts of Products to be purchased under the applicable Work Order and all other purchase orders for Product submitted by SutroVax in accordance with this Article 2 within [***] days from receipt of the order; provided however that Sutro shall use Commercially Reasonable Efforts to accept such amounts and purchase orders. Accepted purchase orders may not be cancelled without the prior written agreement of both Parties except as set forth in Sections 2.5. Unless otherwise directed by SutroVax, Sutro shall fill all accepted purchase orders for Product in accordance with the requested due dates as set forth in further detail in Section 2.9.2.
2.4.2 No Conflicting Terms. The terms and conditions of this Supply Agreement shall be controlling over any conflicting terms and conditions stated in SutroVax's purchase order or Sutro's invoice, confirmation or other standardized document. Any purchase order, order acknowledgement, invoice, proposal or other document which conflicts with or adds to the terms and conditions of this Supply Agreement with respect to the Manufacture and supply of Product for the Territory is hereby rejected, unless the Parties mutually agree to the contrary in writing.
2.4.3 Initial Order. Notwithstanding Section 2.3 or this Section 2.4, Sutro accepts and agrees to fulfil the order previously placed by or on behalf of SutroVax (or to be placed by or on behalf of SutroVax, if no already placed) for the quantities of Product set forth in Schedule 3 by the delivery date set forth therein (the "Initial Order").
2.5 Cancellation. Notwithstanding anything herein to the contrary, SutroVax may not modify or cancel purchase orders with respect to the amounts of Product to be purchased under the applicable Work Order, however SutroVax may modify or cancel other purchase orders (including amounts in a purchase order in excess of the amounts of Product to be purchased under the applicable Work Order) for the Products provided that such modification or change is made further in advance of the originally requested delivery date than the required lead time, where the agreed required lead time for the applicable purchase order has been evidenced in writing (including, for example, by email) between the Parties.
2.6 Delivery and Risk of Loss. Sutro shall mark Product for delivery to the destination(s) specified by SutroVax. All shipments of Product(s) shall be delivered [***] (lncoterms 2010) Sutro Facility. Title and risk of loss and damage to the Product(s) shall remain with Sutro until the Product(s) are delivered in accordance with the foregoing, at which time title and risk ofloss and damage to the Product(s) shall pass to SutroVax. SutroVax will arrange for shipping from Sutro's Facility to the destination specified by SutroVax at SutroVax's cost and expense.
2.7 Packaging. Sutro shall provide the Product to SutroVax in Packaged form in accordance with the Required Standards.
2.8 Conformance to Required Standards. Sutro shall Manufacture the Product(s) in accordance with the Required Standards, as the same may be amended or supplemented from time to time. Each Party shall keep the other promptly and fully advised of any new requirements of the applicable Regulatory Authority or Applicable Law of which it becomes aware and Sutro shall promptly implement such requirements as described in Section 6.6.
2.9 Supply and Delivery.
2.9.1 Shortage. Sutro shall use reasonable efforts to promptly notify SutroVax in writing in the event that Sutro is unable or anticipates that it will be unable to supply compliant Product in accordance with the requirements of this Supply Agreement, including the Quality Agreement and all Required Standards, and each Work Order. Sutro shall use Commercially Reasonable Efforts to overcome any inability or anticipated inability to so supply compliant Product to SutroVax.
2.9.2 Delivery Delays. Subject to Section 2.4.1 (including applicable lead times agreed upon in accordance with Section 2.4.1) Sutro shall make deliveries of Product(s) in accordance with Section 2.6, no more than [***] days before or [***] after the delivery dates specified by SutroVax in the relevant purchase order (provided that such delivery date is in accordance with the applicable Work Order or such purchase order was otherwise accepted by Sutro) (the "Delivery Time Period"). For any failure to supply compliant Product(s) in the later of the Delivery Time Period and the period ending [***] after the delivery date specified under the Work Order, without limiting SutroVax's other remedies, subject to this Section 2.9.2 and Section 9.3 (Limitation of Liability), Sutro shall be liable for any non-cancelable Third Party penalties, costs and expenses incurred by SutroVax as a result of Sutro's failure to supply Product(s) as aforesaid, subject to receipt by Sutro of appropriate documentary evidence of such penalties, costs and expenses to the extent such evidence of such amounts may be provided by SutroVax without breaching SutroVax's or its Affiliates' duties of confidentiality to such Third Party (and provided that SutroVax shall use commercially reasonable efforts to (i) minimize or eliminate such penalties, costs and expenses and (ii) where provision of such evidence to Sutro would result in a breach of such duties of confidentiality, to obtain the consent of the applicable Third Party to the provision of such evidence to Sutro). In the event that Sutro makes a Manufacturing Change and is not able to Manufacture and supply Product in conformance with the Required Standards within [***] days of the delivery date identified on the applicable purchase order, Sutro shall Manufacture such Product without such Manufacturing Change. The rights of SutroVax set forth in this paragraph are in addition to any other rights set forth in this Supply Agreement.
2.10 Allocation. Without limiting any other rights or remedies available to SutroVax, if the demand for a Product in aggregate exceeds available supply or Sutro otherwise concludes that it may be unable to supply a Product in accordance with the requirements of this Supply Agreement in the quantities and within the time periods specified in each Work Order and the corresponding purchase orders that have been accepted by Sutro, Sutro shall immediately notify SutroVax of such shortfall (or anticipated shortfall), and shall use Commercially Reasonable
Efforts to procure Components and capacity adequate to meet accepted purchase orders and supply compliant Product in accordance with the requirements of this Supply Agreement. Sutro shall allocate its available Components and manufacturing capacity to provide SutroVax with quantities of such Product at least equal to the greater of (a) [***] of the amount of Product (or products equivalent to Product) that Sutro allocates for itself and its Affiliates (but in no event less than [***] liters of Extract per month and the minimum allocation volume set out in Schedule 1 of each Custom Reagent per month), provided that SutroVax demonstrates actual need for the applicable quantities of Extract, and (b) the [***]. Without limiting the foregoing, if there is a shortage of supply of Product, Sutro shall provide Product to SutroVax for any quantities of Product ordered by SutroVax in accordance with the applicable Work Order or purchase order in priority to any subsequent Third Party purchase orders, but not in priority to any Third Party purchase orders or other binding commitment placed before placement of the applicable SutroVax Work Order or purchase order.
2.11 Short Dated Product. Sutro agrees to ship all Product(s) so that they are delivered to SutroVax and will remain compliant with the Specifications for at least [***] months from the date of delivery in accordance with this Supply Agreement.
2.12 Subcontracting by Sutro. Sutro shall (a) ensure that any subcontractor or delegatee of Sutro's obligations under this Supply Agreement has and maintains all appropriate qualifications; (b) enter into a quality agreement with each such subcontractor and delegatee which terms are similar to the terms of the Quality Agreement between SutroVax and Sutro; and (c) be responsible for each subcontractor's and delegatee's performance hereunder (including performance or non-performance by such subcontractor or delegatee that would constitute a breach of this Supply Agreement or such quality agreement if conducted by Sutro) as if Sutro were itself performing such activities. Sutro shall not subcontract the Manufacture of Product to a Third Party without SutroVax's prior consent other than to an Alternate Supplier as expressly set forth in Section 2.15.
2.13 CMOs. Notwithstanding anything to the contrary in this Supply Agreement, SutroVax shall have the rights to purchase Available Extracts and Extracts from CMOs (as defined in the License Agreement) to the extent provided in section 3.1 of the License Agreement.
2.14 Phase 3/Commercial Supply Agreement. If requested by SutroVax in writing (which request shall not be made prior to [***]), the Parties shall negotiate in good faith reasonable terms and conditions of an agreement for the supply by Sutro of the Products for the production of Vaccine Compositions for use in phase 3 clinical studies and for commercial purposes ("Phase 3/Commercial Supply Agreement"). The price for the Products Manufactured by Sutro under the Phase 3/Commercial Supply Agreement shall not exceed [***] of the Fully Burdened Manufacturing Cost thereof. If the Parties have not entered into the Phase 3/Commercial Supply Agreement within [***] after SutroVax's request to negotiate the Phase 3/Commercial Supply Agreement, upon either Party's request by written notice to the other Party the terms and conditions of the Phase 3/Commercial Supply Agreement shall be determined by binding arbitration in accordance with the procedures set forth in Section 11.4. Upon the selection of one draft Phase 3/Commercial Supply Agreement by the arbitrator pursuant to Section 11.4, unless SutroVax elects not to enter into such Phase 3/Commercial Supply
Agreement by written notice thereof to Sutro within [***] days after such selection, the Parties shall execute the definitive Phase 3/Commercial Supply Agreement selected by the arbitrator (but excluding, for clarity, any provision granting to SutroVax or its Affiliates or Sublicensees any right to obtain or use any Sutro Core Know-How); and if SutroVax elects to not enter into the Phase 3/Commercial Supply Agreement selected by the arbitrator by providing notice thereof within such [***] day period, then neither Party shall be obligated to enter into the Phase 3/Commercial Supply Agreement.
2.15 Qualification of Alternate Supplier.
2.15.1 Transfer Addendum.
(a) Transfer Addendum. Upon SutroVax' written request, the Parties agree to negotiate in good faith an addendum to this Supply Agreement setting forth the terms and conditions pursuant to which Sutro will conduct a Process Transfer to a Third Party contract manufacturer ("CMO") and/or engage such CMO to establish Capacity to Manufacture Extract (as Process Transfer and Capacity are defined below), in each case for the Manufacture and supply of such Extract for SutroVax' (or its Affiliate's or SutroVax CMO's) use to manufacture Vaccine Compositions, consistent with the remainder of this Section 2.15 (such addendum, a "Transfer Addendum"). As requested by SutroVax, this procedure may also be used in the event that SutroVax wishes Sutro to conduct a Process Transfer to a Third Party CMO in order to establish Capacity to Manufacture Custom Reagents. In connection with such request, SutroVax shall provide to Sutro a description of the desired Process Transfer and/or Capacity, including timing and other requirements thereof. Such Transfer Addendum shall:
(i) include a plan and budget for the conduct of the Process Transfer and/or establishment of such Capacity, which shall include amounts charged by the CMO (as defined further below, the "Alternate Supplier") to receive and conduct such Process Transfer and/or establish such Capacity, as well as reasonable FTE costs for Sutro personnel performing and managing technology transfer activities in accordance with the Transfer Addendum·
(ii) require SutroVax to fund the costs incurred by Sutro to conduct Process Transfer and/or establish such Capacity in accordance with such budget;
(iii) provide for initiation and completion of the Process Transfer and establishment of Capacity as requested by SutroVax, to the extent possible;
(iv) to the extent requested by SutroVax, be designed to enable the Alternate Supplier to Manufacture Extract of suitable quality for use in Phase 3 clinical trials and commercialization of a Vaccine Composition at a capacity to support SutroVax' projected commercial requirements for Extract (or other capacity identified by SutroVax in connection with the negotiation of the Transfer Addendum), as requested by SutroVax;
(v) require the Parties to fully cooperate to verify that the Extract supplied by the Alternate Supplier meets the Specifications, to validate the Manufacturing process implemented at the Alternate Supplier and to qualify the Alternate Supplier, in each case to supply Extract for SutroVax' use in Phase 3 clinical trials and commercialization of a Vaccine Composition (collectively, with respect to Capacity established, "Validating" such Capacity);
(vi) include mechanisms for keeping SutroVax fully informed, at scheduled intervals not to exceed once per quarter, of the progress of the Process Transfer and establishing such Capacity, as applicable, including with respect to the anticipated date for qualifying the Alternate Supplier and any changes to such anticipated date;
(vii) provide a right for SutroVax to modify the timing of or terminate the Process Transfer, Capacity or specified aspects thereof on reasonable notice, subject to SutroVax' agreement to bear any resulting termination or cancellation fees charged by the Alternative Supplier; and
(viii) include a mechanism for Sutro to cooperate with SutroVax and keep SutroVax reasonably informed with respect to Sutro's negotiation of an agreement with a potential Alternate Supplier for a Process Transfer and/or establishment of Capacity, including with respect to pricing for Extract from the Alternate Supplier to Sutro and any commitments to purchase quantities of Extract from the Alternate Supplier that SutroVax would be obligated to assume (e.g., in connection with establishing Capacity), if any, and require Sutro to obtain SutroVax' approval (not to be withheld unreasonably) of the terms of such agreement prior to entering into such agreement to the extent that the terms apply to SutroVax (it being understood that Sutro may redact any terms that are not relevant to SutroVax).
(b) Scope. As used above, "Process Transfer" means a technology transfer of Sutro's know-how and information as is necessary or useful for the Third Party CMO to Manufacture in its own facilities Extract that meets SutroVax' requirements, including any such information and know-how as would be needed for such CMO to scale up such Manufacture to the requested commercial volumes. To establish "Capacity" means that the CMO would take such actions as are necessary (including validation and if necessary adapting or reserving existing facilities, establishing new facilities and/or procuring necessary equipment) to Manufacture Extract meeting SutroVax' requirements for Phase 3 and commercial supply in such quantities as SutroVax designates. It is understood that SutroVax may request that the Process Transfer and establishment of Capacity be undertaken in separate steps, for example by undertaking an initial Process Transfer to demonstrate the CMO's ability to Manufacture Extract, and then later establishing Capacity for Phase 3 and commercial supply, as requested by SutroVax in accordance with Section 2.15.1(a) (i.e., in separate requests).
(c) Selection of Alternate Supplier. The "Alternate Supplier" will be selected by Sutro, provided that Sutro must select an "Alternate Supplier" that is substantially similar to those CMOs identified on Schedule 2.15.1 hereto and provided further that SutroVax shall have the right to veto such selection based only on a genuine and material conflict of interest between SutroVax and the Alternate Supplier. Additional CMOs may be added to Schedule 2.15.1 by Sutro with SutroVax's approval (not to be withheld unreasonably).
(d) Alternate Supplier as Subcontractor. It is understood that the Alternate Supplier established under the Transfer Addendum shall operate as a subcontractor of Sutro under this Supply Agreement and the Phase 3/Commercial Supply Agreement, and as such SutroVax will order from Sutro thereunder any Extract to be Manufactured by such Alternate Supplier. Subject to the foregoing, the Transfer Addendum and the Phase 3/Commercial Supply Agreement will include reasonable and customary rights for SutroVax to conduct audits/inspections, site visits, quarterly meetings, each such audit/inspection, site visit and quarterly meeting to be coordinated by Sutro and to occur in the presence of a representative for Sutro and SutroVax, in connection with the Alternate Supplier's manufacture of Extract for supply to SutroVax. For clarity, SutroVax shall not conduct any business discussions for the supply of Extract with the Alternate Supplier in a manner that induces the Alternate Supplier to breach its agreement with Sutro. Notwithstanding the foregoing, in the event Sutro undergoes a Change of Control or Sutro permits any third party to acquire Extract directly from an Alternate Supplier established under the Transfer Addendum, then SutroVax shall thereafter have the right to establish a supply agreement with and obtain supply of Extract directly from such Alternate Supplier.
(e) Quotations. Upon SutroVax's request (which request, for clarity, may be before a request to negotiate a Transfer Addendum), Sutro shall seek quotations from one or more Third Party CMO(s) for such a Process Transfer and/or establishment of such Capacity, in each case as requested by SutroVax, and the Parties shall reasonably cooperate to establish requests for quotations for such purposes.
(f) Arbitration. If the Parties have not agreed upon a Transfer Addendum within [***] after SutroVax' request, upon SutroVax' request by written notice to Sutro, the terms and conditions of the Transfer Addendum shall be determined by binding arbitration in accordance with the procedures set forth in Section 11.4. For clarity, however, it is understood that a Transfer Addendum shall not include any provision granting to SutroVax or its Affiliates or Sublicens.ee s any right to obtain or use any Sutro Core Know-How.
2.15.2 Source of Supply. It is understood that after the Alternate Supplier is qualified, SutroVax shall have the right under this Supply Agreement and the Phase 3/Commercial Supply Agreement to specify whether Extract ordered from Sutro pursuant to this Agreement or the Phase 3/Commercial Supply Agreement will be Manufactured at Sutro's Facility or at the Alternate Supplier's facilities (and to the extent Extract from the Alternate Supplier is ordered under this Supply Agreement or the Phase 3/Commercial Supply Agreement, the facility of the Alternate Supplier shall be deemed a Facility for purposes of this Supply Agreement and the Phase 3/Commercial Supply Agreement). Notwithstanding the foregoing, to the extent the FDA and EMA have confirmed that Extract manufactured at Sutro's Facility and the Alternate Supplier's Facility are interchangeable and can be supplied from either such Facility without any additional regulatory requirements or regulatory delay with respect to the applicable Vaccine Composition, and such Extract otherwise meets SutroVax' requirements, then with SutroVax' consent (not to be withheld unreasonably) Sutro may supply Extract from either Sutro's Facility or the Alternate Supplier's Facility.
2.15.3 Price. To the extent Sutro or its Affiliate Manufactures Extract supplied to SutroVax, the Price (per unit volume or unit weight) under this Supply Agreement and the Phase 3/Commercial Supply Agreement for such Extract shall not exceed [***] of the Fully Burdened Manufacturing Costs of such Extract; and to the extent the Extract to be supplied to SutroVax is Manufactured by a Third Party (including the Alternate Supplier), the Price to be
charged to SutroVax under this Supply Agreement and the Phase 3/Commercial Supply Agreement for such Extract shall equal the amount Sutro paid such Third Party for such Extract ("OOP Cost") plus an amount reasonably calculated to cover Sutro's FTE costs to procure and manage the relationship with such Third Party, such amount not to exceed [***] of the OOP Cost for such Extract. To the extent that Sutro or its Affiliate receives any portion of the amounts paid to such Third Party to Manufacture Extract (e.g., as a profit share or otherwise), the Price to be charged SutroVax shall be the lesser of i) [***], or ii) [***]; in either case, [***]. For clarity, Section 3.4 of the License Agreement shall apply with respect to the Alternate Supplier.
2.15.4 Sutro/Third Party use of Alternate Supplier. Once the Alternate Supplier is qualified pursuant to this Section 2.15, SutroVax shall have the first right (as between SutroVax and Sutro or Third Parties supplied or authorized by Sutro) to obtain Extract Manufactured by the Alternate Supplier up to the Capacity established pursuant to the Transfer Addendum for a period ending the later of [***] or [***], and provided SutroVax commits to [***] or [***].
2.16 Other Extracts. From time-to-time, subject to an agreed-upon Work Order, SutroVax may place purchase orders for quantities of research grade extract derived from strains of E. Coli other than that set forth on Schedule 1 attached hereto (each an "Other Extract"). Sutro shall use Commercially Reasonable Efforts to accept such purchase orders (and shall accept such purchase orders placed consistent with an agreed-upon Work Order) and manufacture and supply to SutroVax such Other Extracts. For the purpose of calculating the Price for Other Extracts in accordance with this Section, the Price will be the cost of materials and Sutro's labor at an FTE rate of [***] per year for Sutro laboratory scientists. Upon Sutro's acceptance of a purchase order for Other Extract, such Other Extract in such purchase order shall be deemed Extract for purposes of Sections 2.1, 2.2, 2.3, 2.4.1 (solely with respect to the last two sentences thereof), 2.5, 2.6, 2.7, 2.8, 2.9.1 , 3.1, 4, 5, 6, 7 and 9.
2.17 Manufacture of Custom Reagents. For clarity, SutroVax may Manufacture Custom Reagents itself or obtain supply thereof through a Third Party independent of this Supply Agreement and nothing in this Supply Agreement is intended to restrict SutroVax from doing so. Upon SutroVax's request, and subject to the remainder of the terms of this Section 2.17, Sutro shall (a) transfer to SutroVax or a contract manufacturer designated by SutroVax (which contract manufacturer is reasonably acceptable to Sutro, the approval of which shall not be unreasonably withheld, conditions or delayed by Sutro) as soon as reasonably practicable the process to Manufacture each Custom Reagent and the items of Sutro Know-How reasonably necessary for SutroVax or its designee to Manufacture each Custom Reagent, including cell lines, standard operating procedures, protocols, batch records, analytical method standard operating procedures and analytical method transfer protocols and (b) make Sutro Personnel reasonably available to SutroVax or its designee for scientific and technical explanations and on-site support that may reasonably be requested by SutroVax or its designee to Manufacture the Custom Reagents; provided however, that SutroVax shall fully reimburse Sutro for all documented time spent by Sutro's personnel to perform such transfer (on an FTE basis, each such FTE charged at an annual rate of [***]) and out-of-pocket costs incurred by Sutro in connection with all of the activities under the preceding sub-clauses (a) and (b), in accordance with a budget reasonably approved in advance by SutroVax. Upon such SutroVax request, Sutro and SutroVax shall, within [***] days, agree on a scope of work for such transfer, including
scale, timeline, estimated budget, and required materials; both parties shall use reasonable efforts to complete the transfer as soon as reasonably practical. If requested by SutroVax (including if such request is prior to agreement on a scope of work), Sutro shall promptly transfer to SutroVax or its designee the cell lines, manufacturing instructions and analytical methods used for Manufacture of each Custom Reagent. For clarity, SutroVax shall have the right to enter into an agreement directly with such designee for the Manufacture and supply of Custom Reagents directly to SutroVax, its Affiliates, and any SutroVax CMO and, upon SutroVax's request, to the extent necessary, Sutro shall authorize such designee to enter into such agreement with SutroVax and perform such activities. For further clarity, Sutro shall not be responsible for any damages resulting from delay or failure in establishing the processes for Manufacture of Custom Reagents at SutroVax's designee resulting from action or inaction on the part of the designee or to the extent beyond Sutro's control. SutroVax shall have the right to obtain from such designee such items of Sutro Know-How transferred to such designee and use such items in connection with the exercise of its rights pursuant to the License Agreement, including for the Manufacture of Custom Reagents and the management of such designee. SutroVax shall use such Sutro Know-How transferred under this Section 2.17 (to the extent it is Discloser's Information of Sutro and does not meet one or more the criteria in clause (a) through (e) of Section 10.1 of the License Agreement) only for the Manufacture of Custom Reagents or otherwise within the scope of rights and licenses granted SutroVax in the License Agreement. In case of such a transfer to SutroVax or its designee, SutroVax will share with Sutro (i) the proposed process for manufacture of Custom Reagents through a Third Party so that Sutro may provide feedback and ensure that the process and Specifications are consistent with Sutro's process, and (ii) all regulatory submissions (including DMFs with respect to Custom Reagents) at least [***] days in advance of their intended date of submission to a Regulatory Authority in the Territory, and shall take into account Sutro's feedback to ensure alignment with Sutro's regulatory submissions and Regulatory Approvals with respect to Custom Reagents. Following completion of the transfer set forth above, Sutro shall provide reasonable support for the use of Third Party Custom Reagents in conjunction with Extract supplied by or on behalf of Sutro. In addition, Extract supplied by Sutro that conforms to the Required Standards when tested with Custom Reagents supplied by Sutro but not with Custom Reagents manufactured under this Section shall be deemed to conform to the Required Standards and SutroVax may not reject such Extract as a result of such non-conformance to the Required Standards when tested with Custom Reagents. SutroVax shall not prevent Sutro from separately contracting with the contract manufacturer for Manufacture of Custom Reagents for use on its own behalf or on behalf of other third parties.
2.18 Sutro Core Know-How. Notwithstanding anything to the contrary, except as set forth in Section 15.3 of the License Agreement, in no event shall SutroVax, its Affiliates or Sublicensees have the right to access any Sutro Core Know-How (as defined in the License Agreement), whether directly from Sutro or its Affiliates or through a CMO or otherwise, and SutroVax, its Affiliates and Sublicensees shall not require, request or solicit any CMO to deliver any Sutro Core Know-How to SutroVax, its Affiliates and/or its Sublicensees, and no agreement between any CMO and Sutro, its Affiliates and Subsidiaries shall contain any provision granting to SutroVax or its Affiliates or Sublicensees any right to obtain or use any Sutro Core Know-How. Without limiting the foregoing, in the event any item of Sutro Core Know-How is delivered to SutroVax, its Affiliates and/or its Sublicensees (except as set forth in Section 15.3 of the License Agreement), SutroVax, its Affiliates and Sublicensees shall immediately return such item to Sutro. Notwithstanding the foregoing, to the extent SutroVax or any of its Affiliates
or Sublicensees is required by a Regulatory Authority (or Applicable Law) in the United States, Europe or Japan to confidentially disclose, as part of the applicable regulatory filings with respect to a Vaccine Composition, any Sutro Core Know-How (for clarity, excluding any tangible embodiments of such Sutro Core Know-How other than information and documentation), Sutro shall, upon SutroVax's written request, confidentially disclose such Sutro Core Know-How as part of the applicable regulatory filings, subject to the payment obligations set forth in Section 5.4 of the License Agreement.
2.19 Express Rights. Except as expressly set forth in this Supply Agreement, no rights or licenses are granted to SutroVax under this Supply Agreement.
2.20 Extract Requirements. SutroVax agrees to purchase all its requirements of Extract from Sutro in accordance with this Agreement, except to the extent SutroVax is allowed to purchase Extract from (a) Alternate Suppliers engaged by Sutro in accordance with Section 2.15 of this Agreement; (b) a CMO engaged or established and authorized by Sutro under Section 3.l(d) of the License Agreement; or (c) a CMO authorized by Sutro under Section 3.l(e) of the License Agreement. Manufacturing of Extracts in breach of this Section 2.20 shall be deemed a material breach of this Agreement and the License Agreement by SutroVax.
ARTICLE 3 PRICING AND PAYMENT
3.1 Invoices. Sutro shall invoice SutroVax at the time of each shipment of Product(s) for the Price for such shipment. SutroVax will pay such invoices within [***] days of receipt of invoice (including all required documentation) by SutroVax.
3.2 Prices. The Prices for the Products shall not exceed [***] of the Fully Burdened Manufacturing Costs of such Product at the time such Product is manufactured and shall be set forth in the applicable Work Order. Upon SutroVax's request from time-to-time, Sutro shall disclose to SutroVax the then- current Price for Product. The Price for the Products as of the Effective Date is set forth in Schedule 1.
3.3 Recordkeeping. During the Term and for [***] years thereafter, or for such longer period as may be required by Applicable Law, Sutro shall prepare and retain, and shall cause its subcontractors to prepare and retain, accurate books and records related to transactions made pursuant to this Supply Agreement and Prices. Such records shall be made available for reasonable review, audit and inspection upon reasonable notice and with reasonable frequency, upon SutroVax's request for the purpose of verifying Sutro's calculations of amounts due hereunder, the basis for such calculations (including Sutro's calculation of the Fully Burdened Manufacturing Costs) or payments and Sutro's compliance with the terms and conditions of this Supply Agreement. Audits and inspections may be conducted by SutroVax's own personnel or retained consultant(s), subject to the confidentiality obligations set forth in this Supply Agreement.
3.4 Taxes. The Prices are exclusive of all Taxes. SutroVax will pay all taxes and duties that are assessed by any national, federal, state or local governmental authority on SutroVax's purchase or use of the Products, including, without limitation, sales, use, excise, value-added and withholding taxes, but excluding any taxes based on Sutro's income or gross receipts (collectively, "Taxes"). Sutro will separately identify all such Taxes on Sutro's invoice.
ARTICLE 4 PRODUCT TESTING
4.1 Product Testing and Inspections. Each shipment of Product shall be accompanied by a certificate of analysis describing all current requirements of the Specifications and results of tests performed on such Product and a certificate of conformity certifying that the quantities of Product supplied have been Manufactured, controlled and released according to the Required Standards ("COA/COC") as set forth in the applicable Quality Agreement (subject to SutroVax's conduct of the SutroVax Activity Test to confirm Extract meets the SutroVax Activity Criteria). The COA/COC acceptance criteria for each Product shall be set forth in the Specification for such Product. Two of the tests and corresponding COA/COC acceptance criteria for the Extract shall be the performance of a productivity (Activity) test of the applicable Sutro protein (the "Sutro Activity Test" and "Sutro Activity Criteria") and the performance of a productivity (activity) test of the applicable Vaccine Composition (the "SutroVax Activity Test" and "SutroVax Activity Criteria"). Sutro shall perform the Sutro Activity Test to confirm that all shipments of Extract meet the Sutro Activity Criteria and SutroVax (or its designee) shall perform the SutroVax Activity Test to confirm that all shipments of Extract meet the SutroVax Activity Criteria. Sutro will also provide SutroVax with Material Safety Data Sheets ("MSDS") or an equivalent instrument recognized by the applicable Regulatory Authority as required for the Product(s), and updates of the same as necessary.
4.2 Acceptance/Rejection of Non-Conforming Goods. SutroVax or its designee shall have a period of [***] calendar days from the date of delivery of the Product(s) in accordance with Section 2.6 and the COA/COCs or the equivalent instrument recognized by the applicable Regulatory Authority for such Product(s) ("Acceptance Period"), to inspect any shipment of Product(s) and conduct the SutroVax Activity Test to determine whether such shipment conforms to the Required Standards. If SutroVax determines that the Product(s) do not conform to the Required Standards, it hall notify Sutro within the Acceptance Period, and, if requested by Sutro, SutroVax shall ship a sample of such non-conforming Product(s) to Sutro at Sutro's expense. SutroVax's failure to notify Sutro of the non-conformity within the Acceptance Period will be deemed for purposes of this Supply Agreement to constitute SutroVax's acceptance of such shipment, provided, however, that such acceptance shall be subject to SutroVax's right to reject Product(s) until [***] days from the delivery date of the applicable Product, in each case, due to discovery by SutroVax or SutroVax's Affiliates or designees that the applicable Product does not conform to the Required Standards and such non-conformance could not reasonably be discovered within the Acceptance Period ("Latent Defects") provided that SutroVax gives Sutro with written notice of such Latent Defect within [***] days of SutroVax or any SutroVax Affiliate or designee becoming aware of such defect.
4.3 Disputes Regarding Conformance to Required Standards. If Sutro does not agree with SutroVax's determination that Product fails to conform to the Required Standards, then Sutro shall so notify SutroVax in writing within [***] days of its receipt of SutroVax's notice of non-conformity with respect to such Product and (if requested) Product sample. Sutro and SutroVax shall use reasonable efforts to resolve such disagreement as promptly as possible.
Without limiting the foregoing, Sutro and SutroVax shall discuss in good faith mutually acceptable testing procedures pursuant to which both Sutro and SutroVax will re-test a sample of the disputed Product to determine whether such Product meets the Required Standards. Notwithstanding the foregoing, in the event that Sutro and SutroVax are unable to resolve such disagreement within [***] days of the date of the applicable rejection notice, either Party may submit a sample of the allegedly non-conforming Product for testing and a determination as to whether or not such Product conforms to the Required Standards to an independent testing organization, or to a consultant of recognized repute within the United States pharmaceutical industry, in either case mutually agreed upon by the Parties (such organization or consultant, the "Laboratory"), the appointment of which shall not be unreasonably withheld or delayed by either Party. The determination of the Laboratory with respect to all or part of any shipment of Product shall be final and binding upon the Parties. The fees and expenses of the Laboratory making such determination shall be borne by Sutro, in the event that the Laboratory determines that the Product was non-conforming and by SutroVax, in the event that the Laboratory determines that the Product did conform to the Required Standards.
4.4 Return and Replacement of Non-Conforming Goods. Product that is either rejected by SutroVax as not meeting the Required Standards, or that is determined by the Laboratory not to meet such Required Standards, shall, [***], be returned by SutroVax to Sutro, or destroyed pursuant to Applicable Law, at Sutro's reasonable expense. Sutro shall replace any non-conforming Product(s) within the shortest possible time. SutroVax shall have no responsibility to Sutro for the amounts invoiced for non-conforming Product(s), and shall be credited for any amounts paid, but shall pay Sutro the applicable Price for the replacement Product(s) under the terms of Section 3.1.
ARTICLE 5 INSPECTION
5.1 Right to Audit. During the Term and the [***] period thereafter, SutroVax or a SutroVax Affiliate may, during normal working hours and upon reasonable advance notice perform site audits and inspect, or request information relating to, Sutro's or its subcontractor's Facilities and records directly or indirectly involved in the performance of this Supply Agreement or related to the Product(s). Such requests should be made in writing and Sutro will allow for such audits or inspection to occur within [***] days from request (excepting for cause audits) for Sutro's Facilities and within [***] days' from request (excepting for cause audits) for Sutro's subcontractor's facilities. Reasonable advance notice for audits for cause shall not require more than [***] advance notice. During such an inspection or request for information the inspectors may inquire about the progress of the work being carried out by Sutro or its subcontractor, and are in particular but not exclusively authorized to:
5.1.1 Inspect the Facilities, documents and equipment used, or to be used, in the Manufacture of the Product(s);
5.1.2 Verify the qualifications of the employees and subcontractors carrying out such work and their use of the relevant equipment;
5.1.3 Evaluate all scientific techniques used by Sutro, its subcontractors and their respective employees in the performance of this Supply Agreement and the procedures used in the creation and storage of samples of the Product(s), provided that nothing in this Section 5.1.3 shall require Sutroto disclose any Sutro Core Know-How;
5.1.4 Verify and evaluate information relating to the utilization of the Manufacturing capacity of Sutro's Facilities or its subcontractor's Facilities;
5.1.5 Review correspondence, reports, filings and other documents from Regulatory Authorities to the extent related to the Manufacturing activities hereunder;
5.1.6 Evaluate the implementation of all Manufacturing and process changes made with respect to the Product, including pursuant to any corrective action plan; and
5.1.7 Ascertain compliance with Applicable Laws, the Specifications and this Supply Agreement.
5.2 Access. Sutro shall provide SutroVax's and its Affiliate's and Sublicensee's inspectors with access to its Facilities, and information related to such Facilities, in order that the inspectors may carry out the inspections or inquiries referred to in the provisions of this Article 5. For the avoidance of doubt, neither SutroVax nor any of its Affiliates or Sublicensees (or their respective inspectors) shall have the right to observe the Manufacture of the Extract or be present at Sutro and its subcontractors' Facilities at such times when Extract is being Manufactured. Sutro shall use Commercially Reasonable Efforts to obtain from its subcontractors commitments similar to those contemplated in this Section 5.2. Audits and inspections may be conducted by SutroVax's own personnel or retained consultant(s), subject to the confidentiality obligations set forth in this Supply Agreement.
5.3 Sutro Audits. Without limiting the foregoing; Sutro is responsible for auditing the facilities of the suppliers of Components, if any, periodically, and Sutro agrees to provide SutroVax, upon SutroVax's request with a current copy of the audit report of such facilities and to incorporate SutroVax's comments with respect to any corrective action plan related to the Product.
ARTICLE 6 REGULATORY AND QUALITY RESPONSIBILITIES
6.1 Regulatory Responsibilities. Sutro shall obtain and maintain any and all regulatory and governmental permits, licenses and approvals that are necessary for Sutro to Manufacture the Product(s) for SutroVax or its Affiliates in accordance with the terms of this Supply Agreement and Applicable Law. As between the Parties, SutroVax shall have the sole responsibility for all Regulatory Approvals of the Vaccine Compositions.
6.2 Right of Reference; Drug Master Files. Sutro shall (a) file Drug Master File(s) for the Products with the FDA as requested by SutroVax, and with Regulatory Authorities in the European Union (including the United Kingdom) and Japan in accordance with timelines to be mutually agreed upon (such agreement not to be unreasonably withheld by either Party) (provided at SutroVax's request, Sutro shall do so within [***] of SutroVax's request using
Regulatory Filings that comprise versions of the DMF(s) filed with the FDA that have been reformatted to comply with EU and Japanese requirements), and (b) provide the appropriate authorizations to such Regulatory Authority(ies) allowing the Regulatory Authority the right to review and SutroVax or its designee to reference such Drug Master File(s) in support of (and other Regulatory Materials, to the extent necessary to support) an application for Regulatory Approval submitted by SutroVax (or its permitted designee) for any Vaccine Composition produced using the Product the subject of the applicable Drug Master File (it being understood that SutroVax, its Affiliates· and Sublicensees shall not have access to the information contained in such Drug Master Files (or other confidential Regulatory Materials submitted for a similar purpose as a Drug Master File (e.g., a clinical trial application for such purpose in the European Union)) as a result of such authorization and right to reference). Sutro shall file such Drug Master File in coordination with SutroVax's efforts to file and prosecute the applicable regulatory filings to such Regulatory Authority and Sutro shall be responsible, at SutroVax's sole expense (subject to a budget reasonably approved in advance by SutroVax), for providing the applicable Regulatory Authorities with such additional data as they may request (which may in some cases require Sutro to conduct additional studies), and for correcting any deficiencies of such Drug Master File identified by such Regulatory Authority, in each case in a reasonably prompt and efficient manner so as to prevent any delay in obtaining Regulatory Approvals for any Vaccine Composition based on such Drug Master File. In addition, Sutro shall be responsible for maintaining such Drug Master File in accordance with applicable Laws as necessary to support filing and prosecuting the applicable regulatory filing(s) and obtaining and maintaining the applicable Regulatory Approval(s) for Vaccine Compositions produced using the Products. For further clarity, to the extent Sutro discloses. Sutro Know- How to SutroVax, SutroVax shall have the right to include (and authorize the inclusion of) such Sutro Know-How in Regulatory Materials to the extent it is necessary or useful for the purpose of obtaining Regulatory Approval of a Vaccine Composition. Sutro's obligations under this Section 6.2 shall [***]. Sutro shall cause its personnel to record time spent performing such activities to a job code specific to such activities. For purposes of this Article 6 "Drug Master File" or "DMF" means a submission to a Regulatory Authority of information concerning the chemistry, manufacturing and controls ("CMC") of the Products to permit such Regulatory Authority to review this information in support of any application for Regulatory Approval for a product submitted by a party that has been granted a right to reference such submission without disclosing the contents of such submission to such party. Sutro shall file DMF(s) for the Products with other Regulatory Authorities in the Territory in accordance with the terms and conditions of the Phase 3/Commercial Supply Agreement referenced in Section 2.14 (and, for clarity, shall file DMF(s) for the Products with Regulatory Authorities in the European Union (including the United Kingdom) and Japan as necessary to comply with the requirements of such Regulatory Authorities, to the extent not filed under this Supply Agreement).
6.2.1 Compliance. Subject to the foregoing, Sutro shall provide the information set forth under this Section 6.2 in a timely manner and compliant with the reporting requirements of the Regulatory Authorities.
6.2.2 Safety Data. Each Party understands and acknowledges that the other Party and its Affiliates and respective licensees or sublicensees may need to access and utilize and include certain safety data (e.g., adverse event reports) pertaining to product made using Products that is generated or received by such Party and its Affiliates and respective licensees or sublicensees in its Regulatory Materials in its respective Territory as required by applicable Laws. Each Party shall have the right to share any and all such safety data generated by the other Party or the other Party's Affiliates or licensees or sublicensees with its Affiliates and Third Parties (including its licensees and sublicensees) as permitted under section 10.2 of the License Agreement.
6.2.3 Cooperation. Each Party agrees to (i) make its personnel reasonably available at their respective places of employment to consult with the other Party on issues related to the activities conducted in accordance with this Article 6 or otherwise relating to the development of the Products or Vaccine Compositions and thereafter in connection with any request from any Regulatory Authority, including with respect to regulatory, scientific, technical and clinical testing issues, or otherwise, throughout the Term, and (ii) otherwise provide such assistance as may be reasonably requested by the other from time-to-time in connection with the activities to be conducted under this Article 6 or otherwise relating to the development of the Vaccine Compositions or Products.
6.3 Recalls. Each of SutroVax and Sutro will immediately inform the other in writing if it believes one or more lots of any Product(s), or any products made by Sutro or its licensees using the Products (to the extent such products are made using Products from the same batch provided to SutroVax), or any Vaccine Compositions should be subject to recall from distribution, withdrawal or some other field action, or that potential adulteration, misbranding, and/or other issues have arisen that relate to the safety or efficacy of such Product. SutroVax shall have the final decision-making authority as to any such recall or field action and the sole right to initiate any such recall or field action with respect to Vaccine Compositions made using the Products. Sutro shall cooperate in the conduct of any recall or field action with respect to the Vaccine Compositions as reasonably requested by SutroVax. In the event it is determined that such a recall resulted from a breach by either Party of any of its representations, warranties, duties or obligations under this Supply Agreement, such Party shall be responsible for the costs of the recall and shall reimburse the other Party as necessary; provided that if both Parties share responsibility with respect to such recall, the costs shall be shared in the ratio of the Parties' contributory responsibility.
6.4 Retention of Samples. Sutro shall prepare and retain, and shall cause its subcontractors to prepare and retain, such samples and records in respect of the Product(s) and the Manufacture thereof as are required by Applicable Law (including, as applicable, cGMPs).
6.5 Regulatory Authority Inspections and Correspondence. Sutro shall permit Regulatory Authorities to conduct such inspections of any Facility at which any of the Manufacturing activities relating to the Product(s) are performed, as such Regulatory Authorities may request, including pre-approval inspections,· and shall cooperate with such Regulatory Authorities with respect to such inspections and any related matters, in each case that is related to the Manufacture of Product(s). Sutro shall give SutroVax or its Affiliates prior written notice of any such inspections, and shall keep SutroVax informed about the results and conclusions of each such regulatory inspection, including actions taken by Sutro to remedy conditions cited in such inspections. Sutro shall provide SutroVax with copies of any written inspection reports issued by anyRegulatory Authority and all correspondence between Sutro and any Regulatory Authority with respect thereto, including any notices of observation and all related
correspondence, in each case relating to the Product(s) or its Manufacture or to general manufacturing concerns (e.g., facility compliance or the like) that are reasonably likely to impact the Product(s) to the extent such general manufacturing matters would be reasonably expected to have a material effect on the manufacture of Vaccine Compositions; provided that Sutro may redact from any such report and correspondence any Sutro Core Know-How and any information subject to an obligation of confidentiality to a Third Party. In addition, Sutro agrees to promptly notify and provide SutroVax copies of any material request, directive, or other written communication to or from Regulatory Authorities related to the Product or its Manufacture that would reasonably be expected to have a material effect on the manufacture of Vaccine Compositions (it being understood that SutroVax, its Affiliates and Sublicensees shall not have access to Sutro Core Know How (which Sutro may redact from such reports or correspondence provided to SutroVax) or Sutro's Drug Master Files or other confidential Regulatory Materials submitted for a similar purpose as a Drug Master File). Sutro shall provide SutroVax with a copy of the applicable portion of any correspondence made by Sutro to a Regulatory Authority for review and comment prior to submission to the applicable Regulatory Authority solely to the extent such correspondence made by Sutro is related to SutroVax or is in response to a request, directive or correspondence from the applicable Regulatory Authority regarding SutroVax or a Vaccine Composition (e.g., in response to a report regarding a pre- approval inspection for SutroVax). Sutro will consider in good faith any comments received from SutroVax within the time period indicated by Sutro (which shall not be less than [***], to the extent consistent with the require timeline for Sutro's response) with respect to any matter that relates to SutroVax. In addition, Sutro shall notify SutroVax of any occurrences or information that arise out of Sutro's Manufacturing activities that have, or could reasonably be expected to have, adverse regulatory compliance or reporting consequences concerning any Product(s) or which might otherwise be reasonably expected to adversely affect the supply by Sutro of Product(s) to SutroVax.
6.6 Changes or Modifications in Manufacturing Activities. Sutro shall not make any changes to the Specifications, processes, Facilities, raw materials, raw material suppliers or any other item that would affect the Manufacturing activities related to the Product (a "Manufacturing Change") that (a) would require a change to the applicable Drug Master File, (b) would be reasonably expected to cause SutroVax to be materially delayed obtaining any Regulatory Approval with respect to Vaccine Compositions or (c) causes the Product to not meet the Specification therefor (including the Activity Test with respect to Extract); without SutroVax's prior written consent (not to be unreasonably withheld, conditioned or delated). Notwithstanding the foregoing, Sutro shall promptly make and implement such changes as are required by Applicable Law provided that, prior to implementation, Sutro shall provide notice thereof to SutroVax and confer with SutroVax with respect to its timelines, estimated effect on Price and other issues regarding such implementation. Sutro shall provide SutroVax at least [***] days' written notice prior to implementing any Manufacturing Change. Sutro shall not make any change to the Specification for a Product without SutroVax's prior written consent. In addition, SutroVax shall have the right to request changes in or modifications to the Specifications and Sutro will consider in good faith any such requested changes or modifications. All such changes or modifications shall be documented in writing and shall be signed by an authorized representative of SutroVax and Sutro. If such changes or modifications result in a material change in Sutro's Manufacturing costs or lead times, the Parties shall agree upon an appropriate adjustment to the Price or in the delivery schedules, as the case may be, for Product(s) to be provided by Sutro hereunder. Sutro shall promptly implement any agreed upon changes to the Specifications.
6.7 Quality Agreement. As soon as reasonably practicable after the Effective Date, the Parties shall enter into a quality agreement governing Sutro's supply of Products (the "Quality Agreement"), which Quality Agreement shall include the Specifications for the Product(s) consistent with the Specifications set forth in Schedule 2. Accordingly, to permit the Quality Agreement to be finalized within such period, Sutro shall provide SutroVax or its designee access to Sutro's Facilities and records to enable SutroVax or its designee to complete an audit pursuant to Section 5.1 within [***] days after the Effective Date.
ARTICLE 7 REPRESENTATION AND WARRANTIES
7.1 SutroVax Warranties and Representations. SutroVax represents and warrants the following:
7.1.1 SutroVax is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.
7.1.2 SutroVax has all requisite power and authority to enter into this Supply Agreement. The person signing this Supply Agreement has the necessary corporate authority to legally bind SutroVax to the terms set forth herein.
7.1.3 SutroVax's execution of this Supply Agreement and performance of the terms set forth herein will not cause SutroVax to be in conflict with or constitute a breach of its organizational documents nor any other agreement, court order, consent decree or other arrangement, whether written or oral, by which it is bound.
7.1.4 SutroVax's execution of this Supply Agreement and performance hereunder are in, and will be in, compliance with any Applicable Law in all material respects.
7.1.5 This Supply Agreement is its legal, valid and binding obligation, enforceable against SutroVax in accordance with the terms and conditions hereof, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally or by the principles governing the availability of equitable remedies.
7.2 Sutro Warranties and Representations. Sutro represents and warrants the following:
7.2.1 Sutro is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.
7.2.2 Sutro has all requisite power and authority to enter into this Supply Agreement and has the requisite skill, knowledge, staffing, financial resources, capacity and ability to carry out its obligations hereunder. The person signing this Supply Agreement has the necessary authority to legally bind Sutro to the terms set forth herein.
7.2.3 Sutro's execution of this Supply Agreement and performance of the terms set forth herein will not cause Sutro to be in conflict with or constitute a breach of its organizational documents nor any other agreement, court order, consent decree or other arrangement, whether written or oral, by which it is bound.
7.2.4 Sutro's execution of this Supply Agreement and performance hereunder are in, and will be in, compliance with any Applicable Law in all material respects.
7.2.5 Sutro has and will maintain throughout the Term all permits, licenses, registrations and other forms of governmental authorization. and approval as required by Applicable Law in order for Sutro to execute and deliver this Supply Agreement and to perform its obligations hereunder in accordance with all Applicable Law.
7.2.6 as of the Effective Date, to the best of Sutro's knowledge, the practice of the Sutro Platform, including the use of the Products, does not infringe any Third Party patents.
7.2.7 7.2.7 Sutro is not debarred and Sutro has not and will not use in any capacity the services of any person debarred under subsection 306(a) or (b) of the U.S. Generic Drug Enforcement Act of 1992, or other Applicable Law, nor have debarment proceedings against Sutro or any of its employees or permitted subcontractors been commenced.
7.2.8 This Supply Agreement is its legal, valid and binding obligation, enforceable against Sutro in accordance with the terms and conditions hereof, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally or by the principles governing the availability of equitable remedies.
7.2.9 As of the Effective Date, there are no claims, judgments or settlements against or owed by Sutro or its Affiliates, or pending or, to the best of Sutro's knowledge, threatened claims or litigation, relating to the Product(s).
7.3 Product Warranties. Sutro represents and warrants that:
7.3.1 Sutro's Facility and all Product (as delivered in accordance with Section 2.1 and until the expiration date thereof) supplied hereunder (and the Manufacture thereof) shall comply with this Supply Agreement, all Applicable Law (including cGMPs, if applicable),·be free from defects in material and workmanship, and meet all Specifications.
7.3.2 Title to all Product(s) provided under this Supply Agreement shall pass to SutroVax as set forth in Section 2.6, free and clear of any security interest, lien, or other encumbrance.
7.4 Disclaimer. EACH PARTY AGREES AND ACKNOWLEDGES THAT, EXCEPT AS SET FORTH IN THIS ARTICLE 7, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, IMPLIED OR STATUTORY, AND EACH PARTY HEREBY EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, IMPLIED OR STATUTORY, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AGAINST NON-INFRINGEMENT OR THE LIKE, OR ARISING FROM COURSE OF PERFORMANCE.
ARTICLE 8 CONFIDENTIALITY
8.1 Article 10 of the License Agreement (Confidentiality) is hereby incorporated into this Supply Agreement by reference. The terms and provisions of this Supply Agreement (which shall be the Discloser's Information of both Parties) and all other information and data, including all notes, books, papers, diagrams, documents, reports, e-mail, memoranda, visual observations, oral communications and all other data or information in whatever form, that one Party or any of its Affiliates or representatives supplies or otherwise makes available to the other Party or its Affiliates or representatives pursuant to this Supply Agreement shall be deemed Discloser's Information pursuant to Article 10 of the License Agreement.
ARTICLE 9 INDEMNIFICATION AND INSURANCE
9.1 Indemnification.
9.1.1 Indemnification by Sutro. Sutro hereby agrees, at its sole cost and expense, to defend, hold harmless and indemnify, to the extent permitted by Applicable Law, (collectively, "Indemnify") SutroVax and its Affiliates and their respective agents, directors, officers and employees of such Persons and the respective successors and assigns of any of the foregoing (the "SutroVax Indemnitees") from and against any and all liabilities, damages, penalties, fines, costs and expenses (including, reasonable attorneys' fees and other expenses of litigation) (collectively, "Liabilities") resulting from suits, claims, actions and demands, in each case brought by a Third Party (each, a "Third-Party Claim") against any SutroVax Indemnitee and arising from or occurring as a result of: [***]. Sutro's obligation to Indemnify the SutroVax Indemnitees pursuant to this Section 9.1.1 shall not apply to the extent that any such Liabilities are the result of a material breach by SutroVax of its obligations, representations, warranties or covenants under this Supply Agreement or the License Agreement or any SutroVax Indemnitee' s negligence or willful misconduct.
9.1.2 Indemnification by SutroVax. SutroVax hereby agrees to Indemnify Sutro and its agents, directors, officers and employees and the respective successors and assigns of any of the foregoing (the "Sutro lndemnitees") from and against any and all Liabilities resulting from Third-Party Claims against any Sutro Indemnitee arising from or occurring as a result of: [***]. SutroVax's obligation to Indemnify the Sutro Indemnitees pursuant to this Section 9.1.2 shall not apply to the extent that any such Liabilities are the result of a material breach by Sutro of its obligations, representations, warranties or covenants under this Supply Agreement or the License Agreement or any Sutro Indemnitee's negligence or willful misconduct.
9.1.3 Procedure. To be eligible to be Indemnified hereunder, the indemnified Person shall provide the indemnifying Party with prompt written notice of the Third-Party Claim giving rise to the indemnification obligation pursuant to this Section 9.1 and the right to control the defense (with the reasonable cooperation of the indemnified Person) or settlement any such claim; provided, however, that the indemnifying Party shall not enter into any settlement that admits fault, wrongdoing or damages without the indemnified Person's written consent, such consent not to be unreasonably withheld or delayed. The indemnified Person shall have the right to join, but not to control, at its own expense and with counsel of its choice, the defense of any claim or suit that has been assumed by the indemnifying Party.
9.2 Insurance. Each Party shall procure and maintain insurance, including clinical trials and product liability insurance, adequate to cover its obligations hereunder and consistent with normal business practices of prudent companies similarly situated at all times during which any Product or Vaccine Compositions is being clinically tested in human subjects or commercially distributed or sold by such Party. It is understood that such insurance shall not be construed to create a limit of either Party's liability or indemnification obligations under this Article 9, or that the maintenance of such insurance shall not be construed to relieve either Party of its other obligations under this Supply Agreement. Each Party shall provide the other with written evidence of such insurance upon request. Each Party shall provide the other with written notice at least [***] days prior to the cancellation, non renewal or material change in such insurance.
9.3 LIMITATION OF LIABILITY. EXCEPT (I) WITH RESPECT TO ANY BREACH OF ARTICLE 8 (CONFIDENTIALITY), (II) FOR THIRD PARTY PENALTIES, COSTS AND EXPENSES AS SET FORTH IN SECTION 2.9, OR (III) FOR [***], TO THE MAXIMUM EXTENT PERMITTED BY LAW, (A) NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES, WHETHER LIABILITY IS ASSERTED IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR ANY OTHER THEORY OR FORM OF ACTION, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY THEREOF; AND (B) EACH PARTY'S TOTAL LIABILITY TO THE OTHER PARTY UNDER THIS SUPPLY AGREEMENT SHALL NOT EXCEED [***]. SUTRO'S LIABITY TO SUTROVAX FOR THIRD PARTY PENALTIES, COSTS AND EXPENSES UNDER SECTION 2.9 SHALL NOT EXCEED [***].
ARTICLE 10 TERM AND TERMINATION
10.1 Term. The term of this Supply Agreement shall begin on the Effective Date first set forth above and shall remain in effect until the later of (a) July 31, 2021 or (b) the date that the Parties enter into the Phase 3/Commercial Supply Agreement and Sutro is supplying to SutroVax each Product under the Phase 3/Commercial Supply Agreement (the "Term"), unless it is terminated earlier in accordance with Section 10.2.
10.2 Termination. Notwithstanding anything to the contrary in this Supply Agreement, this Supply Agreement may be terminated:
10.2.1 in its entirety or with respect to one or more Products, on a Product-by-Product basis, by mutual written consent of Sutro and SutroVax;
10.2.2 in its entirety by a Party if the other Party materially breaches any of the material terms, conditions or agreements contained in this Supply Agreement to be kept, observed or performed by the other Party, by giving the Party who committed the breach [***] days' prior written notice, unless the notified Party shall have cured the breach within such [***]-day period; and
10.2.3 in its entirety or with respect to one or more Products, on a Product-by-Product basis, by SutroVax upon [***] days' prior written notice to Sutro for any reason.
10.3 Effects of Termination. Upon the expiration of the Term or termination of this Supply Agreement, in its entirety or with respect to one or more Products, this Supply Agreement shall, except as otherwise provided in this Section 10.3 or Section 10.5, be of no further force or effect; provided, however, that (a) in the event this Supply Agreement is terminated by SutroVax pursuant to Section 10.2.3 and there are outstanding Work Orders or other purchase orders accepted by Sutro that would not be fulfilled as a result of such termination, SutroVax shall reimburse Sutro for all supplies and materials purchased by Sutro and time incurred by Sutro personnel (to the extent incurred solely for manufacture of Product for SutroVax) for the manufacture, or preparation for the manufacture, of Products for any Work Orders placed by SutroVax and any other purchase orders accepted by Sutro prior to such expiration or termination, in each case to the extent Sutro cannot otherwise reasonably mitigate such the costs and expenses of such supplies, materials and time (e.g., by use of resulting supplies, materials and work-in-progress Product for other purposes); provided that to the extent SutroVax pays for any supplies or materials, upon SutroVax's request Sutro shall promptly transfer and deliver such supplies and materials to SutroVax; and (b) if this Supply Agreement is terminated with respect to one or more Products, but not all Products, then this Supply Agreement shall continue in full force and effect with respect to the applicable Product(s) for which it is not terminated.
10.4 Nonexclusive Remedy. Exercise of any right of termination afforded to either Party under this Supply Agreement (i) shall not prejudice any other legal rights or remedies either Party have against the other in respect of any breach of the terms and conditions of this Supply Agreement, and (ii) shall be without any obligation or liability arising from such termination other than such obligations expressly arising from termination of this Supply Agreement.
10.5 Survival. Expiration of the Term or termination of this Supply Agreement (for any reason) shall not affect any accrued rights or liabilities of either Party. Article 4 (Product Testing), Article 5 (Inspection), Article 8 (Confidentiality), Article 9 (Indemnification and Insurance), Article 11 (Disputes), Article 12 (Miscellaneous), and Sections 2.2 (Transfer of Product), 2.14 (Phase 3/Commercial Supply Agreement), 2.15 (Qualification of Alternate Supplier), 2.17 (Manufacture of Custom Reagents), 3.3 (Recordkeeping), 3.4 (Taxes), 6.2 (Right of Reference; Drug Master Files), 6.3 (Recalls), 6.4 (Retention of Samples), 6.5 Regulatory Authority Inspections and Correspondence), 7.3 (Product Warranties), 7.4 (Disclaimer), 10.3 (Effects of Termination), 10.4 (Nonexclusive Remedy), and 10.5 (Survival) shall survive any expiration of the Term or termination of this Supply Agreement.
ARTICLE 11 DISPUTE RESOLUTION
11.1 Principal Contacts. Each Party will appoint an individual employed by it to serve as its "Principal Contact" for purposes of this Supply Agreement. Either Party may from time to time replace its Principal Contact with a different employee, but unless required due to events beyond its control, neither Party will replace its Principal Contact without at least [***] days prior notice to the other Party. The two Principal Contacts shall communicate with each other regularly during the Term as the Parties may agree or as the Principal Contacts shall mutually determine to be useful.
11.2 Escalation. The Parties intend that, to the maximum extent practicable, they shall reach decisions hereunder cooperatively through discussions among the Principal Contacts and by mutual consent of the Parties. In situations in which that does not occur, disputes or differences arising out of or in connection with this Supply Agreement shall initially be referred for review by the Parties' respective Senior Managements (as defined below). Such Senior Managements shall discuss the proposed dispute or difference, and shall meet with respect thereto if either of them believes a meeting or meetings are likely to be useful. If the Senior Managements do not resolve the dispute or difference within [***] days (or such lesser or longer period as they may agree is a useful period for their discussions), then either Party may pursue its other available remedies, consistent with this Supply Agreement. As used herein, Sutro's "Senior Management" means its then-current CEO, and SutroVax's "Senior Management" means its then-current CEO. For clarity, there shall be no obligation for any Disputed Matter arising out of Section 2.14 or 2.15 to be referred to the Senior Management to review prior to such matters being resolved by arbitration pursuant to Sections 11.3 and 11.4.
11.3 Arbitration. If the Senior Managements are not able to resolve such dispute referred to them under Section 11.2 within such [***] day period, then such dispute shall be resolved by final and binding arbitration as follows: The Parties shall select a mutually agreeable arbitrator who has significant relevant experience in the subject matter of the disputed issue and no affiliation or pre-existing relationship with either Party. If the Parties cannot agree on an arbitrator within [***] days after the end of the [***] day period referred in Section 11.2 (or with respect to a Disputed Matter described in Section 11.4, after referral by a Party of such Disputed Matter to arbitration), either Party may request the Judicial and Mediation Services ("JAMS") in San Francisco, CA to appoint an arbitrator on behalf of the Parties in accordance with the commercial arbitration rules of JAMS, and the proceeding shall be conducted in accordance with JAMS rules. The arbitrator may decide any issue as to whether, or as to the extent to which, any dispute is subject to the arbitration and other dispute resolution provisions in this Supply Agreement. The arbitrator must base the award on the provisions of this Supply Agreement and must render the award in a writing which must include an explanation of the reasons for such award. Judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. The arbitrator's fees and expenses shall be shared equally by the Parties, unless the arbitrator in the award assesses such fees and expenses against one of the Parties or allocates such fees and expenses other than equally between the Parties. Each Party shall bear and pay its own expenses incurred in connection with any dispute resolution under this Section 11.3. Notwithstanding the foregoing, either Party shall have the right, without waiving any right or remedy available to such Party under this Supply Agreement or otherwise, to seek and obtain from any court of competent jurisdiction any interim or provisional relief that is necessary or desirable to protect the rights or property of such Party, pending the selection of the arbitrator hereunder or pending the arbitrator's decision of the dispute subject to arbitration.
11.4 Baseball Arbitration. In the event (a) the Parties do not enter into a Phase 3/Commercial Supply Agreement as described in Section 2.14 or (b) the Parties do not enter into a Transfer Addendum as described in Section 2.15 ("Disputed Matter"), then upon either Party's request with respect to the Disputed Matter in clause (a) or SutroVax's request with respect to the Disputed Matter in clause (b), such Disputed Matter shall be resolved by binding arbitration conducted pursuant to Section 11.3, except that the procedures for the conduct of such arbitration shall be as follows:
11.4.1 Each Party shall provide the arbitrator and the other Party with a written report setting forth its position with respect to the substance of such Disputed Matter and a full draft Phase 3/Commercial Supply Agreement or Transfer Addendum, as applicable, and may submit a revised report, position and draft Phase 3/Commercial Supply Agreement or Transfer Addendum, as applicable, to the arbitrator within [***] days of receiving the other Party's report and draft Phase 3/Commercial Supply Agreement or Transfer Addendum, as applicable. If so requested by the arbitrator, each Party shall make oral and/or other written submissions to the arbitrator in accordance with procedures to be established by the arbitrator; provided that other Party shall have the right to be present during any oral submissions. The arbitrator shall select one of the Party's draft Phase 3/Commercial Supply Agreement or Transfer Addendum, as applicable, as his or her decision, based on what is most reasonable and equitable to each of the Parties under the circumstances and reflective of reasonable and customary terms in the biopharmaceutical industry for agreements of this type and most closely reflects the Parties' intent as expressed in this Supply Agreement and the License Agreement, and shall not have the authority to render any substantive decision other than to so select the draft Phase 3/Commercial Supply Agreement or Transfer Addendum, as applicable, of Sutro or SutroVax (as initially submitted, or as revised in accordance with the foregoing, as applicable). For clarity, it is understood that the Parties intend the arbitration under this Section 11.4 to be a "baseball arbitration" type proceeding; and the arbitrator may fashion such detailed procedures as the arbitrator considers appropriate to implement this intent. Notwithstanding anything to the contrary, in no event shall the Phase 3/Commercial Supply Agreement or Transfer Addendum contain any provision granting to SutroVax or its Affiliates or Sublicensees any right to obtain or use any Sutro Core Know-How.
11.4.2 In any arbitration under this Section 11.4, the arbitrator and the Parties shall use their best efforts to resolve such Disputed Matter within [***] days after the selection of the arbitrator, or as soon thereafter as is practicable.
ARTICLE 12 MISCELLANEOUS
12.1 Expenses. Except as otherwise expressly provided herein, each Party shall bear its own costs, fees and expenses incurred by such Party in connection with this Supply Agreement.
12.2 Licenses and Permits. Each Party shall, at its sole cost and expense, maintain in full force and affect all necessary licenses, permits, and other authorizations required by Applicable Law in order to carry out its duties and obligations hereunder.
12.3 Force Majeure. No Party shall be liable for a failure or delay in performing any of its obligations under this Supply Agreement if, but only to the extent that such failure or delay is due to causes beyond the reasonable control of the affected Party, including: (a) acts of God; (b) fire, explosion, or unusually severe weather; (c) war, invasion, riot, terrorism, or other civil unrest; (d) governmental laws, orders, restrictions, actions, embargo or blockages; (e) national or regional emergency; (f) strikes or industrial disputes at a national level which directly impact the affected Party's performance under this Supply Agreement; or (g) other similar cause outside of the reasonable control of such Party ("Force Majeure"); provided that the Party affected shall promptly notify the other of the Force Majeure condition and shall use reasonable efforts to eliminate, cure or overcome any such causes and resume performance of its obligations as soon as possible. If the performance of any obligation of a Party under this Supply Agreement is delayed owing to such a Force Majeure for any continuous period of more than [***] days, the other Party shall have the right to terminate this Supply Agreement.
12.4 Neither Party may assign or transfer this Supply Agreement, including by merger, operation of law, or otherwise, without the other Party's prior written consent (which shall not be withheld unreasonably) except each Party may assign this Supply Agreement without the other Party's consent in the case of assignment or transfer to a Third Party that succeeds to all or substantially all of the assigning Party's business and assets relating to the subject matter of this Supply Agreement, whether by sale, merger, operation of law or otherwise. Any attempted assignment by a Party in violation of this Section without the written consent of the other Party will be null and void. Except as above limited, this Supply Agreement is binding upon and will inure to the benefit of each of the Parties, its successors and assigns. Without limiting the foregoing, in the event that a Party is acquired, the acquiring Party shall agree in writing to abide by the terms of this Supply Agreement. Sutro agrees that if it assigns the License Agreement to any successor as allowed under section 15.1 of the License Agreement, it will also assign to such successor this Supply Agreement in accordance with this Section 12.4.
12.5 This Supply Agreement incorporates the Exhibits referenced herein. This Supply Agreement, together with the License Agreement, constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the Parties hereto with respect to its subject matter. To the extent of any conflict between this Agreement and the License Agreement, the License Agreement shall govern and control.
12.6 All notices, requests or other communication provided for or permitted hereunder shall be given in writing and shall be hand delivered or sent by confirmed facsimile, reputable courier or by registered or certified mail, postage prepaid, return receipt requested, to the address set forth below, or to such other address of which either Party may inform the other in writing. Notices will be deemed delivered on the earliest of transmission by facsimile, actual receipt or [***] days after mailing as described herein.
If to Sutro: Sutro Biopharma, Inc. 310 Utah Ave., Suite 150 South San Francisco, CA 94080 Attention: Chief Executive Officer
If to SutroVax: SutroVax, Inc. 353 Hatch Dr. Foster City, CA 94404 Attention: Chief Executive Officer
12.7 This Supply Agreement may be amended, modified or waived only in a writing signed by the Party or Parties to be bound thereby.
12.8 If any provision of this Supply Agreement shall be held invalid, illegal or unenforceable, such provision shall be enforced to the maximum extent permitted by law and the Parties' fundamental intentions hereunder, and the remaining provisions shall not be affected or impaired.
12.9 Nothing herein contained shall constitute this a joint venture agreement and nothing herein shall constitute any Party as a partner, principal or agent of any other, this being an agreement between independent contracting entities. Except as expressly set forth herein, no Party shall have the authority to bind any other in any respect whatsoever to Third Parties. Except as provided herein, nothing contained in this Supply Agreement shall be construed as conferring any right on any Party to use any name, trade name, trademark or other designation of any other Party hereto, unless the express, written permission of such other Party has been obtained.
12.10 This Supply Agreement has been submitted to the scrutiny of, and has been negotiated by, both Parties and their counsel, and shall be given a fair and reasonable interpretation in accordance with its terms, without consideration or weight being given to any such term's having been drafted by any Party or its counsel.
12.11 This Supply Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California, without regard to any conflict of laws rules to the contrary.
12.12 Each Party acknowledges that the other Party may likely suffer irreparable harm from such Party's breach or threatened breach of this Agreement and the other Party, in such cases, would therefore be entitled, without waiving any other right or remedy available to, to injunctive relief (including specific performance) without the requirement to post a bond, provided the waiver by such Party of the other Party's requirement to post a bond shall expire on the Change of Control of the other Party, and each party agrees that the arbitrator selected under Section 11.3 shall have the power to grant such injunctive relief (or order specific performance). The Parties shall comply with any such injunctive relief (including specific performance) ordered by the arbitrator and agree that such order may, to the extent not precluded by applicable law, be enforceable as a final award in any court of competent jurisdiction.
12.13 This Supply Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile and other electronically scanned signatures shall have the same effect as their originals.
[The remainder of this page is left intentionally blank]
IN WITNESS WHEREOF, the Parties have caused this Supply Agreement to be executed by their respective duly authorized officers as of the Effective Date, each copy of which will for all purposes be deemed to be an original. SUTRO BIOPHARMA, INC. SUTROVAX, INC.
By: /s/ William J. Newell By: /s/ Grant E. Pickering Name: William J. Newell Name: Grant E. Pickering Title: CEO Title: President & CEO
SCHEDULE 1
PRODUCTS AND PRICE
[***]
SCHEDULE2
SPECIFICATIONS
{6 pages omitted}
[***]
SCHEDULE3
INITIAL ORDER
[***]
SCHEDULE 2.15.1
REPRESENTATIVE CMOS
[***] | Highlight the parts (if any) of this contract related to "Cap On Liability" that should be reviewed by a lawyer. Details: Does the contract include a cap on liability upon the breach of a party’s obligation? This includes time limitation for the counterparty to bring claims or maximum amount for recovery. | {
"answer_start": [
19836
],
"text": [
"For any failure to supply compliant Product(s) in the later of the Delivery Time Period and the period ending [***] after the delivery date specified under the Work Order, without limiting SutroVax's other remedies, subject to this Section 2.9.2 and Section 9.3 (Limitation of Liability), Sutro shall be liable for any non-cancelable Third Party penalties, costs and expenses incurred by SutroVax as a result of Sutro's failure to supply Product(s) as aforesaid, subject to receipt by Sutro of appropriate documentary evidence of such penalties, costs and expenses to the extent such evidence of such amounts may be provided by SutroVax without breaching SutroVax's or its Affiliates' duties of confidentiality to such Third Party (and provided that SutroVax shall use commercially reasonable efforts to (i) minimize or eliminate such penalties, costs and expenses and (ii) where provision of such evidence to Sutro would result in a breach of such duties of confidentiality, to obtain the consent of the applicable Third Party to the provision of such evidence to Sutro)."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Non-Transferable License" that should be reviewed by a lawyer. Details: Does the contract limit the ability of a party to transfer the license being granted to a third party?
Context: 1 EXHIBIT 10.5
CORIO INC. LICENSE AND HOSTING AGREEMENT
This License and Hosting Agreement (the "AGREEMENT") is made and entered into as of October 29, 1999 ("EFFECTIVE DATE") by and between Corio Inc., a Delaware corporation, having its principal place of business at 700 Bay Road, Suite 210, Redwood City, CA 94063 ("CORIO") and Commerce One, Inc., a Delaware corporation having its principal place of business at 1600 Rivera Avenue, Walnut Creek, CA 94596 ("COMMERCE ONE").
BACKGROUND
A. Commerce One is the owner of certain proprietary software products (the "SOFTWARE" as further defined below); and
B. Corio wishes to obtain a license to use and host the Software on the terms and conditions set forth herein in connection with the hosting services that Corio will provide to its Customers (as defined below) and Commerce One wishes to grant Corio such a license on such terms;
C. The parties further wish to jointly market and promote the other party's software and/or services as well as provide support and professional services to Corio and its Customers in accordance with this Agreement.
NOW, THEREFORE, for good and valuable consideration, the parties hereby agree as follows:
1. DEFINITIONS.
The following terms shall have the following meanings:
1.1 "SOFTWARE USER" means a named user of the Corio Services worldwide to whom a user identification number and password has been assigned, which permits that user to access and use the Software on a designated Corio Server. The identification number and password used by a Software User is reusable and reassignable and may be used and transferred by Corio, in accordance with the licenses granted below, between Customers as one Customer discontinues the Corio Services and another Customer subscribes.
1.2 "ASP" means Application Service Provider.
1.2.5 "APPLICATION MANAGEMENT REVENUE" means net revenue Corio receives from Customers for Tier One support of the Software and MarketSite Service, operational support of the Software and MarketSite Service and basic infrastructure support (hardware, database and operating system) for the Software and MarketSite Service. Net revenue means all revenue received by Corio from Customers for the Software and MarketSite Service, less taxes, freight, insurance, refunds or credits and other non-product items.
1.3 "CORIO MARKET SEGMENT" means those customers with annual sales revenues of less than $1,000,000,000. For the purposes of this definition the sales revenue shall apply to either the
[*] Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
1
2 entire corporate entity or any separately reporting division. Corio shall have the right to continue to support Corio Customers that have annual sales revenues greater than $1,000,000,000 by way of either sales growth or merger or acquisition of the Corio Customer. Corio and Commerce One further agree that should Corio desire to sell Corio Services to a parent company of a then current Corio Customer that is above this sales revenue threshold, each such sales opportunity shall be discussed as it arises.
1.4 "CORIO SERVERS" means the unlimited number of computer servers owned or operated by or for Corio which will contain the installed Software (as defined below) for access by Customers in connection with the Corio Services.
1.5 "CORIO SERVICES" means the hosting services offered by Corio to its Customers in which Corio allows Customers to access the Corio Servers.
1.6 "CUSTOMER(S)" means one or more customers of the Corio Services having its principal executive offices in the Territory who obtains a sublicense from Corio to use the Software or MarketSite.net Service, in the Corio Market Segment.
1.7 "DEMONSTRATION SOFTWARE" means copies of the Software which are for demonstration purposes only and which contain sample data and transactions.
1.8 "DOCUMENTATION" means any on-line help files or written instruction manuals regarding the use of the Software or MarketSite.net Service.
1.9 "RELATIONSHIP MANAGERS" means the appointed employee of each party, as set forth on EXHIBIT A attached hereto and made a part hereof, who shall be the primary contact for implementing and administering the terms and conditions of this Agreement.
1.10 "SOFTWARE" means Commerce One's proprietary software described in EXHIBIT A attached hereto and made a part hereof, in object code form only, and any Updates or Upgrades (as defined below) thereto.
1.11 "TERRITORY" means the area in which the licenses granted herein are applicable, currently limited to the geographic area of North America.
1.12 "UPDATE(S)" means any error corrections, bug fixes, modifications or enhancements to the Software, which are indicated by a change in the numeric identifier to the Software in the digit to the right of the decimal, or any error corrections, bug fixes, modifications or enhancements of the Software and MarketSite software used to operate the MarketSite.net Service.
1.13 "UPGRADE(S)" means a release, function or version of the Software designated as such by Commerce One which contains new features or significant functional enhancements to the Software, which are indicated by a change in the numeric identifier for the Software in the digit to the left of the decimal, or a new release, function or version of the MarketSite.net Service, which Upgrade is provided to Commerce One's installed customer base for the Software and MarketSite software used to operate the MarketSite.net Service. For the purposes of this Agreement, "Maintenance and Support" means those services listed in EXHIBIT C and the provision of Updates and Upgrades as called for by this Agreement
[*] Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
2
3 2. GRANT OF RIGHTS.
2.1 Hosting Software License. Subject to the terms and conditions of this Agreement, Commerce One hereby grants to Corio a fee-bearing, perpetual and irrevocable, nonexclusive, nontransferable (except in accordance with Section 14.1 of this Agreement), right and license in the Territory to (i) reproduce the Software in machine executable object code format only for installation on the Corio Servers; (ii) install multiple copies of the Software on Corio's Servers which will be made remotely accessible to Corio's Customers for their subsequent use, (iii) permit limited access to and use of the Software and MarketSite.net Service by Customers through Corio Servers; (iv) sublicense an unlimited number of Customers to access and use the Software and MarketSite.net Service only through the installation on Corio servers; and (v) use Commerce One's tools and utilities, subject to any restrictions placed on the Commerce One by third party software providers, to modify and manage the Software. Except as specifically authorized by this Agreement, no license is granted under this Agreement to Corio to distribute the Software to its Customers or for use other than as part of the Corio Services.
2.2 Internal Use License. Subject to the terms and conditions of this Agreement, Commerce One grants to Corio a nonexclusive, nontransferable (except in accordance with Section 14.1 of this Agreement), royalty-free, fully paid up, perpetual right and license in the Territory to reproduce, install and use additional copies of the Software and Software tools and utilities, subject to any restrictions placed on the Commerce One by third party software providers, in machine executable object code for (i) Corio's internal business operations and (ii) production, testing, development, upgrade, reporting and training.
2.3 Demonstration License. Subject to the terms and conditions of this Agreement, Commerce One hereby grants to Corio a nonexclusive, nontransferable (except in accordance with Section 14.1 of this Agreement) royalty-free, fully paid up right and license in the Territory, on Corio Servers, to make a reasonable number of copies of the Demonstration Software solely for demonstration purposes to potential Customers. Demonstration Software shall be made available to Corio's sales personnel and the parties agree to cooperate to make the Commerce One demonstration database available to Corio sales personnel on an ongoing basis.
2.4 Distribution License: Corio shall have the right to resell licenses for Commerce One software, including Hosted BuySite, to any Corio Customer in the Territory, [*]. Subject to the terms and conditions of this Agreement, Commerce One hereby grants to Corio a nonexclusive, nontransferable (except in accordance with Section 14.1 of this Agreement), right and license in the Territory to sell and distribute such software licenses to Customers pursuant to this Section 2.4. Under no circumstances shall Commerce One contact Corio Customers regarding a non-ASP license sale, unless requested to do so by Corio. Further, if a Corio Customer contacts Commerce One to purchase the Software license
independent of the Corio Services, Commerce One shall immediately refer that Customer to Corio.
2.5 Software User License Agreements. Corio shall make the Software and the MarketSite.net Service on the Corio Servers remotely accessible to Customers under the then current terms of its end user license agreement. As to each Software User who is provided access to the Software, Corio
[*] Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
3
4 shall secure the Software User's consent to an end user agreement, which provides that the Software User may access and/or use the Software and MarketSite.net Service only under terms and conditions which include, at a minimum, those set forth on EXHIBIT E ("END USER LICENSE AGREEMENT") and made a part hereof.
2.6 Access to MarketSite.net Service. For the fee set forth in Exhibit B attached hereto and made a part hereof, Corio and its Customers shall have unlimited access to Commerce One's MarketSite electronic catalogue service, as available to Commerce One customers at the URL: Marketsite.net, including without limitation, MarketSite.net Business Transaction Services, MarketPack of Premium Supplier Catalogs, and MarketSite Community Services ("MarketSite.net Service") in accordance with Commerce One's standard access procedures for its customers. In addition, the parties shall share certain revenues related to purchases made by Customers utilizing Commerce One's MarketSite.net Service, as set forth in EXHIBIT B hereto.
2.7 Restrictions. Corio may not copy, distribute, reproduce, use or allow access to the Software or the MarketSite.net Service except as explicitly permitted under this Agreement, and Corio shall not, nor will it permit any third party to, modify, adapt, translate, prepare derivative works from, decompile, reverse engineer, disassemble or otherwise attempt to derive source code from the Software or any internal data files generated by the Software except as required by law.
2.8 Ownership. Commerce One hereby retains all of its right, title, and interest in and to the Software, including all copyrights, patents, trade secret rights, trademarks and other intellectual property rights therein. All rights not expressly granted hereunder are reserved to Commerce One. The Software and all copies thereof are licensed, not sold, to Corio.
2.9 New Products. Updates and Upgrades to the Software and the MarketSite.net Service and software are subject to the terms of this Agreement and are included in the Maintenance and Support fees payable by Corio. Commerce One agrees to license Corio to use future products and solutions offered by Commerce One according to the license fees and other terms and conditions as the parties may agree. These products and solutions may include, but are not limited to the following: e-commerce, and marketing and sales force automation solutions.
2.10 Expansion of Geographical Scope. The parties agree Corio may seek permission to expand the scope of the licenses granted under this Section 2 worldwide, at no additional cost to Corio, and maintaining the revenue sharing provisions contained herein, and Commerce One shall not unreasonably withhold its permission to expand all such licenses worldwide at no additional cost to Corio. If and when localized versions of the Software become available, these versions shall be made available under the maintenance and support provisions of this Agreement.
3. DELIVERY OF SOFTWARE.
3.1 Delivery and Acceptance. Commerce One shall issue to Corio, via electronic means of delivery, as soon as practicable, one (1) machine-readable copy of the Software, along with one (1) copy of the on-line Documentation. Commerce One will provide Corio with one written copy of the Documentation at no cost, and any additional written copies at Commerce One's standard charges. Corio acknowledges that no copy of the source code of the Software will be provided to
4
5 Corio. Within thirty (30) days of delivery of the Software, but in no event later than December 1, 1999, Corio shall test the Software for conformance with the Documentation ("Acceptance Test"). If the Software performs in substantial accordance with the Documentation, then Corio shall notify Commerce One in writing of its acceptance of the Software. In the event Corio finds material errors or defects with the Software, Corio shall notify Commerce One in writing of such errors or defects and provide adequate detail to facilitate Commerce One replicating the error or defect. Upon receipt of written notice, Commerce One shall have fifteen (15) days to correct the defect, reinstall the Software at the
Corio site and re-perform the Acceptance Test. If Corio does not accept the Software after the second Acceptance Test, a third Acceptance Test will be performed. Notwithstanding the foregoing, all Acceptance Testing shall be complete by December 30, 1999, and Corio shall notify Commerce One in writing of it's acceptance or rejection of the Software no later than December 31, 1999. If after the third Acceptance Test Corio does not accept the Software, Corio may, at its sole option, elect to (i) repeat the Acceptance Test or (ii) terminate the Agreement and receive a refund of any fees paid to Commerce One as of such date. Both parties acknowledge that any professional services provided to Corio subsequent to the installation and acceptance of the Software are non-essential for the purpose of the acceptance of the Software.
3.2 New Versions. Commerce One shall provide Corio with any pre-release versions of relevant Updates or Upgrades of the Software. Commerce One shall make these versions available to Corio to preview at the earliest possible date. Commerce One shall provide all such Updates and Upgrades to Corio free of additional charge and Corio shall, in its sole discretion determine when, and if, to offer any such Updates and/or Upgrades to its Customers.
3.3 Additional Materials. Commerce One shall use all commercially reasonable efforts to promptly provide Corio with, at a minimum, the following: (i) release notes; (ii) beta releases; (iii) contacts at beta customers, when requested by Corio and subject to the approval of the Commerce One; (iv) proactive bug notification; (v) software patches; (vi) release documentation including technical reference manuals and user guides; and (vii) all applicable data objects relevant to the Software. These materials shall be provided at no cost to Corio.
4 FEES.
4.1 License Fees. In consideration for the licenses granted to Corio pursuant to Section 2 of this Agreement, Corio shall pay the license fees specified in EXHIBIT B hereto. Payment terms of such license fees shall be as set forth in EXHIBIT B hereto.
4.2 Software Support and Maintenance Fees. Corio shall pay to Commerce One an annual Software Maintenance and Support fee for the support services to be provided by Commerce One specified in Exhibit C attached hereto and made a part hereof, and Updates and Upgrades, according to the fees set forth in Exhibit B hereto. Payment terms of annual Software Maintenance and Support fees shall be as set forth in Exhibit B hereto. Maintenance and Support shall automatically continue during the term of this Agreement and thereafter, provided that Corio continues to pay the annual Maintenance and Support fees contained in Exhibit B, attached hereto.
4.3 Taxes. All fees are exclusive of any sales taxes, use taxes and any other taxes and charges of any kind imposed by any federal, state or local governmental entity for products and services
5
6 provided under this Agreement, and Corio is responsible for payment of all taxes concerning the Corio Services, excluding taxes based solely upon Commerce One's income.
4.4 Audit Rights. Corio shall keep true and accurate books of accounts and records for determining the amounts payable to Commerce One under this Agreement. Such books and records shall be kept for at least three (3) years following the end of the calendar month to which they pertain, and shall be open for inspection by an independent certified public accountant reasonably acceptable to Corio for the purpose of verifying the amounts payable to Commerce One under this Agreement. Such inspections may be made no more than once each calendar year, at reasonable times and upon reasonable notice. Commerce One shall bear all costs and expenses of such inspection. If any such inspection discloses a shortfall or an overpayment, the appropriate party shall promptly pay the amount of such shortfall or refund such overpayment. In addition, if any such inspection reveals an underpayment of more than five percent (5%) for the period under audit, Corio shall reimburse Commerce One for the reasonable cost of the examination.
5 INSTALLATION SUPPORT, MAINTENANCE AND TRAINING.
5.1 Installation. Commerce One shall provide Corio with access to one (1) full-time operations consultant for one (1) week at no charge to Corio as part of the installation project as described in the Corio Statement of Work - Hosted BuySite ASP, dated October 28, 1999 ("Statement of Work") incorporated herein by reference.
5.2 Implementation. Commerce One shall provide Corio with sufficient access to Commerce One's professional services organization during the first three (3) implementations of the Software conducted by Corio and its Customers, in accordance with the Statement of Work incorporated herein by reference, subject to the payment by Corio of the professional services fee set forth in Exhibit B hereto ("IMPLEMENTATION FEE"). Additionally, during the term of the Agreement the parties shall meet periodically to discuss Updates and Upgrades to the Software and MarketSite.net Service to better support Corio's and its Customers' specific application requirements, to be provided at no charge to Corio.
5.3 Support and Maintenance. Commerce One shall provide Corio with support described in EXHIBIT C hereto, and maintenance in the form of Updates and Upgrades. Corio shall be responsible for providing its Customers with routine technical support of the Software and MarketSite.net Service. Corio shall escalate any technical support questions or problems it is unable to answer or resolve directly to Commerce One for Commerce One's immediate attention and resolution under the schedule set forth in EXHIBIT C hereto. The support described in this Section 5.3 and EXHIBIT C hereto shall be provided to Corio but Commerce One shall have no obligation to provide any maintenance or support services to other third parties. Subject to Corio's payment of the annual support and maintenance fee, Commerce One's support and maintenance obligation of the Software and MarketSite.net Service shall continue after termination or expiration of this Agreement with respect to all Software Users granted access to the Software and MarketSite.net Service prior to termination or expiration of this Agreement.
5.4 Product Management Meetings. The parties agree to meet either in person or via teleconference on no less than a quarterly basis to discuss, without limitation, engineering, feature-functionality and architecture-related issues as they pertain to the Software and MarketSite.net Service. The specific topics of the meetings will be determined on a meeting-by-meeting basis. Each party
6
7 shall appoint a product manager to coordinate these meetings. Commerce One shall provide Corio with information relevant to future Software and MarketSite.net Service development efforts, including product and service roadmap, rollout strategy, and plans for future development efforts. The product managers shall be those persons set forth on EXHIBIT A hereto.
5.5 Training. Commerce One shall provide Corio with training as reasonably requested by Corio to train Corio's technical and support personnel regarding implementation, use and operation of the Software and MarketSite.net Service as part of the Implementation Fee. Thereafter, throughout the term of the Agreement and at Corio's request, Commerce One shall provide additional training to Corio subject to payment of Commerce One's standard training fees at a [*]. Corio shall be responsible for training its Customers regarding proper use of the Software and MarketSite.net Service. Further, the parties shall work together and cooperate to train Corio's sales force and product consultants on the Software and MarketSite.net Service and the alliance contemplated by this Agreement, including without limitation, how to position, sell and demonstrate the Software and MarketSite.net Service to potential customers.
5.6 Other Services. Upon Corio's request, Commerce One shall provide certain professional services, including without limitation, consulting services, to Corio or its Customers, subject to the mutual written agreement on the scope of such services, pricing and other terms and conditions.
5.7 Sales and Marketing Efforts. The parties shall engage in joint marketing and sales activities as set forth in EXHIBIT D attached hereto and made a part hereof.
6 TRADEMARKS.
6.1 Right to Display. During the term of this Agreement, each party authorizes the other party to display and use the other's trademarks, trade names and logos (collectively, the TRADEMARKS) in connection with that party's sale, advertisement, service and promotion of the Corio Services or the Software and MarketSite.net Service. Each party shall indicate in all product, service, publicity and printed materials relating to the Corio Services or the Software and MarketSite.net Service that such trademarks are the property of the originating party. Upon termination of this Agreement, each party shall cease all display, advertising and use of all Trademarks of the other party and shall not thereafter use, advertise or display any trademark, trade name or logo which is, or any part of which is, confusingly similar to any such designation association with Corio or the Corio Services or Commerce One or any Commerce One product.
6.2 Promotion Materials and Activities. All representations of the other party's Trademarks that a party intends to use shall be exact copies of those used by the other party and shall first be submitted to the originating party for approval of design, color and other details, which consent shall not be unreasonably withheld or delayed. To ensure trademark quality, each party shall fully comply with all written guidelines provided by the other party concerning the use of the originating party's Trademarks. Each party agrees to change or correct any material or activity that the originating party determines to be inaccurate, objectionable, misleading or a misuse of the originating party's Trademarks.
[*] Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
7
8 7 WARRANTIES AND DISCLAIMER.
7.1 No Conflict. Each party represents and warrants to the other party that it is under no current obligation or restriction, nor will it knowingly assume any such obligation or restriction that does or would in any way interfere or conflict with, or that does or would present a conflict of interest concerning the performance to be rendered hereunder or the rights and licenses granted herein.
7.2 Intellectual Property Warranty. Commerce One represents and warrants to Corio that (a) Commerce One is the sole and exclusive owner of the Software; (b) Commerce One has full and sufficient right, title and authority to grant the rights and/or licenses granted to Corio under this Agreement; (c) the Software does not contain any materials developed by a third party used by Commerce One except pursuant to a license agreement; and (d) the Software does not infringe any patent, copyright, trade secret, trademark or other intellectual property rights of a third party.
7.3 Product Warranty. Commerce One warrants that the Software and MarketSite.net Service will perform in substantial accordance with the Documentation, and the media on which the Software is distributed will be free from defects in materials and workmanship under normal use, for a period of sixty (60) days from the Effective Date, but in no event not later than December 31, 1999 (the "Warranty Period"). In addition, Commerce One warrants that during the Warranty Period the Software and MarketSite.net Service is free of any willfully introduced computer virus, or any other similar harmful, malicious or hidden program or data, which is designed to disable, erase, or alter the Software, or any other files, data, or software. If during the Warranty Period the Software and MarketSite.net Service does not perform in substantial compliance with the Documentation, Commerce One shall take all commercially reasonable efforts to correct the Software and MarketSite.net Service, or if correction of the Software and MarketSite.net Service is reasonably not possible, replace such Software and MarketSite.net Service free of charge. Commerce One will replace any defective media returned to Commerce One during the Warranty Period. In the event any such breach of warranty can not be reasonably corrected at Commerce One's sole expense, Corio has the right to terminate this Agreement and receive a refund of all prepaid fees. The foregoing are Corio's sole and exclusive remedies for breach of product warranty. The warranty set forth above is made to and for the benefit of Corio only. The warranty shall not apply only if:
(a) the Software and MarketSite.net Service has been not properly installed and used at all times and in accordance with the Documentation; and
(b) Corio has requested modifications, alterations or additions to the Software and MarketSite.net Service that cause it to deviate from the Documentation.
7.4 Product Warranty - Year 2000 Compliance. Commerce One warrants that the Software and MarketSite.net Service, when used in accordance with its associated documentation, is in all material respects capable upon installation of accurately processing, providing and/or receiving date data from, into and between the twentieth and twenty-first centuries, including the years 1999 and 2000, and leap year calculations; provided that all licensee and third party equipment, systems, hardware, software and firmware used in combination with the Software and MarketSite.net Service properly exchange date data with the Software and MarketSite.net Service
8
9 OTHERWISE, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE.
8 INDEMNIFICATION.
8.1 By Commerce One. Commerce One shall indemnify, defend and hold harmless Corio and its Customers from any and all damages, liabilities, costs and expenses (including reasonable attorneys' fees) incurred by Corio or its Customers arising out of any claim that the Software infringes any patent, copyright, trademark or trade right secret of a third party; provided that Corio or its Customer promptly notifies Commerce One in writing of any such claim and promptly tenders the control and the defense and settlement of any such claim to Commerce One at Commerce One's expense and with Commerce One's choice of counsel. Corio or its Customer shall cooperate with Commerce One, at Commerce One's expense, in defending or settling such claim and Corio or its Customer may join in defense with counsel of its choice at its own expense. If the Software is, or in the opinion of Commerce One may become, the subject of any claim of infringement or if it is adjudicatively determined that the Software infringes, then Commerce One may, at its sole option and expense, either (i) procure for Corio the right from such third party to use the Software, (ii) replace or modify the Software with other suitable and substantially equivalent products so that the Software becomes noninfringing, or if (i) and (ii) are not practicable after Commerce One has exhausted all diligent efforts, (iii) terminate this
Agreement and refund to Corio a pro-rated portion of the fees paid hereunder.
8.2 Limitations. Commerce One shall have no liability for any infringement based on (i) the use of the Software other than as set forth in the Documentation; or (ii) the modification of the Software by a party other than Commerce One, when such infringement would not have occurred but for such modification.
9 LIMITATION OF LIABILITY.
EXCEPT FOR LIABILITY ARISING UNDER SECTION 8 OF THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY'S LIABILITY ARISING OUT OF THIS AGREEMENT OR THE USE OR PERFORMANCE OF THE SOFTWARE EXCEED THE TOTAL AMOUNT ACTUALLY PAID BY CORIO HEREUNDER FOR THE TRANSACTION WHICH THE LIABILITY RELATES TO DURING THE TWELVE (12) MONTHS IMMEDIATELY PRIOR TO THE FILING OF THE CAUSE OF ACTION TO WHICH THE LIABILITY RELATES. EXCEPT FOR LIABILITY ARISING UNDER SECTION 8 OF THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY TO THE OTHER PARTY FOR ANY LOST PROFITS OR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, OR FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE PARTIES AGREE THAT THIS SECTION 9 REPRESENTS A REASONABLE ALLOCATION OF RISK.
9
10 LIABILITY RELATES. EXCEPT FOR LIABILITY ARISING UNDER SECTION 8 OF THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY TO THE OTHER PARTY FOR ANY LOST PROFITS OR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, OR FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE PARTIES AGREE THAT THIS SECTION 9 REPRESENTS A REASONABLE ALLOCATION OF RISK.
10 CONFIDENTIALITY.
Each party hereby agrees that it shall not use any Confidential Information received from the other party other than as expressly permitted under the terms of a non-disclosure agreement to be concurrently executed with this Agreement.
11 TERM AND TERMINATION.
11.1 Term. The term of this Agreement shall commence on the Effective Date and shall continue in full force and effect for an initial period of five (5) years. Thereafter, this Agreement shall automatically renew for subsequent one (1) year periods unless either party provides the other party with written notification at least thirty (30) days prior to the expiration of the initial five (5) year term or any one (1) year renewal thereof of its intention to terminate this Agreement.
11.2 Termination. If either party materially breaches any term or condition of this Agreement and fails to cure such breach within-thirty (30) days after receiving written notice of the breach, the nonbreaching party may terminate this Agreement on written notice at any time following the end of such-thirty (30) day period. This Agreement shall terminate immediately upon notice if either party becomes insolvent (i.e., becomes unable to pay its debts in the ordinary course of business as they come due) or makes an assignment for the benefit of creditors. Compliance by the Software with the Software's specifications after expiration of the Warranty Period shall be deemed a material condition of this Agreement.
11.3 Effect of Termination. The following Sections shall survive the termination or expiration of this Agreement for any reason: 4.2, 5.3, 7, 8, 9, 10, 12 and 14. Corio's right to allow its then-existing Customers and their Software Users to use and access the Software in accordance with Section 2 of this Agreement and all payment obligations related thereto shall survive any termination or expiration of this Agreement. Commerce One's obligation to provide Software support and maintenance to Corio and its Customers shall survive any termination or expiration of this Agreement, provided Corio continues to make its annual support and maintenance payments as specified in this Agreement. Upon termination or expiration of this Agreement, each party shall otherwise return or destroy any Confidential Information of the other party provided, however, Corio may retain any Confidential Information necessary for Corio to continue supporting it's then-existing Customers.
12 SOURCE CODE ESCROW.
12.1 Escrow Account. Within sixty (60) days of the Effective Date, Commerce One agrees to execute an escrow agreement by and among Corio, Commerce One and a mutually acceptable escrow agent (the "ESCROW AGENT"). The Escrow Agent shall require Commerce One to place in an
10
11 escrow account in California a copy of the source code of the Software
including all Updates and Upgrades thereto, documentation and similar materials (the SOURCE CODE). The escrow agreement shall contain, at a minimum, the terms and conditions set forth in this Section 12. Corio shall bear all fees, expenses and other charges to open and maintain such escrow account. If a Release Condition (as defined in Section 12.2 of this Agreement) occurs and the Escrow Agent provides the Source Code to Corio under the escrow agreement, Corio agrees to hold the Source Code in confidence pursuant to the provisions contained in Section 10 of this Agreement, and not to use them for any purpose other than those purposes contemplated under Section 12.3 of this Agreement.
12.2 Release. Corio shall notify Commerce One in writing if it believes that one of the following events (the "RELEASE CONDITIONS") has occurred and that it intends to seek release of the Source Code from the escrow account: (i) Commerce One's dissolution or ceasing to do business in the normal course, or (ii) Commerce One's repeated and material breach of its support and maintenance obligations under Section 5 of this Agreement and such breach is not cured within sixty (60) days of receipt of written notice thereof from Corio. If Commerce One notifies Corio in writing that it disputes whether any such event has occurred, officers of each of the parties shall negotiate for a period of ten (10) business days to attempt to resolve the dispute. At the end of such ten (10) business day period, if the parties have not resolved the dispute, the matter shall be referred to arbitration in the manner provided in Section 14.3 of this Agreement.
12.3 License. Upon the release of the Source Code to Corio pursuant to Section 12.2 of this Agreement, Corio shall have a royalty-free, nonexclusive, nontransferable, right and license in the Territory to use and modify the Source Code to support and maintain the Software until the expiration or termination of Corio's Customers' End User License Agreements. The object code derived from the Source Code so modified shall be subject to the same rights and restrictions on use, reproduction and disclosure that are contained in this Agreement with respect to the Software. Corio shall not distribute, sell or sublicense the Source Code. Subject to the licenses expressly granted in this Agreement, Commerce One shall retain all right, title and interest in and to the Source Code. This license shall be deemed to extend worldwide in scope if Corio, at the time one or more Release Conditions has occurred, has been granted worldwide license rights by Commerce One under Section 2 of this Agreement.
13 SHARED RESOURCES.
13.1 Operations. To the extent not provided for within the Statement of Work covered by the Implementation Fee, Commerce One shall provide Corio with access to Commerce One operations personnel as reasonably requested by Corio, subject to payment by Corio of Commerce One's standard fees [*]. These Commerce One operations personnel shall work together with Corio personnel to optimize the architecture and performance of the Software and MarketSite.net Service in a hosted environment. Commerce One shall only commit personnel with expertise in installations, operating environments and networking functionality.
13.2 Consulting. To the extent not provided for within the Statement of Work covered by the Implementation Fee, Commerce One shall provide Corio with access to Commerce One consulting personnel as reasonably requested by Corio, subject to payment by Corio of Commerce One's standard fees [*]. These Commerce One
[*] Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
11
12 consulting personnel shall initially work together with Corio personnel to develop implementation templates. Commerce One may, in its sole but reasonable discretion, elect to assign resources from a third party systems integrator subject to advance notification to Corio of such election.
13.3 Engineering. Commerce One shall provide Corio with reasonable access to Commerce One engineering personnel at no additional cost to Corio. Joint engineering work may include product development, including without limitation, technical and functional application development and integration.
13.4 Other. All services provided hereunder, in addition to services subsequently requested by Corio (e.g. customization of the Software) shall be subject to the terms of a separate agreement between the parties.
13.5 Ownership. Subject to Commerce One's pre-existing ownership of any materials or technology provided to Corio, the results of all such development efforts set forth in this Section 13, including all intellectual property rights in any software interface coding or programs created solely by Corio during the term of this Agreement to enable the Software to operated within the Corio Servers' hosted environment ("DEVELOPMENTS"), shall be owned by Corio, unless such Developments are supported on an ongoing basis by Commerce One in which case Commerce One will retain all ownership rights, including
intellectual property rights in the Developments. To the extent that Commerce One would otherwise have a claim of ownership in such Developments, Commerce One hereby assigns all rights in and to such Developments to Corio. Further, Commerce One represents and warrants that all Commerce One employees, agents, contractors or consultants that will be provided to work together with Corio have or will have signed agreements with customary terms containing confidentiality provisions and assignment of inventions ("EMPLOYEE NDA/INVENTION AGREEMENT"). Corio covenants and warrants that it will not disclose to Commerce One or its officers, directors, employees, agents, contractors or consultants any proprietary information, including without limitation any technical information related to Developments created solely by Corio under this Agreement, except upon the written authorization to do so by a Corporate Officer of Commerce One. Commerce One covenants that during the term of this Agreement, it will continue to require all Commerce One employees, agents, contractors or consultants to sign an Employee NDA/Invention Agreement and that Commerce One will furnish to Corio copies of such signed agreements upon Corio's request. Ownership of intellectual property rights to any enhancements, modifications or derivative works to the Software itself which may be developed jointly by the parties or solely by Corio shall be negotiated by the parties prior to the start of any such development work.
13.6 Independent Development: Covenant not to Sue. Nothing in this Agreement will be construed to prohibit either parties' right to independently develop the Developments contemplated above. Each party covenants that it shall not, under any circumstances, sue the other party (or its officers, directors, successors and assigns) or any of that parties' licensees, customers, or distributors ("Protected Entities") for patent infringment under any future patents or future patent rights relating to said Developments, that either party owns or controls, so long as that Protected Entity has a license from Commerce One or Corio to the Software, or to a product that is a modification of, derivative work based on, or replacement for the Software. The foregoing covenant is binding on Corio's permitted successors and assigns, and inures to the benefit of any
12
13 of Commerce One's successors and assigns, and is binding on Commerce One's permitted successors and assigns, and inures to the benefit of any of Corio's successors and assigns.
14 MISCELLANEOUS.
14.1 Assignment. Neither party may assign this Agreement or any rights or obligations hereunder, whether by operation of law or otherwise, without the prior written consent of the other party. Notwithstanding the foregoing, either party shall have the right to assign this Agreement in connection with the merger or acquisition of such party or the sale of all or substantially all of its assets related to this Agreement without such consent, except in the case where such transaction involves a direct competitor of the other party where consent of the other party will be required. Subject to the foregoing, this Agreement will bind and inure to the benefit of the parties, their respective successors and permitted assigns. Any assignment in violation of this Section 14.1 shall be null and void.
14.2 Waiver and Amendment. No modification, amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by the party to be charged. No failure or delay by either party in exercising any right, power, or remedy under this Agreement, except as specifically provided herein, shall operate as a waiver of any such right, power or remedy.
14.3 Choice of Law; Arbitration; Venue. This Agreement shall be governed by the laws of the State of California, USA, excluding conflict of laws provisions and excluding the 1980 United Nations Convention on Contracts for the International Sale of Goods. Any disputes arising out of this Agreement shall be resolved by binding arbitration in accordance with the then-current commercial arbitration rules of the American Arbitration Association ("RULES"). The arbitration shall be conducted by one (1) arbitrator appointed in accordance with the Rules in San Francisco County, California. A judgment upon the award may be entered in any court having jurisdiction of the parties, including without limitation the courts in San Francisco, California. The non-prevailing party in the arbitration shall pay all fees and charges of the American Arbitration Association; each party, however, shall be responsible for the payment of all fees and expenses connected with the presentation of its respective case.
14.4 Notices. All notices, demands or consents required or permitted under this Agreement shall be in writing. Notice shall be considered delivered and effective on the earlier of actual receipt or when (a) personally delivered; (b) the day following transmission if sent by telex, telegram or facsimile followed by written confirmation by registered overnight carrier or certified United States mail; or (c) one (1) day after posting when sent by registered private overnight carrier (e.g., DHL, Federal Express, etc.); or (d) five (5) days after posting when sent by certified United States mail. Notice shall be sent to the parties at the addresses set forth on the first page of this Agreement or at such other address as shall be specified by either party to the other in writing.
14.5 Independent Contractors. The parties are independent contractors with respect to each other. Each party is not and shall not be deemed to be an employee, agent, partner or legal representative of the other for any purpose and shall not have any right, power or authority to create any obligation or responsibility on behalf of the other.
14.6 Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be contrary to law, such provision shall be changed and interpreted so as to best accomplish the
13
14 objectives of the original provision to the fullest extent allowed by law and the remaining provisions of this Agreement shall remain in full force and effect.
14.7 Force Majeure. Neither party shall be deemed to be in breach of this agreement for any failure or delay in performance caused by reasons beyond its reasonable control, including but not limited to acts of God, earthquakes, strikes or shortages of materials.
14.8 Subcontract. Commerce One understands and agrees that Corio shall solely direct the provision of Corio Services and may subcontract certain portions of the Corio Services to third parties at any time during the term of the Agreement.
14.9 Bankruptcy. The parties hereto agree that Corio, as a licensee of Commerce One's intellectual property, shall be afforded all of the protections afforded to a licensee under Section 365(n) of the United States Bankruptcy Code, as amended from time to time (the "CODE") so that the Trustee or Debtor in Possession, as defined in the Code, will not interfere with Corio's license with respect to the Software as provided in this Agreement, as set forth in Section 365(n) of the Code.
14.10 Complete Understanding. This Agreement including all Exhibits, and the Non Disclosure Agreement and the Statement of Work referenced in this Agreement and incorporated by reference herein, constitutes the final, complete and exclusive agreement between the parties with respect to the subject matter hereof, and supersedes any prior or contemporaneous agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
CORIO, INC. COMMERCE ONE, INC.
By: /s/ Signature Illegible By: /s/ Signature Illegible -------------------------------- Name: GEORGE KADIFA Name: MARK S. BIESTMAN --------------------------- ------------------------------
Title: CEO Title: V.P. WORLDWIDE SALES -------------------------- ------------------------------
Date: 11/5/99 Date: -------------------------- ------------------------------
14
15 EXHIBIT A
SOFTWARE
1. SOFTWARE. Hosted BuySite v 6.0
2. DEMONSTRATION SOFTWARE. Hosted BuySite v 6.0
3. RELATIONSHIP MANAGERS. The Corio Relationship Manager shall be: __________. The Commerce One Relationship Manager shall be: ________.
4. PRODUCT MANAGERS. For purposes of Section 5.4 of this Agreement, the Corio product manager shall be: _________.
The Commerce One product manager shall be: _______________.
15
16 EXHIBIT B
PRICING
SOFTWARE: BuySite Hosted Edition version 6.0
MarketSite.net Service access
SOFTWARE USERS: BuySite Hosted Edition: Unlimited
LICENSE FEES: BuySite Hosted Edition: [*]
MARKETSITE.NET SERVICE FEES: MarketSite.net Service Access: Year 1 [*] Year 2-5, and beyond: [*]
MAINTENANCE AND SUPPORT FEES: Year 1 [*] Year 2-5, and beyond: [*]
REVENUE SHARING FEES:
1. MarketSite Transaction Revenue: Commerce One to pay Corio [*] of all transaction fees from Corio Customer transactions on MarketSite.
2. Corio Customer Application Management Revenue: Corio to pay Commerce One [*] of all Application Management Revenue from Corio Customers for use of Commerce One Software or MarketSite.net Service Access subject to the following limitations.
A. No Application Management Revenue shall be due for any Corio Customer subscriptions utilizing the initial 3000 Software User licenses granted herein, subject to a minimum limitation of 40 Authorized Software Users per Customer
B. The Corio invoice amounts used to calculate the revenues subject to this revenue share shall not include Professional Service fees, or Network access fees.
C. These Application Management Revenue fees shall begin accruing when the Corio Customer begins live operations.
IMPLEMENTATION FEES: Time and Materials Basis Billed at [*] in accordance with The Statement of Work as agreed between the parties, not to exceed [*].
* Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
16
17 PAYMENT TERMS
License Fees: Due upon Software Acceptance.
Maintenance and Support Fees: Net 30 of Software acceptance anniversary date, and each year thereafter. Revenue Sharing Fees: Quarterly payments shall be due to receiving party, net 30 days after quarter close.
Implementation or Professional Service Fees: Net 30 days from date of Commerce One invoice, which shall be issued only after successful completion of each agreed upon milestone.
MarketSite.net Access Fee: Due upon Software Acceptance, and on each annual anniversary of Software Acceptance thereafter.
17
18 EXHIBIT C
CUSTOMER SERVICE OUTLINE
1. CONTACTING SUPPORT:
EMAIL: csc@commerceone.com
FAX: (925) 941-6060
SUPPORT HOTLINE: (925) 941-5959
WWW: http://commerceone.com/solutions/osupport.htm
Our web access allows you to submit new incidents and be notified in real time by the support team, who will provide suggestions and technical support to resolve your issue. Such support will include clarification of the functions and features of the Software, clarification of the documentation, guidance in the operations of the Software, and error correction analysis and verification to the extent possible remotely.
2. SERVICE HOURS: Staffed Monday - Friday, 7 am to 7 pm PST (except holidays). After hours support available 24x7 for Priority 1 technical issues only.
3. PRIORITY DEFINITION:
COMMERCE ONE RESPONSIBILITIES:
* Priority 1: The software and/or the hosted physical infrastructure is not operational and no workaround exists. Customer's production/business is seriously affected.
* Priority 2: Software and/or the hosted physical infrastructure functionality is impaired, does not work like proposed, but it is operational
CORIO RESPONSIBILITIES:
* Priority 3: Minor software and/or the hosted physical infrastructure problems or functionality questions.
* Priority 4: Enhancement request or cosmetic problems.
4. RESPONSE TIME: (Commitment to customers) Commence One will make every attempt to contact our customers within 30 minutes of the report of a critical incident, and to notify and work with any third party vendors providing ancillary services that may be affected by the incident. However, for providing specific action plans for resolutions, we are committed to the following schedule:
* Priority 1 incidents: 2 hours
* Priority 2 incidents: 4 hours
For resolution of incidents, we are committed to the following schedule:
* Priority 1 incidents: we will respond as provided above and continue resolution efforts on a 24 x 7 basis until the incident has been resolved
* Priority 2 incidents: we will respond as provided above and continue resolution efforts during business hours until the incident has been resolved
18
19 5. SUPPORT CONTACTS:
Up to 5 individuals can be designated as "Registered Customers" to contact Commerce One for Support services. Upon written notice, customers may change their designated contacts. [Additional contacts can be purchased at additional cost as mutually agreed. Specify the 5 contacts on the Customer Profile form.
19
20 EXHIBIT D
SALES AND MARKETING COOPERATION
The parties agree to the following non-binding sales and marketing cooperation efforts:
1. RELATIONSHIP MANAGERS. The parties' Relationship Managers would attempt to meet at mutually agreeable times no less than every quarter to review and coordinate sales efforts and review customer response to the Software, the MarketSite.net Services and the Corio Services, and address other topics related to this Agreement.
2. SALES COMPENSATION. The parties agree to provide their internal and external sales and marketing personnel sufficient compensation incentives designed to actively promote and encourage cross-selling of the Corio Services, and the Software and the MarketSite.net Services, respectively.
3. JOINT MARKETING PLANS. During the term of this Agreement the parties agree to develop, review and submit to each other new and continuing marketing plans with respect to the Corio Services and the Software and MarketSite.net Services, respectively.
4. MARKETING FUND. Within six (6) months after the Effective Date of the Agreement, Corio and Commerce One each would contribute to a marketing fund to be jointly managed by the parties to promote the sale and marketing of the Corio Services, the Software and the MarketSite.net Services.
5. PERSONNEL. Each party agrees to assign one (1) existing sales or marketing employee primarily dedicated to assist in the sales and marketing promotional activity set forth in this Exhibit D.
6. COOPERATION AND PUBLICITY. Upon mutual agreement, Corio and Commerce One may engage in the following activities: joint publicity releases, joint marketing materials, joint marketing calls, joint conference and trade show efforts, and strategy coordination concerned with promoting the Software, the MarketSite.net Services and the Corio Services in the commercial marketplace.
7. INITIAL CUSTOMERS. Within sixty (60) days after the Effective Date of the Agreement, Corio agrees to use commercially reasonable efforts to obtain orders from two (2) Customers for the Corio Services which include access to the Software and MarketSite.net Services.
20 [/INST] ```json
{<answer_start>
"answer": "Upon the release of the Source Code to Corio pursuant to Section 12.2 of this Agreement, Corio shall have a royalty-free, nonexclusive, nontransferable, right and license in the Territory to use and modify the Source Code to support and maintain the Software until the expiration or termination of Corio's Customers' End User License Agreements."
<answer_end>
}
``` </s> | 1 EXHIBIT 10.5
CORIO INC. LICENSE AND HOSTING AGREEMENT
This License and Hosting Agreement (the "AGREEMENT") is made and entered into as of October 29, 1999 ("EFFECTIVE DATE") by and between Corio Inc., a Delaware corporation, having its principal place of business at 700 Bay Road, Suite 210, Redwood City, CA 94063 ("CORIO") and Commerce One, Inc., a Delaware corporation having its principal place of business at 1600 Rivera Avenue, Walnut Creek, CA 94596 ("COMMERCE ONE").
BACKGROUND
A. Commerce One is the owner of certain proprietary software products (the "SOFTWARE" as further defined below); and
B. Corio wishes to obtain a license to use and host the Software on the terms and conditions set forth herein in connection with the hosting services that Corio will provide to its Customers (as defined below) and Commerce One wishes to grant Corio such a license on such terms;
C. The parties further wish to jointly market and promote the other party's software and/or services as well as provide support and professional services to Corio and its Customers in accordance with this Agreement.
NOW, THEREFORE, for good and valuable consideration, the parties hereby agree as follows:
1. DEFINITIONS.
The following terms shall have the following meanings:
1.1 "SOFTWARE USER" means a named user of the Corio Services worldwide to whom a user identification number and password has been assigned, which permits that user to access and use the Software on a designated Corio Server. The identification number and password used by a Software User is reusable and reassignable and may be used and transferred by Corio, in accordance with the licenses granted below, between Customers as one Customer discontinues the Corio Services and another Customer subscribes.
1.2 "ASP" means Application Service Provider.
1.2.5 "APPLICATION MANAGEMENT REVENUE" means net revenue Corio receives from Customers for Tier One support of the Software and MarketSite Service, operational support of the Software and MarketSite Service and basic infrastructure support (hardware, database and operating system) for the Software and MarketSite Service. Net revenue means all revenue received by Corio from Customers for the Software and MarketSite Service, less taxes, freight, insurance, refunds or credits and other non-product items.
1.3 "CORIO MARKET SEGMENT" means those customers with annual sales revenues of less than $1,000,000,000. For the purposes of this definition the sales revenue shall apply to either the
[*] Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
1
2 entire corporate entity or any separately reporting division. Corio shall have the right to continue to support Corio Customers that have annual sales revenues greater than $1,000,000,000 by way of either sales growth or merger or acquisition of the Corio Customer. Corio and Commerce One further agree that should Corio desire to sell Corio Services to a parent company of a then current Corio Customer that is above this sales revenue threshold, each such sales opportunity shall be discussed as it arises.
1.4 "CORIO SERVERS" means the unlimited number of computer servers owned or operated by or for Corio which will contain the installed Software (as defined below) for access by Customers in connection with the Corio Services.
1.5 "CORIO SERVICES" means the hosting services offered by Corio to its Customers in which Corio allows Customers to access the Corio Servers.
1.6 "CUSTOMER(S)" means one or more customers of the Corio Services having its principal executive offices in the Territory who obtains a sublicense from Corio to use the Software or MarketSite.net Service, in the Corio Market Segment.
1.7 "DEMONSTRATION SOFTWARE" means copies of the Software which are for demonstration purposes only and which contain sample data and transactions.
1.8 "DOCUMENTATION" means any on-line help files or written instruction manuals regarding the use of the Software or MarketSite.net Service.
1.9 "RELATIONSHIP MANAGERS" means the appointed employee of each party, as set forth on EXHIBIT A attached hereto and made a part hereof, who shall be the primary contact for implementing and administering the terms and conditions of this Agreement.
1.10 "SOFTWARE" means Commerce One's proprietary software described in EXHIBIT A attached hereto and made a part hereof, in object code form only, and any Updates or Upgrades (as defined below) thereto.
1.11 "TERRITORY" means the area in which the licenses granted herein are applicable, currently limited to the geographic area of North America.
1.12 "UPDATE(S)" means any error corrections, bug fixes, modifications or enhancements to the Software, which are indicated by a change in the numeric identifier to the Software in the digit to the right of the decimal, or any error corrections, bug fixes, modifications or enhancements of the Software and MarketSite software used to operate the MarketSite.net Service.
1.13 "UPGRADE(S)" means a release, function or version of the Software designated as such by Commerce One which contains new features or significant functional enhancements to the Software, which are indicated by a change in the numeric identifier for the Software in the digit to the left of the decimal, or a new release, function or version of the MarketSite.net Service, which Upgrade is provided to Commerce One's installed customer base for the Software and MarketSite software used to operate the MarketSite.net Service. For the purposes of this Agreement, "Maintenance and Support" means those services listed in EXHIBIT C and the provision of Updates and Upgrades as called for by this Agreement
[*] Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
2
3 2. GRANT OF RIGHTS.
2.1 Hosting Software License. Subject to the terms and conditions of this Agreement, Commerce One hereby grants to Corio a fee-bearing, perpetual and irrevocable, nonexclusive, nontransferable (except in accordance with Section 14.1 of this Agreement), right and license in the Territory to (i) reproduce the Software in machine executable object code format only for installation on the Corio Servers; (ii) install multiple copies of the Software on Corio's Servers which will be made remotely accessible to Corio's Customers for their subsequent use, (iii) permit limited access to and use of the Software and MarketSite.net Service by Customers through Corio Servers; (iv) sublicense an unlimited number of Customers to access and use the Software and MarketSite.net Service only through the installation on Corio servers; and (v) use Commerce One's tools and utilities, subject to any restrictions placed on the Commerce One by third party software providers, to modify and manage the Software. Except as specifically authorized by this Agreement, no license is granted under this Agreement to Corio to distribute the Software to its Customers or for use other than as part of the Corio Services.
2.2 Internal Use License. Subject to the terms and conditions of this Agreement, Commerce One grants to Corio a nonexclusive, nontransferable (except in accordance with Section 14.1 of this Agreement), royalty-free, fully paid up, perpetual right and license in the Territory to reproduce, install and use additional copies of the Software and Software tools and utilities, subject to any restrictions placed on the Commerce One by third party software providers, in machine executable object code for (i) Corio's internal business operations and (ii) production, testing, development, upgrade, reporting and training.
2.3 Demonstration License. Subject to the terms and conditions of this Agreement, Commerce One hereby grants to Corio a nonexclusive, nontransferable (except in accordance with Section 14.1 of this Agreement) royalty-free, fully paid up right and license in the Territory, on Corio Servers, to make a reasonable number of copies of the Demonstration Software solely for demonstration purposes to potential Customers. Demonstration Software shall be made available to Corio's sales personnel and the parties agree to cooperate to make the Commerce One demonstration database available to Corio sales personnel on an ongoing basis.
2.4 Distribution License: Corio shall have the right to resell licenses for Commerce One software, including Hosted BuySite, to any Corio Customer in the Territory, [*]. Subject to the terms and conditions of this Agreement, Commerce One hereby grants to Corio a nonexclusive, nontransferable (except in accordance with Section 14.1 of this Agreement), right and license in the Territory to sell and distribute such software licenses to Customers pursuant to this Section 2.4. Under no circumstances shall Commerce One contact Corio Customers regarding a non-ASP license sale, unless requested to do so by Corio. Further, if a Corio Customer contacts Commerce One to purchase the Software license
independent of the Corio Services, Commerce One shall immediately refer that Customer to Corio.
2.5 Software User License Agreements. Corio shall make the Software and the MarketSite.net Service on the Corio Servers remotely accessible to Customers under the then current terms of its end user license agreement. As to each Software User who is provided access to the Software, Corio
[*] Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
3
4 shall secure the Software User's consent to an end user agreement, which provides that the Software User may access and/or use the Software and MarketSite.net Service only under terms and conditions which include, at a minimum, those set forth on EXHIBIT E ("END USER LICENSE AGREEMENT") and made a part hereof.
2.6 Access to MarketSite.net Service. For the fee set forth in Exhibit B attached hereto and made a part hereof, Corio and its Customers shall have unlimited access to Commerce One's MarketSite electronic catalogue service, as available to Commerce One customers at the URL: Marketsite.net, including without limitation, MarketSite.net Business Transaction Services, MarketPack of Premium Supplier Catalogs, and MarketSite Community Services ("MarketSite.net Service") in accordance with Commerce One's standard access procedures for its customers. In addition, the parties shall share certain revenues related to purchases made by Customers utilizing Commerce One's MarketSite.net Service, as set forth in EXHIBIT B hereto.
2.7 Restrictions. Corio may not copy, distribute, reproduce, use or allow access to the Software or the MarketSite.net Service except as explicitly permitted under this Agreement, and Corio shall not, nor will it permit any third party to, modify, adapt, translate, prepare derivative works from, decompile, reverse engineer, disassemble or otherwise attempt to derive source code from the Software or any internal data files generated by the Software except as required by law.
2.8 Ownership. Commerce One hereby retains all of its right, title, and interest in and to the Software, including all copyrights, patents, trade secret rights, trademarks and other intellectual property rights therein. All rights not expressly granted hereunder are reserved to Commerce One. The Software and all copies thereof are licensed, not sold, to Corio.
2.9 New Products. Updates and Upgrades to the Software and the MarketSite.net Service and software are subject to the terms of this Agreement and are included in the Maintenance and Support fees payable by Corio. Commerce One agrees to license Corio to use future products and solutions offered by Commerce One according to the license fees and other terms and conditions as the parties may agree. These products and solutions may include, but are not limited to the following: e-commerce, and marketing and sales force automation solutions.
2.10 Expansion of Geographical Scope. The parties agree Corio may seek permission to expand the scope of the licenses granted under this Section 2 worldwide, at no additional cost to Corio, and maintaining the revenue sharing provisions contained herein, and Commerce One shall not unreasonably withhold its permission to expand all such licenses worldwide at no additional cost to Corio. If and when localized versions of the Software become available, these versions shall be made available under the maintenance and support provisions of this Agreement.
3. DELIVERY OF SOFTWARE.
3.1 Delivery and Acceptance. Commerce One shall issue to Corio, via electronic means of delivery, as soon as practicable, one (1) machine-readable copy of the Software, along with one (1) copy of the on-line Documentation. Commerce One will provide Corio with one written copy of the Documentation at no cost, and any additional written copies at Commerce One's standard charges. Corio acknowledges that no copy of the source code of the Software will be provided to
4
5 Corio. Within thirty (30) days of delivery of the Software, but in no event later than December 1, 1999, Corio shall test the Software for conformance with the Documentation ("Acceptance Test"). If the Software performs in substantial accordance with the Documentation, then Corio shall notify Commerce One in writing of its acceptance of the Software. In the event Corio finds material errors or defects with the Software, Corio shall notify Commerce One in writing of such errors or defects and provide adequate detail to facilitate Commerce One replicating the error or defect. Upon receipt of written notice, Commerce One shall have fifteen (15) days to correct the defect, reinstall the Software at the
Corio site and re-perform the Acceptance Test. If Corio does not accept the Software after the second Acceptance Test, a third Acceptance Test will be performed. Notwithstanding the foregoing, all Acceptance Testing shall be complete by December 30, 1999, and Corio shall notify Commerce One in writing of it's acceptance or rejection of the Software no later than December 31, 1999. If after the third Acceptance Test Corio does not accept the Software, Corio may, at its sole option, elect to (i) repeat the Acceptance Test or (ii) terminate the Agreement and receive a refund of any fees paid to Commerce One as of such date. Both parties acknowledge that any professional services provided to Corio subsequent to the installation and acceptance of the Software are non-essential for the purpose of the acceptance of the Software.
3.2 New Versions. Commerce One shall provide Corio with any pre-release versions of relevant Updates or Upgrades of the Software. Commerce One shall make these versions available to Corio to preview at the earliest possible date. Commerce One shall provide all such Updates and Upgrades to Corio free of additional charge and Corio shall, in its sole discretion determine when, and if, to offer any such Updates and/or Upgrades to its Customers.
3.3 Additional Materials. Commerce One shall use all commercially reasonable efforts to promptly provide Corio with, at a minimum, the following: (i) release notes; (ii) beta releases; (iii) contacts at beta customers, when requested by Corio and subject to the approval of the Commerce One; (iv) proactive bug notification; (v) software patches; (vi) release documentation including technical reference manuals and user guides; and (vii) all applicable data objects relevant to the Software. These materials shall be provided at no cost to Corio.
4 FEES.
4.1 License Fees. In consideration for the licenses granted to Corio pursuant to Section 2 of this Agreement, Corio shall pay the license fees specified in EXHIBIT B hereto. Payment terms of such license fees shall be as set forth in EXHIBIT B hereto.
4.2 Software Support and Maintenance Fees. Corio shall pay to Commerce One an annual Software Maintenance and Support fee for the support services to be provided by Commerce One specified in Exhibit C attached hereto and made a part hereof, and Updates and Upgrades, according to the fees set forth in Exhibit B hereto. Payment terms of annual Software Maintenance and Support fees shall be as set forth in Exhibit B hereto. Maintenance and Support shall automatically continue during the term of this Agreement and thereafter, provided that Corio continues to pay the annual Maintenance and Support fees contained in Exhibit B, attached hereto.
4.3 Taxes. All fees are exclusive of any sales taxes, use taxes and any other taxes and charges of any kind imposed by any federal, state or local governmental entity for products and services
5
6 provided under this Agreement, and Corio is responsible for payment of all taxes concerning the Corio Services, excluding taxes based solely upon Commerce One's income.
4.4 Audit Rights. Corio shall keep true and accurate books of accounts and records for determining the amounts payable to Commerce One under this Agreement. Such books and records shall be kept for at least three (3) years following the end of the calendar month to which they pertain, and shall be open for inspection by an independent certified public accountant reasonably acceptable to Corio for the purpose of verifying the amounts payable to Commerce One under this Agreement. Such inspections may be made no more than once each calendar year, at reasonable times and upon reasonable notice. Commerce One shall bear all costs and expenses of such inspection. If any such inspection discloses a shortfall or an overpayment, the appropriate party shall promptly pay the amount of such shortfall or refund such overpayment. In addition, if any such inspection reveals an underpayment of more than five percent (5%) for the period under audit, Corio shall reimburse Commerce One for the reasonable cost of the examination.
5 INSTALLATION SUPPORT, MAINTENANCE AND TRAINING.
5.1 Installation. Commerce One shall provide Corio with access to one (1) full-time operations consultant for one (1) week at no charge to Corio as part of the installation project as described in the Corio Statement of Work - Hosted BuySite ASP, dated October 28, 1999 ("Statement of Work") incorporated herein by reference.
5.2 Implementation. Commerce One shall provide Corio with sufficient access to Commerce One's professional services organization during the first three (3) implementations of the Software conducted by Corio and its Customers, in accordance with the Statement of Work incorporated herein by reference, subject to the payment by Corio of the professional services fee set forth in Exhibit B hereto ("IMPLEMENTATION FEE"). Additionally, during the term of the Agreement the parties shall meet periodically to discuss Updates and Upgrades to the Software and MarketSite.net Service to better support Corio's and its Customers' specific application requirements, to be provided at no charge to Corio.
5.3 Support and Maintenance. Commerce One shall provide Corio with support described in EXHIBIT C hereto, and maintenance in the form of Updates and Upgrades. Corio shall be responsible for providing its Customers with routine technical support of the Software and MarketSite.net Service. Corio shall escalate any technical support questions or problems it is unable to answer or resolve directly to Commerce One for Commerce One's immediate attention and resolution under the schedule set forth in EXHIBIT C hereto. The support described in this Section 5.3 and EXHIBIT C hereto shall be provided to Corio but Commerce One shall have no obligation to provide any maintenance or support services to other third parties. Subject to Corio's payment of the annual support and maintenance fee, Commerce One's support and maintenance obligation of the Software and MarketSite.net Service shall continue after termination or expiration of this Agreement with respect to all Software Users granted access to the Software and MarketSite.net Service prior to termination or expiration of this Agreement.
5.4 Product Management Meetings. The parties agree to meet either in person or via teleconference on no less than a quarterly basis to discuss, without limitation, engineering, feature-functionality and architecture-related issues as they pertain to the Software and MarketSite.net Service. The specific topics of the meetings will be determined on a meeting-by-meeting basis. Each party
6
7 shall appoint a product manager to coordinate these meetings. Commerce One shall provide Corio with information relevant to future Software and MarketSite.net Service development efforts, including product and service roadmap, rollout strategy, and plans for future development efforts. The product managers shall be those persons set forth on EXHIBIT A hereto.
5.5 Training. Commerce One shall provide Corio with training as reasonably requested by Corio to train Corio's technical and support personnel regarding implementation, use and operation of the Software and MarketSite.net Service as part of the Implementation Fee. Thereafter, throughout the term of the Agreement and at Corio's request, Commerce One shall provide additional training to Corio subject to payment of Commerce One's standard training fees at a [*]. Corio shall be responsible for training its Customers regarding proper use of the Software and MarketSite.net Service. Further, the parties shall work together and cooperate to train Corio's sales force and product consultants on the Software and MarketSite.net Service and the alliance contemplated by this Agreement, including without limitation, how to position, sell and demonstrate the Software and MarketSite.net Service to potential customers.
5.6 Other Services. Upon Corio's request, Commerce One shall provide certain professional services, including without limitation, consulting services, to Corio or its Customers, subject to the mutual written agreement on the scope of such services, pricing and other terms and conditions.
5.7 Sales and Marketing Efforts. The parties shall engage in joint marketing and sales activities as set forth in EXHIBIT D attached hereto and made a part hereof.
6 TRADEMARKS.
6.1 Right to Display. During the term of this Agreement, each party authorizes the other party to display and use the other's trademarks, trade names and logos (collectively, the TRADEMARKS) in connection with that party's sale, advertisement, service and promotion of the Corio Services or the Software and MarketSite.net Service. Each party shall indicate in all product, service, publicity and printed materials relating to the Corio Services or the Software and MarketSite.net Service that such trademarks are the property of the originating party. Upon termination of this Agreement, each party shall cease all display, advertising and use of all Trademarks of the other party and shall not thereafter use, advertise or display any trademark, trade name or logo which is, or any part of which is, confusingly similar to any such designation association with Corio or the Corio Services or Commerce One or any Commerce One product.
6.2 Promotion Materials and Activities. All representations of the other party's Trademarks that a party intends to use shall be exact copies of those used by the other party and shall first be submitted to the originating party for approval of design, color and other details, which consent shall not be unreasonably withheld or delayed. To ensure trademark quality, each party shall fully comply with all written guidelines provided by the other party concerning the use of the originating party's Trademarks. Each party agrees to change or correct any material or activity that the originating party determines to be inaccurate, objectionable, misleading or a misuse of the originating party's Trademarks.
[*] Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
7
8 7 WARRANTIES AND DISCLAIMER.
7.1 No Conflict. Each party represents and warrants to the other party that it is under no current obligation or restriction, nor will it knowingly assume any such obligation or restriction that does or would in any way interfere or conflict with, or that does or would present a conflict of interest concerning the performance to be rendered hereunder or the rights and licenses granted herein.
7.2 Intellectual Property Warranty. Commerce One represents and warrants to Corio that (a) Commerce One is the sole and exclusive owner of the Software; (b) Commerce One has full and sufficient right, title and authority to grant the rights and/or licenses granted to Corio under this Agreement; (c) the Software does not contain any materials developed by a third party used by Commerce One except pursuant to a license agreement; and (d) the Software does not infringe any patent, copyright, trade secret, trademark or other intellectual property rights of a third party.
7.3 Product Warranty. Commerce One warrants that the Software and MarketSite.net Service will perform in substantial accordance with the Documentation, and the media on which the Software is distributed will be free from defects in materials and workmanship under normal use, for a period of sixty (60) days from the Effective Date, but in no event not later than December 31, 1999 (the "Warranty Period"). In addition, Commerce One warrants that during the Warranty Period the Software and MarketSite.net Service is free of any willfully introduced computer virus, or any other similar harmful, malicious or hidden program or data, which is designed to disable, erase, or alter the Software, or any other files, data, or software. If during the Warranty Period the Software and MarketSite.net Service does not perform in substantial compliance with the Documentation, Commerce One shall take all commercially reasonable efforts to correct the Software and MarketSite.net Service, or if correction of the Software and MarketSite.net Service is reasonably not possible, replace such Software and MarketSite.net Service free of charge. Commerce One will replace any defective media returned to Commerce One during the Warranty Period. In the event any such breach of warranty can not be reasonably corrected at Commerce One's sole expense, Corio has the right to terminate this Agreement and receive a refund of all prepaid fees. The foregoing are Corio's sole and exclusive remedies for breach of product warranty. The warranty set forth above is made to and for the benefit of Corio only. The warranty shall not apply only if:
(a) the Software and MarketSite.net Service has been not properly installed and used at all times and in accordance with the Documentation; and
(b) Corio has requested modifications, alterations or additions to the Software and MarketSite.net Service that cause it to deviate from the Documentation.
7.4 Product Warranty - Year 2000 Compliance. Commerce One warrants that the Software and MarketSite.net Service, when used in accordance with its associated documentation, is in all material respects capable upon installation of accurately processing, providing and/or receiving date data from, into and between the twentieth and twenty-first centuries, including the years 1999 and 2000, and leap year calculations; provided that all licensee and third party equipment, systems, hardware, software and firmware used in combination with the Software and MarketSite.net Service properly exchange date data with the Software and MarketSite.net Service
8
9 OTHERWISE, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE.
8 INDEMNIFICATION.
8.1 By Commerce One. Commerce One shall indemnify, defend and hold harmless Corio and its Customers from any and all damages, liabilities, costs and expenses (including reasonable attorneys' fees) incurred by Corio or its Customers arising out of any claim that the Software infringes any patent, copyright, trademark or trade right secret of a third party; provided that Corio or its Customer promptly notifies Commerce One in writing of any such claim and promptly tenders the control and the defense and settlement of any such claim to Commerce One at Commerce One's expense and with Commerce One's choice of counsel. Corio or its Customer shall cooperate with Commerce One, at Commerce One's expense, in defending or settling such claim and Corio or its Customer may join in defense with counsel of its choice at its own expense. If the Software is, or in the opinion of Commerce One may become, the subject of any claim of infringement or if it is adjudicatively determined that the Software infringes, then Commerce One may, at its sole option and expense, either (i) procure for Corio the right from such third party to use the Software, (ii) replace or modify the Software with other suitable and substantially equivalent products so that the Software becomes noninfringing, or if (i) and (ii) are not practicable after Commerce One has exhausted all diligent efforts, (iii) terminate this
Agreement and refund to Corio a pro-rated portion of the fees paid hereunder.
8.2 Limitations. Commerce One shall have no liability for any infringement based on (i) the use of the Software other than as set forth in the Documentation; or (ii) the modification of the Software by a party other than Commerce One, when such infringement would not have occurred but for such modification.
9 LIMITATION OF LIABILITY.
EXCEPT FOR LIABILITY ARISING UNDER SECTION 8 OF THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY'S LIABILITY ARISING OUT OF THIS AGREEMENT OR THE USE OR PERFORMANCE OF THE SOFTWARE EXCEED THE TOTAL AMOUNT ACTUALLY PAID BY CORIO HEREUNDER FOR THE TRANSACTION WHICH THE LIABILITY RELATES TO DURING THE TWELVE (12) MONTHS IMMEDIATELY PRIOR TO THE FILING OF THE CAUSE OF ACTION TO WHICH THE LIABILITY RELATES. EXCEPT FOR LIABILITY ARISING UNDER SECTION 8 OF THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY TO THE OTHER PARTY FOR ANY LOST PROFITS OR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, OR FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE PARTIES AGREE THAT THIS SECTION 9 REPRESENTS A REASONABLE ALLOCATION OF RISK.
9
10 LIABILITY RELATES. EXCEPT FOR LIABILITY ARISING UNDER SECTION 8 OF THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY TO THE OTHER PARTY FOR ANY LOST PROFITS OR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, OR FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE PARTIES AGREE THAT THIS SECTION 9 REPRESENTS A REASONABLE ALLOCATION OF RISK.
10 CONFIDENTIALITY.
Each party hereby agrees that it shall not use any Confidential Information received from the other party other than as expressly permitted under the terms of a non-disclosure agreement to be concurrently executed with this Agreement.
11 TERM AND TERMINATION.
11.1 Term. The term of this Agreement shall commence on the Effective Date and shall continue in full force and effect for an initial period of five (5) years. Thereafter, this Agreement shall automatically renew for subsequent one (1) year periods unless either party provides the other party with written notification at least thirty (30) days prior to the expiration of the initial five (5) year term or any one (1) year renewal thereof of its intention to terminate this Agreement.
11.2 Termination. If either party materially breaches any term or condition of this Agreement and fails to cure such breach within-thirty (30) days after receiving written notice of the breach, the nonbreaching party may terminate this Agreement on written notice at any time following the end of such-thirty (30) day period. This Agreement shall terminate immediately upon notice if either party becomes insolvent (i.e., becomes unable to pay its debts in the ordinary course of business as they come due) or makes an assignment for the benefit of creditors. Compliance by the Software with the Software's specifications after expiration of the Warranty Period shall be deemed a material condition of this Agreement.
11.3 Effect of Termination. The following Sections shall survive the termination or expiration of this Agreement for any reason: 4.2, 5.3, 7, 8, 9, 10, 12 and 14. Corio's right to allow its then-existing Customers and their Software Users to use and access the Software in accordance with Section 2 of this Agreement and all payment obligations related thereto shall survive any termination or expiration of this Agreement. Commerce One's obligation to provide Software support and maintenance to Corio and its Customers shall survive any termination or expiration of this Agreement, provided Corio continues to make its annual support and maintenance payments as specified in this Agreement. Upon termination or expiration of this Agreement, each party shall otherwise return or destroy any Confidential Information of the other party provided, however, Corio may retain any Confidential Information necessary for Corio to continue supporting it's then-existing Customers.
12 SOURCE CODE ESCROW.
12.1 Escrow Account. Within sixty (60) days of the Effective Date, Commerce One agrees to execute an escrow agreement by and among Corio, Commerce One and a mutually acceptable escrow agent (the "ESCROW AGENT"). The Escrow Agent shall require Commerce One to place in an
10
11 escrow account in California a copy of the source code of the Software
including all Updates and Upgrades thereto, documentation and similar materials (the SOURCE CODE). The escrow agreement shall contain, at a minimum, the terms and conditions set forth in this Section 12. Corio shall bear all fees, expenses and other charges to open and maintain such escrow account. If a Release Condition (as defined in Section 12.2 of this Agreement) occurs and the Escrow Agent provides the Source Code to Corio under the escrow agreement, Corio agrees to hold the Source Code in confidence pursuant to the provisions contained in Section 10 of this Agreement, and not to use them for any purpose other than those purposes contemplated under Section 12.3 of this Agreement.
12.2 Release. Corio shall notify Commerce One in writing if it believes that one of the following events (the "RELEASE CONDITIONS") has occurred and that it intends to seek release of the Source Code from the escrow account: (i) Commerce One's dissolution or ceasing to do business in the normal course, or (ii) Commerce One's repeated and material breach of its support and maintenance obligations under Section 5 of this Agreement and such breach is not cured within sixty (60) days of receipt of written notice thereof from Corio. If Commerce One notifies Corio in writing that it disputes whether any such event has occurred, officers of each of the parties shall negotiate for a period of ten (10) business days to attempt to resolve the dispute. At the end of such ten (10) business day period, if the parties have not resolved the dispute, the matter shall be referred to arbitration in the manner provided in Section 14.3 of this Agreement.
12.3 License. Upon the release of the Source Code to Corio pursuant to Section 12.2 of this Agreement, Corio shall have a royalty-free, nonexclusive, nontransferable, right and license in the Territory to use and modify the Source Code to support and maintain the Software until the expiration or termination of Corio's Customers' End User License Agreements. The object code derived from the Source Code so modified shall be subject to the same rights and restrictions on use, reproduction and disclosure that are contained in this Agreement with respect to the Software. Corio shall not distribute, sell or sublicense the Source Code. Subject to the licenses expressly granted in this Agreement, Commerce One shall retain all right, title and interest in and to the Source Code. This license shall be deemed to extend worldwide in scope if Corio, at the time one or more Release Conditions has occurred, has been granted worldwide license rights by Commerce One under Section 2 of this Agreement.
13 SHARED RESOURCES.
13.1 Operations. To the extent not provided for within the Statement of Work covered by the Implementation Fee, Commerce One shall provide Corio with access to Commerce One operations personnel as reasonably requested by Corio, subject to payment by Corio of Commerce One's standard fees [*]. These Commerce One operations personnel shall work together with Corio personnel to optimize the architecture and performance of the Software and MarketSite.net Service in a hosted environment. Commerce One shall only commit personnel with expertise in installations, operating environments and networking functionality.
13.2 Consulting. To the extent not provided for within the Statement of Work covered by the Implementation Fee, Commerce One shall provide Corio with access to Commerce One consulting personnel as reasonably requested by Corio, subject to payment by Corio of Commerce One's standard fees [*]. These Commerce One
[*] Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
11
12 consulting personnel shall initially work together with Corio personnel to develop implementation templates. Commerce One may, in its sole but reasonable discretion, elect to assign resources from a third party systems integrator subject to advance notification to Corio of such election.
13.3 Engineering. Commerce One shall provide Corio with reasonable access to Commerce One engineering personnel at no additional cost to Corio. Joint engineering work may include product development, including without limitation, technical and functional application development and integration.
13.4 Other. All services provided hereunder, in addition to services subsequently requested by Corio (e.g. customization of the Software) shall be subject to the terms of a separate agreement between the parties.
13.5 Ownership. Subject to Commerce One's pre-existing ownership of any materials or technology provided to Corio, the results of all such development efforts set forth in this Section 13, including all intellectual property rights in any software interface coding or programs created solely by Corio during the term of this Agreement to enable the Software to operated within the Corio Servers' hosted environment ("DEVELOPMENTS"), shall be owned by Corio, unless such Developments are supported on an ongoing basis by Commerce One in which case Commerce One will retain all ownership rights, including
intellectual property rights in the Developments. To the extent that Commerce One would otherwise have a claim of ownership in such Developments, Commerce One hereby assigns all rights in and to such Developments to Corio. Further, Commerce One represents and warrants that all Commerce One employees, agents, contractors or consultants that will be provided to work together with Corio have or will have signed agreements with customary terms containing confidentiality provisions and assignment of inventions ("EMPLOYEE NDA/INVENTION AGREEMENT"). Corio covenants and warrants that it will not disclose to Commerce One or its officers, directors, employees, agents, contractors or consultants any proprietary information, including without limitation any technical information related to Developments created solely by Corio under this Agreement, except upon the written authorization to do so by a Corporate Officer of Commerce One. Commerce One covenants that during the term of this Agreement, it will continue to require all Commerce One employees, agents, contractors or consultants to sign an Employee NDA/Invention Agreement and that Commerce One will furnish to Corio copies of such signed agreements upon Corio's request. Ownership of intellectual property rights to any enhancements, modifications or derivative works to the Software itself which may be developed jointly by the parties or solely by Corio shall be negotiated by the parties prior to the start of any such development work.
13.6 Independent Development: Covenant not to Sue. Nothing in this Agreement will be construed to prohibit either parties' right to independently develop the Developments contemplated above. Each party covenants that it shall not, under any circumstances, sue the other party (or its officers, directors, successors and assigns) or any of that parties' licensees, customers, or distributors ("Protected Entities") for patent infringment under any future patents or future patent rights relating to said Developments, that either party owns or controls, so long as that Protected Entity has a license from Commerce One or Corio to the Software, or to a product that is a modification of, derivative work based on, or replacement for the Software. The foregoing covenant is binding on Corio's permitted successors and assigns, and inures to the benefit of any
12
13 of Commerce One's successors and assigns, and is binding on Commerce One's permitted successors and assigns, and inures to the benefit of any of Corio's successors and assigns.
14 MISCELLANEOUS.
14.1 Assignment. Neither party may assign this Agreement or any rights or obligations hereunder, whether by operation of law or otherwise, without the prior written consent of the other party. Notwithstanding the foregoing, either party shall have the right to assign this Agreement in connection with the merger or acquisition of such party or the sale of all or substantially all of its assets related to this Agreement without such consent, except in the case where such transaction involves a direct competitor of the other party where consent of the other party will be required. Subject to the foregoing, this Agreement will bind and inure to the benefit of the parties, their respective successors and permitted assigns. Any assignment in violation of this Section 14.1 shall be null and void.
14.2 Waiver and Amendment. No modification, amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by the party to be charged. No failure or delay by either party in exercising any right, power, or remedy under this Agreement, except as specifically provided herein, shall operate as a waiver of any such right, power or remedy.
14.3 Choice of Law; Arbitration; Venue. This Agreement shall be governed by the laws of the State of California, USA, excluding conflict of laws provisions and excluding the 1980 United Nations Convention on Contracts for the International Sale of Goods. Any disputes arising out of this Agreement shall be resolved by binding arbitration in accordance with the then-current commercial arbitration rules of the American Arbitration Association ("RULES"). The arbitration shall be conducted by one (1) arbitrator appointed in accordance with the Rules in San Francisco County, California. A judgment upon the award may be entered in any court having jurisdiction of the parties, including without limitation the courts in San Francisco, California. The non-prevailing party in the arbitration shall pay all fees and charges of the American Arbitration Association; each party, however, shall be responsible for the payment of all fees and expenses connected with the presentation of its respective case.
14.4 Notices. All notices, demands or consents required or permitted under this Agreement shall be in writing. Notice shall be considered delivered and effective on the earlier of actual receipt or when (a) personally delivered; (b) the day following transmission if sent by telex, telegram or facsimile followed by written confirmation by registered overnight carrier or certified United States mail; or (c) one (1) day after posting when sent by registered private overnight carrier (e.g., DHL, Federal Express, etc.); or (d) five (5) days after posting when sent by certified United States mail. Notice shall be sent to the parties at the addresses set forth on the first page of this Agreement or at such other address as shall be specified by either party to the other in writing.
14.5 Independent Contractors. The parties are independent contractors with respect to each other. Each party is not and shall not be deemed to be an employee, agent, partner or legal representative of the other for any purpose and shall not have any right, power or authority to create any obligation or responsibility on behalf of the other.
14.6 Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be contrary to law, such provision shall be changed and interpreted so as to best accomplish the
13
14 objectives of the original provision to the fullest extent allowed by law and the remaining provisions of this Agreement shall remain in full force and effect.
14.7 Force Majeure. Neither party shall be deemed to be in breach of this agreement for any failure or delay in performance caused by reasons beyond its reasonable control, including but not limited to acts of God, earthquakes, strikes or shortages of materials.
14.8 Subcontract. Commerce One understands and agrees that Corio shall solely direct the provision of Corio Services and may subcontract certain portions of the Corio Services to third parties at any time during the term of the Agreement.
14.9 Bankruptcy. The parties hereto agree that Corio, as a licensee of Commerce One's intellectual property, shall be afforded all of the protections afforded to a licensee under Section 365(n) of the United States Bankruptcy Code, as amended from time to time (the "CODE") so that the Trustee or Debtor in Possession, as defined in the Code, will not interfere with Corio's license with respect to the Software as provided in this Agreement, as set forth in Section 365(n) of the Code.
14.10 Complete Understanding. This Agreement including all Exhibits, and the Non Disclosure Agreement and the Statement of Work referenced in this Agreement and incorporated by reference herein, constitutes the final, complete and exclusive agreement between the parties with respect to the subject matter hereof, and supersedes any prior or contemporaneous agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
CORIO, INC. COMMERCE ONE, INC.
By: /s/ Signature Illegible By: /s/ Signature Illegible -------------------------------- Name: GEORGE KADIFA Name: MARK S. BIESTMAN --------------------------- ------------------------------
Title: CEO Title: V.P. WORLDWIDE SALES -------------------------- ------------------------------
Date: 11/5/99 Date: -------------------------- ------------------------------
14
15 EXHIBIT A
SOFTWARE
1. SOFTWARE. Hosted BuySite v 6.0
2. DEMONSTRATION SOFTWARE. Hosted BuySite v 6.0
3. RELATIONSHIP MANAGERS. The Corio Relationship Manager shall be: __________. The Commerce One Relationship Manager shall be: ________.
4. PRODUCT MANAGERS. For purposes of Section 5.4 of this Agreement, the Corio product manager shall be: _________.
The Commerce One product manager shall be: _______________.
15
16 EXHIBIT B
PRICING
SOFTWARE: BuySite Hosted Edition version 6.0
MarketSite.net Service access
SOFTWARE USERS: BuySite Hosted Edition: Unlimited
LICENSE FEES: BuySite Hosted Edition: [*]
MARKETSITE.NET SERVICE FEES: MarketSite.net Service Access: Year 1 [*] Year 2-5, and beyond: [*]
MAINTENANCE AND SUPPORT FEES: Year 1 [*] Year 2-5, and beyond: [*]
REVENUE SHARING FEES:
1. MarketSite Transaction Revenue: Commerce One to pay Corio [*] of all transaction fees from Corio Customer transactions on MarketSite.
2. Corio Customer Application Management Revenue: Corio to pay Commerce One [*] of all Application Management Revenue from Corio Customers for use of Commerce One Software or MarketSite.net Service Access subject to the following limitations.
A. No Application Management Revenue shall be due for any Corio Customer subscriptions utilizing the initial 3000 Software User licenses granted herein, subject to a minimum limitation of 40 Authorized Software Users per Customer
B. The Corio invoice amounts used to calculate the revenues subject to this revenue share shall not include Professional Service fees, or Network access fees.
C. These Application Management Revenue fees shall begin accruing when the Corio Customer begins live operations.
IMPLEMENTATION FEES: Time and Materials Basis Billed at [*] in accordance with The Statement of Work as agreed between the parties, not to exceed [*].
* Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
16
17 PAYMENT TERMS
License Fees: Due upon Software Acceptance.
Maintenance and Support Fees: Net 30 of Software acceptance anniversary date, and each year thereafter. Revenue Sharing Fees: Quarterly payments shall be due to receiving party, net 30 days after quarter close.
Implementation or Professional Service Fees: Net 30 days from date of Commerce One invoice, which shall be issued only after successful completion of each agreed upon milestone.
MarketSite.net Access Fee: Due upon Software Acceptance, and on each annual anniversary of Software Acceptance thereafter.
17
18 EXHIBIT C
CUSTOMER SERVICE OUTLINE
1. CONTACTING SUPPORT:
EMAIL: csc@commerceone.com
FAX: (925) 941-6060
SUPPORT HOTLINE: (925) 941-5959
WWW: http://commerceone.com/solutions/osupport.htm
Our web access allows you to submit new incidents and be notified in real time by the support team, who will provide suggestions and technical support to resolve your issue. Such support will include clarification of the functions and features of the Software, clarification of the documentation, guidance in the operations of the Software, and error correction analysis and verification to the extent possible remotely.
2. SERVICE HOURS: Staffed Monday - Friday, 7 am to 7 pm PST (except holidays). After hours support available 24x7 for Priority 1 technical issues only.
3. PRIORITY DEFINITION:
COMMERCE ONE RESPONSIBILITIES:
* Priority 1: The software and/or the hosted physical infrastructure is not operational and no workaround exists. Customer's production/business is seriously affected.
* Priority 2: Software and/or the hosted physical infrastructure functionality is impaired, does not work like proposed, but it is operational
CORIO RESPONSIBILITIES:
* Priority 3: Minor software and/or the hosted physical infrastructure problems or functionality questions.
* Priority 4: Enhancement request or cosmetic problems.
4. RESPONSE TIME: (Commitment to customers) Commence One will make every attempt to contact our customers within 30 minutes of the report of a critical incident, and to notify and work with any third party vendors providing ancillary services that may be affected by the incident. However, for providing specific action plans for resolutions, we are committed to the following schedule:
* Priority 1 incidents: 2 hours
* Priority 2 incidents: 4 hours
For resolution of incidents, we are committed to the following schedule:
* Priority 1 incidents: we will respond as provided above and continue resolution efforts on a 24 x 7 basis until the incident has been resolved
* Priority 2 incidents: we will respond as provided above and continue resolution efforts during business hours until the incident has been resolved
18
19 5. SUPPORT CONTACTS:
Up to 5 individuals can be designated as "Registered Customers" to contact Commerce One for Support services. Upon written notice, customers may change their designated contacts. [Additional contacts can be purchased at additional cost as mutually agreed. Specify the 5 contacts on the Customer Profile form.
19
20 EXHIBIT D
SALES AND MARKETING COOPERATION
The parties agree to the following non-binding sales and marketing cooperation efforts:
1. RELATIONSHIP MANAGERS. The parties' Relationship Managers would attempt to meet at mutually agreeable times no less than every quarter to review and coordinate sales efforts and review customer response to the Software, the MarketSite.net Services and the Corio Services, and address other topics related to this Agreement.
2. SALES COMPENSATION. The parties agree to provide their internal and external sales and marketing personnel sufficient compensation incentives designed to actively promote and encourage cross-selling of the Corio Services, and the Software and the MarketSite.net Services, respectively.
3. JOINT MARKETING PLANS. During the term of this Agreement the parties agree to develop, review and submit to each other new and continuing marketing plans with respect to the Corio Services and the Software and MarketSite.net Services, respectively.
4. MARKETING FUND. Within six (6) months after the Effective Date of the Agreement, Corio and Commerce One each would contribute to a marketing fund to be jointly managed by the parties to promote the sale and marketing of the Corio Services, the Software and the MarketSite.net Services.
5. PERSONNEL. Each party agrees to assign one (1) existing sales or marketing employee primarily dedicated to assist in the sales and marketing promotional activity set forth in this Exhibit D.
6. COOPERATION AND PUBLICITY. Upon mutual agreement, Corio and Commerce One may engage in the following activities: joint publicity releases, joint marketing materials, joint marketing calls, joint conference and trade show efforts, and strategy coordination concerned with promoting the Software, the MarketSite.net Services and the Corio Services in the commercial marketplace.
7. INITIAL CUSTOMERS. Within sixty (60) days after the Effective Date of the Agreement, Corio agrees to use commercially reasonable efforts to obtain orders from two (2) Customers for the Corio Services which include access to the Software and MarketSite.net Services.
20 | Highlight the parts (if any) of this contract related to "Non-Transferable License" that should be reviewed by a lawyer. Details: Does the contract limit the ability of a party to transfer the license being granted to a third party? | {
"answer_start": [
40193
],
"text": [
"Upon the release of the Source Code to Corio pursuant to Section 12.2 of this Agreement, Corio shall have a royalty-free, nonexclusive, nontransferable, right and license in the Territory to use and modify the Source Code to support and maintain the Software until the expiration or termination of Corio's Customers' End User License Agreements."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Non-Compete" that should be reviewed by a lawyer. Details: Is there a restriction on the ability of a party to compete with the counterparty or operate in a certain geography or business or technology sector?
Context: Exhibit 10.19 JOINT CONTENT LICENSE AGREEMENT This JOINT CONTENT LICENSE AGREEMENT (the "Agreement"), dated February 1, 2018 (the "Effective Date"), is made by and between WPT Enterprises, Inc., a Delaware corporation, with offices located at 1920 Main Street, Suite 1150, Irvine, CA 92614 ("WPT"), and ZYNGA INC., a Delaware corporation with offices located at 699 8th Street, San Francisco CA, 94103 ("Zynga US") and ZYNGA GAME IRELAND LIMITED, a limited company organized under the laws of Ireland, resident in Ireland and having its registered office located at The Oval, Building One, Third Floor 160 Shelbourne Road Ballsbridge 4 Co. Dublin Ireland ("Zynga Ireland," and together with Zynga US and their respective Affiliates, "Zynga"). In addition to the Definitions set forth in Section 1 of the Additional Provisions (attached and incorporated by reference), all capitalized terms used herein shall have the meanings set forth below. In consideration of the mutual promises herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: BASIC PROVISIONS 1. Joint Content License Relationship. Among other games, Zynga produces and distributes the ZYNGA POKER® game on a number of global platforms, including Apple iOS, Google Android, Facebook and the zynga.com website. The ZYNGA POKER® game features a Zynga Poker Tournaments Mode that Zynga can customize. Among other things, WPT is the creator of the World Poker Tour, WPT Tournaments and the WPT Invitational Tournaments. WPT Tournaments and WPT Invitational Tournaments are televised poker tournaments where a partner can promote its brand. The parties desire to work cooperatively, but independently, to use commercially reasonable efforts to engage in the marketing and promotional activities described in Exhibit A, including, but not limited to Zynga promoting the WPT brand in a WPT-branded Zynga Poker Tournament Mode, and WPT promoting the Zynga brand in WPT Tournaments and WPT Invitational Tournaments. This Agreement describes the terms of a content license and cooperative marketing relationship under which each party will independently or cooperatively engage in mutually agreed activities to promote each other's products and services throughout the Territory (as defined below). 2. Territory. The Territory for this Agreement is worldwide, but not including Asian countries (including, but not limited to, Bangladesh, Bhutan, Brunei, Cambodia, East Timor, Hong Kong, India, Indonesia, Japan, Laos, Macau, Malaysia, Maldives, Mongolia, Myanmar, Nepal, North Korea, Pakistan, People's Republic of China, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, Vietnam). The parties acknowledge and agree that the rights granted hereunder by Zynga (a) with respect to the United States are granted to, held and exercised by Zynga US and (b) with respect to all other parts of the Territory are granted to, held and exercised by Zynga Ireland.
1
Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019
3. Term. This Agreement will be in effect for three (3) years from the Effective Date ("Initial Term") unless terminated earlier in accordance with this Agreement. This Agreement shall automatically extend for an additional two (2) years on the same terms herein ("Renewal Term") provided WPT receives payments greater than twelve million U.S. dollars ($12,000,000) within the Initial Term. The Initial Term and any such Renewal Term are collectively referred to as the "Term." 4. Annual Minimum Guarantee. Zynga will pay WPT three million U.S. dollars ($3,000,000) per year according to the following schedule (which the parties may alter upon mutual agreement) (the "Annual Minimum Guarantee"): a. Within thirty (30) days of executing this Agreement: $1.5M b. July 1, 2018: $1.5M c. January 1, 2019: $1.5M d. July 1, 2019: $1.5M e. January 1, 2020: $1.5M f. July 1, 2020: $1.5M 5. Royalty. Zynga will pay to WPT ten percent (10%) of the cumulative Net Revenue (as defined in Section 3.b. of the Additional Provisions) ("Royalty") from the WPT-branded Zynga Poker Tournament Mode or other such use of the WPT brand on the Zynga platform. Zynga shall not be required to pay the Royalty to the extent offset by the Annual Minimum Guarantee payments previously paid to WPT during the Term. Conversely, Zynga shall not be required to make Annual Minimum Guarantee payments to the extent offset by the Royalty previously paid to WPT during the Term. The Additional Provisions and any attached Exhibits are incorporated by reference. Signature page to follow.
2
Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019
IN WITNESS WHEREOF ZYNGA INC. Signature: ______________________ Name: _________________________ Title: __________________________
WPT ENTERPRISES, INC. Signature: _________________________ Name: ____________________________ Title: _____________________________ ZYNGA GAME IRELAND LIMITED Signature: ______________________ Name: _________________________ Title: __________________________
3
Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019
ADDITIONAL PROVISIONS The following Additional Provisions form part of the Agreement dated February 1, 2018 entered into by and between ZYNGA INC. and ZYNGA GAME IRELAND LIMITED and their respective affiliates ("Zynga"), and WPT Enterprises, Inc. ("WPT"). 1. DEFINITIONS a. "Affiliate" means an entity, directly or indirectly, controlled by, controlling of, or under common control with a party, either now or in the future, and their respective successors and assigns. b. "Artwork" means, without limitation, all pictorial, graphic, visual, audio, audio-visual, digital, literary, animated, artistic, dramatic, sculptural, musical or any other type of creation or application, whether finished or not, including, without limitation, animation, drawings, designs, sketches, images, illustrations, film, video, electronic, digitized or computerized information, software, object code, source code, on-line elements, music, text, dialogue, stories, visuals, effects, scripts, voiceovers, logos, one-sheets, promotional pieces, packaging, display materials, printed materials, photographs, interstitials, notes, shot logs, character profiles and translations. c. "Agreement" means the Basic Provisions, these Additional Provisions, and any and all attached Exhibits. d. "Licensed Property" means those specific trademarks, service marks, publicity rights, copyrights, intellectual property rights, and any other items set forth in this Agreement, which the parties may utilize in connection with the marketing and promotional activities in Exhibit A. A list of the Licensed Property for each party is described in Exhibit B. e. "Annual Minimum Guarantee" means the guaranteed minimum amount due to WPT by Zynga in consideration of the rights granted herein, which amount may be recoupable from Royalties as set forth below and in the Basic Provisions. f. "Royalty" means the amount(s) set forth in the Basic Provisions and calculated as described in the Additional Provisions. g. "Term" means the term of this Agreement as set forth in the Basic Provisions. h. "Territory" means the territory throughout which the parties are authorized to engage in the marketing and promotional activities as described in Exhibit A and in the Basic Provisions. 2. TRADEMARKS, APPROVALS, AND RESERVATION OF RIGHTS a. Materials. To the extent indicated on Exhibit A, each party will provide the other party with electronic files containing the Licensed Property of such party to be used under this Agreement, as specified in Exhibit B, if any. b. License by Zynga. Subject to the terms and conditions of this Agreement, Zynga grants to WPT a non-exclusive, non- assignable, non-sublicensable, royalty-free, paid up, limited worldwide license to use and display Zynga's Licensed Property solely as necessary to perform WPT's obligations under this Agreement and as specifically described on Exhibit A, in any and all media now known or hereafter devised, for the Term (subject to Section 7.e. of Additional Provisions). c. License by WPT. Subject to the terms and conditions of this Agreement, WPT grants to Zynga a non-exclusive, non-assignable, non-sublicensable, royalty-free, paid up, limited license in the Territory to use and display WPT's Licensed Property solely as necessary to perform Zynga's obligations under this Agreement and as specifically described on Exhibit A, for the Term. d. Trademark Guidelines. In its use of the Licensed Property of the other party ("Licensee"), each party ("Licensor") will comply with any trademark usage guidelines that Licensor may communicate to Licensee from time to time. Each use of Licensor's marks by Licensee will be accompanied by the appropriate trademark symbol (either "™" or "®") and a legend specifying that such marks are trademarks of Licensor as specified on Exhibit B, and will be in accordance with Licensor's then-current trademark usage policies as provided in writing to Licensee from time to time. Licensee will provide Licensor with copies of any materials bearing any of Licensor's marks as requested by Licensor from time to time. If Licensee's use of any of Licensor's marks, or if any material bearing such marks, does not comply with the then-current trademark usage policies provided in writing by Licensor, Licensee will promptly remedy such deficiencies upon receipt of written notice of such deficiencies from Licensor. Other than the express licenses granted herein with respect to each Licensor's marks, nothing herein will grant to Licensee any other right, title or interest in Licensor's marks. All goodwill resulting from Licensee's use of Licensor's marks will inure solely to Licensor. Each party recognizes the great value of the publicity and good will associated with the Licensed Property and acknowledges that: (a) such good will is exclusively that of Licensor or Licensee, as applicable; and (b) the Licensed Property have acquired a secondary meaning as trademarks and/or identifications of Licensor or Licensee, as applicable, in the mind of the purchasing public. Licensee will not, at any time during or after this Agreement, register, attempt to register, claim any interest in, contest the use of, or otherwise adversely affect the validity of any of Licensor's marks (including, without limitation, any act or assistance to any act, which may infringe or lead to the infringement of any such marks).
4
Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019
e. Approvals. The Licensed Property shall be displayed or used only in such form and in such manner as has been approved in writing (which may be by email) by Licensor pursuant to this Section 2 and Licensee shall ensure its usage of the Licensed Property solely as approved. Throughout the Term, including any renewals or extensions (if applicable), Licensee shall comply with reasonable quality standards, style guides and clear specifications communicated to Licensee and rights of approval of Licensor set forth in this Section 2 with respect to any and all of its usage of the Licensed Property. Subject to Licensor's prior written approval of any applicable Licensed Property (hereinafter the "Approved Content"), all Conforming Content will be deemed approved by Licensor. "Conforming Content" means any and all elements of the Approved Content which (i) do not represent deviations in quality, style, look-and-feel or other aspects of use from the Approved Content and (ii) are consistent with the aesthetic style or tone of the Approved Content. The parties will come to agreement with respect to Exhibit A as to whether prior written approval is needed in every instance or whether it is not needed after the first instance has been approved in writing (e.g., given exigencies in television production business, it is reasonable that Zynga would approve the use of its brand conceptually in elements of an episode but not need to re-approve the use in a similar manner for every episode the brand is used in; and similarly, given exigencies in the social gaming business, it is reasonable that WPT would approve use of its brand conceptually in elements of the Zynga platform but not need to re-approve the use in a similar manner for every poker tournament the brand is used in). i. Licensee may use textual and/or pictorial matter pertaining to the Licensed Property on such promotional, display and advertising material as may, in Licensee's reasonable judgment, promote the awareness, consumption and sale of the Licensed Property. All final advertising and promotional material using the Licensed Property must be submitted to Licensor for its prior written approval. All press releases respecting this Agreement or the relationship of the parties herein shall require prior written approval by the other party. ii. Licensor will use commercially reasonable efforts to provide approval and/or feedback within five (5) business days after its receipt of a creative submission, or re-submission, with respect to the Licensed Property or marketing materials; provided that: (a) if Licensor declines to approve any submission or re-submission, then it shall provide reasonably detailed feedback in order to enable Licensee to modify the Licensed Property or marketing material accordingly in order to address Licensor's concerns and obtain Licensor's approval, and (b) if Licensor fails to (1) approve or (2) disapprove and provide feedback within such timeframe, then such submission or re-submission is deemed to have been approved. No approval may be unreasonably withdrawn by Licensor once delivered. iii. Zynga shall advise WPT to Zynga's knowledge as to which jurisdictions where it may be illegal to advertise Zynga's Licensed Property (if any) given local laws or regulations. iv. WPT or its affiliates shall not authorize a Zynga Competitor to commercially exploit the Licensed Property in connection with social poker gaming via a license similar to the license granted herein for the Term. A "Zynga Competitor" means: 1) Aristocrat Technologies Australia Pty Ltd. Or Big Fish Games, Inc.; 2) HUUUGE Inc.; 3) Activision Blizzard, Inc., King.com Ltd. Or King.com (US) LLC; 4) Scientific Games Corporation; 5) Tencent Holdings Limited; and 6) Murka Ltd. The parties agree to work together in good faith to amend the definition of a Zynga Competitor if that meaning for Zynga reasonably changes during the Term. f. Reservation of Rights. The parties acknowledge and agree that, except for the rights and licenses expressly granted by each party to the other party under this Agreement, each party will retain all right, title and interest in and to its products, services, marks, copyrights or other intellectual property, and all content, information and other materials on its website(s), and nothing contained in this Agreement will be construed as conferring upon such party, by implication, operation of law or otherwise, any other license or other right. 3. PAYMENT a. Annual Minimum Guarantee. Zynga will pay to WPT the Annual Minimum Guarantee as set forth in the Basic Provisions. The Annual Minimum Guarantee shall be recoupable from such Royalties as are, or have become, paid to WPT. For clarification, the Annual Minimum Guarantee will operate as an advance payment, such that when accrued Royalties exceed the Annual Minimum Guarantee payments already paid, then the excess Royalties will be paid by Zynga to WPT. b. Royalty. The Royalties to be paid by Zynga to WPT is the percentage of Net Revenue as set forth in Section 5 of the Basic Provisions. "Net Revenue(s)" shall be defined as one hundred percent (100%) of gross revenues and all other receivables of any kind whatsoever received by Zynga or any of Zynga's affiliates attributable to the use of Paid Currency or in connection with the sale of Virtual Digital Goods derived from use of the WPT-brand on the Zynga platform, less the following actual and verifiable "Allowable Deductions": (i) out-of-pocket, third-party payment processing and currency system fees, commissions, and platform distribution fees (e.g., Apple, Google or Facebook platform fees); (ii) any governmental taxes (e.g., VAT, excise or sales or use tax, etc.) arising in connection with related receipts, but excluding any taxes on Licensee's net income; and (iii) charge- backs/refunds/cancellations/fraud. "Paid Currency" means virtual currency purchased using real money. "Virtual Digital Goods" means any virtual, digital representation of any actual or fictional thing or item within Zynga Poker, which is capable of being made available for distribution, placement, download or other display by electronic means. Any other deductions must be mutually agreed upon in advance and in writing by the parties.
5
Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019
c. Payment. All amounts payable and due will be made in U.S. dollars. If withholding taxes are required, Zynga may account for the required amount of such withholding taxes when calculating the Royalty or other payments payable prior to remittance to WPT. Zynga shall provide WPT with an official receipt or other equivalent documentation issued by the appropriate taxing authority or other evidence as is reasonably requested by WPT to establish that such taxes have been paid. Zynga shall pay all amounts accruing under this Agreement for any reporting period to WPT by check or wire transfer to the account specified by WPT in writing, concurrently with Zynga's delivery of the applicable report under Section 3(d), provided that payments will only be paid if the amount owed to WPT for any reporting period is greater than five hundred dollars ($500.00). An amount due of less than five hundred dollars ($500.00) will be accumulated to the next payment and will be included in the amount to be paid to WPT on the next payment date, again provided that the amount owed to WPT in the subsequent month exceeds five hundred dollars ($500.00). Accumulated amounts do not accrue any interest. d. Reporting. Zynga will, within thirty (30) days of the end of each calendar quarter, commencing with the first full calendar quarter following the Effective Date, furnish WPT with complete statements containing the following information with respect to all Net Revenue from the use of the WPT-brand on the Zynga platform, during the preceding period covered by such statement: the Territory; the amount due WPT (or the remaining unrecouped Annual Minimum Guarantee balance as applicable); Net Revenue; Royalties rate; the distribution channels or portals, the platform, the territory(ies), and itemized Allowable Deductions ("Royalty Statement(s)"). The amount shown to be payable to WPT shall be paid simultaneously with the rendition of the respective Royalty Statement. The statements and payments remitted hereunder shall be delivered to WPT via email to the following email address: Deborah.Frazzetta@wpt.com (ATTN: Deborah Frazzetta, VP, Finance. e. Audit Rights. Zynga shall keep full, complete and accurate books of account and records (collectively "records") covering all transactions relating to the subject matter of this Agreement in sufficient detail to enable the Royalties payable hereunder to be determined and verified. Zynga shall permit such records to be examined by authorized representatives of WPT, including such independent auditors as WPT may designate, during usual business hours, with advance notice, to verify to the extent necessary the Royalties paid hereunder, and WPT and its representatives shall use reasonable efforts to minimize disruptions to Zynga's business. Prompt adjustment shall be made by Zynga to compensate for any errors or omissions disclosed by such examination. If the adjustment is more than $1,500 in favor, then out-of-pocket costs of such examination shall be borne by Zynga. f. No Other Charges or Expenses. Neither party will be liable to pay the other party any other types of charges or expenses not agreed to in this Agreement or any related amendment signed by the Parties. 4. REPRESENTATIONS AND WARRANTIES; LIMITATIONS OF LIABILITY a. Each party represents and warrants to the other as follows: (i) it is duly authorized under applicable law and has the authority to enter into and perform this Agreement; (ii) this Agreement constitutes a valid and binding obligation of such party enforceable in accordance with its terms; (iii) the making of this Agreement by such party does not violate any agreement, right or obligation existing between such party and any third party; (iv) the marketing and promotional activities in Exhibit A shall not infringe or misappropriate third party rights, including, without limitation, any patent, trade name, trademark, copyright or other intellectual property or proprietary right and shall not invade or violate any right of privacy, publicity, personal or proprietary right, or other common law or statutory right, nor defame any person or entity in the United States and European Union (the "Principal Territories"), and to the knowledge of such party, outside the Principal Territories; provided that such party makes no representations regarding the Licensed Property or any other materials provided by Licensor as contemplated under this Agreement. b. DISCLAIMER. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WITH RESPECT TO THE SUBJECT MATTER HEREOF, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY LEVEL OF BUSINESS OR SERVICE THAT MAY RESULT FROM THIS AGREEMENT, OR ANY WARRANTY OR CONDITION ARISING FROM ANY COURSE OF DEALING, COURSE OF PERFORMANCE OR USAGE IN THE INDUSTRY. c. LIMITATIONS ON LIABILITY/NO INJUNCTIVE RELIEF. EXCEPT IN CASES OF GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUD, INDEMNIFICATION CLAIMS UNDER SECTION 5 OR BREACHES OF SECTION 2 (TRADEMARKS), 8 (CONFIDENTIALITY), OR 9 (NO AGENCY RELATIONSHIP), IN NO EVENT SHALL EITHER PARTY OR ITS OFFICERS, DIRECTORS, OR EMPLOYEES BE LIABLE TO THE OTHER PARTY IN CONNECTION WITH THE SUBJECT MATTER HEREOF, FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY KIND, LOST PROFITS OR LOST REVENUE, WHETHER ARISING IN CONTRACT, TORT, NEGLIGENCE, STATUTE, OR OTHERWISE, EVEN IF ADVISED OF THE POSSIBILITY THEREOF. IN NO EVENT SHALL THE NON-BREACHING PARTY BE ENTITLED TO EQUITABLE OR INJUNCTIVE RELIEF OF ANY KIND.
6
Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019
5. INDEMNIFICATION a. WPT shall indemnify, defend, and hold harmless Zynga and its Affiliates, and the respective directors, officers and employees of the foregoing (the "Zynga Indemnified Parties") from and against any and all third party claims, actions, suits, costs, liabilities, judgments, obligations, losses, penalties, expenses or damages (including, without limitation, reasonable legal fees and expenses) of whatsoever kind and nature imposed on, incurred by or asserted against any of the Zynga Indemnified Parties arising out of: (i) any breach or alleged breach by WPT of any representation, warranty or covenant made, by WPT pursuant to this Agreement; or (ii) WPT's non-compliance with any applicable federal, state or local laws or with any applicable regulations in connection with its performance of this Agreement. b. Zynga shall indemnify, defend, and hold harmless WPT and its Affiliates, and the respective directors, officers and employees of the foregoing (the "WPT Indemnified Parties") from and against any and all third party claims, actions, suits, costs, liabilities, judgments, obligations, losses, penalties, expenses or damages (including, without limitation, reasonable legal fees and expenses) of whatsoever kind and nature imposed on, incurred by or asserted against any of the WPT Indemnified Parties arising out: (i) any breach or alleged breach by Zynga of any representation, warranty or covenant made by Zynga pursuant to this Agreement; or (ii) Zynga's non-compliance with any applicable federal, state or local laws or with any applicable regulations in connection with its performance of this Agreement. c. In order to seek or receive indemnification hereunder in cases involving third-party claims the party seeking indemnification (the "Indemnified Party") must have promptly notified the other (the "Indemnifying Party") of any claim or litigation of which the Indemnified Party is aware and to which the indemnification relates; and the Indemnified Party must reasonably cooperate with Indemnifying Party in the defense or settlement of such claim or litigation. With regard to any claim or litigation to which the Indemnifying Party itself is not a party, the Indemnifying Party must have afforded the Indemnified Party the opportunity to participate in any compromise, settlement, litigation or other resolution or disposition of such claim or litigation. 6. TERMINATION a. Each party shall have the right at any time to terminate this Agreement without prejudice to any rights which it may have, whether pursuant to the provisions of this Agreement or otherwise in law or in equity or otherwise, upon the occurrence of any one or more of the following events: i. The other party breaches or fails to perform any of its material obligations provided for in this Agreement; ii. The other party is unable to pay its debts when due, or makes any assignment for the benefit of creditors, or files any petition under the bankruptcy or insolvency laws of any jurisdiction, county or place, or has or suffers a receiver or trustee to be appointed for its business or property, or is adjudicated a bankrupt or an insolvent; or iii. The other party asserts any rights in or to the terminating party's intellectual property in violation of this Agreement. a. In the event that any of these events of default should occur and a party elects to exercise its right to terminate this Agreement, such party shall give notice of termination in writing to the other party, which notice shall specify in reasonable detail the event(s) of default that give rise to such termination. The other party shall have thirty (30) days from the effective date of such notice in which to correct any such default(s) (except those which are not curable), and failing such correction by the end of such thirty (30) day cure period, this Agreement shall thereupon immediately terminate. 7. RIGHTS AND OBLIGATIONS UPON TERMINATION OR EXPIRATION. Upon expiration or termination of this Agreement: a. All rights granted to WPT by Zynga shall immediately revert to Zynga, and WPT shall promptly cease any and all marketing and promotional activities using Zynga's Licensed Property. b. All rights granted to Zynga by WPT shall immediately revert to WPT, and Zynga shall promptly cease any and all marketing and promotional activities using WPT's Licensed Property. c. Notwithstanding the foregoing, for each end user that previously downloaded a Zynga game that includes WPT's Licensed Property, and stored such Zynga game within such end user's device, WPT grants a license and right to continue to use, activate, operate, perform, store, use and display that game on the end user's device in perpetuity at no additional charge; provided, however, that Zynga shall use best efforts to offer end users updates to its games which no longer include WPT's Licensed Property after the Term. d. Notwithstanding any termination of this Agreement, nothing herein will obligate Zynga, any users of a Zynga game that includes WPT's Licensed Property or any third party platform or distribution partners to remove from the publicly available content regarding Zynga services or any user accounts with Zynga, any of the references to user interactions, experience points, achievements, item purchases or other engagements or metrics in the Zynga game(s) that were generated prior to the expiration or termination of this Agreement.
7
Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019
e. Notwithstanding any termination of this Agreement, any Approved Content that includes Zynga's Licensed Property may remain in perpetuity in any media in which such Licensed Property was integrated into during the Term (e.g., televised WPT Tournaments or WPT Invitational Tournaments, social media posts, repurposed integrations for "best of" television programs) or for historical purposes (e.g., reference on WPT's website that Zynga-sponsored tour events took place as part of the tour). f. Sections 1, 3-7, and 8-10 of the Additional Provisions shall survive termination or expiration of this Agreement. 8. CONFIDENTIALITY. The parties acknowledge and agree that the subject matter of this Agreement constitutes "Business Purpose" and this Agreement and any Exhibits hereunder are "Confidential Information" of the parties as defined as "Information" in the Non- Disclosure Agreement between the parties dated August 24, 2017, and accordingly the restrictions relating to confidentiality and use thereof provided in the Non-Disclosure Agreement apply to any party's Confidential Information disclosed pursuant to this Agreement. In the event of a conflict between the Non-Disclosure Agreement and this Agreement, the terms of this Agreement will govern. 9. INDEPENDENT CONTRACTORS. The parties are independent contractors with respect to each other and nothing herein shall create any association, partnership, joint venture or agency relationship between them. Neither party shall have the right to obligate or bind the other party in any manner whatsoever, and nothing herein contained shall give, or is intended to give, any rights of any kind to any third persons. 10. MISCELLANEOUS a. Insurance. Each party agrees to carry liability insurance sufficient to cover the risks posed under this Agreement. b. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which shall constitute together but one and the same document. c. Notices. All notices and other communications given hereunder shall be in writing and shall be sent by courier service, express mail, personal delivery or mail to the respective addresses of the parties set forth above (or at such other address as such party may designate by notice to the other party). A copy of any notice to WPT shall also be sent to WPT Enterprises, Inc., ATTN: Legal, 1920 Main Street, Suite 1150, Irvine, CA 92614. A copy of any notice to Zynga shall also be sent to Office of the General Counsel, Zynga Inc., 699 8th Street, San Francisco, CA 94103 with a copy to legalnotices@zynga.com. Notice shall be deemed given as follows: upon delivery if sent by courier service, express mail or personal delivery; and five (5) days after the date of mailing, postage prepaid, certified or registered mail if sent by mail. d. Entire Agreement. This Agreement contains the full and complete understanding between the parties hereto with respect to the license granted hereunder and supersedes all prior agreements and understandings, whether written or oral, pertaining thereto. This Agreement cannot be modified except by a written instrument signed by each party hereto. e. Waiver. No waiver of any term or condition of this Agreement shall be construed as a waiver of any other term or condition and no waiver of any default under this Agreement shall be construed as a waiver of any other default. f. Force Majeure. In the event that either party is prevented from engaging in the marketing and promotional activities in Exhibit A manufacturing, distributing or selling the Licensed Property because of any act of God; unavoidable accident; fire, epidemic; strike, lockout, or other labor dispute; war, riot or civil commotion; act of public enemy; enactment of any rule, law, order or act of government or governmental instrumentality (whether federal, state, local or foreign); or other cause beyond such party's control, and such condition continues for a period of two (2) months or more, either party hereto shall have the right to terminate this Agreement effective at any time during the continuation of such condition by giving the other party at least thirty (30) days' notice to such effect. In such event, all payments made shall become immediately due and payable and this Agreement shall be automatically terminated. g. Governing Law and Forum. This Agreement will for all purposes be governed by and interpreted in accordance with the laws of the State of California without giving effect to any conflict of laws principles that require the application of the laws of a different state. Each of the parties hereto (i) irrevocably agrees that the federal and state courts in the Northern District of California shall have sole and exclusive jurisdiction over any suit or other proceeding arising out of or based upon this Agreement, (ii) submits to the venue and jurisdiction of such courts, and (iii) irrevocably consents to personal jurisdiction by such courts. h. Assignment. This Agreement shall bind and inure to the benefit of each party, its successors and assigns. Without the prior written consent of the other party, neither party shall assign or transfer any of its rights or obligations hereunder, in whole or in part, to any third party, and any purported assignment without such prior written consent shall be null and void and of no force and effect; except that notice, but no consent shall be required for such assignment or transfer in connection with an internal reorganization or sale of the transferring party, including by merger or other business combination, or a sale of substantially all of the assets of the transferring party. None of either party's rights hereunder shall devolve by operation of law or otherwise upon any receiver, liquidator, trustee or other party. i. Severability. In case any one or more of the terms contained in this Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining terms shall not in any way be affected or impaired thereby. The parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable terms with valid terms the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable terms.
8
Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019
EXHIBIT A MARKETING AND PROMOTIONAL ACTIVITIES (the parties mutually agree to provide additional details and commitments) BY WPT: WPT shall promote the Zynga brand in the following activities: ● Prominent display of the Zynga or Zynga Poker brand in WPT Tournaments and WPT Invitational Tournaments, subject to venue approval, network approval and inventory space given existing sponsorship deals BY ZYNGA: Zynga shall promote the WPT brand in the following activities: ● Creation of a WPT-branded Zynga Poker Tournament Mode playable in the Zynga Poker game or other such use of the WPT brand on the Zynga platform as Zynga determines
9
Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019
EXHIBIT B LICENSED PROPERTY (the parties mutually agree to provide additional details on allowable IP) WPT MARKS: ● WPT® ● WORLD POKER TOUR® ZYNGA MARKS: ● ZYNGA® ● ZYNGA POKER®
10
Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 [/INST] ```json
{<answer_start>
"answer": "WPT or its affiliates shall not authorize a Zynga Competitor to commercially exploit the Licensed Property in connection with social poker gaming via a license similar to the license granted herein for the Term."
<answer_end>
}
``` </s> | Exhibit 10.19 JOINT CONTENT LICENSE AGREEMENT This JOINT CONTENT LICENSE AGREEMENT (the "Agreement"), dated February 1, 2018 (the "Effective Date"), is made by and between WPT Enterprises, Inc., a Delaware corporation, with offices located at 1920 Main Street, Suite 1150, Irvine, CA 92614 ("WPT"), and ZYNGA INC., a Delaware corporation with offices located at 699 8th Street, San Francisco CA, 94103 ("Zynga US") and ZYNGA GAME IRELAND LIMITED, a limited company organized under the laws of Ireland, resident in Ireland and having its registered office located at The Oval, Building One, Third Floor 160 Shelbourne Road Ballsbridge 4 Co. Dublin Ireland ("Zynga Ireland," and together with Zynga US and their respective Affiliates, "Zynga"). In addition to the Definitions set forth in Section 1 of the Additional Provisions (attached and incorporated by reference), all capitalized terms used herein shall have the meanings set forth below. In consideration of the mutual promises herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: BASIC PROVISIONS 1. Joint Content License Relationship. Among other games, Zynga produces and distributes the ZYNGA POKER® game on a number of global platforms, including Apple iOS, Google Android, Facebook and the zynga.com website. The ZYNGA POKER® game features a Zynga Poker Tournaments Mode that Zynga can customize. Among other things, WPT is the creator of the World Poker Tour, WPT Tournaments and the WPT Invitational Tournaments. WPT Tournaments and WPT Invitational Tournaments are televised poker tournaments where a partner can promote its brand. The parties desire to work cooperatively, but independently, to use commercially reasonable efforts to engage in the marketing and promotional activities described in Exhibit A, including, but not limited to Zynga promoting the WPT brand in a WPT-branded Zynga Poker Tournament Mode, and WPT promoting the Zynga brand in WPT Tournaments and WPT Invitational Tournaments. This Agreement describes the terms of a content license and cooperative marketing relationship under which each party will independently or cooperatively engage in mutually agreed activities to promote each other's products and services throughout the Territory (as defined below). 2. Territory. The Territory for this Agreement is worldwide, but not including Asian countries (including, but not limited to, Bangladesh, Bhutan, Brunei, Cambodia, East Timor, Hong Kong, India, Indonesia, Japan, Laos, Macau, Malaysia, Maldives, Mongolia, Myanmar, Nepal, North Korea, Pakistan, People's Republic of China, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, Vietnam). The parties acknowledge and agree that the rights granted hereunder by Zynga (a) with respect to the United States are granted to, held and exercised by Zynga US and (b) with respect to all other parts of the Territory are granted to, held and exercised by Zynga Ireland.
1
Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019
3. Term. This Agreement will be in effect for three (3) years from the Effective Date ("Initial Term") unless terminated earlier in accordance with this Agreement. This Agreement shall automatically extend for an additional two (2) years on the same terms herein ("Renewal Term") provided WPT receives payments greater than twelve million U.S. dollars ($12,000,000) within the Initial Term. The Initial Term and any such Renewal Term are collectively referred to as the "Term." 4. Annual Minimum Guarantee. Zynga will pay WPT three million U.S. dollars ($3,000,000) per year according to the following schedule (which the parties may alter upon mutual agreement) (the "Annual Minimum Guarantee"): a. Within thirty (30) days of executing this Agreement: $1.5M b. July 1, 2018: $1.5M c. January 1, 2019: $1.5M d. July 1, 2019: $1.5M e. January 1, 2020: $1.5M f. July 1, 2020: $1.5M 5. Royalty. Zynga will pay to WPT ten percent (10%) of the cumulative Net Revenue (as defined in Section 3.b. of the Additional Provisions) ("Royalty") from the WPT-branded Zynga Poker Tournament Mode or other such use of the WPT brand on the Zynga platform. Zynga shall not be required to pay the Royalty to the extent offset by the Annual Minimum Guarantee payments previously paid to WPT during the Term. Conversely, Zynga shall not be required to make Annual Minimum Guarantee payments to the extent offset by the Royalty previously paid to WPT during the Term. The Additional Provisions and any attached Exhibits are incorporated by reference. Signature page to follow.
2
Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019
IN WITNESS WHEREOF ZYNGA INC. Signature: ______________________ Name: _________________________ Title: __________________________
WPT ENTERPRISES, INC. Signature: _________________________ Name: ____________________________ Title: _____________________________ ZYNGA GAME IRELAND LIMITED Signature: ______________________ Name: _________________________ Title: __________________________
3
Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019
ADDITIONAL PROVISIONS The following Additional Provisions form part of the Agreement dated February 1, 2018 entered into by and between ZYNGA INC. and ZYNGA GAME IRELAND LIMITED and their respective affiliates ("Zynga"), and WPT Enterprises, Inc. ("WPT"). 1. DEFINITIONS a. "Affiliate" means an entity, directly or indirectly, controlled by, controlling of, or under common control with a party, either now or in the future, and their respective successors and assigns. b. "Artwork" means, without limitation, all pictorial, graphic, visual, audio, audio-visual, digital, literary, animated, artistic, dramatic, sculptural, musical or any other type of creation or application, whether finished or not, including, without limitation, animation, drawings, designs, sketches, images, illustrations, film, video, electronic, digitized or computerized information, software, object code, source code, on-line elements, music, text, dialogue, stories, visuals, effects, scripts, voiceovers, logos, one-sheets, promotional pieces, packaging, display materials, printed materials, photographs, interstitials, notes, shot logs, character profiles and translations. c. "Agreement" means the Basic Provisions, these Additional Provisions, and any and all attached Exhibits. d. "Licensed Property" means those specific trademarks, service marks, publicity rights, copyrights, intellectual property rights, and any other items set forth in this Agreement, which the parties may utilize in connection with the marketing and promotional activities in Exhibit A. A list of the Licensed Property for each party is described in Exhibit B. e. "Annual Minimum Guarantee" means the guaranteed minimum amount due to WPT by Zynga in consideration of the rights granted herein, which amount may be recoupable from Royalties as set forth below and in the Basic Provisions. f. "Royalty" means the amount(s) set forth in the Basic Provisions and calculated as described in the Additional Provisions. g. "Term" means the term of this Agreement as set forth in the Basic Provisions. h. "Territory" means the territory throughout which the parties are authorized to engage in the marketing and promotional activities as described in Exhibit A and in the Basic Provisions. 2. TRADEMARKS, APPROVALS, AND RESERVATION OF RIGHTS a. Materials. To the extent indicated on Exhibit A, each party will provide the other party with electronic files containing the Licensed Property of such party to be used under this Agreement, as specified in Exhibit B, if any. b. License by Zynga. Subject to the terms and conditions of this Agreement, Zynga grants to WPT a non-exclusive, non- assignable, non-sublicensable, royalty-free, paid up, limited worldwide license to use and display Zynga's Licensed Property solely as necessary to perform WPT's obligations under this Agreement and as specifically described on Exhibit A, in any and all media now known or hereafter devised, for the Term (subject to Section 7.e. of Additional Provisions). c. License by WPT. Subject to the terms and conditions of this Agreement, WPT grants to Zynga a non-exclusive, non-assignable, non-sublicensable, royalty-free, paid up, limited license in the Territory to use and display WPT's Licensed Property solely as necessary to perform Zynga's obligations under this Agreement and as specifically described on Exhibit A, for the Term. d. Trademark Guidelines. In its use of the Licensed Property of the other party ("Licensee"), each party ("Licensor") will comply with any trademark usage guidelines that Licensor may communicate to Licensee from time to time. Each use of Licensor's marks by Licensee will be accompanied by the appropriate trademark symbol (either "™" or "®") and a legend specifying that such marks are trademarks of Licensor as specified on Exhibit B, and will be in accordance with Licensor's then-current trademark usage policies as provided in writing to Licensee from time to time. Licensee will provide Licensor with copies of any materials bearing any of Licensor's marks as requested by Licensor from time to time. If Licensee's use of any of Licensor's marks, or if any material bearing such marks, does not comply with the then-current trademark usage policies provided in writing by Licensor, Licensee will promptly remedy such deficiencies upon receipt of written notice of such deficiencies from Licensor. Other than the express licenses granted herein with respect to each Licensor's marks, nothing herein will grant to Licensee any other right, title or interest in Licensor's marks. All goodwill resulting from Licensee's use of Licensor's marks will inure solely to Licensor. Each party recognizes the great value of the publicity and good will associated with the Licensed Property and acknowledges that: (a) such good will is exclusively that of Licensor or Licensee, as applicable; and (b) the Licensed Property have acquired a secondary meaning as trademarks and/or identifications of Licensor or Licensee, as applicable, in the mind of the purchasing public. Licensee will not, at any time during or after this Agreement, register, attempt to register, claim any interest in, contest the use of, or otherwise adversely affect the validity of any of Licensor's marks (including, without limitation, any act or assistance to any act, which may infringe or lead to the infringement of any such marks).
4
Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019
e. Approvals. The Licensed Property shall be displayed or used only in such form and in such manner as has been approved in writing (which may be by email) by Licensor pursuant to this Section 2 and Licensee shall ensure its usage of the Licensed Property solely as approved. Throughout the Term, including any renewals or extensions (if applicable), Licensee shall comply with reasonable quality standards, style guides and clear specifications communicated to Licensee and rights of approval of Licensor set forth in this Section 2 with respect to any and all of its usage of the Licensed Property. Subject to Licensor's prior written approval of any applicable Licensed Property (hereinafter the "Approved Content"), all Conforming Content will be deemed approved by Licensor. "Conforming Content" means any and all elements of the Approved Content which (i) do not represent deviations in quality, style, look-and-feel or other aspects of use from the Approved Content and (ii) are consistent with the aesthetic style or tone of the Approved Content. The parties will come to agreement with respect to Exhibit A as to whether prior written approval is needed in every instance or whether it is not needed after the first instance has been approved in writing (e.g., given exigencies in television production business, it is reasonable that Zynga would approve the use of its brand conceptually in elements of an episode but not need to re-approve the use in a similar manner for every episode the brand is used in; and similarly, given exigencies in the social gaming business, it is reasonable that WPT would approve use of its brand conceptually in elements of the Zynga platform but not need to re-approve the use in a similar manner for every poker tournament the brand is used in). i. Licensee may use textual and/or pictorial matter pertaining to the Licensed Property on such promotional, display and advertising material as may, in Licensee's reasonable judgment, promote the awareness, consumption and sale of the Licensed Property. All final advertising and promotional material using the Licensed Property must be submitted to Licensor for its prior written approval. All press releases respecting this Agreement or the relationship of the parties herein shall require prior written approval by the other party. ii. Licensor will use commercially reasonable efforts to provide approval and/or feedback within five (5) business days after its receipt of a creative submission, or re-submission, with respect to the Licensed Property or marketing materials; provided that: (a) if Licensor declines to approve any submission or re-submission, then it shall provide reasonably detailed feedback in order to enable Licensee to modify the Licensed Property or marketing material accordingly in order to address Licensor's concerns and obtain Licensor's approval, and (b) if Licensor fails to (1) approve or (2) disapprove and provide feedback within such timeframe, then such submission or re-submission is deemed to have been approved. No approval may be unreasonably withdrawn by Licensor once delivered. iii. Zynga shall advise WPT to Zynga's knowledge as to which jurisdictions where it may be illegal to advertise Zynga's Licensed Property (if any) given local laws or regulations. iv. WPT or its affiliates shall not authorize a Zynga Competitor to commercially exploit the Licensed Property in connection with social poker gaming via a license similar to the license granted herein for the Term. A "Zynga Competitor" means: 1) Aristocrat Technologies Australia Pty Ltd. Or Big Fish Games, Inc.; 2) HUUUGE Inc.; 3) Activision Blizzard, Inc., King.com Ltd. Or King.com (US) LLC; 4) Scientific Games Corporation; 5) Tencent Holdings Limited; and 6) Murka Ltd. The parties agree to work together in good faith to amend the definition of a Zynga Competitor if that meaning for Zynga reasonably changes during the Term. f. Reservation of Rights. The parties acknowledge and agree that, except for the rights and licenses expressly granted by each party to the other party under this Agreement, each party will retain all right, title and interest in and to its products, services, marks, copyrights or other intellectual property, and all content, information and other materials on its website(s), and nothing contained in this Agreement will be construed as conferring upon such party, by implication, operation of law or otherwise, any other license or other right. 3. PAYMENT a. Annual Minimum Guarantee. Zynga will pay to WPT the Annual Minimum Guarantee as set forth in the Basic Provisions. The Annual Minimum Guarantee shall be recoupable from such Royalties as are, or have become, paid to WPT. For clarification, the Annual Minimum Guarantee will operate as an advance payment, such that when accrued Royalties exceed the Annual Minimum Guarantee payments already paid, then the excess Royalties will be paid by Zynga to WPT. b. Royalty. The Royalties to be paid by Zynga to WPT is the percentage of Net Revenue as set forth in Section 5 of the Basic Provisions. "Net Revenue(s)" shall be defined as one hundred percent (100%) of gross revenues and all other receivables of any kind whatsoever received by Zynga or any of Zynga's affiliates attributable to the use of Paid Currency or in connection with the sale of Virtual Digital Goods derived from use of the WPT-brand on the Zynga platform, less the following actual and verifiable "Allowable Deductions": (i) out-of-pocket, third-party payment processing and currency system fees, commissions, and platform distribution fees (e.g., Apple, Google or Facebook platform fees); (ii) any governmental taxes (e.g., VAT, excise or sales or use tax, etc.) arising in connection with related receipts, but excluding any taxes on Licensee's net income; and (iii) charge- backs/refunds/cancellations/fraud. "Paid Currency" means virtual currency purchased using real money. "Virtual Digital Goods" means any virtual, digital representation of any actual or fictional thing or item within Zynga Poker, which is capable of being made available for distribution, placement, download or other display by electronic means. Any other deductions must be mutually agreed upon in advance and in writing by the parties.
5
Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019
c. Payment. All amounts payable and due will be made in U.S. dollars. If withholding taxes are required, Zynga may account for the required amount of such withholding taxes when calculating the Royalty or other payments payable prior to remittance to WPT. Zynga shall provide WPT with an official receipt or other equivalent documentation issued by the appropriate taxing authority or other evidence as is reasonably requested by WPT to establish that such taxes have been paid. Zynga shall pay all amounts accruing under this Agreement for any reporting period to WPT by check or wire transfer to the account specified by WPT in writing, concurrently with Zynga's delivery of the applicable report under Section 3(d), provided that payments will only be paid if the amount owed to WPT for any reporting period is greater than five hundred dollars ($500.00). An amount due of less than five hundred dollars ($500.00) will be accumulated to the next payment and will be included in the amount to be paid to WPT on the next payment date, again provided that the amount owed to WPT in the subsequent month exceeds five hundred dollars ($500.00). Accumulated amounts do not accrue any interest. d. Reporting. Zynga will, within thirty (30) days of the end of each calendar quarter, commencing with the first full calendar quarter following the Effective Date, furnish WPT with complete statements containing the following information with respect to all Net Revenue from the use of the WPT-brand on the Zynga platform, during the preceding period covered by such statement: the Territory; the amount due WPT (or the remaining unrecouped Annual Minimum Guarantee balance as applicable); Net Revenue; Royalties rate; the distribution channels or portals, the platform, the territory(ies), and itemized Allowable Deductions ("Royalty Statement(s)"). The amount shown to be payable to WPT shall be paid simultaneously with the rendition of the respective Royalty Statement. The statements and payments remitted hereunder shall be delivered to WPT via email to the following email address: Deborah.Frazzetta@wpt.com (ATTN: Deborah Frazzetta, VP, Finance. e. Audit Rights. Zynga shall keep full, complete and accurate books of account and records (collectively "records") covering all transactions relating to the subject matter of this Agreement in sufficient detail to enable the Royalties payable hereunder to be determined and verified. Zynga shall permit such records to be examined by authorized representatives of WPT, including such independent auditors as WPT may designate, during usual business hours, with advance notice, to verify to the extent necessary the Royalties paid hereunder, and WPT and its representatives shall use reasonable efforts to minimize disruptions to Zynga's business. Prompt adjustment shall be made by Zynga to compensate for any errors or omissions disclosed by such examination. If the adjustment is more than $1,500 in favor, then out-of-pocket costs of such examination shall be borne by Zynga. f. No Other Charges or Expenses. Neither party will be liable to pay the other party any other types of charges or expenses not agreed to in this Agreement or any related amendment signed by the Parties. 4. REPRESENTATIONS AND WARRANTIES; LIMITATIONS OF LIABILITY a. Each party represents and warrants to the other as follows: (i) it is duly authorized under applicable law and has the authority to enter into and perform this Agreement; (ii) this Agreement constitutes a valid and binding obligation of such party enforceable in accordance with its terms; (iii) the making of this Agreement by such party does not violate any agreement, right or obligation existing between such party and any third party; (iv) the marketing and promotional activities in Exhibit A shall not infringe or misappropriate third party rights, including, without limitation, any patent, trade name, trademark, copyright or other intellectual property or proprietary right and shall not invade or violate any right of privacy, publicity, personal or proprietary right, or other common law or statutory right, nor defame any person or entity in the United States and European Union (the "Principal Territories"), and to the knowledge of such party, outside the Principal Territories; provided that such party makes no representations regarding the Licensed Property or any other materials provided by Licensor as contemplated under this Agreement. b. DISCLAIMER. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WITH RESPECT TO THE SUBJECT MATTER HEREOF, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY LEVEL OF BUSINESS OR SERVICE THAT MAY RESULT FROM THIS AGREEMENT, OR ANY WARRANTY OR CONDITION ARISING FROM ANY COURSE OF DEALING, COURSE OF PERFORMANCE OR USAGE IN THE INDUSTRY. c. LIMITATIONS ON LIABILITY/NO INJUNCTIVE RELIEF. EXCEPT IN CASES OF GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUD, INDEMNIFICATION CLAIMS UNDER SECTION 5 OR BREACHES OF SECTION 2 (TRADEMARKS), 8 (CONFIDENTIALITY), OR 9 (NO AGENCY RELATIONSHIP), IN NO EVENT SHALL EITHER PARTY OR ITS OFFICERS, DIRECTORS, OR EMPLOYEES BE LIABLE TO THE OTHER PARTY IN CONNECTION WITH THE SUBJECT MATTER HEREOF, FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY KIND, LOST PROFITS OR LOST REVENUE, WHETHER ARISING IN CONTRACT, TORT, NEGLIGENCE, STATUTE, OR OTHERWISE, EVEN IF ADVISED OF THE POSSIBILITY THEREOF. IN NO EVENT SHALL THE NON-BREACHING PARTY BE ENTITLED TO EQUITABLE OR INJUNCTIVE RELIEF OF ANY KIND.
6
Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019
5. INDEMNIFICATION a. WPT shall indemnify, defend, and hold harmless Zynga and its Affiliates, and the respective directors, officers and employees of the foregoing (the "Zynga Indemnified Parties") from and against any and all third party claims, actions, suits, costs, liabilities, judgments, obligations, losses, penalties, expenses or damages (including, without limitation, reasonable legal fees and expenses) of whatsoever kind and nature imposed on, incurred by or asserted against any of the Zynga Indemnified Parties arising out of: (i) any breach or alleged breach by WPT of any representation, warranty or covenant made, by WPT pursuant to this Agreement; or (ii) WPT's non-compliance with any applicable federal, state or local laws or with any applicable regulations in connection with its performance of this Agreement. b. Zynga shall indemnify, defend, and hold harmless WPT and its Affiliates, and the respective directors, officers and employees of the foregoing (the "WPT Indemnified Parties") from and against any and all third party claims, actions, suits, costs, liabilities, judgments, obligations, losses, penalties, expenses or damages (including, without limitation, reasonable legal fees and expenses) of whatsoever kind and nature imposed on, incurred by or asserted against any of the WPT Indemnified Parties arising out: (i) any breach or alleged breach by Zynga of any representation, warranty or covenant made by Zynga pursuant to this Agreement; or (ii) Zynga's non-compliance with any applicable federal, state or local laws or with any applicable regulations in connection with its performance of this Agreement. c. In order to seek or receive indemnification hereunder in cases involving third-party claims the party seeking indemnification (the "Indemnified Party") must have promptly notified the other (the "Indemnifying Party") of any claim or litigation of which the Indemnified Party is aware and to which the indemnification relates; and the Indemnified Party must reasonably cooperate with Indemnifying Party in the defense or settlement of such claim or litigation. With regard to any claim or litigation to which the Indemnifying Party itself is not a party, the Indemnifying Party must have afforded the Indemnified Party the opportunity to participate in any compromise, settlement, litigation or other resolution or disposition of such claim or litigation. 6. TERMINATION a. Each party shall have the right at any time to terminate this Agreement without prejudice to any rights which it may have, whether pursuant to the provisions of this Agreement or otherwise in law or in equity or otherwise, upon the occurrence of any one or more of the following events: i. The other party breaches or fails to perform any of its material obligations provided for in this Agreement; ii. The other party is unable to pay its debts when due, or makes any assignment for the benefit of creditors, or files any petition under the bankruptcy or insolvency laws of any jurisdiction, county or place, or has or suffers a receiver or trustee to be appointed for its business or property, or is adjudicated a bankrupt or an insolvent; or iii. The other party asserts any rights in or to the terminating party's intellectual property in violation of this Agreement. a. In the event that any of these events of default should occur and a party elects to exercise its right to terminate this Agreement, such party shall give notice of termination in writing to the other party, which notice shall specify in reasonable detail the event(s) of default that give rise to such termination. The other party shall have thirty (30) days from the effective date of such notice in which to correct any such default(s) (except those which are not curable), and failing such correction by the end of such thirty (30) day cure period, this Agreement shall thereupon immediately terminate. 7. RIGHTS AND OBLIGATIONS UPON TERMINATION OR EXPIRATION. Upon expiration or termination of this Agreement: a. All rights granted to WPT by Zynga shall immediately revert to Zynga, and WPT shall promptly cease any and all marketing and promotional activities using Zynga's Licensed Property. b. All rights granted to Zynga by WPT shall immediately revert to WPT, and Zynga shall promptly cease any and all marketing and promotional activities using WPT's Licensed Property. c. Notwithstanding the foregoing, for each end user that previously downloaded a Zynga game that includes WPT's Licensed Property, and stored such Zynga game within such end user's device, WPT grants a license and right to continue to use, activate, operate, perform, store, use and display that game on the end user's device in perpetuity at no additional charge; provided, however, that Zynga shall use best efforts to offer end users updates to its games which no longer include WPT's Licensed Property after the Term. d. Notwithstanding any termination of this Agreement, nothing herein will obligate Zynga, any users of a Zynga game that includes WPT's Licensed Property or any third party platform or distribution partners to remove from the publicly available content regarding Zynga services or any user accounts with Zynga, any of the references to user interactions, experience points, achievements, item purchases or other engagements or metrics in the Zynga game(s) that were generated prior to the expiration or termination of this Agreement.
7
Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019
e. Notwithstanding any termination of this Agreement, any Approved Content that includes Zynga's Licensed Property may remain in perpetuity in any media in which such Licensed Property was integrated into during the Term (e.g., televised WPT Tournaments or WPT Invitational Tournaments, social media posts, repurposed integrations for "best of" television programs) or for historical purposes (e.g., reference on WPT's website that Zynga-sponsored tour events took place as part of the tour). f. Sections 1, 3-7, and 8-10 of the Additional Provisions shall survive termination or expiration of this Agreement. 8. CONFIDENTIALITY. The parties acknowledge and agree that the subject matter of this Agreement constitutes "Business Purpose" and this Agreement and any Exhibits hereunder are "Confidential Information" of the parties as defined as "Information" in the Non- Disclosure Agreement between the parties dated August 24, 2017, and accordingly the restrictions relating to confidentiality and use thereof provided in the Non-Disclosure Agreement apply to any party's Confidential Information disclosed pursuant to this Agreement. In the event of a conflict between the Non-Disclosure Agreement and this Agreement, the terms of this Agreement will govern. 9. INDEPENDENT CONTRACTORS. The parties are independent contractors with respect to each other and nothing herein shall create any association, partnership, joint venture or agency relationship between them. Neither party shall have the right to obligate or bind the other party in any manner whatsoever, and nothing herein contained shall give, or is intended to give, any rights of any kind to any third persons. 10. MISCELLANEOUS a. Insurance. Each party agrees to carry liability insurance sufficient to cover the risks posed under this Agreement. b. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which shall constitute together but one and the same document. c. Notices. All notices and other communications given hereunder shall be in writing and shall be sent by courier service, express mail, personal delivery or mail to the respective addresses of the parties set forth above (or at such other address as such party may designate by notice to the other party). A copy of any notice to WPT shall also be sent to WPT Enterprises, Inc., ATTN: Legal, 1920 Main Street, Suite 1150, Irvine, CA 92614. A copy of any notice to Zynga shall also be sent to Office of the General Counsel, Zynga Inc., 699 8th Street, San Francisco, CA 94103 with a copy to legalnotices@zynga.com. Notice shall be deemed given as follows: upon delivery if sent by courier service, express mail or personal delivery; and five (5) days after the date of mailing, postage prepaid, certified or registered mail if sent by mail. d. Entire Agreement. This Agreement contains the full and complete understanding between the parties hereto with respect to the license granted hereunder and supersedes all prior agreements and understandings, whether written or oral, pertaining thereto. This Agreement cannot be modified except by a written instrument signed by each party hereto. e. Waiver. No waiver of any term or condition of this Agreement shall be construed as a waiver of any other term or condition and no waiver of any default under this Agreement shall be construed as a waiver of any other default. f. Force Majeure. In the event that either party is prevented from engaging in the marketing and promotional activities in Exhibit A manufacturing, distributing or selling the Licensed Property because of any act of God; unavoidable accident; fire, epidemic; strike, lockout, or other labor dispute; war, riot or civil commotion; act of public enemy; enactment of any rule, law, order or act of government or governmental instrumentality (whether federal, state, local or foreign); or other cause beyond such party's control, and such condition continues for a period of two (2) months or more, either party hereto shall have the right to terminate this Agreement effective at any time during the continuation of such condition by giving the other party at least thirty (30) days' notice to such effect. In such event, all payments made shall become immediately due and payable and this Agreement shall be automatically terminated. g. Governing Law and Forum. This Agreement will for all purposes be governed by and interpreted in accordance with the laws of the State of California without giving effect to any conflict of laws principles that require the application of the laws of a different state. Each of the parties hereto (i) irrevocably agrees that the federal and state courts in the Northern District of California shall have sole and exclusive jurisdiction over any suit or other proceeding arising out of or based upon this Agreement, (ii) submits to the venue and jurisdiction of such courts, and (iii) irrevocably consents to personal jurisdiction by such courts. h. Assignment. This Agreement shall bind and inure to the benefit of each party, its successors and assigns. Without the prior written consent of the other party, neither party shall assign or transfer any of its rights or obligations hereunder, in whole or in part, to any third party, and any purported assignment without such prior written consent shall be null and void and of no force and effect; except that notice, but no consent shall be required for such assignment or transfer in connection with an internal reorganization or sale of the transferring party, including by merger or other business combination, or a sale of substantially all of the assets of the transferring party. None of either party's rights hereunder shall devolve by operation of law or otherwise upon any receiver, liquidator, trustee or other party. i. Severability. In case any one or more of the terms contained in this Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining terms shall not in any way be affected or impaired thereby. The parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable terms with valid terms the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable terms.
8
Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019
EXHIBIT A MARKETING AND PROMOTIONAL ACTIVITIES (the parties mutually agree to provide additional details and commitments) BY WPT: WPT shall promote the Zynga brand in the following activities: ● Prominent display of the Zynga or Zynga Poker brand in WPT Tournaments and WPT Invitational Tournaments, subject to venue approval, network approval and inventory space given existing sponsorship deals BY ZYNGA: Zynga shall promote the WPT brand in the following activities: ● Creation of a WPT-branded Zynga Poker Tournament Mode playable in the Zynga Poker game or other such use of the WPT brand on the Zynga platform as Zynga determines
9
Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019
EXHIBIT B LICENSED PROPERTY (the parties mutually agree to provide additional details on allowable IP) WPT MARKS: ● WPT® ● WORLD POKER TOUR® ZYNGA MARKS: ● ZYNGA® ● ZYNGA POKER®
10
Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 | Highlight the parts (if any) of this contract related to "Non-Compete" that should be reviewed by a lawyer. Details: Is there a restriction on the ability of a party to compete with the counterparty or operate in a certain geography or business or technology sector? | {
"answer_start": [
13926
],
"text": [
"WPT or its affiliates shall not authorize a Zynga Competitor to commercially exploit the Licensed Property in connection with social poker gaming via a license similar to the license granted herein for the Term."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Expiration Date" that should be reviewed by a lawyer. Details: On what date will the contract's initial term expire?
Context: EXHIBIT 10.102
[McDATA LOGO]
RESELLER AGREEMENT
AGREEMENT NUMBER: 200-04-634-00
McDATA CORPORATION ("McDATA) "RESELLER" MTI TECHNOLOGY CORPORATION
380 INTERLOCKEN CRESCENT ADDRESS: 14661 FRANKLIN AVE
BROOMFIELD, CO 80021 ADDRESS: TUSTIN, CA 92780
ADDRESS:
THE EFFECTIVE DATE OF THIS RESELLER AGREEMENT SHALL BE: Sept 29, 2004
The following documents are incorporated herein by reference:
Reseller Agreement
Premier Addendum
This Agreement, and all Addendums and attachments hereto, identified above, and Channel Notification Documents as issued by McDATA from time to time constitute the entire agreement between McDATA and Reseller with respect to the subject matter hereof, and supersedes all prior and contemporaneous oral or written representations or agreements between the parties regarding the subject matter of this Agreement.
ACCEPTED AND AGREED TO BY: ACCEPTED AND AGREED TO BY:
McDATA CORPORATION(McDATA) RESELLER MTI TECHNOLOGY CORPORATION
SIGNED: /s/ Bruce Chumley SIGNED: /s/ Ron Umagat --------------------------- ---------------------------------- NAME: Bruce Chumley NAME: Ron Umagat
TITLE: VP Channel Sales TITLE: VP of Operations
DATE: 9/29/04 DATE: 9/24/04
This Reseller Agreement (the "Agreement") is entered into by and between McDATA and Reseller.
1. SCOPE
This Agreement establishes the terms and conditions under which Reseller will purchase, market, sell, license or incorporate for resale the McDATA Products and End User Customer Services in the Territory and the non-exclusive terms under which McDATA will provide the Products and End-User Customer Services (as defined below).
2. DEFINITIONS
2.1 "CHANNEL NOTIFICATION DOCUMENT(S)" means McDATA's standard form, incorporated herein by reference, for notifying Resellers of price changes, new product announcements, discontinued/obsolete product announcements, engineering change notifications, product information, marketing and sales Incentive programs, and any other business matters affecting pricing, products and services.
2.2 "END USER CUSTOMER SERVICES" means the collective reference to warranty and post warranty (maintenance) services, including standard and enhanced warranty services, made available by McDATA and provided directly to End User Customers.
2.3 "PRODUCT(S)" means McDATA hardware, Software, and related features, conversions, and options, as listed in the Addendum and further provided through Channel Notification Documents.
2.4 "SOFTWARE" means the computer software, In machine executable object code format only, that is delivered and licensed by McDATA with the Product.
2.5 "TERRITORY" means the area designated on the first page of the incorporated Addendum to this Agreement in which Reseller may, on a non-exclusive basis, market and sell the Products and End User Customer Services.
3. APPOINTMENT/TERRITORY
3.1 Subject to the terms and conditions of this Agreement, McDATA hereby authorizes and appoints Reseller and Reseller accepts the appointment, as a non-exclusive reseller to purchase Products from McDATA and to market, sell, or incorporate for resale McDATA Products to End User Customers in the Territory.
3.2 Reseller's authorization from McDATA to resell McDATA Products is limited to the Territory shown on the first page of this Agreement. Additional sales locations must be pre-approved by McDATA. Reseller may request that additional Reseller sales locations are added to this Agreement. Upon Reseller's request, McDATA will provide Reseller with the criteria and process for applying for authorization of additional sales locations. Reseller agrees that any additional
McDATA authorized sales locations will be governed by the terms and conditions of this Agreement.
3.3 McDATA reserves the right to revise the list of Products and End User Services at any time during the term of this Agreement. McDATA will notify Reseller of such revisions through a Channel Notification Document(s).
4. TERM AND TERMINATION
4.1 TERMINATION WITHOUT CAUSE. Either party may terminate this Agreement without cause upon sixty (60) days prior written notice to the other party.
4.2 TERMINATION FOR BREACH. In addition to any other rights or remedies that may be available at law or in equity, either party may terminate this Agreement if the other party is in material breach of this Agreement and has not cured the breach within thirty (30) days of receiving written notice specifying the breach. If the breach is not cured within the thirty (30) day period, termination will become effective on the thirty-first (31st) day following the written notice.
4.3 TERMINATION FOR INSOLVENCY. Either party, upon written notice to the other party, may elect to immediately terminate this Agreement upon the occurrence of any of the following events: (i) a receiver is appointed for either party or its property; (ii) either party makes, or attempts to make, an assignment for the benefit of its creditors; (iii) any proceedings are commenced by or for either party under any bankruptcy, insolvency, or debtor's relief law and such proceedings are not set aside within thirty days following their filing; and/or (iv) either party liquidates or dissolves or makes a good faith attempt to liquidate or dissolve.
4.4 EFFECT OF TERMINATION. Termination of this Agreement shall not limit either party from pursuing any other remedies available to it, Inducing injunctive relief. The termination of this Agreement simultaneously terminates all programs and incentives McDATA offered to Reseller through Channel Notification Documents and voids any unused program account balances. Upon cancellation, termination or expiration of this
McDATA Corporation Standard Terms OF Reseller Agreement JUNE 2004
2
Agreement, Reseller agrees to immediately pay all monies due to McDATA under this Agreement.
The parties' rights and obligations under Sections 8,9 and 10 hereof shall survive termination of this Agreement.
5. RESELLER OBLIGATIONS/RESPONSIBILITIES
5.1 SALES. Reseller agrees to actively market, promote, demonstrate, sell and provide the Products and End User Customer Services only within the Territory during the term of this Agreement
5.2 REPORTS. For warranty purposes, McDATA may require Reseller to provide McDATA with a written report containing, without limitation, the following information: End User Customer name, Reseller's authorization or location Number, End User Customer information, Product serial numbers, number of units, and level of warranty. McDATA will notify Reseller of reporting requirements, including content and format, in a Channel Notification Document.
5.3 EDUCATIONAL REQUIREMENTS. Reseller agrees to participate in McDATA-speciflad educational courses for purposes of training Reseller's personnel. Educational course requirements will be provided in a Channel Notification Document and must be satisfied by Reseller to maintain its status as a McDATA authorized Reseller McDATA will provide to Reseller without tuition fee, at a McDATA designated training site, the required educational courses identified on the Addendum.
5.4 END USER CUSTOMER TERMS AND CONDITIONS. Reseller will ensure that the terms of its executed agreements with End User Customers am not in conflict with this Agreement
5.5 POINT OF SALE (POS) REPORTS. Beginning on the first month after the Effective Date, in order to qualify for certain McDATA channel partner program benefits, Reseller will provide McDATA with a written monthly point of sale report ("POS Report") listing the Products that Reseller has sold, by model and serial number, together with the names and addresses of all End User Customers. Detailed POS requirements will be communicated through Channel Notification Documents.
5.6 FINANCIAL STATEMENTS. Reseller agrees to provide McDATA with its and its ultimate parent company's most recent financial statements prior to the Effective Date of the Agreement.
6. McDATA OBLIGATIONS/RESPONSIBILITIES
6.1 END USER CUSTOMER SERVICES
McDATA will make available, for End User Customers, warranty, enhanced warranty, and post warranty services according to the terms and conditions of the applicable manufacturer's warranty and McDATA's then-current maintenance policies, McDATA, or an authorized McDATA service provider, will provide technical support and repairs during the warranty and post warranty periods to End User Customers. McDATA reserves the right to revise its technical support program. McDATA will notify Reseller of changes to McDATA's warranty and
technical support and repairs policy through Channel Notification Document(s).
6.2 PRODUCT DISCONTINUATION. McDATA reserves the right to discontinue Products. McDATA will notify Reseller of any Product discontinuance through Channel Notification Document(s).
6.3 PRODUCT AND SERVICE ANNOUNCEMENTS. McDATA will notify Reseller of changes and innovations in performance, serviceability, uses and applications of Products and End User Services through Channel Notification Document(s).
7. END USER CUSTOMER SOFTWARE LICENSE
Product(s) that embody or include Software will be delivered with a shrink-wrap or click-through software license which shall govern End User Customer's use of the Software. McDATA or its suppliers retain title in and to the Software and all intellectual property rights, and no title to the Software or intellectual property rights is transferred to the End User Customers. Such Software is proprietary to, trade secret of, and copyrighted by McDATA or its suppliers.
8. CONFIDENTIALITY
8.1 As used herein, "CONFIDENTIAL INFORMATION" will mean any and all technical or business information, including third party information, furnished or disclosed, in whatever form or medium (regardless of whether tangible, Intangible, visual or oral), by one party to the other, including but not limited to information regarding patents and patent applications, trade secrets, works of authorship, software programs, software source documents, software architecture, algorithms, formulae, ideas, techniques, know-how, processes, inventions, apparatuses, equipment, models, information related to current, future and proposed products and services, research, experimental work, development, design details, specifications and engineering information, financial information, procurement, purchasing and manufacturing requirements, potential and actual customer lists, investors, employees, business and contractual relationships, business forecasts, sales and merchandising information, marketing plans; information regarding third parties; and any physical manifestations of Confidential Information (such as notes, reports, memoranda, etc.).
McDATA Corporation Standard Terms of Reseller Agreement June 2004
3
8.2 Information will not be deemed Confidential Information hereunder if the receiving party can demonstrate that such Information: (a) is already known to the receiving party prior to disclosure; (b) is independently developed by the receiving party without the use of the disclosing party's Confidential Information; (c) is or becomes publicly available through no fault of the receiving party; or (d) is obtained by the receiving party from a third party other than one having an obligation to the disclosing party with respect to the Confidential Information disclosed. A party may disclose Confidential Information pursuant to the requirements of a governmental agency or by operation of law, provided that such party gives the other party reasonable prior written notice sufficient to allow the other party time to contest such disclosure.
8.3 Each party agrees that for a period of three (3) years following the disclosure of Confidential Information, it (a) will not use, directly or indirectly, or reproduce the Confidential Information of the other party for any purpose except in accordance with the terms of the Agreement, (b) will not disclose the Confidential Information of the other party to any third parties except as expressly permitted in this Agreement, and (c) will take all reasonable security measures to maintain the confidentiality of all Confidential Information of the other party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance.
8.4 Upon the termination or expiration of this Agreement, or upon any request of a party, all Confidential Information, together with any copies of same as may be authorized herein, will (at the election of the disclosing party) either be returned to the disclosing party or certified destroyed by the receiving party. Notwithstanding the termination or expiration of this Agreement, each party agrees the requirements regarding use, confidentiality and non-disclosure set forth herein will survive the termination or expiration of this Agreement for a period of three (3) years from the date of the disclosure of the Confidential Information.
8.5 Each party acknowledges that its breach of this Section will cause irreparable damage and hereby agrees that the other party shall be entitled to seek injunctive relief under this Agreement, as well as such further relief as may be granted by a court of competent jurisdiction.
9. TRADEMARKS.
Subject to McDATA's prior written approval, McDATA grants Reseller a limited, nonexclusive, non-transferable, revocable license to use McDATA's Trademarks (defined as McDATA's name or any abbreviation thereof, its acronym, logotype or any other trademarks or trade names of McDATA) for the sole purpose of marketing and selling Products and End User Customer Services in the Territory during the term of this Agreement Reseller agrees to comply with McDATA's Logo Usage Guide, which is found at McDATA's web site, www.mcdata.com. By using McDATA's Trademarks, Reseller does not acquire any proprietary rights to such Trademarks, and Reseller agrees not to obtain or attempt to obtain, by any method, any rights, title or interest in or to any of the Trademarks. Additional provisions relating to the proper usage of the Trademarks are sat forth in Channel
Notification Documents.
10. LIMITATION OF LIABILITY AND DISCLAIMER OF WARRANTY
10.1 EXCEPT FOR A BREACH OF SECTION 8 (CONFIDENTIALITY), IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY INDIRECT, PUNITIVE, SPECIAL, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, NOR FOR ANY DAMAGES RELATING TO LOST DATA, LOST PROFITS, ADVERTISING OR PROMOTIONAL COSTS, TERMINATION OF EMPLOYEES, SALARIES OF EMPLOYEES OR SEVERANCE PAYMENTS, CREATION OF CUSTOMER BASE, OR FUTURE EXPECTATIONS OR OTHER ECONOMIC ADVANTAGE, HOWSOEVER ARISING AND REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, WARRANTY OR TORT (INCLUDING NEGLIGENCE) OR UNDER ANY OTHER THEORY OF LIABILITY IN LAW OR IN EQUITY, EVEN IF SUCH PARTY HAS BEEN PREVIOUSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
10.2 Notwithstanding any provision herein to the contrary, McDATA's entire liability in any given instance from any cause whatsoever, and regardless of the form of action, whether in contract, warranty or tort (including negligence) or any other theory of liability in law or in equity, will in no event exceed the lease, of (i) the purchase price for the specific Product that is the subject matter of or is directly relative the cause of action; or (ii) Five Hundred Thousand Dollars ($500,000).
10.3 The foregoing limitations will not apply (i) to claims by either party for personal injury or damage to personal property, or (ii) claims by McDATA for negligent or misuse or unauthorized use by Reseller of any of McDATA's proprietary rights, including Trademarks and Software.
10.4 THE WARRANTIES, IF ANY, PROVIDED IN THIS AGREEMENT (INCLUDING THE APPENDICES AND CHANNEL NOTIFICATION DOCUMENTS) OR AS PROVIDED WITH THE PRODUCTS ARE GIVEN IN LIEU OF ALL OTHER
McDATA Corporation Standard Terms of Reseller Agreement June 2004
4
WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, NONINFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE, ALL OF WHICH ARE HEREBY EXPRESSLY DISCLAIMED AND EXCLUDED.
11. MARKETING
McDATA and Reseller may publicly refer to the existence, but not the content, of this Agreement and may reference their business relationship by creating a hyper-link from one party's web site to the other party's web site. Reseller grants McDATA a license to use Reseller's trademarks and corporate logos solely for such marketing and reference purposes. Copies of each party's logo and authorized trademark(s) can be obtained from their respective marketing departments and may not be altered or changed by either party, its employees or agents, without prior written permission from an authorized representative of the other.
12. GENERAL
12.1 NO AMENDMENT OR WAIVER. No provision of this Agreement will be deemed waived, amended or modified by either party, unless such waiver, amendment or modification is made in writing and signed by authorized representatives of both parties. No waiver of rights under this Agreement by either party shall constitute a subsequent waiver of&sbsp;such rights or any other rights under this Agreement. Notwithstanding the foregoing, the parties agree to the use of Channel Notification Documents as set forth in this Agreement.
12.2 SEVERABILITY. If any provision of this Agreement is held to be invalid or unenforceable by a proper authority having jurisdiction over this Agreement, the remaining provisions of this Agreement will remain in full force and effect.
12.3 NO AGENCY CREATED. Nothing in this Agreement shall be construed to create a partnership, joint venture, or agency relationship between the parties. Neither party is granted the tight or authority to assume or create any obligation or responsibility, express or implied, on behalf of, or in the name of the other party, or to bind such other party in any manner to anything whatsoever.
12.4 NO THIRD PARTY BENEFICIARIES. The parties agree that there shall be no third party beneficiaries to this Agreement, including but not limited to Reseller's End User Customers.
12.5 ASSIGNMENT. Neither party will assign this Agreement or any rights hereunder without the prior written consent of the other party, which consent will not be unreasonably withheld. Notwithstanding the foregoing sentence, McDATA may assign this Agreement to any entity controlled by, controlling, or under common control with McDATA or to any successor by merger, divestiture, consolidation or reorganization, or to any purchasers of all or substantially all of the assets of the business of McDATA without consent of Reseller.
12.6 GOVERNING LAWS. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado excluding its choice of law provisions. The United Nations Convention on Contracts for the International Sale of Goods (CISG) is specifically excluded and shall not be applicable to any transaction contemplated herein.
12.7 DISPUTE RESOLUTION PROCESS. In case of any dispute between the parties relating to this Agreement, such dispute shall be finally resolved in Denver, Colorado (USA) by arbitration under the Commercial Rules of Arbitration of the American Arbitration Association, using three arbitrators, one selected by each of McDATA and Reseller and the third selected in accordance with such Rules. The
arbitrators will decide the issues presented to them applying the substantive laws of the Sate of Colorado (USA). The award of the arbitrators may be granted notwithstanding the absence of any party and such award shall be in writing and shall be final and binding upon the parties and shall not be appealed from or contested in any court or tribunal. Any award rendered hereunder may be entered for enforcement, if necessary, in any court of competent jurisdiction.
12.8 INJUNCTIVE RELIEF. Notwithstanding the above provisions relating to arbitration, the parties agree that in respect of any violation of any provision of this Agreement, including without limitation violation of any proprietary or confidential information, for which an award of damages is an inadequate remedy to project the injured party, the injured party is entitled to seek injunctive relief, including a preliminary injunction, in a court of competent jurisdiction, in addition to any other relief available to it under the arbitration procedures specified above in Section 12.7.
12.9 OFFICIAL LANGUAGE. The official language of this Agreement and all transactions conducted under this Agreement is English.
12.10 FORCE MAJEURE. Neither party will be liable for any failure or delay in its performance under this Agreement due to any cause beyond its reasonable control, including but not limited to acts of God, war, riot, embargoes, acts of civil or military authorities, fire, floods, accidents, strikes, delays by suppliers or shortages of transportation, facilities, fuel, energy, labor, or materials.
McDATA Corporation Standard Terms of Reseller Agreement June 2004
5
12.11 COMPLIANCE WITH LAWS. McDATA and Reseller each agree to comply with all applicable laws and each understand and agree that the continuing rights and obligations of the parties hereunder are specifically conditioned upon compliance with such laws. These laws include, without limitation, the following: (i) the U.S. anti-boycott regulations, (ii) the U.S. Foreign Corrupt Practices Act ("FCPA"), (iii) the export control laws of the United States of America, (iv) the prevailing regulations which may be issued from time to time by the U.S. Department of Commerce and the Office of Munitions Control and the U.S. Department of State, and (v) any export or import laws of the agencies of the Territory or of any countries into or through which the Products purchased under this Agreement may be transported.
12.12 NOTICES. Notices required hereunder will be in writing and will be deemed given when transmitted by facsimile (provided such facsimile is subsequently confirmed in writing within five (5) days of the facsimile date) or deposited with an express delivery service with guaranteed third-day delivery, prepaid, addressed as follows:
NOTICES TO: McDATA CORPORATION: McDATA Corporation 380 Interlocken Crescent Broomfield, CO 80021 Attn: VP of Sales With a copy to: VP and General Counsel Fax:720-558-3235
NOTICES TO: RESELLER MTI Technology Corp 14661 Franklin Ave Tustin,CA 92780 Attn: CFO Fax : 714-481-4136
12.13 ENTIRE AGREEMENT. This Agreement, together with any and all attachments hereto and applicable Appendices, Addendums and Channel Notification Documents as issued from time to time by McDATA constitutes the entire agreement between McDATA and Reseller with respect to the subject matter hereof, and supersedes all prior and contemporaneous oral or written representations or agreements between the parties regarding the subject matter of this Agreement.
12.14 COUNTERPARTS. This Agreement may be executed in counterparts or by facsimile, each of which shall be an original, and all of which together shall constitute one and the same instrument.
12.15 NUCLEAR, AVIATION OR LIFE SUPPORT APPLICATION. McDATA specifically disclaims liability for use of McDATA Software in connection with the design, construction, maintenance, and/or operation of any (i) nuclear facility, (ii) aircraft, aircraft communication or aircraft ground support system, or (iii) life support system by Reseller or its End User Customers. Such use is entirely at the user's risk. McDATA shall not be liable to Reseller or its End User Customers, in whole or in part, for any claims arising out of such use. Reseller agrees to defend, indemnify, and hold McDATA harmless from and against any and all claims arising out of use of the Software in such applications by Reseller or its End User Customers.
McDATA Corporation Standard Terms of Reseller Agreement June 2004
6
PREMIER RESELLER ADDENDUM
RESELLER AGREEMENT
This addendum applies to a Reseller that will purchase, market, sell license or incorporate Product to any commercial non-United States government entity, instrumentality or agency.
TERRITORY: NORTH AMERICA
1. SCOPE
1.1 Sales to the US Government are not authorized under this Agreement.
1.2 Reseller is authorized to procure McDATA Products and End User Customer Services through the source defined in Paragraph 2.3, "Product Provider." Reseller procurement of Product and End User Customer Services from sources other than the Product Provider is a material breach of this Agreement and may result in termination of this Agreement. In the event Reseller procures Product or End User Customer Services from sources other than its Product Provider, such procurements will not be included in any McDATA marketing and promotional programs made available to Reseller by McDATA. McDATA, at its sole discretion, may change this policy through a Channel Notification Document.
2. DEFINITIONS
2.1 "DISTRIBUTOR" means a business entity which is authorized by McDATA through a fully executed distributor agreement to market and sell, or incorporate for resale, the McDATA Products and End User Customer Services to McDATA authorized Resellers in its Territory.
2.2 "END USER CUSTOMER" means any entity which, for its own use and not for resale, (i) purchase McDATA-manufactured Products; and/or (ii) licenses Software associated therewith from McDATA; and/or (iii) receives End User Customer Services from McDATA.
2.3 "PRODUCT PROVIDER" means either a McDATA-authorized OEM and/or Distributor who provides Product(s) to the Reseller, as set forth in Appendix 1.
2.4 "RESELLER" means a business entity which is authorized by McDATA through a fully executed Reseller Agreement to (i) market and resell Products; (ii) purchase McDATA-manufactured Products from a Product Provider, without the intention of purchasing such Products for its own use; and/or (iii) resell End User Customer Services from McDATA.
3. TERM
The initial term of this Agreement shall be for a period of one (1) year from the Effective Date unless sooner terminated pursuant to the termination provisions herein. Thereafter, this Agreement automatically renews for successive terms of one (1) year.
4. RESELLER OBLIGATIONS/RESPONSIBILITIES
For enhanced warranty and post warranty services, Reseller shall refer to McDATA's Product Offerings on its website. McDATA will notify Reseller of changes to the Product Offerings through its Channel Notification Documents.
5. END USER CUSTOMER SOFTWARE LICENSE
Product(s) that embody or include Software will be delivered with a shrink-wrap or click-through software license which shall govern End User Customer's use of the Software. Such Software is proprietary to, trade secret of, and copyrighted by McDATA or its suppliers. McDATA or its suppliers retain title in and to the Software and all intellectual property rights, and no title to the Software or intellectual property rights is transferred to the End User Customers.
6. MARKETING
Reseller agrees not to publish or advertise any price below Manufacturer's Suggested List Price on its web site or by means of any online communications or any other mass communications, including without limitation, catalogues, fax blasts, direct mail pieces, or e-mail blasts.
7. GOVERNMENT FLOWDOWN PROVISIONS.
Reseller agrees that flowdown provisions, including, but not limited to United States Government Federal Acquisition Regulations ("FARs"), Defense FARs or NASA FARs, shall not apply to McDATA and McDATA does not accept such provisions notwithstanding the existence of such provisions. In addition, McDATA is not responsible for fulfilling any contract obligations under any schedule contracts including those obligations under the United States Government General Service Administration ("GSA") contract and the California Multiple Award Schedule ("CMAS") contract.
McDATA Corporation Standard Terms of Reseller Agreement June 2004
7
APPENDIX I RESELLER AGREEMENT PREMIER PARTNER PRODUCTS, PRODUCT PROVIDER AND REVENUE TARGETS
PRODUCTS:
Reseller is eligible to sell the McDATA Products listed below. McDATA will provide Product information including pricing, availability, features,
accessories, services and support in the Channel Notification Documents. McDATA will update the Product listing from time-to-time through the Channel Notification Documents.
- Fibre Channel Directors
- Switches
- Software
- Fabricenter(TM) Cabinet
004 ANNUALIZED REVENUE TARGET: $500,000
The 2004 Annualized Revenue Target to qualify as a Premier Reseller is $500,000. Reseller is eligible for Premier Reseller program benefits and responsible for the obligations as defined in the Channel Notification Documents.
INITIAL EDUCATION REQUIREMENTS:
Reseller must successfully complete both Sales and Technical Foundation training, for each McDATA authorized sales location, as follows, within ninety (90) days of the effective date of this Agreement.
Sales: All Sales Reps/sales location McDATA Solution (web-based) Technical: 3 individuals Certified Professional Accelerated Track (CPAT)
McDATA will waive the charges associated with the above listed required technical courses for three (3) individuals at Reseller's organization. McDATA may, at its sole discretion, provide additional education incentives to Reseller based upon sales performance. These incentives, if made available, will be communicated via Channel Notification Documents.
McDATA Corporation Reseller Agreement Premier Partner Addendum June 2004
8
PRODUCT PROVIDER:
Reseller will purchase Products directly from one of the Distributors listed on the next page below. Terms and conditions for purchase of Products from the Distributor are as agreed between Distributor and Reseller.
Reseller may elect a new distributor annually by notifying McDATA thirty (30) days prior to renewal of the Agreement. If McDATA does not receive notice of a new distributor election and the Agreement is renewed, Reseller agrees that it will continue to purchase Products through the currently designated distributor.
Under limited circumstances as approved by McDATA in writing, Reseller may purchase from another Product Provider as directed by McDATA. This may include a) critical customer need where Product is not available from Product Provider in the time frame required by End User, but available through another Authorized McDATA Product Provider or b) repeated, documented dissatisfaction with specified Product Provider during the term of the Agreement.
PLEASE INDICATE WHICH ONE OF THE FOLLOWING DISTRIBUTORS YOU CHOOSE TO BUY FROM FOR THE FIRST YEAR OF YOUR AGREEMENT WITH McDATA:
[ ] AVNET
East Coast Sates - Elsa Neves Phone: 877-286-3879 X5815 Fax: 480-794-9324 Email: elsa.neves@avnet.com West Coast Sates - Jan Johnson Phone: 877-967-3664 Fax: 480-794-9324 Email: jan.johnson@avnet.com
[ ] ARROW ESS
Cindie Snell Phone: 303-824-3651 Fax: 303-824.3646 Email: csnell@arrow.com
[ ] BELL MICROPRODUCTS,INC
Lyle Freemen Phone: 952-345-7942 1941 Ringwood Ave Email: lfreerman@bellmicro.com San Jose, California 95131 -1721
[ ] MOCA
Adrienne Hargrove Phone: 1 -800-786-3425 5230 Pacific Concourse Dr, 4th Flr, Fax: Los Angeles, CA 80045 Email:
[X] TIDAL WIRE
Cherie Vallone Phone: 781-332-1104 Email: cvallone@tidalwire.com
McDATA reserves the right to change the Premier Partner criteria each January or upon sixty (60) days advanced notice through a Channel Notification Document. If Reseller fails to comply with any of the above requirements, McDATA reserves the right to change the Reseller Designation and Reseller will become eligible for only those programs applicable to the new Reseller Designation.
McDATA Corporation Reseller Agreement Premier Partner Addendum June 2004
9 [/INST] ```json
{<answer_start>
"answer": "The initial term of this Agreement shall be for a period of one (1) year from the Effective Date unless sooner terminated pursuant to the termination provisions herein."
<answer_end>
}
``` </s> | EXHIBIT 10.102
[McDATA LOGO]
RESELLER AGREEMENT
AGREEMENT NUMBER: 200-04-634-00
McDATA CORPORATION ("McDATA) "RESELLER" MTI TECHNOLOGY CORPORATION
380 INTERLOCKEN CRESCENT ADDRESS: 14661 FRANKLIN AVE
BROOMFIELD, CO 80021 ADDRESS: TUSTIN, CA 92780
ADDRESS:
THE EFFECTIVE DATE OF THIS RESELLER AGREEMENT SHALL BE: Sept 29, 2004
The following documents are incorporated herein by reference:
Reseller Agreement
Premier Addendum
This Agreement, and all Addendums and attachments hereto, identified above, and Channel Notification Documents as issued by McDATA from time to time constitute the entire agreement between McDATA and Reseller with respect to the subject matter hereof, and supersedes all prior and contemporaneous oral or written representations or agreements between the parties regarding the subject matter of this Agreement.
ACCEPTED AND AGREED TO BY: ACCEPTED AND AGREED TO BY:
McDATA CORPORATION(McDATA) RESELLER MTI TECHNOLOGY CORPORATION
SIGNED: /s/ Bruce Chumley SIGNED: /s/ Ron Umagat --------------------------- ---------------------------------- NAME: Bruce Chumley NAME: Ron Umagat
TITLE: VP Channel Sales TITLE: VP of Operations
DATE: 9/29/04 DATE: 9/24/04
This Reseller Agreement (the "Agreement") is entered into by and between McDATA and Reseller.
1. SCOPE
This Agreement establishes the terms and conditions under which Reseller will purchase, market, sell, license or incorporate for resale the McDATA Products and End User Customer Services in the Territory and the non-exclusive terms under which McDATA will provide the Products and End-User Customer Services (as defined below).
2. DEFINITIONS
2.1 "CHANNEL NOTIFICATION DOCUMENT(S)" means McDATA's standard form, incorporated herein by reference, for notifying Resellers of price changes, new product announcements, discontinued/obsolete product announcements, engineering change notifications, product information, marketing and sales Incentive programs, and any other business matters affecting pricing, products and services.
2.2 "END USER CUSTOMER SERVICES" means the collective reference to warranty and post warranty (maintenance) services, including standard and enhanced warranty services, made available by McDATA and provided directly to End User Customers.
2.3 "PRODUCT(S)" means McDATA hardware, Software, and related features, conversions, and options, as listed in the Addendum and further provided through Channel Notification Documents.
2.4 "SOFTWARE" means the computer software, In machine executable object code format only, that is delivered and licensed by McDATA with the Product.
2.5 "TERRITORY" means the area designated on the first page of the incorporated Addendum to this Agreement in which Reseller may, on a non-exclusive basis, market and sell the Products and End User Customer Services.
3. APPOINTMENT/TERRITORY
3.1 Subject to the terms and conditions of this Agreement, McDATA hereby authorizes and appoints Reseller and Reseller accepts the appointment, as a non-exclusive reseller to purchase Products from McDATA and to market, sell, or incorporate for resale McDATA Products to End User Customers in the Territory.
3.2 Reseller's authorization from McDATA to resell McDATA Products is limited to the Territory shown on the first page of this Agreement. Additional sales locations must be pre-approved by McDATA. Reseller may request that additional Reseller sales locations are added to this Agreement. Upon Reseller's request, McDATA will provide Reseller with the criteria and process for applying for authorization of additional sales locations. Reseller agrees that any additional
McDATA authorized sales locations will be governed by the terms and conditions of this Agreement.
3.3 McDATA reserves the right to revise the list of Products and End User Services at any time during the term of this Agreement. McDATA will notify Reseller of such revisions through a Channel Notification Document(s).
4. TERM AND TERMINATION
4.1 TERMINATION WITHOUT CAUSE. Either party may terminate this Agreement without cause upon sixty (60) days prior written notice to the other party.
4.2 TERMINATION FOR BREACH. In addition to any other rights or remedies that may be available at law or in equity, either party may terminate this Agreement if the other party is in material breach of this Agreement and has not cured the breach within thirty (30) days of receiving written notice specifying the breach. If the breach is not cured within the thirty (30) day period, termination will become effective on the thirty-first (31st) day following the written notice.
4.3 TERMINATION FOR INSOLVENCY. Either party, upon written notice to the other party, may elect to immediately terminate this Agreement upon the occurrence of any of the following events: (i) a receiver is appointed for either party or its property; (ii) either party makes, or attempts to make, an assignment for the benefit of its creditors; (iii) any proceedings are commenced by or for either party under any bankruptcy, insolvency, or debtor's relief law and such proceedings are not set aside within thirty days following their filing; and/or (iv) either party liquidates or dissolves or makes a good faith attempt to liquidate or dissolve.
4.4 EFFECT OF TERMINATION. Termination of this Agreement shall not limit either party from pursuing any other remedies available to it, Inducing injunctive relief. The termination of this Agreement simultaneously terminates all programs and incentives McDATA offered to Reseller through Channel Notification Documents and voids any unused program account balances. Upon cancellation, termination or expiration of this
McDATA Corporation Standard Terms OF Reseller Agreement JUNE 2004
2
Agreement, Reseller agrees to immediately pay all monies due to McDATA under this Agreement.
The parties' rights and obligations under Sections 8,9 and 10 hereof shall survive termination of this Agreement.
5. RESELLER OBLIGATIONS/RESPONSIBILITIES
5.1 SALES. Reseller agrees to actively market, promote, demonstrate, sell and provide the Products and End User Customer Services only within the Territory during the term of this Agreement
5.2 REPORTS. For warranty purposes, McDATA may require Reseller to provide McDATA with a written report containing, without limitation, the following information: End User Customer name, Reseller's authorization or location Number, End User Customer information, Product serial numbers, number of units, and level of warranty. McDATA will notify Reseller of reporting requirements, including content and format, in a Channel Notification Document.
5.3 EDUCATIONAL REQUIREMENTS. Reseller agrees to participate in McDATA-speciflad educational courses for purposes of training Reseller's personnel. Educational course requirements will be provided in a Channel Notification Document and must be satisfied by Reseller to maintain its status as a McDATA authorized Reseller McDATA will provide to Reseller without tuition fee, at a McDATA designated training site, the required educational courses identified on the Addendum.
5.4 END USER CUSTOMER TERMS AND CONDITIONS. Reseller will ensure that the terms of its executed agreements with End User Customers am not in conflict with this Agreement
5.5 POINT OF SALE (POS) REPORTS. Beginning on the first month after the Effective Date, in order to qualify for certain McDATA channel partner program benefits, Reseller will provide McDATA with a written monthly point of sale report ("POS Report") listing the Products that Reseller has sold, by model and serial number, together with the names and addresses of all End User Customers. Detailed POS requirements will be communicated through Channel Notification Documents.
5.6 FINANCIAL STATEMENTS. Reseller agrees to provide McDATA with its and its ultimate parent company's most recent financial statements prior to the Effective Date of the Agreement.
6. McDATA OBLIGATIONS/RESPONSIBILITIES
6.1 END USER CUSTOMER SERVICES
McDATA will make available, for End User Customers, warranty, enhanced warranty, and post warranty services according to the terms and conditions of the applicable manufacturer's warranty and McDATA's then-current maintenance policies, McDATA, or an authorized McDATA service provider, will provide technical support and repairs during the warranty and post warranty periods to End User Customers. McDATA reserves the right to revise its technical support program. McDATA will notify Reseller of changes to McDATA's warranty and
technical support and repairs policy through Channel Notification Document(s).
6.2 PRODUCT DISCONTINUATION. McDATA reserves the right to discontinue Products. McDATA will notify Reseller of any Product discontinuance through Channel Notification Document(s).
6.3 PRODUCT AND SERVICE ANNOUNCEMENTS. McDATA will notify Reseller of changes and innovations in performance, serviceability, uses and applications of Products and End User Services through Channel Notification Document(s).
7. END USER CUSTOMER SOFTWARE LICENSE
Product(s) that embody or include Software will be delivered with a shrink-wrap or click-through software license which shall govern End User Customer's use of the Software. McDATA or its suppliers retain title in and to the Software and all intellectual property rights, and no title to the Software or intellectual property rights is transferred to the End User Customers. Such Software is proprietary to, trade secret of, and copyrighted by McDATA or its suppliers.
8. CONFIDENTIALITY
8.1 As used herein, "CONFIDENTIAL INFORMATION" will mean any and all technical or business information, including third party information, furnished or disclosed, in whatever form or medium (regardless of whether tangible, Intangible, visual or oral), by one party to the other, including but not limited to information regarding patents and patent applications, trade secrets, works of authorship, software programs, software source documents, software architecture, algorithms, formulae, ideas, techniques, know-how, processes, inventions, apparatuses, equipment, models, information related to current, future and proposed products and services, research, experimental work, development, design details, specifications and engineering information, financial information, procurement, purchasing and manufacturing requirements, potential and actual customer lists, investors, employees, business and contractual relationships, business forecasts, sales and merchandising information, marketing plans; information regarding third parties; and any physical manifestations of Confidential Information (such as notes, reports, memoranda, etc.).
McDATA Corporation Standard Terms of Reseller Agreement June 2004
3
8.2 Information will not be deemed Confidential Information hereunder if the receiving party can demonstrate that such Information: (a) is already known to the receiving party prior to disclosure; (b) is independently developed by the receiving party without the use of the disclosing party's Confidential Information; (c) is or becomes publicly available through no fault of the receiving party; or (d) is obtained by the receiving party from a third party other than one having an obligation to the disclosing party with respect to the Confidential Information disclosed. A party may disclose Confidential Information pursuant to the requirements of a governmental agency or by operation of law, provided that such party gives the other party reasonable prior written notice sufficient to allow the other party time to contest such disclosure.
8.3 Each party agrees that for a period of three (3) years following the disclosure of Confidential Information, it (a) will not use, directly or indirectly, or reproduce the Confidential Information of the other party for any purpose except in accordance with the terms of the Agreement, (b) will not disclose the Confidential Information of the other party to any third parties except as expressly permitted in this Agreement, and (c) will take all reasonable security measures to maintain the confidentiality of all Confidential Information of the other party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance.
8.4 Upon the termination or expiration of this Agreement, or upon any request of a party, all Confidential Information, together with any copies of same as may be authorized herein, will (at the election of the disclosing party) either be returned to the disclosing party or certified destroyed by the receiving party. Notwithstanding the termination or expiration of this Agreement, each party agrees the requirements regarding use, confidentiality and non-disclosure set forth herein will survive the termination or expiration of this Agreement for a period of three (3) years from the date of the disclosure of the Confidential Information.
8.5 Each party acknowledges that its breach of this Section will cause irreparable damage and hereby agrees that the other party shall be entitled to seek injunctive relief under this Agreement, as well as such further relief as may be granted by a court of competent jurisdiction.
9. TRADEMARKS.
Subject to McDATA's prior written approval, McDATA grants Reseller a limited, nonexclusive, non-transferable, revocable license to use McDATA's Trademarks (defined as McDATA's name or any abbreviation thereof, its acronym, logotype or any other trademarks or trade names of McDATA) for the sole purpose of marketing and selling Products and End User Customer Services in the Territory during the term of this Agreement Reseller agrees to comply with McDATA's Logo Usage Guide, which is found at McDATA's web site, www.mcdata.com. By using McDATA's Trademarks, Reseller does not acquire any proprietary rights to such Trademarks, and Reseller agrees not to obtain or attempt to obtain, by any method, any rights, title or interest in or to any of the Trademarks. Additional provisions relating to the proper usage of the Trademarks are sat forth in Channel
Notification Documents.
10. LIMITATION OF LIABILITY AND DISCLAIMER OF WARRANTY
10.1 EXCEPT FOR A BREACH OF SECTION 8 (CONFIDENTIALITY), IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY INDIRECT, PUNITIVE, SPECIAL, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, NOR FOR ANY DAMAGES RELATING TO LOST DATA, LOST PROFITS, ADVERTISING OR PROMOTIONAL COSTS, TERMINATION OF EMPLOYEES, SALARIES OF EMPLOYEES OR SEVERANCE PAYMENTS, CREATION OF CUSTOMER BASE, OR FUTURE EXPECTATIONS OR OTHER ECONOMIC ADVANTAGE, HOWSOEVER ARISING AND REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, WARRANTY OR TORT (INCLUDING NEGLIGENCE) OR UNDER ANY OTHER THEORY OF LIABILITY IN LAW OR IN EQUITY, EVEN IF SUCH PARTY HAS BEEN PREVIOUSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
10.2 Notwithstanding any provision herein to the contrary, McDATA's entire liability in any given instance from any cause whatsoever, and regardless of the form of action, whether in contract, warranty or tort (including negligence) or any other theory of liability in law or in equity, will in no event exceed the lease, of (i) the purchase price for the specific Product that is the subject matter of or is directly relative the cause of action; or (ii) Five Hundred Thousand Dollars ($500,000).
10.3 The foregoing limitations will not apply (i) to claims by either party for personal injury or damage to personal property, or (ii) claims by McDATA for negligent or misuse or unauthorized use by Reseller of any of McDATA's proprietary rights, including Trademarks and Software.
10.4 THE WARRANTIES, IF ANY, PROVIDED IN THIS AGREEMENT (INCLUDING THE APPENDICES AND CHANNEL NOTIFICATION DOCUMENTS) OR AS PROVIDED WITH THE PRODUCTS ARE GIVEN IN LIEU OF ALL OTHER
McDATA Corporation Standard Terms of Reseller Agreement June 2004
4
WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, NONINFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE, ALL OF WHICH ARE HEREBY EXPRESSLY DISCLAIMED AND EXCLUDED.
11. MARKETING
McDATA and Reseller may publicly refer to the existence, but not the content, of this Agreement and may reference their business relationship by creating a hyper-link from one party's web site to the other party's web site. Reseller grants McDATA a license to use Reseller's trademarks and corporate logos solely for such marketing and reference purposes. Copies of each party's logo and authorized trademark(s) can be obtained from their respective marketing departments and may not be altered or changed by either party, its employees or agents, without prior written permission from an authorized representative of the other.
12. GENERAL
12.1 NO AMENDMENT OR WAIVER. No provision of this Agreement will be deemed waived, amended or modified by either party, unless such waiver, amendment or modification is made in writing and signed by authorized representatives of both parties. No waiver of rights under this Agreement by either party shall constitute a subsequent waiver of&sbsp;such rights or any other rights under this Agreement. Notwithstanding the foregoing, the parties agree to the use of Channel Notification Documents as set forth in this Agreement.
12.2 SEVERABILITY. If any provision of this Agreement is held to be invalid or unenforceable by a proper authority having jurisdiction over this Agreement, the remaining provisions of this Agreement will remain in full force and effect.
12.3 NO AGENCY CREATED. Nothing in this Agreement shall be construed to create a partnership, joint venture, or agency relationship between the parties. Neither party is granted the tight or authority to assume or create any obligation or responsibility, express or implied, on behalf of, or in the name of the other party, or to bind such other party in any manner to anything whatsoever.
12.4 NO THIRD PARTY BENEFICIARIES. The parties agree that there shall be no third party beneficiaries to this Agreement, including but not limited to Reseller's End User Customers.
12.5 ASSIGNMENT. Neither party will assign this Agreement or any rights hereunder without the prior written consent of the other party, which consent will not be unreasonably withheld. Notwithstanding the foregoing sentence, McDATA may assign this Agreement to any entity controlled by, controlling, or under common control with McDATA or to any successor by merger, divestiture, consolidation or reorganization, or to any purchasers of all or substantially all of the assets of the business of McDATA without consent of Reseller.
12.6 GOVERNING LAWS. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado excluding its choice of law provisions. The United Nations Convention on Contracts for the International Sale of Goods (CISG) is specifically excluded and shall not be applicable to any transaction contemplated herein.
12.7 DISPUTE RESOLUTION PROCESS. In case of any dispute between the parties relating to this Agreement, such dispute shall be finally resolved in Denver, Colorado (USA) by arbitration under the Commercial Rules of Arbitration of the American Arbitration Association, using three arbitrators, one selected by each of McDATA and Reseller and the third selected in accordance with such Rules. The
arbitrators will decide the issues presented to them applying the substantive laws of the Sate of Colorado (USA). The award of the arbitrators may be granted notwithstanding the absence of any party and such award shall be in writing and shall be final and binding upon the parties and shall not be appealed from or contested in any court or tribunal. Any award rendered hereunder may be entered for enforcement, if necessary, in any court of competent jurisdiction.
12.8 INJUNCTIVE RELIEF. Notwithstanding the above provisions relating to arbitration, the parties agree that in respect of any violation of any provision of this Agreement, including without limitation violation of any proprietary or confidential information, for which an award of damages is an inadequate remedy to project the injured party, the injured party is entitled to seek injunctive relief, including a preliminary injunction, in a court of competent jurisdiction, in addition to any other relief available to it under the arbitration procedures specified above in Section 12.7.
12.9 OFFICIAL LANGUAGE. The official language of this Agreement and all transactions conducted under this Agreement is English.
12.10 FORCE MAJEURE. Neither party will be liable for any failure or delay in its performance under this Agreement due to any cause beyond its reasonable control, including but not limited to acts of God, war, riot, embargoes, acts of civil or military authorities, fire, floods, accidents, strikes, delays by suppliers or shortages of transportation, facilities, fuel, energy, labor, or materials.
McDATA Corporation Standard Terms of Reseller Agreement June 2004
5
12.11 COMPLIANCE WITH LAWS. McDATA and Reseller each agree to comply with all applicable laws and each understand and agree that the continuing rights and obligations of the parties hereunder are specifically conditioned upon compliance with such laws. These laws include, without limitation, the following: (i) the U.S. anti-boycott regulations, (ii) the U.S. Foreign Corrupt Practices Act ("FCPA"), (iii) the export control laws of the United States of America, (iv) the prevailing regulations which may be issued from time to time by the U.S. Department of Commerce and the Office of Munitions Control and the U.S. Department of State, and (v) any export or import laws of the agencies of the Territory or of any countries into or through which the Products purchased under this Agreement may be transported.
12.12 NOTICES. Notices required hereunder will be in writing and will be deemed given when transmitted by facsimile (provided such facsimile is subsequently confirmed in writing within five (5) days of the facsimile date) or deposited with an express delivery service with guaranteed third-day delivery, prepaid, addressed as follows:
NOTICES TO: McDATA CORPORATION: McDATA Corporation 380 Interlocken Crescent Broomfield, CO 80021 Attn: VP of Sales With a copy to: VP and General Counsel Fax:720-558-3235
NOTICES TO: RESELLER MTI Technology Corp 14661 Franklin Ave Tustin,CA 92780 Attn: CFO Fax : 714-481-4136
12.13 ENTIRE AGREEMENT. This Agreement, together with any and all attachments hereto and applicable Appendices, Addendums and Channel Notification Documents as issued from time to time by McDATA constitutes the entire agreement between McDATA and Reseller with respect to the subject matter hereof, and supersedes all prior and contemporaneous oral or written representations or agreements between the parties regarding the subject matter of this Agreement.
12.14 COUNTERPARTS. This Agreement may be executed in counterparts or by facsimile, each of which shall be an original, and all of which together shall constitute one and the same instrument.
12.15 NUCLEAR, AVIATION OR LIFE SUPPORT APPLICATION. McDATA specifically disclaims liability for use of McDATA Software in connection with the design, construction, maintenance, and/or operation of any (i) nuclear facility, (ii) aircraft, aircraft communication or aircraft ground support system, or (iii) life support system by Reseller or its End User Customers. Such use is entirely at the user's risk. McDATA shall not be liable to Reseller or its End User Customers, in whole or in part, for any claims arising out of such use. Reseller agrees to defend, indemnify, and hold McDATA harmless from and against any and all claims arising out of use of the Software in such applications by Reseller or its End User Customers.
McDATA Corporation Standard Terms of Reseller Agreement June 2004
6
PREMIER RESELLER ADDENDUM
RESELLER AGREEMENT
This addendum applies to a Reseller that will purchase, market, sell license or incorporate Product to any commercial non-United States government entity, instrumentality or agency.
TERRITORY: NORTH AMERICA
1. SCOPE
1.1 Sales to the US Government are not authorized under this Agreement.
1.2 Reseller is authorized to procure McDATA Products and End User Customer Services through the source defined in Paragraph 2.3, "Product Provider." Reseller procurement of Product and End User Customer Services from sources other than the Product Provider is a material breach of this Agreement and may result in termination of this Agreement. In the event Reseller procures Product or End User Customer Services from sources other than its Product Provider, such procurements will not be included in any McDATA marketing and promotional programs made available to Reseller by McDATA. McDATA, at its sole discretion, may change this policy through a Channel Notification Document.
2. DEFINITIONS
2.1 "DISTRIBUTOR" means a business entity which is authorized by McDATA through a fully executed distributor agreement to market and sell, or incorporate for resale, the McDATA Products and End User Customer Services to McDATA authorized Resellers in its Territory.
2.2 "END USER CUSTOMER" means any entity which, for its own use and not for resale, (i) purchase McDATA-manufactured Products; and/or (ii) licenses Software associated therewith from McDATA; and/or (iii) receives End User Customer Services from McDATA.
2.3 "PRODUCT PROVIDER" means either a McDATA-authorized OEM and/or Distributor who provides Product(s) to the Reseller, as set forth in Appendix 1.
2.4 "RESELLER" means a business entity which is authorized by McDATA through a fully executed Reseller Agreement to (i) market and resell Products; (ii) purchase McDATA-manufactured Products from a Product Provider, without the intention of purchasing such Products for its own use; and/or (iii) resell End User Customer Services from McDATA.
3. TERM
The initial term of this Agreement shall be for a period of one (1) year from the Effective Date unless sooner terminated pursuant to the termination provisions herein. Thereafter, this Agreement automatically renews for successive terms of one (1) year.
4. RESELLER OBLIGATIONS/RESPONSIBILITIES
For enhanced warranty and post warranty services, Reseller shall refer to McDATA's Product Offerings on its website. McDATA will notify Reseller of changes to the Product Offerings through its Channel Notification Documents.
5. END USER CUSTOMER SOFTWARE LICENSE
Product(s) that embody or include Software will be delivered with a shrink-wrap or click-through software license which shall govern End User Customer's use of the Software. Such Software is proprietary to, trade secret of, and copyrighted by McDATA or its suppliers. McDATA or its suppliers retain title in and to the Software and all intellectual property rights, and no title to the Software or intellectual property rights is transferred to the End User Customers.
6. MARKETING
Reseller agrees not to publish or advertise any price below Manufacturer's Suggested List Price on its web site or by means of any online communications or any other mass communications, including without limitation, catalogues, fax blasts, direct mail pieces, or e-mail blasts.
7. GOVERNMENT FLOWDOWN PROVISIONS.
Reseller agrees that flowdown provisions, including, but not limited to United States Government Federal Acquisition Regulations ("FARs"), Defense FARs or NASA FARs, shall not apply to McDATA and McDATA does not accept such provisions notwithstanding the existence of such provisions. In addition, McDATA is not responsible for fulfilling any contract obligations under any schedule contracts including those obligations under the United States Government General Service Administration ("GSA") contract and the California Multiple Award Schedule ("CMAS") contract.
McDATA Corporation Standard Terms of Reseller Agreement June 2004
7
APPENDIX I RESELLER AGREEMENT PREMIER PARTNER PRODUCTS, PRODUCT PROVIDER AND REVENUE TARGETS
PRODUCTS:
Reseller is eligible to sell the McDATA Products listed below. McDATA will provide Product information including pricing, availability, features,
accessories, services and support in the Channel Notification Documents. McDATA will update the Product listing from time-to-time through the Channel Notification Documents.
- Fibre Channel Directors
- Switches
- Software
- Fabricenter(TM) Cabinet
004 ANNUALIZED REVENUE TARGET: $500,000
The 2004 Annualized Revenue Target to qualify as a Premier Reseller is $500,000. Reseller is eligible for Premier Reseller program benefits and responsible for the obligations as defined in the Channel Notification Documents.
INITIAL EDUCATION REQUIREMENTS:
Reseller must successfully complete both Sales and Technical Foundation training, for each McDATA authorized sales location, as follows, within ninety (90) days of the effective date of this Agreement.
Sales: All Sales Reps/sales location McDATA Solution (web-based) Technical: 3 individuals Certified Professional Accelerated Track (CPAT)
McDATA will waive the charges associated with the above listed required technical courses for three (3) individuals at Reseller's organization. McDATA may, at its sole discretion, provide additional education incentives to Reseller based upon sales performance. These incentives, if made available, will be communicated via Channel Notification Documents.
McDATA Corporation Reseller Agreement Premier Partner Addendum June 2004
8
PRODUCT PROVIDER:
Reseller will purchase Products directly from one of the Distributors listed on the next page below. Terms and conditions for purchase of Products from the Distributor are as agreed between Distributor and Reseller.
Reseller may elect a new distributor annually by notifying McDATA thirty (30) days prior to renewal of the Agreement. If McDATA does not receive notice of a new distributor election and the Agreement is renewed, Reseller agrees that it will continue to purchase Products through the currently designated distributor.
Under limited circumstances as approved by McDATA in writing, Reseller may purchase from another Product Provider as directed by McDATA. This may include a) critical customer need where Product is not available from Product Provider in the time frame required by End User, but available through another Authorized McDATA Product Provider or b) repeated, documented dissatisfaction with specified Product Provider during the term of the Agreement.
PLEASE INDICATE WHICH ONE OF THE FOLLOWING DISTRIBUTORS YOU CHOOSE TO BUY FROM FOR THE FIRST YEAR OF YOUR AGREEMENT WITH McDATA:
[ ] AVNET
East Coast Sates - Elsa Neves Phone: 877-286-3879 X5815 Fax: 480-794-9324 Email: elsa.neves@avnet.com West Coast Sates - Jan Johnson Phone: 877-967-3664 Fax: 480-794-9324 Email: jan.johnson@avnet.com
[ ] ARROW ESS
Cindie Snell Phone: 303-824-3651 Fax: 303-824.3646 Email: csnell@arrow.com
[ ] BELL MICROPRODUCTS,INC
Lyle Freemen Phone: 952-345-7942 1941 Ringwood Ave Email: lfreerman@bellmicro.com San Jose, California 95131 -1721
[ ] MOCA
Adrienne Hargrove Phone: 1 -800-786-3425 5230 Pacific Concourse Dr, 4th Flr, Fax: Los Angeles, CA 80045 Email:
[X] TIDAL WIRE
Cherie Vallone Phone: 781-332-1104 Email: cvallone@tidalwire.com
McDATA reserves the right to change the Premier Partner criteria each January or upon sixty (60) days advanced notice through a Channel Notification Document. If Reseller fails to comply with any of the above requirements, McDATA reserves the right to change the Reseller Designation and Reseller will become eligible for only those programs applicable to the new Reseller Designation.
McDATA Corporation Reseller Agreement Premier Partner Addendum June 2004
9 | Highlight the parts (if any) of this contract related to "Expiration Date" that should be reviewed by a lawyer. Details: On what date will the contract's initial term expire? | {
"answer_start": [
26315
],
"text": [
"The initial term of this Agreement shall be for a period of one (1) year from the Effective Date unless sooner terminated pursuant to the termination provisions herein."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Insurance" that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?
Context: 925 West Georgia Street Suite 1820 Vancouver, British Columbia Canada V6C 3L2 Facsimile: 604-632-1730 PROMOTION AGREEMENT (the "Agreement") This agreement (the "Agreement") is made between Charity Tunes Inc., a British Columbia corporation with registered office located at Suite 1800, 925 West Georgia Street, Vancouver, British Columbia, Canada V6C 3L2 ("Charity Tunes") and ConAgra Foods Canada Inc. ("Sponsor") a Canada corporation, 5935 Airport Rd, Suite 405, Mississauga, Ontario, Canada L4V 1W5. WHEREAS as a new initiative, Charity Tunes and Sponsor will enter into a promotional partnership, whereby Sponsor will offer Charity Tunes music downloads on Sponsor's Pogo products consistent with the terms and conditions of this Agreement (the "Promotion"). NOW THEREFORE in consideration of the mutual covenants made herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Charity Tunes and Sponsor, the parties agree as follows
A consumer who purchases a specially Designated Sponsor Product (as defined below) will receive exactly one (1) unique pin code (a "Pin Code") in-pack. Such a consumer wil l be entitled to visit a custom interactive landing page at the CharityTunes.com website to enter the unique code and consumer's valid email address to receive downloads up to a maximum of either three (3), five (5), or seven (7) free MP3 song downloads having a retail value of $1.29 per song or less. Charity Tunes shall make its music catalogue available to the purchasers in MP3 file format to the fullest extent that such format is available to Charity Tunes pursuant to any agreements in effect between Charity Tunes and its wholesalers on the date of this Agreement. Accordingly, Charity Tunes shall use its best efforts to update its music catalogue with available MP3 files by June 30, 2009. The custom interactive landing page shall be designed, operated and maintained at the expense of Sponsor, and shall be subject to the mutual approval by Charity Tunes and Sponsor, which approval shall not be unreasonably withheld. The landing page shall feature the Charity Tunes logo in a size and prominence substantially equal to that of Sponsor.
POGO 8 pack, POGO 10 pack, POGO 20 pack and POGO 30 pack products sold at participating retail locations in Canada (individually and collectively the "Designated Sponsor Products") are the only products for which a Pin Code will be distributed and each consumer who purchases a Designated Sponsor Product will receive one and only one Pin Code while supplies last and subject to the limitations detailed herein. A Pin Code for three (3) songs shall be distributed exclusively with POGO 8 or 10 packs. A Pin Code for five (5) songs shall be distributed exclusively with POGO 20 packs. A Pin Code for seven (7) songs shall be distributed exclusively with POGO 30 packs. Designated Sponsor Products sold by Sponsor with the Promotion offer may not be sold at a higher list price than the same (or substantially similar) product(s) that do not contain the Promotion offer. Pin Codes themselves may not be retailed in any way.
1.PROMOTION OFFER:
2.DESIGNATED SPONSOR PRODUCTS:
1
Pin codes will only be distributed in the Designated Sponsor Products during the Promotion Period (defined below). The total number of Pin Codes to be distributed as prizes in the Promotion shall not exceed: (i) 277,760 Pin Codes containing three (3) music downloads per Pin Code ; (ii) 130,300 Pin Codes containing five (5) music downloads per Pin Code; and (iii) 27,900 Pin Codes containing seven (7) music downloads per Pin Code. No Designated Sponsor Product shall contain more than 1 Pin Code per pack. The distribution limits stated above are the maximum number of Pin Codes that may be distributed in the Promotion. No 3- song, 5-song, or 7-song Pin Codes may be subdivided, duplicated or distributed in combination with one another. Charity Tunes agrees to generate the unique Pin Codes for the Promotion. The parties therefore understand and acknowledge the critical need to maintain in absolute secrecy the Pin Codes generated for the Promotion such that they are only disclosed to the appropriate recipient via the authorized distribution method described herein. If the Pin Codes are made available to the public by Sponsor or by any of its employees, officers, directors, consultants, agents, representatives or advisors, except in the manner provided for herein, all parties agree that Pin Code security will be deemed compromised, and Charity Tunes may terminate all subsequent Pin Code redemptions. Sponsor agrees that it will not increase the list price to its customers of Designated Sponsor Products that form part of this promotion as compared to its otherwise identical products that do not form part of the promotion.
The offer shall be communicated to potential consumers only via in-store on-pack advertising, and retailer flyer advertising. Any communication of offer, including but not limited to Sponsor's rules for the Promotion, must indicate that the offer is only available while supplies last.
A consumer who receives a Pin Code for a designated number of music downloads in accordance with paragraph 3 above will be directed to visit the custom interactive landing page in order to redeem his/her free music downloads. Consumer will have to enter the Pin Code in order to complete the transaction. Consumer will be required to enter the Pin Code exactly as it appears in the email and follow the instructions on the web site to download the selected music download. In no case may any Pin Code be redeemed later than March 31, 2010. To assist as required with the redemption process, consumers shall have access to Charity Tunes customer support by emailing at support@charitytunes.com.
Sponsor shall received 435,960 unique Pin Codes for this Promotion and Sponsor is responsible for maintaining a record of all Pin Codes distributed or withheld, such record being subject to the confidentiality terms set forth above.
Designated Sponsor Products with Pin Codes may be distributed from approximately October 1, 2009 to approximately December 31, 2009 (the "Promotion Period"). Eligible Pin Codes may be entered on the www.charitytunes.com website and corresponding music downloaded from October 1, 2009 to March 31, 2010. Pin Codes entered for redemption after 11:59:59 pm PT on March 31, 2010 may be rejected as ineligible. The contents of this section are to be reflected in the Sponsor's rules for the Promotion.
The Charity Tunes system used for redemption of downloads will ensure that (i) downloads are obtained under the Promotion only by way of redemption of eligible Pin Codes and only up to the maximum number of music downloads per Pin Code set out at paragraph 3 above, (ii) otherwise eligible Pin Codes are invalidated once they have been used to download their respective per Pin Code maximum, and (iii) the total maximum download limits described herein are observed.
3.DISTRIBUTION:
4.COMMUNICATION OF OFFER:
5.PROMOTION MECHANIC:
6.GENERATION / PRINTING OF CODES:
7.PROMOTION PERIOD:
8.SECURITY & VERIFICATION:
2
The Pin Codes that will be distributed to consumers of the Designated Sponsor Products under the Promotion will be set with parental controls and will not allow any user download content that has been designated by Charity Tunes music providers as containing explicit content.
Upon execution of this Agreement by both parties, Charity Tunes will invoice Sponsor for 435,960 unique codes consisting of a maximum of 277,760 Pin Codes containing three (3) music downloads per Pin Code ; (ii) 130,300 Pin Codes containing five (5) music downloads per Pin Code; and (iii) 27,900 Pin Codes containing seven (7) music downloads per Pin Code, for a total cost of $117,605.60 CDN (plus applicable taxes) (collectively the "Fee"), which Fee is calculated at the rate of $0.07 CND (plus applicable taxes) per potential download. The Fee shall be payable to Charity Tunes in two equal installments of $58,802.80 (plus applicable taxes) due to Charity Tunes on October 1, 2009 and November 1, 2009, respectively payable upon receipt of invoice.
In consideration of the fees paid by Sponsor as set out herein, Charity Tunes agrees that during the period beginning October 1, 2009 and ending March 31, 2010, Charity Tunes shall not enable another program sponsorship for all competitive products/product categories distributed/sold within the total Canadian consumer/retail/wholesale market place, inclusive of: - Total Frozen Handhelds - Total Corporation General Mills Handhelds - Total Pizza Pops Handhelds / total Pillsbury Mini Pizzas - Total Corporation McCain Foods Handhelds - Total Pizza Pockets / total McCain Mini Pizzas - Total Corporation Heinz Handhelds - Total Heinz Hot bites (Bagel Bites and Taco Bites) / total Anchor Poppers - Total Corporation Schneider Foods Handhelds - Total Hot Stuffs / total Lean Stuffs - Total Resers Burritos - Total Corp les Plats du Chef Handhelds - Total Hinsdale Farms Corndogs
9.EXPLICIT CONTENT:
10.FEE:
11.WARRANTY AND INDEMNITY:
11.1Warranty. Charity Tunes warrants that, subject only to any limitation or condition specified in this Agreement, it will provide immediately to any consumer entitled to a music download in connection with a Pin Code the music download selected by that consumer.
11.2Obligations upon any breach. If for any reason Charity Tunes fails to provide a music download to a consumer in accordance with clause 11.1, thereby breaching its warranty thereunder, it shall: (i) forthwith remedy that failure by providing the requested download to that consumer as soon as possible; (ii) forthwith provide notice to Sponsor of the failure to immediately provide the download, including the date, time and other details of the failure, and of the steps being taken forthwith to remedy the failure; and (iii) once the failure has been remedied by Charity Tunes, forthwith provide Sponsor with notice of same.
11.3Indemnity. Furthermore, Charity Tunes will indemnify, save and hold harmless Sponsor, its shareholders, officers, agents and affiliated companies from and against any and all claims, investigations, lawsuits, losses, damages, costs, payments, charges, expenses and attorneys fees, including any amount paid to settle an action or to satisfy a judgment by or for the benefit of any person, that they, or any of them, may at any time incur as a result of any breach of this Agreement by Charity Tunes.
12.EXCLUSIVITY:
3
13.GENERAL:
13.1Relationship between the Parties. Nothing in this Agreement shall be construed as creating any relationship (whether by way of employer/employee, agency, joint venture, association, or partnership). It is expressly understood that the relationship between the parties shall be that of independent contractors, whether for the purposes of the Income Tax Act (Canada), provincial taxation legislation or otherwise.
13.2Time. Time is of the essence of this Agreement.
13.3Presumption. This Agreement or any section thereof shall not be construed against any party due to the fact that said Agreement or any section thereof was drafted by said party.
13.4Titles and Captions. All article, section and paragraph titles or captions contained in this Agreement are for convenience only and shall not be deemed part of the context nor affect the interpretation of this Agreement.
13.5Further Action. The parties hereto shall execute and deliver all documents, provide all information and take or forbear from all such action as may be necessary or appropriate to achieve the purposes of this Agreement.
13.6Good Faith, Cooperation and Due Diligence. The parties hereto covenant, warrant and represent to each other good faith, complete cooperation, due diligence and honesty in fact in the performance of all obligations of the parties pursuant to this Agreement. All promises and covenants are mutual and dependent.
13.7Savings Clause. If any provision of this Agreement, or the application of such provision to any person or circumstance, shall be held invalid, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby.
13.8Assignment. This Agreement may not be assigned by either party hereto without the written consent of the other but shall be binding upon the successors of the parties.
13.9Notices. All notices required or permitted to be given under this Agreement shall be given in writing and shall be delivered, either personally or by express delivery service, to the party to be notified. Notice to each party shall be deemed to have been duly given upon delivery, personally or by courier, addressed to the attention of the officer at the address set forth heretofore, or to such other officer or addresses as either party may designate, upon at least ten days written notice, to the other party.
13.10Entire agreement. This Agreement contains the entire understanding and agreement among the parties. There are no other agreements, conditions or representations, oral or written, express or implied, with regard thereto. This Agreement may be amended only in writing signed by all parties.
13.11Waiver. A delay or failure by any party to exercise a right under this Agreement, or a partial or single exercise of that right, shall not constitute a waiver of that or any other right.
4
IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement:
5
13.12Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. In the event that the document is signed by one party and faxed to another the parties agree that a faxed signature shall be binding upon the parties to this Agreement as though the signature was an original.
13.13Successors. The provisions of this Agreement shall be binding upon all parties, their successors and permitted assigns.
13.14Counsel. The parties expressly acknowledge that each has been advised to seek separate counsel for advice in this matter and has been given a reasonable opportunity to do so.
13.15Law and Jurisdiction. This Agreement shall be governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein. The parties hereby attorn to the exclusive jurisdiction of the provincial and federal courts located in the city of Toronto, Ontario for all matters arising from this Agreement.
Signed in agreement: /s/ Marko Bukovec Marko Bukovec Title: Marketing Director ConAgra Foods Canada Inc. Date:June 25, 2009
Signed in agreement: /s/ Robin Ram Robin Ram President Charity Tunes, Inc. Date: June 29, 2009 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | 925 West Georgia Street Suite 1820 Vancouver, British Columbia Canada V6C 3L2 Facsimile: 604-632-1730 PROMOTION AGREEMENT (the "Agreement") This agreement (the "Agreement") is made between Charity Tunes Inc., a British Columbia corporation with registered office located at Suite 1800, 925 West Georgia Street, Vancouver, British Columbia, Canada V6C 3L2 ("Charity Tunes") and ConAgra Foods Canada Inc. ("Sponsor") a Canada corporation, 5935 Airport Rd, Suite 405, Mississauga, Ontario, Canada L4V 1W5. WHEREAS as a new initiative, Charity Tunes and Sponsor will enter into a promotional partnership, whereby Sponsor will offer Charity Tunes music downloads on Sponsor's Pogo products consistent with the terms and conditions of this Agreement (the "Promotion"). NOW THEREFORE in consideration of the mutual covenants made herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Charity Tunes and Sponsor, the parties agree as follows
A consumer who purchases a specially Designated Sponsor Product (as defined below) will receive exactly one (1) unique pin code (a "Pin Code") in-pack. Such a consumer wil l be entitled to visit a custom interactive landing page at the CharityTunes.com website to enter the unique code and consumer's valid email address to receive downloads up to a maximum of either three (3), five (5), or seven (7) free MP3 song downloads having a retail value of $1.29 per song or less. Charity Tunes shall make its music catalogue available to the purchasers in MP3 file format to the fullest extent that such format is available to Charity Tunes pursuant to any agreements in effect between Charity Tunes and its wholesalers on the date of this Agreement. Accordingly, Charity Tunes shall use its best efforts to update its music catalogue with available MP3 files by June 30, 2009. The custom interactive landing page shall be designed, operated and maintained at the expense of Sponsor, and shall be subject to the mutual approval by Charity Tunes and Sponsor, which approval shall not be unreasonably withheld. The landing page shall feature the Charity Tunes logo in a size and prominence substantially equal to that of Sponsor.
POGO 8 pack, POGO 10 pack, POGO 20 pack and POGO 30 pack products sold at participating retail locations in Canada (individually and collectively the "Designated Sponsor Products") are the only products for which a Pin Code will be distributed and each consumer who purchases a Designated Sponsor Product will receive one and only one Pin Code while supplies last and subject to the limitations detailed herein. A Pin Code for three (3) songs shall be distributed exclusively with POGO 8 or 10 packs. A Pin Code for five (5) songs shall be distributed exclusively with POGO 20 packs. A Pin Code for seven (7) songs shall be distributed exclusively with POGO 30 packs. Designated Sponsor Products sold by Sponsor with the Promotion offer may not be sold at a higher list price than the same (or substantially similar) product(s) that do not contain the Promotion offer. Pin Codes themselves may not be retailed in any way.
1.PROMOTION OFFER:
2.DESIGNATED SPONSOR PRODUCTS:
1
Pin codes will only be distributed in the Designated Sponsor Products during the Promotion Period (defined below). The total number of Pin Codes to be distributed as prizes in the Promotion shall not exceed: (i) 277,760 Pin Codes containing three (3) music downloads per Pin Code ; (ii) 130,300 Pin Codes containing five (5) music downloads per Pin Code; and (iii) 27,900 Pin Codes containing seven (7) music downloads per Pin Code. No Designated Sponsor Product shall contain more than 1 Pin Code per pack. The distribution limits stated above are the maximum number of Pin Codes that may be distributed in the Promotion. No 3- song, 5-song, or 7-song Pin Codes may be subdivided, duplicated or distributed in combination with one another. Charity Tunes agrees to generate the unique Pin Codes for the Promotion. The parties therefore understand and acknowledge the critical need to maintain in absolute secrecy the Pin Codes generated for the Promotion such that they are only disclosed to the appropriate recipient via the authorized distribution method described herein. If the Pin Codes are made available to the public by Sponsor or by any of its employees, officers, directors, consultants, agents, representatives or advisors, except in the manner provided for herein, all parties agree that Pin Code security will be deemed compromised, and Charity Tunes may terminate all subsequent Pin Code redemptions. Sponsor agrees that it will not increase the list price to its customers of Designated Sponsor Products that form part of this promotion as compared to its otherwise identical products that do not form part of the promotion.
The offer shall be communicated to potential consumers only via in-store on-pack advertising, and retailer flyer advertising. Any communication of offer, including but not limited to Sponsor's rules for the Promotion, must indicate that the offer is only available while supplies last.
A consumer who receives a Pin Code for a designated number of music downloads in accordance with paragraph 3 above will be directed to visit the custom interactive landing page in order to redeem his/her free music downloads. Consumer will have to enter the Pin Code in order to complete the transaction. Consumer will be required to enter the Pin Code exactly as it appears in the email and follow the instructions on the web site to download the selected music download. In no case may any Pin Code be redeemed later than March 31, 2010. To assist as required with the redemption process, consumers shall have access to Charity Tunes customer support by emailing at support@charitytunes.com.
Sponsor shall received 435,960 unique Pin Codes for this Promotion and Sponsor is responsible for maintaining a record of all Pin Codes distributed or withheld, such record being subject to the confidentiality terms set forth above.
Designated Sponsor Products with Pin Codes may be distributed from approximately October 1, 2009 to approximately December 31, 2009 (the "Promotion Period"). Eligible Pin Codes may be entered on the www.charitytunes.com website and corresponding music downloaded from October 1, 2009 to March 31, 2010. Pin Codes entered for redemption after 11:59:59 pm PT on March 31, 2010 may be rejected as ineligible. The contents of this section are to be reflected in the Sponsor's rules for the Promotion.
The Charity Tunes system used for redemption of downloads will ensure that (i) downloads are obtained under the Promotion only by way of redemption of eligible Pin Codes and only up to the maximum number of music downloads per Pin Code set out at paragraph 3 above, (ii) otherwise eligible Pin Codes are invalidated once they have been used to download their respective per Pin Code maximum, and (iii) the total maximum download limits described herein are observed.
3.DISTRIBUTION:
4.COMMUNICATION OF OFFER:
5.PROMOTION MECHANIC:
6.GENERATION / PRINTING OF CODES:
7.PROMOTION PERIOD:
8.SECURITY & VERIFICATION:
2
The Pin Codes that will be distributed to consumers of the Designated Sponsor Products under the Promotion will be set with parental controls and will not allow any user download content that has been designated by Charity Tunes music providers as containing explicit content.
Upon execution of this Agreement by both parties, Charity Tunes will invoice Sponsor for 435,960 unique codes consisting of a maximum of 277,760 Pin Codes containing three (3) music downloads per Pin Code ; (ii) 130,300 Pin Codes containing five (5) music downloads per Pin Code; and (iii) 27,900 Pin Codes containing seven (7) music downloads per Pin Code, for a total cost of $117,605.60 CDN (plus applicable taxes) (collectively the "Fee"), which Fee is calculated at the rate of $0.07 CND (plus applicable taxes) per potential download. The Fee shall be payable to Charity Tunes in two equal installments of $58,802.80 (plus applicable taxes) due to Charity Tunes on October 1, 2009 and November 1, 2009, respectively payable upon receipt of invoice.
In consideration of the fees paid by Sponsor as set out herein, Charity Tunes agrees that during the period beginning October 1, 2009 and ending March 31, 2010, Charity Tunes shall not enable another program sponsorship for all competitive products/product categories distributed/sold within the total Canadian consumer/retail/wholesale market place, inclusive of: - Total Frozen Handhelds - Total Corporation General Mills Handhelds - Total Pizza Pops Handhelds / total Pillsbury Mini Pizzas - Total Corporation McCain Foods Handhelds - Total Pizza Pockets / total McCain Mini Pizzas - Total Corporation Heinz Handhelds - Total Heinz Hot bites (Bagel Bites and Taco Bites) / total Anchor Poppers - Total Corporation Schneider Foods Handhelds - Total Hot Stuffs / total Lean Stuffs - Total Resers Burritos - Total Corp les Plats du Chef Handhelds - Total Hinsdale Farms Corndogs
9.EXPLICIT CONTENT:
10.FEE:
11.WARRANTY AND INDEMNITY:
11.1Warranty. Charity Tunes warrants that, subject only to any limitation or condition specified in this Agreement, it will provide immediately to any consumer entitled to a music download in connection with a Pin Code the music download selected by that consumer.
11.2Obligations upon any breach. If for any reason Charity Tunes fails to provide a music download to a consumer in accordance with clause 11.1, thereby breaching its warranty thereunder, it shall: (i) forthwith remedy that failure by providing the requested download to that consumer as soon as possible; (ii) forthwith provide notice to Sponsor of the failure to immediately provide the download, including the date, time and other details of the failure, and of the steps being taken forthwith to remedy the failure; and (iii) once the failure has been remedied by Charity Tunes, forthwith provide Sponsor with notice of same.
11.3Indemnity. Furthermore, Charity Tunes will indemnify, save and hold harmless Sponsor, its shareholders, officers, agents and affiliated companies from and against any and all claims, investigations, lawsuits, losses, damages, costs, payments, charges, expenses and attorneys fees, including any amount paid to settle an action or to satisfy a judgment by or for the benefit of any person, that they, or any of them, may at any time incur as a result of any breach of this Agreement by Charity Tunes.
12.EXCLUSIVITY:
3
13.GENERAL:
13.1Relationship between the Parties. Nothing in this Agreement shall be construed as creating any relationship (whether by way of employer/employee, agency, joint venture, association, or partnership). It is expressly understood that the relationship between the parties shall be that of independent contractors, whether for the purposes of the Income Tax Act (Canada), provincial taxation legislation or otherwise.
13.2Time. Time is of the essence of this Agreement.
13.3Presumption. This Agreement or any section thereof shall not be construed against any party due to the fact that said Agreement or any section thereof was drafted by said party.
13.4Titles and Captions. All article, section and paragraph titles or captions contained in this Agreement are for convenience only and shall not be deemed part of the context nor affect the interpretation of this Agreement.
13.5Further Action. The parties hereto shall execute and deliver all documents, provide all information and take or forbear from all such action as may be necessary or appropriate to achieve the purposes of this Agreement.
13.6Good Faith, Cooperation and Due Diligence. The parties hereto covenant, warrant and represent to each other good faith, complete cooperation, due diligence and honesty in fact in the performance of all obligations of the parties pursuant to this Agreement. All promises and covenants are mutual and dependent.
13.7Savings Clause. If any provision of this Agreement, or the application of such provision to any person or circumstance, shall be held invalid, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby.
13.8Assignment. This Agreement may not be assigned by either party hereto without the written consent of the other but shall be binding upon the successors of the parties.
13.9Notices. All notices required or permitted to be given under this Agreement shall be given in writing and shall be delivered, either personally or by express delivery service, to the party to be notified. Notice to each party shall be deemed to have been duly given upon delivery, personally or by courier, addressed to the attention of the officer at the address set forth heretofore, or to such other officer or addresses as either party may designate, upon at least ten days written notice, to the other party.
13.10Entire agreement. This Agreement contains the entire understanding and agreement among the parties. There are no other agreements, conditions or representations, oral or written, express or implied, with regard thereto. This Agreement may be amended only in writing signed by all parties.
13.11Waiver. A delay or failure by any party to exercise a right under this Agreement, or a partial or single exercise of that right, shall not constitute a waiver of that or any other right.
4
IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement:
5
13.12Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. In the event that the document is signed by one party and faxed to another the parties agree that a faxed signature shall be binding upon the parties to this Agreement as though the signature was an original.
13.13Successors. The provisions of this Agreement shall be binding upon all parties, their successors and permitted assigns.
13.14Counsel. The parties expressly acknowledge that each has been advised to seek separate counsel for advice in this matter and has been given a reasonable opportunity to do so.
13.15Law and Jurisdiction. This Agreement shall be governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein. The parties hereby attorn to the exclusive jurisdiction of the provincial and federal courts located in the city of Toronto, Ontario for all matters arising from this Agreement.
Signed in agreement: /s/ Marko Bukovec Marko Bukovec Title: Marketing Director ConAgra Foods Canada Inc. Date:June 25, 2009
Signed in agreement: /s/ Robin Ram Robin Ram President Charity Tunes, Inc. Date: June 29, 2009 | Highlight the parts (if any) of this contract related to "Insurance" that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Termination For Convenience" that should be reviewed by a lawyer. Details: Can a party terminate this contract without cause (solely by giving a notice and allowing a waiting period to expire)?
Context: Exhibit 10.1
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS EXHIBIT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
SERVICES OUTSOURCING AGREEMENT
Between
CCA INDUSTRIES, INC. ("Company")
And
EMERSON HEALTHCARE, LLC ("Contractor")
DATED AS OF January 20, 2014
CONFIDENTIAL TREATMENT REQUESTED
This Services Outsourcing Agreement (this "Agreement") is made as of January 20, 2014 (Date), between CCA Industries, Inc. ("Company"), and Emerson HealthCare, LLC, a Pennsylvania limited liability company ("Contractor").
RECITALS
WHEREAS, the Company will own, develop, manufacture or have manufactured, market and sell the products set forth on Exhibit A attached hereto, as the same may be amended from time to time in accordance with the terms hereof (the "Products"), and desires to outsource certain logistical and administrative services with respect to the Products; and
WHEREAS, the Company desires to engage Contractor to provide certain logistical and administrative services with respect to the Products and Contractor is willing to provide such services in connection therewith, on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Contractor agree as follows:
ARTICLE I
GENERAL TERMS
1.01 Certain Defined Terms. For the purposes of this Agreement, the following capitalized terms shall have the meanings set forth below.
(a) "Accounts Receivable" shall mean all accounts receivable, notes receivable and other indebtedness due and owed by any Customer and arising or held in connection with the sale of any of the Products.
(b) "Agreement" shall mean this Agreement, including all Exhibits attached hereto, as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof.
(c) "Claim" shall have the meaning set forth in Section 7.01.
(d) "Company" shall have the meaning set forth in the Preamble to this Agreement.
(e) "Confidential Information" shall have the meaning set forth in Section 5.04.
(f) "Contractor" shall have the meaning set forth in the Preamble to this Agreement.
(g) "Customer" means any current or prospective customer of the Company with respect to the Products.
(h) "Disclosing Party" shall have the meaning set forth in Section 5.04.
1
CONFIDENTIAL TREATMENT REQUESTED
(i) "Effective Date" shall have the meaning set forth in Section 2.01.
(j) "Files and Work Papers" shall have the meaning set forth in Section 5.05.
(k) "Force Majeure Event" shall have the meaning set forth in Section 8.03.
(l) "Governmental Authority' means any supranational, national, federal, provincial, state or local judicial, legislative, executive or regulatory authority, body or instrumentality.
(m) "Gross Invoiced Sales" means the gross selling price (before the application of any non-cash discounts, rebates, credits, allowances or similar deductions or adjustments) less any cash discounts, of all Products that are invoiced to and paid by Customers.
(n) "Intellectual Property" means all intellectual property rights, including all rights in patents, patent applications, formulae, trademarks, trademark applications, trade names, confidential information, trade secrets, inventions, copyright, industrial designs and know-how.
(o) "Notice Period" shall mean the period between the termination date of this Agreement and the date that is six (6) months after the date on which the Company provides Contractor with written notice of its election to terminate this Agreement.
(p) "OHL" means Ozbum-Hessey Logistics, LLC and its Affiliates.
(q) "Person" means an individual, a limited liability company, a joint venture, a corporation, a partnership, an association, a trust, a division or an operating group of any of the foregoing or any other entity or organization.
(r) "Products" shall have the meaning set forth in the Recitals to this Agreement.
(s) "Receiving Party" shall have the meaning set forth in Section 5.04.
(t) "Sales Representation Agreement" means the sales representation agreement, dated as of the date hereof, between Company and Contractor.
(u) "Service Fees" shall have the meaning set forth in Section 4.01.
(v) "Services" means any of the services to be provided by or on behalf of Contractor to the Company under this Agreement and set forth on Exhibit B.
(w) "Term" shall have the meaning set forth in Section 2.01.
(x) "Termination Fee" shall mean an amount equal to the average Service Fees per day over the 180 day period immediately preceding the date written notice of termination is provided pursuant to Section 8.01(d) and (e) multiplied by number of days by which the Notice Period will be less than 180.
(y) "Territory" means the United States, excluding its territories and possessions.
2
CONFIDENTIAL TREATMENT REQUESTED
1.02 Interpretation. The words "hereof," "herein," "hereto" and "hereunder" and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The terms defined in the singular shall have a comparable meaning when used in the plural and vice versa. The term "including" shall mean "including, without limitation." When a reference is made in this Agreement to an Article, a Section or an Exhibit, such reference shall be to an Article or a Section of, or an Exhibit to, this Agreement unless otherwise indicated.
ARTICLE I1
TERM: EFFECTIVE DATE
2.01 Term. This agreement shall commence on January 20, 2014 (the "Effective Date") and shall continue in effect for six (6) months (the "Initial Term"). This agreement shall automatically renew for successive six (6) month periods unless written notice is provided of either party's intent not to renew at least six (6) months before the end of the then-current term.
2.02 Effective Date. This Agreement shall have no force or effect unless and until the Effective Date. If the Effective Date does not occur, then this Agreement shall be void ab initio and shall have no force or effect.
ARTICLE III
OBLIGATIONS OF CONTRACTOR
3.01 Contractor Services. Contractor shall perform during the Term of this Agreement the Services set forth on Exhibit B in respect of the Products in the Territory.
3.02 Meetings. Contractor shall meet with the Company on at least a monthly basis, or more often to the extent reasonably requested by the Company, to review historical sales results by Product SKU, forward-looking sales forecasts by Product SKU, current inventories of the Products on hand, production scheduled and to be scheduled of the Products, and any other matters as the parties shall determine. Such meetings shall take place at the offices of the Company (or, at the election of the Company, by video or telephone conference) no later than the fifteenth (15th) day of each calendar month during the Term of this Agreement or at such other time as the parties shall mutually agree.
3.03 Access. From time to time during the Term of this Agreement, upon reasonable advance notice, Contractor shall permit the Company and its agents, representatives, auditors and designees to visit, inspect and have full access, during normal business hours, to properties, assets, books, records, agreements, documents, data, files and personnel of Contractor.
3.04 Ownership of Accounts Receivable & Inventory. Contractor acknowledges and agrees that it is acting solely as a collection agent on behalf of the Company with respect to all Accounts
3
CONFIDENTIAL TREATMENT REQUESTED
Receivable collected from Customers, and such Accounts Receivable and the proceeds therefrom are and shall remain at all times property of the Company. Contractor further acknowledges and agrees that it has no ownership interest whatsoever in any of the Company's Inventory.
ARTICLE IV
PAYMENT
4.01 Service Fees. In consideration of providing the Services set forth in Exhibit B, the Company agrees to pay to Contractor [ ** ] percent ([ *∗ ]%]) of Company's Gross Invoiced Sales (the "Service Fees"). Company agrees to have Fesnak & Associates, LLP pay the Service Fees directly to Contractor. Service Fees shall be paid to Contractor within five (5) days after the end of each month.
4.02 Remittance. Contractor shall deposit into bank accounts designated by the Company an amount equal to the following: all amounts received from any Customer that are related to Accounts Receivable, less each of the following that is applicable to any such Accounts Receivable (and has not already been applied to reduce any Accounts Receivable): (i) Service Fees, (ii) commissions pursuant to the Sales Representation Agreement, (iii) returns, (iv) quantity and cash discounts, (v) trade allowances or markdowns granted on account of unsalable or discontinued Products, (vi) all sales or use taxes, tariffs, duties or similar charges of any Governmental Authority paid by or for the benefit of the Company, (vii) freight, warehousing (storage and labor) and other charges associated with the distribution of the Products using Contractor's warehouse, logistics terminal and shipping facility (see Exhibit "C"), (viii) the Company's pro rata portion of product liability insurance (approximately $800 per million dollars of sales) purchased by the Contractor in connection with performance of the Services, and (ix) any other deductions, rebates, credits, allowances or adjustments, in each case, which has been specifically identified by such Customer as being applicable to any such Accounts Receivable. Contractor shall use its best efforts to deposit the foregoing amounts within five (5) business days, following the receipt thereof.
4.03 Retention of Monies. During the Term of this agreement, and for a period of twenty four (24)months after Termination (the "Withholding Period"), Contractor may retain monies (collections in Accounts Receivable) against any reasonable anticipated deductions for product recalls, unsalables, rebates, allowances or any audits or other adjustments it deems necessary. The retention of monies shall only be to the extent that the reasonable anticipated deductions exceed the anticipated accounts receivables. At the end of the Withholding Period, Contractor shall remit to the Company the retained monies less any deductions charged by Customers against Company's Products. After the Withholding Period, Company will remain liable to Contractor for any additional audits, deductions, rebates, credits, allowances or other adjustments taken by the Customers against the Company's Products.
4
CONFIDENTIAL TREATMENT REQUESTED
4.04 Expenses. Other than as specifically provided herein, each party shall be responsible for its own expenses incurred in connection with the performance of its obligations under this Agreement; provided, that the Company shall reimburse Contractor for reasonable documented out-of-pocket travel expenses associated with any meeting specifically requested by the Company and not otherwise contemplated by this Agreement.
ARTICLE V
ADDITIONAL AGREEMENTS
5.01 New Products. The Company may amend Exhibit A to add new products to the scope of this Agreement, including line extensions of the then-existing Products and new brands acquired by the Company that are sold into the same classes of trade as the then-existing Products.
5.02 Intellectual Property. All rights to either party's Intellectual Property, including all rights in patents, patent applications, formulae, trademarks, trademark applications, trade names, confidential information, trade secrets, inventions, copyright, industrial designs and know-how, ("Intellectual Property") shall remain that party's absolute property during and after the Term of this Agreement. The Products and any Intellectual Property owned by the Company in connection therewith shall be the absolute property of the Company during and after the Term of this Agreement. Neither party shall apply for registration of any trademarks, trade names, or brand names of the other party and each party hereby renounces all rights that it may acquire to such trademarks, trade names or brand names according to law or customs because of this Agreement or because of its use of such trademarks, trade names, or brand names under this Agreement.
5.03 Grant of Sublicense. Solely to the extent necessary to enable Contractor to provide the Services in accordance with the terms herein, the Company hereby grants Contractor a royalty-free, non-exclusive sublicense, without the right to grant further sublicenses, under any and all applicable trademarks and other Intellectual Property owned or controlled by or licensed to the Company or any of its Affiliates to provide, during the Term of this Agreement, the Services in respect of the Products in the Territory. Nothing contained herein shall give Contractor any right to use any of the Company's Intellectual Property used in connection with the Products or trademarks or trade names that may appear on the labeling for the Products, except for providing the Services in accordance with the terms herein. Except as provided in this Section 5.03, Contractor shall not obtain any right, title or interest in any of the Company's Intellectual Property or trademark or any other trademark designation or trade name by virtue of this Agreement or Contractor's performance of its obligations hereunder.
5.04 Confidentiality. In performing its obligations under this Agreement, each party may receive information (the "Receiving Party") of a confidential and proprietary nature regarding the other party, including information about such party's intellectual property and its operations, research,
5
CONFIDENTIAL TREATMENT REQUESTED
marketing plans, strategies and customer lists (collectively, "Confidential Information"). The Receiving Party shall hold the other party's Confidential Information in strict confidence, shall not use such Confidential Information, except as permitted hereunder, and shall not disclose such Confidential Information to any third party without the prior written consent of the disclosing party (the "Disclosing Party"). Each party shall use the same degree of care to protect the Disclosing Party's Confidential Information as it uses to protect its own Confidential Information of like nature, but in no circumstances less than a commercially reasonable level of care. The Receiving Party shall ensure that its employees and agents are bound to the same obligations of confidentiality as the Receiving Party. Confidential Information shall not be deemed to include: (a) information which is known to the Receiving Party prior to the date of receipt and not obtained or derived in any manner related to this Agreement, (b) information which is or becomes part of the public domain through no fault of the Receiving Party, or (c) information which is obtained from a third party that lawfully possesses such Confidential Information and is under no obligation to keep such Confidential Information confidential. The Receiving Party may disclose Confidential Information of the Disclosing Party in response to a valid court order, law, rule, regulation or other governmental action, provided that the Disclosing Party is notified in writing prior to disclosure of such Confidential Information to permit the Disclosing Party to oppose such disclosure by appropriate legal action. Upon the termination or expiration of this Agreement or upon the earlier request of the Disclosing Party, the Receiving Party shall (i) promptly return to the Disclosing Party all Confidential Information, or (ii) upon written request by the Disclosing Party, destroy all Confidential Information and provide the Disclosing Party with written certification of such destruction. Upon the termination or expiration of this Agreement, the Receiving Party shall cease all further use of any Confidential Information, whether in tangible or intangible form.
5.05 Records Management. All paper or electronic records, files, documents, work papers and other information in any form, whether marked "confidential" or not, provided by the Company, its employees, agents or Affiliates or generated pursuant to this Agreement shall remain the exclusive property of the Company (collectively, "Files and Work Papers"). During the Term of this Agreement and for a reasonable transitional period thereafter, Contractor shall maintain adequate levels of information technology system redundancy, security and emergency back-up as the Company may reasonably require to protect the Files and Work Papers of the Company.
5.06 Vendors. Contractor shall retain Fesnak & Associates, LLP to provide accounting services in connection with Contractor's performance of the Services and shall not engage a different accountant to provide such services without the Company's prior written consent (not to be unreasonably withheld). Contractor and the Company are arranging for OHL to provide certain warehousing, shipping and other logistical services related to the Products, as mutually agreed by the parties, and Contractor shall not engage a different vendor with respect to such services without the Company's prior written consent (not to be unreasonably withheld).
6
CONFIDENTIAL TREATMENT REQUESTED
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties of Contractor. As of the date hereof, Contractor hereby represents and Warrants to the Company that the execution and delivery of this Agreement, and the performance of Contractor's obligations hereunder, do not and will not conflict with, violate or breach, or constitute a default or require any consent under, any contractual obligation or court or administrative order by which Contractor is bound.
6.02 Representations and Warranties Company. As of the date hereof, the Company hereby represents and warrants to Contractor that the execution and delivery of this Agreement, and the performance of the Company's obligations hereunder, do not and will not conflict with, violate or breach, or constitute a default or require any consent under, any contractual obligation or court or administrative order by which the Company is bound.
ARTICLE VII
INDEMNIFICATION AND INSURANCE
7.01 Indemnification by the Company. The Company hereby agrees to indemnify and hold Contractor, including its Affiliates and its and their respective officers, directors, partners, members, employees and agents, harmless from and against any and all claims, actions, suits, losses, demands, damages, costs and expenses (including reasonable attorneys' fees) of every kind, nature, or description (each, a "Claim") brought in connection with, arising out of or related to the Products or the Company's breach of its representations, warranties or covenants hereunder, except those Claims arising out of Contractor's or its Affiliates' fraud, willful misconduct, negligence or material breach of this Agreement or any other agreement with the Company.
7.02 Indemnification by Contractor. Contractor hereby agrees to indemnify and hold the Company, including its Affiliates and its and their respective officers, directors, partners, members, employees and agents, harmless from and against any and all Claims brought in connection with or arising out of or related to Contractor's or its Affiliates' fraud, willful misconduct, negligence or material breach of this Agreement.
7.03 Insurance. Company shall maintain Products Liability Insurance and in an amount satisfactory to Contractor, under which Contractor is named as an additional insured. All insurance coverages are to be placed with insurers which have a Best's rating of no less than "A." Such insurance requirements shall be maintained during the Term and shall continue for a minimum of three years following termination of this Agreement. Failure to comply with the insurance requirements shall place Company in material breach of this Agreement.
ARTICLE VIII
7
CONFIDENTIAL TREATMENT REQUESTED
TERMINATION
8.01 Termination. This Agreement shall be terminable as follows:
(a) In the event that a party hereto commits a material breach of any of the terms or conditions of this Agreement the other party may terminate this Agreement (i) if such breach may be cured, upon written notice if the breaching party fails to cure such breach within thirty (30) days after its receipt of written notice thereof, or (ii) if such breach is incapable of cure, upon written notice to the other party thereof (it being understood that any breach of Section 5.04 would be incapable of cure);
(b) Notwithstanding the provisions of Section 8.01, in the event that a party hereto fails to pay any amounts payable hereunder when due, the other party may terminate this Agreement (i) if such breach may be cured, upon written notice if the breaching party fails to cure such breach within three (3) business days after its receipt of written notice thereof; or, (ii) if such breach is incapable of cure, upon written notice to the other party thereof;
(c) In accordance with the provisions of Section 8.03; or,
(d) Either party hereto may terminate this Agreement after the Initial Period upon at least six (6) months' prior written notice to the other party thereof. The Company may terminate this Agreement in accordance with the immediately preceding sentence but with less than six (6) months' prior written notice to Contractor; provided, that in such event, the Company shall pay Contractor an amount equal to the Termination Fee.
8.02 Effect of Termination. Subject to Section 4.03, upon termination or expiration of this Agreement, other than with respect to any amounts then the subject of a good faith dispute, the Company shall pay to Contractor and Contractor shall pay to the Company all monies due in respect of the Services provided.
8.03 Force Majeure. If either party is prevented from or delayed in performing any of its obligations hereunder due to any cause which is beyond the nonperforming party's reasonable control, including, without limitation, fire, explosion, flood, or other acts of God; acts, regulations, or laws of any Governmental Authority; war or civil commotion; acts of terrorism, strike, lock-out or labor disturbances; or failure of public utilities or common carriers (a "Force Majeure Event"), such non-performing party shall not be liable for breach of this Agreement with respect to such non-performance or delay to the extent any such non-performance or delay is due to a Force Majeure Event; provided, that the non-performing party gives immediate written notice to the other party of the Force Majeure Event. If a Force Majeure Event asserted as the basis of a party's non-performance continues to prevent performance for more than one (1) month, the other party may terminate this Agreement by giving written notice to the nonperforming party before the non-performing party resumes performance. Notwithstanding anything contained in this Section 8.03,
8
CONFIDENTIAL TREATMENT REQUESTED
such non-performing party shall exercise commercially reasonable efforts to eliminate the Force Majeure Event and to resume timely performance of its affected obligations as soon as practicable.
ARTICLE IX
MISCELLANEOUS
9.01 Relationship of the Parties. The relationship of the Company and Contractor established by this Agreement is that of independent contractors, and nothing contained herein shall be construed to (a) give either party any right or authority to create or assume any obligation or incur any expense of any kind on behalf of the other without the other party's prior written approval, or (b) constitute the parties as partners, joint venturers, co-owners, employer and employee or otherwise as participants in a joint or common undertaking.
9.02 Notices. All notices and other communications shall be in writing and shall be deemed to have been duly given when: (a) delivered personally, or (b) transmitted by facsimile (with receipt confirmed), or (c) if mailed, five (5) days after being deposited in the United States mail, postage prepaid, or by certified or registered mail, return receipt requested, postage prepaid, or (d) if sent by overnight courier for delivery on the next day, the day following deposit of the notice with Federal Express or another nationally recognized overnight courier service (billed to sender), to the parties at the following addresses:
If to Contractor: Emerson HealthCare, LLC Attention: Scott Emerson 407 East Lancaster Avenue Wayne, Pennsylvania 19087 Telephone: (610) 971-9600 Facsimile: (610) 971-9616 With a copy to: Steven L. Gershman, Esq. The Navy Yard Corporate Center One Crescent Drive Suite 400 Philadelphia, PA 19112 Telephone (215) 271-6102 Facsimile: (215) 218-2039 If to the Company: CCA Industries, Inc. Attention: Chief Executive Officer 200 Murray Hill Parkway East Rutherford, NJ 07073
9
CONFIDENTIAL TREATMENT REQUESTED
Telephone (201) 935-3232 Facsimile: (201) 842-6049
With a copy to: CCA Industries, Inc. Attention: Chief Financial Officer 200 Murray Hill Parkway East Rutherford, NJ 07073 Telephone (201) 935-3232 Facsimile: (201) 842-6049 9.03 Failure to Exercise. The failure of either party to enforce at any time for any period any provision hereof shall not be construed to be a waiver of such provision or of the right of such party thereafter to enforce each such provision, nor shall any single or partial exercise of any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy. Remedies provided herein are cumulative and not exclusive of any remedies provided at law.
9.04 Assignment. This Agreement may not be assigned by either party without the prior written consent of the other party, except that, without such consent, (i) Company may make an assignment of this Agreement as collateral security in favor of its lenders, and (ii) the Company may assign this Agreement to a purchaser of all or substantially all of the assets of the Company's business related to the Products. Subject to the foregoing sentence, this Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and assigns.
9.05 No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to confer upon any Person other than the Company and Contractor, or their successors or permitted assigns, any rights or remedies under or by reason of this Agreement.
10
CONFIDENTIAL TREATMENT REQUESTED
9.06 Severability. Any term or provision of this Agreement that is deemed invalid or unenforceable in any jurisdiction shall, to the extent the economic benefits conferred by such Agreement to both parties remain substantially unimpaired, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction.
9.07 Governing Law. This Agreement shall be deemed to have been entered into in the State of New Jersey, and shall be construed and interpreted in accordance with the laws of that State applicable to agreements made and to be performed in the State of New Jersey. Any and all disputes, controversies and claims arising out of or relating to this Agreement, or with respect to the interpretation of this Agreement, or the rights or obligations of the parties and their successors and permitted assigns, whether by operation of law or otherwise, shall be settled and determined by arbitration in New Jersey pursuant to the then existing rules of the American Arbitration Association for commercial arbitration. The arbitrators shall have the power to award specific performance, rescission or injunctive relief in addition to damages or other monetary awards, but shall not have the power to modify, alter, enlarge upon or otherwise change any of the provisions or terms and conditions of this Agreement. The arbitration shall be final and binding upon the parties and judgment there on may be entered in the courts of the State of New Jersey and the United States federal courts in said State, and the parties hereby consent to the jurisdiction of such courts for such purposes. Service of any notice, process, motion or other document in connection with any arbitration proceeding, any arbitration award or any other action or proceeding, maybe by personal service or by certified or registered mail return receipt requested, addressed to the party intended at its address for the receipt of notices as herein set forth.
9.08 Headings. The headings used herein have been inserted for convenience only and shall not affect the interpretation of this Agreement.
9.09 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and together shall constitute one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that both parties need not sign the same counterpart.
9.10 Entire Agreement. NO VARIATIONS OR MODIFICATIONS OF THIS AGREEMENT SHALL BE DEEMED VALID UNLESS REDUCED TO WRITING AND SIGNED BY THE PARTIES HERETO. THIS AGREEMENT CONTAINS THE ENTIRE AGREEMENT AMONG THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ALL PRIOR AGREEMENTS AND UNDERSTANDINGS, ORAL OR WRITTEN, WITH RESPECT TO SUCH MATTERS, EXCEPT FOR ANY WRITTEN AGREEMENT OF THE PARTIES THAT EXPRESSLY PROVIDES THAT IT IS NOT SUPERSEDED BY THIS AGREEMENT. ANY PROVISION OF THIS AGREEMENT MAY BE AMENDED OR WAIVED
11
CONFIDENTIAL TREATMENT REQUESTED
IF, AND ONLY IF, SUCH AMENDMENT OR WAIVER IS IN WRITING AND SIGNED (I) IN THE CASE OF AN AMENDMENT, BY THE COMPANY AND CONTRACTOR AND (II) IN THE CASE OF A WAIVER, BY THE PARTY AGAINST WHOM THE WAIVER IS TO BE EFFECTIVE.
9.11 Survival. Sections 5.02, 5.04, 5.05 and 8.02, and Articles Article IV, Article VII and Article IX shall survive the expiration or termination of this Agreement in accordance with the respective terms thereof.
IN WITNESS WHEREOF, the parties have executed or caused this Agreement to be executed as of the date first written above.
EMERSON HEALTHCATE, LLC "Contractor"
By: /s/s Scott Emerson Scott Emerson
and
CCA INDUSTRIES, INC. "Company"
By: /s/ Richard Kornhauser Richard Kornhauser, President & CEO
12
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT A TO SERVICES OUTSOURCING AGREEMENT
List of Products:
List to be furnished by CCA
13
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT B TO SERVICES OUTSOURCING AGREEMENT
SEE-ATTACHED FLOW CHARTS
14
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT C - LOGISTIC EXPENSES
• Outbound freight costs - average out to be approximately [ ** ] cents per lb.
• Warehouse labor [ ** ] cents per case.
• There is no charge for unloading and putting away inbound product as long as product arrives on standardized configured pallets. The labor charge only occurs when the product is shipped outbound to customers/retailers.
• Storage cost of [ ** ] cents per month per case - First [ ** ] days for each case no charge - If case sits longer than [ *∗ ] days the monthly charge applies going forward.
• For International Sales the above warehouse labor and storage costs apply. There will be no Service Fee paid for international sales, but Company understands that Contractor will not be performing any services. It is assumed buyer will be paying for freight for International Sales.
15 [/INST] ```json
{<answer_start>
"answer": "Either party hereto may terminate this Agreement after the Initial Period upon at least six (6) months' prior written notice to the other party thereof."
<answer_end>
}
``` </s> | Exhibit 10.1
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS EXHIBIT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
SERVICES OUTSOURCING AGREEMENT
Between
CCA INDUSTRIES, INC. ("Company")
And
EMERSON HEALTHCARE, LLC ("Contractor")
DATED AS OF January 20, 2014
CONFIDENTIAL TREATMENT REQUESTED
This Services Outsourcing Agreement (this "Agreement") is made as of January 20, 2014 (Date), between CCA Industries, Inc. ("Company"), and Emerson HealthCare, LLC, a Pennsylvania limited liability company ("Contractor").
RECITALS
WHEREAS, the Company will own, develop, manufacture or have manufactured, market and sell the products set forth on Exhibit A attached hereto, as the same may be amended from time to time in accordance with the terms hereof (the "Products"), and desires to outsource certain logistical and administrative services with respect to the Products; and
WHEREAS, the Company desires to engage Contractor to provide certain logistical and administrative services with respect to the Products and Contractor is willing to provide such services in connection therewith, on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Contractor agree as follows:
ARTICLE I
GENERAL TERMS
1.01 Certain Defined Terms. For the purposes of this Agreement, the following capitalized terms shall have the meanings set forth below.
(a) "Accounts Receivable" shall mean all accounts receivable, notes receivable and other indebtedness due and owed by any Customer and arising or held in connection with the sale of any of the Products.
(b) "Agreement" shall mean this Agreement, including all Exhibits attached hereto, as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof.
(c) "Claim" shall have the meaning set forth in Section 7.01.
(d) "Company" shall have the meaning set forth in the Preamble to this Agreement.
(e) "Confidential Information" shall have the meaning set forth in Section 5.04.
(f) "Contractor" shall have the meaning set forth in the Preamble to this Agreement.
(g) "Customer" means any current or prospective customer of the Company with respect to the Products.
(h) "Disclosing Party" shall have the meaning set forth in Section 5.04.
1
CONFIDENTIAL TREATMENT REQUESTED
(i) "Effective Date" shall have the meaning set forth in Section 2.01.
(j) "Files and Work Papers" shall have the meaning set forth in Section 5.05.
(k) "Force Majeure Event" shall have the meaning set forth in Section 8.03.
(l) "Governmental Authority' means any supranational, national, federal, provincial, state or local judicial, legislative, executive or regulatory authority, body or instrumentality.
(m) "Gross Invoiced Sales" means the gross selling price (before the application of any non-cash discounts, rebates, credits, allowances or similar deductions or adjustments) less any cash discounts, of all Products that are invoiced to and paid by Customers.
(n) "Intellectual Property" means all intellectual property rights, including all rights in patents, patent applications, formulae, trademarks, trademark applications, trade names, confidential information, trade secrets, inventions, copyright, industrial designs and know-how.
(o) "Notice Period" shall mean the period between the termination date of this Agreement and the date that is six (6) months after the date on which the Company provides Contractor with written notice of its election to terminate this Agreement.
(p) "OHL" means Ozbum-Hessey Logistics, LLC and its Affiliates.
(q) "Person" means an individual, a limited liability company, a joint venture, a corporation, a partnership, an association, a trust, a division or an operating group of any of the foregoing or any other entity or organization.
(r) "Products" shall have the meaning set forth in the Recitals to this Agreement.
(s) "Receiving Party" shall have the meaning set forth in Section 5.04.
(t) "Sales Representation Agreement" means the sales representation agreement, dated as of the date hereof, between Company and Contractor.
(u) "Service Fees" shall have the meaning set forth in Section 4.01.
(v) "Services" means any of the services to be provided by or on behalf of Contractor to the Company under this Agreement and set forth on Exhibit B.
(w) "Term" shall have the meaning set forth in Section 2.01.
(x) "Termination Fee" shall mean an amount equal to the average Service Fees per day over the 180 day period immediately preceding the date written notice of termination is provided pursuant to Section 8.01(d) and (e) multiplied by number of days by which the Notice Period will be less than 180.
(y) "Territory" means the United States, excluding its territories and possessions.
2
CONFIDENTIAL TREATMENT REQUESTED
1.02 Interpretation. The words "hereof," "herein," "hereto" and "hereunder" and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The terms defined in the singular shall have a comparable meaning when used in the plural and vice versa. The term "including" shall mean "including, without limitation." When a reference is made in this Agreement to an Article, a Section or an Exhibit, such reference shall be to an Article or a Section of, or an Exhibit to, this Agreement unless otherwise indicated.
ARTICLE I1
TERM: EFFECTIVE DATE
2.01 Term. This agreement shall commence on January 20, 2014 (the "Effective Date") and shall continue in effect for six (6) months (the "Initial Term"). This agreement shall automatically renew for successive six (6) month periods unless written notice is provided of either party's intent not to renew at least six (6) months before the end of the then-current term.
2.02 Effective Date. This Agreement shall have no force or effect unless and until the Effective Date. If the Effective Date does not occur, then this Agreement shall be void ab initio and shall have no force or effect.
ARTICLE III
OBLIGATIONS OF CONTRACTOR
3.01 Contractor Services. Contractor shall perform during the Term of this Agreement the Services set forth on Exhibit B in respect of the Products in the Territory.
3.02 Meetings. Contractor shall meet with the Company on at least a monthly basis, or more often to the extent reasonably requested by the Company, to review historical sales results by Product SKU, forward-looking sales forecasts by Product SKU, current inventories of the Products on hand, production scheduled and to be scheduled of the Products, and any other matters as the parties shall determine. Such meetings shall take place at the offices of the Company (or, at the election of the Company, by video or telephone conference) no later than the fifteenth (15th) day of each calendar month during the Term of this Agreement or at such other time as the parties shall mutually agree.
3.03 Access. From time to time during the Term of this Agreement, upon reasonable advance notice, Contractor shall permit the Company and its agents, representatives, auditors and designees to visit, inspect and have full access, during normal business hours, to properties, assets, books, records, agreements, documents, data, files and personnel of Contractor.
3.04 Ownership of Accounts Receivable & Inventory. Contractor acknowledges and agrees that it is acting solely as a collection agent on behalf of the Company with respect to all Accounts
3
CONFIDENTIAL TREATMENT REQUESTED
Receivable collected from Customers, and such Accounts Receivable and the proceeds therefrom are and shall remain at all times property of the Company. Contractor further acknowledges and agrees that it has no ownership interest whatsoever in any of the Company's Inventory.
ARTICLE IV
PAYMENT
4.01 Service Fees. In consideration of providing the Services set forth in Exhibit B, the Company agrees to pay to Contractor [ ** ] percent ([ *∗ ]%]) of Company's Gross Invoiced Sales (the "Service Fees"). Company agrees to have Fesnak & Associates, LLP pay the Service Fees directly to Contractor. Service Fees shall be paid to Contractor within five (5) days after the end of each month.
4.02 Remittance. Contractor shall deposit into bank accounts designated by the Company an amount equal to the following: all amounts received from any Customer that are related to Accounts Receivable, less each of the following that is applicable to any such Accounts Receivable (and has not already been applied to reduce any Accounts Receivable): (i) Service Fees, (ii) commissions pursuant to the Sales Representation Agreement, (iii) returns, (iv) quantity and cash discounts, (v) trade allowances or markdowns granted on account of unsalable or discontinued Products, (vi) all sales or use taxes, tariffs, duties or similar charges of any Governmental Authority paid by or for the benefit of the Company, (vii) freight, warehousing (storage and labor) and other charges associated with the distribution of the Products using Contractor's warehouse, logistics terminal and shipping facility (see Exhibit "C"), (viii) the Company's pro rata portion of product liability insurance (approximately $800 per million dollars of sales) purchased by the Contractor in connection with performance of the Services, and (ix) any other deductions, rebates, credits, allowances or adjustments, in each case, which has been specifically identified by such Customer as being applicable to any such Accounts Receivable. Contractor shall use its best efforts to deposit the foregoing amounts within five (5) business days, following the receipt thereof.
4.03 Retention of Monies. During the Term of this agreement, and for a period of twenty four (24)months after Termination (the "Withholding Period"), Contractor may retain monies (collections in Accounts Receivable) against any reasonable anticipated deductions for product recalls, unsalables, rebates, allowances or any audits or other adjustments it deems necessary. The retention of monies shall only be to the extent that the reasonable anticipated deductions exceed the anticipated accounts receivables. At the end of the Withholding Period, Contractor shall remit to the Company the retained monies less any deductions charged by Customers against Company's Products. After the Withholding Period, Company will remain liable to Contractor for any additional audits, deductions, rebates, credits, allowances or other adjustments taken by the Customers against the Company's Products.
4
CONFIDENTIAL TREATMENT REQUESTED
4.04 Expenses. Other than as specifically provided herein, each party shall be responsible for its own expenses incurred in connection with the performance of its obligations under this Agreement; provided, that the Company shall reimburse Contractor for reasonable documented out-of-pocket travel expenses associated with any meeting specifically requested by the Company and not otherwise contemplated by this Agreement.
ARTICLE V
ADDITIONAL AGREEMENTS
5.01 New Products. The Company may amend Exhibit A to add new products to the scope of this Agreement, including line extensions of the then-existing Products and new brands acquired by the Company that are sold into the same classes of trade as the then-existing Products.
5.02 Intellectual Property. All rights to either party's Intellectual Property, including all rights in patents, patent applications, formulae, trademarks, trademark applications, trade names, confidential information, trade secrets, inventions, copyright, industrial designs and know-how, ("Intellectual Property") shall remain that party's absolute property during and after the Term of this Agreement. The Products and any Intellectual Property owned by the Company in connection therewith shall be the absolute property of the Company during and after the Term of this Agreement. Neither party shall apply for registration of any trademarks, trade names, or brand names of the other party and each party hereby renounces all rights that it may acquire to such trademarks, trade names or brand names according to law or customs because of this Agreement or because of its use of such trademarks, trade names, or brand names under this Agreement.
5.03 Grant of Sublicense. Solely to the extent necessary to enable Contractor to provide the Services in accordance with the terms herein, the Company hereby grants Contractor a royalty-free, non-exclusive sublicense, without the right to grant further sublicenses, under any and all applicable trademarks and other Intellectual Property owned or controlled by or licensed to the Company or any of its Affiliates to provide, during the Term of this Agreement, the Services in respect of the Products in the Territory. Nothing contained herein shall give Contractor any right to use any of the Company's Intellectual Property used in connection with the Products or trademarks or trade names that may appear on the labeling for the Products, except for providing the Services in accordance with the terms herein. Except as provided in this Section 5.03, Contractor shall not obtain any right, title or interest in any of the Company's Intellectual Property or trademark or any other trademark designation or trade name by virtue of this Agreement or Contractor's performance of its obligations hereunder.
5.04 Confidentiality. In performing its obligations under this Agreement, each party may receive information (the "Receiving Party") of a confidential and proprietary nature regarding the other party, including information about such party's intellectual property and its operations, research,
5
CONFIDENTIAL TREATMENT REQUESTED
marketing plans, strategies and customer lists (collectively, "Confidential Information"). The Receiving Party shall hold the other party's Confidential Information in strict confidence, shall not use such Confidential Information, except as permitted hereunder, and shall not disclose such Confidential Information to any third party without the prior written consent of the disclosing party (the "Disclosing Party"). Each party shall use the same degree of care to protect the Disclosing Party's Confidential Information as it uses to protect its own Confidential Information of like nature, but in no circumstances less than a commercially reasonable level of care. The Receiving Party shall ensure that its employees and agents are bound to the same obligations of confidentiality as the Receiving Party. Confidential Information shall not be deemed to include: (a) information which is known to the Receiving Party prior to the date of receipt and not obtained or derived in any manner related to this Agreement, (b) information which is or becomes part of the public domain through no fault of the Receiving Party, or (c) information which is obtained from a third party that lawfully possesses such Confidential Information and is under no obligation to keep such Confidential Information confidential. The Receiving Party may disclose Confidential Information of the Disclosing Party in response to a valid court order, law, rule, regulation or other governmental action, provided that the Disclosing Party is notified in writing prior to disclosure of such Confidential Information to permit the Disclosing Party to oppose such disclosure by appropriate legal action. Upon the termination or expiration of this Agreement or upon the earlier request of the Disclosing Party, the Receiving Party shall (i) promptly return to the Disclosing Party all Confidential Information, or (ii) upon written request by the Disclosing Party, destroy all Confidential Information and provide the Disclosing Party with written certification of such destruction. Upon the termination or expiration of this Agreement, the Receiving Party shall cease all further use of any Confidential Information, whether in tangible or intangible form.
5.05 Records Management. All paper or electronic records, files, documents, work papers and other information in any form, whether marked "confidential" or not, provided by the Company, its employees, agents or Affiliates or generated pursuant to this Agreement shall remain the exclusive property of the Company (collectively, "Files and Work Papers"). During the Term of this Agreement and for a reasonable transitional period thereafter, Contractor shall maintain adequate levels of information technology system redundancy, security and emergency back-up as the Company may reasonably require to protect the Files and Work Papers of the Company.
5.06 Vendors. Contractor shall retain Fesnak & Associates, LLP to provide accounting services in connection with Contractor's performance of the Services and shall not engage a different accountant to provide such services without the Company's prior written consent (not to be unreasonably withheld). Contractor and the Company are arranging for OHL to provide certain warehousing, shipping and other logistical services related to the Products, as mutually agreed by the parties, and Contractor shall not engage a different vendor with respect to such services without the Company's prior written consent (not to be unreasonably withheld).
6
CONFIDENTIAL TREATMENT REQUESTED
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties of Contractor. As of the date hereof, Contractor hereby represents and Warrants to the Company that the execution and delivery of this Agreement, and the performance of Contractor's obligations hereunder, do not and will not conflict with, violate or breach, or constitute a default or require any consent under, any contractual obligation or court or administrative order by which Contractor is bound.
6.02 Representations and Warranties Company. As of the date hereof, the Company hereby represents and warrants to Contractor that the execution and delivery of this Agreement, and the performance of the Company's obligations hereunder, do not and will not conflict with, violate or breach, or constitute a default or require any consent under, any contractual obligation or court or administrative order by which the Company is bound.
ARTICLE VII
INDEMNIFICATION AND INSURANCE
7.01 Indemnification by the Company. The Company hereby agrees to indemnify and hold Contractor, including its Affiliates and its and their respective officers, directors, partners, members, employees and agents, harmless from and against any and all claims, actions, suits, losses, demands, damages, costs and expenses (including reasonable attorneys' fees) of every kind, nature, or description (each, a "Claim") brought in connection with, arising out of or related to the Products or the Company's breach of its representations, warranties or covenants hereunder, except those Claims arising out of Contractor's or its Affiliates' fraud, willful misconduct, negligence or material breach of this Agreement or any other agreement with the Company.
7.02 Indemnification by Contractor. Contractor hereby agrees to indemnify and hold the Company, including its Affiliates and its and their respective officers, directors, partners, members, employees and agents, harmless from and against any and all Claims brought in connection with or arising out of or related to Contractor's or its Affiliates' fraud, willful misconduct, negligence or material breach of this Agreement.
7.03 Insurance. Company shall maintain Products Liability Insurance and in an amount satisfactory to Contractor, under which Contractor is named as an additional insured. All insurance coverages are to be placed with insurers which have a Best's rating of no less than "A." Such insurance requirements shall be maintained during the Term and shall continue for a minimum of three years following termination of this Agreement. Failure to comply with the insurance requirements shall place Company in material breach of this Agreement.
ARTICLE VIII
7
CONFIDENTIAL TREATMENT REQUESTED
TERMINATION
8.01 Termination. This Agreement shall be terminable as follows:
(a) In the event that a party hereto commits a material breach of any of the terms or conditions of this Agreement the other party may terminate this Agreement (i) if such breach may be cured, upon written notice if the breaching party fails to cure such breach within thirty (30) days after its receipt of written notice thereof, or (ii) if such breach is incapable of cure, upon written notice to the other party thereof (it being understood that any breach of Section 5.04 would be incapable of cure);
(b) Notwithstanding the provisions of Section 8.01, in the event that a party hereto fails to pay any amounts payable hereunder when due, the other party may terminate this Agreement (i) if such breach may be cured, upon written notice if the breaching party fails to cure such breach within three (3) business days after its receipt of written notice thereof; or, (ii) if such breach is incapable of cure, upon written notice to the other party thereof;
(c) In accordance with the provisions of Section 8.03; or,
(d) Either party hereto may terminate this Agreement after the Initial Period upon at least six (6) months' prior written notice to the other party thereof. The Company may terminate this Agreement in accordance with the immediately preceding sentence but with less than six (6) months' prior written notice to Contractor; provided, that in such event, the Company shall pay Contractor an amount equal to the Termination Fee.
8.02 Effect of Termination. Subject to Section 4.03, upon termination or expiration of this Agreement, other than with respect to any amounts then the subject of a good faith dispute, the Company shall pay to Contractor and Contractor shall pay to the Company all monies due in respect of the Services provided.
8.03 Force Majeure. If either party is prevented from or delayed in performing any of its obligations hereunder due to any cause which is beyond the nonperforming party's reasonable control, including, without limitation, fire, explosion, flood, or other acts of God; acts, regulations, or laws of any Governmental Authority; war or civil commotion; acts of terrorism, strike, lock-out or labor disturbances; or failure of public utilities or common carriers (a "Force Majeure Event"), such non-performing party shall not be liable for breach of this Agreement with respect to such non-performance or delay to the extent any such non-performance or delay is due to a Force Majeure Event; provided, that the non-performing party gives immediate written notice to the other party of the Force Majeure Event. If a Force Majeure Event asserted as the basis of a party's non-performance continues to prevent performance for more than one (1) month, the other party may terminate this Agreement by giving written notice to the nonperforming party before the non-performing party resumes performance. Notwithstanding anything contained in this Section 8.03,
8
CONFIDENTIAL TREATMENT REQUESTED
such non-performing party shall exercise commercially reasonable efforts to eliminate the Force Majeure Event and to resume timely performance of its affected obligations as soon as practicable.
ARTICLE IX
MISCELLANEOUS
9.01 Relationship of the Parties. The relationship of the Company and Contractor established by this Agreement is that of independent contractors, and nothing contained herein shall be construed to (a) give either party any right or authority to create or assume any obligation or incur any expense of any kind on behalf of the other without the other party's prior written approval, or (b) constitute the parties as partners, joint venturers, co-owners, employer and employee or otherwise as participants in a joint or common undertaking.
9.02 Notices. All notices and other communications shall be in writing and shall be deemed to have been duly given when: (a) delivered personally, or (b) transmitted by facsimile (with receipt confirmed), or (c) if mailed, five (5) days after being deposited in the United States mail, postage prepaid, or by certified or registered mail, return receipt requested, postage prepaid, or (d) if sent by overnight courier for delivery on the next day, the day following deposit of the notice with Federal Express or another nationally recognized overnight courier service (billed to sender), to the parties at the following addresses:
If to Contractor: Emerson HealthCare, LLC Attention: Scott Emerson 407 East Lancaster Avenue Wayne, Pennsylvania 19087 Telephone: (610) 971-9600 Facsimile: (610) 971-9616 With a copy to: Steven L. Gershman, Esq. The Navy Yard Corporate Center One Crescent Drive Suite 400 Philadelphia, PA 19112 Telephone (215) 271-6102 Facsimile: (215) 218-2039 If to the Company: CCA Industries, Inc. Attention: Chief Executive Officer 200 Murray Hill Parkway East Rutherford, NJ 07073
9
CONFIDENTIAL TREATMENT REQUESTED
Telephone (201) 935-3232 Facsimile: (201) 842-6049
With a copy to: CCA Industries, Inc. Attention: Chief Financial Officer 200 Murray Hill Parkway East Rutherford, NJ 07073 Telephone (201) 935-3232 Facsimile: (201) 842-6049 9.03 Failure to Exercise. The failure of either party to enforce at any time for any period any provision hereof shall not be construed to be a waiver of such provision or of the right of such party thereafter to enforce each such provision, nor shall any single or partial exercise of any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy. Remedies provided herein are cumulative and not exclusive of any remedies provided at law.
9.04 Assignment. This Agreement may not be assigned by either party without the prior written consent of the other party, except that, without such consent, (i) Company may make an assignment of this Agreement as collateral security in favor of its lenders, and (ii) the Company may assign this Agreement to a purchaser of all or substantially all of the assets of the Company's business related to the Products. Subject to the foregoing sentence, this Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and assigns.
9.05 No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to confer upon any Person other than the Company and Contractor, or their successors or permitted assigns, any rights or remedies under or by reason of this Agreement.
10
CONFIDENTIAL TREATMENT REQUESTED
9.06 Severability. Any term or provision of this Agreement that is deemed invalid or unenforceable in any jurisdiction shall, to the extent the economic benefits conferred by such Agreement to both parties remain substantially unimpaired, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction.
9.07 Governing Law. This Agreement shall be deemed to have been entered into in the State of New Jersey, and shall be construed and interpreted in accordance with the laws of that State applicable to agreements made and to be performed in the State of New Jersey. Any and all disputes, controversies and claims arising out of or relating to this Agreement, or with respect to the interpretation of this Agreement, or the rights or obligations of the parties and their successors and permitted assigns, whether by operation of law or otherwise, shall be settled and determined by arbitration in New Jersey pursuant to the then existing rules of the American Arbitration Association for commercial arbitration. The arbitrators shall have the power to award specific performance, rescission or injunctive relief in addition to damages or other monetary awards, but shall not have the power to modify, alter, enlarge upon or otherwise change any of the provisions or terms and conditions of this Agreement. The arbitration shall be final and binding upon the parties and judgment there on may be entered in the courts of the State of New Jersey and the United States federal courts in said State, and the parties hereby consent to the jurisdiction of such courts for such purposes. Service of any notice, process, motion or other document in connection with any arbitration proceeding, any arbitration award or any other action or proceeding, maybe by personal service or by certified or registered mail return receipt requested, addressed to the party intended at its address for the receipt of notices as herein set forth.
9.08 Headings. The headings used herein have been inserted for convenience only and shall not affect the interpretation of this Agreement.
9.09 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and together shall constitute one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that both parties need not sign the same counterpart.
9.10 Entire Agreement. NO VARIATIONS OR MODIFICATIONS OF THIS AGREEMENT SHALL BE DEEMED VALID UNLESS REDUCED TO WRITING AND SIGNED BY THE PARTIES HERETO. THIS AGREEMENT CONTAINS THE ENTIRE AGREEMENT AMONG THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ALL PRIOR AGREEMENTS AND UNDERSTANDINGS, ORAL OR WRITTEN, WITH RESPECT TO SUCH MATTERS, EXCEPT FOR ANY WRITTEN AGREEMENT OF THE PARTIES THAT EXPRESSLY PROVIDES THAT IT IS NOT SUPERSEDED BY THIS AGREEMENT. ANY PROVISION OF THIS AGREEMENT MAY BE AMENDED OR WAIVED
11
CONFIDENTIAL TREATMENT REQUESTED
IF, AND ONLY IF, SUCH AMENDMENT OR WAIVER IS IN WRITING AND SIGNED (I) IN THE CASE OF AN AMENDMENT, BY THE COMPANY AND CONTRACTOR AND (II) IN THE CASE OF A WAIVER, BY THE PARTY AGAINST WHOM THE WAIVER IS TO BE EFFECTIVE.
9.11 Survival. Sections 5.02, 5.04, 5.05 and 8.02, and Articles Article IV, Article VII and Article IX shall survive the expiration or termination of this Agreement in accordance with the respective terms thereof.
IN WITNESS WHEREOF, the parties have executed or caused this Agreement to be executed as of the date first written above.
EMERSON HEALTHCATE, LLC "Contractor"
By: /s/s Scott Emerson Scott Emerson
and
CCA INDUSTRIES, INC. "Company"
By: /s/ Richard Kornhauser Richard Kornhauser, President & CEO
12
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT A TO SERVICES OUTSOURCING AGREEMENT
List of Products:
List to be furnished by CCA
13
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT B TO SERVICES OUTSOURCING AGREEMENT
SEE-ATTACHED FLOW CHARTS
14
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT C - LOGISTIC EXPENSES
• Outbound freight costs - average out to be approximately [ ** ] cents per lb.
• Warehouse labor [ ** ] cents per case.
• There is no charge for unloading and putting away inbound product as long as product arrives on standardized configured pallets. The labor charge only occurs when the product is shipped outbound to customers/retailers.
• Storage cost of [ ** ] cents per month per case - First [ ** ] days for each case no charge - If case sits longer than [ *∗ ] days the monthly charge applies going forward.
• For International Sales the above warehouse labor and storage costs apply. There will be no Service Fee paid for international sales, but Company understands that Contractor will not be performing any services. It is assumed buyer will be paying for freight for International Sales.
15 | Highlight the parts (if any) of this contract related to "Termination For Convenience" that should be reviewed by a lawyer. Details: Can a party terminate this contract without cause (solely by giving a notice and allowing a waiting period to expire)? | {
"answer_start": [
21354
],
"text": [
"Either party hereto may terminate this Agreement after the Initial Period upon at least six (6) months' prior written notice to the other party thereof."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Rofr/Rofo/Rofn" that should be reviewed by a lawyer. Details: Is there a clause granting one party a right of first refusal, right of first offer or right of first negotiation to purchase, license, market, or distribute equity interest, technology, assets, products or services?
Context: EXHIBIT 10.3
TRANSPORTATION SERVICES AGREEMENT
THIS MARINE TRANSPORTATION AGREEMENT (this "Agreement") is executed this 23rd day of December, 2003, by and between Martin Operating Partnership L.P., a Delaware limited partnership ("Owner"), and Midstream Fuel Service LLC, an Alabama limited liability company ("Charterer"), in order to evidence the agreement of such parties with respect to Owner's provision of marine transportation services with respect to #2 fuel oil and high sulfur diesel on board its marine vessels under the following terms and conditions.
1. TERM; TERMINATION
The initial term of this Agreement shall be for 3 years (the "Initial Term") commencing on the date first set forth above (the "Commencement Date") and ending on the 3rd anniversary of the Commencement Date. This Agreement will automatically renew for successive one year terms (each a "Renewal Term", and together with the Initial Term, the "Term"), unless either Charterer or Owner elects not to renew this Agreement by providing the other party with written notice of such election 30 days prior to the expiration of the Initial Term or Renewal Term, as applicable, at which point this Agreement will automatically terminate.
Within 30 days of the end of the Initial Term, and within 30 days of the end of each Renewal Term, both parties hereto shall have the right renegotiate the fee specified below for the use of the vessels. If no such agreement on such fee is reached by such parties by the commencement of a Renewal Term, this Agreement shall automatically terminate.
Either party hereto shall have the right to terminate this Agreement in the event of a breach by the other party of its obligations hereunder, subject to 10 days prior written notice of such breach given by the non-breaching party to the breaching party and the opportunity for such breaching party to cure such breach during such 10 day period. Upon any such termination, this Agreement shall thereafter have no further force or effect except as to already accrued rights and obligations, which shall continue until satisfied. 2. GENERAL TERMS
During the Term, Charterer agrees that Owner will be the sole and exclusive provider of marine transportation services for #2 fuel oil and high sulfur diesel owned by Charterer or owned by others and in transit for sale to Charterer so long as Owner has the required equipment available. Owner shall at all times provide sufficient and proper equipment for Charterer's performance of such transportation. Said equipment shall be manned, equipped, supplied and operated by Owner. The master and crew of said vessels shall be fully qualified, experience and, where necessary, certified and licensed. Owner agrees that said equipment shall be maintained in a seaworthy, staunch, tight and suitable condition and, to the best of Owner's knowledge, in compliance with all applicable laws and regulations.
In connection with its use of any vessel, Charterer will follow Owner's normal scheduling, loading and offloading protocols established from time to time, subject to Owner's obligations set forth in this Agreement.
1
3. RATE
Charterer agrees to pay to Owner a fee of $______ per gallon of product transported. Owner will invoice such fees to Charterer on a monthly basis and Charterer will pay such invoiced amounts within 30 days of invoice date.
The fee stated above, unless otherwise adjusted by the parties pursuant to Section 1 above, shall be adjusted annually (both upward and downward), by a factor equal to the amount of increase or decrease, as the case may be, in the Consumer Price Index for the immediately proceeding month of November, over the Consumer Price Index for November of the preceding year. For purposes hereof, the term "Consumer Price Index" shall mean the "Consumer Price Index for Urban Wage Earners and Clerical Workers (1967=100)" specified for "All Items. United States" compiled by the Bureau of Labor Statistics of the United States Department of Labor (the "Index"). In the event the Consumer Price Index shall be converted to a different standard reference base or otherwise revised, the determination of the percentage change shall be made with the use of such conversion factor, formula or table for converting the Consumer Price Index as may be published by the Bureau of Labor Statistics or, if said Bureau shall not publish the same, then as shall be reasonably determined by the parties. 4. LOAD AND DISCHARGE
The Load Port shall be FOB Refinery Offtake in the U.S. Gulf of Mexico. The Discharge Port shall be at the Owner's terminals located at Venice, LA; Port Forrochon, LA; Berwick, LA; Intracoastal City, LA; Cameron, LA; Sabine Pass, TX; Beaumont, TX; Galveston, TX; Houston, TX; Freeport, TX; Port O'Connor, TX; and Harbor Island, TX. 5. TITLE TO PRODUCT
Title to all product handled shall remain at all times in the name of the Charterer. The Charterer agrees not to tender for load any product injurious to the vessels or which product would render the vessels unfit, after cleaning, for the proper storage of similar product. 6. ASSIGNMENT Neither party shall assign this Agreement without the express written consent of the other party. 7. ENTIRE AGREEMENT
This Agreement shall constitute the entire agreement concerning the subject hereof between the parties superseding all previous agreements, negotiations and representations made prior or contemporaneous to the date hereof. This Agreement shall be modified or amended only by written agreement executed by both parties hereto. 8. GOVERNING LAW This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. 9. ADDITIONAL TERMS The "Additional Terms" attached hereto as Exhibit A shall be deemed to be incorporated into this Agreement by this reference.
2
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.
MARTIN OPERATING PARTNERSHIP L.P. By: Martin Operating GP LLC, Its General Partner By: Martin Midstream Partners L.P., Its Sole Member By: Martin Midstream GP LLC, Its General Partner By: /s/ RUBEN S. MARTIN Ruben S. Martin Chief Executive Officer and President MIDSTREAM FUEL SERVICE LLC By: Martin Resource Management Corporation, its Sole Member By: /s/ RUBEN S. MARTIN
Name: Ruben S. Martin Title: Chief Executive Officer and President
3
EXHIBIT A
ADDITIONAL TERMS
These additional terms are deemed to be incorporated by reference into this Agreement.
1. INVOICING & PAYMENT. All monthly Owner invoices to Charterer for rates and cost items will be paid by Charterer within 30 days of invoice date in accordance with Owner's normal payment protocols, which will be specified in the applicable invoice. Each monthly invoice shall be itemized to include charges by applicable vessel by day.
2. DEMISE OF CHARTER. The Master of an applicable vessel, although appointed by and in the employ of Owner and subject to Owner's direction and control, shall observe the reasonable instructions of Charterer in connection with Charterer's transportation needs under this Agreement; PROVIDED, HOWEVER, THAT NOTHING IN THIS CLAUSE OR ELSEWHERE IN THIS AGREEMENT SHALL BE CONSTRUED AS CREATING A DEMISE OF THE APPLICABLE VESSEL TO CHARTERER OR AS VESTING CHARTERER WITH ANY CONTROL OVER THE PHYSICAL OPERATION OR NAVIGATION OF THE APPLICABLE VESSEL.
3. POLLUTION PREVENTION. Owner will, in the case of an escape or discharge of products or threat of escape or discharge of same from the applicable vessel into the navigable waters of the United States, promptly undertake such measures as are reasonably necessary or which may be required by applicable laws, rules and regulations to mitigate the resultant pollution damage; provided, however, that Charterer may at its option, and upon notice to Owner and on the conditions hereinafter set forth, undertake such measures. Charterer shall keep Owner advised of any such measures to be undertaken by it under such circumstances. Any of such measures actually undertaken by Charterer shall be at Owner's expense (except to the extent that such escape or discharge was caused or contributed to by Charterer). If Owner believes that any such measures undertaken by Charterer should not be undertaken or should be discontinued, Owner may so notify Charterer and thereafter Charterer, if it elects to continue such measures, shall do so at its own risk and expense.
4. INDEMNITY. Owner covenants and agrees to fully defend, protect, indemnify and hold harmless Charterer and its affiliates from and against each and every claim, demand, cause of action, liability, damage, cost or expense (including, but not limited to, reasonable attorney's fees and expenses incurred in the defense of Charterer), resulting from any damage to property or injury or death to persons caused, directly or indirectly, by Owner's acts or omissions in connection with Owner's provision of marine transportation services hereunder, except to the extent caused, directly or indirectly, by the acts or omissions of Charterer.
Charterer covenants and agrees to fully defend, protect, indemnify and hold harmless Owner and its affiliates from and against each and every claim, demand, cause of action, liability, damage, cost or expense (including, but not limited to, reasonable attorney's fees and expenses incurred in the defense of Owner), resulting from any damage to property or injury or death to persons caused, directly or indirectly, by Charterer's acts or omissions in connection with Charterer's use of marine transportation services hereunder, except to the extent caused, directly or indirectly, by the acts or omissions of Owner.
The foregoing indemnities shall expressly exclude any liability for consequential, punitive, special or similar damages, including, without limitation, lost profits.
5. COMPLIANCE WITH LAW; INSURANCE: During the Term of this Agreement, Owner shall comply in all material respects with applicable laws, including, without limitation applicable environmental, health, safety and financial responsibility laws, rules and regulations, applicable to the use of the Vessel for bulk crude oil or finished lubricating products transportation. Owner covenants that it will maintain at all times during the Term of this Agreement insurance coverage for sudden and accidental pollution of $500,000,000.
4
6. CHARTERER'S REPRESENTATIVES: Charterer's representatives may board any vessel used under this Agreement at any convenient place to observe cargo-handling operations, to inspect logs and certificates, and to confirm that Owner is fulfilling its obligations under this Agreement.
7. DRUG & ALCOHOL ABUSE POLICY: Owner warrants that it will maintain and enforce at all times during the Term of this Agreement a drug and alcohol abuse policy applicable to the vessels which complies in all material respects with the minimum standards promulgated by the U.S. Coast Guard.
8. CONDITION OF EQUIPMENT: Owner shall, before and at commencement of each voyage by any vessel under this Agreement, exercise commercially reasonable efforts to ensure that such vessel is seaworthy and in good operating condition, properly manned, equipped and supplied for the voyage, to ensure that the pipes, pumps and coils tight, staunch, are in good operating condition and fit for the voyage, and to ensure that the tanks and other spaces in which product is to be carried are in good operating condition and fit for the carriage and preservation of the same. To the extent required by applicable law, Owner will maintain at all times during the Term of this Agreement a valid and subsisting certificate or other permit issued by the U.S. Coast Guard (or other governmental bureau or department having jurisdiction) approving the applicable vessel for the transportation and carriage of inflammable liquids.
9. SUBLET: Charterer shall not be permitted to sublet the use of any vessels to any third party.
10. FORCE MAJEURE: The vessels, their captains and Owner shall not, unless otherwise in this Agreement expressly provided, be responsible for any loss or damage arising or resulting from: any act, default or barratry of the captain, pilots, mariners, or other servants of Owner in the navigation or management of such vessel; fire, unless caused by the personal design or neglect of Owner; collision, stranding or peril, danger or accident of navigable waters; saving or attempting to save life or property; wastage in weight or bulk, or any other loss or damage arising from inherent defect, quality or vice of the cargo; any act or omission of Charterer, Owner, any other shipper or any consignee of the cargo, their agents or representatives; insufficiency or inadequacy of marks; explosion, bursting of boilers, breakage of shafts, or any latent defect in hull, equipment or machinery; unseaworthiness of any vessel unless caused by want or due diligence on the part of Owner to make such vessel seaworthy or to have it properly manned, equipped and supplied; or from any other cause of whatsoever kind arising without the actual fault of Owner. And neither the vessels, their captains or Owner, nor the Charterer, shall, unless otherwise in this Agreement expressly provided, be responsible for any loss or damage or delay or failure in performing hereunder arising or resulting from; act of God, act of war; act of public enemies, pirates or assailing thieves; acts of terrorism; arrest or restraint of princes, rulers of people, or seizure under legal process provided bond is promptly furnished to release such vessel or cargo; strike or lockout or stoppage or restraint of labor from whatever cause, either partial or general, or riot or civil commotion.
5 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | EXHIBIT 10.3
TRANSPORTATION SERVICES AGREEMENT
THIS MARINE TRANSPORTATION AGREEMENT (this "Agreement") is executed this 23rd day of December, 2003, by and between Martin Operating Partnership L.P., a Delaware limited partnership ("Owner"), and Midstream Fuel Service LLC, an Alabama limited liability company ("Charterer"), in order to evidence the agreement of such parties with respect to Owner's provision of marine transportation services with respect to #2 fuel oil and high sulfur diesel on board its marine vessels under the following terms and conditions.
1. TERM; TERMINATION
The initial term of this Agreement shall be for 3 years (the "Initial Term") commencing on the date first set forth above (the "Commencement Date") and ending on the 3rd anniversary of the Commencement Date. This Agreement will automatically renew for successive one year terms (each a "Renewal Term", and together with the Initial Term, the "Term"), unless either Charterer or Owner elects not to renew this Agreement by providing the other party with written notice of such election 30 days prior to the expiration of the Initial Term or Renewal Term, as applicable, at which point this Agreement will automatically terminate.
Within 30 days of the end of the Initial Term, and within 30 days of the end of each Renewal Term, both parties hereto shall have the right renegotiate the fee specified below for the use of the vessels. If no such agreement on such fee is reached by such parties by the commencement of a Renewal Term, this Agreement shall automatically terminate.
Either party hereto shall have the right to terminate this Agreement in the event of a breach by the other party of its obligations hereunder, subject to 10 days prior written notice of such breach given by the non-breaching party to the breaching party and the opportunity for such breaching party to cure such breach during such 10 day period. Upon any such termination, this Agreement shall thereafter have no further force or effect except as to already accrued rights and obligations, which shall continue until satisfied. 2. GENERAL TERMS
During the Term, Charterer agrees that Owner will be the sole and exclusive provider of marine transportation services for #2 fuel oil and high sulfur diesel owned by Charterer or owned by others and in transit for sale to Charterer so long as Owner has the required equipment available. Owner shall at all times provide sufficient and proper equipment for Charterer's performance of such transportation. Said equipment shall be manned, equipped, supplied and operated by Owner. The master and crew of said vessels shall be fully qualified, experience and, where necessary, certified and licensed. Owner agrees that said equipment shall be maintained in a seaworthy, staunch, tight and suitable condition and, to the best of Owner's knowledge, in compliance with all applicable laws and regulations.
In connection with its use of any vessel, Charterer will follow Owner's normal scheduling, loading and offloading protocols established from time to time, subject to Owner's obligations set forth in this Agreement.
1
3. RATE
Charterer agrees to pay to Owner a fee of $______ per gallon of product transported. Owner will invoice such fees to Charterer on a monthly basis and Charterer will pay such invoiced amounts within 30 days of invoice date.
The fee stated above, unless otherwise adjusted by the parties pursuant to Section 1 above, shall be adjusted annually (both upward and downward), by a factor equal to the amount of increase or decrease, as the case may be, in the Consumer Price Index for the immediately proceeding month of November, over the Consumer Price Index for November of the preceding year. For purposes hereof, the term "Consumer Price Index" shall mean the "Consumer Price Index for Urban Wage Earners and Clerical Workers (1967=100)" specified for "All Items. United States" compiled by the Bureau of Labor Statistics of the United States Department of Labor (the "Index"). In the event the Consumer Price Index shall be converted to a different standard reference base or otherwise revised, the determination of the percentage change shall be made with the use of such conversion factor, formula or table for converting the Consumer Price Index as may be published by the Bureau of Labor Statistics or, if said Bureau shall not publish the same, then as shall be reasonably determined by the parties. 4. LOAD AND DISCHARGE
The Load Port shall be FOB Refinery Offtake in the U.S. Gulf of Mexico. The Discharge Port shall be at the Owner's terminals located at Venice, LA; Port Forrochon, LA; Berwick, LA; Intracoastal City, LA; Cameron, LA; Sabine Pass, TX; Beaumont, TX; Galveston, TX; Houston, TX; Freeport, TX; Port O'Connor, TX; and Harbor Island, TX. 5. TITLE TO PRODUCT
Title to all product handled shall remain at all times in the name of the Charterer. The Charterer agrees not to tender for load any product injurious to the vessels or which product would render the vessels unfit, after cleaning, for the proper storage of similar product. 6. ASSIGNMENT Neither party shall assign this Agreement without the express written consent of the other party. 7. ENTIRE AGREEMENT
This Agreement shall constitute the entire agreement concerning the subject hereof between the parties superseding all previous agreements, negotiations and representations made prior or contemporaneous to the date hereof. This Agreement shall be modified or amended only by written agreement executed by both parties hereto. 8. GOVERNING LAW This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. 9. ADDITIONAL TERMS The "Additional Terms" attached hereto as Exhibit A shall be deemed to be incorporated into this Agreement by this reference.
2
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.
MARTIN OPERATING PARTNERSHIP L.P. By: Martin Operating GP LLC, Its General Partner By: Martin Midstream Partners L.P., Its Sole Member By: Martin Midstream GP LLC, Its General Partner By: /s/ RUBEN S. MARTIN Ruben S. Martin Chief Executive Officer and President MIDSTREAM FUEL SERVICE LLC By: Martin Resource Management Corporation, its Sole Member By: /s/ RUBEN S. MARTIN
Name: Ruben S. Martin Title: Chief Executive Officer and President
3
EXHIBIT A
ADDITIONAL TERMS
These additional terms are deemed to be incorporated by reference into this Agreement.
1. INVOICING & PAYMENT. All monthly Owner invoices to Charterer for rates and cost items will be paid by Charterer within 30 days of invoice date in accordance with Owner's normal payment protocols, which will be specified in the applicable invoice. Each monthly invoice shall be itemized to include charges by applicable vessel by day.
2. DEMISE OF CHARTER. The Master of an applicable vessel, although appointed by and in the employ of Owner and subject to Owner's direction and control, shall observe the reasonable instructions of Charterer in connection with Charterer's transportation needs under this Agreement; PROVIDED, HOWEVER, THAT NOTHING IN THIS CLAUSE OR ELSEWHERE IN THIS AGREEMENT SHALL BE CONSTRUED AS CREATING A DEMISE OF THE APPLICABLE VESSEL TO CHARTERER OR AS VESTING CHARTERER WITH ANY CONTROL OVER THE PHYSICAL OPERATION OR NAVIGATION OF THE APPLICABLE VESSEL.
3. POLLUTION PREVENTION. Owner will, in the case of an escape or discharge of products or threat of escape or discharge of same from the applicable vessel into the navigable waters of the United States, promptly undertake such measures as are reasonably necessary or which may be required by applicable laws, rules and regulations to mitigate the resultant pollution damage; provided, however, that Charterer may at its option, and upon notice to Owner and on the conditions hereinafter set forth, undertake such measures. Charterer shall keep Owner advised of any such measures to be undertaken by it under such circumstances. Any of such measures actually undertaken by Charterer shall be at Owner's expense (except to the extent that such escape or discharge was caused or contributed to by Charterer). If Owner believes that any such measures undertaken by Charterer should not be undertaken or should be discontinued, Owner may so notify Charterer and thereafter Charterer, if it elects to continue such measures, shall do so at its own risk and expense.
4. INDEMNITY. Owner covenants and agrees to fully defend, protect, indemnify and hold harmless Charterer and its affiliates from and against each and every claim, demand, cause of action, liability, damage, cost or expense (including, but not limited to, reasonable attorney's fees and expenses incurred in the defense of Charterer), resulting from any damage to property or injury or death to persons caused, directly or indirectly, by Owner's acts or omissions in connection with Owner's provision of marine transportation services hereunder, except to the extent caused, directly or indirectly, by the acts or omissions of Charterer.
Charterer covenants and agrees to fully defend, protect, indemnify and hold harmless Owner and its affiliates from and against each and every claim, demand, cause of action, liability, damage, cost or expense (including, but not limited to, reasonable attorney's fees and expenses incurred in the defense of Owner), resulting from any damage to property or injury or death to persons caused, directly or indirectly, by Charterer's acts or omissions in connection with Charterer's use of marine transportation services hereunder, except to the extent caused, directly or indirectly, by the acts or omissions of Owner.
The foregoing indemnities shall expressly exclude any liability for consequential, punitive, special or similar damages, including, without limitation, lost profits.
5. COMPLIANCE WITH LAW; INSURANCE: During the Term of this Agreement, Owner shall comply in all material respects with applicable laws, including, without limitation applicable environmental, health, safety and financial responsibility laws, rules and regulations, applicable to the use of the Vessel for bulk crude oil or finished lubricating products transportation. Owner covenants that it will maintain at all times during the Term of this Agreement insurance coverage for sudden and accidental pollution of $500,000,000.
4
6. CHARTERER'S REPRESENTATIVES: Charterer's representatives may board any vessel used under this Agreement at any convenient place to observe cargo-handling operations, to inspect logs and certificates, and to confirm that Owner is fulfilling its obligations under this Agreement.
7. DRUG & ALCOHOL ABUSE POLICY: Owner warrants that it will maintain and enforce at all times during the Term of this Agreement a drug and alcohol abuse policy applicable to the vessels which complies in all material respects with the minimum standards promulgated by the U.S. Coast Guard.
8. CONDITION OF EQUIPMENT: Owner shall, before and at commencement of each voyage by any vessel under this Agreement, exercise commercially reasonable efforts to ensure that such vessel is seaworthy and in good operating condition, properly manned, equipped and supplied for the voyage, to ensure that the pipes, pumps and coils tight, staunch, are in good operating condition and fit for the voyage, and to ensure that the tanks and other spaces in which product is to be carried are in good operating condition and fit for the carriage and preservation of the same. To the extent required by applicable law, Owner will maintain at all times during the Term of this Agreement a valid and subsisting certificate or other permit issued by the U.S. Coast Guard (or other governmental bureau or department having jurisdiction) approving the applicable vessel for the transportation and carriage of inflammable liquids.
9. SUBLET: Charterer shall not be permitted to sublet the use of any vessels to any third party.
10. FORCE MAJEURE: The vessels, their captains and Owner shall not, unless otherwise in this Agreement expressly provided, be responsible for any loss or damage arising or resulting from: any act, default or barratry of the captain, pilots, mariners, or other servants of Owner in the navigation or management of such vessel; fire, unless caused by the personal design or neglect of Owner; collision, stranding or peril, danger or accident of navigable waters; saving or attempting to save life or property; wastage in weight or bulk, or any other loss or damage arising from inherent defect, quality or vice of the cargo; any act or omission of Charterer, Owner, any other shipper or any consignee of the cargo, their agents or representatives; insufficiency or inadequacy of marks; explosion, bursting of boilers, breakage of shafts, or any latent defect in hull, equipment or machinery; unseaworthiness of any vessel unless caused by want or due diligence on the part of Owner to make such vessel seaworthy or to have it properly manned, equipped and supplied; or from any other cause of whatsoever kind arising without the actual fault of Owner. And neither the vessels, their captains or Owner, nor the Charterer, shall, unless otherwise in this Agreement expressly provided, be responsible for any loss or damage or delay or failure in performing hereunder arising or resulting from; act of God, act of war; act of public enemies, pirates or assailing thieves; acts of terrorism; arrest or restraint of princes, rulers of people, or seizure under legal process provided bond is promptly furnished to release such vessel or cargo; strike or lockout or stoppage or restraint of labor from whatever cause, either partial or general, or riot or civil commotion.
5 | Highlight the parts (if any) of this contract related to "Rofr/Rofo/Rofn" that should be reviewed by a lawyer. Details: Is there a clause granting one party a right of first refusal, right of first offer or right of first negotiation to purchase, license, market, or distribute equity interest, technology, assets, products or services? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Effective Date" that should be reviewed by a lawyer. Details: The date when the contract is effective
Context: Exhibit h(2) SPONSORSHIP AGREEMENT
SPONSORSHIP AGREEMENT, dated as of February 4, 2005, by and between Domini Advisor Trust, a Massachusetts business trust (the "Trust"), and Domini Social Investments LLC, a Massachusetts limited liability company ("Domini" or the "Sponsor").
W I T N E S S E T H:
WHEREAS, the Trust is engaged in business as an open-end investment company registered under the Investment Company Act of 1940, as amended, and consists of one or more series; and
WHEREAS, the Trust desires to enter into this Agreement with respect to its current and future series; and
WHEREAS, the Trust wishes to engage Domini to provide certain oversight, administrative and management services, and Domini is willing to provide such oversight, administrative and management services to the Trust on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties hereto as herein set forth, the parties covenant and agree as follows:
1. Duties of the Sponsor. Subject to the direction and control of the Board of Trustees of the Trust, the Sponsor shall perform such oversight, administrative and management services as may from time to time be reasonably requested by the Trust, which shall include without limitation: (a) maintaining office facilities (which may be in the office of Domini or an affiliate) and furnishing clerical services necessary for maintaining the organization of the Trust and for performing the oversight, administrative and management functions herein set forth; (b) arranging, if desired by the Trust, for directors, officers or employees of the Sponsor to serve as Trustees, officers or agents of the Trust if duly elected or appointed to such positions and subject to their individual consent and to any limitations imposed by law; (c) supervising the overall administration of the Trust, including the updating of corporate organizational documents, and the negotiation of contracts and fees with and the monitoring and coordinating of performance and billings of the Trust's transfer agent, shareholder servicing agents (if any), custodian, administrator, subadministrator (if any) and other independent contractors or agents; (d) overseeing (with advice of the Trust's counsel) the preparation of and, if applicable, filing all documents required for compliance by the Trust with applicable laws and regulations (including state "blue sky" laws and regulations), including registration statements on Form N-1A, prospectuses and statements of additional information, or similar forms, as applicable, semi-annual and annual reports to shareholders and proxy statements, and reviewing tax returns; (e) preparation of agendas and supporting documents for and minutes of meetings of Trustees, committees of Trustees and preparation of notices, proxy statements and minutes of meetings of shareholders; (f) arranging for maintenance of books and records of the Trust; (g) maintaining telephone coverage to respond to shareholder inquiries regarding matters to which this Agreement pertains to which the transfer agent is unable to respond; (h) providing
reports and assistance regarding each series' compliance with securities and tax laws and each series' investment objectives; (i) arranging for dissemination of yield and other performance information to newspapers and tracking services; (j) arranging for and preparing annual renewals for fidelity bond and errors and omissions insurance coverage; (k) developing a budget for the Trust, establishing the rate of expense accruals and arranging for the payment of all fixed and management expenses; and (l) answering questions from the general public, the media and investors in the Trust regarding (i) the securities holdings of the Trust; (ii) any limits in which the Trust invests; (iii) the social investment philosophy of the Trust; and (iv) the proxy voting philosophy and shareholder activism philosophy of the Trust. Notwithstanding the foregoing, the Sponsor shall not be deemed to have assumed, pursuant to this Agreement, any duties with respect to, and shall not be responsible for, the management of the Trust's assets or the rendering of investment advice and supervision with respect thereto or the distribution of shares of any series, nor shall the Sponsor be deemed to have assumed or have any responsibility with respect to functions specifically assumed by any transfer agent, custodian, fund accounting pricing agent or shareholder servicing agent of the Trust.
2. Allocation of Charges and Expenses. Domini shall pay the entire salaries and wages of all of the Trust's Trustees, officers and agents who devote part or all of their time to the affairs of Domini or its affiliates, and the wages and salaries of such persons shall not be deemed to be expenses incurred by the Trust for purposes of this Section 2. The Trust shall pay all of its operating expenses, including but not limited to fees due the Sponsor under this Agreement, compensation of Trustees not affiliated with the Sponsor, governmental fees, including but not limited to Securities and Exchange Commission fees and state "blue sky" fees; interest charges; taxes and related charges; membership dues of the Trust in the Investment Company Institute and other professional or industry associations; fees and expenses of the Trust's independent auditors and accountants, of legal counsel and any transfer agent, distributor, shareholder servicing agent, recordkeeper, registrar or dividend disbursing agent of the Trust; expenses of distributing, issuing and redeeming shares and servicing shareholder accounts; expenses of preparing, printing and mailing prospectuses and statements of additional information, reports, notices, proxy statements and reports to shareholders and governmental officers and commissions; expenses connected with the execution, recording and settlement of portfolio security transactions; insurance premiums; fees and expenses of the Trust's custodian for all services to the Trust, including safekeeping of funds and securities and maintaining required books and accounts; expenses of calculating the net asset value of shares of the Trust; expenses of shareholder meetings; and expenses relating to the issuance, registration and qualification of shares of any series of the Trust.
3. Compensation of the Sponsor. For the services to be rendered and facilities to be provided by the Sponsor hereunder, the Trust shall pay Domini a fee accrued daily and payable monthly at an annual rate equal to 0.50% of the Trust's average daily net assets for the Trust's then current fiscal year. If Domini serves as the Sponsor for less than the whole of any period specified in this Section 3, the compensation to Domini, as Sponsor, shall be prorated. For purposes of computing the fees payable to the Sponsor hereunder, the value of the Trust's net assets shall be computed in the manner specified in the Trust's then-current prospectus and statement of additional information.
2
4. Limitation of Liability of the Sponsor. The Sponsor shall not be liable for any error of judgment or mistake of law or for any act or omission in the oversight, administration or management of the Trust or the performance of its duties hereunder, except for willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of the reckless disregard of its obligations and duties hereunder. As used in this Section 4, the term "Sponsor" shall include Domini and/or any of its affiliates and the directors, officers and employees of Domini and/or any of its affiliates.
5. Activities of the Sponsor. The services of the Sponsor to the Trust are not to be deemed to be exclusive, Domini being free to render oversight, administrative and/or other services to other parties. It is understood that Trustees, officers and shareholders of the Trust are or may become interested in the Sponsor and/or any of its affiliates as directors, officers, employees or otherwise and that directors, officers and employees of the Sponsor and/or any of its affiliates are or may become similarly interested in the Trust and that the Sponsor and/or any of its affiliates may be or become interested in the Trust as a shareholder or otherwise.
6. Duration, Termination and Amendments of this Agreement. This Agreement shall become effective as of the day and year first above written and shall govern the relations between the parties hereto thereafter, unless terminated as set forth in this Section 6.
This Agreement may not be altered or amended, except by an instrument in writing and executed by both parties. This Agreement may be terminated at any time, without the payment of any penalty, with respect to any series or the Trust, by the Board of Trustees of the Trust, or by the Sponsor, in each case on not less than 60 days' written notice to the other party.
7. Subcontracting by Domini. Domini may subcontract for the performance of some or all of Domini's obligations hereunder with any one or more persons; provided, however, that Domini shall not enter into any such subcontract unless the Trustees of the Trust shall have found the subcontracting party to be qualified to perform the obligations sought to be subcontracted; and provided, further, that, unless the Trust otherwise expressly agrees in writing, Domini shall be as fully responsible to the Trust for the acts and omissions of any subcontractor as it would be for its own acts or omissions.
8. Severability. If any provision of this Agreement shall become or shall be found to be invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby.
9. Notice. Any notices under this Agreement shall be in writing addressed and delivered personally, by telecopy or mailed postage-paid to the other party at such address as such other party may designate in accordance with this Section 9 for the receipt of such notice. Until further notice to the other party, it is agreed that the address of the Trust shall be 536 Broadway, 7th Floor, New York, New York 10012, and the address of Domini shall be 536 Broadway, 7th Floor, New York, New York 10012.
3
10. Miscellaneous. Each party agrees to perform such further actions and execute such further documents as are necessary to effectuate the purposes hereof. This Agreement shall be construed and enforced and interpreted in accordance with and governed by the laws of the Commonwealth of Massachusetts without reference to principles of conflicts of law. The captions in this Agreement are included for convenience only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered in their names and on their behalf by the undersigned, thereunto duly authorized, all as of the day and year first above written. The undersigned Trustee of the Trust has executed this Agreement not individually but as a Trustee under the Trust's Declaration of Trust, dated October 6, 2004, as amended, and the obligations of this Agreement are not binding upon any of the Trustees or shareholders of the Trust individually but bind only the Trust estate.
DOMINI ADVISOR TRUST
By: /s/ Amy L. Domini --------------------------------- Amy L. Domini Trustee
DOMINI SOCIAL INVESTMENTS LLC
By: /s/ Amy L. Domini --------------------------------- Amy L. Domini Chief Executive Officer
4 [/INST] ```json
{<answer_start>
"answer": "This Agreement shall become effective as of the day and year first above written and shall govern the relations between the parties hereto thereafter, unless terminated as set forth in this Section 6."
<answer_end>
}
``` </s> | Exhibit h(2) SPONSORSHIP AGREEMENT
SPONSORSHIP AGREEMENT, dated as of February 4, 2005, by and between Domini Advisor Trust, a Massachusetts business trust (the "Trust"), and Domini Social Investments LLC, a Massachusetts limited liability company ("Domini" or the "Sponsor").
W I T N E S S E T H:
WHEREAS, the Trust is engaged in business as an open-end investment company registered under the Investment Company Act of 1940, as amended, and consists of one or more series; and
WHEREAS, the Trust desires to enter into this Agreement with respect to its current and future series; and
WHEREAS, the Trust wishes to engage Domini to provide certain oversight, administrative and management services, and Domini is willing to provide such oversight, administrative and management services to the Trust on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties hereto as herein set forth, the parties covenant and agree as follows:
1. Duties of the Sponsor. Subject to the direction and control of the Board of Trustees of the Trust, the Sponsor shall perform such oversight, administrative and management services as may from time to time be reasonably requested by the Trust, which shall include without limitation: (a) maintaining office facilities (which may be in the office of Domini or an affiliate) and furnishing clerical services necessary for maintaining the organization of the Trust and for performing the oversight, administrative and management functions herein set forth; (b) arranging, if desired by the Trust, for directors, officers or employees of the Sponsor to serve as Trustees, officers or agents of the Trust if duly elected or appointed to such positions and subject to their individual consent and to any limitations imposed by law; (c) supervising the overall administration of the Trust, including the updating of corporate organizational documents, and the negotiation of contracts and fees with and the monitoring and coordinating of performance and billings of the Trust's transfer agent, shareholder servicing agents (if any), custodian, administrator, subadministrator (if any) and other independent contractors or agents; (d) overseeing (with advice of the Trust's counsel) the preparation of and, if applicable, filing all documents required for compliance by the Trust with applicable laws and regulations (including state "blue sky" laws and regulations), including registration statements on Form N-1A, prospectuses and statements of additional information, or similar forms, as applicable, semi-annual and annual reports to shareholders and proxy statements, and reviewing tax returns; (e) preparation of agendas and supporting documents for and minutes of meetings of Trustees, committees of Trustees and preparation of notices, proxy statements and minutes of meetings of shareholders; (f) arranging for maintenance of books and records of the Trust; (g) maintaining telephone coverage to respond to shareholder inquiries regarding matters to which this Agreement pertains to which the transfer agent is unable to respond; (h) providing
reports and assistance regarding each series' compliance with securities and tax laws and each series' investment objectives; (i) arranging for dissemination of yield and other performance information to newspapers and tracking services; (j) arranging for and preparing annual renewals for fidelity bond and errors and omissions insurance coverage; (k) developing a budget for the Trust, establishing the rate of expense accruals and arranging for the payment of all fixed and management expenses; and (l) answering questions from the general public, the media and investors in the Trust regarding (i) the securities holdings of the Trust; (ii) any limits in which the Trust invests; (iii) the social investment philosophy of the Trust; and (iv) the proxy voting philosophy and shareholder activism philosophy of the Trust. Notwithstanding the foregoing, the Sponsor shall not be deemed to have assumed, pursuant to this Agreement, any duties with respect to, and shall not be responsible for, the management of the Trust's assets or the rendering of investment advice and supervision with respect thereto or the distribution of shares of any series, nor shall the Sponsor be deemed to have assumed or have any responsibility with respect to functions specifically assumed by any transfer agent, custodian, fund accounting pricing agent or shareholder servicing agent of the Trust.
2. Allocation of Charges and Expenses. Domini shall pay the entire salaries and wages of all of the Trust's Trustees, officers and agents who devote part or all of their time to the affairs of Domini or its affiliates, and the wages and salaries of such persons shall not be deemed to be expenses incurred by the Trust for purposes of this Section 2. The Trust shall pay all of its operating expenses, including but not limited to fees due the Sponsor under this Agreement, compensation of Trustees not affiliated with the Sponsor, governmental fees, including but not limited to Securities and Exchange Commission fees and state "blue sky" fees; interest charges; taxes and related charges; membership dues of the Trust in the Investment Company Institute and other professional or industry associations; fees and expenses of the Trust's independent auditors and accountants, of legal counsel and any transfer agent, distributor, shareholder servicing agent, recordkeeper, registrar or dividend disbursing agent of the Trust; expenses of distributing, issuing and redeeming shares and servicing shareholder accounts; expenses of preparing, printing and mailing prospectuses and statements of additional information, reports, notices, proxy statements and reports to shareholders and governmental officers and commissions; expenses connected with the execution, recording and settlement of portfolio security transactions; insurance premiums; fees and expenses of the Trust's custodian for all services to the Trust, including safekeeping of funds and securities and maintaining required books and accounts; expenses of calculating the net asset value of shares of the Trust; expenses of shareholder meetings; and expenses relating to the issuance, registration and qualification of shares of any series of the Trust.
3. Compensation of the Sponsor. For the services to be rendered and facilities to be provided by the Sponsor hereunder, the Trust shall pay Domini a fee accrued daily and payable monthly at an annual rate equal to 0.50% of the Trust's average daily net assets for the Trust's then current fiscal year. If Domini serves as the Sponsor for less than the whole of any period specified in this Section 3, the compensation to Domini, as Sponsor, shall be prorated. For purposes of computing the fees payable to the Sponsor hereunder, the value of the Trust's net assets shall be computed in the manner specified in the Trust's then-current prospectus and statement of additional information.
2
4. Limitation of Liability of the Sponsor. The Sponsor shall not be liable for any error of judgment or mistake of law or for any act or omission in the oversight, administration or management of the Trust or the performance of its duties hereunder, except for willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of the reckless disregard of its obligations and duties hereunder. As used in this Section 4, the term "Sponsor" shall include Domini and/or any of its affiliates and the directors, officers and employees of Domini and/or any of its affiliates.
5. Activities of the Sponsor. The services of the Sponsor to the Trust are not to be deemed to be exclusive, Domini being free to render oversight, administrative and/or other services to other parties. It is understood that Trustees, officers and shareholders of the Trust are or may become interested in the Sponsor and/or any of its affiliates as directors, officers, employees or otherwise and that directors, officers and employees of the Sponsor and/or any of its affiliates are or may become similarly interested in the Trust and that the Sponsor and/or any of its affiliates may be or become interested in the Trust as a shareholder or otherwise.
6. Duration, Termination and Amendments of this Agreement. This Agreement shall become effective as of the day and year first above written and shall govern the relations between the parties hereto thereafter, unless terminated as set forth in this Section 6.
This Agreement may not be altered or amended, except by an instrument in writing and executed by both parties. This Agreement may be terminated at any time, without the payment of any penalty, with respect to any series or the Trust, by the Board of Trustees of the Trust, or by the Sponsor, in each case on not less than 60 days' written notice to the other party.
7. Subcontracting by Domini. Domini may subcontract for the performance of some or all of Domini's obligations hereunder with any one or more persons; provided, however, that Domini shall not enter into any such subcontract unless the Trustees of the Trust shall have found the subcontracting party to be qualified to perform the obligations sought to be subcontracted; and provided, further, that, unless the Trust otherwise expressly agrees in writing, Domini shall be as fully responsible to the Trust for the acts and omissions of any subcontractor as it would be for its own acts or omissions.
8. Severability. If any provision of this Agreement shall become or shall be found to be invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby.
9. Notice. Any notices under this Agreement shall be in writing addressed and delivered personally, by telecopy or mailed postage-paid to the other party at such address as such other party may designate in accordance with this Section 9 for the receipt of such notice. Until further notice to the other party, it is agreed that the address of the Trust shall be 536 Broadway, 7th Floor, New York, New York 10012, and the address of Domini shall be 536 Broadway, 7th Floor, New York, New York 10012.
3
10. Miscellaneous. Each party agrees to perform such further actions and execute such further documents as are necessary to effectuate the purposes hereof. This Agreement shall be construed and enforced and interpreted in accordance with and governed by the laws of the Commonwealth of Massachusetts without reference to principles of conflicts of law. The captions in this Agreement are included for convenience only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered in their names and on their behalf by the undersigned, thereunto duly authorized, all as of the day and year first above written. The undersigned Trustee of the Trust has executed this Agreement not individually but as a Trustee under the Trust's Declaration of Trust, dated October 6, 2004, as amended, and the obligations of this Agreement are not binding upon any of the Trustees or shareholders of the Trust individually but bind only the Trust estate.
DOMINI ADVISOR TRUST
By: /s/ Amy L. Domini --------------------------------- Amy L. Domini Trustee
DOMINI SOCIAL INVESTMENTS LLC
By: /s/ Amy L. Domini --------------------------------- Amy L. Domini Chief Executive Officer
4 | Highlight the parts (if any) of this contract related to "Effective Date" that should be reviewed by a lawyer. Details: The date when the contract is effective | {
"answer_start": [
8587
],
"text": [
"This Agreement shall become effective as of the day and year first above written and shall govern the relations between the parties hereto thereafter, unless terminated as set forth in this Section 6."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Parties" that should be reviewed by a lawyer. Details: The two or more parties who signed the contract
Context: DISTRIBUTION AND SERVICES AGREEMENT January 18, 2020 This is to confirm that, in consideration of the agreements hereinafter contained, the undersigned, the Integrity Short Term Government Fund, (the "Fund"), an open-end, diversified, management investment company organized as a series of The Integrity Funds, a Delaware statutory trust, has agreed that Integrity Funds Distributor, LLC, ("Integrity"), shall be, for the period of this distribution agreement (the "Agreement"), the principal underwriter of shares issued by the Fund, including such classes of shares as may now or hereafter be authorized (the "Shares"). SECTION 1. SERVICES AS UNDERWRITER Section 1.1 Integrity will act as principal underwriter for the distribution of the Shares covered by the registration statement, prospectus, and statement of additional information then in effect of the Fund (the "Registration Statement") under the Securities Act of 1933, as amended (the "1933 Act"), and the Investment Company Act of 1940, as amended (the "1940 Act"). Section 1.2 Integrity agrees to use its best efforts to solicit orders for the sale of the Shares at the public offering price, as determined in accordance with the Registration Statement, and will undertake such advertising and promotion as it believes is reasonable in connection with such solicitation. Integrity shall order Shares from the Fund only to the extent that it shall have received purchase orders therefore. Section 1.3 All activities by Integrity as underwriter of the Shares shall comply with all applicable laws, rules, and regulations, including, without limitation, all rules and regulations made or adopted by the Securities and Exchange Commission (the "SEC") or by any securities association registered under the Securities Exchange Act of 1934 and the Fund's Registration Statement. Section 1.4 Integrity will provide one or more persons during normal business hours to respond to telephone questions concerning the Fund. Section 1.5 Integrity acknowledges that, whenever in the judgment of the Fund's officers such action is warranted for any reason, including, without limitation, market, economic, or political conditions, those officers may decline to accept any orders for, or make any sales of, the Shares until such time as those officers deem it advisable to accept such orders and to make such sales. Section 1.6 Integrity shall be deemed to be an independent contractor and, except as specifically provided or authorized herein, shall have no authority to act for or represent the Fund. Integrity will act only on its own behalf as principal should it choose to enter into selling agreements with selected dealers or others. Integrity may allow commissions or concessions to dealers in such amounts as Integrity shall determine from time to time, as set forth in the Fund's Registration Statement. Except as may otherwise be determined by Integrity and the Fund from time to time, such commissions or concessions shall be uniform to all dealers. Shares sold to dealers shall be for resale by such dealers only at the public offering price(s) set forth in the Fund's then current Registration Statement. The price the Fund shall receive for all Shares purchased from the Fund shall be the net asset value used in determining the public offering price applicable to the sale of such Shares.
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
Section 1.7 In consideration of the services rendered pursuant to this Agreement, Integrity shall receive the excess, if any, of the sales price, as set forth in the Fund's Registration Statement, over the net asset value of Shares sold by Integrity, as underwriter. The Fund shall also pay Integrity any distribution and/or service fees applicable to the Shares as authorized by the Shareholder Services Plan (the "Plan") adopted by the Fund under Rule 12b-1 of the Investment Company Act of 1940 and set forth in the Fund's Registration Statement. Such fees shall be payable in the manner and terms set forth in the Plan. Section 1.8 Integrity will bear all expenses in connection with the performance of its services and the incurring of distribution expenses under this Agreement. For purposes of this Agreement, "distribution expenses" of Integrity shall mean all expenses borne by Integrity or by any other person with which Integrity has an agreement approved by the Fund, which expenses represent payment for activities primarily intended to result in the sale of Shares, including, but not limited to, the following: (a) payments made to, and expenses of, persons who provide support services in connection with the distribution of Shares, including, but not limited to, office space and equipment, telephone facilities, answering routine inquiries regarding the Fund, processing shareholder transactions, and providing any other shareholder services; (b) costs relating to the formulation and implementation of marketing and promotional activities, including, but not limited to, direct mail promotions and television, radio, newspaper, magazine, and other mass media advertising; (c) costs of printing and distributing prospectuses and reports of the Fund to prospective shareholders of the Fund; (d) costs involved in preparing, printing, and distributing sales literature pertaining to the Fund; (e) costs involved in obtaining whatever information, analyses, and reports with respect to marketing and promotional activities that the Fund may, from time to time, deem advisable; and 2
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
(f) sales commissions and other fees paid, together with related financing costs to brokers, dealers or other selling entities with a dealer agreement in effect for the sale of Fund Shares. Distribution expenses, however, shall not include any expenditures in connection with services which Integrity, any of its affiliates, or any other person has agreed to bear without reimbursement. Section 1.9 Integrity shall prepare and deliver reports to the Treasurer of the Fund and to the Investment Adviser on a regular, at least quarterly, basis, showing the distribution expenses incurred pursuant to this Agreement and the Plan and the purposes therefore, as well as any supplemental reports as the Trustees, from time to time, may reasonably request. SECTION 2. DUTIES OF THE FUND Section 2.1 The Fund agrees at its own expense to execute any and all documents, to furnish any and all information, and to take any other actions that may be reasonably necessary in connection with the qualification of the Shares for sale in those states that Integrity may designate. Section 2.2 The Fund shall furnish from time to time, for use in connection with the sale of the Shares, such information reports with respect to the Fund and its Shares as Integrity may reasonably request, all of which shall be signed by one or more of the Fund's duly authorized officers; and the Fund warrants that the statements contained in any such reports, when so signed by one or more of the Fund's officers, shall be true and correct. The Fund shall also furnish Integrity upon request with: (a) annual audits of the Fund's books and accounts made by independent public accountants regularly retained by the Fund, (b) semi-annual unaudited financial statements pertaining to the Fund, (c) quarterly earnings statements prepared by the Fund, (d) a monthly itemized list of the securities in the portfolio of the Fund, (e) monthly balance sheets as soon as practicable after the end of each month, and (f) from time to time such additional information regarding the Fund's financial condition as Integrity may reasonably request. Section 2.3 The Fund shall pay to Integrity, as set forth in the Registration Statement, any distribution and service fee authorized by the Plan. SECTION 3. REPRESENTATIONS AND WARRANTIES Section 3.1 The Fund represents to Integrity that all registration statements, prospectuses, and statements of additional information filed by the Fund with the SEC under the 1933 Act and the 1940 Act with respect to the Shares of the Fund have been carefully prepared in conformity with the requirements of the 1933 Act, the 1940 Act, and the rules and regulations of the SEC thereunder. As used in this Agreement, the terms "registration statement," "prospectus," and "statement of additional information" shall mean any registration statement, prospectus, and statement of additional information filed by the Fund with the SEC and any amendments and supplements thereto which at any time shall have been filed with the SEC. The Fund represents and warrants to Integrity that any registration statement, prospectus, and statement of additional information, when such registration statement becomes effective, will include all statements required to be contained therein in conformity with the 1933 Act, the 1940 Act, and the rules and regulations of the SEC; that all statements of fact contained in any registration statement, prospectus, or statement of additional information will be true and correct when such registration statement becomes effective; and that neither any registration statement nor any prospectus or statement of additional information when such registration statement becomes effective will include an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading to a purchaser of Shares. Integrity may, but shall not be obligated to, propose from time to time such amendment or amendments to any registration statement and such supplement or supplements to any prospectus or statement of additional information as, in the light of future developments, may, in the opinion of Integrity's counsel, be necessary or advisable. If the Fund shall not propose such amendment or amendments and/or supplement or supplements within fifteen days after receipt by the Fund of a written request from Integrity to do so, Integrity may, at its option, terminate this Agreement. The Fund shall not file any amendment to any registration statement or supplement to any prospectus or statement of additional information without giving Integrity reasonable notice thereof in advance; provided, however, that nothing contained in this Agreement shall in any way limit the Fund's right to file at any time such amendments to any registration statement and/or supplements to any prospectus or statement of additional information, of whatever character, as the Fund may deem advisable, such right being in all respects absolute and unconditional. 3
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
SECTION 4. INDEMNIFICATION Section 4.1 The Fund authorizes Integrity and any dealers with whom Integrity has entered into dealer agreements to use any prospectus or statement of additional information furnished by the Fund from time to time in connection with the sale of Shares. The Fund agrees to indemnify, defend, and hold Integrity, its several officers and governors, and any person who controls Integrity within the meaning of Section 15 of the 1933 Act, free and harmless from and against any and all claims, demands, liabilities, and expenses (including the cost of investigating or defending such claims, demands, or liabilities and any counsel fees incurred in connection therewith) which Integrity, its officers and governors, or any such controlling person may incur under the 1933 Act, the 1940 Act, or common law or otherwise, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any registration statement, any prospectus, or any statement of additional information, or arising out of or based upon any omission or alleged omission to state a material fact required to be stated in any registration statement, any prospectus, or any statement of additional information, or necessary to make the statements in any of them not misleading; provided, however, that the Fund's agreement to indemnify Integrity, its officers or governors, and any such controlling person shall not be deemed to cover any claims, demands, liabilities, or expenses arising out of or based upon any statements or representations made by Integrity or its representatives or agents other than such statements and representations as are contained in any registration statement, prospectus, or statement of additional information and in such financial and other statements as are furnished to Integrity pursuant to paragraph 2.2 hereof; and further provided that the Fund's agreement to indemnify Integrity and the Fund's representations and warranties hereinbefore set forth in paragraph 3 shall not be deemed to cover any liability to the Fund or its shareholders to which Integrity would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of its duties, or by reason of Integrity's reckless disregard of its obligations and duties under this Agreement. The Fund's agreement to indemnify Integrity, its officers and governors, and any such controlling person, as aforesaid, is expressly conditioned upon the Fund's being notified of any action brought against Integrity, its officers or governors, or any such controlling person, such notification to be given by letter or by telegram addressed to the Fund at its principal office in Minot, North Dakota, and sent to the Fund by the person against whom such action is brought, within ten days after the summons or other first legal process shall have been served. The failure so to notify the Fund of any such action shall not relieve the Fund from any liability that the Fund may have to the person against whom such action is brought by reason of any such untrue statement or omission or alleged omission otherwise than on account of the Fund's indemnity agreement contained in this paragraph 4.1. The Fund's indemnification agreement contained in this paragraph 4.1 and the Fund's representations and warranties in this Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of Integrity, its officers and governors, or any controlling person, and shall survive the delivery of any Shares. This agreement of indemnity will inure exclusively to Integrity's benefit, to the benefit of its several officers and governors, and their respective estates, and to the benefit of the controlling persons and their successors. The Fund agrees to notify Integrity promptly of the commencement of any litigation or proceedings against the Fund or any of its officers or trustees in connection with the issuance and sale of any Shares. 4
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
Section 4.2 Integrity agrees to indemnify, defend, and hold the Fund, its several officers and trustees, and any person who controls the Fund within the meaning of Section 15 of the 1933 Act, free and harmless from and against any and all claims, demands, liabilities, and expenses (including the costs of investigating or defending such claims, demands, or liabilities and any counsel fees incurred in connection therewith) that the Fund, its officers or trustees, or any such controlling person may incur under the 1933 Act, the 1940 Act, or common law or otherwise, but only to the extent that such liability or expense incurred by the Fund, its officers or trustees, or such controlling person resulting from such claims or demands shall arise out of or be based upon (a) any unauthorized sales literature, advertisements, information, statements, or representations or (b) any untrue or alleged untrue statement of a material fact contained in information furnished in writing by Integrity to the Fund and used in the answers to any of the items of the registration statement or in the corresponding statements made in the prospectus or statement of additional information, or shall arise out of or be based upon any omission or alleged omission to state a material fact in connection with such information furnished in writing by Integrity to the Fund and required to be stated in such answers or necessary to make such information not misleading. Integrity's agreement to indemnify the Fund, its officers and trustees, and any such controlling person, as aforesaid, is expressly conditioned upon Integrity's being notified of any action brought against the Fund, its officers or trustees, or any such controlling person, such notification to be given by letter or telegram addressed to Integrity at its principal office in Minot, North Dakota, and sent to Integrity by the person against whom such action is brought, within ten days after the summons or other first legal process shall have been served. The failure so to notify Integrity of any such action shall not relieve Integrity from any liability that Integrity may have to the Fund, its officers or trustees, or to such controlling person by reason of any such untrue or alleged untrue statement or omission or alleged omission otherwise than on account of Integrity's indemnity agreement contained in this paragraph 4.2. Integrity agrees to notify the Fund promptly of the commencement of any litigation or proceedings against Integrity or any of its officers or governors in connection with the issuance and sale of any Shares. 5
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
Section 4.3 In case any action shall be brought against any indemnified party under paragraph 4.1 or 4.2, and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it shall wish to do so, to assume the defense thereof with counsel satisfactory to such indemnified party. If the indemnifying party opts to assume the defense of such action, the indemnifying party will not be liable to the indemnified party for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than (a) reasonable costs of investigation or the furnishing of documents or witnesses and (b) all reasonable fees and expenses of separate counsel to such indemnified party if (i) the indemnifying party and the indemnified party shall have agreed to the retention of such counsel or (ii) the indemnified party shall have concluded reasonably that representation of the indemnifying party and the indemnified party by the same counsel would be inappropriate due to actual or potential differing interests between them in the conduct of the defense of such action. SECTION 5. EFFECTIVENESS OF REGISTRATION Section 5.1 None of the Shares shall be offered by either Integrity or the Fund under any of the provisions of this Agreement and no orders for the purchase or sale of the Shares hereunder shall be accepted by the Fund if and so long as the effectiveness of the registration statement then in effect or any necessary amendments thereto shall be suspended under any of the provisions of the 1933 Act or if and so long as a current prospectus as required by Section 5(b)(2) of the 1933 Act is not on file with the SEC; provided, however, that nothing contained in this paragraph 5 shall in any way restrict or have an application to or bearing upon the Fund's obligation to repurchase Shares from any shareholder in accordance with the provisions of the Fund's prospectus, statement of additional information, or declaration of trust. SECTION 6. NOTICE TO INTEGRITY Section 6.1 The Fund agrees to advise Integrity immediately in writing: 6
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
(a) of any request by the SEC for amendments to the registration statement, prospectus, or statement of additional information then in effect or for additional information; (b) in the event of the issuance by the SEC of any stop order suspending the effectiveness of the registration statement, prospectus, or statement of additional information then in effect or the initiation of any proceeding for that purpose; (c) of the happening of any event that makes untrue any statement of a material fact made in the registration statement, prospectus, or statement of additional information then in effect or that requires the making of a change in such registration statement, prospectus, or statement of additional information in order to make the statement therein not misleading; and (d) of all actions of the SEC with respect to any amendment to any registration statement, prospectus, or statement of additional information which may from time to time be filed with the SEC. SECTION 7. TERM OF AGREEMENT Section 7.1 This Agreement shall continue until January 18, 2022, and thereafter shall continue automatically for successive annual periods ending on January 18th of each year, provided such continuance is specifically approved at least annually by (a) the Fund's Board of Trustees and (b) a vote of a majority (as defined in the 1940 Act) of the Fund's Trustees who are not interested persons (as defined in the 1940 Act) of the Fund and who have no direct or indirect financial interest in the operation of the Plan, in this Agreement, or any agreement related to the Plan (the "Qualified Trustees"), by vote cast in person at a meeting called for the purpose of voting on such approval. This Agreement is terminable with respect to the Fund, without penalty, (a) on 60 days' written notice, by vote of a majority of the Qualified Trustees or by vote of a majority (as defined in the 1940 Act) of the outstanding voting securities of the Fund or (b) on 90 days' written notice by Integrity. This Agreement will also terminate automatically in the event of its assignment (as defined in the 1940 Act). SECTION 8. MISCELLANEOUS Section 8.1 The Fund recognizes that governors, officers, and employees of Integrity may from time to time serve as directors, officers, and employees of corporations and business trusts (including other investment companies) and that Integrity or its affiliates may enter into distribution or other agreements with such other corporations and trusts. Section 8.2 It is expressly agreed that the obligations of the Fund hereunder shall not be binding upon any of the trustees, shareholders, nominees, officers, agents, or employees of the Fund, personally, but bind only the property of the Fund. The execution and delivery of this Agreement have been authorized by the Trustees and signed by an authorized officer of the Fund, acting as such, and neither such authorization by such Trustees nor such execution and delivery by such officer shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the property of the Fund. 7
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
Section 8.3 This Agreement shall be construed in accordance with the laws of the State of Kansas. Section 8.4 This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original; but such counterparts shall, together, constitute only one instrument. Section 8.5 This Agreement may not be amended or modified in any manner except by both parties with the same formality as this Agreement and as may be permitted or required by the 1940 Act. Section 8.6 The captions of this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. In Witness Whereof, the parties hereto have caused this Agreement to be executed as of the date first set forth herein. Integrity Short Term Government Fund By: /s/ Shannon D. Radke Shannon D. Radke - President Accepted: Integrity Funds Distributor, LLC By: /s/ Shannon D. Radke Shannon D. Radke - President Dated: January 18, 2020 8
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020 [/INST] ```json
{<answer_start>
"answer": "Integrity"
<answer_end>
}
``` </s> | DISTRIBUTION AND SERVICES AGREEMENT January 18, 2020 This is to confirm that, in consideration of the agreements hereinafter contained, the undersigned, the Integrity Short Term Government Fund, (the "Fund"), an open-end, diversified, management investment company organized as a series of The Integrity Funds, a Delaware statutory trust, has agreed that Integrity Funds Distributor, LLC, ("Integrity"), shall be, for the period of this distribution agreement (the "Agreement"), the principal underwriter of shares issued by the Fund, including such classes of shares as may now or hereafter be authorized (the "Shares"). SECTION 1. SERVICES AS UNDERWRITER Section 1.1 Integrity will act as principal underwriter for the distribution of the Shares covered by the registration statement, prospectus, and statement of additional information then in effect of the Fund (the "Registration Statement") under the Securities Act of 1933, as amended (the "1933 Act"), and the Investment Company Act of 1940, as amended (the "1940 Act"). Section 1.2 Integrity agrees to use its best efforts to solicit orders for the sale of the Shares at the public offering price, as determined in accordance with the Registration Statement, and will undertake such advertising and promotion as it believes is reasonable in connection with such solicitation. Integrity shall order Shares from the Fund only to the extent that it shall have received purchase orders therefore. Section 1.3 All activities by Integrity as underwriter of the Shares shall comply with all applicable laws, rules, and regulations, including, without limitation, all rules and regulations made or adopted by the Securities and Exchange Commission (the "SEC") or by any securities association registered under the Securities Exchange Act of 1934 and the Fund's Registration Statement. Section 1.4 Integrity will provide one or more persons during normal business hours to respond to telephone questions concerning the Fund. Section 1.5 Integrity acknowledges that, whenever in the judgment of the Fund's officers such action is warranted for any reason, including, without limitation, market, economic, or political conditions, those officers may decline to accept any orders for, or make any sales of, the Shares until such time as those officers deem it advisable to accept such orders and to make such sales. Section 1.6 Integrity shall be deemed to be an independent contractor and, except as specifically provided or authorized herein, shall have no authority to act for or represent the Fund. Integrity will act only on its own behalf as principal should it choose to enter into selling agreements with selected dealers or others. Integrity may allow commissions or concessions to dealers in such amounts as Integrity shall determine from time to time, as set forth in the Fund's Registration Statement. Except as may otherwise be determined by Integrity and the Fund from time to time, such commissions or concessions shall be uniform to all dealers. Shares sold to dealers shall be for resale by such dealers only at the public offering price(s) set forth in the Fund's then current Registration Statement. The price the Fund shall receive for all Shares purchased from the Fund shall be the net asset value used in determining the public offering price applicable to the sale of such Shares.
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
Section 1.7 In consideration of the services rendered pursuant to this Agreement, Integrity shall receive the excess, if any, of the sales price, as set forth in the Fund's Registration Statement, over the net asset value of Shares sold by Integrity, as underwriter. The Fund shall also pay Integrity any distribution and/or service fees applicable to the Shares as authorized by the Shareholder Services Plan (the "Plan") adopted by the Fund under Rule 12b-1 of the Investment Company Act of 1940 and set forth in the Fund's Registration Statement. Such fees shall be payable in the manner and terms set forth in the Plan. Section 1.8 Integrity will bear all expenses in connection with the performance of its services and the incurring of distribution expenses under this Agreement. For purposes of this Agreement, "distribution expenses" of Integrity shall mean all expenses borne by Integrity or by any other person with which Integrity has an agreement approved by the Fund, which expenses represent payment for activities primarily intended to result in the sale of Shares, including, but not limited to, the following: (a) payments made to, and expenses of, persons who provide support services in connection with the distribution of Shares, including, but not limited to, office space and equipment, telephone facilities, answering routine inquiries regarding the Fund, processing shareholder transactions, and providing any other shareholder services; (b) costs relating to the formulation and implementation of marketing and promotional activities, including, but not limited to, direct mail promotions and television, radio, newspaper, magazine, and other mass media advertising; (c) costs of printing and distributing prospectuses and reports of the Fund to prospective shareholders of the Fund; (d) costs involved in preparing, printing, and distributing sales literature pertaining to the Fund; (e) costs involved in obtaining whatever information, analyses, and reports with respect to marketing and promotional activities that the Fund may, from time to time, deem advisable; and 2
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
(f) sales commissions and other fees paid, together with related financing costs to brokers, dealers or other selling entities with a dealer agreement in effect for the sale of Fund Shares. Distribution expenses, however, shall not include any expenditures in connection with services which Integrity, any of its affiliates, or any other person has agreed to bear without reimbursement. Section 1.9 Integrity shall prepare and deliver reports to the Treasurer of the Fund and to the Investment Adviser on a regular, at least quarterly, basis, showing the distribution expenses incurred pursuant to this Agreement and the Plan and the purposes therefore, as well as any supplemental reports as the Trustees, from time to time, may reasonably request. SECTION 2. DUTIES OF THE FUND Section 2.1 The Fund agrees at its own expense to execute any and all documents, to furnish any and all information, and to take any other actions that may be reasonably necessary in connection with the qualification of the Shares for sale in those states that Integrity may designate. Section 2.2 The Fund shall furnish from time to time, for use in connection with the sale of the Shares, such information reports with respect to the Fund and its Shares as Integrity may reasonably request, all of which shall be signed by one or more of the Fund's duly authorized officers; and the Fund warrants that the statements contained in any such reports, when so signed by one or more of the Fund's officers, shall be true and correct. The Fund shall also furnish Integrity upon request with: (a) annual audits of the Fund's books and accounts made by independent public accountants regularly retained by the Fund, (b) semi-annual unaudited financial statements pertaining to the Fund, (c) quarterly earnings statements prepared by the Fund, (d) a monthly itemized list of the securities in the portfolio of the Fund, (e) monthly balance sheets as soon as practicable after the end of each month, and (f) from time to time such additional information regarding the Fund's financial condition as Integrity may reasonably request. Section 2.3 The Fund shall pay to Integrity, as set forth in the Registration Statement, any distribution and service fee authorized by the Plan. SECTION 3. REPRESENTATIONS AND WARRANTIES Section 3.1 The Fund represents to Integrity that all registration statements, prospectuses, and statements of additional information filed by the Fund with the SEC under the 1933 Act and the 1940 Act with respect to the Shares of the Fund have been carefully prepared in conformity with the requirements of the 1933 Act, the 1940 Act, and the rules and regulations of the SEC thereunder. As used in this Agreement, the terms "registration statement," "prospectus," and "statement of additional information" shall mean any registration statement, prospectus, and statement of additional information filed by the Fund with the SEC and any amendments and supplements thereto which at any time shall have been filed with the SEC. The Fund represents and warrants to Integrity that any registration statement, prospectus, and statement of additional information, when such registration statement becomes effective, will include all statements required to be contained therein in conformity with the 1933 Act, the 1940 Act, and the rules and regulations of the SEC; that all statements of fact contained in any registration statement, prospectus, or statement of additional information will be true and correct when such registration statement becomes effective; and that neither any registration statement nor any prospectus or statement of additional information when such registration statement becomes effective will include an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading to a purchaser of Shares. Integrity may, but shall not be obligated to, propose from time to time such amendment or amendments to any registration statement and such supplement or supplements to any prospectus or statement of additional information as, in the light of future developments, may, in the opinion of Integrity's counsel, be necessary or advisable. If the Fund shall not propose such amendment or amendments and/or supplement or supplements within fifteen days after receipt by the Fund of a written request from Integrity to do so, Integrity may, at its option, terminate this Agreement. The Fund shall not file any amendment to any registration statement or supplement to any prospectus or statement of additional information without giving Integrity reasonable notice thereof in advance; provided, however, that nothing contained in this Agreement shall in any way limit the Fund's right to file at any time such amendments to any registration statement and/or supplements to any prospectus or statement of additional information, of whatever character, as the Fund may deem advisable, such right being in all respects absolute and unconditional. 3
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
SECTION 4. INDEMNIFICATION Section 4.1 The Fund authorizes Integrity and any dealers with whom Integrity has entered into dealer agreements to use any prospectus or statement of additional information furnished by the Fund from time to time in connection with the sale of Shares. The Fund agrees to indemnify, defend, and hold Integrity, its several officers and governors, and any person who controls Integrity within the meaning of Section 15 of the 1933 Act, free and harmless from and against any and all claims, demands, liabilities, and expenses (including the cost of investigating or defending such claims, demands, or liabilities and any counsel fees incurred in connection therewith) which Integrity, its officers and governors, or any such controlling person may incur under the 1933 Act, the 1940 Act, or common law or otherwise, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any registration statement, any prospectus, or any statement of additional information, or arising out of or based upon any omission or alleged omission to state a material fact required to be stated in any registration statement, any prospectus, or any statement of additional information, or necessary to make the statements in any of them not misleading; provided, however, that the Fund's agreement to indemnify Integrity, its officers or governors, and any such controlling person shall not be deemed to cover any claims, demands, liabilities, or expenses arising out of or based upon any statements or representations made by Integrity or its representatives or agents other than such statements and representations as are contained in any registration statement, prospectus, or statement of additional information and in such financial and other statements as are furnished to Integrity pursuant to paragraph 2.2 hereof; and further provided that the Fund's agreement to indemnify Integrity and the Fund's representations and warranties hereinbefore set forth in paragraph 3 shall not be deemed to cover any liability to the Fund or its shareholders to which Integrity would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of its duties, or by reason of Integrity's reckless disregard of its obligations and duties under this Agreement. The Fund's agreement to indemnify Integrity, its officers and governors, and any such controlling person, as aforesaid, is expressly conditioned upon the Fund's being notified of any action brought against Integrity, its officers or governors, or any such controlling person, such notification to be given by letter or by telegram addressed to the Fund at its principal office in Minot, North Dakota, and sent to the Fund by the person against whom such action is brought, within ten days after the summons or other first legal process shall have been served. The failure so to notify the Fund of any such action shall not relieve the Fund from any liability that the Fund may have to the person against whom such action is brought by reason of any such untrue statement or omission or alleged omission otherwise than on account of the Fund's indemnity agreement contained in this paragraph 4.1. The Fund's indemnification agreement contained in this paragraph 4.1 and the Fund's representations and warranties in this Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of Integrity, its officers and governors, or any controlling person, and shall survive the delivery of any Shares. This agreement of indemnity will inure exclusively to Integrity's benefit, to the benefit of its several officers and governors, and their respective estates, and to the benefit of the controlling persons and their successors. The Fund agrees to notify Integrity promptly of the commencement of any litigation or proceedings against the Fund or any of its officers or trustees in connection with the issuance and sale of any Shares. 4
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
Section 4.2 Integrity agrees to indemnify, defend, and hold the Fund, its several officers and trustees, and any person who controls the Fund within the meaning of Section 15 of the 1933 Act, free and harmless from and against any and all claims, demands, liabilities, and expenses (including the costs of investigating or defending such claims, demands, or liabilities and any counsel fees incurred in connection therewith) that the Fund, its officers or trustees, or any such controlling person may incur under the 1933 Act, the 1940 Act, or common law or otherwise, but only to the extent that such liability or expense incurred by the Fund, its officers or trustees, or such controlling person resulting from such claims or demands shall arise out of or be based upon (a) any unauthorized sales literature, advertisements, information, statements, or representations or (b) any untrue or alleged untrue statement of a material fact contained in information furnished in writing by Integrity to the Fund and used in the answers to any of the items of the registration statement or in the corresponding statements made in the prospectus or statement of additional information, or shall arise out of or be based upon any omission or alleged omission to state a material fact in connection with such information furnished in writing by Integrity to the Fund and required to be stated in such answers or necessary to make such information not misleading. Integrity's agreement to indemnify the Fund, its officers and trustees, and any such controlling person, as aforesaid, is expressly conditioned upon Integrity's being notified of any action brought against the Fund, its officers or trustees, or any such controlling person, such notification to be given by letter or telegram addressed to Integrity at its principal office in Minot, North Dakota, and sent to Integrity by the person against whom such action is brought, within ten days after the summons or other first legal process shall have been served. The failure so to notify Integrity of any such action shall not relieve Integrity from any liability that Integrity may have to the Fund, its officers or trustees, or to such controlling person by reason of any such untrue or alleged untrue statement or omission or alleged omission otherwise than on account of Integrity's indemnity agreement contained in this paragraph 4.2. Integrity agrees to notify the Fund promptly of the commencement of any litigation or proceedings against Integrity or any of its officers or governors in connection with the issuance and sale of any Shares. 5
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
Section 4.3 In case any action shall be brought against any indemnified party under paragraph 4.1 or 4.2, and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it shall wish to do so, to assume the defense thereof with counsel satisfactory to such indemnified party. If the indemnifying party opts to assume the defense of such action, the indemnifying party will not be liable to the indemnified party for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than (a) reasonable costs of investigation or the furnishing of documents or witnesses and (b) all reasonable fees and expenses of separate counsel to such indemnified party if (i) the indemnifying party and the indemnified party shall have agreed to the retention of such counsel or (ii) the indemnified party shall have concluded reasonably that representation of the indemnifying party and the indemnified party by the same counsel would be inappropriate due to actual or potential differing interests between them in the conduct of the defense of such action. SECTION 5. EFFECTIVENESS OF REGISTRATION Section 5.1 None of the Shares shall be offered by either Integrity or the Fund under any of the provisions of this Agreement and no orders for the purchase or sale of the Shares hereunder shall be accepted by the Fund if and so long as the effectiveness of the registration statement then in effect or any necessary amendments thereto shall be suspended under any of the provisions of the 1933 Act or if and so long as a current prospectus as required by Section 5(b)(2) of the 1933 Act is not on file with the SEC; provided, however, that nothing contained in this paragraph 5 shall in any way restrict or have an application to or bearing upon the Fund's obligation to repurchase Shares from any shareholder in accordance with the provisions of the Fund's prospectus, statement of additional information, or declaration of trust. SECTION 6. NOTICE TO INTEGRITY Section 6.1 The Fund agrees to advise Integrity immediately in writing: 6
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
(a) of any request by the SEC for amendments to the registration statement, prospectus, or statement of additional information then in effect or for additional information; (b) in the event of the issuance by the SEC of any stop order suspending the effectiveness of the registration statement, prospectus, or statement of additional information then in effect or the initiation of any proceeding for that purpose; (c) of the happening of any event that makes untrue any statement of a material fact made in the registration statement, prospectus, or statement of additional information then in effect or that requires the making of a change in such registration statement, prospectus, or statement of additional information in order to make the statement therein not misleading; and (d) of all actions of the SEC with respect to any amendment to any registration statement, prospectus, or statement of additional information which may from time to time be filed with the SEC. SECTION 7. TERM OF AGREEMENT Section 7.1 This Agreement shall continue until January 18, 2022, and thereafter shall continue automatically for successive annual periods ending on January 18th of each year, provided such continuance is specifically approved at least annually by (a) the Fund's Board of Trustees and (b) a vote of a majority (as defined in the 1940 Act) of the Fund's Trustees who are not interested persons (as defined in the 1940 Act) of the Fund and who have no direct or indirect financial interest in the operation of the Plan, in this Agreement, or any agreement related to the Plan (the "Qualified Trustees"), by vote cast in person at a meeting called for the purpose of voting on such approval. This Agreement is terminable with respect to the Fund, without penalty, (a) on 60 days' written notice, by vote of a majority of the Qualified Trustees or by vote of a majority (as defined in the 1940 Act) of the outstanding voting securities of the Fund or (b) on 90 days' written notice by Integrity. This Agreement will also terminate automatically in the event of its assignment (as defined in the 1940 Act). SECTION 8. MISCELLANEOUS Section 8.1 The Fund recognizes that governors, officers, and employees of Integrity may from time to time serve as directors, officers, and employees of corporations and business trusts (including other investment companies) and that Integrity or its affiliates may enter into distribution or other agreements with such other corporations and trusts. Section 8.2 It is expressly agreed that the obligations of the Fund hereunder shall not be binding upon any of the trustees, shareholders, nominees, officers, agents, or employees of the Fund, personally, but bind only the property of the Fund. The execution and delivery of this Agreement have been authorized by the Trustees and signed by an authorized officer of the Fund, acting as such, and neither such authorization by such Trustees nor such execution and delivery by such officer shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the property of the Fund. 7
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020
Section 8.3 This Agreement shall be construed in accordance with the laws of the State of Kansas. Section 8.4 This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original; but such counterparts shall, together, constitute only one instrument. Section 8.5 This Agreement may not be amended or modified in any manner except by both parties with the same formality as this Agreement and as may be permitted or required by the 1940 Act. Section 8.6 The captions of this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. In Witness Whereof, the parties hereto have caused this Agreement to be executed as of the date first set forth herein. Integrity Short Term Government Fund By: /s/ Shannon D. Radke Shannon D. Radke - President Accepted: Integrity Funds Distributor, LLC By: /s/ Shannon D. Radke Shannon D. Radke - President Dated: January 18, 2020 8
Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020 | Highlight the parts (if any) of this contract related to "Parties" that should be reviewed by a lawyer. Details: The two or more parties who signed the contract | {
"answer_start": [
157
],
"text": [
"Integrity"
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Post-Termination Services" that should be reviewed by a lawyer. Details: Is a party subject to obligations after the termination or expiration of a contract, including any post-termination transition, payment, transfer of IP, wind-down, last-buy, or similar commitments?
Context: Exhibit 10.18 MAINTENANCE AGREEMENT MAINTENANCE AGREEMENT (this "Agreement"), dated as of July 23, 2003, made by Universal Access, Inc., a corporation organized and existing under the laws of the State of Delaware (the "Company"), and CityNet Telecommunications, Inc., a corporation organized and existing under the laws of the State of Delaware (the "Provider"). All capitalized terms used herein and not otherwise defined shall have the meaning set forth in the Purchase Agreement (as defined below). WITNESSETH: WHEREAS, the Provider and the Company entered into that certain Stock Purchase Agreement (the "Purchase Agreement") by and between the Provider and the Company dated as of April 7, 2003; WHEREAS, pursuant to the Purchase Agreement, the Provider will transfer the Fiber Ring Assets to the Company upon the Closing; WHEREAS, as a condition to the Closing, the Provider and the Company agreed to enter into this Agreement; NOW, THEREFORE, in consideration of the mutual agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: SECTION 1 TERM OF AGREEMENT 1.1. Initial Term. This Agreement commences on the date first above written, and will remain in effect for the period of five (5) years, except as otherwise provided herein. 1.2. Extension of Term. This Agreement will extend automatically for monthly periods unless either party to this Agreement notifies the other party in writing at least thirty (30) days before the expiration of the then current term. 1.3 Termination of Term. Notwithstanding the foregoing, either party may terminate this Agreement at any time without liability by providing one hundred eighty (180) days written notice to the other party. SECTION 2 DESCRIPTION OF SERVICES AND FEES 2.1. Services. (a) The Provider or its affiliate will provide the Company, with respect to the Fiber Ring Assets, all maintenance services (including but not limited to jetwashing and related ancillary services) required under the Provider's license agreements with the municipalities in which the Fiber Ring Assets are located (each a "City Rights Agreement"), and monitoring, emergency response and emergency splicing (collectively, the "Services"). If a
service call is required to restore the Fiber Ring Assets to good operating condition, the Company will notify the Provider promptly after it becomes aware of the service affecting problem. (b) The Services shall not include any of the following: (i) remedial or preventive maintenance service performed outside that expressly defined in this Section 2.1; (ii) repair of damage or loss resulting from accident, neglect, misuse or abuse or causes other than ordinary use by the Company for the purpose for which any of the Fiber Ring Assets was designed (collectively, "Repairs"); provided that Services do include Repairs if the damage or loss is caused by the Provider; (iii) making specification or field engineering changes; (iv) unless authorized in writing by the Provider, services resulting from, or which are impractical for the Provider to render because of, any adjustment, repair, maintenance, modification or alteration of the Fiber Ring Assets by any person other than the Provider; and (v) service calls required to restore any of the Fiber Ring Assets to good operating condition, if the Company fails to notify the Provider of a need for service within one (1) day of the Company's knowledge of such need, and such delay has made the provision of the Services more costly. 2.2. Availability of the Services and Repairs. The Provider will be available to provide the Services 24 hours per day, seven (7) days per week. Periodically during the term of this Agreement, the Provider will provide to the Company contact information and reasonable protocols to be followed in order to schedule performance of the Services. 2.3. Fees. In each of the first twelve months of this Agreement, the Company shall pay to the Provider $40,000 per month in exchange for the Services (the "Service Fee"). Upon each anniversary of the commencement of this Agreement, the Service Fee shall be increased by a percentage that reflects the actual increases in the Provider's cost of providing the Services, if any. All materials and labor required to provide any Repairs or any other services or other work not specified in Section 2.1(a) hereof requested by the Company shall be billed to the Company, in addition to the Service Fee as adjusted, at a rate equal to the Provider's actual cost plus 10% service/overhead fee. SECTION 3 COVENANTS OF THE COMPANY As a condition to receiving the Services under this Agreement, the Company hereby agrees and covenants as follows:
3.1. Access to the Fiber Ring Assets. The Company will provide full and free access to the equipment in which to perform service on a 24/7 basis. 3.2. Operation of the Fiber Ring Assets. The Company shall take any and all actions, and refrain from taking any action, within the control of the Company, to ensure that the Provider remains in compliance with, and does not breach or violate the terms of, a City Rights Agreement or any other agreement related to the Fiber Ring Assets to which the Provider is a party. This obligation shall include operating the Fiber Ring Assets in such a manner, and performing certain of the obligations of the operator of the Fiber Ring Assets, so as to remain in compliance with such agreements. The Company acknowledges that it has received and reviewed each of the City Rights Agreements set forth on Schedule 3.2 hereto. The obligations under this Section 3.2 shall survive termination of this Agreement for the life of any applicable City Rights Agreement or similar license. In any sale of a fiber ring, any transferee must agree to assume these obligations from Buyer. 3.3. Transfer of the Fiber Ring Assets. The Company shall not sell, transfer or otherwise attempt to convey or dispose of any part of the Fiber Ring Assets, other than sales and leases of capacity or of individual fiber strands in the ordinary and usual course of business unless the Provider consents to such transaction, which consent will not be withheld if, (a) the proposed transferee consents in writing to the assumption of all obligations of the Company under this Agreement, including those obligations to be undertaken under other agreements pursuant to Section 3.3, and (b) all governmental approvals (under City Rights Agreements or otherwise) have been obtained, with the Provider having the right (if it elects) to coordinate such efforts if it is the counterparty under such agreements requiring approval (with the Company to pay the reasonable costs of doing so). SECTION 4 COVENANTS OF THE PROVIDER As a condition to receiving the Service Fee and any other fees payable to the Provider under this Agreement, the Company hereby agrees and covenants as follows: 4.1. Commercially Reasonable Efforts. The Provider shall undertake commercially reasonable efforts to provide the Services and Repairs. The Provider shall provide the Services and Repairs in a professional and workmanlike manner. 4.2. Access to Information. The Provider shall make available any and all information held by it that is necessary and reasonable for the Company to fulfill its obligations under Section 3.3 of this Agreement. 4.3 Maintenance of Insurance. The Provider will obtain and maintain appropriate liability insurance in an amount of not less than $1,000,000 combined single limit for accidents or occurrences which cause bodily injury, death or property damage related to the performance of the Services. The insurance policy willname the Company as an additional insured. The Provider will provide the Company with a certificate of insurance issued to evidence such coverage. Such certificate will provide that there shall be no cancellation, non-renewal, or modification of such coverage without thirty days' prior written notice to the Company.
4.4 Operation of the Fiber Ring Assets. The Provider shall take any and all actions, and refrain from taking any action, within the control of the Provider, to ensure that the Company remains in compliance with, and does not breach or violate the terms of a City Rights Agreement. SECTION 5 MISCELLANEOUS 5.1. Excused Non-Performance. The Provider shall not be liable nor deemed to be in default for any delay or failure in performance under this Agreement resulting, directly or indirectly, from causes beyond the reasonable control of the Provider, provided that the Provider shall refund to the Company a pro rata portion of the Service Fee for any period in excess of two (2) weeks during which the Provider fails to or is unable for any reason to provide the Services or Repairs called for under this Agreement. Service provided under this Agreement does not assure uninterrupted operation of equipment. 5.2. Limited Warranty. The Provider shall provide maintenance under this Agreement for the fixed rate without regard to the number of legitimate service requests by the Company. 5.3 Limitation of Liability. EXCEPT AS STATED ABOVE, THE PROVIDER'S OBLIGATIONS UNDER THIS AGREEMENT ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED. ALL IMPLIED WARRANTIES ARE LIMITED TO THE DURATION OF THIS AGREEMENT. A PARTY'S TOTAL LIABILITY TO THE OTHER PARTY IN CONNECTION WITH THIS AGREEMENT, FOR ANY AND ALL CAUSES OF ACTIONS AND CLAIMS, INCLUDING, WITHOUT LIMITATION, BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE, STRICT LIABILITY, MISREPRESENTATION AND OTHER TORTS, SHALL BE: (a) FOR BODILY INJURY OR DEATH TO ANY PERSON PROXIMATELY CAUSED BY A PARTY'S NEGLIGENCE, THE AMOUNT OF DIRECT DAMAGES PROVEN; (b) FOR LOSS OR DAMAGE TO REAL PROPERTY OR TANGIBLE PERSONAL PROPERTY PROXIMATELY CAUSED BY A PARTY'S NEGLIGENCE, THE AMOUNT OF DIRECT DAMAGES PROVEN; (c) FOR ANY DAMAGES ARISING OUT OF THE WILLFUL OR INTENTIONAL MISCONDUCT OF A PARTY, THE AMOUNT OF DIRECT DAMAGES PROVEN; (d) FOR ALL OTHER DAMAGES OTHER THAN THOSE SET FORTH ABOVE AND NOT EXCLUDED UNDER THIS AGREEMENT, EACH PARTY'S LIABILITY TO THE OTHER PARTY DURING ANY TWELVE (12) MONTH PERIOD SHALL BE LIMITED TO THE LESSOR OF (i) DIRECT DAMAGES PROVEN BY THE PARTY, OR (ii) THE AMOUNT PAID BY THE COMPANY TO THE PROVIDER UNDER THIS AGREEMENT FOR THE TWELVE (12) MONTH PERIOD PRIOR TO THE CLAIM. The foregoing limitations do not apply to the Company's obligation to pay the Service Fees.
THE PROVIDER SHALL NOT BE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS OF REVENUES OR LOSS OF PROFIT, ARISING OUT OF THE PROVISION OF THE SERVICES OR REPAIRS, NOTWITHSTANDING ADVANCE NOTICE FROM THE COMPANY THAT THE POSSIBILITY OF SUCH DAMAGE OR LOSS EXISTS. 5.3. Notices. Any notice, request, demand or other communication required or permitted hereunder shall be deemed to have been given if delivered by facsimile transmission, upon receipt, if by hand delivery, upon receipt, if sent by nationally recognized overnight courier service, one day after deposit with such, or if sent by registered or certified mail, upon the sooner of the date on which receipt is acknowledged or the expiration of three days after deposit in United States post office facilities properly addressed with postage prepaid. All notices to a party will be sent to the addresses set forth below or to such other address or person as such party may designate by notice to each other party hereunder: TO THE PROVIDER:
CityNet Telecommunications, Inc. 8405 Colesville Road 6th Floor Silver Spring, Maryland 20910 Attention: General Counsel Facsimile: 301-608-8121 TO THE COMPANY:
Universal Access Global Holdings Inc. 233 S. Wacker Drive, Suite 600 Chicago, IL 60606 Attention: General Counsel Facsimile: 312-660-1290 If notice is sent by facsimile transmission, in order to be effective, such notice must also be sent by one of the other means of delivery identified above. Any notice given hereunder may be given on behalf of any party by his counsel or other authorized representatives. 5.4. Amendments. Any term, covenant, agreement or condition of this Agreement may be amended only in a writing signed by the Company and the Provider. 5.5. Assignment; Successors or Assigns. This Agreement and the rights and obligations hereunder may be assigned by the Provider upon written notice to the Company. All rights and obligations under this Agreement shall be binding upon any and all successors or assigns. 5.6. Survival. All covenants, representations and warranties made herein by the Company shall survive and not be waived by the execution and delivery of this Agreement.
5.7. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. 5.8. Headings. The headings of the sections and subsections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. 5.9. Governing Law; Submission To Jurisdiction; Venue. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED ACCORDING TO AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF DELAWARE, EXCLUDING ITS CONFLICTS OF LAWS PRINCIPLES TO THE EXTENT SUCH PRINCIPLES WOULD LEAD TO THE APPLICATION OF A SUBSTANTIVE LAW OTHER THAN THE LAW OF THE STATE OF DELAWARE. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF DELAWARE OR IN ANY UNITED STATES DISTRICT COURT SITTING WITHIN THE STATE OF DELAWARE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY AND THE PROVIDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY AND THE PROVIDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT. EACH OF THE COMPANY AND THE PROVIDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, THAT MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. (c) EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
5.10. Severability. If any provision of this Agreement is determined to be illegal, invalid or unenforceable, such provision shall be fully severable and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to the illegal, invalid or unenforceable provisions. 5.11. Entirety. This Agreement represents the entire agreement of the parties hereto, and supersedes all prior agreements and understandings, oral or written, if any, relating to the transactions contemplated herein.
IN WITNESS WHEREOF, the parties hereto have caused this Maintenance Agreement to be executed by their duly elected officers duly authorized as of the date first above written.
UNIVERSAL ACCESS, INC.
By:
Name:
Title:
CITYNET TELECOMMUNICATIONS, INC.
By:
Name:
Title:
SCHEDULE 3.2 City Rights Agreements (1) Access and License Agreement dated December 8, 2000, between the Consolidated City of Indianapolis, Marion County, Indiana and the Department of Capital Asset Management (jointly as "Licensor") and CityNet Telecommunications, Inc. as "Licensee," as amended by the Amendment to the Access and License Agreement dated as of June 25, 2003, by and between Licensor, Licensee and Universal Access, Inc. (2) License Agreement dated November 8, 2000, between the City of Albuquerque, New Mexico and CityNet Telecommunications, Inc. [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 10.18 MAINTENANCE AGREEMENT MAINTENANCE AGREEMENT (this "Agreement"), dated as of July 23, 2003, made by Universal Access, Inc., a corporation organized and existing under the laws of the State of Delaware (the "Company"), and CityNet Telecommunications, Inc., a corporation organized and existing under the laws of the State of Delaware (the "Provider"). All capitalized terms used herein and not otherwise defined shall have the meaning set forth in the Purchase Agreement (as defined below). WITNESSETH: WHEREAS, the Provider and the Company entered into that certain Stock Purchase Agreement (the "Purchase Agreement") by and between the Provider and the Company dated as of April 7, 2003; WHEREAS, pursuant to the Purchase Agreement, the Provider will transfer the Fiber Ring Assets to the Company upon the Closing; WHEREAS, as a condition to the Closing, the Provider and the Company agreed to enter into this Agreement; NOW, THEREFORE, in consideration of the mutual agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: SECTION 1 TERM OF AGREEMENT 1.1. Initial Term. This Agreement commences on the date first above written, and will remain in effect for the period of five (5) years, except as otherwise provided herein. 1.2. Extension of Term. This Agreement will extend automatically for monthly periods unless either party to this Agreement notifies the other party in writing at least thirty (30) days before the expiration of the then current term. 1.3 Termination of Term. Notwithstanding the foregoing, either party may terminate this Agreement at any time without liability by providing one hundred eighty (180) days written notice to the other party. SECTION 2 DESCRIPTION OF SERVICES AND FEES 2.1. Services. (a) The Provider or its affiliate will provide the Company, with respect to the Fiber Ring Assets, all maintenance services (including but not limited to jetwashing and related ancillary services) required under the Provider's license agreements with the municipalities in which the Fiber Ring Assets are located (each a "City Rights Agreement"), and monitoring, emergency response and emergency splicing (collectively, the "Services"). If a
service call is required to restore the Fiber Ring Assets to good operating condition, the Company will notify the Provider promptly after it becomes aware of the service affecting problem. (b) The Services shall not include any of the following: (i) remedial or preventive maintenance service performed outside that expressly defined in this Section 2.1; (ii) repair of damage or loss resulting from accident, neglect, misuse or abuse or causes other than ordinary use by the Company for the purpose for which any of the Fiber Ring Assets was designed (collectively, "Repairs"); provided that Services do include Repairs if the damage or loss is caused by the Provider; (iii) making specification or field engineering changes; (iv) unless authorized in writing by the Provider, services resulting from, or which are impractical for the Provider to render because of, any adjustment, repair, maintenance, modification or alteration of the Fiber Ring Assets by any person other than the Provider; and (v) service calls required to restore any of the Fiber Ring Assets to good operating condition, if the Company fails to notify the Provider of a need for service within one (1) day of the Company's knowledge of such need, and such delay has made the provision of the Services more costly. 2.2. Availability of the Services and Repairs. The Provider will be available to provide the Services 24 hours per day, seven (7) days per week. Periodically during the term of this Agreement, the Provider will provide to the Company contact information and reasonable protocols to be followed in order to schedule performance of the Services. 2.3. Fees. In each of the first twelve months of this Agreement, the Company shall pay to the Provider $40,000 per month in exchange for the Services (the "Service Fee"). Upon each anniversary of the commencement of this Agreement, the Service Fee shall be increased by a percentage that reflects the actual increases in the Provider's cost of providing the Services, if any. All materials and labor required to provide any Repairs or any other services or other work not specified in Section 2.1(a) hereof requested by the Company shall be billed to the Company, in addition to the Service Fee as adjusted, at a rate equal to the Provider's actual cost plus 10% service/overhead fee. SECTION 3 COVENANTS OF THE COMPANY As a condition to receiving the Services under this Agreement, the Company hereby agrees and covenants as follows:
3.1. Access to the Fiber Ring Assets. The Company will provide full and free access to the equipment in which to perform service on a 24/7 basis. 3.2. Operation of the Fiber Ring Assets. The Company shall take any and all actions, and refrain from taking any action, within the control of the Company, to ensure that the Provider remains in compliance with, and does not breach or violate the terms of, a City Rights Agreement or any other agreement related to the Fiber Ring Assets to which the Provider is a party. This obligation shall include operating the Fiber Ring Assets in such a manner, and performing certain of the obligations of the operator of the Fiber Ring Assets, so as to remain in compliance with such agreements. The Company acknowledges that it has received and reviewed each of the City Rights Agreements set forth on Schedule 3.2 hereto. The obligations under this Section 3.2 shall survive termination of this Agreement for the life of any applicable City Rights Agreement or similar license. In any sale of a fiber ring, any transferee must agree to assume these obligations from Buyer. 3.3. Transfer of the Fiber Ring Assets. The Company shall not sell, transfer or otherwise attempt to convey or dispose of any part of the Fiber Ring Assets, other than sales and leases of capacity or of individual fiber strands in the ordinary and usual course of business unless the Provider consents to such transaction, which consent will not be withheld if, (a) the proposed transferee consents in writing to the assumption of all obligations of the Company under this Agreement, including those obligations to be undertaken under other agreements pursuant to Section 3.3, and (b) all governmental approvals (under City Rights Agreements or otherwise) have been obtained, with the Provider having the right (if it elects) to coordinate such efforts if it is the counterparty under such agreements requiring approval (with the Company to pay the reasonable costs of doing so). SECTION 4 COVENANTS OF THE PROVIDER As a condition to receiving the Service Fee and any other fees payable to the Provider under this Agreement, the Company hereby agrees and covenants as follows: 4.1. Commercially Reasonable Efforts. The Provider shall undertake commercially reasonable efforts to provide the Services and Repairs. The Provider shall provide the Services and Repairs in a professional and workmanlike manner. 4.2. Access to Information. The Provider shall make available any and all information held by it that is necessary and reasonable for the Company to fulfill its obligations under Section 3.3 of this Agreement. 4.3 Maintenance of Insurance. The Provider will obtain and maintain appropriate liability insurance in an amount of not less than $1,000,000 combined single limit for accidents or occurrences which cause bodily injury, death or property damage related to the performance of the Services. The insurance policy willname the Company as an additional insured. The Provider will provide the Company with a certificate of insurance issued to evidence such coverage. Such certificate will provide that there shall be no cancellation, non-renewal, or modification of such coverage without thirty days' prior written notice to the Company.
4.4 Operation of the Fiber Ring Assets. The Provider shall take any and all actions, and refrain from taking any action, within the control of the Provider, to ensure that the Company remains in compliance with, and does not breach or violate the terms of a City Rights Agreement. SECTION 5 MISCELLANEOUS 5.1. Excused Non-Performance. The Provider shall not be liable nor deemed to be in default for any delay or failure in performance under this Agreement resulting, directly or indirectly, from causes beyond the reasonable control of the Provider, provided that the Provider shall refund to the Company a pro rata portion of the Service Fee for any period in excess of two (2) weeks during which the Provider fails to or is unable for any reason to provide the Services or Repairs called for under this Agreement. Service provided under this Agreement does not assure uninterrupted operation of equipment. 5.2. Limited Warranty. The Provider shall provide maintenance under this Agreement for the fixed rate without regard to the number of legitimate service requests by the Company. 5.3 Limitation of Liability. EXCEPT AS STATED ABOVE, THE PROVIDER'S OBLIGATIONS UNDER THIS AGREEMENT ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED. ALL IMPLIED WARRANTIES ARE LIMITED TO THE DURATION OF THIS AGREEMENT. A PARTY'S TOTAL LIABILITY TO THE OTHER PARTY IN CONNECTION WITH THIS AGREEMENT, FOR ANY AND ALL CAUSES OF ACTIONS AND CLAIMS, INCLUDING, WITHOUT LIMITATION, BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE, STRICT LIABILITY, MISREPRESENTATION AND OTHER TORTS, SHALL BE: (a) FOR BODILY INJURY OR DEATH TO ANY PERSON PROXIMATELY CAUSED BY A PARTY'S NEGLIGENCE, THE AMOUNT OF DIRECT DAMAGES PROVEN; (b) FOR LOSS OR DAMAGE TO REAL PROPERTY OR TANGIBLE PERSONAL PROPERTY PROXIMATELY CAUSED BY A PARTY'S NEGLIGENCE, THE AMOUNT OF DIRECT DAMAGES PROVEN; (c) FOR ANY DAMAGES ARISING OUT OF THE WILLFUL OR INTENTIONAL MISCONDUCT OF A PARTY, THE AMOUNT OF DIRECT DAMAGES PROVEN; (d) FOR ALL OTHER DAMAGES OTHER THAN THOSE SET FORTH ABOVE AND NOT EXCLUDED UNDER THIS AGREEMENT, EACH PARTY'S LIABILITY TO THE OTHER PARTY DURING ANY TWELVE (12) MONTH PERIOD SHALL BE LIMITED TO THE LESSOR OF (i) DIRECT DAMAGES PROVEN BY THE PARTY, OR (ii) THE AMOUNT PAID BY THE COMPANY TO THE PROVIDER UNDER THIS AGREEMENT FOR THE TWELVE (12) MONTH PERIOD PRIOR TO THE CLAIM. The foregoing limitations do not apply to the Company's obligation to pay the Service Fees.
THE PROVIDER SHALL NOT BE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS OF REVENUES OR LOSS OF PROFIT, ARISING OUT OF THE PROVISION OF THE SERVICES OR REPAIRS, NOTWITHSTANDING ADVANCE NOTICE FROM THE COMPANY THAT THE POSSIBILITY OF SUCH DAMAGE OR LOSS EXISTS. 5.3. Notices. Any notice, request, demand or other communication required or permitted hereunder shall be deemed to have been given if delivered by facsimile transmission, upon receipt, if by hand delivery, upon receipt, if sent by nationally recognized overnight courier service, one day after deposit with such, or if sent by registered or certified mail, upon the sooner of the date on which receipt is acknowledged or the expiration of three days after deposit in United States post office facilities properly addressed with postage prepaid. All notices to a party will be sent to the addresses set forth below or to such other address or person as such party may designate by notice to each other party hereunder: TO THE PROVIDER:
CityNet Telecommunications, Inc. 8405 Colesville Road 6th Floor Silver Spring, Maryland 20910 Attention: General Counsel Facsimile: 301-608-8121 TO THE COMPANY:
Universal Access Global Holdings Inc. 233 S. Wacker Drive, Suite 600 Chicago, IL 60606 Attention: General Counsel Facsimile: 312-660-1290 If notice is sent by facsimile transmission, in order to be effective, such notice must also be sent by one of the other means of delivery identified above. Any notice given hereunder may be given on behalf of any party by his counsel or other authorized representatives. 5.4. Amendments. Any term, covenant, agreement or condition of this Agreement may be amended only in a writing signed by the Company and the Provider. 5.5. Assignment; Successors or Assigns. This Agreement and the rights and obligations hereunder may be assigned by the Provider upon written notice to the Company. All rights and obligations under this Agreement shall be binding upon any and all successors or assigns. 5.6. Survival. All covenants, representations and warranties made herein by the Company shall survive and not be waived by the execution and delivery of this Agreement.
5.7. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. 5.8. Headings. The headings of the sections and subsections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. 5.9. Governing Law; Submission To Jurisdiction; Venue. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED ACCORDING TO AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF DELAWARE, EXCLUDING ITS CONFLICTS OF LAWS PRINCIPLES TO THE EXTENT SUCH PRINCIPLES WOULD LEAD TO THE APPLICATION OF A SUBSTANTIVE LAW OTHER THAN THE LAW OF THE STATE OF DELAWARE. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF DELAWARE OR IN ANY UNITED STATES DISTRICT COURT SITTING WITHIN THE STATE OF DELAWARE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY AND THE PROVIDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY AND THE PROVIDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT. EACH OF THE COMPANY AND THE PROVIDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, THAT MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. (c) EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
5.10. Severability. If any provision of this Agreement is determined to be illegal, invalid or unenforceable, such provision shall be fully severable and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to the illegal, invalid or unenforceable provisions. 5.11. Entirety. This Agreement represents the entire agreement of the parties hereto, and supersedes all prior agreements and understandings, oral or written, if any, relating to the transactions contemplated herein.
IN WITNESS WHEREOF, the parties hereto have caused this Maintenance Agreement to be executed by their duly elected officers duly authorized as of the date first above written.
UNIVERSAL ACCESS, INC.
By:
Name:
Title:
CITYNET TELECOMMUNICATIONS, INC.
By:
Name:
Title:
SCHEDULE 3.2 City Rights Agreements (1) Access and License Agreement dated December 8, 2000, between the Consolidated City of Indianapolis, Marion County, Indiana and the Department of Capital Asset Management (jointly as "Licensor") and CityNet Telecommunications, Inc. as "Licensee," as amended by the Amendment to the Access and License Agreement dated as of June 25, 2003, by and between Licensor, Licensee and Universal Access, Inc. (2) License Agreement dated November 8, 2000, between the City of Albuquerque, New Mexico and CityNet Telecommunications, Inc. | Highlight the parts (if any) of this contract related to "Post-Termination Services" that should be reviewed by a lawyer. Details: Is a party subject to obligations after the termination or expiration of a contract, including any post-termination transition, payment, transfer of IP, wind-down, last-buy, or similar commitments? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Most Favored Nation" that should be reviewed by a lawyer. Details: Is there a clause that if a third party gets better terms on the licensing or sale of technology/goods/services described in the contract, the buyer of such technology/goods/services under the contract shall be entitled to those better terms?
Context: [***] = CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE A Product License Schedule FORM This Product License Schedule is issued pursuant to the Software License, Customization and Maintenance Agreement (the "Agreement") executed by and between Bank of America, N.A. ("Bank of America") and Cardlytics, ("Supplier") and incorporates by reference all of the terms and conditions of the Agreement.
TERM FOR ORDERING
A. Software
This Schedule constitutes an Order in accordance with the terms of the Agreement.
B. Payment Schedule for Source Code delivery as outlined in Section 2.7
• Beginning three (3) years after the General Services Agreement Effective Date, the Supplier Software version in place one (1) yearfollowing the Service reaching 10,000,000 Users $[***]
• The latest commercially available version, or earlier versions at Bank of America's option, of the Supplier Software:
• Beginning 3 years after the General Services Agreement Effective Date or one (1) year following the Service reaching 10,000,000 Users, whichever is later, if Supplier has failed to meet either of the Performance Adjustments as outlined in Schedule B of the General Services Agreement for six (6) consecutive months. $[***]
• Beginning 3 years after the General Services Agreement Effective Date and one (1) year following the National Launch date and Supplier has met both of the Performance Adjustments as outlined in Schedule B of the General Services Agreement. Bank of America Total Revenue Share minus Supplier Total Revenue share for the preceding twelve (12) months
• At any time if Supplier materially breaches either Agreement $[***]
C. Maintenance Services
No-charge Maintenance Services shall be provided from the Delivery Date through the Warranty Period. The first paid (Initial) Maintenance Term shall commence upon expiration of the Warranty Period and shall continue for twelve (12) months thereafter. Thereafter, the Maintenance Term shall automatically renew for successive period, 12 months, on the terms and conditions of this Agreement unless Bank of America terminates Maintenance Services pursuant to this Agreement. Bank of America may terminate Maintenance Services for convenience at any time in accordance with the Section entitled "Termination" of the Agreement. If Bank of America terminates the Maintenance Services, Bank of America shall have the right to reinstate the Maintenance Services without paying any reinstatement fee. During the initial Maintenance Term and any renewal term, Maintenance Fees shall be paid in the increments described below under "Payment Terms." Proprietary to Bank of America Page A-2 vTIP2010
Source: CARDLYTICS, INC., S-1, 1/12/2018
PRODUCTS LICENSED PROGRAMS: PROGRAM MATERIALS: PLATFORM:
The Software consists of the following: The Program Materials include the following: The Platform consists of the following:
Cardlytics OPS (Offer Placement System) Version 3.0
Installation Guides Operational Guides
Computer: database servers, application servers and web servers
Operating System: Microsoft.net and SQL 2008
Other Required Components Client side ad serving technology
PAYMENT TERMS
The Software License and Maintenance will be provided at no charge. Proprietary to Bank of America Page A-3 vTIP2010
Source: CARDLYTICS, INC., S-1, 1/12/2018
[***] = CONFIDENTIAL TREATMENT REQUESTED
PAYMENT TERMS
DELIVERY/INSTALLATION DATES ACCEPTANCE PERIOD MAINTENANCE PERIOD
WARRANTY PERIOD DURATION
Delivery Date:
TBD
Installation Date:
TBD
The period commencing on the Installation Date and continuing for the number of days specified:
120 days
Notwithstanding anything set forth elsewhere in this Agreement (or below), the Maintenance Period shall be twenty- four (24) hours per day, seven (7) days per week, including Bank of America holidays.
120 days
METHOD OF DELIVERY AND STATE WHERE SOFTWARE AND DOCUMENTATION ARE RECEIVED
The method of delivery and name of the State where Supplier shall deliver and Bank of America shall receive Software and Documentation:
TBD
TRAINING
Supplier shall provide the following training classes pursuant to this Agreement in connection with installation of the first copy of the Software.
Date:
INSTALLATION SUPPORT
In addition to the installation support provided pursuant to the Section entitled "Ordering, Delivery and Installation," Supplier shall provide Bank of America the following installation services:
Installation Support will be handled in a separate agreement
NON-MAINTENANCE SERVICES SUPPORT
Support services shall be provided at the Time and Materials rates set forth in the Price List.
RELATIONSHIP MANAGERS
The following shall be the Relationship Managers for the parties: Bank of America: Cardlytics: Brian Woodward Jason Brooks Address: [***] [***] Proprietary to Bank of America Page A-4 vTIP2010
Source: CARDLYTICS, INC., S-1, 1/12/2018
SOURCE CODE INSTALLATION SITE
Bank of America shall maintain its copy of the Source Code on the terms of this Agreement at the following address: Address: TBD
INSTALLATION SITE
Address: TBD
INVOICE ADDRESS(ES)
Licenses:
N/A Maintenance:
N/A Proprietary to Bank of America Page A-5 vTIP2010
Source: CARDLYTICS, INC., S-1, 1/12/2018 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | [***] = CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE A Product License Schedule FORM This Product License Schedule is issued pursuant to the Software License, Customization and Maintenance Agreement (the "Agreement") executed by and between Bank of America, N.A. ("Bank of America") and Cardlytics, ("Supplier") and incorporates by reference all of the terms and conditions of the Agreement.
TERM FOR ORDERING
A. Software
This Schedule constitutes an Order in accordance with the terms of the Agreement.
B. Payment Schedule for Source Code delivery as outlined in Section 2.7
• Beginning three (3) years after the General Services Agreement Effective Date, the Supplier Software version in place one (1) yearfollowing the Service reaching 10,000,000 Users $[***]
• The latest commercially available version, or earlier versions at Bank of America's option, of the Supplier Software:
• Beginning 3 years after the General Services Agreement Effective Date or one (1) year following the Service reaching 10,000,000 Users, whichever is later, if Supplier has failed to meet either of the Performance Adjustments as outlined in Schedule B of the General Services Agreement for six (6) consecutive months. $[***]
• Beginning 3 years after the General Services Agreement Effective Date and one (1) year following the National Launch date and Supplier has met both of the Performance Adjustments as outlined in Schedule B of the General Services Agreement. Bank of America Total Revenue Share minus Supplier Total Revenue share for the preceding twelve (12) months
• At any time if Supplier materially breaches either Agreement $[***]
C. Maintenance Services
No-charge Maintenance Services shall be provided from the Delivery Date through the Warranty Period. The first paid (Initial) Maintenance Term shall commence upon expiration of the Warranty Period and shall continue for twelve (12) months thereafter. Thereafter, the Maintenance Term shall automatically renew for successive period, 12 months, on the terms and conditions of this Agreement unless Bank of America terminates Maintenance Services pursuant to this Agreement. Bank of America may terminate Maintenance Services for convenience at any time in accordance with the Section entitled "Termination" of the Agreement. If Bank of America terminates the Maintenance Services, Bank of America shall have the right to reinstate the Maintenance Services without paying any reinstatement fee. During the initial Maintenance Term and any renewal term, Maintenance Fees shall be paid in the increments described below under "Payment Terms." Proprietary to Bank of America Page A-2 vTIP2010
Source: CARDLYTICS, INC., S-1, 1/12/2018
PRODUCTS LICENSED PROGRAMS: PROGRAM MATERIALS: PLATFORM:
The Software consists of the following: The Program Materials include the following: The Platform consists of the following:
Cardlytics OPS (Offer Placement System) Version 3.0
Installation Guides Operational Guides
Computer: database servers, application servers and web servers
Operating System: Microsoft.net and SQL 2008
Other Required Components Client side ad serving technology
PAYMENT TERMS
The Software License and Maintenance will be provided at no charge. Proprietary to Bank of America Page A-3 vTIP2010
Source: CARDLYTICS, INC., S-1, 1/12/2018
[***] = CONFIDENTIAL TREATMENT REQUESTED
PAYMENT TERMS
DELIVERY/INSTALLATION DATES ACCEPTANCE PERIOD MAINTENANCE PERIOD
WARRANTY PERIOD DURATION
Delivery Date:
TBD
Installation Date:
TBD
The period commencing on the Installation Date and continuing for the number of days specified:
120 days
Notwithstanding anything set forth elsewhere in this Agreement (or below), the Maintenance Period shall be twenty- four (24) hours per day, seven (7) days per week, including Bank of America holidays.
120 days
METHOD OF DELIVERY AND STATE WHERE SOFTWARE AND DOCUMENTATION ARE RECEIVED
The method of delivery and name of the State where Supplier shall deliver and Bank of America shall receive Software and Documentation:
TBD
TRAINING
Supplier shall provide the following training classes pursuant to this Agreement in connection with installation of the first copy of the Software.
Date:
INSTALLATION SUPPORT
In addition to the installation support provided pursuant to the Section entitled "Ordering, Delivery and Installation," Supplier shall provide Bank of America the following installation services:
Installation Support will be handled in a separate agreement
NON-MAINTENANCE SERVICES SUPPORT
Support services shall be provided at the Time and Materials rates set forth in the Price List.
RELATIONSHIP MANAGERS
The following shall be the Relationship Managers for the parties: Bank of America: Cardlytics: Brian Woodward Jason Brooks Address: [***] [***] Proprietary to Bank of America Page A-4 vTIP2010
Source: CARDLYTICS, INC., S-1, 1/12/2018
SOURCE CODE INSTALLATION SITE
Bank of America shall maintain its copy of the Source Code on the terms of this Agreement at the following address: Address: TBD
INSTALLATION SITE
Address: TBD
INVOICE ADDRESS(ES)
Licenses:
N/A Maintenance:
N/A Proprietary to Bank of America Page A-5 vTIP2010
Source: CARDLYTICS, INC., S-1, 1/12/2018 | Highlight the parts (if any) of this contract related to "Most Favored Nation" that should be reviewed by a lawyer. Details: Is there a clause that if a third party gets better terms on the licensing or sale of technology/goods/services described in the contract, the buyer of such technology/goods/services under the contract shall be entitled to those better terms? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "No-Solicit Of Customers" that should be reviewed by a lawyer. Details: Is a party restricted from contracting or soliciting customers or partners of the counterparty, whether during the contract or after the contract ends (or both)?
Context: DISTRIBUTOR AGREEMENT
1. CERTIFICATION AND IDENTIFICATION:
COMWARE TECHNICAL SERVICES OF 17922 SKY PARK CIRCLE, SUITE E, IRVINE, CALIFORNIA 92614-6414 (COMWARE) certifies that the Products furnished under this agreement by INTERNATIONAL TEST SYSTEMS, INC. OF 4703 SHAVANO OAK, SUITE 102, SAN ANTONIO, TEXAS 78249 (ITS) will be incorporated by COMWARE as a part of COMWARE'S systems which COMWARE sells or leases to unaffiliated third parties in the regular course of COMWARE'S business and that COMWARE'S own contribution to these systems reflect a verifiable value added. COMWARE also represents that it is an experienced user of computer equipment and software sufficiently like the Products, as defined below, and that it needs only minor support in the incorporation of the Products into its lines of business.
2. DEFINITIONS:
INITIAL DISTRIBUTION PERIOD: April 15, 2000 through October 15, 2000 (6 Months from the Effective Date)
PRODUCTS: The CircuiTest 2000S In-Circuit Test System
The CircuiTest 2100 Scanner Expansion
EXCLUSIVE TERRITORIES: The 48 Contiguous United States
EFFECTIVE DATE: The earlier of the date Comware orders and pays for a minimum of $22,710 worth of Products, in any combination, or April 15, 2000.
3. EXCLUSIVE RIGHTS: Upon the effective date of this agreement COMWARE shall have the exclusive right to purchase, at the DISCOUNTS described below, and resell Products to potential customers during the Initial Distribution Period, based on the following terms and conditions:
(a) COMWARE must purchase no less than $22,710.00 worth of Products, in any combination, by April 15, 2000. This initial order shall be evidenced by valid purchase order from COMWARE to be received by ITS no later than 5:00PM April 1, 2000, with payment to be received by ITS no later than April 15, 2000. In the event either of these dates are not met, this Agreement will automatically and immediately terminate and neither of the parties hereto will have any further obligations, one to the other.
(b) Future Purchase Orders and delivery will approximate the 15 day delivery schedule (but not the dates), although payment will be made by COMWARE to ITS no later than thirty (30) days after receipt of invoice from ITS.
(c) Provided COMWARE purchases the initial products as in (a) above, COMWARE shall have the right to purchase additional Products up to a total of $45,420.00 at the following discounts:
1
INITIAL DISCOUNTS:
PRODUCT IDENTIFICATION SUGGESTED RETAIL PRICE DISCOUNT PRICE TO COMWARE ------------------------------------------------------------------------------------------------- CircuiTest 2000S $5,995.00 45% $3,297.25 CircuiTest 2100 Scanner $2,995.00 56% $1,317.80
(INTERNATIONAL TEST SYSTEMS RESERVES THE RIGHT TO CHANGE THE RETAIL PRICE AT ANY TIME, WITH NOTICE TO COMWARE.)
(d) In the event COMWARE purchases products in excess of $45,420.00 during the Initial Distribution Period, COMWARE shall have the right to purchase additional Products at the following discounts:
SUBSEQUENT DISCOUNTS:
PRODUCT IDENTIFICATION SUGGESTED RETAIL PRICE DISCOUNT PRICE TO COMWARE ------------------------------------------------------------------------------------------------- CircuiTest 2000S $5,995.00 50% $2,997.50 CircuiTest 2100 Scanner $2,995.00 60% $1,198.00
(INTERNATIONAL TEST SYSTEMS RESERVES THE RIGHT TO CHANGE THE RETAIL PRICE AT ANY TIME, WITH NOTICE TO COMWARE.)
4. RENEWAL PERIOD: Provided that COMWARE purchases a minimum of $45,420.00 worth of Products, in any combination, during the Initial Distribution
Period, this Agreement will automatically renew for an additional 6 months (the Renewal Period). In the event COMWARE purchases an amount less than $45,420.00, than this Agreement will automatically terminate.
5. MINIMUM ORDERS TO MAINTAIN AGREEMENT: COMWARE must purchase order a minimum of $4,200 worth of Products per month during the Renewal Period TO maintain the terms and conditions of this Agreement. In the event COMWARE does not meet these minimum purchase requirements, this Agreement will automatically and immediately terminate and neither of the parties hereto will have any further obligations, one to the other.
6. OBLIGATIONS OF COMWARE:
o Use best efforts to market and sell the Products to customers. o Provide marketing feedback to ITS. o Train customers on and demonstrate ITS products. o COMWARE reserves the right to develop and sell value-added services that support the sales of ITS systems. o COMWARE reserves the right to develop their own marketing materials, brochures, and advertisements for ITS' products at no cost to ITS. o Communicate with and respond to ITS AND ITS inquires. o Assist ITS in customer feedback.
2
7. OBLIGATIONS OF ITS:
o ITS will deliver working systems no later than 30 days after a hard copy purchase order is received from COMWARE. o ITS will provide free technical support to customers who have purchased ITS systems for a period of 30 days. After the 30 day free technical support period, ITS reserves the right to charge a reasonable fee for additional support. o ITS will be solely responsible for the production of brochures describing the products, and will provide COMWARE with ample space for placement of business card/label and provide COMWARE with as many brochures as it may from time to time reasonably require, free of charge. o In event of cancellation of a purchase order, or re-scheduling of any item on a purchase order beyond the discount period, COMWARE may be liable for bill back or adjustment of discounts based upon actual quantities of items delivered within the discount period. o COMWARE will not be penalized for delays in delivery caused by ITS, or any agent of ITS. o ITS will use its best efforts to provide a swift and complete resolution of any product-related problems, whether or not such problems are covered under the terms of the WARRANTY. In the event that one of COMWARE'S customers has a problem that is beyond the scope of COMWARE'S capabilities, ITS will address the problem without delay in the best interest of customer service.
8. WARRANTY: ITS Products are warranted free from defects of material or workmanship for 3 years after shipment from the manufacturer. Equipment purchased from ITS, which becomes defective within that time period will be repaired by ITS at its headquarters in San Antonio, Texas at no cost to COMWARE beyond cost of shipping the equipment to ITS. ITS will bear the cost of returning the item to COMWARE by UPS, REGULAR DELIVERY. priority shipping costs will be borne by COMWARE.
This warranty is contingent upon proper use and installation of the Products and does not cover equipment which has been modified without ITS' consent or which has been subjected to unusual physical or electrical stress or on which the original identification marks have been removed or altered.
9. DOCUMENTATION AND SUPPORT: ITS will supply with each of the Products ordered one set of user and technical documentation and one set of software in reproducible form.
COMWARE may purchase additional copies of the documentation and software disks at then prevailing prices.
COMWARE will receive minimal assistance and support from ITS consistent with the certifications in Section 1.
3
TERMINATION: except as specifically described elsewhere in this agreement, either ITS or COMWARE shall have the right to terminate this Agreement with 30 days written notice from the other party, for any reason whatsoever.
11. GOVERNMENT SALES: COMWARE reserves the right to incorporate, as extension of this Agreement, additional terms and conditions as may be required for sale of Products to the US Government. These terms and conditions will be expressly quoted in attachments to subject purchase orders. ITS reserves the right to reject such purchase orders only under those conditions where these terms and conditions are in conflict with stated policy or corporate condition of ITS at the time the purchase orders are received.
12. ENTIRE AGREEMENT: This Agreement supersedes all prior agreements and understandings between the parties relating to the subject matter and is intended by the parties as the complete and exclusive statement of the terms of the Agreement. No modification, addition to or waiver of the terms and conditions of this Agreement shall be effective unless in writing and signed by the party against whom the same is sought to be enforced.
13. GOVERNED BY THE STATE OF TEXAS: This Agreement shall be interpreted and governed by the laws of the State of Texas. Comware agrees to submit to the jurisdiction of the State of Texas, Bexar County, USA.
INTERNATIONAL TEST SYSTEMS, INC. COMWARE TECHNICAL SERVICES
BY BY ------------------------------- ---------------------------------
PRINTED PRINTED -------------------------- ----------------------------
TITLE TITLE ---------------------------- ------------------------------
DATE DATE ----------------------------- -------------------------------
4 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | DISTRIBUTOR AGREEMENT
1. CERTIFICATION AND IDENTIFICATION:
COMWARE TECHNICAL SERVICES OF 17922 SKY PARK CIRCLE, SUITE E, IRVINE, CALIFORNIA 92614-6414 (COMWARE) certifies that the Products furnished under this agreement by INTERNATIONAL TEST SYSTEMS, INC. OF 4703 SHAVANO OAK, SUITE 102, SAN ANTONIO, TEXAS 78249 (ITS) will be incorporated by COMWARE as a part of COMWARE'S systems which COMWARE sells or leases to unaffiliated third parties in the regular course of COMWARE'S business and that COMWARE'S own contribution to these systems reflect a verifiable value added. COMWARE also represents that it is an experienced user of computer equipment and software sufficiently like the Products, as defined below, and that it needs only minor support in the incorporation of the Products into its lines of business.
2. DEFINITIONS:
INITIAL DISTRIBUTION PERIOD: April 15, 2000 through October 15, 2000 (6 Months from the Effective Date)
PRODUCTS: The CircuiTest 2000S In-Circuit Test System
The CircuiTest 2100 Scanner Expansion
EXCLUSIVE TERRITORIES: The 48 Contiguous United States
EFFECTIVE DATE: The earlier of the date Comware orders and pays for a minimum of $22,710 worth of Products, in any combination, or April 15, 2000.
3. EXCLUSIVE RIGHTS: Upon the effective date of this agreement COMWARE shall have the exclusive right to purchase, at the DISCOUNTS described below, and resell Products to potential customers during the Initial Distribution Period, based on the following terms and conditions:
(a) COMWARE must purchase no less than $22,710.00 worth of Products, in any combination, by April 15, 2000. This initial order shall be evidenced by valid purchase order from COMWARE to be received by ITS no later than 5:00PM April 1, 2000, with payment to be received by ITS no later than April 15, 2000. In the event either of these dates are not met, this Agreement will automatically and immediately terminate and neither of the parties hereto will have any further obligations, one to the other.
(b) Future Purchase Orders and delivery will approximate the 15 day delivery schedule (but not the dates), although payment will be made by COMWARE to ITS no later than thirty (30) days after receipt of invoice from ITS.
(c) Provided COMWARE purchases the initial products as in (a) above, COMWARE shall have the right to purchase additional Products up to a total of $45,420.00 at the following discounts:
1
INITIAL DISCOUNTS:
PRODUCT IDENTIFICATION SUGGESTED RETAIL PRICE DISCOUNT PRICE TO COMWARE ------------------------------------------------------------------------------------------------- CircuiTest 2000S $5,995.00 45% $3,297.25 CircuiTest 2100 Scanner $2,995.00 56% $1,317.80
(INTERNATIONAL TEST SYSTEMS RESERVES THE RIGHT TO CHANGE THE RETAIL PRICE AT ANY TIME, WITH NOTICE TO COMWARE.)
(d) In the event COMWARE purchases products in excess of $45,420.00 during the Initial Distribution Period, COMWARE shall have the right to purchase additional Products at the following discounts:
SUBSEQUENT DISCOUNTS:
PRODUCT IDENTIFICATION SUGGESTED RETAIL PRICE DISCOUNT PRICE TO COMWARE ------------------------------------------------------------------------------------------------- CircuiTest 2000S $5,995.00 50% $2,997.50 CircuiTest 2100 Scanner $2,995.00 60% $1,198.00
(INTERNATIONAL TEST SYSTEMS RESERVES THE RIGHT TO CHANGE THE RETAIL PRICE AT ANY TIME, WITH NOTICE TO COMWARE.)
4. RENEWAL PERIOD: Provided that COMWARE purchases a minimum of $45,420.00 worth of Products, in any combination, during the Initial Distribution
Period, this Agreement will automatically renew for an additional 6 months (the Renewal Period). In the event COMWARE purchases an amount less than $45,420.00, than this Agreement will automatically terminate.
5. MINIMUM ORDERS TO MAINTAIN AGREEMENT: COMWARE must purchase order a minimum of $4,200 worth of Products per month during the Renewal Period TO maintain the terms and conditions of this Agreement. In the event COMWARE does not meet these minimum purchase requirements, this Agreement will automatically and immediately terminate and neither of the parties hereto will have any further obligations, one to the other.
6. OBLIGATIONS OF COMWARE:
o Use best efforts to market and sell the Products to customers. o Provide marketing feedback to ITS. o Train customers on and demonstrate ITS products. o COMWARE reserves the right to develop and sell value-added services that support the sales of ITS systems. o COMWARE reserves the right to develop their own marketing materials, brochures, and advertisements for ITS' products at no cost to ITS. o Communicate with and respond to ITS AND ITS inquires. o Assist ITS in customer feedback.
2
7. OBLIGATIONS OF ITS:
o ITS will deliver working systems no later than 30 days after a hard copy purchase order is received from COMWARE. o ITS will provide free technical support to customers who have purchased ITS systems for a period of 30 days. After the 30 day free technical support period, ITS reserves the right to charge a reasonable fee for additional support. o ITS will be solely responsible for the production of brochures describing the products, and will provide COMWARE with ample space for placement of business card/label and provide COMWARE with as many brochures as it may from time to time reasonably require, free of charge. o In event of cancellation of a purchase order, or re-scheduling of any item on a purchase order beyond the discount period, COMWARE may be liable for bill back or adjustment of discounts based upon actual quantities of items delivered within the discount period. o COMWARE will not be penalized for delays in delivery caused by ITS, or any agent of ITS. o ITS will use its best efforts to provide a swift and complete resolution of any product-related problems, whether or not such problems are covered under the terms of the WARRANTY. In the event that one of COMWARE'S customers has a problem that is beyond the scope of COMWARE'S capabilities, ITS will address the problem without delay in the best interest of customer service.
8. WARRANTY: ITS Products are warranted free from defects of material or workmanship for 3 years after shipment from the manufacturer. Equipment purchased from ITS, which becomes defective within that time period will be repaired by ITS at its headquarters in San Antonio, Texas at no cost to COMWARE beyond cost of shipping the equipment to ITS. ITS will bear the cost of returning the item to COMWARE by UPS, REGULAR DELIVERY. priority shipping costs will be borne by COMWARE.
This warranty is contingent upon proper use and installation of the Products and does not cover equipment which has been modified without ITS' consent or which has been subjected to unusual physical or electrical stress or on which the original identification marks have been removed or altered.
9. DOCUMENTATION AND SUPPORT: ITS will supply with each of the Products ordered one set of user and technical documentation and one set of software in reproducible form.
COMWARE may purchase additional copies of the documentation and software disks at then prevailing prices.
COMWARE will receive minimal assistance and support from ITS consistent with the certifications in Section 1.
3
TERMINATION: except as specifically described elsewhere in this agreement, either ITS or COMWARE shall have the right to terminate this Agreement with 30 days written notice from the other party, for any reason whatsoever.
11. GOVERNMENT SALES: COMWARE reserves the right to incorporate, as extension of this Agreement, additional terms and conditions as may be required for sale of Products to the US Government. These terms and conditions will be expressly quoted in attachments to subject purchase orders. ITS reserves the right to reject such purchase orders only under those conditions where these terms and conditions are in conflict with stated policy or corporate condition of ITS at the time the purchase orders are received.
12. ENTIRE AGREEMENT: This Agreement supersedes all prior agreements and understandings between the parties relating to the subject matter and is intended by the parties as the complete and exclusive statement of the terms of the Agreement. No modification, addition to or waiver of the terms and conditions of this Agreement shall be effective unless in writing and signed by the party against whom the same is sought to be enforced.
13. GOVERNED BY THE STATE OF TEXAS: This Agreement shall be interpreted and governed by the laws of the State of Texas. Comware agrees to submit to the jurisdiction of the State of Texas, Bexar County, USA.
INTERNATIONAL TEST SYSTEMS, INC. COMWARE TECHNICAL SERVICES
BY BY ------------------------------- ---------------------------------
PRINTED PRINTED -------------------------- ----------------------------
TITLE TITLE ---------------------------- ------------------------------
DATE DATE ----------------------------- -------------------------------
4 | Highlight the parts (if any) of this contract related to "No-Solicit Of Customers" that should be reviewed by a lawyer. Details: Is a party restricted from contracting or soliciting customers or partners of the counterparty, whether during the contract or after the contract ends (or both)? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "No-Solicit Of Customers" that should be reviewed by a lawyer. Details: Is a party restricted from contracting or soliciting customers or partners of the counterparty, whether during the contract or after the contract ends (or both)?
Context: EXHIBIT 10.43 Dated 29/3/18
Distributorship agreement
between
Signature Orthopaedics Pty Ltd
And
CPM Medical Consultants LLC
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
EXHIBIT 10.43 THIS AGREEMENT is dated
Parties
(1) Signature Orthopaedics Pty Ltd (ACN 106 702 416) , 7 Sirius Road, Lane Cove, NSW
(2) CPM Medical Consultants, LLC of 1565N. Central Expressway, Suite 200, Dallas, TX 75080.
Background
The Supplier wishes to appoint the Distributor as its non-exclusive distributor for the promotion and sale of the Products within the Territory (both as defined below), and the Distributor wishes to promote and sell the Products within the Territory on the terms of this agreement.
Agreed terms
1. Definitions and interpretation
1.1 The definitions and rules of interpretation in this clause apply in this agreement.
Business Day: a day (other than a Saturday, Sunday or public holiday in Australia) when banks in Sydney are open for business.
Commencement Date: means the date of this agreement.
Control: the ability to direct the affairs of another person, whether by virtue of the ownership of shares, contract or otherwise.
Inactive Territories means a country in which the Distributor has not sold or supplied the Product during the Initial Term.
Initial Term has the meaning given to it in clause 12.1.
Products: As defined in Schedule 1 and includes any other products developed by the Supplier and which the Supplier may permit the Distributor, by express notice in writing, to distribute in the Territory.
Term: the term of this agreement, as determined in accordance with clause 11. Territory: means the territory specified in Schedule 2.
Trade Marks: the trade mark registrations listed in Schedule 3 and any further trade marks that the Supplier may permit, or procure permission for, the Distributor to use in the Territory in respect of the Products by express notice in writing.
GST: goods and services tax chargeable under the Goods and Services Tax Act and any similar replacement or additional tax or such other similar or analogous form of tax under the laws and regulations in the Territory.
1
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
Year: the period of 12 months from the Commencement Date and each consecutive period of 12 months thereafter during the Term.
1.2 Clause, schedule and paragraph headings shall not affect the interpretation of this agreement.
1.3 A person includes a natural person, corporate or unincorporated body (whether or not having separate legal personality).
1.4 The Schedules form part of this agreement and shall have effect as if set out in full in the body of this agreement. Any reference to this agreement includes the Schedules.
1.5 A reference to a company shall include any company, corporation or other body corporate, wherever and however incorporated or established.
1.6 Words in the singular shall include the plural and vice versa.
1.7 A reference to one gender shall include a reference to the other genders.
1.8 A reference to any party shall include that party's personal representatives, successors or permitted assigns.
1.9 A reference to a statute, statutory provision or any subordinated legislation made under a statute is a reference to such statute, provision or subordinated legislation as amended or re-enacted from time to time, whether before or after the date of this agreement and in the case of a reference to a statute is also to all subordinate legislation made under that statute whether before or after the date of this agreement.
1.10 A reference to writing or written includes faxes and e-mail.
1.11 Documents in agreed form are documents in the form agreed by the parties and initialled by or on behalf of them for identification.
1.12 Any reference to a legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than Australia, be deemed to include a reference to what most nearly approximates to the Australian legal term in that jurisdiction.
1.13 A reference to a document is a reference to that document as varied or novated (in each case, other than in breach of the provisions of this agreement) at any time.
1.14 References to clauses and schedules are to the clauses and schedules of this agreement.
2
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
1.15 Any phrase introduced by the terms including, include, in particular or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms.
2. Appointment
2.1 The Supplier appoints the Distributor as its non-exclusive distributor to distribute the Products in the Territory on the terms of this agreement.
2.2 Following the expiry of the Initial Term, the Supplier may amend the Territory to remove any Inactive Territories.
2.3 Notwithstanding 2.1 and 2.2, the Supplier may sell or supply the Products to end users within USA at anytime.
2.4 The Distributor shall not:
(a) represent itself as an agent of the Supplier for any purpose; or
(b) pledge the Supplier's credit; or
(c) give any condition or warranty on the Supplier's behalf except for any warranty or guarantee which cannot be excluded under law; or
(d) make any representation on the Supplier's behalf; or
(e) commit the Supplier to any contracts; or
(f) act as the agent or the buying agent, for any person for any goods which are competitive with the Product; or
(g) retain any monies of the Supplier except on a trustee or fiduciary basis; or
(h) knowingly make any false or misleading statement to any supplier or service provider, or to the Distributor or its business, about the Products or the liability of the Supplier for the cost of any goods or services supplied to the Distributor or its business; or
(i) incur any liability or assume any obligation on behalf of the Supplier; or
2.5 The Distributor shall not without the Supplier's prior written consent make any promises or guarantees about the Products beyond those:
(a) agreed between the Distributor and the Supplier; and
(b) contained in any promotional material supplied by the Supplier.
3
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
3. Distributor's undertakings
The Distributor undertakes and agrees with the Supplier that at all times during the Term it will:
(a) use all reasonable endeavours to promote the distribution and sale of the Products;
(b) not use any promotional or advertising material for the Products not approved by the Supplier, such approval not be unreasonably withheld;
(c) provide Yearly non-binding sales forecasts;
(d) establish and maintain documented procedures for identifying the Products with a control number for traceability and copies of those records and procedures must be made available to the Supplier within thirty (30) days of request;
(e) provide regular reports on the sales activities within the Territory;
(f) employ a sufficient number of suitably qualified personnel to ensure the proper fulfilment of the Distributor's obligations under this agreement;
(g) maintain, on its own account, an inventory of the Products at levels which are appropriate and adequate for the Distributor to meet all customer delivery requirements for the Products throughout the Territory;
(h) keep full and proper books of account and records clearly showing all enquiries, quotations, transactions and proceedings relating to the Products;
(i) allow the Supplier, on reasonable notice, access to its accounts and records relating to the sale or distribution of the Products for inspection but not more than once in each year. For clarity, the Supplier will not be permitted access to any accounts or records which do not directly relate to the sale or distribution of the Products;
(j) comply with any reasonable directives or instructions given by the Supplier for any promotional activities, at the suppliers cost, concerning the nature, type, quality, characteristics, fitness for purpose, suitability, use and description of the Products;
4. Supply of products
4.1 The parties acknowledge that:
(a) the Supplier is the manufacturer of the Products; and
4
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
(b) the Supplier will have no obligation to separately supply the Products, except as otherwise provided for in this Agreement.
4.2 Supplier's undertakings
The Supplier undertakes to:
(a) provide information and support that may reasonably be requested by the Distributor to enable it to discharge its duties under this agreement properly and efficiently; and
(b) approve or reject any promotional information or material submitted by the Distributor within 28 days of receipt.
5. Prices and payment
5.1 The prices to be paid by the Distributor to the Supplier for the Products are to be the Price, as set out in Schedule 4.
5.2 Any and all expenses, costs and charges incurred by the Distributor in the performance of its obligations under this agreement will be paid by the Distributor, unless the Supplier has expressly agreed in advance in writing to pay such expenses, costs and charges.
5.3 The Distributor must pay the full amount invoiced to it by the Supplier in USD$'s within thirty (45) days of the date of invoice.
5.4 Neither party may withhold payment of any amount due to the other because of any set-off, counter-claim, abatement, or other similar deduction.
6. GST and taxes (Only Applicable to Australian companies)
6.1 All sums payable under this agreement, or otherwise payable by any party to any other party under this agreement are exclusive of any GST chargeable on the supplies for which such sums (or any part of them) are the whole or part of the consideration for GST purposes.
6.2 Where, under this agreement, any party makes a supply to any other party (Recipient) for GST purposes and GST is or becomes chargeable on that supply for which the supplying party is required to account to the relevant tax authority, the Recipient shall, subject to the receipt of a valid GST invoice, pay the supplying party (in addition to, and at the same time as, any other consideration for that supply) the amount of such GST.
6.3 Where any party is required by this agreement to reimburse or indemnify any other party for any cost or expense, that first party shall reimburse or indemnify the other party for the full amount of the cost or expense, including any GST on that amount,
5
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
except to the extent that the other party is entitled to credit or repayment for that GST from any relevant tax authority.
6.4 All import taxes, charges, levies, assessments and other fees of any kind imposed on the purchase or import of the Products shall be the responsibility of, and for the account of, the Distributor.
7. Advertising and promotion
7.1 The Distributor shall:
(a) cooperate with the Supplier in relation to the promotion and advertisement of the Products;
(b) not make any written statement as to the quality or manufacture of the Products without the prior written approval of the Supplier; and
(c) pays its own costs of advertising the Product except where there is any separate advertising campaign which the Supplier and the Distributor have agreed to fund jointly in any agreed proportion.
8. Anti-bribery compliance
8.1 The Distributor shall:
(a) comply with all applicable laws, statutes and regulations relating to anti-bribery and anti- corruption; and
(b) not engage in any activity, practice or conduct which would constitute an offence.
9. Trade marks and intellectual property
9.1 The Supplier hereby grants to the Distributor the non-exclusive right, in the Territory, to use the Trade Marks in the promotion, advertisement and sale of the Products, subject to, and for the duration of, this agreement.
9.2 The Distributor may sell and/or distribute the Products using the Trade Marks in conjunction with any trade marks owned or licensed by the Distributor.
9.3 All representations of the Trade Marks that the Distributor intends to use shall be submitted to the Supplier for approval before use.
9.4 Within limiting this clause 12, the Distributor shall be entitled to add a label to the Products it purchases to show that the products purchased are being distributed by the Distributor.
9.5 The Supplier represents and warrants that:
6
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
(a) Trade Marks; and
(b) The Products, do not infringe any intellectual property rights of any third parties and the Supplier agrees to indemnify and hold harmless the Distributor against any clauses by a third party for infringement of intellectual property rights in relation to the Products or the Trade marks .
9.6 The Distributor shall not sub-license, transfer or otherwise deal with the rights of use of the Trade Marks granted under this agreement.
9.7 The Distributor shall not do, or omit to do, anything in its use of the Trade Marks that could adversely affect their validity or the goodwill of the Supplier.
9.8 The Distributor shall immediately enter into any document necessary for the recording, registration or safeguarding of the Supplier's Trade Mark rights with the Supplier for the marketing of the Products under the Trade Marks in a form satisfactory to the Supplier, at the suppliers cost.
9.9 Each party shall promptly give notice in writing to the other if it becomes aware of:
(a) any infringement or suspected infringement of the Trade Marks or any other intellectual property rights relating to the Products within the Territory; or
(b) any claim that any Product or the manufacture, use, sale or other disposal of any Product within the Territory, whether or not under the Trade Marks, infringes the rights of any third party,
9.10 In respect of any matter that falls within clause 9.9(a):
(a) the Supplier shall in its absolute discretion, decide what action to take in respect of the matter (if any);
(b) the Supplier shall conduct and have sole control over any consequent action that it deems necessary; and
(c) the Supplier shall pay all costs in relation to that action and shall be entitled to all damages and other sums that may be paid or awarded as a result of that action.
9.11 In respect of any matter that falls within clause 9.9(b):
(a) the Supplier and the Distributor shall agree:
(i) what steps to take to prevent or terminate the infringement; and
(ii) the proportions in which they shall share the cost of those steps and any damages and other sums which may be awarded to or against
7
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
them, being agreed between the parties that the Supplier shall hold Distributor harmless against any damages connected with any material or workmanship defect of the Products; and
(b) failing agreement between the parties, either party may take any action as it considers necessary or appropriate, at its own expense, to defend the claim and shall be entitled to and responsible for all damages and other sums that may be recovered or awarded against it as a result of that action.
9.12 Each party shall, at the request and expense of the other, provide any reasonable assistance to the other (including the use of its name in, or being joined as a party to, proceedings) with any action to be taken by the other party under this clause 9, provided that that party is given such indemnity as it may reasonably require against any losses, costs and expenses it may incur as a result of or in connection with providing such assistance.
10. Product liability and insurance
10.1 Subject to the Distributor fulfilling all the conditions in this clause 10, the Supplier shall indemnify the Distributor, defend and hold harmless against any liability incurred by the Distributor in respect of damage to property, death or personal injury arising from any fault or defect in the design of the Products and any reasonable costs, claims, demands and expenses, including reasonable attorneys' fees, arising out of or in connection with that liability (Relevant Claim), except to the extent the liability arises as a result of the wilful misconduct of the Distributor. The Supplier shall add the distributor to their current insurance certificate.
10.2 The Distributor shall, within five days of a matter which may result in a Relevant Claim:
(a) give the Supplier written notice of the details of the matter;
(b) give the Supplier access to and allow copies to be taken of any materials, records or documents as the Supplier may require to take action under clause 10.2(c);
(c) allow the Supplier the exclusive conduct of any proceedings and take any action that the Supplier requires to defend or resist the matter, including using professional advisers nominated by the Supplier; and
(d) not admit liability or settle the matter without the Supplier's written consent.
10.3 During the Term, the Supplier shall maintain product liability insurance with a reputable insurer of no less than AU$10 million for any one occurrence for any and all liability (however arising) for a claim that the Products are faulty or defective. The Supplier shall provide a copy of the insurance policy to the Distributor on request.
8
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
10.4 The Distributor undertakes to maintain appropriate, up-to-date and accurate records to enable the immediate recall of any Products or batches of Products from the retail or wholesale markets. These records shall include records of deliveries to customers (including batch numbers, delivery date, name and address of customer, telephone number, fax number and e-mail address).
10.5 The Distributor shall, at the Supplier's cost, give any assistance that the Supplier shall reasonably require to recall, as a matter of urgency, Products from the retail or wholesale market.
11. Duration and termination
11.1 This agreement begins on the Commencement Date and, subject to clause 11.2, shall continue for an initial term of one (1) years (Initial Term) and indefinitely after that until terminated by either party giving at least twelve (12) months' prior written notice to expire on or after the expiry date of the initial term.
11.2 Without affecting any other rights that it may be entitled to, either party may give notice in writing to the other terminating this agreement immediately if:
(a) the other party fails to pay any amount due under this agreement on the due date for payment and remains in default not less than 14 days after being notified in writing to make such payment; or
(b) the other party commits a material breach of any material term of this agreement and (if such breach is remediable) fails to remedy that breach within a period of 14 days of being notified in writing to do so; or
(c) the other party repeatedly breaches any of the terms of this agreement in such a manner as to reasonably justify the opinion that its conduct is inconsistent with it having the intention or ability to give effect to the terms of this agreement; or
(d) the other party suspends, or threatens to suspend, payment of its debts or is unable to pay its debts as they fall due or admits inability to pay its debts or (being a company) is deemed unable to pay its debts within the meaning of the Corporations Act 2001 (Cth) OR (being a natural person) is deemed either unable to pay its debts or as having no reasonable prospect of so doing, in either case, within the meaning of the Corporations Act 2001 (Cth) OR (being a partnership) has any partner to whom any of the foregoing apply: or
(e) the other party commences negotiations with all or any class of its creditors with a view to rescheduling any of its debts, or makes a proposal for or enters into any compromise or arrangement with its creditors other than for the sole purpose of a scheme for a solvent amalgamation of that other party with one or more other companies or the solvent reconstruction of that other party; or
9
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
(f) a petition is filed, a notice is given, a resolution is passed, or an order is made, for or in connection with the winding up of that other party other than for the sole purpose of a scheme for a solvent amalgamation of that other party with one or more other companies or the solvent reconstruction of that other party: or
(g) an application is made to court, or an order is made, for the appointment of an administrator or if a notice of intention to appoint an administrator is given or if an administrator is appointed over the other party; or
(h) a person becomes entitled to appoint a receiver over the assets of the other party or a receiver is appointed over the assets of the other party; or
(i) the other party, being an individual, is the subject of a bankruptcy petition or order; or
(j) a creditor or encumbrancer of the other party attaches or takes possession of, or a distress, execution, sequestration or other such process is levied or enforced on or sued against, the whole or any part of its assets and such attachment or process is not discharged within 14 days; or
(k) any event occurs, or proceeding is taken, with respect to the other party in any jurisdiction to which it is subject that has an effect equivalent or similar to any of the events mentioned in clause 11.2(d) to clause 11.2(j) (inclusive); or
(l) the other party suspends or ceases, or threatens to suspend or cease, to carry on all or a substantial part of its business; or
(m) the other party, being an individual, dies or, by reason of illness or incapacity (whether mental or physical), is incapable of managing his or her own affairs or becomes a patient under any mental health legislation.
(n) Without affecting any other rights that it may be entitled to, the Supplier may give notice in writing to the Distributor terminating this agreement immediately if the Distributor purports to assign its rights or obligations under this agreement to an entity that is not (1) affiliated with, (2) related to, or (3) sharing common ownership with the Distributor (a Permitted Assignee).
12. Effectsof termination
12.1 Termination of this agreement for any reason shall not affect any rights or liabilities accrued at the date of termination.
10
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
12.2 At the Supplier's option, on termination of this agreement:
(a) the Supplier may buy from the Distributor all or any stocks of Products for the current market value for those Products. The Distributor must deliver such Products to the Supplier within 14 days of receiving the Supplier's notice, and the Supplier must pay for the Products in full within 30 days of their delivery. The Supplier shall be responsible for the costs of packaging, insurance and carriage of the Products; or
(b) the Distributor may dispose of the balance of the Products in its possession and account to the Supplier for the Price for those Products; and
(c) subject to clause 12.2(b), the Distributor must cease using any intellectual property of the Supplier or of another person that relates to the distributorship and the Distributor must sign any instrument and do any other act that is necessary to achieve this purpose;
12.3 For the purposes of clause 12.2(a) the current market value in respect of Products shall be the price that the Products are ordinarily supplied as at the date of termination of this agreement.
12.4 Subject to clause 12.2, all other rights and licences of the Distributor under this agreement shall terminate on the termination date.
13. Confidentiality
13.1 Each party undertakes that it shall not at any time, disclose to any person any confidential information concerning the business, affairs, customers, clients or suppliers of the other party or of any member of the group of companies to which the other party belongs, except as provided by clause 13.2.
13.2 Each party may disclose the other party's confidential information:
(a) to those of its employees, officers, representatives or advisers who need to know such information for the purpose of carrying out the party's obligations under this agreement. Each party shall ensure that its employees, officers, representatives or advisers to whom it discloses the other party's confidential information comply with this clause 13; and
(b) as may be required by law, court order or any governmental or regulatory authority; provided, however, that the other party reserves the right to challenge such disclosure under applicable law. If such party elects to challenge the disclosure, no confidential information shall be disclosed during the pendency of such challenge.
13.3 No party shall use any other party's confidential information for any purpose other than to perform its obligations under this agreement.
11
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
14. Entire agreement
14.1 This agreement (and any document referred to in it) constitutes the whole agreement between the parties and supersedes all previous agreements between the parties relating to its subject matter.
14.2 Each party acknowledges that, in entering into this agreement (and any document referred to in it), it has not relied on, and shall have no right or remedy in respect of, any statement, representation, assurance or warranty (whether made negligently or innocently) other than as expressly set out in this agreement. Each party agrees that its only liability in respect of those representations and warranties that are set out in this agreement (whether made innocently or negligently) shall be for breach of contract.
14.3 Nothing in this clause shall limit or exclude any liability for fraud.
15. Variation
No amendment or variation of this agreement shall be effective unless it is in writing and signed by the parties (or their authorised representatives).
16. Assignment and other dealings prohibited
16.1 The Distributor shall not assign, transfer, mortgage, charge, declare a trust of or deal in any other manner with this agreement or any of its rights and obligations under or arising out of this agreement, or purport to do any of the same; provided, however, the Distributor may assign or transfer this agreement to a Permitted Assignee without the consent of Supplier. The Distributor shall not sub-contract or delegate in any manner any or all of its obligations under this agreement to any third party or agent.
16.2 If the Distributor seeks the Supplier's consent to any proposed dealing under clause 16.1, the Distributor must: -
(a) disclose fully in writing all material facts relating to the dealing
(b) comply fully with any conditions or requirements set down by the Supplier which attach to any Suppliers consent that is given.
16.3 Each party that has rights under this agreement is acting on its own behalf and not for the benefit of another person.
17. Freedom to contract
The parties declare that they each have the right, power and authority and have taken all action necessary to execute and deliver and to exercise their rights and perform their obligations under this agreement.
12
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
18. Waiver
No failure or delay by a party to exercise any right or remedy provided under this agreement or by law shall constitute a waiver of that or any other right or remedy, nor shall it preclude or restrict the further exercise of that or any other right or remedy. No single or partial exercise of such right or remedy shall preclude or restrict the further exercise of that or any other right or remedy.
19. Severance
19.1 If any provision of this agreement (or part of any provision) is found by any court or other authority of competent jurisdiction to be invalid, illegal or unenforceable, that provision or part-provision shall, to the extent required, be deemed not to form part of this agreement, and the validity and enforceability of the other provisions of this agreement shall not be affected.
19.2 If a provision of this agreement (or part of any provision) is found illegal, invalid or unenforceable, the provision shall apply with the minimum modification necessary to make it legal, valid and enforceable.
20. Notices
20.1 Any notice required to be given under this agreement, shall be in writing and shall be delivered personally, by email, or sent by pre-paid first class post or recorded delivery or by commercial courier, to each party required to receive the notice at its address as set out at the beginning of this agreement or as otherwise specified by the relevant party by notice in writing to each other party.
20.2 Any notice shall be deemed to have been duly received:
(a) if delivered personally, when left at the address and for the contact referred to in this clause; or
(b) if sent by pre-paid first class post or recorded delivery, at 9.00 am on the second Business Day after posting; or
(c) if delivered by commercial courier, on the date and at the time that the courier's delivery receipt is signed; or
(d) if delivered by email, on the date and at the time such email is received by the recipient whether such message is opened at that time.
Any notice given or received by a lawyer for a party to this agreement is deemed to be given or received with the actual or ostensible authority of the lawyer.
The Supplier may at times by notice nominate an address for service of legal proceeding, whether in Australia or in any other place. A nomination binds the
13
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
parties but nothing prevents the Supplier from making further nomination in place of any earlier nomination.
20.3 A notice given under this agreement shall not be validly given if sent by e-mail.
21. Third party rights
21.1 A person who is not a party to this agreement shall not have any rights under or in connection with it by virtue of the Contracts
21.2 The rights of the parties to terminate, rescind or agree any variation, waiver or settlement under this agreement are not subject to the consent of any person that is not a party to this agreement.
22. No partnership or agency
Except as expressly provided, nothing in this agreement is intended to, or shall be deemed to, establish any partnership or joint venture between the parties, constitute either party the agent of the other, nor authorise a party to make or enter into any commitments for or on behalf of the other party.
23. Counterparts
This agreement may be executed in any number of counterparts, each of which when executed and delivered shall constitute an original of this agreement, but all the counterparts shall together constitute the same agreement.
24. Governing law and jurisdiction
24.1 This agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with Ohio law.
24.2 The parties irrevocably agree that the courts of Ohio shall have non-exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this agreement or its subject matter or formation (including non- contractual disputes or claims).
This agreement has been entered into on the date stated at the beginning of it.
14
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
Schedule 1
AriaTM Hip Stem System
RemedyTM Hip Stem system
LogicalTM Hip Cup system
Signature BiPolar Head
Genius Total knee system
15
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
Schedule 2 Territory
USA.
16
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
Schedule 3 The Trade Marks
OriginTM, LogicalTM, AriaTM, RemedyTM, GeniusTM
17
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
Schedule 4 Prices
Aria Stem $610
Origin Stem $610
Remedy Stem $610
Logical Cup $450
Logical Liner $210
Metal Head $240
Ceramic Head $340
BiPolar Head $250
PS / CR Femoral Component $550
Insert $340
Tibia Tray $440
Patella $70
18
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
SIGNED by Signature Orthopaedics Pty Ltd (ACN 106 702 416) In accordance with section 127 of the Corporations Act:
) ) ) ) )
Director/Secretary
Name (please print)
Director
Name (please print)
SIGNED by
CPM Medical LLC
) ) ) ) )
Director/Secretary
Name (please print)
Director
Name (please print)
19
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | EXHIBIT 10.43 Dated 29/3/18
Distributorship agreement
between
Signature Orthopaedics Pty Ltd
And
CPM Medical Consultants LLC
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
EXHIBIT 10.43 THIS AGREEMENT is dated
Parties
(1) Signature Orthopaedics Pty Ltd (ACN 106 702 416) , 7 Sirius Road, Lane Cove, NSW
(2) CPM Medical Consultants, LLC of 1565N. Central Expressway, Suite 200, Dallas, TX 75080.
Background
The Supplier wishes to appoint the Distributor as its non-exclusive distributor for the promotion and sale of the Products within the Territory (both as defined below), and the Distributor wishes to promote and sell the Products within the Territory on the terms of this agreement.
Agreed terms
1. Definitions and interpretation
1.1 The definitions and rules of interpretation in this clause apply in this agreement.
Business Day: a day (other than a Saturday, Sunday or public holiday in Australia) when banks in Sydney are open for business.
Commencement Date: means the date of this agreement.
Control: the ability to direct the affairs of another person, whether by virtue of the ownership of shares, contract or otherwise.
Inactive Territories means a country in which the Distributor has not sold or supplied the Product during the Initial Term.
Initial Term has the meaning given to it in clause 12.1.
Products: As defined in Schedule 1 and includes any other products developed by the Supplier and which the Supplier may permit the Distributor, by express notice in writing, to distribute in the Territory.
Term: the term of this agreement, as determined in accordance with clause 11. Territory: means the territory specified in Schedule 2.
Trade Marks: the trade mark registrations listed in Schedule 3 and any further trade marks that the Supplier may permit, or procure permission for, the Distributor to use in the Territory in respect of the Products by express notice in writing.
GST: goods and services tax chargeable under the Goods and Services Tax Act and any similar replacement or additional tax or such other similar or analogous form of tax under the laws and regulations in the Territory.
1
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
Year: the period of 12 months from the Commencement Date and each consecutive period of 12 months thereafter during the Term.
1.2 Clause, schedule and paragraph headings shall not affect the interpretation of this agreement.
1.3 A person includes a natural person, corporate or unincorporated body (whether or not having separate legal personality).
1.4 The Schedules form part of this agreement and shall have effect as if set out in full in the body of this agreement. Any reference to this agreement includes the Schedules.
1.5 A reference to a company shall include any company, corporation or other body corporate, wherever and however incorporated or established.
1.6 Words in the singular shall include the plural and vice versa.
1.7 A reference to one gender shall include a reference to the other genders.
1.8 A reference to any party shall include that party's personal representatives, successors or permitted assigns.
1.9 A reference to a statute, statutory provision or any subordinated legislation made under a statute is a reference to such statute, provision or subordinated legislation as amended or re-enacted from time to time, whether before or after the date of this agreement and in the case of a reference to a statute is also to all subordinate legislation made under that statute whether before or after the date of this agreement.
1.10 A reference to writing or written includes faxes and e-mail.
1.11 Documents in agreed form are documents in the form agreed by the parties and initialled by or on behalf of them for identification.
1.12 Any reference to a legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than Australia, be deemed to include a reference to what most nearly approximates to the Australian legal term in that jurisdiction.
1.13 A reference to a document is a reference to that document as varied or novated (in each case, other than in breach of the provisions of this agreement) at any time.
1.14 References to clauses and schedules are to the clauses and schedules of this agreement.
2
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
1.15 Any phrase introduced by the terms including, include, in particular or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms.
2. Appointment
2.1 The Supplier appoints the Distributor as its non-exclusive distributor to distribute the Products in the Territory on the terms of this agreement.
2.2 Following the expiry of the Initial Term, the Supplier may amend the Territory to remove any Inactive Territories.
2.3 Notwithstanding 2.1 and 2.2, the Supplier may sell or supply the Products to end users within USA at anytime.
2.4 The Distributor shall not:
(a) represent itself as an agent of the Supplier for any purpose; or
(b) pledge the Supplier's credit; or
(c) give any condition or warranty on the Supplier's behalf except for any warranty or guarantee which cannot be excluded under law; or
(d) make any representation on the Supplier's behalf; or
(e) commit the Supplier to any contracts; or
(f) act as the agent or the buying agent, for any person for any goods which are competitive with the Product; or
(g) retain any monies of the Supplier except on a trustee or fiduciary basis; or
(h) knowingly make any false or misleading statement to any supplier or service provider, or to the Distributor or its business, about the Products or the liability of the Supplier for the cost of any goods or services supplied to the Distributor or its business; or
(i) incur any liability or assume any obligation on behalf of the Supplier; or
2.5 The Distributor shall not without the Supplier's prior written consent make any promises or guarantees about the Products beyond those:
(a) agreed between the Distributor and the Supplier; and
(b) contained in any promotional material supplied by the Supplier.
3
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
3. Distributor's undertakings
The Distributor undertakes and agrees with the Supplier that at all times during the Term it will:
(a) use all reasonable endeavours to promote the distribution and sale of the Products;
(b) not use any promotional or advertising material for the Products not approved by the Supplier, such approval not be unreasonably withheld;
(c) provide Yearly non-binding sales forecasts;
(d) establish and maintain documented procedures for identifying the Products with a control number for traceability and copies of those records and procedures must be made available to the Supplier within thirty (30) days of request;
(e) provide regular reports on the sales activities within the Territory;
(f) employ a sufficient number of suitably qualified personnel to ensure the proper fulfilment of the Distributor's obligations under this agreement;
(g) maintain, on its own account, an inventory of the Products at levels which are appropriate and adequate for the Distributor to meet all customer delivery requirements for the Products throughout the Territory;
(h) keep full and proper books of account and records clearly showing all enquiries, quotations, transactions and proceedings relating to the Products;
(i) allow the Supplier, on reasonable notice, access to its accounts and records relating to the sale or distribution of the Products for inspection but not more than once in each year. For clarity, the Supplier will not be permitted access to any accounts or records which do not directly relate to the sale or distribution of the Products;
(j) comply with any reasonable directives or instructions given by the Supplier for any promotional activities, at the suppliers cost, concerning the nature, type, quality, characteristics, fitness for purpose, suitability, use and description of the Products;
4. Supply of products
4.1 The parties acknowledge that:
(a) the Supplier is the manufacturer of the Products; and
4
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
(b) the Supplier will have no obligation to separately supply the Products, except as otherwise provided for in this Agreement.
4.2 Supplier's undertakings
The Supplier undertakes to:
(a) provide information and support that may reasonably be requested by the Distributor to enable it to discharge its duties under this agreement properly and efficiently; and
(b) approve or reject any promotional information or material submitted by the Distributor within 28 days of receipt.
5. Prices and payment
5.1 The prices to be paid by the Distributor to the Supplier for the Products are to be the Price, as set out in Schedule 4.
5.2 Any and all expenses, costs and charges incurred by the Distributor in the performance of its obligations under this agreement will be paid by the Distributor, unless the Supplier has expressly agreed in advance in writing to pay such expenses, costs and charges.
5.3 The Distributor must pay the full amount invoiced to it by the Supplier in USD$'s within thirty (45) days of the date of invoice.
5.4 Neither party may withhold payment of any amount due to the other because of any set-off, counter-claim, abatement, or other similar deduction.
6. GST and taxes (Only Applicable to Australian companies)
6.1 All sums payable under this agreement, or otherwise payable by any party to any other party under this agreement are exclusive of any GST chargeable on the supplies for which such sums (or any part of them) are the whole or part of the consideration for GST purposes.
6.2 Where, under this agreement, any party makes a supply to any other party (Recipient) for GST purposes and GST is or becomes chargeable on that supply for which the supplying party is required to account to the relevant tax authority, the Recipient shall, subject to the receipt of a valid GST invoice, pay the supplying party (in addition to, and at the same time as, any other consideration for that supply) the amount of such GST.
6.3 Where any party is required by this agreement to reimburse or indemnify any other party for any cost or expense, that first party shall reimburse or indemnify the other party for the full amount of the cost or expense, including any GST on that amount,
5
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
except to the extent that the other party is entitled to credit or repayment for that GST from any relevant tax authority.
6.4 All import taxes, charges, levies, assessments and other fees of any kind imposed on the purchase or import of the Products shall be the responsibility of, and for the account of, the Distributor.
7. Advertising and promotion
7.1 The Distributor shall:
(a) cooperate with the Supplier in relation to the promotion and advertisement of the Products;
(b) not make any written statement as to the quality or manufacture of the Products without the prior written approval of the Supplier; and
(c) pays its own costs of advertising the Product except where there is any separate advertising campaign which the Supplier and the Distributor have agreed to fund jointly in any agreed proportion.
8. Anti-bribery compliance
8.1 The Distributor shall:
(a) comply with all applicable laws, statutes and regulations relating to anti-bribery and anti- corruption; and
(b) not engage in any activity, practice or conduct which would constitute an offence.
9. Trade marks and intellectual property
9.1 The Supplier hereby grants to the Distributor the non-exclusive right, in the Territory, to use the Trade Marks in the promotion, advertisement and sale of the Products, subject to, and for the duration of, this agreement.
9.2 The Distributor may sell and/or distribute the Products using the Trade Marks in conjunction with any trade marks owned or licensed by the Distributor.
9.3 All representations of the Trade Marks that the Distributor intends to use shall be submitted to the Supplier for approval before use.
9.4 Within limiting this clause 12, the Distributor shall be entitled to add a label to the Products it purchases to show that the products purchased are being distributed by the Distributor.
9.5 The Supplier represents and warrants that:
6
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
(a) Trade Marks; and
(b) The Products, do not infringe any intellectual property rights of any third parties and the Supplier agrees to indemnify and hold harmless the Distributor against any clauses by a third party for infringement of intellectual property rights in relation to the Products or the Trade marks .
9.6 The Distributor shall not sub-license, transfer or otherwise deal with the rights of use of the Trade Marks granted under this agreement.
9.7 The Distributor shall not do, or omit to do, anything in its use of the Trade Marks that could adversely affect their validity or the goodwill of the Supplier.
9.8 The Distributor shall immediately enter into any document necessary for the recording, registration or safeguarding of the Supplier's Trade Mark rights with the Supplier for the marketing of the Products under the Trade Marks in a form satisfactory to the Supplier, at the suppliers cost.
9.9 Each party shall promptly give notice in writing to the other if it becomes aware of:
(a) any infringement or suspected infringement of the Trade Marks or any other intellectual property rights relating to the Products within the Territory; or
(b) any claim that any Product or the manufacture, use, sale or other disposal of any Product within the Territory, whether or not under the Trade Marks, infringes the rights of any third party,
9.10 In respect of any matter that falls within clause 9.9(a):
(a) the Supplier shall in its absolute discretion, decide what action to take in respect of the matter (if any);
(b) the Supplier shall conduct and have sole control over any consequent action that it deems necessary; and
(c) the Supplier shall pay all costs in relation to that action and shall be entitled to all damages and other sums that may be paid or awarded as a result of that action.
9.11 In respect of any matter that falls within clause 9.9(b):
(a) the Supplier and the Distributor shall agree:
(i) what steps to take to prevent or terminate the infringement; and
(ii) the proportions in which they shall share the cost of those steps and any damages and other sums which may be awarded to or against
7
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
them, being agreed between the parties that the Supplier shall hold Distributor harmless against any damages connected with any material or workmanship defect of the Products; and
(b) failing agreement between the parties, either party may take any action as it considers necessary or appropriate, at its own expense, to defend the claim and shall be entitled to and responsible for all damages and other sums that may be recovered or awarded against it as a result of that action.
9.12 Each party shall, at the request and expense of the other, provide any reasonable assistance to the other (including the use of its name in, or being joined as a party to, proceedings) with any action to be taken by the other party under this clause 9, provided that that party is given such indemnity as it may reasonably require against any losses, costs and expenses it may incur as a result of or in connection with providing such assistance.
10. Product liability and insurance
10.1 Subject to the Distributor fulfilling all the conditions in this clause 10, the Supplier shall indemnify the Distributor, defend and hold harmless against any liability incurred by the Distributor in respect of damage to property, death or personal injury arising from any fault or defect in the design of the Products and any reasonable costs, claims, demands and expenses, including reasonable attorneys' fees, arising out of or in connection with that liability (Relevant Claim), except to the extent the liability arises as a result of the wilful misconduct of the Distributor. The Supplier shall add the distributor to their current insurance certificate.
10.2 The Distributor shall, within five days of a matter which may result in a Relevant Claim:
(a) give the Supplier written notice of the details of the matter;
(b) give the Supplier access to and allow copies to be taken of any materials, records or documents as the Supplier may require to take action under clause 10.2(c);
(c) allow the Supplier the exclusive conduct of any proceedings and take any action that the Supplier requires to defend or resist the matter, including using professional advisers nominated by the Supplier; and
(d) not admit liability or settle the matter without the Supplier's written consent.
10.3 During the Term, the Supplier shall maintain product liability insurance with a reputable insurer of no less than AU$10 million for any one occurrence for any and all liability (however arising) for a claim that the Products are faulty or defective. The Supplier shall provide a copy of the insurance policy to the Distributor on request.
8
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
10.4 The Distributor undertakes to maintain appropriate, up-to-date and accurate records to enable the immediate recall of any Products or batches of Products from the retail or wholesale markets. These records shall include records of deliveries to customers (including batch numbers, delivery date, name and address of customer, telephone number, fax number and e-mail address).
10.5 The Distributor shall, at the Supplier's cost, give any assistance that the Supplier shall reasonably require to recall, as a matter of urgency, Products from the retail or wholesale market.
11. Duration and termination
11.1 This agreement begins on the Commencement Date and, subject to clause 11.2, shall continue for an initial term of one (1) years (Initial Term) and indefinitely after that until terminated by either party giving at least twelve (12) months' prior written notice to expire on or after the expiry date of the initial term.
11.2 Without affecting any other rights that it may be entitled to, either party may give notice in writing to the other terminating this agreement immediately if:
(a) the other party fails to pay any amount due under this agreement on the due date for payment and remains in default not less than 14 days after being notified in writing to make such payment; or
(b) the other party commits a material breach of any material term of this agreement and (if such breach is remediable) fails to remedy that breach within a period of 14 days of being notified in writing to do so; or
(c) the other party repeatedly breaches any of the terms of this agreement in such a manner as to reasonably justify the opinion that its conduct is inconsistent with it having the intention or ability to give effect to the terms of this agreement; or
(d) the other party suspends, or threatens to suspend, payment of its debts or is unable to pay its debts as they fall due or admits inability to pay its debts or (being a company) is deemed unable to pay its debts within the meaning of the Corporations Act 2001 (Cth) OR (being a natural person) is deemed either unable to pay its debts or as having no reasonable prospect of so doing, in either case, within the meaning of the Corporations Act 2001 (Cth) OR (being a partnership) has any partner to whom any of the foregoing apply: or
(e) the other party commences negotiations with all or any class of its creditors with a view to rescheduling any of its debts, or makes a proposal for or enters into any compromise or arrangement with its creditors other than for the sole purpose of a scheme for a solvent amalgamation of that other party with one or more other companies or the solvent reconstruction of that other party; or
9
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
(f) a petition is filed, a notice is given, a resolution is passed, or an order is made, for or in connection with the winding up of that other party other than for the sole purpose of a scheme for a solvent amalgamation of that other party with one or more other companies or the solvent reconstruction of that other party: or
(g) an application is made to court, or an order is made, for the appointment of an administrator or if a notice of intention to appoint an administrator is given or if an administrator is appointed over the other party; or
(h) a person becomes entitled to appoint a receiver over the assets of the other party or a receiver is appointed over the assets of the other party; or
(i) the other party, being an individual, is the subject of a bankruptcy petition or order; or
(j) a creditor or encumbrancer of the other party attaches or takes possession of, or a distress, execution, sequestration or other such process is levied or enforced on or sued against, the whole or any part of its assets and such attachment or process is not discharged within 14 days; or
(k) any event occurs, or proceeding is taken, with respect to the other party in any jurisdiction to which it is subject that has an effect equivalent or similar to any of the events mentioned in clause 11.2(d) to clause 11.2(j) (inclusive); or
(l) the other party suspends or ceases, or threatens to suspend or cease, to carry on all or a substantial part of its business; or
(m) the other party, being an individual, dies or, by reason of illness or incapacity (whether mental or physical), is incapable of managing his or her own affairs or becomes a patient under any mental health legislation.
(n) Without affecting any other rights that it may be entitled to, the Supplier may give notice in writing to the Distributor terminating this agreement immediately if the Distributor purports to assign its rights or obligations under this agreement to an entity that is not (1) affiliated with, (2) related to, or (3) sharing common ownership with the Distributor (a Permitted Assignee).
12. Effectsof termination
12.1 Termination of this agreement for any reason shall not affect any rights or liabilities accrued at the date of termination.
10
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
12.2 At the Supplier's option, on termination of this agreement:
(a) the Supplier may buy from the Distributor all or any stocks of Products for the current market value for those Products. The Distributor must deliver such Products to the Supplier within 14 days of receiving the Supplier's notice, and the Supplier must pay for the Products in full within 30 days of their delivery. The Supplier shall be responsible for the costs of packaging, insurance and carriage of the Products; or
(b) the Distributor may dispose of the balance of the Products in its possession and account to the Supplier for the Price for those Products; and
(c) subject to clause 12.2(b), the Distributor must cease using any intellectual property of the Supplier or of another person that relates to the distributorship and the Distributor must sign any instrument and do any other act that is necessary to achieve this purpose;
12.3 For the purposes of clause 12.2(a) the current market value in respect of Products shall be the price that the Products are ordinarily supplied as at the date of termination of this agreement.
12.4 Subject to clause 12.2, all other rights and licences of the Distributor under this agreement shall terminate on the termination date.
13. Confidentiality
13.1 Each party undertakes that it shall not at any time, disclose to any person any confidential information concerning the business, affairs, customers, clients or suppliers of the other party or of any member of the group of companies to which the other party belongs, except as provided by clause 13.2.
13.2 Each party may disclose the other party's confidential information:
(a) to those of its employees, officers, representatives or advisers who need to know such information for the purpose of carrying out the party's obligations under this agreement. Each party shall ensure that its employees, officers, representatives or advisers to whom it discloses the other party's confidential information comply with this clause 13; and
(b) as may be required by law, court order or any governmental or regulatory authority; provided, however, that the other party reserves the right to challenge such disclosure under applicable law. If such party elects to challenge the disclosure, no confidential information shall be disclosed during the pendency of such challenge.
13.3 No party shall use any other party's confidential information for any purpose other than to perform its obligations under this agreement.
11
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
14. Entire agreement
14.1 This agreement (and any document referred to in it) constitutes the whole agreement between the parties and supersedes all previous agreements between the parties relating to its subject matter.
14.2 Each party acknowledges that, in entering into this agreement (and any document referred to in it), it has not relied on, and shall have no right or remedy in respect of, any statement, representation, assurance or warranty (whether made negligently or innocently) other than as expressly set out in this agreement. Each party agrees that its only liability in respect of those representations and warranties that are set out in this agreement (whether made innocently or negligently) shall be for breach of contract.
14.3 Nothing in this clause shall limit or exclude any liability for fraud.
15. Variation
No amendment or variation of this agreement shall be effective unless it is in writing and signed by the parties (or their authorised representatives).
16. Assignment and other dealings prohibited
16.1 The Distributor shall not assign, transfer, mortgage, charge, declare a trust of or deal in any other manner with this agreement or any of its rights and obligations under or arising out of this agreement, or purport to do any of the same; provided, however, the Distributor may assign or transfer this agreement to a Permitted Assignee without the consent of Supplier. The Distributor shall not sub-contract or delegate in any manner any or all of its obligations under this agreement to any third party or agent.
16.2 If the Distributor seeks the Supplier's consent to any proposed dealing under clause 16.1, the Distributor must: -
(a) disclose fully in writing all material facts relating to the dealing
(b) comply fully with any conditions or requirements set down by the Supplier which attach to any Suppliers consent that is given.
16.3 Each party that has rights under this agreement is acting on its own behalf and not for the benefit of another person.
17. Freedom to contract
The parties declare that they each have the right, power and authority and have taken all action necessary to execute and deliver and to exercise their rights and perform their obligations under this agreement.
12
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
18. Waiver
No failure or delay by a party to exercise any right or remedy provided under this agreement or by law shall constitute a waiver of that or any other right or remedy, nor shall it preclude or restrict the further exercise of that or any other right or remedy. No single or partial exercise of such right or remedy shall preclude or restrict the further exercise of that or any other right or remedy.
19. Severance
19.1 If any provision of this agreement (or part of any provision) is found by any court or other authority of competent jurisdiction to be invalid, illegal or unenforceable, that provision or part-provision shall, to the extent required, be deemed not to form part of this agreement, and the validity and enforceability of the other provisions of this agreement shall not be affected.
19.2 If a provision of this agreement (or part of any provision) is found illegal, invalid or unenforceable, the provision shall apply with the minimum modification necessary to make it legal, valid and enforceable.
20. Notices
20.1 Any notice required to be given under this agreement, shall be in writing and shall be delivered personally, by email, or sent by pre-paid first class post or recorded delivery or by commercial courier, to each party required to receive the notice at its address as set out at the beginning of this agreement or as otherwise specified by the relevant party by notice in writing to each other party.
20.2 Any notice shall be deemed to have been duly received:
(a) if delivered personally, when left at the address and for the contact referred to in this clause; or
(b) if sent by pre-paid first class post or recorded delivery, at 9.00 am on the second Business Day after posting; or
(c) if delivered by commercial courier, on the date and at the time that the courier's delivery receipt is signed; or
(d) if delivered by email, on the date and at the time such email is received by the recipient whether such message is opened at that time.
Any notice given or received by a lawyer for a party to this agreement is deemed to be given or received with the actual or ostensible authority of the lawyer.
The Supplier may at times by notice nominate an address for service of legal proceeding, whether in Australia or in any other place. A nomination binds the
13
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
parties but nothing prevents the Supplier from making further nomination in place of any earlier nomination.
20.3 A notice given under this agreement shall not be validly given if sent by e-mail.
21. Third party rights
21.1 A person who is not a party to this agreement shall not have any rights under or in connection with it by virtue of the Contracts
21.2 The rights of the parties to terminate, rescind or agree any variation, waiver or settlement under this agreement are not subject to the consent of any person that is not a party to this agreement.
22. No partnership or agency
Except as expressly provided, nothing in this agreement is intended to, or shall be deemed to, establish any partnership or joint venture between the parties, constitute either party the agent of the other, nor authorise a party to make or enter into any commitments for or on behalf of the other party.
23. Counterparts
This agreement may be executed in any number of counterparts, each of which when executed and delivered shall constitute an original of this agreement, but all the counterparts shall together constitute the same agreement.
24. Governing law and jurisdiction
24.1 This agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with Ohio law.
24.2 The parties irrevocably agree that the courts of Ohio shall have non-exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this agreement or its subject matter or formation (including non- contractual disputes or claims).
This agreement has been entered into on the date stated at the beginning of it.
14
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
Schedule 1
AriaTM Hip Stem System
RemedyTM Hip Stem system
LogicalTM Hip Cup system
Signature BiPolar Head
Genius Total knee system
15
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
Schedule 2 Territory
USA.
16
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
Schedule 3 The Trade Marks
OriginTM, LogicalTM, AriaTM, RemedyTM, GeniusTM
17
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
Schedule 4 Prices
Aria Stem $610
Origin Stem $610
Remedy Stem $610
Logical Cup $450
Logical Liner $210
Metal Head $240
Ceramic Head $340
BiPolar Head $250
PS / CR Femoral Component $550
Insert $340
Tibia Tray $440
Patella $70
18
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019
SIGNED by Signature Orthopaedics Pty Ltd (ACN 106 702 416) In accordance with section 127 of the Corporations Act:
) ) ) ) )
Director/Secretary
Name (please print)
Director
Name (please print)
SIGNED by
CPM Medical LLC
) ) ) ) )
Director/Secretary
Name (please print)
Director
Name (please print)
19
Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 | Highlight the parts (if any) of this contract related to "No-Solicit Of Customers" that should be reviewed by a lawyer. Details: Is a party restricted from contracting or soliciting customers or partners of the counterparty, whether during the contract or after the contract ends (or both)? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Competitive Restriction Exception" that should be reviewed by a lawyer. Details: This category includes the exceptions or carveouts to Non-Compete, Exclusivity and No-Solicit of Customers above.
Context: RESELLER AGREEMENT This agreement ("Agreement") dated as of January 11, 2011 ("Effective Date") is between Diversinet Corp. ("Diversinet"), an Ontario corporation with its principal place of business located at 2235 Sheppard Avenue East, Suite 1700, Toronto, Ontario, Canada M2J 5B5, and 2205925 Ontario Limited, with its principal place of business located at 111 Main Street West, Suite 304, North Bay, Ontario P1B 2T6 (the "Reseller"). Diversinet and the Reseller are hereinafter referred to individually as a "Party" and, collectively, as the "Parties". The Schedules attached hereto shall form an integral part of this Agreement, and all references to this Agreement shall be deemed to include the Schedules. WHEREAS Diversinet is a provider of mobile device security and authentication solutions for the mobile data ecosystem, and is the owner of certain software products, user documentation and services and the related trade-marks; AND WHEREAS Reseller has represented that it is qualified and desires to act as a reseller of certain of Diversinet's products within a certain defined territory, and agrees to use its best efforts to market and sell such products in such territory; NOW THEREFORE, for and in consideration of the mutual promises and commitments contained hereafter and other considerations, the receipt and sufficiency of which is hereby acknowledged, the Parties have entered into this Agreement for the purpose of permitting Reseller to market and sell certain of Diversinet's products pursuant to the terms and conditions set out as follows. 1. Appointment Subject to payment of the Annual Minimum Commitment ("AMC" - defined herein), Diversinet hereby grants to Reseller an exclusive, non- transferable and non-assignable right to market, sell, and sub-license those Diversinet products listed in Schedule 2 (the "Products") within the territory listed in Schedule 3 (the "Territory") to Canadian headquartered companies, and governmental and broader public sector entities located in Canada. Reseller's customers (the "Customers") are defined as those organizations/enterprises that will market and manage the end-users of the Products (the "End-Users"). Reseller acknowledges and agrees that it does not have the right to assign sub-resellers under this Agreement outside of the Territory, except with the prior written consent of Diversinet. Furthermore, if Reseller terminates the AMC in the manner contemplated in Schedule 3, the exclusive license above shall revert to being a non- exclusive license. In either case, Reseller will have the non-exclusive right to contract in the rest of the world, excluding the United States. If Reseller identifies End- Users in the United States, with the prior written consent of Diversinet, Reseller may sell the Products to the End-Users. United Stated revenues will not be counted against the AMC however Reseller will be entitled to the discount rates as indicated in Schedule 3.. In addition, Diversinet hereby grants to Reseller the right to use those Diversinet trademarks and copyrighted materials with respect to the Products solely for the purpose of marketing and distribution of the Products as authorized hereunder. Reseller acknowledges that the use of such trademarks and copyrighted materials does not create in its favour any right, whether of ownership or otherwise, to such trade-marks and copyrighted materials, and that all rights arising from the use thereof by Reseller shall inure to the benefit of Diversinet. Reseller agrees that the rights granted to Reseller in this Section 1 are solely for the purpose of supplying the Products to Reseller, its Customers and End-Users located in the Territory. Any use outside of the rights granted herein shall require an additional license from Diversinet. 2. Ownership and Representations (a) Except as expressly granted herein, Diversinet does not grant any further rights, license or immunity to Reseller, and hereby retains and does not waive any rights it may have with respect to patents, trade-marks, copyrights, moral rights or other intellectual property or proprietary rights enforceable under the laws of any country. Reseller shall not authorize anyone to reverse engineer, decompile, alter, transfer, modify or create a derivative work from any of the Products, nor may Reseller itself engage in so doing. (b) Reseller shall not make any representations or warranties regarding the use or operation of the Products other than those included in any promotional materials provided by Diversinet and any Product documentation provided by Diversinet. 3. Term and Renewal The term of this Agreement shall begin on the Effective Date and continue in effect for a period of five (5) years (the "Initial Term"), unless sooner terminated in accordance with the provisions set out herein. Upon expiration of the Initial Term, this Agreement shall automatically renew for consecutive one (1) year periods, unless terminated by Reseller within sixty (60) days prior to the expiration of the Initial Term or any renewal term, as the case may be (the Initial Term and each renewal term, collectively, the "Term"). Any annual renewal would be subject to the payment, if applicable, of the AMC as agreed to by the parties, however such AMC will not be less than the previous year AMC times 115%, payable in applicable quarterly instalments. 4. Termination (a) Either Party may terminate this Agreement: (i) Upon thirty (30) days' written notice to Reseller if Reseller fails to make any AMC payment when due under this Agreement, or when an audit, as set out in Section 13, by Diversinet reveals any under-payment for any payment due, and it is not paid within the thirty (30) day written notice period; (ii) providing thirty (60) days' written notice to the other Party if the other Party breaches any material term or condition of this Agreement, and fails to cure such breach within the 60 day period; (iii) upon providing thirty (30) days' written notice to Reseller if Reseller terminates the provisions of the Annual Minimum Commitment and fails to meet the sales targets as set out in Schedule 3. (b) This Agreement shall terminate automatically without notice and without further action by Diversinet in the event that:
(i) Reseller ceases carrying on its business, or if a petition shall be filed, an order shall be made or an effective resolution is passed for the winding-up, dissolution or liquidation of Reseller. (c) Termination under Subsection 4(a) shall trigger a phase-out period during which Reseller may continue to provide products and services to Customers. Such phase-out period shall be the longer of (i) the remaining term of the agreement between the Reseller and its Customers, and (ii) 18 months. (d) Upon the termination of this Agreement for any reason: (1) all rights granted to Reseller hereunder shall automatically come to an end and revert to Diversinet, including without limitation any right to use, operate and provide customer service or support for the Products; (2) Reseller shall immediately pay to Diversinet all amounts due and outstanding hereunder as of the date of such termination or expiration; and (3) within five (5) days of termination of this Agreement, for whatever reason, Reseller, must: (a) destroy all copies of the Products and any associated Products documentation in its possession or under its direct control; and (b) deliver to Diversinet a written certificate warranting that it has complied with the foregoing obligations. 1. Customer Orders (a) Customer Agreements. The Parties acknowledge and agree that Reseller's Customers will acquire the Products and related services under contract with Reseller, that Diversinet shall not have any contractual interest in Reseller's Customer relationships. Prior to Reseller committing to provide any Products to a Customer, Reseller shall cause Customer to enter into purchase agreement(s) with Reseller with respect to each of the Products purchased by Customer (each, a "Customer Agreement"). Reseller agrees that it shall include terms and conditions in its Customer Agreements that are sufficient to protect Diversinet's interests as reflected in this Agreement, including, but not limited to, those terms set out in Schedule 4 hereto. Such Customer Agreements shall be subject to Diversinet's approval, which approval shall not be unreasonably withheld. Reseller shall use commercially reasonable efforts to ensure that all Customers abide by the terms of the applicable Customer Agreement(s). Furthermore, Reseller shall enforce its Customer Agreements against Customer when requested to do so by Diversinet. For greater clarity, Diversinet expects that the Reseller will include all of the points covered in Section 4 in its end user agreement. When the Reseller receives a customer order they will fax both the end user agreement and the details of the order to Diversinet and if the end user agreement contains all of the points outlined in Section 4 then Diversinet will approve the order and ship the required products to the Reseller. (b) Ordering Process. Reseller shall submit all orders to Diversinet for the applicable Products. Reseller's submission of orders to Diversinet shall comply at all times with Diversinet's reasonable procedures and requirements and are subject to acceptance by Diversinet acting reasonably. Reseller shall be solely responsible for all sales activity culminating in and including the procurement of fully-executed Customer Agreements and purchase orders specifying the Products and Services ordered and the specific number of tokens. 1. Delivery (a) Subject to Reseller's compliance with the terms and procedures set forth in this Agreement, Diversinet shall provide to Reseller or to Customers the Products properly ordered by Reseller and accepted by Diversinet in material compliance with the applicable terms hereof, notwithstanding any inconsistent or additional terms which Reseller includes in any Customer agreement. (b) Unless otherwise agreed to by the Parties, delivery of the Products shall take place via electronic transmission or by courier, and will take place within two (2) Business Days of a written request or purchase order for software and within five (5) Business Days for a standard appliance. Custom built appliances or software are subject to evaluation and delivery date will be communicated after assessment. "Business Day" shall mean 9:00 a.m. to 5:00 p.m. (Eastern Standard Time), Monday through Friday, excluding all statutory holidays observed in the Province of Ontario in Canada. Delivery will be F.O.B. Diversinet's facility. Reseller shall have fifteen (15) calendar days after the later of (i) the delivery of any of the Products by Diversinet; or (ii) any applicable evaluation period; to inspect the Products and ensure their substantial compliance with the corresponding documentation. Unless Reseller notifies Diversinet within such fifteen (15) day period that any of the Products fail to substantially comply with the relevant documentation, such Products shall be deemed accepted. In the event Reseller rejects any of the Products, Reseller shall give Diversinet written notice of rejection, specifying in reasonable detail the basis for such rejection. Diversinet will use commercially reasonable efforts to correct any nonconformance and re-deliver such Products to Reseller. 1. Reseller Covenants (a) Manner of Performance. Reseller shall: (i) use commercially reasonable efforts to market and sell the Products and Services to Customers; (ii) conduct business in a competent and professional manner that reflects favorably at all times on the Products and the goodwill and reputation of Diversinet; (iii) avoid deceptive, misleading, or unethical practices that are or might be detrimental to Diversinet or the Products, or to the public in general; (iv) not make any false or misleading representations with regard to Diversinet or to the Products; (v) not publish or employ, or cooperate in the publication or employment of, any misleading or deceptive advertising material with regard to Diversinet or the Products or related services; (vi) not make any representation, warranties or guarantees to potential Customers or to the trade with respect to the specifications, features or capabilities of the Products that are inconsistent with published statements made by Diversinet; and (vii) comply with all applicable federal, state, region, and local laws and regulations related to the performance of its duties hereunder. (b) Reporting Requirements. Reseller shall, on a monthly basis, communicate to Diversinet information about Customers as reasonably requested by Diversinet including, but not limited to, Customer business, marketing, sales and technical information, installation, service delivery and on-going maintenance information. (c) Technical Expertise. Reseller and its staff shall be conversant with the technical language conventional to the Products and similar technologies in general, and will develop sufficient knowledge of the industry, of the Products and of products competitive with the Products (including specifications, features and benefits) in order to explain in detail to potential Customers and End Users the differences between the Products and competitive products and services. (d) Branding. Reseller may provide its own branding for the Products; however Reseller will include a "powered by Diversinet" tag or such similar identifiers as mutually agreed to by the Parties. Should Reseller require Diversinet to brand the Product, then such work will be done under a separate statement of work to be agreed upon in writing by the Parties. 1. Fees and Billing
(a) Rates. For the Diversinet Products sold or distributed by Reseller, Reseller shall pay Diversinet the applicable list price, in U.S. dollars, for such Product, less the applicable discount for each Product, all as set out in Schedule 3. Any reference to any amounts or currency in this Agreement means United States dollars or U.S. dollars. (b) Billing. Diversinet will invoice Reseller for applicable one time Token Fees and the upfront annual Validation and Support Fee upon setting up a master account for each Customer and pre-loading it with MobiSecure tokens. Other fees and charges payable under this Agreement will be invoiced to Reseller according to terms set out in this Agreement or any applicable schedules or attachments hereto. Reseller shall be responsible for payment to Diversinet of all invoiced amounts for Products and services provided by Diversinet at Reseller's request to Reseller, its Customers and/or End-Users. (c) Payment Terms. Invoices are due and payable within 30 calendar days from the invoice date or from when the amount is due, whichever is later. (d) Late Charges and Taxes. All overdue amounts shall bear interest at the rate of 1% per month (12% per annum, simple interest), or the highest rate allowed by applicable law, whichever is less, until paid in full. Interest shall accrue on a daily basis. Fees do not include any sales, transfer, use, property, value added and other taxes, or any customs duties, tariffs or other governmental charges, all of which (if any are due and have been incurred within the Territory) are assumed and payable by Reseller (except for taxes imposed on Diversinet's net income). Providing proof of an exemption from any such duty, tax or charge is the responsibility of Reseller. Diversinet acknowledges and agrees that Reseller shall withhold any applicable non-resident withholding taxes from any amount owing hereunder and remit such taxes to the applicable federal taxing authority without provision for gross-up, if Diversinet becomes a non-resident of Canada or assigns the Agreement to a non-resident of Canada and if Diversinet does not provide Reseller with an appropriate exemption thereto. (e) Network Charges. The Customer or End User shall at all times be responsible for all mobile network data, roaming or airtime charges, SMS related charges, application certification charges or marketing costs and any other fees or levies related to the cellular or wireless network over which the Products are offered and/or provisioned, as well as Customer's own Internet access fees (collectively, the "Network Charges"). None of the fees chargeable hereunder include any Network Charges and Reseller shall ensure that Customer shall indemnify and hold harmless Diversinet and Reseller against any such Network Charges that may be levied against them for the operation of the Products. 1. Training and Consulting (a) Diversinet will arrange for the initial personal technical and sales instruction of up to three (3) Reseller personnel for up to five (5) days in learning the functions, installation, integration, operation and maintenance of the Products. Such instruction shall take place in Diversinet's corporate headquarters and expenses of the Reseller personnel incurred for attending such initial instruction shall be paid by Reseller. There will be no charge for this initial training. Thereafter, Diversinet will make available to Reseller standard Product training courses generally offered by Diversinet at the list price. (a) Upon Reseller's request, Diversinet will provide Reseller with pre-sales consulting and post-sales consulting at the Diversinet's standard rates. Post-sales consulting will be provided under a separate services agreement to be entered into by the Parties, which shall include specific statement(s) of work. (b) Statements of Work ("SOW"). Fees for any future development services shall be as agreed to by the Parties in an SOW. Reimbursable expenses agreed to by Reseller shall be paid by Reseller within thirty (30) days of Diversinet's documented invoice. Diversinet shall offer to perform such work at Diversinet's then standard daily rate (currently at $1,500 per day). Reseller hereby agrees and acknowledges that Diversinet shall own all code, documentation and modifications to the code or documentation, and all copyrights, trade secrets and other intellectual property rights with respect to any such code or documentation. Diversinet hereby agrees and acknowledges that Reseller owns any and all intellectual property rights with respect to any Reseller-specific private label associated with the software. 1. Support (a) Services. Diversinet may provide, upon written agreement between the parties, the server hardware, physical environment, including physical security, HVAC and power for the server hardware, all as required to provide the Products as described in Schedule 2. Diversinet may also provide internet connectivity, by being responsible for network operation and availability from the public Internet up to the termination cables at the network interface card on the server hardware. Diversinet shall use commercially reasonable efforts to maintain connectivity, through the public Internet, between the server hardware and the wireless network operators or other network on which an End User's device operates. Diversinet specifically excludes any responsibility for any connectivity between a network operator and a wireless device, including any SMS, SMTP, or other connectivity. The products, their related service objectives and each Party's related responsibilities in respect thereto are to be more fully described in a separate agreement. (b) Service Term. During the Term, and subject to Reseller's payment of the annual Support Fees, Diversinet will provide support for the Products in accordance with the terms set out in Schedule 5. Furthermore, Diversinet will support the existing Reseller trial including Apple App Store submission until December 31, 2010. Diversinet will support the Reseller certification with Canada Health Infoway, at no additional cost, until December 31, 2010. (c) Standard Support. Reseller's Customers will be responsible for first level support to End-Users. Reseller will be responsible for second level support to its Customer. Diversinet will provide third level support to Reseller. Diversinet will accept electronic mail messages via the Internet using SMTP compliant software ("E Mail") addressed to: support@diversinet.com, from Reseller with questions regarding the functions of the Products, as well as questions about how to make full use of the software ("Support Questions"). If second level support is not being provided by the Reseller, Diversinet may, at its sole discretion, provide additional support to Reseller. In these cases, Diversinet may charge the Reseller for support services or reduce the product price discount provided to Reseller. Reseller's Support Questions must be referred to Diversinet by a single person, designated initially as Primary Technical Support Contact ("Primary Contact") set out in Schedule 1, unless Diversinet is notified in writing of an alternate technical support contact ("Alternate Contact"). The names and e-mail addresses of up to four (4) Alternate Contacts (along with the name of the particular project or department) shall be designated in a list provided by the Primary Contact via E Mail at support@diversinet.com. All Primary Contacts and Alternate Contacts (collectively, "Contacts") must be members of the designated project or department. It is Reseller's responsibility to provide
Diversinet with an initial list of Contacts and to keep that list current in order to receive timely service. (d) Updates. During the Term, Diversinet will provide updated versions of the Products ("Updates"). Updates shall be designated by a version number with a higher number to the right of the decimal point (e.g., version 1.4 is an Update to version 1.2), but do not include New Releases or Custom Releases (which are designated with a higher number to the left of the decimal point, or at the end with a letter, respectively). Prior to delivering any Updates, Diversinet may require Reseller to sign a revised schedule if any additional grants or licenses are required for an Update. (e) Internet Access. Diversinet may provide, at no additional cost, access to Diversinet's Internet-based Frequently Asked Questions (FAQ's) archives, a defect 'fix' list, or a private discussion forum available to all Products support customers, which will be moderated by Diversinet's engineers when available. (f) Beta Versions. Diversinet may provide Reseller with access to Beta Test versions of Updates to Products as described in paragraph (d) above. (g) Update Input. Diversinet will give special consideration to Reseller's feature requests for future versions of the Products. 1. ASP Sales The Reseller may sell the Products as an Application Service Provider ("ASP") sales model. Under an ASP model, the Reseller shall provide the Products through computer-based services to End Users over a network. The Reseller shall be responsible for providing, at the Reseller's sole cost and expense, the infrastructure, network, hosting environment, support and/or website. Reseller warrants and guarantees that Diversinet shall have no obligations, representations or guarantees to the End User for sales made by the Reseller under an ASP sale. 2. Confidential Information (a) Reseller agrees that all software, documentation and materials provided with the Products and all information contained therein is owned by Diversinet. The Parties agree that any other information of a confidential or proprietary nature provided by one Party to the other from time to time, whether marked as "Proprietary", "Confidential", "Secret" or any other designation implying confidentiality, is owned by the disclosing Party (all such information hereafter, collectively "Trade Secrets"). Both Parties shall treat the other Party's Trade Secrets with the same care as they treat their own confidential information of a like nature, but in no case shall the receiving Party use less care in handling the Trade Secrets than would be reasonable under the circumstances. The Parties agree not to make the other Party's Trade Secrets available in any form to any third party, or use the other Party's Trade Secrets for any purpose other than as set forth in this Agreement or as authorized by the other Party in writing. The Parties' obligations under this subsection shall survive the termination or expiration of this Agreement. (b) General Exclusions: The Parties' obligations set out in this section shall not apply to any information which is: (i) rightfully in a Party's possession before receipt from the other Party; (ii) independently developed by a Party without reference to the other Party's Trade Secrets; (iii) approved for release by written agreement with the other Party; (iv) rightfully in the public domain; (v) disclosed by requirement of a governmental agency or third party as expressly required by operation of law, regulation or court order. The disclosing Party shall promptly notify the other Party of the pending disclosure to allow the other Party to seek a protective order; or (vi) lawfully disclosed to a Party by a third party without an obligation of confidentiality to the Party. (c) It is expressly agreed that a violation of this section will cause irreparable harm to the owning Party and that a remedy at law would be inadequate. Therefore, in addition to any and all other remedies available at law, the owning Party shall be entitled to seek (without posting of a bond) preliminary, injunctive, emergency or equitable relief in the event of any actual or threatened violation of any or all of the provisions hereof. 3. Audit During the Term and for seven (7) years after the expiration or termination of this Agreement, or such longer period as required by applicable law, Reseller agrees to maintain complete books, records and accounts relevant to the computation of and accounting for the amounts payable under this Agreement. Reseller agrees to allow Diversinet or its agents and representatives the right to examine and audit such books, records and accounts during Reseller's normal business hours for no more than once per calendar quarter upon reasonable notice. If such examination reveals a deficiency in any amounts paid, Reseller agrees to pay any such deficiency forthwith upon demand, plus interest calculated in accordance with Section (Late Charges and Taxes) above and, if in excess of 5%, the cost of the audit incurred by Diversinet. 4. Limited Warranty EACH PARTY DOES NOT WARRANT TO THE OTHER THAT THE MATERIALS IT PROVIDES IN CONNECTION WITH THIS AGREEMENT WILL MEET THE REQUIREMENTS OF THE OTHER PARTY OR ITS CUSTOMERS, OR THAT THEIR OPERATION WILL BE UNINTERRUPTED OR ERROR FREE. Diversinet warrants as follows: (a) Each of the Products operates in substantial accordance with its documentation ("Operation Warranty"). With respect to the Operation Warranty, Reseller's sole remedy, and Diversinet's sole obligation, shall be to cause the Product to operate substantially in accordance with its documentation in a timely manner. All Products shall be virus-checked prior to delivery to Reseller. (b) The services provided under this Agreement shall be performed in a timely and professional manner by personnel ("Personnel") and in all material respects in accordance with the requirements set forth here in Schedule 5 (Service Level Agreement). Personnel shall be appropriately trained in the performance of such services under this Agreement and shall meet those standards generally observed by reputable and competent members of the same industry providing similar services. c) Diversinet shall ensure that there collectively is a sufficient number of employees and personnel assigned and available during the term to provide the services in accordance with the service levels and the standards and other terms and conditions of this Agreement.
(d) Diversinet shall exercise professional and good judgement in carrying out and performing its obligations under this Agreement. (e) The Products do not contain any virus, Trojan horse, worm, trapdoor, backdoor, malicious code or other code or device designed to interfere with proper use of the Software or cause harm or injury. (h) As of the Effective Date, to the best of its knowledge, none of the Products infringes upon any third party's patent rights ("Limited Patent Warranty"). EXCEPT AS EXPRESSLY SET FORTH ABOVE, DIVERSINET PROVIDES THE PRODUCTS, DOCUMENTATION AND OTHER RELATED SERVICES (COLLECTIVELY, THE "BUNDLED PRODUCT") TO RESELLER "AS IS" WITHOUT WARRANTY, MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY OTHER WARRANTIES OF PERFORMANCE, AND IMPLIED WARRANTIES OF NON INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, REGARDING THE BUNDLED PRODUCTS, EITHER AS A UNIT, OR AS INDIVIDUAL PARTS. EXCEPT AS ABOVE SET FORTH, DIVERSINET SHALL BEAR NO RISK AS TO THE PERFORMANCE OF THE BUNDLED PRODUCT, AND ALL RISK IS TO BE ALLOCATED BETWEEN RESELLER AND IT CUSTOMERS AND END-USERS, OR ANY OTHERS WHO USE THE BUNDLED PRODUCT ("USERS"). EXCEPT AS ABOVE SET FORTH, SHOULD THE BUNDLED PRODUCT PROVE DEFECTIVE, DIVERSINET SHALL NOT BEAR ANY COST WHATSOEVER FOR ANY SERVICE, REPAIR OR CORRECTION TO ANY PARTY. USERS SHALL BE SOLELY RESPONSIBLE FOR ADEQUATELY PROTECTING DATA USED IN CONNECTION WITH THE BUNDLED PRODUCT. EXCEPT AS ABOVE SET FORTH, DIVERSINET SHALL NOT BE RESPONSIBLE FOR LOST DATA, RERUN TIME, INACCURATE INPUT, WORK DELAYS OR LOST PROFITS, LOSS OF SECURITY FOR PROPRIETARY DATA OR ANY OTHER INJURIES OR DAMAGES RESULTING FROM USE OF THE BUNDLED PRODUCT. Neither Diversinet, nor its subsidiaries, nor their respective directors, officers, employees, agents, assignees, co-developers, servants and contractors, nor the Reseller has any right to make any other representation, warranty or promise of any kind with respect to any of the Products. This Agreement does not, in itself, grant any patent license or patent right of any manner or kind. Reseller will be solely responsible for determining which patent rights it may need to use the Products and for obtaining such licenses, where applicable. So long as the terms of this agreement are respected, Diversinet agrees that it will not bring any suit, claim or demand against Reseller, its Customers or End-Users for breach of Diversinet's patent rights in the Products, if any. 5. Limitation of Liability and Damages (a) EXCEPT TO THE EXTENT DIRECT FORESEEABLE DAMAGES, IN NO EVENT SHALL DIVERSINET BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION ANY COMMERCIAL DAMAGES OR LOSSES) AS A RESULT OF THE USE, SALE OR DISTRIBUTION OF THE BUNDLED PRODUCT, WHETHER BY WAY OF A LEGAL THEORY OF CONTRACT, TORT (INCLUDING NEGLIGENCE), PRODUCT LIABILITY, STRICT LIABILITY, OR ANY OTHER THEORY, EVEN IF DIVERSINET HAS BEEN INFORMED OF THE POSSIBILITY OF SUCH DAMAGES. (b) RESELLER WAIVES ANY RIGHT IT MAY HAVE TO RECEIVE ANY COMPENSATION OR REPARATIONS ON TERMINATION OR EXPIRATION OF THIS AGREEMENT UNDER THE LAW OF THE TERRITORY OR OTHERWISE, OTHER THAN AS EXPRESSLY PROVIDED IN THIS AGREEMENT. THE PARTIES ACKNOWLEDGE THAT THIS SECTION HAS BEEN INCLUDED AS A MATERIAL INDUCEMENT FOR DIVERSINET TO ENTER INTO THIS AGREEMENT AND THAT DIVERSINET WOULD NOT HAVE ENTERED INTO THIS AGREEMENT BUT FOR THE LIMITATIONS OF LIABILITY AS SET FORTH HEREIN. (c) The availability of the MobiSecure™ Strong Authentication service depends on many factors, including Customer's connection to the Internet, End Users' connection to the Internet, the availability of the Internet and the Internet backbone and equipment that, by its nature, is not fault tolerant. Diversinet does not and cannot control the flow of data to or from Diversinet's network and other portions of the Internet. Such flow depends in large part on the performance of Internet services provided or controlled by third parties. At times, actions or inaction of such third parties can impair or disrupt Customers' connections to the Internet (or portions thereof). Although Diversinet will use commercially reasonable efforts to take all actions it deems appropriate to remedy and avoid such events, Diversinet cannot guarantee that such events will not occur. Accordingly, Diversinet shall have no responsibility for any failure to meet the requirements hereunder, with respect to performance issues, including without limitation: (i) caused by factors outside of Diversinet's reasonable control; (ii) that result from any actions or omissions of Customers, End Users or any third parties; (iii) that result from Customers' equipment and/or third party equipment (not within the sole control of Diversinet); (iv) caused by any act or failure to act by Customer or as a result of any Third Party Software. (d) NOTWITHSTANDING THE ABOVE, IN NO EVENT SHALL DIVERSINET'S LIABILITY RELATING TO THIS AGREEMENT (OR THE BUNDLED PRODUCT) EXCEED ONE HUNDRED PERCENT (100%) OF THE AGGREGATE AMOUNT OF THE LICENSE FEES, ROYALTIES AND SUPPORT FEES PAID BY RESELLER IN THE TWELVE (12) MONTH PERIOD PRECEDING THE EVENT OR CIRCUMSTANCE GIVING RISE TO THE ALLEGED LIABILITY ON THE PART OF DIVERSINET. (e) The limitations set forth in Section 15(a), (b), (c), (d) and (e) shall not apply in respect of (i) breach of confidentiality obligations; (ii) breach of privacy provisions as detailed in Schedule 6; (iii) the intellectual property indemnity; (iv) any Abandonment committed by Diversinet; or (v) any willful gross misconduct (including fraud). "Abandonment" means Diversinet's cessation or suspension of, or refusal to perform, its obligations under this Agreement, and such cessation, suspension or refusal (i) was knowingly intended by Diversinet to cause harm to Reseller, and (ii) was not the result of a termination of this Agreement by Diversinet in accordance with Section 4 (Termination). 1. Indemnification (a) Reseller Indemnity. Reseller shall indemnify and hold harmless Diversinet and/or any of its directors, officers, agents, employees, contractors, parent companies, affiliates, and/or subsidiaries (collectively, the "Diversinet Parties") from and against any claim, suit or proceeding by a third party based on or arising out of (i) the acts or omissions of Reseller in connection with its performance or failure to perform any other obligations in this Agreement or any agreement with a Customer, and (ii) any unauthorized representation or any misrepresentation of fact to any third party with respect to one or more of the Diversinet Parties or Products made by Reseller or any director, officer, agent, or employee of Reseller, provided that:
(i) Diversinet promptly notifies Reseller in writing of any such claim and Reseller has sole control of any related investigation, defense and settlement negotiations; and (ii) Diversinet fully cooperates with Reseller, at Reseller's expense, in defending or settling such claim. (b) Infringement Indemnity. Diversinet shall diligently defend, indemnify and hold Reseller harmless, at its own expense, any action, loss, cost or expense brought against Reseller to the extent that it is based upon a claim that Reseller's use of the unmodified Products as permitted herein infringes upon a third party's intellectual property rights, and will pay the resulting costs, damages and legal fees finally awarded against Reseller through settlement, judgment, arbitration, mediation or otherwise in such action that are attributable to such claim, provided that: (i) Reseller promptly notifies Diversinet in writing of any such claim under patent law and Diversinet has sole control of any related investigation, defense and settlement negotiations; and (ii) Reseller fully cooperates with Diversinet, at Diversinet's expense, in defending or settling such claim. (c) Should any of the Products become, or in Diversinet's sole opinion is likely to become, the subject of any third party intellectual property infringement claim, Reseller shall permit Diversinet, at Diversinet's sole option and expense, to: (i) procure for Reseller the right to continue to use such Product; or (ii) modify such Product so that it becomes non-infringing; (d) Diversinet shall have no liability for any claim based upon: (i) use of other than a current or the last prior release to the current unaltered version of the Products; or (ii) use, operation or combination of the Products with non-Diversinet programs, data, equipment or documentation in a manner not reasonably contemplated by this Agreement, if such infringement would have been avoided but for such uses, operation, or combination; or (iii) Reseller's or its agent's activities after Diversinet has notified Reseller that such use may result in infringement provided that the Reseller has been provided with access to an updated version that would not be infringing. (e) THE FOREGOING STATES OUT THE ENTIRE LIABILITY OF DIVERSINET, AND THE SOLE AND EXCLUSIVE REMEDY OF RESELLER AND END-USER, WITH RESPECT TO THE INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS BY THE PRODUCTS. 2. Escrow Agreement The Parties agree to execute an escrow agreement, within 90 days of the Effective Date, with a nationally recognized escrow agent with respect to the source code for the Products and name Reseller as a beneficiary. Diversinet will then immediately send a copy of the escrow agreement to Reseller for its counter-signature. Diversinet shall, at least annually, deposit the source code in the escrow account. Costs associated with the escrow agreement shall be borne by Reseller. Reseller will be provided with a copy of any deposit correspondence and escrow agent's acceptance thereof. The escrow agreement shall provide, among other terms, that the source code shall be released to Reseller if any of the following events (collectively the "Release Conditions") occurs: (i) Diversinet ceases to support services at levels as stated in Schedule 5 under this Agreement that is not remedied within sixty (60) days after receipt of written notice of such failure; (ii) Diversinet makes an assignment for the benefit of creditors, or becomes subject to direct control of a trustee, receiver or similar authority, or Diversinet becomes subject to any bankruptcy or insolvency proceeding under federal or state statutes; or (iii) Diversinet suspends or ceases to carry on its business and a receiver, trustee or assignee does not carry on the business. 3. Non-Solicitation During the Term, the Reseller agrees that it shall not induce any person employed by Diversinet to leave Diversinet's employ to become an employee of Reseller or its agents or contractors. 4. Relationship Nothing in this Agreement shall be construed so as to create a joint venture, partnership, employer/employee, franchisor/franchisee or principal/agent relationship between the Parties. Reseller and Diversinet are independent contracting parties. Neither Reseller nor its employees, consultants, contractors or agents have any authority to bind Diversinet by contract or otherwise to any obligation. 5. Choice of Forum This Agreement shall be governed by the laws of the province of Ontario, Canada, without regard to its conflict of laws principles. Any litigation or other dispute resolution between the Parties relating to this Agreement or its construction shall take place in the courts of Toronto, Ontario, Canada. The Parties consent to the personal jurisdiction of, and venue in, the provincial and federal courts therein. The Parties agree that the United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement. No action against Diversinet regardless of form, including negligence, arising out of any claimed breach of this Agreement or transactions under this Agreement may be brought by Reseller more than two years after the cause of action has accrued. 6. Assignment Without the express prior written consent of Diversinet (not to be unreasonably refused), Reseller may not assign this Agreement or its interest herein in whole or in part but Reseller shall continue to be responsible should the assignee fail to perform. Diversinet may assign this Agreement at any time and in such event, this Agreement shall continue in full force and effect as if the assignee were named as the licensor in the first instance but Diversinet shall continue to be responsible should the assignee fail to perform. This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the Parties. 7. Interpretation
This Agreement, including all Schedules, attachments and addenda, is the entire agreement constituting the complete and exclusive statement of the terms and conditions between the Parties with respect to the subject matter hereof, and cancels and supersedes all previous negotiations, commitments, writings and agreements that the Parties may have entered into. The Parties acknowledge that they have read this Agreement, understand it and agree to be bound by its terms and conditions. Except for Diversinet's unilateral right to update certain Schedules as specifically set out in such Schedules, any subsequent waiver or modification of this Agreement or any part hereof shall only be effective if in writing and signed by both Parties. No delay or failure to enforce any right under this Agreement shall be considered a waiver of that Party's rights to thereafter enforce each and every right and provision of this Agreement. In addition, headings set out in this Agreement are an organizational aid, not a substantive part of this Agreement, and are not intended to limit or expand the language of each section. Any person signing this Agreement (or any later modifications or addenda) on behalf of Reseller warrants that he or she has the authority to bind Reseller. Time shall be of the essence of this Agreement. 8. Attorney Fees The prevailing Party (as determined by the finder of fact) in any law suit or other dispute resolution to enforce or interpret any part of this Agreement shall be entitled to recover, as a costs of suit, reasonable attorney's fees as determined by the finder of fact (including, but not limited to, costs, expenses and fees on appeal). 9. Severability If any part of this Agreement shall be found invalid or unenforceable by a court of competent jurisdiction, said portion shall be severed from the Agreement, and the remainder shall be interpreted so as to reasonably effect the intention of the Parties. Any limitation of liability, disclaimer of warranties and exclusion of damages set out in this Agreement are expressly intended to exist independently from, and to be severable from, this Agreement. 10. Force Majeure Neither Party shall in any circumstances be liable to the other for any loss of any kind whatsoever including, but not limited to, any damages or abatement of charges whether directly or indirectly caused to or incurred by the other Party by reason of any failure or delay in the performance of its obligations hereunder which is due to circumstances beyond the reasonable control of the affected Party, including, without limitation, acts of God, acts of terrorism, fire, flood, strike, labour disputes, civil, commercial sabotage, statute order or any regulation of any government public or local authority. 11. Compliance with Laws The Products include software ("Software") that is commercial computer software developed at private expense, and in all respects is proprietary data belonging solely to Diversinet or its suppliers. Reseller shall comply with all applicable export and import control and other relevant laws of any applicable jurisdiction. Determination of the applicable law is Reseller's responsibility. Reseller understands that the Products utilize cryptographic products that are highly regulated. 12. Publicity The Parties shall use commercially reasonable efforts to issue a joint press release concerning this Agreement after the execution hereof. Any further use of the other Party's name or logo in any publicity materials is prohibited without such other Party's prior written consent, which consent shall not be unreasonably withheld. 13. Notices Any notice, demand, or communication between the Parties shall be deemed given and received: (i) when personally delivered; (ii) when transmitted by facsimile with proof of transmittal; or (iii) five (5) days after deposit (properly addressed with postage prepaid) with the postal service for registered/certified mail. The addresses and contact information may be changed at any time by giving written notice as allowed under this section. Reseller's address and contact information are as set out in Schedule 1. Address and contact information for Diversinet are as follows: Diversinet Corp. Attention: Chief Financial Officer 2235 Sheppard Avenue East, Suite 1700 Toronto, Ontario, Canada M2J 5B5 Phone: 416-756-2324 Fax: 416-756-7346 14. Survival Any terms or conditions of this Agreement by which obligations of either Party are expressed to be applicable or which extend or may extend beyond termination of this Agreement shall survive the expiration or termination hereof. 15. Language This Agreement shall be interpreted consistent with its English linguistic construction, and all communications between the Parties shall be deemed to be conducted in the English language. Reseller will be responsible, at its own cost and expense, for any language and documentation localization for the Territory. 16. Counterparts This Agreement may be executed in two or more counterparts, by original or facsimile transmission, each of which so executed shall be deemed to be an original and such counterparts together shall constitute one and the same document. IN WITNESS WHEREOF the Parties have signed this Agreement, as of the date first written above, by their duly authorized representatives. 2205925 Ontario Limited DIVERSINET CORP.
Signature:__________________________________ Signature:__________________________
Print Name: Dr. Wendy Graham Print Name: Albert Wahbe
Title: President Title: CEO
Schedule 1 Reseller Information
#
Date Signed_________________________________ Date Signed________________________
Name 2205925 Ontario Limited
Street Address 111 Main Street West, Suite 304
City North Bay, ON
Country Canada
Zip/Postal Code P1B 2T6
Billing Address (if different from above) Shipping Address (if different from above) Telephone Facsimile Person Signing Contract Dr. Wendy Graham
E-mail Address drgraham@vianet.ca
Primary Technical Support Contact Address and Contact Information for Notice section in the Agreement
Schedule 2 Products Unless otherwise agreed to by the Parties, the Products shall mean the following: 1. MobiSecure® Wallet and Vault MobiSecure® Vault server allows subscribers to securely store and manage their personal data and other information, select the information to be downloaded to their mobile devices and share it with others via email, fax or SMS messaging. The MobiSecure® Vault server is designed to host and manage a variety of different types of personal information e.g. financial, health, identities and passwords. It provides a framework for administrators to define and customize the information to be hosted and managed and supports a plug-in architecture and web service interfaces to allow for rapid integration with external information, payment and messaging systems. MobiSecure® Wallet application works in conjunction with the MobiSecure® vault server. It is designed to run on desktop computers and mobile platforms including Java based phones, RIM Blackberries®, Microsoft Windows Mobile®, iPhone, Android and BREW devices. The Wallet application provides offline and online access to personal information. Information is stored in the device for instant and offline access securely using a patented technique. The information is synchronized automatically or upon user's request with the vault server using a secure data synchronization protocol. Users may use the wallet application to access their information instantly when they are traveling, retrieve additional information from the vault server or send their information to others via email, SMS or fax. The wallet application includes an embedded software One-Time-Password (OTP) token to allow for secure and easy access to the vault server using dynamic password based authentication. The MobiSecure® Wallet SDK and MobiSecure® Vault API allows customers and third party developers to build secure mobile applications by leveraging Diversinet's Wallet secure container services. Applications features and benefits (utilizing Wallet and Vault) include: Patient Portal The Patient Portal is a set of web pages designed to permit patients to display, add, delete and update information pertaining to their demographics, attending physicians, chronic conditions, allergies, immunizations and messages received from registered doctors and clinical staff. The Physician's Tool This is a windows based application which permits doctors and authorized 'circle of care' workers to access patient records stored in the information repository. These users may add, delete or update the patient records and may also 'Validate' existing records. Validation consists of marking the records as 'Validated' and making them read only from that point to maintain record values that the physician has agreed to by validating the record. The Physician's Tool also can create and display secured messages to the patient which will be protected by the Diversinet MobiSecure® Health platform. The tool can also display a complete record of messages sent to the patient with associated time and date of acknowledgment from the patient. The administrator users of the tool can also add and delete doctors and other circle of care worker accounts in order to administer the operation of the clinical side of the Diversinet Platform. Message Manager The Message Manager is a tool used to collect and display incoming patient messages to the clinic and answer's to previously sent questions from the clinic. The Message Manager permits the user to prepare reply messages as well as automatically preparing an audit trail of all display and reply activities. Message Generator The Message Generator is an extension of the messaging tool in the Physician's Tool above, used to create user reminder messages based upon reminder criteria and the user records in the repository for recurring action requirements. Examples include recurring tests (i.e. PAP, colonoscopy, recurring blood work supporting medications), reminders about health and lifestyle choices, medication reminders.) 2. MobiSecure® Strong Authentication MobiSecure® Strong Authentication is a fully automated, OATH-standards based strong authentication server product. It is available as a fully configured appliance or a packaged software product and is designed to be easy to deploy and easy to use for high-volume Internet or wireless- based strong authentication. Its supported clients operate on mobile phones, personal computers, USB stick and can also be embedded into microchip or smart card technologies. The system supports Over-the-Air and Over-the-Web MobiSecure SoftToken delivery. The same system also supports the MobiSecure Validation Server for ongoing one-time password (OTP) validation for user authentication. MobiSecure Strong Authentication components are: The MobiSecure® Strong Authentication Platform contains the following components: 1. MobiSecure Provisioning Server 2. MobiSecure Validation Server 3. MobiSecure SMS Server 4. MobiSecure Registration/Administration Server 5. MobiSecure SoftToken Client MobiSecure® SoftToken: MobiSecure SoftToken is a client-side software token that is available as a Mobile SoftToken or as PCToken. It can be easily delivered, downloaded and embedded into a user's personal computer, PDA or mobile phone. It performs basic functions for managing and generating one-time password values. The client-side software token is easily delivered, downloaded and installed into a user's device. MobiSecure® SoftToken supports both time based and event based one-time passwords. Event based one-time passwords expire once they are used and are no longer valid. Time based one-time passwords expire once they are used or the valid time period elapses, whichever comes first. MobiSecure® SoftToken can be embedded into customer client applications using SDK's for mobile platforms and Windows PC. Key features of
the MobiSecure® Strong Authentication Toolkit are listed below: 1. Lightweight library allows for a modular implementation- use only the components you need 2. Client API available in C and Java programming languages for software clients a. Allows organizations to develop their own clients or integrate with existing applications b. DLL provided for rapid development on Microsoft Windows platform 3. Server API a. SPML interface for integrating enterprise applications b. SPML Java client libraries for rapid integration c. Free Radius interface to OTP Validation Server 3. MobiSecure® SMS Messaging MobiSecure® SMS Messaging leverages the familiarity and popularity of SMS messaging to create a secure messaging solution that utilizes state of the art AES encryption technology to securely transmit and receive SMS messages. Messages can be both 1-Way (Push) based and 2-Way (Pull or Push-Pull) based between mobile users and backend server applications. Unlike traditional SMS service, MobiSecure® SMS Messaging subscribers will automatically receive message delivery and read confirmations on their mobile device. The MobiSecure® SMS Messaging solution offers a fully integrated secure gateway environment. This simplifies and eliminates extensive integration efforts with multiple gateways globally. High-level APIs, allow for the submission of text messages from a third party application or directly from the handset itself.
Schedule 3 Territory, Sales Targets, Prices and Discount Annual Minimum Commitment ("Annual Minimum Commitment" or "AMC"). During the Term of the Agreement, Reseller shall pay to Diversinet an Annual Minimum Commitment, payable as follows: a) A total of four hundred thousand ($400,000) dollars shall be paid by Reseller to Diversinet as of the Effective Date. b) A total of seven hundred thousand ($700,000) dollars shall be paid by Reseller in quarterly instalments of $175,000 to Diversinet on each of December 1, 2011, March 1, 2012, June 1, 2012 and September 1, 2012. c) A total of one million ($1,000,000) dollars shall be paid by Reseller in quarterly instalments of $250,000 to Diversinet on each of December 1, 2012, March 1, 2013, June 1, 2013 and September 1, 2013. d) A total of one million three hundred thousand ($1,300,000) dollars shall be paid by Reseller in quarterly instalments of $325,000 to Diversinet on each of December 1, 2013, March 1, 2014, June 1, 2014 and September 1, 2014. e) A total of one million six hundred thousand ($1,600,000) dollars shall be paid by Reseller in quarterly instalments of $400,000 to Diversinet on each of December 1, 2014, March 1, 2015, June 1, 2015 and September 1, 2015. AMC Tokens. For each contract year that the AMC applies, Diversinet shall deliver to Reseller the number of End User licenses equal to the contract year AMC divided by twenty-four (24) in satisfaction of the AMC. For the first contract year, the applicable service license fees for the Mihealth pilot production shall be deducted from the AMC. There is no carryover of the AMC from one year to the next. AMC Termination. After the first year and upon 180 days written notice, Reseller may terminate the AMC. Termination of the AMC by Reseller shall eliminate any exclusivity of the Reseller in the Territory. Territory Assuming that the AMC amounts have been paid and the Reseller has not terminated the AMC, Reseller shall have the exclusive right to contract with Canadian head quartered companies and governmental and broader public sector entities located in Canada (the "Territory"). Furthermore, Reseller will have the non-exclusive right to contract in the rest of the world, excluding the United States. Sales Targets After AMC termination, Reseller shall generate at least the following amount of new sales of the Products in each contract year (for the purpose of this Schedule 3, a contract year shall be each 12-month period commencing after the termination by Reseller of the AMC). New sales are defined as the aggregate amount of all Product sales and Support Fees paid by Reseller pursuant to pricing set out below, inclusive of any applicable discounts and exclusive of applicable taxes. If Diversinet materially reduces Reseller's Territory, the Parties shall negotiate and, acting reasonably, adjust Reseller's sales targets. Contract Year 1: $750,000 (quarterly targets at ¼ of annual amount) Contract Year 2: $1,000,000 (quarterly targets at ¼ of annual amount) Contract Year 3: $1,250,000 (quarterly targets at ¼ of annual amount) Contract Year 4 onward: $1,500,000 (quarterly targets at ¼ of annual amount) Product Prices and Discount: Diversinet maintains a product price list that details the products available and the list price. The product price list is incorporated by reference to this Agreement. The Product List Price is subject to change by Diversinet upon provision of at least thirty (30) days' written notice to Reseller. Reseller shall be entitled to the following discount to the following Diversinet's standard pricing: Discount % For annual revenues < $1m 30% For annual revenues > $1m and <$2m 40% For annual revenues > $2m 50% Product Price List Terms and Conditions ÿ Price proposals are valid for 30 days and subject to change by Diversinet at its sole discretion ÿ All prices are expressed in United States dollars ÿ Prices do not include any applicable taxes ÿ Prices do not include shipping and additional charges ÿ Support and maintenance fees are 20% of the server license fee, payable annually in advance after the first year and include: patch, maintenance and major release updates, Diversinet online technical support and email/phone technical product support from Monday- Friday, 9:00a.m.-5:00p.m., excluding statutory holidays ÿ Optional maintenance and level 2 support and training is available at $1,500 per person day (excluding travel and out-of-expenses) ÿ Professional services are available at $1,500 per person day (excluding travel and out-of-expenses) SCHEDULE 4
CUSTOMER TERMS & CONDITIONS
Reseller agrees to include terms and conditions in its Customer agreements that are reflective of the following:
(a) the Customer is granted a non-exclusive, non-transferable and non-assignable right to use the Products solely for their intended use; (b) the Customer may not reverse engineer, decompile, alter, transfer, modify or create a derivative work of the Product; (c) no ownership rights to the Products and documentation are transferred to the Customer; (d) the Customer may not use the Products otherwise than as a part of the equipment, hardware or software in which any Product has been incorporated or for which it has been delivered;
(e) the Customer may not remove any proprietary, copyrights, trade secret or warning legend from any Products or documentation or copies thereof; (f) the Customer may not furnish the Products or documentation into any country in violation of any export control laws or regulations. The Reseller's agreements with its Customers shall also contain disclaimers of warranties and limitations of liabilities with respect to the Products and documentation at least as restrictive as those set forth in this Agreement. SCHEDULE 5 Service Level Agreement 1. Overview. This Support Plan Schedule ("SLA") details the terms for technical support provided by Diversinet during the term of this Agreement to the Reseller's Technical Support team, provided however, Reseller is current with payment of all fees. The Reseller's Subscribers shall interface with the Reseller Technical Support only. The Reseller Technical Support shall escalate product issues of a certain severity and above to Diversinet Technical Support. This SLA specifically addresses: (i) the service levels definition, measurement and minimum service standard in effect for the product, and (ii) technical support definition, availability and response timeframes. 1.1 Reseller Technical Support Escalation Path Around Product Issues 1.a.1 Subscriber call arrives at the Reseller Level 1 Support: the Reseller Level 1 Support will open a trouble ticket and attempt to resolve the issue. If no resolution, trouble ticket escalates to the Reseller Level 2 Support. 1.a.2 Level 2 Support attempts to resolve the Subscriber trouble ticket utilizing documentation, tools and procedures provided with the product. If Level 2 Support can't resolve the problem, Level 2 shall make a judgment call as to whether this appears to be a Subscriber problem or a Diversinet product related problem. Level 2 will escalate the trouble ticket to the Reseller Engineering Maintenance and Escalations. (EME). 1.a.3 The Reseller's EME will investigate. If this is indeed a Subscriber related problem, EME will be responsible for resolution. If EME determines this is actually a Diversinet Software issue, EME will send the trouble ticket back to Level 2 for dispatch to Diversinet. Level 2 Support will escalate the trouble ticket to Diversinet for resolution. Level 2 Technical Support still owns the Subscriber relationship. Anyone in Reseller Level 2 Technical Support can escalate to Diversinet. 1. Diversinet Support Service Availability. Technical Support Availability. Diversinet Technical Support will be available to accept and respond to problem calls or email from Reseller's Technical Support from 9:00 am - 5:00 pm Eastern Standard Time (US), 5 days a week (Monday through Friday), 52 weeks a year, excluding United States and Canadian national holidays. During such hours, technical support calls or email will be answered immediately by the support staff. Diversinet will provide a phone option to speak directly to a trained technical support representative. Diversinet will make the reasonable commercial effort to answer promptly to calls. 2.1 Diversinet Contact information
2.2 Reseller Contact information
2.3 Response Time "Response Time" shall mean the time it takes to respond to a request specific to the Severity (defined below) of the incident as described below. In the event the response time is not met the incident shall be escalated as described below. Escalation of Incident: Definitions of Severity levels Severity 1 Problems. Severity 1 Problems generally include any events that have a significant impact on the operations of the system and have an impact on Subscribers' use of the Software, such as: ÿ
Designation Name (if applicable) Direct Tel. No Cell Tel E-Mail
Technical Support N/A 416 756 2324 x 300 N/A support@diversinet.com
Technical Support & Escalation Manager Charles Blair 416 756 2324 x 234 416 562 1773 cblair@diversinet.com
TS VP David Annan 416 756 2324 x 232 416 587 0108 dannan@diversinet.com
Designation Name (if applicable) Direct Tel. No Cell Tel E-Mail
Technical Support & Escalation Manager
TS VP
System or application is down or unavailable; transactions can't be processed. ÿ Any event that significantly disrupts or threatens to disrupt service levels of the Software due to errors in the software, tools or system configuration provided by Diversinet. ÿ Any online application outage that significantly impacts the online availability and service level of the Software. ÿ Consistent degradation of performance (response time or function) that significantly impairs the Software. ÿ Any repeating unresolved incidents that have significant impact on the operations of the Diversinet Based Service or Subscribers' use of the Software.
ÿ Resolution may involve software changes, configuration modifications, operating procedure changes or 'workarounds'. Resolution shall be defined as a situation wherein the system is restored to a state wherein the effective outage is relieved. Severity 2 Problems. Severity 2 Problems generally includes any events (other than Severity 1 Problems) that adversely affect the operation of the Diversinet Based Service or the User Software, such as: ÿ An error that disables only certain non-essential functions of the User Software and may result in degraded operations, including without limitation, an error that results in computer transactions not processing properly. ÿ An error/event that disables only non-essential functions of the User Software, but also adversely affects the use of the User Software. ÿ Resolution may involve software changes, configuration modifications, operating procedure changes or 'workarounds'. Resolution shall be defined as a situation wherein the system is restored to a state wherein the effective outage is relieved. Severity 3 Problems: Severity 3 Problems generally includes minor events that do not have a significant impact or adverse effect on the operation or performance of the Diversinet Based Service or the User Software. Severity 4 Problems: Severity 4 Problems generally are potential Software enhancements or feature requests that Subscribers request of Reseller Technical Support. This is to help Diversinet track Reseller's requests and process them appropriately. Problem Isolation: Diversinet Technical Support will provide best efforts to mitigate all service affecting conditions which may arise. For each S1 - S3 incident Diversinet will produce an Incident Report provided to Reseller. Situations where there are unapproved variations made in the approved design, configuration, network or systems environments are not covered under this SLA. Furthermore, this SLA does not cover problems encountered by end users relating to hand held devices hardware, software and network problems that are outside the control of Diversinet or not supported by Diversinet. Diversinet will inform/publish to Reseller a quarterly list of mobile devices, related software and network operators and telecommunication companies that can support Diversinet software, products and services. Resolution Target: Diversinet will commit to provide a resolution to problems caused by its software, tools or procedures. Every effort will be made to prevent maintenance procedures during Scheduled Maintenance Times from affecting service availability. Table 1: Escalation Tiers and Initial Response Times
#
Priority Level Technical Support Initial Response (in Hours) Escalation to Manager (in Hours) Escalation to VP (in Hours)
S1 1 2 3
S2 2 4 24
S3 4 8 48
S4 Next Business Day
SCHEDULE 6 PERSONAL INFORMATION Definitions, Interpretation 1) In this Exhibit D:
a) "Agreement" means the License Agreement between Diversinet Corp. ("Licensor") and 2205925 Ontario Limited ("Licensee") with effective date of January 10, 2011;
b) "Personal Information" means information that is defined as "personal information" in PIPEDA, including without limitation personal health information, that is held, transmitted or stored on or by the Software licensed to Licensee under the Agreement;
c) "PIPEDA" means the Personal Information Protection and Electronic Documents Act (Canada); and
d) "Services" means the services provided by Licensor to Licensee under the Agreement including without limitation, the Support Services.
2) Any capitalized term that is not defined in section 1 above has the meaning attributed thereto in the Agreement.
3) The parties acknowledge and agree that:
a) Licensee represents that it is an organization subject to PIPEDA and Licensor is a third party service provider to the Licensee in connection with the Services;
b) Licensee's End Users shall interface with Licensee Technical Support only and in general, Licensor will not require access to Personal Information to provide the Services;
c) notwithstanding subsection 3(b) above, Licensor may from time to time require access to Personal Information to provide the Services;
d) Licensor shall only access Personal Information with the prior written consent of Licensee;
e) Licensor shall not download, which for the purposes of this Privacy Exhibit includes copy, hold or otherwise save Personal Information, without the prior written consent of Licensee and for greater certainty, consent to access Personal Information does not constitute consent to download Personal Information;
f) where Licensor receives consent to access, access and download or access and otherwise use Personal Information, the terms and conditions of this Privacy Exhibit shall apply to Licensor in relation to those activities; and
g) where Confidential Information of the Licensee is also Personal Information, the provisions of this Privacy Exhibit take priority over section 7 of the Agreement in the event of any conflict.
Ownership of Personal Information/ Prohibition on Disclosure 4) Nothing in this Privacy Exhibit shall be interpreted or construed to give Licensor any interest in or control of Personal Information and for greater certainty, as between Licensor and Licensee, Licensee owns and controls and shall continue to own and control Personal Information.
5) Licensor shall not disclose Personal Information. For clarity, the use of Personal Information by employees, agents and representatives of Licensor in accordance with this Privacy Exhibit does not constitute the disclosure of Personal Information by Licensor to those employees, agents and representatives.
Safeguards 6) Notwithstanding any provision to the contrary in the Agreement, Licensor shall not subcontract or assign any of the Services that may require access to or the downloading or other use of Personal Information except with the prior written consent of Licensee or as required to be disclosed by a governmental agency or third party as expressly required by operation of law, regulation or court order.
7) Licensor shall use security safeguards that meet or exceed industry standards to protect Personal Information against such risks as loss and unauthorized access, collection, use, disclosure and destruction.
8) Notwithstanding any provision to the contrary in the Agreement, Licensor shall not, except with the prior written consent of Licensee, access or use Personal Information from outside Canada or transmit Personal Information outside Canada.
9) Where Licensor downloads Personal Information in accordance with this Privacy Exhibit, Licensor shall prohibit its employees, agents and representatives from downloading Personal Information onto any portable device, unless the information is encrypted in accordance with industry standards for strong encryption.
10) Licensor shall segregate Personal Information from information of any person other than Licensee.
11) Subject to a written direction from Licensee to securely destroy Personal Information, upon the expiry or termination of the Agreement and at any other time at the request of Licensee, Licensor shall promptly return to the Licensee Personal Information that Licensor downloaded in accordance with this Privacy Exhibit.
Inspection and Audit 12) In addition to any other rights of inspection, review and audit Licensee may have, Licensee or a person appointed by Licensee may, at any reasonable time, on reasonable notice to Licensor, at Licensee's sole cost and expense, enter any location from or in which Licensor has accessed, used or downloaded Personal Information to inspect, review and audit the equipment, systems (including without limitation security systems), documents, processes and practices that are used in connection with the provision of the Services for the purpose of assessing Licensor's compliance with this Privacy Exhibit. Licensor shall provide all reasonable assistance to Licensee in relation to any such inspection, review and audit.
13) Licensor shall track the access, downloading and use of Personal Information, in accordance with this Privacy Exhibit, by its employees, agents and representatives and maintain a record of such activities. Within twenty-four hours of a request, Licensor shall provide Licensee
with a copy of any or all of the records created and maintained under this section 13.
Licensor Employees, Agents, Representatives 14) Licensor shall ensure that it only permits access to Personal Information to those of its employees, agents and representatives who: (a) will need access to Personal Information to deliver the Services; (b) have received training in the protection of Personal Information; and (c) have agreed to comply with the provisions of sections (5), (8), (9), (10) and (12) of this Privacy Exhibit.
Notice of Non-Compliance 15) If for any reason Licensor does not comply or anticipates that it shall be unable to comply with a provision of this Privacy Exhibit in any respect, Licensor shall promptly notify Licensee of the particulars of the non-compliance or anticipated non-compliance and of the steps it proposes to take to address or prevent the recurrence of the non-compliance or anticipated non-compliance.
Default 16) Notwithstanding anything to the contrary in the Agreement, Licensor acknowledges and agrees that a breach of this Privacy Exhibit by Licensor which remains uncured for a period of sixty (60) days shall constitute a material breach and grounds for the termination on notice of the Agreement by Licensee without cost or liability to Licensee. Without limiting the foregoing, Licensor agrees that in addition to any other rights or remedies Licensee may have for material breach of the Agreement, Licensee has the right to an injunction or other equitable relief in any court of competent jurisdiction enjoining a threatened or actual breach of this Privacy Exhibit by Licensor.
No Withholding 17) Licensor shall not, and hereby forever waives any and all right to, refuse to return Personal Information to enforce any alleged payment obligation or in connection with any dispute connected with the Agreement or any other matter between Licensor and Licensee.
Survival 18) The obligations of Licensor under this Privacy Exhibit shall survive the termination of the Agreement.
# [/INST] ```json
{<answer_start>
"answer": "Subject to payment of the Annual Minimum Commitment ("AMC" - defined herein), Diversinet hereby grants to Reseller an exclusive, non- transferable and non-assignable right to market, sell, and sub-license those Diversinet products listed in Schedule 2 (the "Products") within the territory listed in Schedule 3 (the "Territory") to Canadian headquartered companies, and governmental and broader public sector entities located in Canada."
<answer_end>
}
``` </s> | RESELLER AGREEMENT This agreement ("Agreement") dated as of January 11, 2011 ("Effective Date") is between Diversinet Corp. ("Diversinet"), an Ontario corporation with its principal place of business located at 2235 Sheppard Avenue East, Suite 1700, Toronto, Ontario, Canada M2J 5B5, and 2205925 Ontario Limited, with its principal place of business located at 111 Main Street West, Suite 304, North Bay, Ontario P1B 2T6 (the "Reseller"). Diversinet and the Reseller are hereinafter referred to individually as a "Party" and, collectively, as the "Parties". The Schedules attached hereto shall form an integral part of this Agreement, and all references to this Agreement shall be deemed to include the Schedules. WHEREAS Diversinet is a provider of mobile device security and authentication solutions for the mobile data ecosystem, and is the owner of certain software products, user documentation and services and the related trade-marks; AND WHEREAS Reseller has represented that it is qualified and desires to act as a reseller of certain of Diversinet's products within a certain defined territory, and agrees to use its best efforts to market and sell such products in such territory; NOW THEREFORE, for and in consideration of the mutual promises and commitments contained hereafter and other considerations, the receipt and sufficiency of which is hereby acknowledged, the Parties have entered into this Agreement for the purpose of permitting Reseller to market and sell certain of Diversinet's products pursuant to the terms and conditions set out as follows. 1. Appointment Subject to payment of the Annual Minimum Commitment ("AMC" - defined herein), Diversinet hereby grants to Reseller an exclusive, non- transferable and non-assignable right to market, sell, and sub-license those Diversinet products listed in Schedule 2 (the "Products") within the territory listed in Schedule 3 (the "Territory") to Canadian headquartered companies, and governmental and broader public sector entities located in Canada. Reseller's customers (the "Customers") are defined as those organizations/enterprises that will market and manage the end-users of the Products (the "End-Users"). Reseller acknowledges and agrees that it does not have the right to assign sub-resellers under this Agreement outside of the Territory, except with the prior written consent of Diversinet. Furthermore, if Reseller terminates the AMC in the manner contemplated in Schedule 3, the exclusive license above shall revert to being a non- exclusive license. In either case, Reseller will have the non-exclusive right to contract in the rest of the world, excluding the United States. If Reseller identifies End- Users in the United States, with the prior written consent of Diversinet, Reseller may sell the Products to the End-Users. United Stated revenues will not be counted against the AMC however Reseller will be entitled to the discount rates as indicated in Schedule 3.. In addition, Diversinet hereby grants to Reseller the right to use those Diversinet trademarks and copyrighted materials with respect to the Products solely for the purpose of marketing and distribution of the Products as authorized hereunder. Reseller acknowledges that the use of such trademarks and copyrighted materials does not create in its favour any right, whether of ownership or otherwise, to such trade-marks and copyrighted materials, and that all rights arising from the use thereof by Reseller shall inure to the benefit of Diversinet. Reseller agrees that the rights granted to Reseller in this Section 1 are solely for the purpose of supplying the Products to Reseller, its Customers and End-Users located in the Territory. Any use outside of the rights granted herein shall require an additional license from Diversinet. 2. Ownership and Representations (a) Except as expressly granted herein, Diversinet does not grant any further rights, license or immunity to Reseller, and hereby retains and does not waive any rights it may have with respect to patents, trade-marks, copyrights, moral rights or other intellectual property or proprietary rights enforceable under the laws of any country. Reseller shall not authorize anyone to reverse engineer, decompile, alter, transfer, modify or create a derivative work from any of the Products, nor may Reseller itself engage in so doing. (b) Reseller shall not make any representations or warranties regarding the use or operation of the Products other than those included in any promotional materials provided by Diversinet and any Product documentation provided by Diversinet. 3. Term and Renewal The term of this Agreement shall begin on the Effective Date and continue in effect for a period of five (5) years (the "Initial Term"), unless sooner terminated in accordance with the provisions set out herein. Upon expiration of the Initial Term, this Agreement shall automatically renew for consecutive one (1) year periods, unless terminated by Reseller within sixty (60) days prior to the expiration of the Initial Term or any renewal term, as the case may be (the Initial Term and each renewal term, collectively, the "Term"). Any annual renewal would be subject to the payment, if applicable, of the AMC as agreed to by the parties, however such AMC will not be less than the previous year AMC times 115%, payable in applicable quarterly instalments. 4. Termination (a) Either Party may terminate this Agreement: (i) Upon thirty (30) days' written notice to Reseller if Reseller fails to make any AMC payment when due under this Agreement, or when an audit, as set out in Section 13, by Diversinet reveals any under-payment for any payment due, and it is not paid within the thirty (30) day written notice period; (ii) providing thirty (60) days' written notice to the other Party if the other Party breaches any material term or condition of this Agreement, and fails to cure such breach within the 60 day period; (iii) upon providing thirty (30) days' written notice to Reseller if Reseller terminates the provisions of the Annual Minimum Commitment and fails to meet the sales targets as set out in Schedule 3. (b) This Agreement shall terminate automatically without notice and without further action by Diversinet in the event that:
(i) Reseller ceases carrying on its business, or if a petition shall be filed, an order shall be made or an effective resolution is passed for the winding-up, dissolution or liquidation of Reseller. (c) Termination under Subsection 4(a) shall trigger a phase-out period during which Reseller may continue to provide products and services to Customers. Such phase-out period shall be the longer of (i) the remaining term of the agreement between the Reseller and its Customers, and (ii) 18 months. (d) Upon the termination of this Agreement for any reason: (1) all rights granted to Reseller hereunder shall automatically come to an end and revert to Diversinet, including without limitation any right to use, operate and provide customer service or support for the Products; (2) Reseller shall immediately pay to Diversinet all amounts due and outstanding hereunder as of the date of such termination or expiration; and (3) within five (5) days of termination of this Agreement, for whatever reason, Reseller, must: (a) destroy all copies of the Products and any associated Products documentation in its possession or under its direct control; and (b) deliver to Diversinet a written certificate warranting that it has complied with the foregoing obligations. 1. Customer Orders (a) Customer Agreements. The Parties acknowledge and agree that Reseller's Customers will acquire the Products and related services under contract with Reseller, that Diversinet shall not have any contractual interest in Reseller's Customer relationships. Prior to Reseller committing to provide any Products to a Customer, Reseller shall cause Customer to enter into purchase agreement(s) with Reseller with respect to each of the Products purchased by Customer (each, a "Customer Agreement"). Reseller agrees that it shall include terms and conditions in its Customer Agreements that are sufficient to protect Diversinet's interests as reflected in this Agreement, including, but not limited to, those terms set out in Schedule 4 hereto. Such Customer Agreements shall be subject to Diversinet's approval, which approval shall not be unreasonably withheld. Reseller shall use commercially reasonable efforts to ensure that all Customers abide by the terms of the applicable Customer Agreement(s). Furthermore, Reseller shall enforce its Customer Agreements against Customer when requested to do so by Diversinet. For greater clarity, Diversinet expects that the Reseller will include all of the points covered in Section 4 in its end user agreement. When the Reseller receives a customer order they will fax both the end user agreement and the details of the order to Diversinet and if the end user agreement contains all of the points outlined in Section 4 then Diversinet will approve the order and ship the required products to the Reseller. (b) Ordering Process. Reseller shall submit all orders to Diversinet for the applicable Products. Reseller's submission of orders to Diversinet shall comply at all times with Diversinet's reasonable procedures and requirements and are subject to acceptance by Diversinet acting reasonably. Reseller shall be solely responsible for all sales activity culminating in and including the procurement of fully-executed Customer Agreements and purchase orders specifying the Products and Services ordered and the specific number of tokens. 1. Delivery (a) Subject to Reseller's compliance with the terms and procedures set forth in this Agreement, Diversinet shall provide to Reseller or to Customers the Products properly ordered by Reseller and accepted by Diversinet in material compliance with the applicable terms hereof, notwithstanding any inconsistent or additional terms which Reseller includes in any Customer agreement. (b) Unless otherwise agreed to by the Parties, delivery of the Products shall take place via electronic transmission or by courier, and will take place within two (2) Business Days of a written request or purchase order for software and within five (5) Business Days for a standard appliance. Custom built appliances or software are subject to evaluation and delivery date will be communicated after assessment. "Business Day" shall mean 9:00 a.m. to 5:00 p.m. (Eastern Standard Time), Monday through Friday, excluding all statutory holidays observed in the Province of Ontario in Canada. Delivery will be F.O.B. Diversinet's facility. Reseller shall have fifteen (15) calendar days after the later of (i) the delivery of any of the Products by Diversinet; or (ii) any applicable evaluation period; to inspect the Products and ensure their substantial compliance with the corresponding documentation. Unless Reseller notifies Diversinet within such fifteen (15) day period that any of the Products fail to substantially comply with the relevant documentation, such Products shall be deemed accepted. In the event Reseller rejects any of the Products, Reseller shall give Diversinet written notice of rejection, specifying in reasonable detail the basis for such rejection. Diversinet will use commercially reasonable efforts to correct any nonconformance and re-deliver such Products to Reseller. 1. Reseller Covenants (a) Manner of Performance. Reseller shall: (i) use commercially reasonable efforts to market and sell the Products and Services to Customers; (ii) conduct business in a competent and professional manner that reflects favorably at all times on the Products and the goodwill and reputation of Diversinet; (iii) avoid deceptive, misleading, or unethical practices that are or might be detrimental to Diversinet or the Products, or to the public in general; (iv) not make any false or misleading representations with regard to Diversinet or to the Products; (v) not publish or employ, or cooperate in the publication or employment of, any misleading or deceptive advertising material with regard to Diversinet or the Products or related services; (vi) not make any representation, warranties or guarantees to potential Customers or to the trade with respect to the specifications, features or capabilities of the Products that are inconsistent with published statements made by Diversinet; and (vii) comply with all applicable federal, state, region, and local laws and regulations related to the performance of its duties hereunder. (b) Reporting Requirements. Reseller shall, on a monthly basis, communicate to Diversinet information about Customers as reasonably requested by Diversinet including, but not limited to, Customer business, marketing, sales and technical information, installation, service delivery and on-going maintenance information. (c) Technical Expertise. Reseller and its staff shall be conversant with the technical language conventional to the Products and similar technologies in general, and will develop sufficient knowledge of the industry, of the Products and of products competitive with the Products (including specifications, features and benefits) in order to explain in detail to potential Customers and End Users the differences between the Products and competitive products and services. (d) Branding. Reseller may provide its own branding for the Products; however Reseller will include a "powered by Diversinet" tag or such similar identifiers as mutually agreed to by the Parties. Should Reseller require Diversinet to brand the Product, then such work will be done under a separate statement of work to be agreed upon in writing by the Parties. 1. Fees and Billing
(a) Rates. For the Diversinet Products sold or distributed by Reseller, Reseller shall pay Diversinet the applicable list price, in U.S. dollars, for such Product, less the applicable discount for each Product, all as set out in Schedule 3. Any reference to any amounts or currency in this Agreement means United States dollars or U.S. dollars. (b) Billing. Diversinet will invoice Reseller for applicable one time Token Fees and the upfront annual Validation and Support Fee upon setting up a master account for each Customer and pre-loading it with MobiSecure tokens. Other fees and charges payable under this Agreement will be invoiced to Reseller according to terms set out in this Agreement or any applicable schedules or attachments hereto. Reseller shall be responsible for payment to Diversinet of all invoiced amounts for Products and services provided by Diversinet at Reseller's request to Reseller, its Customers and/or End-Users. (c) Payment Terms. Invoices are due and payable within 30 calendar days from the invoice date or from when the amount is due, whichever is later. (d) Late Charges and Taxes. All overdue amounts shall bear interest at the rate of 1% per month (12% per annum, simple interest), or the highest rate allowed by applicable law, whichever is less, until paid in full. Interest shall accrue on a daily basis. Fees do not include any sales, transfer, use, property, value added and other taxes, or any customs duties, tariffs or other governmental charges, all of which (if any are due and have been incurred within the Territory) are assumed and payable by Reseller (except for taxes imposed on Diversinet's net income). Providing proof of an exemption from any such duty, tax or charge is the responsibility of Reseller. Diversinet acknowledges and agrees that Reseller shall withhold any applicable non-resident withholding taxes from any amount owing hereunder and remit such taxes to the applicable federal taxing authority without provision for gross-up, if Diversinet becomes a non-resident of Canada or assigns the Agreement to a non-resident of Canada and if Diversinet does not provide Reseller with an appropriate exemption thereto. (e) Network Charges. The Customer or End User shall at all times be responsible for all mobile network data, roaming or airtime charges, SMS related charges, application certification charges or marketing costs and any other fees or levies related to the cellular or wireless network over which the Products are offered and/or provisioned, as well as Customer's own Internet access fees (collectively, the "Network Charges"). None of the fees chargeable hereunder include any Network Charges and Reseller shall ensure that Customer shall indemnify and hold harmless Diversinet and Reseller against any such Network Charges that may be levied against them for the operation of the Products. 1. Training and Consulting (a) Diversinet will arrange for the initial personal technical and sales instruction of up to three (3) Reseller personnel for up to five (5) days in learning the functions, installation, integration, operation and maintenance of the Products. Such instruction shall take place in Diversinet's corporate headquarters and expenses of the Reseller personnel incurred for attending such initial instruction shall be paid by Reseller. There will be no charge for this initial training. Thereafter, Diversinet will make available to Reseller standard Product training courses generally offered by Diversinet at the list price. (a) Upon Reseller's request, Diversinet will provide Reseller with pre-sales consulting and post-sales consulting at the Diversinet's standard rates. Post-sales consulting will be provided under a separate services agreement to be entered into by the Parties, which shall include specific statement(s) of work. (b) Statements of Work ("SOW"). Fees for any future development services shall be as agreed to by the Parties in an SOW. Reimbursable expenses agreed to by Reseller shall be paid by Reseller within thirty (30) days of Diversinet's documented invoice. Diversinet shall offer to perform such work at Diversinet's then standard daily rate (currently at $1,500 per day). Reseller hereby agrees and acknowledges that Diversinet shall own all code, documentation and modifications to the code or documentation, and all copyrights, trade secrets and other intellectual property rights with respect to any such code or documentation. Diversinet hereby agrees and acknowledges that Reseller owns any and all intellectual property rights with respect to any Reseller-specific private label associated with the software. 1. Support (a) Services. Diversinet may provide, upon written agreement between the parties, the server hardware, physical environment, including physical security, HVAC and power for the server hardware, all as required to provide the Products as described in Schedule 2. Diversinet may also provide internet connectivity, by being responsible for network operation and availability from the public Internet up to the termination cables at the network interface card on the server hardware. Diversinet shall use commercially reasonable efforts to maintain connectivity, through the public Internet, between the server hardware and the wireless network operators or other network on which an End User's device operates. Diversinet specifically excludes any responsibility for any connectivity between a network operator and a wireless device, including any SMS, SMTP, or other connectivity. The products, their related service objectives and each Party's related responsibilities in respect thereto are to be more fully described in a separate agreement. (b) Service Term. During the Term, and subject to Reseller's payment of the annual Support Fees, Diversinet will provide support for the Products in accordance with the terms set out in Schedule 5. Furthermore, Diversinet will support the existing Reseller trial including Apple App Store submission until December 31, 2010. Diversinet will support the Reseller certification with Canada Health Infoway, at no additional cost, until December 31, 2010. (c) Standard Support. Reseller's Customers will be responsible for first level support to End-Users. Reseller will be responsible for second level support to its Customer. Diversinet will provide third level support to Reseller. Diversinet will accept electronic mail messages via the Internet using SMTP compliant software ("E Mail") addressed to: support@diversinet.com, from Reseller with questions regarding the functions of the Products, as well as questions about how to make full use of the software ("Support Questions"). If second level support is not being provided by the Reseller, Diversinet may, at its sole discretion, provide additional support to Reseller. In these cases, Diversinet may charge the Reseller for support services or reduce the product price discount provided to Reseller. Reseller's Support Questions must be referred to Diversinet by a single person, designated initially as Primary Technical Support Contact ("Primary Contact") set out in Schedule 1, unless Diversinet is notified in writing of an alternate technical support contact ("Alternate Contact"). The names and e-mail addresses of up to four (4) Alternate Contacts (along with the name of the particular project or department) shall be designated in a list provided by the Primary Contact via E Mail at support@diversinet.com. All Primary Contacts and Alternate Contacts (collectively, "Contacts") must be members of the designated project or department. It is Reseller's responsibility to provide
Diversinet with an initial list of Contacts and to keep that list current in order to receive timely service. (d) Updates. During the Term, Diversinet will provide updated versions of the Products ("Updates"). Updates shall be designated by a version number with a higher number to the right of the decimal point (e.g., version 1.4 is an Update to version 1.2), but do not include New Releases or Custom Releases (which are designated with a higher number to the left of the decimal point, or at the end with a letter, respectively). Prior to delivering any Updates, Diversinet may require Reseller to sign a revised schedule if any additional grants or licenses are required for an Update. (e) Internet Access. Diversinet may provide, at no additional cost, access to Diversinet's Internet-based Frequently Asked Questions (FAQ's) archives, a defect 'fix' list, or a private discussion forum available to all Products support customers, which will be moderated by Diversinet's engineers when available. (f) Beta Versions. Diversinet may provide Reseller with access to Beta Test versions of Updates to Products as described in paragraph (d) above. (g) Update Input. Diversinet will give special consideration to Reseller's feature requests for future versions of the Products. 1. ASP Sales The Reseller may sell the Products as an Application Service Provider ("ASP") sales model. Under an ASP model, the Reseller shall provide the Products through computer-based services to End Users over a network. The Reseller shall be responsible for providing, at the Reseller's sole cost and expense, the infrastructure, network, hosting environment, support and/or website. Reseller warrants and guarantees that Diversinet shall have no obligations, representations or guarantees to the End User for sales made by the Reseller under an ASP sale. 2. Confidential Information (a) Reseller agrees that all software, documentation and materials provided with the Products and all information contained therein is owned by Diversinet. The Parties agree that any other information of a confidential or proprietary nature provided by one Party to the other from time to time, whether marked as "Proprietary", "Confidential", "Secret" or any other designation implying confidentiality, is owned by the disclosing Party (all such information hereafter, collectively "Trade Secrets"). Both Parties shall treat the other Party's Trade Secrets with the same care as they treat their own confidential information of a like nature, but in no case shall the receiving Party use less care in handling the Trade Secrets than would be reasonable under the circumstances. The Parties agree not to make the other Party's Trade Secrets available in any form to any third party, or use the other Party's Trade Secrets for any purpose other than as set forth in this Agreement or as authorized by the other Party in writing. The Parties' obligations under this subsection shall survive the termination or expiration of this Agreement. (b) General Exclusions: The Parties' obligations set out in this section shall not apply to any information which is: (i) rightfully in a Party's possession before receipt from the other Party; (ii) independently developed by a Party without reference to the other Party's Trade Secrets; (iii) approved for release by written agreement with the other Party; (iv) rightfully in the public domain; (v) disclosed by requirement of a governmental agency or third party as expressly required by operation of law, regulation or court order. The disclosing Party shall promptly notify the other Party of the pending disclosure to allow the other Party to seek a protective order; or (vi) lawfully disclosed to a Party by a third party without an obligation of confidentiality to the Party. (c) It is expressly agreed that a violation of this section will cause irreparable harm to the owning Party and that a remedy at law would be inadequate. Therefore, in addition to any and all other remedies available at law, the owning Party shall be entitled to seek (without posting of a bond) preliminary, injunctive, emergency or equitable relief in the event of any actual or threatened violation of any or all of the provisions hereof. 3. Audit During the Term and for seven (7) years after the expiration or termination of this Agreement, or such longer period as required by applicable law, Reseller agrees to maintain complete books, records and accounts relevant to the computation of and accounting for the amounts payable under this Agreement. Reseller agrees to allow Diversinet or its agents and representatives the right to examine and audit such books, records and accounts during Reseller's normal business hours for no more than once per calendar quarter upon reasonable notice. If such examination reveals a deficiency in any amounts paid, Reseller agrees to pay any such deficiency forthwith upon demand, plus interest calculated in accordance with Section (Late Charges and Taxes) above and, if in excess of 5%, the cost of the audit incurred by Diversinet. 4. Limited Warranty EACH PARTY DOES NOT WARRANT TO THE OTHER THAT THE MATERIALS IT PROVIDES IN CONNECTION WITH THIS AGREEMENT WILL MEET THE REQUIREMENTS OF THE OTHER PARTY OR ITS CUSTOMERS, OR THAT THEIR OPERATION WILL BE UNINTERRUPTED OR ERROR FREE. Diversinet warrants as follows: (a) Each of the Products operates in substantial accordance with its documentation ("Operation Warranty"). With respect to the Operation Warranty, Reseller's sole remedy, and Diversinet's sole obligation, shall be to cause the Product to operate substantially in accordance with its documentation in a timely manner. All Products shall be virus-checked prior to delivery to Reseller. (b) The services provided under this Agreement shall be performed in a timely and professional manner by personnel ("Personnel") and in all material respects in accordance with the requirements set forth here in Schedule 5 (Service Level Agreement). Personnel shall be appropriately trained in the performance of such services under this Agreement and shall meet those standards generally observed by reputable and competent members of the same industry providing similar services. c) Diversinet shall ensure that there collectively is a sufficient number of employees and personnel assigned and available during the term to provide the services in accordance with the service levels and the standards and other terms and conditions of this Agreement.
(d) Diversinet shall exercise professional and good judgement in carrying out and performing its obligations under this Agreement. (e) The Products do not contain any virus, Trojan horse, worm, trapdoor, backdoor, malicious code or other code or device designed to interfere with proper use of the Software or cause harm or injury. (h) As of the Effective Date, to the best of its knowledge, none of the Products infringes upon any third party's patent rights ("Limited Patent Warranty"). EXCEPT AS EXPRESSLY SET FORTH ABOVE, DIVERSINET PROVIDES THE PRODUCTS, DOCUMENTATION AND OTHER RELATED SERVICES (COLLECTIVELY, THE "BUNDLED PRODUCT") TO RESELLER "AS IS" WITHOUT WARRANTY, MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY OTHER WARRANTIES OF PERFORMANCE, AND IMPLIED WARRANTIES OF NON INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, REGARDING THE BUNDLED PRODUCTS, EITHER AS A UNIT, OR AS INDIVIDUAL PARTS. EXCEPT AS ABOVE SET FORTH, DIVERSINET SHALL BEAR NO RISK AS TO THE PERFORMANCE OF THE BUNDLED PRODUCT, AND ALL RISK IS TO BE ALLOCATED BETWEEN RESELLER AND IT CUSTOMERS AND END-USERS, OR ANY OTHERS WHO USE THE BUNDLED PRODUCT ("USERS"). EXCEPT AS ABOVE SET FORTH, SHOULD THE BUNDLED PRODUCT PROVE DEFECTIVE, DIVERSINET SHALL NOT BEAR ANY COST WHATSOEVER FOR ANY SERVICE, REPAIR OR CORRECTION TO ANY PARTY. USERS SHALL BE SOLELY RESPONSIBLE FOR ADEQUATELY PROTECTING DATA USED IN CONNECTION WITH THE BUNDLED PRODUCT. EXCEPT AS ABOVE SET FORTH, DIVERSINET SHALL NOT BE RESPONSIBLE FOR LOST DATA, RERUN TIME, INACCURATE INPUT, WORK DELAYS OR LOST PROFITS, LOSS OF SECURITY FOR PROPRIETARY DATA OR ANY OTHER INJURIES OR DAMAGES RESULTING FROM USE OF THE BUNDLED PRODUCT. Neither Diversinet, nor its subsidiaries, nor their respective directors, officers, employees, agents, assignees, co-developers, servants and contractors, nor the Reseller has any right to make any other representation, warranty or promise of any kind with respect to any of the Products. This Agreement does not, in itself, grant any patent license or patent right of any manner or kind. Reseller will be solely responsible for determining which patent rights it may need to use the Products and for obtaining such licenses, where applicable. So long as the terms of this agreement are respected, Diversinet agrees that it will not bring any suit, claim or demand against Reseller, its Customers or End-Users for breach of Diversinet's patent rights in the Products, if any. 5. Limitation of Liability and Damages (a) EXCEPT TO THE EXTENT DIRECT FORESEEABLE DAMAGES, IN NO EVENT SHALL DIVERSINET BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION ANY COMMERCIAL DAMAGES OR LOSSES) AS A RESULT OF THE USE, SALE OR DISTRIBUTION OF THE BUNDLED PRODUCT, WHETHER BY WAY OF A LEGAL THEORY OF CONTRACT, TORT (INCLUDING NEGLIGENCE), PRODUCT LIABILITY, STRICT LIABILITY, OR ANY OTHER THEORY, EVEN IF DIVERSINET HAS BEEN INFORMED OF THE POSSIBILITY OF SUCH DAMAGES. (b) RESELLER WAIVES ANY RIGHT IT MAY HAVE TO RECEIVE ANY COMPENSATION OR REPARATIONS ON TERMINATION OR EXPIRATION OF THIS AGREEMENT UNDER THE LAW OF THE TERRITORY OR OTHERWISE, OTHER THAN AS EXPRESSLY PROVIDED IN THIS AGREEMENT. THE PARTIES ACKNOWLEDGE THAT THIS SECTION HAS BEEN INCLUDED AS A MATERIAL INDUCEMENT FOR DIVERSINET TO ENTER INTO THIS AGREEMENT AND THAT DIVERSINET WOULD NOT HAVE ENTERED INTO THIS AGREEMENT BUT FOR THE LIMITATIONS OF LIABILITY AS SET FORTH HEREIN. (c) The availability of the MobiSecure™ Strong Authentication service depends on many factors, including Customer's connection to the Internet, End Users' connection to the Internet, the availability of the Internet and the Internet backbone and equipment that, by its nature, is not fault tolerant. Diversinet does not and cannot control the flow of data to or from Diversinet's network and other portions of the Internet. Such flow depends in large part on the performance of Internet services provided or controlled by third parties. At times, actions or inaction of such third parties can impair or disrupt Customers' connections to the Internet (or portions thereof). Although Diversinet will use commercially reasonable efforts to take all actions it deems appropriate to remedy and avoid such events, Diversinet cannot guarantee that such events will not occur. Accordingly, Diversinet shall have no responsibility for any failure to meet the requirements hereunder, with respect to performance issues, including without limitation: (i) caused by factors outside of Diversinet's reasonable control; (ii) that result from any actions or omissions of Customers, End Users or any third parties; (iii) that result from Customers' equipment and/or third party equipment (not within the sole control of Diversinet); (iv) caused by any act or failure to act by Customer or as a result of any Third Party Software. (d) NOTWITHSTANDING THE ABOVE, IN NO EVENT SHALL DIVERSINET'S LIABILITY RELATING TO THIS AGREEMENT (OR THE BUNDLED PRODUCT) EXCEED ONE HUNDRED PERCENT (100%) OF THE AGGREGATE AMOUNT OF THE LICENSE FEES, ROYALTIES AND SUPPORT FEES PAID BY RESELLER IN THE TWELVE (12) MONTH PERIOD PRECEDING THE EVENT OR CIRCUMSTANCE GIVING RISE TO THE ALLEGED LIABILITY ON THE PART OF DIVERSINET. (e) The limitations set forth in Section 15(a), (b), (c), (d) and (e) shall not apply in respect of (i) breach of confidentiality obligations; (ii) breach of privacy provisions as detailed in Schedule 6; (iii) the intellectual property indemnity; (iv) any Abandonment committed by Diversinet; or (v) any willful gross misconduct (including fraud). "Abandonment" means Diversinet's cessation or suspension of, or refusal to perform, its obligations under this Agreement, and such cessation, suspension or refusal (i) was knowingly intended by Diversinet to cause harm to Reseller, and (ii) was not the result of a termination of this Agreement by Diversinet in accordance with Section 4 (Termination). 1. Indemnification (a) Reseller Indemnity. Reseller shall indemnify and hold harmless Diversinet and/or any of its directors, officers, agents, employees, contractors, parent companies, affiliates, and/or subsidiaries (collectively, the "Diversinet Parties") from and against any claim, suit or proceeding by a third party based on or arising out of (i) the acts or omissions of Reseller in connection with its performance or failure to perform any other obligations in this Agreement or any agreement with a Customer, and (ii) any unauthorized representation or any misrepresentation of fact to any third party with respect to one or more of the Diversinet Parties or Products made by Reseller or any director, officer, agent, or employee of Reseller, provided that:
(i) Diversinet promptly notifies Reseller in writing of any such claim and Reseller has sole control of any related investigation, defense and settlement negotiations; and (ii) Diversinet fully cooperates with Reseller, at Reseller's expense, in defending or settling such claim. (b) Infringement Indemnity. Diversinet shall diligently defend, indemnify and hold Reseller harmless, at its own expense, any action, loss, cost or expense brought against Reseller to the extent that it is based upon a claim that Reseller's use of the unmodified Products as permitted herein infringes upon a third party's intellectual property rights, and will pay the resulting costs, damages and legal fees finally awarded against Reseller through settlement, judgment, arbitration, mediation or otherwise in such action that are attributable to such claim, provided that: (i) Reseller promptly notifies Diversinet in writing of any such claim under patent law and Diversinet has sole control of any related investigation, defense and settlement negotiations; and (ii) Reseller fully cooperates with Diversinet, at Diversinet's expense, in defending or settling such claim. (c) Should any of the Products become, or in Diversinet's sole opinion is likely to become, the subject of any third party intellectual property infringement claim, Reseller shall permit Diversinet, at Diversinet's sole option and expense, to: (i) procure for Reseller the right to continue to use such Product; or (ii) modify such Product so that it becomes non-infringing; (d) Diversinet shall have no liability for any claim based upon: (i) use of other than a current or the last prior release to the current unaltered version of the Products; or (ii) use, operation or combination of the Products with non-Diversinet programs, data, equipment or documentation in a manner not reasonably contemplated by this Agreement, if such infringement would have been avoided but for such uses, operation, or combination; or (iii) Reseller's or its agent's activities after Diversinet has notified Reseller that such use may result in infringement provided that the Reseller has been provided with access to an updated version that would not be infringing. (e) THE FOREGOING STATES OUT THE ENTIRE LIABILITY OF DIVERSINET, AND THE SOLE AND EXCLUSIVE REMEDY OF RESELLER AND END-USER, WITH RESPECT TO THE INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS BY THE PRODUCTS. 2. Escrow Agreement The Parties agree to execute an escrow agreement, within 90 days of the Effective Date, with a nationally recognized escrow agent with respect to the source code for the Products and name Reseller as a beneficiary. Diversinet will then immediately send a copy of the escrow agreement to Reseller for its counter-signature. Diversinet shall, at least annually, deposit the source code in the escrow account. Costs associated with the escrow agreement shall be borne by Reseller. Reseller will be provided with a copy of any deposit correspondence and escrow agent's acceptance thereof. The escrow agreement shall provide, among other terms, that the source code shall be released to Reseller if any of the following events (collectively the "Release Conditions") occurs: (i) Diversinet ceases to support services at levels as stated in Schedule 5 under this Agreement that is not remedied within sixty (60) days after receipt of written notice of such failure; (ii) Diversinet makes an assignment for the benefit of creditors, or becomes subject to direct control of a trustee, receiver or similar authority, or Diversinet becomes subject to any bankruptcy or insolvency proceeding under federal or state statutes; or (iii) Diversinet suspends or ceases to carry on its business and a receiver, trustee or assignee does not carry on the business. 3. Non-Solicitation During the Term, the Reseller agrees that it shall not induce any person employed by Diversinet to leave Diversinet's employ to become an employee of Reseller or its agents or contractors. 4. Relationship Nothing in this Agreement shall be construed so as to create a joint venture, partnership, employer/employee, franchisor/franchisee or principal/agent relationship between the Parties. Reseller and Diversinet are independent contracting parties. Neither Reseller nor its employees, consultants, contractors or agents have any authority to bind Diversinet by contract or otherwise to any obligation. 5. Choice of Forum This Agreement shall be governed by the laws of the province of Ontario, Canada, without regard to its conflict of laws principles. Any litigation or other dispute resolution between the Parties relating to this Agreement or its construction shall take place in the courts of Toronto, Ontario, Canada. The Parties consent to the personal jurisdiction of, and venue in, the provincial and federal courts therein. The Parties agree that the United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement. No action against Diversinet regardless of form, including negligence, arising out of any claimed breach of this Agreement or transactions under this Agreement may be brought by Reseller more than two years after the cause of action has accrued. 6. Assignment Without the express prior written consent of Diversinet (not to be unreasonably refused), Reseller may not assign this Agreement or its interest herein in whole or in part but Reseller shall continue to be responsible should the assignee fail to perform. Diversinet may assign this Agreement at any time and in such event, this Agreement shall continue in full force and effect as if the assignee were named as the licensor in the first instance but Diversinet shall continue to be responsible should the assignee fail to perform. This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the Parties. 7. Interpretation
This Agreement, including all Schedules, attachments and addenda, is the entire agreement constituting the complete and exclusive statement of the terms and conditions between the Parties with respect to the subject matter hereof, and cancels and supersedes all previous negotiations, commitments, writings and agreements that the Parties may have entered into. The Parties acknowledge that they have read this Agreement, understand it and agree to be bound by its terms and conditions. Except for Diversinet's unilateral right to update certain Schedules as specifically set out in such Schedules, any subsequent waiver or modification of this Agreement or any part hereof shall only be effective if in writing and signed by both Parties. No delay or failure to enforce any right under this Agreement shall be considered a waiver of that Party's rights to thereafter enforce each and every right and provision of this Agreement. In addition, headings set out in this Agreement are an organizational aid, not a substantive part of this Agreement, and are not intended to limit or expand the language of each section. Any person signing this Agreement (or any later modifications or addenda) on behalf of Reseller warrants that he or she has the authority to bind Reseller. Time shall be of the essence of this Agreement. 8. Attorney Fees The prevailing Party (as determined by the finder of fact) in any law suit or other dispute resolution to enforce or interpret any part of this Agreement shall be entitled to recover, as a costs of suit, reasonable attorney's fees as determined by the finder of fact (including, but not limited to, costs, expenses and fees on appeal). 9. Severability If any part of this Agreement shall be found invalid or unenforceable by a court of competent jurisdiction, said portion shall be severed from the Agreement, and the remainder shall be interpreted so as to reasonably effect the intention of the Parties. Any limitation of liability, disclaimer of warranties and exclusion of damages set out in this Agreement are expressly intended to exist independently from, and to be severable from, this Agreement. 10. Force Majeure Neither Party shall in any circumstances be liable to the other for any loss of any kind whatsoever including, but not limited to, any damages or abatement of charges whether directly or indirectly caused to or incurred by the other Party by reason of any failure or delay in the performance of its obligations hereunder which is due to circumstances beyond the reasonable control of the affected Party, including, without limitation, acts of God, acts of terrorism, fire, flood, strike, labour disputes, civil, commercial sabotage, statute order or any regulation of any government public or local authority. 11. Compliance with Laws The Products include software ("Software") that is commercial computer software developed at private expense, and in all respects is proprietary data belonging solely to Diversinet or its suppliers. Reseller shall comply with all applicable export and import control and other relevant laws of any applicable jurisdiction. Determination of the applicable law is Reseller's responsibility. Reseller understands that the Products utilize cryptographic products that are highly regulated. 12. Publicity The Parties shall use commercially reasonable efforts to issue a joint press release concerning this Agreement after the execution hereof. Any further use of the other Party's name or logo in any publicity materials is prohibited without such other Party's prior written consent, which consent shall not be unreasonably withheld. 13. Notices Any notice, demand, or communication between the Parties shall be deemed given and received: (i) when personally delivered; (ii) when transmitted by facsimile with proof of transmittal; or (iii) five (5) days after deposit (properly addressed with postage prepaid) with the postal service for registered/certified mail. The addresses and contact information may be changed at any time by giving written notice as allowed under this section. Reseller's address and contact information are as set out in Schedule 1. Address and contact information for Diversinet are as follows: Diversinet Corp. Attention: Chief Financial Officer 2235 Sheppard Avenue East, Suite 1700 Toronto, Ontario, Canada M2J 5B5 Phone: 416-756-2324 Fax: 416-756-7346 14. Survival Any terms or conditions of this Agreement by which obligations of either Party are expressed to be applicable or which extend or may extend beyond termination of this Agreement shall survive the expiration or termination hereof. 15. Language This Agreement shall be interpreted consistent with its English linguistic construction, and all communications between the Parties shall be deemed to be conducted in the English language. Reseller will be responsible, at its own cost and expense, for any language and documentation localization for the Territory. 16. Counterparts This Agreement may be executed in two or more counterparts, by original or facsimile transmission, each of which so executed shall be deemed to be an original and such counterparts together shall constitute one and the same document. IN WITNESS WHEREOF the Parties have signed this Agreement, as of the date first written above, by their duly authorized representatives. 2205925 Ontario Limited DIVERSINET CORP.
Signature:__________________________________ Signature:__________________________
Print Name: Dr. Wendy Graham Print Name: Albert Wahbe
Title: President Title: CEO
Schedule 1 Reseller Information
#
Date Signed_________________________________ Date Signed________________________
Name 2205925 Ontario Limited
Street Address 111 Main Street West, Suite 304
City North Bay, ON
Country Canada
Zip/Postal Code P1B 2T6
Billing Address (if different from above) Shipping Address (if different from above) Telephone Facsimile Person Signing Contract Dr. Wendy Graham
E-mail Address drgraham@vianet.ca
Primary Technical Support Contact Address and Contact Information for Notice section in the Agreement
Schedule 2 Products Unless otherwise agreed to by the Parties, the Products shall mean the following: 1. MobiSecure® Wallet and Vault MobiSecure® Vault server allows subscribers to securely store and manage their personal data and other information, select the information to be downloaded to their mobile devices and share it with others via email, fax or SMS messaging. The MobiSecure® Vault server is designed to host and manage a variety of different types of personal information e.g. financial, health, identities and passwords. It provides a framework for administrators to define and customize the information to be hosted and managed and supports a plug-in architecture and web service interfaces to allow for rapid integration with external information, payment and messaging systems. MobiSecure® Wallet application works in conjunction with the MobiSecure® vault server. It is designed to run on desktop computers and mobile platforms including Java based phones, RIM Blackberries®, Microsoft Windows Mobile®, iPhone, Android and BREW devices. The Wallet application provides offline and online access to personal information. Information is stored in the device for instant and offline access securely using a patented technique. The information is synchronized automatically or upon user's request with the vault server using a secure data synchronization protocol. Users may use the wallet application to access their information instantly when they are traveling, retrieve additional information from the vault server or send their information to others via email, SMS or fax. The wallet application includes an embedded software One-Time-Password (OTP) token to allow for secure and easy access to the vault server using dynamic password based authentication. The MobiSecure® Wallet SDK and MobiSecure® Vault API allows customers and third party developers to build secure mobile applications by leveraging Diversinet's Wallet secure container services. Applications features and benefits (utilizing Wallet and Vault) include: Patient Portal The Patient Portal is a set of web pages designed to permit patients to display, add, delete and update information pertaining to their demographics, attending physicians, chronic conditions, allergies, immunizations and messages received from registered doctors and clinical staff. The Physician's Tool This is a windows based application which permits doctors and authorized 'circle of care' workers to access patient records stored in the information repository. These users may add, delete or update the patient records and may also 'Validate' existing records. Validation consists of marking the records as 'Validated' and making them read only from that point to maintain record values that the physician has agreed to by validating the record. The Physician's Tool also can create and display secured messages to the patient which will be protected by the Diversinet MobiSecure® Health platform. The tool can also display a complete record of messages sent to the patient with associated time and date of acknowledgment from the patient. The administrator users of the tool can also add and delete doctors and other circle of care worker accounts in order to administer the operation of the clinical side of the Diversinet Platform. Message Manager The Message Manager is a tool used to collect and display incoming patient messages to the clinic and answer's to previously sent questions from the clinic. The Message Manager permits the user to prepare reply messages as well as automatically preparing an audit trail of all display and reply activities. Message Generator The Message Generator is an extension of the messaging tool in the Physician's Tool above, used to create user reminder messages based upon reminder criteria and the user records in the repository for recurring action requirements. Examples include recurring tests (i.e. PAP, colonoscopy, recurring blood work supporting medications), reminders about health and lifestyle choices, medication reminders.) 2. MobiSecure® Strong Authentication MobiSecure® Strong Authentication is a fully automated, OATH-standards based strong authentication server product. It is available as a fully configured appliance or a packaged software product and is designed to be easy to deploy and easy to use for high-volume Internet or wireless- based strong authentication. Its supported clients operate on mobile phones, personal computers, USB stick and can also be embedded into microchip or smart card technologies. The system supports Over-the-Air and Over-the-Web MobiSecure SoftToken delivery. The same system also supports the MobiSecure Validation Server for ongoing one-time password (OTP) validation for user authentication. MobiSecure Strong Authentication components are: The MobiSecure® Strong Authentication Platform contains the following components: 1. MobiSecure Provisioning Server 2. MobiSecure Validation Server 3. MobiSecure SMS Server 4. MobiSecure Registration/Administration Server 5. MobiSecure SoftToken Client MobiSecure® SoftToken: MobiSecure SoftToken is a client-side software token that is available as a Mobile SoftToken or as PCToken. It can be easily delivered, downloaded and embedded into a user's personal computer, PDA or mobile phone. It performs basic functions for managing and generating one-time password values. The client-side software token is easily delivered, downloaded and installed into a user's device. MobiSecure® SoftToken supports both time based and event based one-time passwords. Event based one-time passwords expire once they are used and are no longer valid. Time based one-time passwords expire once they are used or the valid time period elapses, whichever comes first. MobiSecure® SoftToken can be embedded into customer client applications using SDK's for mobile platforms and Windows PC. Key features of
the MobiSecure® Strong Authentication Toolkit are listed below: 1. Lightweight library allows for a modular implementation- use only the components you need 2. Client API available in C and Java programming languages for software clients a. Allows organizations to develop their own clients or integrate with existing applications b. DLL provided for rapid development on Microsoft Windows platform 3. Server API a. SPML interface for integrating enterprise applications b. SPML Java client libraries for rapid integration c. Free Radius interface to OTP Validation Server 3. MobiSecure® SMS Messaging MobiSecure® SMS Messaging leverages the familiarity and popularity of SMS messaging to create a secure messaging solution that utilizes state of the art AES encryption technology to securely transmit and receive SMS messages. Messages can be both 1-Way (Push) based and 2-Way (Pull or Push-Pull) based between mobile users and backend server applications. Unlike traditional SMS service, MobiSecure® SMS Messaging subscribers will automatically receive message delivery and read confirmations on their mobile device. The MobiSecure® SMS Messaging solution offers a fully integrated secure gateway environment. This simplifies and eliminates extensive integration efforts with multiple gateways globally. High-level APIs, allow for the submission of text messages from a third party application or directly from the handset itself.
Schedule 3 Territory, Sales Targets, Prices and Discount Annual Minimum Commitment ("Annual Minimum Commitment" or "AMC"). During the Term of the Agreement, Reseller shall pay to Diversinet an Annual Minimum Commitment, payable as follows: a) A total of four hundred thousand ($400,000) dollars shall be paid by Reseller to Diversinet as of the Effective Date. b) A total of seven hundred thousand ($700,000) dollars shall be paid by Reseller in quarterly instalments of $175,000 to Diversinet on each of December 1, 2011, March 1, 2012, June 1, 2012 and September 1, 2012. c) A total of one million ($1,000,000) dollars shall be paid by Reseller in quarterly instalments of $250,000 to Diversinet on each of December 1, 2012, March 1, 2013, June 1, 2013 and September 1, 2013. d) A total of one million three hundred thousand ($1,300,000) dollars shall be paid by Reseller in quarterly instalments of $325,000 to Diversinet on each of December 1, 2013, March 1, 2014, June 1, 2014 and September 1, 2014. e) A total of one million six hundred thousand ($1,600,000) dollars shall be paid by Reseller in quarterly instalments of $400,000 to Diversinet on each of December 1, 2014, March 1, 2015, June 1, 2015 and September 1, 2015. AMC Tokens. For each contract year that the AMC applies, Diversinet shall deliver to Reseller the number of End User licenses equal to the contract year AMC divided by twenty-four (24) in satisfaction of the AMC. For the first contract year, the applicable service license fees for the Mihealth pilot production shall be deducted from the AMC. There is no carryover of the AMC from one year to the next. AMC Termination. After the first year and upon 180 days written notice, Reseller may terminate the AMC. Termination of the AMC by Reseller shall eliminate any exclusivity of the Reseller in the Territory. Territory Assuming that the AMC amounts have been paid and the Reseller has not terminated the AMC, Reseller shall have the exclusive right to contract with Canadian head quartered companies and governmental and broader public sector entities located in Canada (the "Territory"). Furthermore, Reseller will have the non-exclusive right to contract in the rest of the world, excluding the United States. Sales Targets After AMC termination, Reseller shall generate at least the following amount of new sales of the Products in each contract year (for the purpose of this Schedule 3, a contract year shall be each 12-month period commencing after the termination by Reseller of the AMC). New sales are defined as the aggregate amount of all Product sales and Support Fees paid by Reseller pursuant to pricing set out below, inclusive of any applicable discounts and exclusive of applicable taxes. If Diversinet materially reduces Reseller's Territory, the Parties shall negotiate and, acting reasonably, adjust Reseller's sales targets. Contract Year 1: $750,000 (quarterly targets at ¼ of annual amount) Contract Year 2: $1,000,000 (quarterly targets at ¼ of annual amount) Contract Year 3: $1,250,000 (quarterly targets at ¼ of annual amount) Contract Year 4 onward: $1,500,000 (quarterly targets at ¼ of annual amount) Product Prices and Discount: Diversinet maintains a product price list that details the products available and the list price. The product price list is incorporated by reference to this Agreement. The Product List Price is subject to change by Diversinet upon provision of at least thirty (30) days' written notice to Reseller. Reseller shall be entitled to the following discount to the following Diversinet's standard pricing: Discount % For annual revenues < $1m 30% For annual revenues > $1m and <$2m 40% For annual revenues > $2m 50% Product Price List Terms and Conditions ÿ Price proposals are valid for 30 days and subject to change by Diversinet at its sole discretion ÿ All prices are expressed in United States dollars ÿ Prices do not include any applicable taxes ÿ Prices do not include shipping and additional charges ÿ Support and maintenance fees are 20% of the server license fee, payable annually in advance after the first year and include: patch, maintenance and major release updates, Diversinet online technical support and email/phone technical product support from Monday- Friday, 9:00a.m.-5:00p.m., excluding statutory holidays ÿ Optional maintenance and level 2 support and training is available at $1,500 per person day (excluding travel and out-of-expenses) ÿ Professional services are available at $1,500 per person day (excluding travel and out-of-expenses) SCHEDULE 4
CUSTOMER TERMS & CONDITIONS
Reseller agrees to include terms and conditions in its Customer agreements that are reflective of the following:
(a) the Customer is granted a non-exclusive, non-transferable and non-assignable right to use the Products solely for their intended use; (b) the Customer may not reverse engineer, decompile, alter, transfer, modify or create a derivative work of the Product; (c) no ownership rights to the Products and documentation are transferred to the Customer; (d) the Customer may not use the Products otherwise than as a part of the equipment, hardware or software in which any Product has been incorporated or for which it has been delivered;
(e) the Customer may not remove any proprietary, copyrights, trade secret or warning legend from any Products or documentation or copies thereof; (f) the Customer may not furnish the Products or documentation into any country in violation of any export control laws or regulations. The Reseller's agreements with its Customers shall also contain disclaimers of warranties and limitations of liabilities with respect to the Products and documentation at least as restrictive as those set forth in this Agreement. SCHEDULE 5 Service Level Agreement 1. Overview. This Support Plan Schedule ("SLA") details the terms for technical support provided by Diversinet during the term of this Agreement to the Reseller's Technical Support team, provided however, Reseller is current with payment of all fees. The Reseller's Subscribers shall interface with the Reseller Technical Support only. The Reseller Technical Support shall escalate product issues of a certain severity and above to Diversinet Technical Support. This SLA specifically addresses: (i) the service levels definition, measurement and minimum service standard in effect for the product, and (ii) technical support definition, availability and response timeframes. 1.1 Reseller Technical Support Escalation Path Around Product Issues 1.a.1 Subscriber call arrives at the Reseller Level 1 Support: the Reseller Level 1 Support will open a trouble ticket and attempt to resolve the issue. If no resolution, trouble ticket escalates to the Reseller Level 2 Support. 1.a.2 Level 2 Support attempts to resolve the Subscriber trouble ticket utilizing documentation, tools and procedures provided with the product. If Level 2 Support can't resolve the problem, Level 2 shall make a judgment call as to whether this appears to be a Subscriber problem or a Diversinet product related problem. Level 2 will escalate the trouble ticket to the Reseller Engineering Maintenance and Escalations. (EME). 1.a.3 The Reseller's EME will investigate. If this is indeed a Subscriber related problem, EME will be responsible for resolution. If EME determines this is actually a Diversinet Software issue, EME will send the trouble ticket back to Level 2 for dispatch to Diversinet. Level 2 Support will escalate the trouble ticket to Diversinet for resolution. Level 2 Technical Support still owns the Subscriber relationship. Anyone in Reseller Level 2 Technical Support can escalate to Diversinet. 1. Diversinet Support Service Availability. Technical Support Availability. Diversinet Technical Support will be available to accept and respond to problem calls or email from Reseller's Technical Support from 9:00 am - 5:00 pm Eastern Standard Time (US), 5 days a week (Monday through Friday), 52 weeks a year, excluding United States and Canadian national holidays. During such hours, technical support calls or email will be answered immediately by the support staff. Diversinet will provide a phone option to speak directly to a trained technical support representative. Diversinet will make the reasonable commercial effort to answer promptly to calls. 2.1 Diversinet Contact information
2.2 Reseller Contact information
2.3 Response Time "Response Time" shall mean the time it takes to respond to a request specific to the Severity (defined below) of the incident as described below. In the event the response time is not met the incident shall be escalated as described below. Escalation of Incident: Definitions of Severity levels Severity 1 Problems. Severity 1 Problems generally include any events that have a significant impact on the operations of the system and have an impact on Subscribers' use of the Software, such as: ÿ
Designation Name (if applicable) Direct Tel. No Cell Tel E-Mail
Technical Support N/A 416 756 2324 x 300 N/A support@diversinet.com
Technical Support & Escalation Manager Charles Blair 416 756 2324 x 234 416 562 1773 cblair@diversinet.com
TS VP David Annan 416 756 2324 x 232 416 587 0108 dannan@diversinet.com
Designation Name (if applicable) Direct Tel. No Cell Tel E-Mail
Technical Support & Escalation Manager
TS VP
System or application is down or unavailable; transactions can't be processed. ÿ Any event that significantly disrupts or threatens to disrupt service levels of the Software due to errors in the software, tools or system configuration provided by Diversinet. ÿ Any online application outage that significantly impacts the online availability and service level of the Software. ÿ Consistent degradation of performance (response time or function) that significantly impairs the Software. ÿ Any repeating unresolved incidents that have significant impact on the operations of the Diversinet Based Service or Subscribers' use of the Software.
ÿ Resolution may involve software changes, configuration modifications, operating procedure changes or 'workarounds'. Resolution shall be defined as a situation wherein the system is restored to a state wherein the effective outage is relieved. Severity 2 Problems. Severity 2 Problems generally includes any events (other than Severity 1 Problems) that adversely affect the operation of the Diversinet Based Service or the User Software, such as: ÿ An error that disables only certain non-essential functions of the User Software and may result in degraded operations, including without limitation, an error that results in computer transactions not processing properly. ÿ An error/event that disables only non-essential functions of the User Software, but also adversely affects the use of the User Software. ÿ Resolution may involve software changes, configuration modifications, operating procedure changes or 'workarounds'. Resolution shall be defined as a situation wherein the system is restored to a state wherein the effective outage is relieved. Severity 3 Problems: Severity 3 Problems generally includes minor events that do not have a significant impact or adverse effect on the operation or performance of the Diversinet Based Service or the User Software. Severity 4 Problems: Severity 4 Problems generally are potential Software enhancements or feature requests that Subscribers request of Reseller Technical Support. This is to help Diversinet track Reseller's requests and process them appropriately. Problem Isolation: Diversinet Technical Support will provide best efforts to mitigate all service affecting conditions which may arise. For each S1 - S3 incident Diversinet will produce an Incident Report provided to Reseller. Situations where there are unapproved variations made in the approved design, configuration, network or systems environments are not covered under this SLA. Furthermore, this SLA does not cover problems encountered by end users relating to hand held devices hardware, software and network problems that are outside the control of Diversinet or not supported by Diversinet. Diversinet will inform/publish to Reseller a quarterly list of mobile devices, related software and network operators and telecommunication companies that can support Diversinet software, products and services. Resolution Target: Diversinet will commit to provide a resolution to problems caused by its software, tools or procedures. Every effort will be made to prevent maintenance procedures during Scheduled Maintenance Times from affecting service availability. Table 1: Escalation Tiers and Initial Response Times
#
Priority Level Technical Support Initial Response (in Hours) Escalation to Manager (in Hours) Escalation to VP (in Hours)
S1 1 2 3
S2 2 4 24
S3 4 8 48
S4 Next Business Day
SCHEDULE 6 PERSONAL INFORMATION Definitions, Interpretation 1) In this Exhibit D:
a) "Agreement" means the License Agreement between Diversinet Corp. ("Licensor") and 2205925 Ontario Limited ("Licensee") with effective date of January 10, 2011;
b) "Personal Information" means information that is defined as "personal information" in PIPEDA, including without limitation personal health information, that is held, transmitted or stored on or by the Software licensed to Licensee under the Agreement;
c) "PIPEDA" means the Personal Information Protection and Electronic Documents Act (Canada); and
d) "Services" means the services provided by Licensor to Licensee under the Agreement including without limitation, the Support Services.
2) Any capitalized term that is not defined in section 1 above has the meaning attributed thereto in the Agreement.
3) The parties acknowledge and agree that:
a) Licensee represents that it is an organization subject to PIPEDA and Licensor is a third party service provider to the Licensee in connection with the Services;
b) Licensee's End Users shall interface with Licensee Technical Support only and in general, Licensor will not require access to Personal Information to provide the Services;
c) notwithstanding subsection 3(b) above, Licensor may from time to time require access to Personal Information to provide the Services;
d) Licensor shall only access Personal Information with the prior written consent of Licensee;
e) Licensor shall not download, which for the purposes of this Privacy Exhibit includes copy, hold or otherwise save Personal Information, without the prior written consent of Licensee and for greater certainty, consent to access Personal Information does not constitute consent to download Personal Information;
f) where Licensor receives consent to access, access and download or access and otherwise use Personal Information, the terms and conditions of this Privacy Exhibit shall apply to Licensor in relation to those activities; and
g) where Confidential Information of the Licensee is also Personal Information, the provisions of this Privacy Exhibit take priority over section 7 of the Agreement in the event of any conflict.
Ownership of Personal Information/ Prohibition on Disclosure 4) Nothing in this Privacy Exhibit shall be interpreted or construed to give Licensor any interest in or control of Personal Information and for greater certainty, as between Licensor and Licensee, Licensee owns and controls and shall continue to own and control Personal Information.
5) Licensor shall not disclose Personal Information. For clarity, the use of Personal Information by employees, agents and representatives of Licensor in accordance with this Privacy Exhibit does not constitute the disclosure of Personal Information by Licensor to those employees, agents and representatives.
Safeguards 6) Notwithstanding any provision to the contrary in the Agreement, Licensor shall not subcontract or assign any of the Services that may require access to or the downloading or other use of Personal Information except with the prior written consent of Licensee or as required to be disclosed by a governmental agency or third party as expressly required by operation of law, regulation or court order.
7) Licensor shall use security safeguards that meet or exceed industry standards to protect Personal Information against such risks as loss and unauthorized access, collection, use, disclosure and destruction.
8) Notwithstanding any provision to the contrary in the Agreement, Licensor shall not, except with the prior written consent of Licensee, access or use Personal Information from outside Canada or transmit Personal Information outside Canada.
9) Where Licensor downloads Personal Information in accordance with this Privacy Exhibit, Licensor shall prohibit its employees, agents and representatives from downloading Personal Information onto any portable device, unless the information is encrypted in accordance with industry standards for strong encryption.
10) Licensor shall segregate Personal Information from information of any person other than Licensee.
11) Subject to a written direction from Licensee to securely destroy Personal Information, upon the expiry or termination of the Agreement and at any other time at the request of Licensee, Licensor shall promptly return to the Licensee Personal Information that Licensor downloaded in accordance with this Privacy Exhibit.
Inspection and Audit 12) In addition to any other rights of inspection, review and audit Licensee may have, Licensee or a person appointed by Licensee may, at any reasonable time, on reasonable notice to Licensor, at Licensee's sole cost and expense, enter any location from or in which Licensor has accessed, used or downloaded Personal Information to inspect, review and audit the equipment, systems (including without limitation security systems), documents, processes and practices that are used in connection with the provision of the Services for the purpose of assessing Licensor's compliance with this Privacy Exhibit. Licensor shall provide all reasonable assistance to Licensee in relation to any such inspection, review and audit.
13) Licensor shall track the access, downloading and use of Personal Information, in accordance with this Privacy Exhibit, by its employees, agents and representatives and maintain a record of such activities. Within twenty-four hours of a request, Licensor shall provide Licensee
with a copy of any or all of the records created and maintained under this section 13.
Licensor Employees, Agents, Representatives 14) Licensor shall ensure that it only permits access to Personal Information to those of its employees, agents and representatives who: (a) will need access to Personal Information to deliver the Services; (b) have received training in the protection of Personal Information; and (c) have agreed to comply with the provisions of sections (5), (8), (9), (10) and (12) of this Privacy Exhibit.
Notice of Non-Compliance 15) If for any reason Licensor does not comply or anticipates that it shall be unable to comply with a provision of this Privacy Exhibit in any respect, Licensor shall promptly notify Licensee of the particulars of the non-compliance or anticipated non-compliance and of the steps it proposes to take to address or prevent the recurrence of the non-compliance or anticipated non-compliance.
Default 16) Notwithstanding anything to the contrary in the Agreement, Licensor acknowledges and agrees that a breach of this Privacy Exhibit by Licensor which remains uncured for a period of sixty (60) days shall constitute a material breach and grounds for the termination on notice of the Agreement by Licensee without cost or liability to Licensee. Without limiting the foregoing, Licensor agrees that in addition to any other rights or remedies Licensee may have for material breach of the Agreement, Licensee has the right to an injunction or other equitable relief in any court of competent jurisdiction enjoining a threatened or actual breach of this Privacy Exhibit by Licensor.
No Withholding 17) Licensor shall not, and hereby forever waives any and all right to, refuse to return Personal Information to enforce any alleged payment obligation or in connection with any dispute connected with the Agreement or any other matter between Licensor and Licensee.
Survival 18) The obligations of Licensor under this Privacy Exhibit shall survive the termination of the Agreement.
# | Highlight the parts (if any) of this contract related to "Competitive Restriction Exception" that should be reviewed by a lawyer. Details: This category includes the exceptions or carveouts to Non-Compete, Exclusivity and No-Solicit of Customers above. | {
"answer_start": [
1613
],
"text": [
"Subject to payment of the Annual Minimum Commitment (\"AMC\" - defined herein), Diversinet hereby grants to Reseller an exclusive, non- transferable and non-assignable right to market, sell, and sub-license those Diversinet products listed in Schedule 2 (the \"Products\") within the territory listed in Schedule 3 (the \"Territory\") to Canadian headquartered companies, and governmental and broader public sector entities located in Canada."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Change Of Control" that should be reviewed by a lawyer. Details: Does one party have the right to terminate or is consent or notice required of the counterparty if such party undergoes a change of control, such as a merger, stock sale, transfer of all or substantially all of its assets or business, or assignment by operation of law?
Context: Exhibit 26
JOINT FILING AGREEMENT
Pursuant to and in accordance with the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (the "Exchange Act") the undersigned hereby agree to the joint filing on behalf of each of them of any filing required by such party under Section 13 of the Exchange Act or any rule or regulation thereunder (including any amendment, restatement, supplement, and/or exhibit thereto) with respect to securities of Tallgrass Energy, LP, a Delaware limited partnership, and further agree to the filing, furnishing, and/or incorporation by reference of this Agreement as an exhibit thereto. Each of them is responsible for the timely filing of such filings and any amendments thereto, and for the completeness and accuracy of the information concerning such person contained therein; but none of them is responsible for the completeness or accuracy of the information concerning the other persons making the filing, unless such person knows or has reason to believe that such information is inaccurate. This Agreement shall remain in full force and effect until revoked by any party hereto in a signed writing provided to each other party hereto, and then only with respect to such revoking party. This Agreement may be executed in any number of counterparts all of which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned hereby execute this Joint Filing Agreement as of February 19, 2020. PRAIRIE ECI ACQUIROR LP By: BIP Holdings Manager L.L.C., its general partner
By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director
PRAIRIE NON-ECI ACQUIROR LP By: BIP Holdings Manager L.L.C., its general partner
By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director
PRAIRIE VCOC ACQUIROR LP By: BIP Holdings Manager L.L.C., its general partner
By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director
PRAIRIE SECONDARY ACQUIROR LP By: BIP Holdings Manager L.L.C., its general partner
By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director
PRAIRIE SECONDARY ACQUIROR E LP By: BIP Holdings Manager L.L.C., its general partner
By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director
BIP HOLDINGS MANAGER L.L.C.
By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director
BLACKSTONE INFRASTRUCTURE ASSOCIATES L.P. By: BIA GP L.P., its general partner By: BIA GP L.L.C., its general partner
By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director
BIA GP L.P. By: BIA GP L.L.C., its general partner
By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director
BIA GP L.L.C.
By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director
BLACKSTONE HOLDINGS III L.P. By: Blackstone Holdings III GP L.P., its general partner By: Blackstone Holdings III GP Management L.L.C., its general partner
By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer
BLACKSTONE HOLDINGS III GP L.P. By: Blackstone Holdings III GP Management L.L.C., its general partner
By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer
BLACKSTONE HOLDINGS III GP MANAGEMENT L.L.C.
By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer
BLACKSTONE HOLDINGS II L.P. By: Blackstone Holdings I/II GP L.L.C., its general partner By: The Blackstone Group Inc., its sole member
By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer
BLACKSTONE HOLDINGS I/II GP L.L.C. By: The Blackstone Group Inc., its sole member
By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer
THE BLACKSTONE GROUP INC.
By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer
BLACKSTONE GROUP MANAGEMENT L.L.C.
By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer
STEPHEN A. SCHWARZMAN
By: /s/ Stephen A. Schwarzman By: Stephen A. Schwarzman [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 26
JOINT FILING AGREEMENT
Pursuant to and in accordance with the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (the "Exchange Act") the undersigned hereby agree to the joint filing on behalf of each of them of any filing required by such party under Section 13 of the Exchange Act or any rule or regulation thereunder (including any amendment, restatement, supplement, and/or exhibit thereto) with respect to securities of Tallgrass Energy, LP, a Delaware limited partnership, and further agree to the filing, furnishing, and/or incorporation by reference of this Agreement as an exhibit thereto. Each of them is responsible for the timely filing of such filings and any amendments thereto, and for the completeness and accuracy of the information concerning such person contained therein; but none of them is responsible for the completeness or accuracy of the information concerning the other persons making the filing, unless such person knows or has reason to believe that such information is inaccurate. This Agreement shall remain in full force and effect until revoked by any party hereto in a signed writing provided to each other party hereto, and then only with respect to such revoking party. This Agreement may be executed in any number of counterparts all of which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned hereby execute this Joint Filing Agreement as of February 19, 2020. PRAIRIE ECI ACQUIROR LP By: BIP Holdings Manager L.L.C., its general partner
By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director
PRAIRIE NON-ECI ACQUIROR LP By: BIP Holdings Manager L.L.C., its general partner
By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director
PRAIRIE VCOC ACQUIROR LP By: BIP Holdings Manager L.L.C., its general partner
By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director
PRAIRIE SECONDARY ACQUIROR LP By: BIP Holdings Manager L.L.C., its general partner
By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director
PRAIRIE SECONDARY ACQUIROR E LP By: BIP Holdings Manager L.L.C., its general partner
By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director
BIP HOLDINGS MANAGER L.L.C.
By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director
BLACKSTONE INFRASTRUCTURE ASSOCIATES L.P. By: BIA GP L.P., its general partner By: BIA GP L.L.C., its general partner
By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director
BIA GP L.P. By: BIA GP L.L.C., its general partner
By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director
BIA GP L.L.C.
By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director
BLACKSTONE HOLDINGS III L.P. By: Blackstone Holdings III GP L.P., its general partner By: Blackstone Holdings III GP Management L.L.C., its general partner
By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer
BLACKSTONE HOLDINGS III GP L.P. By: Blackstone Holdings III GP Management L.L.C., its general partner
By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer
BLACKSTONE HOLDINGS III GP MANAGEMENT L.L.C.
By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer
BLACKSTONE HOLDINGS II L.P. By: Blackstone Holdings I/II GP L.L.C., its general partner By: The Blackstone Group Inc., its sole member
By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer
BLACKSTONE HOLDINGS I/II GP L.L.C. By: The Blackstone Group Inc., its sole member
By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer
THE BLACKSTONE GROUP INC.
By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer
BLACKSTONE GROUP MANAGEMENT L.L.C.
By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer
STEPHEN A. SCHWARZMAN
By: /s/ Stephen A. Schwarzman By: Stephen A. Schwarzman | Highlight the parts (if any) of this contract related to "Change Of Control" that should be reviewed by a lawyer. Details: Does one party have the right to terminate or is consent or notice required of the counterparty if such party undergoes a change of control, such as a merger, stock sale, transfer of all or substantially all of its assets or business, or assignment by operation of law? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Audit Rights" that should be reviewed by a lawyer. Details: Does a party have the right to audit the books, records, or physical locations of the counterparty to ensure compliance with the contract?
Context: DISTRIBUTOR AGREEMENT
This Agreement is made and entered into this 7th day of April, 2003 (the "Effective Date"), by and between Wireless Links Inc, a Pennsylvania corporation having its principal place of business at 1050 Wall Street, Suite 202, Lyndhurst, New Jersey 07071 (hereinafter called "WLI"), and Jaguar Investments, Inc. and its affiliates, a Nevada corporation, having its principal place of business at 10400 Griffin Rd., Suite 101, Ft. Lauderdale, Florida 33328 (hereinafter called "Power2Ship") with reference to the following facts:
Whereas WLI is engaged in the design and development, manufacture, importation, distribution, resale, service and support of mobile data and GPS based information products and services;
Whereas Power2Ship is engaged in the business of collecting, processing and disseminating logistics information and providing other transportation-related products and services to shippers and carriers of freight and
Whereas Power2Ship desires to become a distributor of certain of WLI's products and services on the terms and conditions hereinafter set forth.
NOW, THEREFORE; in consideration of the mutual covenants and agreements hereinafter set forth, the parties hereto do hereby agree as follows:
1. APPOINTMENT
1.1. WLI hereby grants to Power2Ship the non-exclusive right and license to distribute certain WLI's products and services (the "Products" or "Units") and software programs ("Licensed Programs") to Power2Ship's customers (which are end users) located in North America. "Products" or "Units" in this Agreement are limited to WLI's G3001 GPSLink mobile terminal as defined in Section 1.2. "Licensed Programs" in this Agreement are limited to WLI's MidLink Middleware software and G3001 programming tools. Further, Power2Ship shall also be authorized to resell other WLI products, services and support programs subject to separate written amendments to be made by the parties to this Agreement. WLI reserves the right to add additional products and to delete obsolete or superseded products at any time during the term of this Agreement upon sixty (60) days prior written notice to Power2Ship.
1.2. G3001 GPSLink is a fully functional device including GPS receiver with an integrated CDPD or GPRS modem including 4 dry contact alarm inputs and one contact output and a DB9 connector for serial connection to a PDA. When integrated with MidLink middleware the G3001 can integrate to any third party software application subject to specifications published from time to time by WLI and available for download from the WLI web site.
1.3. The Products and Licensed Programs shall be sold by Power2Ship to its customers pursuant to WLI's standard warranty and software license agreements.
1.4. Power2Ship may, at any time during the term of this Agreement, assign its rights and obligations under this Agreement to one or more of its subsidiaries in which it owns at least 50.1% of the actual equity of the subsidiary on a fully diluted basis and as long as Power2Ship remains the guarantor for the payments and terms and conditions of this Agreement (individually, a "Subsidiary"). Each Subsidiary shall thereafter have the rights and obligations of Power2Ship hereunder with respect to all terms and conditions of this agreement as if such Subsidiary had entered into this Agreement directly with WLI.
1.5. If Power2Ship merges with another company and/or changes its name, this Agreement will survive the merger and/or name change and the new entity will assume all the rights and obligations of Power2Ship pursuant to this Agreement.
1.6. WLI may, at any time during the term of this Agreement, assign its rights and obligations under this Agreement to any subsidiary in which it owns at least 50.1% of the equity on a fully diluted basis.
1.7. Power2Ship acknowledges that it has already integrated the G3001 packaged with the MidLink middleware into its application tested it and found it to meet its requirements.
2. TERM
2.1. Unless otherwise terminated as provided herein, the initial term of this Agreement shall be three (3) years from the Effective Date and shall thereafter be automatically renewed for subsequent one (1) year periods unless either party notifies the other in writing of its election not to renew the Agreement at least one hundred twenty (120) days prior to the expiration of the then-current term. Should this Agreement be terminated by either party for any reason, the obligations of the parties to each other as set forth herein will survive any termination.
3. PRICES
3.1. Subject to Section 3.6 below the price of the Product, excluding the Licensed Programs, is $[*] per Unit. The total price for both of the Licensed Programs together is $[*] per month per Product ("License Fee"). The License Fee shall begin on the date the Product is shipped to a customer and shall be paid by Power2Ship to WLI by the 7th of each month for the prior month (prorated if the Unit was shipped during the prior month) and shall continue for as long as the Product is active on any wireless network. Notwithstanding the foregoing, Power2Ship is obligated to pay the License Fee to WLI for a minimum of 36 months.
3.2. Once the monthly License Fee for a particular Unit has started, it will continue for a minimum of 36 consecutive months with the only exception being that should Power2Ship uninstall a particular Unit from one customer and install it at another customer, Power2Ship is permitted to suspend the monthly License Fee for that particular Unit for a maximum of 2 months during the life of this Agreement. This suspension of the License Fee is permitted only once per a particular Unit during the life of the Agreement (i.e., the suspension can't occur in two non-consecutive months). Units that are suspended for less than thirty consecutive days are not considered suspended.
3.3. Once Power2Ship has paid WLI the License Fee for a minimum of 36 months for a particular Unit, Power2Ship may discontinue paying the month License Fee only if that particular Unit has been deactivated from the wireless network. If a Unit is deactivated after 36 months and subsequently is reactivated, Power2Ship must restart the payment of the License Fee for as long as that particular Unit remains active on the wireless network.
3.4. The $[*] hardware price per Unit is based on a single order of a minimum of 1000 Units and manufacturing of a minimum 500 Units. At the time of placing the order with WLI, Power2Ship must pay the full purchase price of $[*] per Unit. The delivery time is 8-10 weeks starting with the date the payment is received by WLI.
-------- ------- RH JS 6/7/2002 Page 1 of 9
3.5. To shorten the delivery time to 3-4 weeks, Power2Ship has the option to purchase all the key components for $[*] per Unit and have them stored at no charge by WLI on behalf of Power2Ship so they can be available for immediate manufacturing when Power2Ship places an order. If this option is exercised, when Power2ship places an order to authorize Units to be manufactured it will pay with the $[*] balance per Unit at the time of such order.
3.6. Power2ship has the option to order Units in lower quantities at higher Unit prices as follows: 100 to 299 Unit at $[*]; 300 to 499 Units at $[*] and; 500 to 999 Units at $[*]. The only exception to this will be the first order of 100 Units at a Unit price of $[*] if the order is placed no later than April 4, 2003.
3.7. The Unit prices and monthly License Fees of $[*] can't be increased by WLI under the terms of this Agreement.
3.8. Unless otherwise stated in writing by WLI, all prices quoted shall be exclusive of state and local use, sales and property taxes. Power2Ship agrees to be responsible for any such taxes incurred as a result of its purchase of Products from WLI, unless Power2Ship shall have presented WLI with an exemption certificate.
3.9. Power2Ship may purchase dual antennas with a " screw for the Units from WLI at the following unit prices: $[*] when purchased in quantities of 100 to 499; $[*] when purchased in quantities of 500 to 999 and; $[*] when purchased in quantities of 1000 or more. Terms of payment for the antennas are [*]% upon placing the order with WLI and the balance when the antennas are ready to be shipped to Power2Ship. A lead time of at least four weeks is required for delivery.
3.10. Power2Ship will pay WLI 10% of any activation commissions ("Unit Commissions"), if any, it receives as a result of any Unit activated on a specific wireless network. The payment will be paid on the 7th of every month for any Unit Commissions received by Power2Ship during the previous month. Power2Ship will provide with the payment a report of the total number of activations during the month and the amount received per activation.
3.11. All prices are FOB WLI offices in NJ.
4. RESERVATION OF TITLE; COPYRIGHT; CONFIDENTIALITY
4.1. Licensed Programs are provided solely in executable files. This Agreement does not provide Power2Ship with title or ownership of the Licensed Programs, but only a limited right to sub-license the Licensed Programs. The Licensed Programs are, and shall remain, the property of WLI and certain third-party licensors who have authorized WLI to incorporate their software into the Licensed Programs.
4.2. Power2Ship acknowledges that the programs, software information, and user materials included in the Licensed Programs contain confidential information and trade secrets, which WLI has entrusted to Power2Ship in confidence to use only as expressly permitted by this Agreement. Power2Ship acknowledges that WLI claims and reserves all rights and benefits afforded under federal law in the programs, software information, and user materials included in the Licensed Programs as copyrighted works.
4.3. The MidLink software is licensed to Power2Ship for the exclusive use with WLI's products. Power2ship commits not to connect to WLI's MidLink software using any other wireless devices and /or terminal (s) and /or GPS devices other than WLI branded products.
4.4. Power2Ship shall protect the programs, software information, and user materials included in the Licensed Programs as confidential information and trade secrets. Power2Ship shall not, at any time, disclose such confidential information and trade secrets to any other person, firm, organization, or employee that does not (consistent with Power2Ship's right of use hereunder)
need to obtain access to the Licensed Programs. Power2Ship shall devote its best efforts to ensure that all Power2Ship's personnel and all other persons afforded access to the Licensed Programs by Power2Ship protect the Licensed Programs as trade secrets and confidential information and refrain from any use or disclosure in any manner not expressly permitted by this Agreement. These restrictions shall not apply to information (1) generally known to the public or obtainable from public sources; (2) readily apparent from the keyboard operation, visual display, or output reports of the Licensed Programs; (3) previously in the possession of Power2Ship or subsequently developed or acquired without reliance on the Licensed Programs; or (4) approved by WLI for release without restriction.
4.5. Restrictions on Use of Licensed Programs and Products. The programs, software information and user materials included in the Licensed Programs and Products may not be decomposed, reverse engineered, reprinted, transcribed, extracted or reproduced, in whole or in part, without the prior written consent of WLI. Power2Ship shall not in any way modify or alter the Licensed Programs without the prior written consent of WLI.
4.6. Survival of Obligations. Power2Ship's obligations under Section 4 of this Agreement shall survive the termination of this Agreement.
4.7. Specific Performance and Injunctive Relief. Power2Ship agrees and acknowledges that, in the event of any breach directly or indirectly by Power2Ship of any provision of this Section 4, monetary damages will not afford WLI an adequate remedy, and irreparable harm may be presumed. Accordingly, WLI shall be entitled to receive injunctive relief from a court of competent jurisdiction for any such breach by Power2Ship.
4.8. Confidentiality. Power2Ship acknowledges that the Licensed Programs and all copies thereof are proprietary, confidential and a trade secret of WLI and the exclusive title shall remain with WLI. All applicable rights to copyrights, patents, trademarks, trade names, logos and identifying slogans and other intellectual property rights in the products are the exclusive property of WLI and Power2Ship shall not contest such ownership. Power2Ship is committing directly or indirectly not to copy and/or not to reverse engineer any of WLI's software and/or hardware products. Power2Ship shall be responsible for any breach of this Section by its employees, agents, subcontractors or consultants. WLI acknowledges that the conceptual functionality of its Unit is in the public domain and this paragraph does not cover the Unit's actual functionality. But this Section 4.8 shall apply to the proprietary WLI implementation and technology.
5. ORDER PROCEDURE AND MANDATORY REPORTS BY POWER2SHIP
5.1. Power2Ship shall place individual written purchase orders for Products from time to time during the term of this Agreement. Each purchase order placed by Power2Ship shall contain the following minimum information: (i) identification of each Product ordered by model number, quantity and price; (ii) shipping instructions and destinations; and (iii) requested delivery date for each Product. Power2Ship will pay for shipping cost from WLI offices in NJ to any destination.
-------- ------- RH JS Page 2
5.2. Any Units shipped by WLI directly to a customer of Power2ship as per Power2Ship's instruction is considered activated at the date of the shipment and the $[*] monthly License Fee will start as of that date .
5.3. Once an order is placed by Power2Ship, such order can't be cancelled and delivery dates for Units can't be rescheduled.
5.4. When Products are ordered for the GPRS network, Power2Ship must provide one SIM card for every Unit ordered within a maximum of two weeks from the date of order. The Sim Cards have to be placed and tested in the Unit as they are being manufactured at the factory. Failure to provide the SIM cards in time will require re-opening and re-test of the Units in the US at a cost of $[*] per Unit to be paid by Power2Ship.
5.5. Every Unit has a serial number. Power2Ship must provide WLI with a weekly report listing the serial number of every Unit shipped to a customer during the prior week.
5.6. Power2Ship must provide a separate weekly report to WLI that lists the serial number of any Units suspended during the prior week and that includes the SIM # and ID, date of return, name of returning customer and reason for return.
5.7. Power2Ship must provide a separate weekly report to WLI that lists the serial number of any Units reactivated (i.e., after having previously been suspended) during the prior week.
5.8. The weekly reports in Section 5.5, 5.6 and 5.7 must be sent to WLI every Monday. The weekly reports are to be sent in Excel file format via e-mail. The report must be sent even if there is no activity during the prior week.
5.9. Power2Ship must provide WLI with a complete copy of its monthly airtime bill for the Units as received by the respective wireless operators (T-Mobile, Verizon, AT&T, etc.). Power2Ship is required to keep all the WLI Unit activations on every wireless network on a separate account from any other vendor's brand used by Power2Ship. Every such monthly invoice (one per operator) must be submitted to WLI within 7 days from the date it is received by Power2Ship and the invoice must include all pages listed on the invoice (example 7of 7 pages). Power2Ship's Chief Executive Officer or Chief Financial Officer
must confirm in writing to WLI every quarter that the account numbers under which the WLI Units are being activated on the various networks are the only accounts under which the WLI units are activated.
6. DELIVERY, TITLE AND RISK OF LOSS
6.1. Delivery shall be F.O.B. WLI's facility in Lyndhurst, New Jersey. WLI shall use its reasonable efforts to deliver Products to Power2Ship on the date of delivery specified by Power2Ship. WLI will use its reasonable efforts to notify Power2Ship of any delays in scheduled delivery dates.
6.2. Title to the Products and the risk of loss or damage shall pass to Power2Ship upon delivery of the Products to Power2Ship or its shipping company of choice. In the event of any loss of or damage to the Products following delivery to the carrier, WLI shall, upon request, cooperate with Power2Ship in connection with the proof of loss claim presented by Power2Ship to the carrier and/or insurer.
6.3. Power2Ship shall bear the entire risk of loss or damage to the Units and any other equipment purchased from WLI (collectively the "Equipment") after installation of the Equipment in the customers' vehicles. The occurrence of any such loss or damage shall not permit Power2Ship to delay or reduce the payment of any fees prescribed under this agreement unless Power2Ship presents WLI with proof of a claim to an insurance company and, in such case, Power2Ship should replace the lost or damaged Equipment within a maximum of 60 days and resume the payment of monthly License Fees to WLI. Power2Ship is advised to obtain and maintain property and casualty insurance for the Equipment against all risks of loss or damage. The amount of such insurance shall not be less than the replacement cost of the Equipment.
6.4. Power2Ship is responsible for maintaining and storing in a safe and secure location backup copies of all data files Power2Ship may place in the System. In no event shall WLI be liable for loss or destruction of Power2Ship's data files for any reason.
7. PAYMENT
7.1. Power2Ship must pay WLI for the Products in full on the day it submits a PO (i.e., the PO is not valid unless accompanied by payment in full).
7.2. The payment of the optional antenna is 50% with the purchase order and 50% when the antennas are ready to be shipped to Power2Ship.
7.3. Monthly License Fees must be paid no later then the 7th of the month for all Units active during the previous month. For example, on the 7th of July Power2Ship will pay for Units that were active in June.
7.4. The purchase price for the Unit does not include repair beyond the first year limited warranty. The renewal of the limited warranty after the first year is at the option of the customer, but in any case, Unit failure does not relieve Power2Ship of its obligation to pay the monthly License Fees to WLI for that Unit. The first year limited warranty starts on the day of the activation of the Unit on a wireless network. As a distributor, Power2Ship should keep a minimum number of Units in stock for immediate replacement for its customers.
7.5. This Agreement is separate and apart from the contract between Power2Ship and its customer. Failure of the customer to pay Power2Ship, for whatever reason, does not affect the obligation of Power2Ship to pay its contractual obligations to WLI.
7.6. If an invoice is past due by more than 30 days, WLI may discontinue providing technical support to Power2Ship until the invoice is paid. If Power2Ship does not make payment of any amount due and payable hereunder within 60 days of the date of invoice, WLI (without prejudice to any other remedy) shall be entitled to interest on all past due amounts at the lower of eighteen percent (18%) per annum or the highest rate permitted by law, plus reimbursement of all costs incurred in collecting such amounts, including court costs and reasonable attorney fees.
8. LICENSED SOFTWARE ACCESS AND AUDIT
8.1. Should a dispute occur concerning the number of Units that Power2Ship has activated with its customer, WLI may designate an independent certified public accountant who may audit Power2Ship's books and records concerning sales of Units and of Licensed Software under this Agreement. Said examination shall be at WLI's sole cost and expense during normal business hours and upon reasonable notice, and may not be conducted more than once annually; provided, however, -------- ------- that if such audit reveals an underpayment by Power2Ship of more than 10% for the period audited, Power2Ship shall pay WLI's actual costs and expenses for performing such audit.
8.2. WLI, at its own discretion, may visit Power2Ship's warehouse at normal business hours to verify the actual number of Units in inventory and/or the number of Units suspended.
-------- ------- RH JS Page 3
8.3. Power2Ship commits to allow WLI free access to its MidLink software via the Internet for ongoing maintenance and updates.
9. PRODUCT INFORMATION OBLIGATIONS
9.1. Product Descriptions and Technical Support Requirements. WLI shall provide Power2Ship with integration documentation and programming information for its Unit.
9.2. Warranty Return Procedure. WLI's warranty return procedure is set forth in Exhibit A.
10. TECHNICAL INFORMATION AND SERVICES
10.1. WLI shall provide, at no cost to Power2Ship, reasonable training, including but not limited to, training of Power2Ship's sales and technical personnel, to enable Power2Ship to meets its obligations under this Agreement, including its obligation to provide service or support to end-users following termination of this Agreement.
10.2. Power2Ship is committed to provide technical support and service for WLI's Products sold by Power2Ship to its customers.
10.3. Power2Ship will receive the first customer call and will have to maintain a minimum inventory level of spare Units to service its customers within 48 hours. WLI will support an end-user only upon Power2Ship's request and only after Power2Ship has tried to provide the support and has failed to fix the problem. WLI will not be involved in any end-user training.
10.4. Power2Ship will maintain a minimum level of inventory of the Product for service purposes, which the parties estimate to be 1% of the aggregate number of Units active on any wireless network at any given time.
11. WARRANTY AND INDEMNIFICATION
11.1. WLI warrants the Products pursuant to the terms of its hardware limited warranty and limited software warranty set forth in Exhibit B hereto. Subject to the terms and conditions of Exhibit A, WLI agrees, in its sole discretion, to repair or replace at its sole cost and expense, any defective Products or parts thereof which are returned to it within the applicable warranty period, provided that the Products have not been altered or repaired other than with authorization from WLI and by its approved procedures; that the Products have not been subjected to misuse, improper maintenance, negligence or accident; that the Products have not been damaged by excessive physical or electrical stress; and that the Products have not had their serial number or any part thereof altered, defaced or removed.
11.2. The warranty and remedies set forth in Exhibit B are exclusive and in lieu of any other warranties or remedies, express or implied, including the implied warranties of merchantability and fitness for intended or particular purpose. The liability of WLI to Power2Ship for any claim whatsoever related to the Products or the Licensed Programs or this Agreement, including any cause of action in contract, tort, or strict liability, shall not exceed the total amount payable under this Agreement by Power2Ship to WLI within the most recent six-month period for the Licensed Programs (if such claim relates to the Licensed Programs), or for the WLI Products (if such claim relates to the WLI Products). Under no circumstances shall WLI be liable to Power2Ship or to any other person or entity for any incidental, special or consequential damages whether arising out of breach of warranty, breach of contract or otherwise even if WLI has been advised of the possibility of such claims or demands.
11.3. To the extent not otherwise provided herein, WLI agrees to defend, indemnify and hold harmless Power2Ship from and against (a) any claim by a third party that a Product supplied hereunder did not conform to WLI's warranty when received by Power2Ship or that WLI failed on request to provide warranty service in accordance with WLI's applicable warranty statement or (b) any claim arising under Section 14 of this Agreement. Power2Ship shall be reimbursed for any actual loss, liability or damage suffered or incurred by Power2Ship and for all reasonable costs and expenses (including reasonable attorneys' fees) incurred by Power2Ship in connection with any action, suit, proceeding, demand, assessment or judgment incident to any of the matters indemnified against in this provision provided that Power2Ship immediately notifies WLI as to the institution of such suit, gives or obtains for WLI such authority as may be necessary for WLI to defend same, and supplies WLI such further information and assistance for the defense thereof as WLI may reasonably require and request. WLI shall have no obligation under this section, and shall have no liability to Power2Ship, if such claim arises due to the alteration or modification of any Product without the prior written consent of WLI.
11.4. Power2Ship shall defend, indemnify and hold harmless WLI from all liability and claims whatsoever for any injury to persons or property or for any loss, expense, or damage incurred by any of Power2Ship's personnel or invitees or by any other person or party (except agents or employees of WLI) arising as a result of or in connection with Power2Ship's acquisition or use of the Products and Licensed Programs or WLI 's performance of its obligations or exercise of its rights hereunder except for those claims which are the result of the willful acts or gross negligence of WLI.
12. INTELLECTUAL PROPERTY RIGHTS INDEMNIFICATION
12.1. WLI represents and warrants that: (i) it owns all right, title and interest in and to the Products necessary to enter into and perform its obligations to Power2Ship hereunder, and (ii) no Product or Licensed Programs sold to Power2Ship during the term of this Agreement, nor the use of any such Product or Licensed Program, nor anything in or contemplated by this Agreement, infringes upon the Intellectual Rights (as defined herein) of any other person or entity, and no suit or proceeding is pending or threatened alleging that any Product or Licensed program, or the use thereof, infringes upon any Intellectual Rights. As used herein, the term "Intellectual Right" means any rights relating to any trademark, trade name, service mark, copyright, patent, trade secret or other proprietary right.
13. USE OF TRADEMARKS
13.1. Power2Ship shall not acquire any right to or interest in any trademark or trade name owned or used by WLI. Power2Ship may use for purposes of this Agreement such trademarks and trade names as appear on the Products and on promotional materials therefore when received by Power2Ship from WLI.
13.2. Power2Ship acknowledges that WLI and its affiliates are the owners and/or licensees of the trademarks, service marks, commercial symbols and trade names used by WLI. Power2Ship shall not contest the right of WLI and its affiliates to the use of any trademarks, service marks, commercial symbols or trade names used or claimed by WLI.
13.3. All WLI's use of Power2Ship's company name, logos, trademarks or other registered identifiers must meet Power2Ship's corporate communications standards and must have Power2Ship's written approval prior to such use by WLI. All Power2Ship's use of WLI's company name, logos, trademarks or other registered identifiers must meet WLI's corporate communications standards and must have WLI's written approval prior to such use by WLI.
-------- ------- RH JS Page 4
13.4. Power2Ship shall have the right to place its trademarks on the Products but shall not obscure any WLI trademarks.
14. TERMINATION
14.1. Termination for Cause by WLI WLI may, upon written notice, terminate this Agreement at any time in the event that (a) Power2Ship defaults or otherwise fails to perform any obligation, warranty, duty, responsibility or other term or condition of this Agreement, including failure to make a payment when due and such default or failure continues unremedied for a period fifteen (15) days after such notice; (b) Power2Ship ceases permanently to carry on its present business, except as a result of a bona fide reorganization in the course of which the Agreement is transferred to a successor company of equal or greater financial resources carrying on substantially the same business; (c) Power2Ship makes an assignment for the benefit of creditors; or admits in writing its inability to pay debts as they mature; or a trustee or receiver of Power2Ship, or of any substantial part of Power2Ship's assets, is appointed by any court; or a proceeding is instituted by or against Power2Ship under any provision of the United States Bankruptcy Code or any other law affecting the rights of creditors and such proceeding is acquiesced in or is not dismissed within sixty (60) days; or (d) WLI's continued performance under this Agreement would cause it to be in violation of (i) any order of any court or regulatory agency having jurisdiction over WLI, or (ii) any law, statute, ordinance or regulation to which WLI is subject.
14.2. Termination for Cause by Power2Ship. Power2Ship may, upon written notice, terminate this Agreement at any time in the event that (a) WLI defaults or otherwise fails to perform any obligation, warranty, duty, responsibility or other term or condition of this Agreement, including failure to pay a refund when due and such default or failure continues unremedied for a period fifteen (15) days after such notice; (b) WLI ceases permanently to carry on its present business, except as a result of a bona fide reorganization in the course of which the Agreement is transferred to a successor company of equal or greater financial resources carrying on substantially the same business; (c) WLI makes an assignment for the benefit of creditors; or admits in writing its inability to pay debts as they mature; or a trustee or receiver of WLI, or of any substantial part of WLI's assets, is appointed by any court; or a proceeding is instituted by or against WLI under any provision of the United States Bankruptcy Code or any other law affecting the rights of creditors and such proceeding is acquiesced in or is not dismissed within sixty (60) days; or (d) Power2Ship's continued performance under this Agreement would cause it to be in violation of (i) any order of any court or regulatory agency having jurisdiction over Power2Ship, or (ii) any law, statute, ordinance or regulation to which Power2Ship is subject.
14.3. Termination of this Agreement shall not release either party from the obligation to pay any sums to the other party whether then or thereafter due or operate to discharge any liability which has been incurred prior to the effective date of such termination.
14.4. Upon expiration of this Agreement or termination by either party, Power2Ship may sell off any remaining inventory of the Products or Licensed Software acquired prior to termination.
14.5. Neither party shall be liable to the other party for any special, incidental, or consequential damages arising in connection with, or out of termination of, this agreement.
15. NOTICES
Any notice or communication given pursuant to this Agreement shall be in writing, delivered in person or may be telegraphed, telexed, sent by facsimile transmission or United States certified, registered or express mail, Federal Express or other private courier, postage prepaid, return receipt requested in the event of delivery by mail. In the event notice shall be given by facsimile transmission an original of such notice shall simultaneously be deposited in United States mail, postage prepaid, or sent by Federal Express or other private courier, addressed as hereinafter required. Notices shall be given to the parties addressed as set forth in the first paragraph of the Agreement or at such other address as the parties may from time to time designate by notice hereunder. Notices shall be given when delivered personally, or when
telegraphed, telexed or sent by facsimile transmission if sent during regular business hours of the recipient and if not, on the next following business day or if mailed, at midnight on the third business day after the date of mailing or if sent by Federal Express or by other private courier on the next following business day.
If to WLI: Wireless Links, Inc. Attention: Joe Shayovitch 1050 Wall Street Suite 320 Lyndhurst, New Jersey 07071 Facsimile No. 201-531-9795
If to Power2Ship: Freight Rate, Inc. Attention: Richard Hersh 10400 Griffin Rd., Suite 101 Ft. Lauderdale, FL 33328
16. GENERAL
16.1. This Agreement, its interpretation and construction, and the remedies for its enforcement or breach are to be applied in accordance with the laws of the State of New Jersey.
16.2. Failure on any occasion by WLI or Power2Ship to enforce any term or condition of this Agreement shall not prevent or bar enforcement on any other occasion.
16.3. Neither party shall be deemed to be in default of any provision hereof or be liable for any delay, failure in performance or interruption of service resulting directly or indirectly from act of war, act of God, act of civil or military authority, civil disturbance or any other cause beyond its reasonable control.
16.4. The relationship between WLI and Power2Ship is that of independent contractors. Neither party, nor its agents or its employees shall be deemed to be the agent of the other party. Neither party shall have the right to bind the other party, transact any business in the other party's name or in its behalf or incur any liability for or on behalf of the other party.
16.5. Neither WLI nor Power2Ship shall intentionally disclose, and each party shall use reasonable efforts to prohibit, the unintentional disclosure to any third party of any confidential or proprietary information of the other party during the term of this Agreement and for a period of one (1) year thereafter.
16.6. The headings to the paragraphs of this Agreement are included merely for convenience of reference and shall not affect the meaning of the language included therein.
16.7. No provisions of this Agreement may be altered or amended unless such alteration or amendment is in writing and executed by duly authorized officers of both parties, except where otherwise specifically provided for in this Agreement.
16.8. The covenants contained in this Agreement which, by their terms, require or contemplate performance by the parties after the expiration or termination of this Agreement shall be enforceable notwithstanding said expiration or termination.
16.9. This Agreement (including all Exhibits hereto), constitutes the entire Agreement and understanding between the parties relating to the subject matter hereof, supersedes all other agreements, oral or written, heretofore made between the parties with respect to such subject matter, supersedes the standard terms and conditions in Power2Ship's purchase order form and WLI's quotation, invoice or acknowledgment form, and supersedes any other terms or conditions of purchase proposed by Power2Ship or WLI. This Agreement may not be assigned by either party without the prior written consent of the other party. If any provision in this Agreement should be held illegal or unenforceable, no other provision of this Agreement shall be affected.
-------- ------- RH JS Page 5
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.
Wireless Links, Inc. Jaguar Investments, Inc.
By: By: ------------------------- ----------------------------- Its: Its: Chief Executive Officer ------------------------ ----------------------------
-------- ------- RH JS Page 6
EXHIBIT A
PRODUCT WARRANTY INFORMATION
WARRANTY
A) HARDWARE LIMITED WARRANTY - WLI will provide a one year limited warranty for its hardware products as per the terms and conditions described in "Attachment B". The first year warranty starts with the date of shipment and terminates on the anniversary of the first year.
B) Extended limited warranty beyond the first year is available at the same terms and conditions described in "Attachment B ". The second year Limited warranty price will be determined between the parties based on the total number of units to be under warranty in a particular year.
- The Warranty is a limited warranty that does not cover damage caused by improper use, abuse or use for other than intended purposes. The Warranty does not cover LCD screen or batteries. See Attachment B, Limited Warranty for the Acknowledger(TM) and related accessories.
- The parties understand and agree that WLI does not warrant any part of the Peripheral equipment that is not sold directly by WLI
- Within 14 days from discovery of a defect, the Integrator shall notify WLI in writing of said defect. Said notice of defect shall contain a reasonably detailed description of the defect as determinable by the Integrator. Said notice shall also indicate the serial numbers of all Acknowledgers and the release levels of software in which the defect was discovered.
C) DEFECTIVE EQUIPMENT RETURN. Defective equipment will be returned promptly to WLI's repair centre at the Power2Ship cost. The integrator will return for repair products under warranty and will pay the shipping cost to WLI and will carry the risk of loss until the package has been delivered to WLI. WLI will pay the shipping cost back via standard "UPS ground" and will carry the risk of loss until the package is delivered to the integrator.
For each unit, prior to return Power2Ship must send WLI a description of the problem including the serial number and date of shipping and date of purchase. Every return must have a Return Merchandise Authorisation number (RMA) as issued by WLI. Replacement or repaired units will be returned to the Integrator within 14 working days of receipt of a defective unit at WLI's cost.
D) LIMITED WARRANTY OF LICENSED PROGRAMS. WLI warrants, for the benefit of the Integrator only, that at the time Integrator's license of Licensed Programs commences, WLI has the right and authority to license the Licensed Programs to Integrator, and the Licensed Programs conform in all material respects to any specifications supplied to Integrator in writing by WLI. WLI does not warrant that the Licensed Programs can be used without interruption or that they are error-free.
Any implied warranties of the Licensed Software are LIMITED to one year starting from the date it was shipped to the integrator or starting with the date specified as the starting date in the leasing and / or purchase agreement with the Integrator. If the date is different then the shipping date to the integrator the integrator has to provide a copy of the agreement with the Integrator to verify the start of warranty.
E) CORRECTIONS AND UPDATES OF LICENSED PROGRAMS.
WLI shall maintain the accuracy of the Licensed Programs by making a reasonable attempt to correct any programming or database errors that Integrator brings to WLI attention. In addition, WLI from time to time may furnish Integrator with further releases of the Licensed Programs to provide corrections of significant programming or database errors and updates of database information. WLI obtains the information contained in the database of the Licensed Programs from established outside sources, and WLI makes every effort to keep the information up-to-date, but it cannot guarantee absolute accuracy and timeliness. After the expiration of the initial term of this Agreement, WLI shall provide any correction and update assistance only on mutually acceptable terms at WLI's customary rates then in effect. WLI reserves the right to make modifications and enhancements of the Licensed Programs (other than simple corrections and updates
-------- ------- RH JS Page 7
EXHIBIT B End User Warranty
LIMITED WARRANTY FOR THE ACKNOWLEDGER(TM) AND RELATED ACCESSORIES ----------------------------------------------------------------- Wireless Links (WLI) warrants to the original end user purchaser ("You") that the Equipment will be free from defects in workmanship and materials ("Limited Warranty") for a period of one (1) year from the date of the purchase of the Equipment (the "Warranty Period"). This limited warranty does not&sbsp;apply to normal wear and tear and does not cover repair or replacement of Equipment damaged by misuse, accident, abuse, neglect, misapplication, alteration of any kind (including upgrades and expansions)' disaster or defects due to repairs or modifications made by anyone other than the Manufacturer or its authorized service representative. In addition, this limited warranty does not apply to physical damage of any nature whatsoever to the surface of the display, to the surface of the signature pad of the Equipment or to any data stored within the Equipment. WLI shall not have any liability whatsoever with respect to any data stored within the Equipment. Before returning any Equipment under this limited warranty, call WLI and request a return merchandise authorization number (RMA - number)' then ship the Equipment in the original packaging or its equivalent to the location designated by WLI accompanied by proof of purchase, a brief written explanation of the defects, the RMA Number and a return shipment address. WLI at
its discretion will repair or replace the Equipment in accordance with the terms of this limited warranty and send it back to you. You are responsible for the cost of shipping the Equipment to the location designated by WLI and the risk of loss or damage in transit. WLI will bear the cost of return shipment to you and the risk of loss or damage during such return shipment. REPAIR OR REPLACEMENT BY WLI AS PROVIDED IN THIS LIMITED WARRANTY IS YOUR EXCLUSIVE REMEDY UNDER THIS LIMITED WARRANTY. WLI SHALL NOT BE LIABLE FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES. WLI DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, OR STATUTORY INCLUDING BUT NOT LIMITED TO, ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY WARRANTY ARISING OUT OF ANY PROPOSAL, SPECIFICATION OR SAMPLE. ANY SOFTWARE PROVIDED WITH THE EQUIPMENT IS PROVIDED UNDER A SEPARATE SOFTWARE LICENSE AGREEMENT.
-------- ------- RH JS Page 8
EXHIBIT C-2 END-USER PROGRAM LICENSE AGREEMENT
WIRELESS LINKS (WLI) SOFTWARE LICENSE AGREEMENT ----------------------------------------------------
Licensed Programs are provided solely in executable files and consist of the following programs: MidLink (WLI's middleware), MapLink, and all G3001 related programming tools,
1. RESERVATION OF TITLE. This Agreement does not provide the Power2Ship (you) with title or ownership of the Licensed Programs, but only a right of limited use of one copy per software package per license. The Licensed Programs are, and shall remain, the property of Wireless Links and certain third-party licensers who have authorized Wireless Links to incorporate their software into the System. Subject to a distribution agreement the Power2Ship (you) can redistribute the licensed products but you can't reproduce the Licensed Programs.
2. COPYRIGHT PROTECTION. Power2Ship acknowledges that the programs, software information, and user materials included in the Licensed Programs contain confidential information and trade secrets, which WLI(TM) has entrusted to Power2Ship in confidence to use only as expressly permitted by this Agreement. Power2Ship acknowledges that Wireless Links claims and reserves all rights and benefits afforded under federal law in the programs, database information, and user materials included in the Licensed Programs as copyrighted works.
3. PRESERVATION OF SECRECY AND CONFIDENTIALITY. Power2Ship shall protect the programs, database information, and user materials include din the Licensed Programs as confidential information and trade secrets. Power2Ship shall not, at any time, disclose such confidential information and trade secrets to any other person, firm, organization, or employee that does not (consistent with Power2Ship's right of use hereunder) need to obtain access to the Licensed Programs. Power2Ship shall devote its best efforts to ensure that all Power2Ship's personnel and all other persons afforded access to the Licensed Programs by Power2Ship protect the Licensed Programs as trade secrets and confidential information and refrain from any use of disclosure in any manner not expressly permitted by this Agreement. These restrictions shall not apply to information (1) generally know to the public of obtainable from public sources; (2) readily apparent from the keyboard operation, visual display, or output reports of the Licensed Program; (3) previously in the possession of Power2Ship or subsequently developed or acquired without reliance on the Licensed programs; or (4) approved by WLI for release without restriction.
4. RESTRICTIONS ON USE OF LICENSED PROGRAMS. The programs, software information, and user materials included in the Licensed Programs may not be decompiled, reverse engineered, reprinted, transcribed, extracted, or reproduced, in whole or in part, without the prior written consent of WLI. Power2Ship shall not in any way modify or alter the Licensed Programs without the prior written consent of WLI.
5. SURVIVALS OF OBLIGATIONS; RETURN OF PROGRAMS. Power2Ship's obligations under this Agreement shall remain in effect for as long as Power2Ship continues to use the Licensed Programs. Power2Ship shall promptly return all materials and documentation relating to the Licensed Programs provided by WLI upon (1) termination of either this Agreement of Power2Ship's license of the Licensed Programs, for any reason, or (2) discontinuance or abandonment of Power2Ship's use or control of the Licensed Programs.
6. POWER2SHIP'S DATA FILES. Power2Ship is responsible for maintaining and storing in a safe and secure location backup copies of all data files Power2Ship may place in the System. In no event shall WLI(TM) be liable for loss or destruction of Power2Ship's data files for any reason.
7. LIMITED WARRANTY ON LICENSED PROGRAMS. WLI(TM) warrants, for the benefit of Power2Ship only, that at the time Power2Ship's license of Licensed Programs commences, WLI(TM) has the right and authority to license the Licensed Programs to Power2Ship, and the Licensed Programs conform in all material respects to any specification supplied to Power2Ship in writing by WLI(TM). WLI(TM) does not warrant that the Licensed Programs can be used without interruption or that they are error-free. Any implied warranties of the Licensed Software are LIMITED to one year starting from the date of purchase or for the period described in the contractual agreement with the Power2Ship. For best and fast service WLI recommends to Power2Ship to install on the server NT computer a modem fax with PC-Anywhere software and a dedicated phone line to allow WLI to dial in for routine maintenance.
8. CORRECTIONS AND UPDATES OF LICENSED PROGRAMS. WLI shall maintain the accuracy of the Licensed Programs by using its best endeavors to correct any programming or database errors that Power2Ship brings to WLI(TM)'s attention. In addition, during the warranty period and/or duration of this agreement WLI from time to time may furnish Power2Ship with further releases of the Licensed Programs to provide corrections of significant programming or software errors. After the expiration of this agreement, WLI shall provide any correction and update assistance only on mutually acceptable terms at WLI's customary rates then in effect. WLI(TM) reserves the right to make optional modifications and enhancements of the Licensed Programs (other than simple corrections and updates) available only at additional charges.
-------- ------- RH JS Page 9 [/INST] ```json
{<answer_start>
"answer": "WLI, at its own discretion, may visit Power2Ship's warehouse at normal business hours to verify the actual number of Units in inventory and/or the number of Units suspended."
<answer_end>
}
``` </s> | DISTRIBUTOR AGREEMENT
This Agreement is made and entered into this 7th day of April, 2003 (the "Effective Date"), by and between Wireless Links Inc, a Pennsylvania corporation having its principal place of business at 1050 Wall Street, Suite 202, Lyndhurst, New Jersey 07071 (hereinafter called "WLI"), and Jaguar Investments, Inc. and its affiliates, a Nevada corporation, having its principal place of business at 10400 Griffin Rd., Suite 101, Ft. Lauderdale, Florida 33328 (hereinafter called "Power2Ship") with reference to the following facts:
Whereas WLI is engaged in the design and development, manufacture, importation, distribution, resale, service and support of mobile data and GPS based information products and services;
Whereas Power2Ship is engaged in the business of collecting, processing and disseminating logistics information and providing other transportation-related products and services to shippers and carriers of freight and
Whereas Power2Ship desires to become a distributor of certain of WLI's products and services on the terms and conditions hereinafter set forth.
NOW, THEREFORE; in consideration of the mutual covenants and agreements hereinafter set forth, the parties hereto do hereby agree as follows:
1. APPOINTMENT
1.1. WLI hereby grants to Power2Ship the non-exclusive right and license to distribute certain WLI's products and services (the "Products" or "Units") and software programs ("Licensed Programs") to Power2Ship's customers (which are end users) located in North America. "Products" or "Units" in this Agreement are limited to WLI's G3001 GPSLink mobile terminal as defined in Section 1.2. "Licensed Programs" in this Agreement are limited to WLI's MidLink Middleware software and G3001 programming tools. Further, Power2Ship shall also be authorized to resell other WLI products, services and support programs subject to separate written amendments to be made by the parties to this Agreement. WLI reserves the right to add additional products and to delete obsolete or superseded products at any time during the term of this Agreement upon sixty (60) days prior written notice to Power2Ship.
1.2. G3001 GPSLink is a fully functional device including GPS receiver with an integrated CDPD or GPRS modem including 4 dry contact alarm inputs and one contact output and a DB9 connector for serial connection to a PDA. When integrated with MidLink middleware the G3001 can integrate to any third party software application subject to specifications published from time to time by WLI and available for download from the WLI web site.
1.3. The Products and Licensed Programs shall be sold by Power2Ship to its customers pursuant to WLI's standard warranty and software license agreements.
1.4. Power2Ship may, at any time during the term of this Agreement, assign its rights and obligations under this Agreement to one or more of its subsidiaries in which it owns at least 50.1% of the actual equity of the subsidiary on a fully diluted basis and as long as Power2Ship remains the guarantor for the payments and terms and conditions of this Agreement (individually, a "Subsidiary"). Each Subsidiary shall thereafter have the rights and obligations of Power2Ship hereunder with respect to all terms and conditions of this agreement as if such Subsidiary had entered into this Agreement directly with WLI.
1.5. If Power2Ship merges with another company and/or changes its name, this Agreement will survive the merger and/or name change and the new entity will assume all the rights and obligations of Power2Ship pursuant to this Agreement.
1.6. WLI may, at any time during the term of this Agreement, assign its rights and obligations under this Agreement to any subsidiary in which it owns at least 50.1% of the equity on a fully diluted basis.
1.7. Power2Ship acknowledges that it has already integrated the G3001 packaged with the MidLink middleware into its application tested it and found it to meet its requirements.
2. TERM
2.1. Unless otherwise terminated as provided herein, the initial term of this Agreement shall be three (3) years from the Effective Date and shall thereafter be automatically renewed for subsequent one (1) year periods unless either party notifies the other in writing of its election not to renew the Agreement at least one hundred twenty (120) days prior to the expiration of the then-current term. Should this Agreement be terminated by either party for any reason, the obligations of the parties to each other as set forth herein will survive any termination.
3. PRICES
3.1. Subject to Section 3.6 below the price of the Product, excluding the Licensed Programs, is $[*] per Unit. The total price for both of the Licensed Programs together is $[*] per month per Product ("License Fee"). The License Fee shall begin on the date the Product is shipped to a customer and shall be paid by Power2Ship to WLI by the 7th of each month for the prior month (prorated if the Unit was shipped during the prior month) and shall continue for as long as the Product is active on any wireless network. Notwithstanding the foregoing, Power2Ship is obligated to pay the License Fee to WLI for a minimum of 36 months.
3.2. Once the monthly License Fee for a particular Unit has started, it will continue for a minimum of 36 consecutive months with the only exception being that should Power2Ship uninstall a particular Unit from one customer and install it at another customer, Power2Ship is permitted to suspend the monthly License Fee for that particular Unit for a maximum of 2 months during the life of this Agreement. This suspension of the License Fee is permitted only once per a particular Unit during the life of the Agreement (i.e., the suspension can't occur in two non-consecutive months). Units that are suspended for less than thirty consecutive days are not considered suspended.
3.3. Once Power2Ship has paid WLI the License Fee for a minimum of 36 months for a particular Unit, Power2Ship may discontinue paying the month License Fee only if that particular Unit has been deactivated from the wireless network. If a Unit is deactivated after 36 months and subsequently is reactivated, Power2Ship must restart the payment of the License Fee for as long as that particular Unit remains active on the wireless network.
3.4. The $[*] hardware price per Unit is based on a single order of a minimum of 1000 Units and manufacturing of a minimum 500 Units. At the time of placing the order with WLI, Power2Ship must pay the full purchase price of $[*] per Unit. The delivery time is 8-10 weeks starting with the date the payment is received by WLI.
-------- ------- RH JS 6/7/2002 Page 1 of 9
3.5. To shorten the delivery time to 3-4 weeks, Power2Ship has the option to purchase all the key components for $[*] per Unit and have them stored at no charge by WLI on behalf of Power2Ship so they can be available for immediate manufacturing when Power2Ship places an order. If this option is exercised, when Power2ship places an order to authorize Units to be manufactured it will pay with the $[*] balance per Unit at the time of such order.
3.6. Power2ship has the option to order Units in lower quantities at higher Unit prices as follows: 100 to 299 Unit at $[*]; 300 to 499 Units at $[*] and; 500 to 999 Units at $[*]. The only exception to this will be the first order of 100 Units at a Unit price of $[*] if the order is placed no later than April 4, 2003.
3.7. The Unit prices and monthly License Fees of $[*] can't be increased by WLI under the terms of this Agreement.
3.8. Unless otherwise stated in writing by WLI, all prices quoted shall be exclusive of state and local use, sales and property taxes. Power2Ship agrees to be responsible for any such taxes incurred as a result of its purchase of Products from WLI, unless Power2Ship shall have presented WLI with an exemption certificate.
3.9. Power2Ship may purchase dual antennas with a " screw for the Units from WLI at the following unit prices: $[*] when purchased in quantities of 100 to 499; $[*] when purchased in quantities of 500 to 999 and; $[*] when purchased in quantities of 1000 or more. Terms of payment for the antennas are [*]% upon placing the order with WLI and the balance when the antennas are ready to be shipped to Power2Ship. A lead time of at least four weeks is required for delivery.
3.10. Power2Ship will pay WLI 10% of any activation commissions ("Unit Commissions"), if any, it receives as a result of any Unit activated on a specific wireless network. The payment will be paid on the 7th of every month for any Unit Commissions received by Power2Ship during the previous month. Power2Ship will provide with the payment a report of the total number of activations during the month and the amount received per activation.
3.11. All prices are FOB WLI offices in NJ.
4. RESERVATION OF TITLE; COPYRIGHT; CONFIDENTIALITY
4.1. Licensed Programs are provided solely in executable files. This Agreement does not provide Power2Ship with title or ownership of the Licensed Programs, but only a limited right to sub-license the Licensed Programs. The Licensed Programs are, and shall remain, the property of WLI and certain third-party licensors who have authorized WLI to incorporate their software into the Licensed Programs.
4.2. Power2Ship acknowledges that the programs, software information, and user materials included in the Licensed Programs contain confidential information and trade secrets, which WLI has entrusted to Power2Ship in confidence to use only as expressly permitted by this Agreement. Power2Ship acknowledges that WLI claims and reserves all rights and benefits afforded under federal law in the programs, software information, and user materials included in the Licensed Programs as copyrighted works.
4.3. The MidLink software is licensed to Power2Ship for the exclusive use with WLI's products. Power2ship commits not to connect to WLI's MidLink software using any other wireless devices and /or terminal (s) and /or GPS devices other than WLI branded products.
4.4. Power2Ship shall protect the programs, software information, and user materials included in the Licensed Programs as confidential information and trade secrets. Power2Ship shall not, at any time, disclose such confidential information and trade secrets to any other person, firm, organization, or employee that does not (consistent with Power2Ship's right of use hereunder)
need to obtain access to the Licensed Programs. Power2Ship shall devote its best efforts to ensure that all Power2Ship's personnel and all other persons afforded access to the Licensed Programs by Power2Ship protect the Licensed Programs as trade secrets and confidential information and refrain from any use or disclosure in any manner not expressly permitted by this Agreement. These restrictions shall not apply to information (1) generally known to the public or obtainable from public sources; (2) readily apparent from the keyboard operation, visual display, or output reports of the Licensed Programs; (3) previously in the possession of Power2Ship or subsequently developed or acquired without reliance on the Licensed Programs; or (4) approved by WLI for release without restriction.
4.5. Restrictions on Use of Licensed Programs and Products. The programs, software information and user materials included in the Licensed Programs and Products may not be decomposed, reverse engineered, reprinted, transcribed, extracted or reproduced, in whole or in part, without the prior written consent of WLI. Power2Ship shall not in any way modify or alter the Licensed Programs without the prior written consent of WLI.
4.6. Survival of Obligations. Power2Ship's obligations under Section 4 of this Agreement shall survive the termination of this Agreement.
4.7. Specific Performance and Injunctive Relief. Power2Ship agrees and acknowledges that, in the event of any breach directly or indirectly by Power2Ship of any provision of this Section 4, monetary damages will not afford WLI an adequate remedy, and irreparable harm may be presumed. Accordingly, WLI shall be entitled to receive injunctive relief from a court of competent jurisdiction for any such breach by Power2Ship.
4.8. Confidentiality. Power2Ship acknowledges that the Licensed Programs and all copies thereof are proprietary, confidential and a trade secret of WLI and the exclusive title shall remain with WLI. All applicable rights to copyrights, patents, trademarks, trade names, logos and identifying slogans and other intellectual property rights in the products are the exclusive property of WLI and Power2Ship shall not contest such ownership. Power2Ship is committing directly or indirectly not to copy and/or not to reverse engineer any of WLI's software and/or hardware products. Power2Ship shall be responsible for any breach of this Section by its employees, agents, subcontractors or consultants. WLI acknowledges that the conceptual functionality of its Unit is in the public domain and this paragraph does not cover the Unit's actual functionality. But this Section 4.8 shall apply to the proprietary WLI implementation and technology.
5. ORDER PROCEDURE AND MANDATORY REPORTS BY POWER2SHIP
5.1. Power2Ship shall place individual written purchase orders for Products from time to time during the term of this Agreement. Each purchase order placed by Power2Ship shall contain the following minimum information: (i) identification of each Product ordered by model number, quantity and price; (ii) shipping instructions and destinations; and (iii) requested delivery date for each Product. Power2Ship will pay for shipping cost from WLI offices in NJ to any destination.
-------- ------- RH JS Page 2
5.2. Any Units shipped by WLI directly to a customer of Power2ship as per Power2Ship's instruction is considered activated at the date of the shipment and the $[*] monthly License Fee will start as of that date .
5.3. Once an order is placed by Power2Ship, such order can't be cancelled and delivery dates for Units can't be rescheduled.
5.4. When Products are ordered for the GPRS network, Power2Ship must provide one SIM card for every Unit ordered within a maximum of two weeks from the date of order. The Sim Cards have to be placed and tested in the Unit as they are being manufactured at the factory. Failure to provide the SIM cards in time will require re-opening and re-test of the Units in the US at a cost of $[*] per Unit to be paid by Power2Ship.
5.5. Every Unit has a serial number. Power2Ship must provide WLI with a weekly report listing the serial number of every Unit shipped to a customer during the prior week.
5.6. Power2Ship must provide a separate weekly report to WLI that lists the serial number of any Units suspended during the prior week and that includes the SIM # and ID, date of return, name of returning customer and reason for return.
5.7. Power2Ship must provide a separate weekly report to WLI that lists the serial number of any Units reactivated (i.e., after having previously been suspended) during the prior week.
5.8. The weekly reports in Section 5.5, 5.6 and 5.7 must be sent to WLI every Monday. The weekly reports are to be sent in Excel file format via e-mail. The report must be sent even if there is no activity during the prior week.
5.9. Power2Ship must provide WLI with a complete copy of its monthly airtime bill for the Units as received by the respective wireless operators (T-Mobile, Verizon, AT&T, etc.). Power2Ship is required to keep all the WLI Unit activations on every wireless network on a separate account from any other vendor's brand used by Power2Ship. Every such monthly invoice (one per operator) must be submitted to WLI within 7 days from the date it is received by Power2Ship and the invoice must include all pages listed on the invoice (example 7of 7 pages). Power2Ship's Chief Executive Officer or Chief Financial Officer
must confirm in writing to WLI every quarter that the account numbers under which the WLI Units are being activated on the various networks are the only accounts under which the WLI units are activated.
6. DELIVERY, TITLE AND RISK OF LOSS
6.1. Delivery shall be F.O.B. WLI's facility in Lyndhurst, New Jersey. WLI shall use its reasonable efforts to deliver Products to Power2Ship on the date of delivery specified by Power2Ship. WLI will use its reasonable efforts to notify Power2Ship of any delays in scheduled delivery dates.
6.2. Title to the Products and the risk of loss or damage shall pass to Power2Ship upon delivery of the Products to Power2Ship or its shipping company of choice. In the event of any loss of or damage to the Products following delivery to the carrier, WLI shall, upon request, cooperate with Power2Ship in connection with the proof of loss claim presented by Power2Ship to the carrier and/or insurer.
6.3. Power2Ship shall bear the entire risk of loss or damage to the Units and any other equipment purchased from WLI (collectively the "Equipment") after installation of the Equipment in the customers' vehicles. The occurrence of any such loss or damage shall not permit Power2Ship to delay or reduce the payment of any fees prescribed under this agreement unless Power2Ship presents WLI with proof of a claim to an insurance company and, in such case, Power2Ship should replace the lost or damaged Equipment within a maximum of 60 days and resume the payment of monthly License Fees to WLI. Power2Ship is advised to obtain and maintain property and casualty insurance for the Equipment against all risks of loss or damage. The amount of such insurance shall not be less than the replacement cost of the Equipment.
6.4. Power2Ship is responsible for maintaining and storing in a safe and secure location backup copies of all data files Power2Ship may place in the System. In no event shall WLI be liable for loss or destruction of Power2Ship's data files for any reason.
7. PAYMENT
7.1. Power2Ship must pay WLI for the Products in full on the day it submits a PO (i.e., the PO is not valid unless accompanied by payment in full).
7.2. The payment of the optional antenna is 50% with the purchase order and 50% when the antennas are ready to be shipped to Power2Ship.
7.3. Monthly License Fees must be paid no later then the 7th of the month for all Units active during the previous month. For example, on the 7th of July Power2Ship will pay for Units that were active in June.
7.4. The purchase price for the Unit does not include repair beyond the first year limited warranty. The renewal of the limited warranty after the first year is at the option of the customer, but in any case, Unit failure does not relieve Power2Ship of its obligation to pay the monthly License Fees to WLI for that Unit. The first year limited warranty starts on the day of the activation of the Unit on a wireless network. As a distributor, Power2Ship should keep a minimum number of Units in stock for immediate replacement for its customers.
7.5. This Agreement is separate and apart from the contract between Power2Ship and its customer. Failure of the customer to pay Power2Ship, for whatever reason, does not affect the obligation of Power2Ship to pay its contractual obligations to WLI.
7.6. If an invoice is past due by more than 30 days, WLI may discontinue providing technical support to Power2Ship until the invoice is paid. If Power2Ship does not make payment of any amount due and payable hereunder within 60 days of the date of invoice, WLI (without prejudice to any other remedy) shall be entitled to interest on all past due amounts at the lower of eighteen percent (18%) per annum or the highest rate permitted by law, plus reimbursement of all costs incurred in collecting such amounts, including court costs and reasonable attorney fees.
8. LICENSED SOFTWARE ACCESS AND AUDIT
8.1. Should a dispute occur concerning the number of Units that Power2Ship has activated with its customer, WLI may designate an independent certified public accountant who may audit Power2Ship's books and records concerning sales of Units and of Licensed Software under this Agreement. Said examination shall be at WLI's sole cost and expense during normal business hours and upon reasonable notice, and may not be conducted more than once annually; provided, however, -------- ------- that if such audit reveals an underpayment by Power2Ship of more than 10% for the period audited, Power2Ship shall pay WLI's actual costs and expenses for performing such audit.
8.2. WLI, at its own discretion, may visit Power2Ship's warehouse at normal business hours to verify the actual number of Units in inventory and/or the number of Units suspended.
-------- ------- RH JS Page 3
8.3. Power2Ship commits to allow WLI free access to its MidLink software via the Internet for ongoing maintenance and updates.
9. PRODUCT INFORMATION OBLIGATIONS
9.1. Product Descriptions and Technical Support Requirements. WLI shall provide Power2Ship with integration documentation and programming information for its Unit.
9.2. Warranty Return Procedure. WLI's warranty return procedure is set forth in Exhibit A.
10. TECHNICAL INFORMATION AND SERVICES
10.1. WLI shall provide, at no cost to Power2Ship, reasonable training, including but not limited to, training of Power2Ship's sales and technical personnel, to enable Power2Ship to meets its obligations under this Agreement, including its obligation to provide service or support to end-users following termination of this Agreement.
10.2. Power2Ship is committed to provide technical support and service for WLI's Products sold by Power2Ship to its customers.
10.3. Power2Ship will receive the first customer call and will have to maintain a minimum inventory level of spare Units to service its customers within 48 hours. WLI will support an end-user only upon Power2Ship's request and only after Power2Ship has tried to provide the support and has failed to fix the problem. WLI will not be involved in any end-user training.
10.4. Power2Ship will maintain a minimum level of inventory of the Product for service purposes, which the parties estimate to be 1% of the aggregate number of Units active on any wireless network at any given time.
11. WARRANTY AND INDEMNIFICATION
11.1. WLI warrants the Products pursuant to the terms of its hardware limited warranty and limited software warranty set forth in Exhibit B hereto. Subject to the terms and conditions of Exhibit A, WLI agrees, in its sole discretion, to repair or replace at its sole cost and expense, any defective Products or parts thereof which are returned to it within the applicable warranty period, provided that the Products have not been altered or repaired other than with authorization from WLI and by its approved procedures; that the Products have not been subjected to misuse, improper maintenance, negligence or accident; that the Products have not been damaged by excessive physical or electrical stress; and that the Products have not had their serial number or any part thereof altered, defaced or removed.
11.2. The warranty and remedies set forth in Exhibit B are exclusive and in lieu of any other warranties or remedies, express or implied, including the implied warranties of merchantability and fitness for intended or particular purpose. The liability of WLI to Power2Ship for any claim whatsoever related to the Products or the Licensed Programs or this Agreement, including any cause of action in contract, tort, or strict liability, shall not exceed the total amount payable under this Agreement by Power2Ship to WLI within the most recent six-month period for the Licensed Programs (if such claim relates to the Licensed Programs), or for the WLI Products (if such claim relates to the WLI Products). Under no circumstances shall WLI be liable to Power2Ship or to any other person or entity for any incidental, special or consequential damages whether arising out of breach of warranty, breach of contract or otherwise even if WLI has been advised of the possibility of such claims or demands.
11.3. To the extent not otherwise provided herein, WLI agrees to defend, indemnify and hold harmless Power2Ship from and against (a) any claim by a third party that a Product supplied hereunder did not conform to WLI's warranty when received by Power2Ship or that WLI failed on request to provide warranty service in accordance with WLI's applicable warranty statement or (b) any claim arising under Section 14 of this Agreement. Power2Ship shall be reimbursed for any actual loss, liability or damage suffered or incurred by Power2Ship and for all reasonable costs and expenses (including reasonable attorneys' fees) incurred by Power2Ship in connection with any action, suit, proceeding, demand, assessment or judgment incident to any of the matters indemnified against in this provision provided that Power2Ship immediately notifies WLI as to the institution of such suit, gives or obtains for WLI such authority as may be necessary for WLI to defend same, and supplies WLI such further information and assistance for the defense thereof as WLI may reasonably require and request. WLI shall have no obligation under this section, and shall have no liability to Power2Ship, if such claim arises due to the alteration or modification of any Product without the prior written consent of WLI.
11.4. Power2Ship shall defend, indemnify and hold harmless WLI from all liability and claims whatsoever for any injury to persons or property or for any loss, expense, or damage incurred by any of Power2Ship's personnel or invitees or by any other person or party (except agents or employees of WLI) arising as a result of or in connection with Power2Ship's acquisition or use of the Products and Licensed Programs or WLI 's performance of its obligations or exercise of its rights hereunder except for those claims which are the result of the willful acts or gross negligence of WLI.
12. INTELLECTUAL PROPERTY RIGHTS INDEMNIFICATION
12.1. WLI represents and warrants that: (i) it owns all right, title and interest in and to the Products necessary to enter into and perform its obligations to Power2Ship hereunder, and (ii) no Product or Licensed Programs sold to Power2Ship during the term of this Agreement, nor the use of any such Product or Licensed Program, nor anything in or contemplated by this Agreement, infringes upon the Intellectual Rights (as defined herein) of any other person or entity, and no suit or proceeding is pending or threatened alleging that any Product or Licensed program, or the use thereof, infringes upon any Intellectual Rights. As used herein, the term "Intellectual Right" means any rights relating to any trademark, trade name, service mark, copyright, patent, trade secret or other proprietary right.
13. USE OF TRADEMARKS
13.1. Power2Ship shall not acquire any right to or interest in any trademark or trade name owned or used by WLI. Power2Ship may use for purposes of this Agreement such trademarks and trade names as appear on the Products and on promotional materials therefore when received by Power2Ship from WLI.
13.2. Power2Ship acknowledges that WLI and its affiliates are the owners and/or licensees of the trademarks, service marks, commercial symbols and trade names used by WLI. Power2Ship shall not contest the right of WLI and its affiliates to the use of any trademarks, service marks, commercial symbols or trade names used or claimed by WLI.
13.3. All WLI's use of Power2Ship's company name, logos, trademarks or other registered identifiers must meet Power2Ship's corporate communications standards and must have Power2Ship's written approval prior to such use by WLI. All Power2Ship's use of WLI's company name, logos, trademarks or other registered identifiers must meet WLI's corporate communications standards and must have WLI's written approval prior to such use by WLI.
-------- ------- RH JS Page 4
13.4. Power2Ship shall have the right to place its trademarks on the Products but shall not obscure any WLI trademarks.
14. TERMINATION
14.1. Termination for Cause by WLI WLI may, upon written notice, terminate this Agreement at any time in the event that (a) Power2Ship defaults or otherwise fails to perform any obligation, warranty, duty, responsibility or other term or condition of this Agreement, including failure to make a payment when due and such default or failure continues unremedied for a period fifteen (15) days after such notice; (b) Power2Ship ceases permanently to carry on its present business, except as a result of a bona fide reorganization in the course of which the Agreement is transferred to a successor company of equal or greater financial resources carrying on substantially the same business; (c) Power2Ship makes an assignment for the benefit of creditors; or admits in writing its inability to pay debts as they mature; or a trustee or receiver of Power2Ship, or of any substantial part of Power2Ship's assets, is appointed by any court; or a proceeding is instituted by or against Power2Ship under any provision of the United States Bankruptcy Code or any other law affecting the rights of creditors and such proceeding is acquiesced in or is not dismissed within sixty (60) days; or (d) WLI's continued performance under this Agreement would cause it to be in violation of (i) any order of any court or regulatory agency having jurisdiction over WLI, or (ii) any law, statute, ordinance or regulation to which WLI is subject.
14.2. Termination for Cause by Power2Ship. Power2Ship may, upon written notice, terminate this Agreement at any time in the event that (a) WLI defaults or otherwise fails to perform any obligation, warranty, duty, responsibility or other term or condition of this Agreement, including failure to pay a refund when due and such default or failure continues unremedied for a period fifteen (15) days after such notice; (b) WLI ceases permanently to carry on its present business, except as a result of a bona fide reorganization in the course of which the Agreement is transferred to a successor company of equal or greater financial resources carrying on substantially the same business; (c) WLI makes an assignment for the benefit of creditors; or admits in writing its inability to pay debts as they mature; or a trustee or receiver of WLI, or of any substantial part of WLI's assets, is appointed by any court; or a proceeding is instituted by or against WLI under any provision of the United States Bankruptcy Code or any other law affecting the rights of creditors and such proceeding is acquiesced in or is not dismissed within sixty (60) days; or (d) Power2Ship's continued performance under this Agreement would cause it to be in violation of (i) any order of any court or regulatory agency having jurisdiction over Power2Ship, or (ii) any law, statute, ordinance or regulation to which Power2Ship is subject.
14.3. Termination of this Agreement shall not release either party from the obligation to pay any sums to the other party whether then or thereafter due or operate to discharge any liability which has been incurred prior to the effective date of such termination.
14.4. Upon expiration of this Agreement or termination by either party, Power2Ship may sell off any remaining inventory of the Products or Licensed Software acquired prior to termination.
14.5. Neither party shall be liable to the other party for any special, incidental, or consequential damages arising in connection with, or out of termination of, this agreement.
15. NOTICES
Any notice or communication given pursuant to this Agreement shall be in writing, delivered in person or may be telegraphed, telexed, sent by facsimile transmission or United States certified, registered or express mail, Federal Express or other private courier, postage prepaid, return receipt requested in the event of delivery by mail. In the event notice shall be given by facsimile transmission an original of such notice shall simultaneously be deposited in United States mail, postage prepaid, or sent by Federal Express or other private courier, addressed as hereinafter required. Notices shall be given to the parties addressed as set forth in the first paragraph of the Agreement or at such other address as the parties may from time to time designate by notice hereunder. Notices shall be given when delivered personally, or when
telegraphed, telexed or sent by facsimile transmission if sent during regular business hours of the recipient and if not, on the next following business day or if mailed, at midnight on the third business day after the date of mailing or if sent by Federal Express or by other private courier on the next following business day.
If to WLI: Wireless Links, Inc. Attention: Joe Shayovitch 1050 Wall Street Suite 320 Lyndhurst, New Jersey 07071 Facsimile No. 201-531-9795
If to Power2Ship: Freight Rate, Inc. Attention: Richard Hersh 10400 Griffin Rd., Suite 101 Ft. Lauderdale, FL 33328
16. GENERAL
16.1. This Agreement, its interpretation and construction, and the remedies for its enforcement or breach are to be applied in accordance with the laws of the State of New Jersey.
16.2. Failure on any occasion by WLI or Power2Ship to enforce any term or condition of this Agreement shall not prevent or bar enforcement on any other occasion.
16.3. Neither party shall be deemed to be in default of any provision hereof or be liable for any delay, failure in performance or interruption of service resulting directly or indirectly from act of war, act of God, act of civil or military authority, civil disturbance or any other cause beyond its reasonable control.
16.4. The relationship between WLI and Power2Ship is that of independent contractors. Neither party, nor its agents or its employees shall be deemed to be the agent of the other party. Neither party shall have the right to bind the other party, transact any business in the other party's name or in its behalf or incur any liability for or on behalf of the other party.
16.5. Neither WLI nor Power2Ship shall intentionally disclose, and each party shall use reasonable efforts to prohibit, the unintentional disclosure to any third party of any confidential or proprietary information of the other party during the term of this Agreement and for a period of one (1) year thereafter.
16.6. The headings to the paragraphs of this Agreement are included merely for convenience of reference and shall not affect the meaning of the language included therein.
16.7. No provisions of this Agreement may be altered or amended unless such alteration or amendment is in writing and executed by duly authorized officers of both parties, except where otherwise specifically provided for in this Agreement.
16.8. The covenants contained in this Agreement which, by their terms, require or contemplate performance by the parties after the expiration or termination of this Agreement shall be enforceable notwithstanding said expiration or termination.
16.9. This Agreement (including all Exhibits hereto), constitutes the entire Agreement and understanding between the parties relating to the subject matter hereof, supersedes all other agreements, oral or written, heretofore made between the parties with respect to such subject matter, supersedes the standard terms and conditions in Power2Ship's purchase order form and WLI's quotation, invoice or acknowledgment form, and supersedes any other terms or conditions of purchase proposed by Power2Ship or WLI. This Agreement may not be assigned by either party without the prior written consent of the other party. If any provision in this Agreement should be held illegal or unenforceable, no other provision of this Agreement shall be affected.
-------- ------- RH JS Page 5
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.
Wireless Links, Inc. Jaguar Investments, Inc.
By: By: ------------------------- ----------------------------- Its: Its: Chief Executive Officer ------------------------ ----------------------------
-------- ------- RH JS Page 6
EXHIBIT A
PRODUCT WARRANTY INFORMATION
WARRANTY
A) HARDWARE LIMITED WARRANTY - WLI will provide a one year limited warranty for its hardware products as per the terms and conditions described in "Attachment B". The first year warranty starts with the date of shipment and terminates on the anniversary of the first year.
B) Extended limited warranty beyond the first year is available at the same terms and conditions described in "Attachment B ". The second year Limited warranty price will be determined between the parties based on the total number of units to be under warranty in a particular year.
- The Warranty is a limited warranty that does not cover damage caused by improper use, abuse or use for other than intended purposes. The Warranty does not cover LCD screen or batteries. See Attachment B, Limited Warranty for the Acknowledger(TM) and related accessories.
- The parties understand and agree that WLI does not warrant any part of the Peripheral equipment that is not sold directly by WLI
- Within 14 days from discovery of a defect, the Integrator shall notify WLI in writing of said defect. Said notice of defect shall contain a reasonably detailed description of the defect as determinable by the Integrator. Said notice shall also indicate the serial numbers of all Acknowledgers and the release levels of software in which the defect was discovered.
C) DEFECTIVE EQUIPMENT RETURN. Defective equipment will be returned promptly to WLI's repair centre at the Power2Ship cost. The integrator will return for repair products under warranty and will pay the shipping cost to WLI and will carry the risk of loss until the package has been delivered to WLI. WLI will pay the shipping cost back via standard "UPS ground" and will carry the risk of loss until the package is delivered to the integrator.
For each unit, prior to return Power2Ship must send WLI a description of the problem including the serial number and date of shipping and date of purchase. Every return must have a Return Merchandise Authorisation number (RMA) as issued by WLI. Replacement or repaired units will be returned to the Integrator within 14 working days of receipt of a defective unit at WLI's cost.
D) LIMITED WARRANTY OF LICENSED PROGRAMS. WLI warrants, for the benefit of the Integrator only, that at the time Integrator's license of Licensed Programs commences, WLI has the right and authority to license the Licensed Programs to Integrator, and the Licensed Programs conform in all material respects to any specifications supplied to Integrator in writing by WLI. WLI does not warrant that the Licensed Programs can be used without interruption or that they are error-free.
Any implied warranties of the Licensed Software are LIMITED to one year starting from the date it was shipped to the integrator or starting with the date specified as the starting date in the leasing and / or purchase agreement with the Integrator. If the date is different then the shipping date to the integrator the integrator has to provide a copy of the agreement with the Integrator to verify the start of warranty.
E) CORRECTIONS AND UPDATES OF LICENSED PROGRAMS.
WLI shall maintain the accuracy of the Licensed Programs by making a reasonable attempt to correct any programming or database errors that Integrator brings to WLI attention. In addition, WLI from time to time may furnish Integrator with further releases of the Licensed Programs to provide corrections of significant programming or database errors and updates of database information. WLI obtains the information contained in the database of the Licensed Programs from established outside sources, and WLI makes every effort to keep the information up-to-date, but it cannot guarantee absolute accuracy and timeliness. After the expiration of the initial term of this Agreement, WLI shall provide any correction and update assistance only on mutually acceptable terms at WLI's customary rates then in effect. WLI reserves the right to make modifications and enhancements of the Licensed Programs (other than simple corrections and updates
-------- ------- RH JS Page 7
EXHIBIT B End User Warranty
LIMITED WARRANTY FOR THE ACKNOWLEDGER(TM) AND RELATED ACCESSORIES ----------------------------------------------------------------- Wireless Links (WLI) warrants to the original end user purchaser ("You") that the Equipment will be free from defects in workmanship and materials ("Limited Warranty") for a period of one (1) year from the date of the purchase of the Equipment (the "Warranty Period"). This limited warranty does not&sbsp;apply to normal wear and tear and does not cover repair or replacement of Equipment damaged by misuse, accident, abuse, neglect, misapplication, alteration of any kind (including upgrades and expansions)' disaster or defects due to repairs or modifications made by anyone other than the Manufacturer or its authorized service representative. In addition, this limited warranty does not apply to physical damage of any nature whatsoever to the surface of the display, to the surface of the signature pad of the Equipment or to any data stored within the Equipment. WLI shall not have any liability whatsoever with respect to any data stored within the Equipment. Before returning any Equipment under this limited warranty, call WLI and request a return merchandise authorization number (RMA - number)' then ship the Equipment in the original packaging or its equivalent to the location designated by WLI accompanied by proof of purchase, a brief written explanation of the defects, the RMA Number and a return shipment address. WLI at
its discretion will repair or replace the Equipment in accordance with the terms of this limited warranty and send it back to you. You are responsible for the cost of shipping the Equipment to the location designated by WLI and the risk of loss or damage in transit. WLI will bear the cost of return shipment to you and the risk of loss or damage during such return shipment. REPAIR OR REPLACEMENT BY WLI AS PROVIDED IN THIS LIMITED WARRANTY IS YOUR EXCLUSIVE REMEDY UNDER THIS LIMITED WARRANTY. WLI SHALL NOT BE LIABLE FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES. WLI DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, OR STATUTORY INCLUDING BUT NOT LIMITED TO, ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY WARRANTY ARISING OUT OF ANY PROPOSAL, SPECIFICATION OR SAMPLE. ANY SOFTWARE PROVIDED WITH THE EQUIPMENT IS PROVIDED UNDER A SEPARATE SOFTWARE LICENSE AGREEMENT.
-------- ------- RH JS Page 8
EXHIBIT C-2 END-USER PROGRAM LICENSE AGREEMENT
WIRELESS LINKS (WLI) SOFTWARE LICENSE AGREEMENT ----------------------------------------------------
Licensed Programs are provided solely in executable files and consist of the following programs: MidLink (WLI's middleware), MapLink, and all G3001 related programming tools,
1. RESERVATION OF TITLE. This Agreement does not provide the Power2Ship (you) with title or ownership of the Licensed Programs, but only a right of limited use of one copy per software package per license. The Licensed Programs are, and shall remain, the property of Wireless Links and certain third-party licensers who have authorized Wireless Links to incorporate their software into the System. Subject to a distribution agreement the Power2Ship (you) can redistribute the licensed products but you can't reproduce the Licensed Programs.
2. COPYRIGHT PROTECTION. Power2Ship acknowledges that the programs, software information, and user materials included in the Licensed Programs contain confidential information and trade secrets, which WLI(TM) has entrusted to Power2Ship in confidence to use only as expressly permitted by this Agreement. Power2Ship acknowledges that Wireless Links claims and reserves all rights and benefits afforded under federal law in the programs, database information, and user materials included in the Licensed Programs as copyrighted works.
3. PRESERVATION OF SECRECY AND CONFIDENTIALITY. Power2Ship shall protect the programs, database information, and user materials include din the Licensed Programs as confidential information and trade secrets. Power2Ship shall not, at any time, disclose such confidential information and trade secrets to any other person, firm, organization, or employee that does not (consistent with Power2Ship's right of use hereunder) need to obtain access to the Licensed Programs. Power2Ship shall devote its best efforts to ensure that all Power2Ship's personnel and all other persons afforded access to the Licensed Programs by Power2Ship protect the Licensed Programs as trade secrets and confidential information and refrain from any use of disclosure in any manner not expressly permitted by this Agreement. These restrictions shall not apply to information (1) generally know to the public of obtainable from public sources; (2) readily apparent from the keyboard operation, visual display, or output reports of the Licensed Program; (3) previously in the possession of Power2Ship or subsequently developed or acquired without reliance on the Licensed programs; or (4) approved by WLI for release without restriction.
4. RESTRICTIONS ON USE OF LICENSED PROGRAMS. The programs, software information, and user materials included in the Licensed Programs may not be decompiled, reverse engineered, reprinted, transcribed, extracted, or reproduced, in whole or in part, without the prior written consent of WLI. Power2Ship shall not in any way modify or alter the Licensed Programs without the prior written consent of WLI.
5. SURVIVALS OF OBLIGATIONS; RETURN OF PROGRAMS. Power2Ship's obligations under this Agreement shall remain in effect for as long as Power2Ship continues to use the Licensed Programs. Power2Ship shall promptly return all materials and documentation relating to the Licensed Programs provided by WLI upon (1) termination of either this Agreement of Power2Ship's license of the Licensed Programs, for any reason, or (2) discontinuance or abandonment of Power2Ship's use or control of the Licensed Programs.
6. POWER2SHIP'S DATA FILES. Power2Ship is responsible for maintaining and storing in a safe and secure location backup copies of all data files Power2Ship may place in the System. In no event shall WLI(TM) be liable for loss or destruction of Power2Ship's data files for any reason.
7. LIMITED WARRANTY ON LICENSED PROGRAMS. WLI(TM) warrants, for the benefit of Power2Ship only, that at the time Power2Ship's license of Licensed Programs commences, WLI(TM) has the right and authority to license the Licensed Programs to Power2Ship, and the Licensed Programs conform in all material respects to any specification supplied to Power2Ship in writing by WLI(TM). WLI(TM) does not warrant that the Licensed Programs can be used without interruption or that they are error-free. Any implied warranties of the Licensed Software are LIMITED to one year starting from the date of purchase or for the period described in the contractual agreement with the Power2Ship. For best and fast service WLI recommends to Power2Ship to install on the server NT computer a modem fax with PC-Anywhere software and a dedicated phone line to allow WLI to dial in for routine maintenance.
8. CORRECTIONS AND UPDATES OF LICENSED PROGRAMS. WLI shall maintain the accuracy of the Licensed Programs by using its best endeavors to correct any programming or database errors that Power2Ship brings to WLI(TM)'s attention. In addition, during the warranty period and/or duration of this agreement WLI from time to time may furnish Power2Ship with further releases of the Licensed Programs to provide corrections of significant programming or software errors. After the expiration of this agreement, WLI shall provide any correction and update assistance only on mutually acceptable terms at WLI's customary rates then in effect. WLI(TM) reserves the right to make optional modifications and enhancements of the Licensed Programs (other than simple corrections and updates) available only at additional charges.
-------- ------- RH JS Page 9 | Highlight the parts (if any) of this contract related to "Audit Rights" that should be reviewed by a lawyer. Details: Does a party have the right to audit the books, records, or physical locations of the counterparty to ensure compliance with the contract? | {
"answer_start": [
20782
],
"text": [
"WLI, at its own discretion, may visit Power2Ship's warehouse at normal business hours to verify the actual number of Units in inventory and/or the number of Units suspended."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Non-Compete" that should be reviewed by a lawyer. Details: Is there a restriction on the ability of a party to compete with the counterparty or operate in a certain geography or business or technology sector?
Context: Exhibit 10.26 CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [*], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. PROMOTION AND DISTRIBUTION AGREEMENT This Promotion and Distribution Agreement including all exhibits (collectively referred to as the "Agreement"), effective as of 1 August 2011 (the "Effective Date"), is made by and between Whitesmoke Inc., with registered offices/principle place of business at 501 Silverside Road, Suite 105, Wilmington DE 19809, USA, ("Distributor"), and Google Inc whose principle place of business is at 1600 Amphitheatre Parkway, Mountain View, CA 94043, USA ("Google").
"Bundle" means the Distribution Products bundled with the Distributor App(s). "Chrome Browser" means the machine-readable binary code version of the Google Chrome browser provided to Distributor in connection with this Agreement, and any modifications or updates to it that Google may provide to Distributor. "Chrome Browser Installer" means: (a) the machine-readable binary code version of the installer provided to Distributor in connection with this Agreement that installs the Chrome Browser, and any modifications, updates or upgrades to it that Google may provide to Distributor; and (b) the Chrome Browser Criteria Checker. "Chrome Use Event" means an event that indicates an [* ] has occurred. "Chrome Server Communication" means a communication that, as determined solely by Google, is sent for the purpose of indicating that an End User: (a) is [* ] to the [* ]; and (b) has kept the [* ] open for a minimum of [* ] during a [* ] (whether during the [* ] or a [* ] of the Chrome Browser). "Criteria Checker" means a set of software routines (and any updates to them) provided to Distributor by Google, as part of a software library, that check certain criteria (as determined by Google and modified by Google from time to time) to determine if the Chrome Browser or Google Toolbar (as applicable) can be installed on an End User's operating system. Accordingly, "Chrome Browser Criteria Checker" means the Criteria Checker provided by Google in respect of the Chrome Browser and "Google Toolbar Criteria Checker" means the Criteria Checker provided by Google in respect of the Google Toolbar. "Distributor App(s)" means the following application (and successor versions of such software): the trial version of the WhiteSmoke Writer (currently called WhiteSmoke 2011) available on a worldwide basis, but for the avoidance of doubt shall not mean any other products of Distributor, including without limitation the full paid version of Whitesmoke Writer or any version of Whitesmoke "Translator" software, regardless of whether Whitesmoke Writer incorporates any translation functionality. *Confidential treatment requested Google Confidential
1. DEFINITIONS
1.1 In this Agreement unless expressly stated otherwise:
- 1 -
"Distribution Products" means:
"End User" means an end user customer of Distributor who is located in the Territory. "EULA" means the end user license agreement applicable to a Product, which end user license agreement may be updated or modified by Google in its sole discretion from time to time. "False" means a "false" response (or equivalent negative response) given by the Criteria Checker. "Google Program Guidelines" means the policy and implementation guidelines applicable to the Products as updated by Google and provided to Distributor from time to time. "Google Toolbar" means the machine-readable binary code version of the Google toolbar for Internet Explorer provided to Distributor in connection with this Agreement, and any modifications or updates to it that Google may provide to Distributor. "Google Toolbar Installer" means: (a) the machine-readable binary code version of the installer provided to Distributor in connection with this Agreement that installs the Google Toolbar, and any modifications, updates or upgrades to it that Google may provide to Distributor; and (b) the Google Toolbar Criteria Checker. "Google Trademarks" means all names, trade names, trademarks, and logos used by Google in connection with the Products. "Group Company" means in relation to each of the parties:
"Install Completed" occurs when an End User has completed the install process for a Bundle and the install completed screen is shown to the End User in accordance with Exhibit B.
(a) as at the Effective Date, the Google Toolbar Installer and the Chrome Browser Installer; and
(b) if Distributor notifies Google at any time after the Effective Date that it wishes to bundle the full Google Toolbar and Google provides its approval in writing (including email), the Google Toolbar; and
(c) if Distributor notifies Google at any time after the Effective Date that it wishes to bundle the full Chrome Browser and Google provides its approval in writing (including email), the Chrome Browser.
(a) any parent company of that party; and
(b) any corporate body of which that party directly or indirectly has control or which is directly or indirectly controlled by the same person or group of persons as that party.
- 2 -
"Intellectual Property Rights" means all copyright, moral rights, patent rights, trade marks, design right, rights in or relating to databases, rights in or relating to confidential information, rights in relation to domain names, and any other intellectual property rights (registered or unregistered) throughout the world. "IPO" means an initial public offering of all or any of the shares in Distributor or securities representing those shares for the purposes of being publically traded or quoted on an investment exchange. "Maximum Distribution Commitment" means [* ] , as may be increased by Google pursuant to Clause 4.2 (Maximum Distribution Commitment). "[ * ]" means a [ * ] or [ * ] entered by the [ * ] into the [ * ] located at the [ * ] of the [ * ]. [ * ] do not include the events listed in Clause 3.9(c)(ii). "Products" means the Google Toolbar, Google Toolbar Installer, Chrome Browser and Chrome Browser Installer. "[ * ]" means the [ * ] received by a [ * ] that, as determined solely by [ * ]: (a) is [ * ] by a [ * ] obtained via a [ * ]; (b) is the next [ * ] that occurs following a [ * ]; and (c) includes the [ * ]. [ * ] only include those [ * ] which meet the requirements set out in Clause 3.9(c)(iii). "[ * ]" means a [ * ] received by [ * ] that, as determined solely by [ * ]: (a) is [ * ] by a [ * ] obtained via a [ * ]; (b) is sent for the [ * ] of indicating that an [ * ]: (i) has opened [ * ] following installation of the [ * ], (ii) is [ * ] to the [ * ], and (iii) has [ * ] a [ * ] into the [ * ]; and (c) includes the correct [ * ]. [ * ] only include those [ * ] which meet the requirements set out in Clause 3.9(c)(i). "Term" means the earlier of: (a) the end of the two year period from the Effective Date to 31 July 2013; or (b) the last day of the calendar month within which the Maximum Distribution Commitment is reached. "Territory" means those countries listed in Exhibit A, excluding any territory or state prohibited under Clause 11.5. "True" means a "true" response (or equivalent positive response) given by the Criteria Checker.
*Confidential treatment requested Google Confidential
1.2 In this Agreement, the words "include" and "including" will not limit the generality of any words preceding them.
2. LICENSE GRANTS AND RESTRICTIONS
2.1 Products License Grant. Subject to the terms and conditions of this Agreement, Google grants to Distributor a [* ] license during the Term to: (a) bundle the Distribution Products, in machine-readable binary code format only, solely with Distributor App(s); (b) distribute Bundles directly (or indirectly, subject to Clause 2.2 (Third Party Distribution)) to End Users in the Territory; (c) when indicated by the applicable Criteria Checker and requested by the End User in accordance with clause 3.2 (Form of Distribution Offering), install the Chrome Browser or the Google Toolbar (as applicable) on the End User's system using the Google Installers; and (d) reproduce (or have reproduced by Third Party Distributors as defined in Clause 2.2 (Third Party Distribution)), the Distribution Products to the extent necessary to exercise the rights granted in (a), (b) and (c).
- 3 -
*Confidential treatment requested Google Confidential
2.2 Third Party Distribution. Distributor may distribute Bundles to third parties solely for redistribution of such Bundles by those third parties directly to End Users (such third parties, "Third Party Distributors"); provided that: (a) in connection with any and all such offers or distributions, Distributor shall, and shall ensure that each Third Party Distributor shall, distribute Bundles in a manner that is no less protective of the Products and Google than the terms of this Agreement, and (b) Google in its sole discretion may direct Distributor to cease distributing Bundles to any Third Party Distributor that in Google's sole discretion would either: (i) harm or devalue Google's business, brand or name, or (ii) violate Google's privacy policy, and Distributor shall cause any such Third Party Distributor to cease distribution of Bundles as soon as practicable but in no event longer than [ * ] following receipt of such request from Google. Distributor shall ensure that no Third Party Distributor bundles anything in or with Bundles without Google's prior written approval, and if Google grants its approval, Distributor shall provide Google with information about any such bundling arrangements at Google's request.
2.3 License Grant Restrictions. Distributor shall not, and shall not allow any third party to (except to the extent that such prohibitions are not permitted by law): (a) disassemble, de-compile or otherwise reverse engineer the Products or otherwise attempt to learn the source code or algorithms underlying the Products; (b) modify the Products, create derivative works from or based on the Products; (c) except as expressly set out in this Agreement, provide, sell, license, distribute, lease, lend, or disclose the Products to any third party; (d) use the Products for timeshare, service bureau, or other unauthorised purposes; or (e) exceed the scope of any license granted to Distributor under this Agreement.
2.4 Trademark License and Use. Subject to the terms and conditions of this Agreement, Google grants to Distributor a limited, [ * ] license during the Term to use the Google Trademarks, in accordance with Google's trademark usage guidelines, solely to market and promote the Products consistent with this Agreement, provided that all use of the Google Trademarks shall be subject to Google's prior review and advance written consent. All uses of the Google Trademarks, and all goodwill associated therewith, shall inure solely to the benefit of Google.
2.5 Trademark Restrictions. Distributor shall not remove, modify, adapt, or prepare derivative works of any Google Trademarks or Google copyright notices, or other Google proprietary rights notices.
2.6 Updated Versions of Distribution Products. Google may request that Distributor distribute the latest version of the Distribution Products. Distributor shall begin such distribution within [ * ] following Google's request.
3. DISTRIBUTION AND OTHER OBLIGATIONS
3.1 Delivery. Google shall deliver the Distribution Products electronically to Distributor at a [ * ] following the Effective Date and prior to Launch (as defined in Clause 3.4 (Launch)).
- 4 -
User to review such EULA via a hyperlink to such EULA: and (c) a button on which each End User may click indicating agreement to the terms of such EULA. In the event that an End User does not affirmatively agree to install the Google Toolbar or Chrome Browser, by clicking on the button to agree to the terms of the applicable EULA, then the Google Toolbar or Chrome Browser (as applicable) shall not be installed on such End User's computer.
*Confidential treatment requested Google Confidential
3.2 Form of Distribution Offering. Distributor shall ensure that the form of any offering of the Products by Distributor, including the timing, relative and absolute placement, visual presentation to End Users, initial launch of the Products (and any modifications to them) and the presentation of any other applications or products offered with the Products, conforms to the Google Program Guidelines and to Exhibit B of this Agreement. Except as set out in Clause 2 (Licence Grant and Restrictions) and except for End Users as expressly set out in this Agreement, Distributor shall not offer or distribute the Products to any third party. If, during the Term, Exhibit B and the Google Program Guidelines conflict, Exhibit B will take precedence with respect to the conflicting terms.
3.3 Guidelines for Applications. Distributor shall comply, and shall ensure that each Third Party Distributor complies, with the Guidelines for Applications set out in Exhibit C.
3.4 Launch. Distributor shall begin distribution of Bundles in accordance with this Agreement ("Launch") within [ * ] days following the Effective Date (the date of such Launch, the "Launch Date"). Beginning on the Launch Date and continuing throughout the Term, Distributor shall ensure that [ * ]Distributor App distributed by or on behalf of Distributor is bundled with the Distribution Products as set out in this Agreement.
3.5 Exclusivity.
(a) [ * ]
(b) [ * ].
3.6 EULA. In connection with Distributor's distribution of the Products under this Agreement, and before the Google Toolbar or Chrome Browser can be installed by an End User, Distributor shall provide each End User with: (a) a clear statement inviting the End User to agree to the terms of the applicable EULA; (b) the opportunity for each End
3.7 Accurate Reproduction. Distributor agrees that in connection with its exercise of the right granted in Clause 2.1 (Products Licence Grant) it shall accurately reproduce the Distribution Products and shall not: (a) modify any Product (including modify the Chrome Browser or Google Toolbar configuration files or registry settings); or (b) insert into the Products any viruses, worms, date bombs, time bombs, or other code that is specifically designed to cause the Products to cease operating, or to damage, interrupt, or interfere with any Products or End User data.
3.8 [ * ]. During the Term and for a period of [ * ] following the expiration or termination of this Agreement, Distributor shall not, and shall not engage any third party to: (a) restrict, modify, or reconfigure in any manner any of the Products that have been installed by End Users (such End Users, "Installed Base End Users") in connection with this Agreement; or (b) engage in activities that encourage Installed Base End Users to modify, uninstall or reconfigure any or the Products.
- 5 -
*Confidential treatment requested Google Confidential
3.9 Reporting.
(a) By Distributor. During the Term, Distributor shall, on a [ * ] basis, no later than the [ * ] of the following [ * ], provide Google with a report identifying, on a country-by-country basis, the total number of: (i) Bundles distributed; (ii) Installs Completed; (iii) Google Toolbar offers presented to End Users; and (iv) Chrome Browser offers presented to End Users, in the preceding [ * ].
(b) By Google. During the Term, Google shall on a [ * ] basis, provide Distributor with a report of the [ * ] of [ * ] and [ * ] in the preceding [ * ] broken down on a [ * ] basis and by the [ * ] in Exhibit A.
(c) Parameters. Distributor acknowledges, and shall cooperate with Google to [ * ] that:
(i) [ * ]: (A) are determined on a [ * ] (B) are only [ * ]; (C) do not include [ * ] from computers on which another [ * ] of the [ * ] is [ * ]; and (D) do not include use of the [ * ] in any [ * ] other than [ * ].
(ii) [ * ] do not include: (A) [ * ] that has been [ * ], (B) [ * ] or [ * ] in any area other than in the [ * ], or (C) any other [ * ] of the [ * ] designed to artificially [ * ].
(iii) [ * ]: (A) are determined on a [ * ]; (B) are only [ * ]; (C) are not sent in response to [ * ] from computers on which another [ * ] of the [ * ] is [ * ]; and (D) are sent only in response to [ * ] from computers that meet the [ * ] requirements as determined by the [ * ].
(d) Records and Audit Rights. Distributor will keep and maintain complete and accurate books, records, and accounts relating to this Agreement. During the Term, and for a period of [ * ] thereafter, Google may audit Distributor's relevant records to confirm Distributor's compliance with this Agreement. Google's auditor will only have access to those books and records of Distributor which are reasonably necessary to confirm such compliance.
4. PAYMENT TERMS
4.1 Payments. Subject to Clause 4.2, during the Term on a [ * ] basis, Google shall pay to Distributor the applicable payment set out in Exhibit A for each [ * ] and each [ * ] that occurred during the previous [ * ]. Google shall determine the [ * ] in respect of which each [ * ] and [ * ] took [ * ] (using the relevant [ * ]). Notwithstanding the foregoing, in no event will the [ * ] of [ * ] by Google to Distributor for all [ * ] and all [ * ] in respect of [ * ] (as set out in Exhibit A) exceed [ * ] ([ * ]) of the [ * ] to Distributor for such [ * ].
4.2 [ * ]. Notwithstanding anything to the contrary, in no event shall the [ * ] paid or payable to Distributor by Google pursuant to Clause 4.1 (Payments) exceed the [ * ]. Google shall have the right, at its sole option, to increase the [ * ] by providing written notice to Distributor no later than [ * ] prior to the end of the Term. The foregoing sentence shall not relieve Google of any payment obligations that have accrued prior to the achievement of the [ * ].
4.3 Payment Terms. All payments under this Agreement shall be made in [ * ] in the [ * ] following the [ * ] for which the payments are applicable. The party receiving payment will be responsible for any bank charges assessed by the recipient's bank. In addition to other rights and remedies Google may have, Google may offset any payment obligations to Distributor that Google may incur under this Agreement against any product or service fees owed to Google and not yet paid by Distributor under any agreement between Distributor and Google. Google may also withhold and offset against its payment obligations under this Agreement, or require Distributor to pay to Google within [ * ] of any invoice, any amounts Google [ * ] overpaid to Distributor in prior periods.
- 6 -
*Confidential treatment requested Google Confidential
4.4 Taxes. All payments under this Agreement are exclusive of taxes imposed by any governmental entity. Google shall pay any applicable taxes imposed by governmental agencies with respect to the transactions under this Agreement other than taxes based upon Distributor's income. Google shall promptly provide to Distributor a copy of an official tax receipt or other appropriate evidence of any taxes imposed on payments made under this Agreement. When Distributor has the legal obligation to collect any applicable taxes, the appropriate amount shall be invoiced to and paid by Google unless Google provides Distributor with a valid tax exemption certificate authorised by the appropriate taxing authority.
4.5 Interest. Distributor may charge interest at the rate of [ * ] above the base rate of Barclays Bank PLC from time to time, from the due date until the date of actual payment, whether before or after judgment, on any payment pursuant to this Clause 4 (Payment Terms) which is overdue.
5. TERM AND TERMINATION
5.1 Term. This Agreement shall commence on the Effective Date and, unless earlier terminated as set out in this Agreement, shall continue for the Term.
5.2 Termination for breach. A party may suspend performance and/or terminate this Agreement, with immediate effect, if the other party:
(a) is in material breach of this Agreement where the breach is incapable of remedy; or
(b) is in material breach of this Agreement where the breach is capable of remedy and fails to remedy that breach within thirty (30) days after receiving written notice of such breach.
5.3 Termination for insolvency. A party may suspend performance and/or terminate this Agreement with immediate effect, if:
(a) the other party enters into an arrangement or composition with or for the benefit of its creditors, goes into administration, receivership or administrative receivership, is declared bankrupt or insolvent or is dissolved or otherwise ceases to carry on business; or
(b) any analogous event happens to the other party in any jurisdiction in which it is incorporated or resident or in which it carries on business or has assets.
5.4 Change of Control. [ * ] may terminate this Agreement immediately upon written notice if there is a Change of Control of [ * ]. In this Clause the term "Control" shall mean the possession by any person(s) directly or indirectly of the power to direct or cause the direction of another person and "Change of Control" is to be construed accordingly. [ * ] expected to experience, or [ * ] is experiencing, such Change of Control shall notify [ * ] in writing of this before or within [ * ] after the Change of Control. If [ * ] has not exercised its right of termination under this Clause within [ * ] following the later of (i) the receipt of notice of [ * ] Change of Control or (ii) the Change of Control event, that [ * ]. The parties acknowledge that as at the Effective Date, [ * ] may [ * ] its [ * ]. [ * ] agrees not to exercise its termination right under this clause 5.4 if [ * ], provided that following [ * ]:
- 7 -
For the avoidance of doubt, if following [ * ] there is a transfer of shareholding or interests in Distributor to any existing or new shareholder(s) which results in any person or persons subsequently gaining Control of Distributor, then Google may exercise its right to terminate in accordance with this clause 5.4..
*Confidential treatment requested Google Confidential
5.4.1. no one person Controls [ * ] (other than an[ * ] which is not a [ * ] of [ * ] (as determined by [ * ]in its sole discretion)); and
5.4.2. no [ * ] of [ * ] (as determined by [ * ] in its sole discretion) holds a [ * ] or [ * ] in [ * ].
5.5 Additional Termination Rights. Google may terminate this Agreement immediately upon written notice to Distributor if: (a) Distributor breaches Clause 2 (License Grants and Restrictions), Clause 3.6 (EULA), Clause 3.7 (Accurate Reproduction), or Clause 6 (Confidential Information), (b) if Google believes, in good faith, that the Distributor has violated or caused Google to violate any Anti-Bribery Laws (as defined in Clause 8.5) or that such a violation is reasonably likely to occur, or (c) Distributor is in material breach of this Agreement more than [ * ] notwithstanding any cure of such breaches. Notwithstanding anything to the contrary, in the event that the government or controlling body of any country or territory in which Bundles are distributed imposes any law, restriction or regulation that makes it illegal to distribute the Products, or any portion of them, into such country or territory, or if any such law, restriction or regulation places a substantial burden on Google, where substantial is measured with respect to Google's economic benefit under this Agreement, as determined by Google in its reasonable and good faith judgment (such substantial burden, a "Substantial Burden") then either party or Google (in the case of a Substantial Burden) may require the suspension of all distributions of Bundles in such country or territory until such time as such law, restriction or regulation is repealed, nullified or modified such that it is no longer illegal or a Substantial Burden (in the case of Google), as applicable, for Bundles to be distributed in such country or territory ("Special Suspension"); provided, however, that Distributor's obligations under Clause 3.5 (Exclusivity) shall not apply in respect of the relevant country or territory during any period of Special Suspension. If a period of Special Suspension extends for more than [ * ] may then terminate this Agreement (in part) in respect of the affected country or territory only, such termination to take effect upon written notice[ * ]. [ * ] will use its reasonable endeavours to provide [ * ] with [ * ] (to the extent it is practicable to do so) of the [ * ] or [ * ] (which was commenced by [ * ]).
5.6 Effect of Termination. Upon expiration or termination of this Agreement: (a) all rights and licenses granted under this Agreement shall immediately cease; (b) Distributor shall (and shall ensure that any Third Party Distributors shall) immediately stop reproducing the Products and offering or distributing Bundles; (c) Distributor shall return or destroy (and a duly appointed officer of Distributor shall certify to such destruction) all copies of the Products and any other Google Confidential Information in its possession; and (d) the fees payable to Distributor shall immediately cease accruing and Google shall within [ * ] following such expiration or termination pay to Distributor any undisputed amounts which have accrued from the time of the most recent payment to Distributor through the date of termination or expiration of this Agreement. Clauses 5.6 (Effect of Termination), 6 (Confidential Information), 7 (Proprietary Rights), 9 (Limitation of Liability), 10 (Indemnification) and 11 (General) shall survive the termination or expiration of this Agreement.
- 8 -
*Confidential treatment requested Google Confidential
6. CONFIDENTIAL INFORMATION
6.1 In this Agreement, "Confidential Information" means information disclosed by (or on behalf of) one party to the other party under this Agreement that is marked as confidential or, from its nature, content or the circumstances in which it is disclosed, might reasonably be supposed to be confidential, including the terms and conditions (including the Exhibits) of this Agreement. It does not include information that the recipient already knew, that becomes public through no fault of the recipient, that was independently developed by the recipient or that was lawfully given to the recipient by a third party.
6.2 The recipient of any Confidential Information shall not disclose that Confidential Information, except to Group Companies, employees and/or professional advisors who need to know it and who have agreed in writing (or in the case of professional advisors are otherwise bound) to keep it confidential. The recipient shall ensure that those people and entities: (a) use such Confidential Information only to exercise rights and fulfill obligations under this Agreement, and (b) keep such Confidential Information confidential. The recipient may also disclose Confidential Information when required by law, or the regulation or rule of a major US stock exchange or the United States Securities and Exchange Commission, after giving reasonable notice to the discloser, such notice to be sufficient to give the discloser: (i) the opportunity to seek confidential treatment, a protective order or similar remedies or relief prior to disclosure (if applicable) and (ii) (where any disclosure is necessary) time to consult on and approve the form and content of the relevant disclosure. The parties shall then promptly discuss and agree in good faith on the form and content of the disclosure (each acting reasonably).
7. PROPRIETARY RIGHTS
7.1 Distributor acknowledges that Google and/or its licensors own all right, title and interest, including all Intellectual Property Rights in and to the Products and the Google Trademarks and all modifications to them. Distributor has, and shall acquire, no rights in the foregoing except those expressly granted by this Agreement. Google shall not be restricted from selling, licensing, modifying, or otherwise distributing the Products and/or the Google Trademarks to any third party.
7.2 Google acknowledges that Distributor and/or its licensors own all right, title and interest, including all Intellectual Property Rights, in and to the Distributor Apps and all [ * ] to [ * ]. Except as expressly set forth in this Agreement, Distributor shall not be [ * ]from [ * ], or otherwise [ * ]the Distributor App(s) or other products of Distributor to [ * ].
8. WARRANTIES
8.1 Each party warrants to the other that it will use reasonable care and skill in complying with its obligations under this Agreement. Distributor also represents and warrants that it will undertake commercially reasonable endeavours in good faith to comply with Google's business partner due diligence process including providing requested information.
- 9 -
*Confidential treatment requested Google Confidential
8.2 Google warrants that the Distribution Products will for a period of [ * ] from the date of their supply to Distributor be free from any defect which has a materially adverse effect on their use or operation.
8.3 If any of the warranties in Clause 8.1 or 8.2 is breached by Google, Distributor must tell Google as soon as possible. Distributor must give Google a reasonable time to fix the problem and (if necessary) to supply Distributor with a corrected or replacement version of the Distribution Product or a way to work-around the problem that is not materially detrimental to Distributor, or to re-perform any relevant services. This will be done without any additional charge to Distributor. If Google is able to do this within a reasonable time, Google will have no other obligations or liability in relation to that breach.
8.4 Google will not be liable for breach of any of the warranties or other terms in this Agreement to the extent that the breach arises from:
(a) use of the Products other than in accordance with normal operating procedures;
(b) any alterations or maintenance to the Products done by anyone other than Google or someone authorised by Google;
(c) any problem with a computer on which the Products are installed, or with any equipment connected to that computer or any other software which is installed on that computer;
(d) any abnormal or incorrect operating conditions; or
(e) use of the Products in combination with any other hardware or software, unless this use has been approved by Google in writing.
8.5 Distributor will comply with all applicable commercial and public anti-bribery laws, including, without limitation, the UK's Bribery Act 2010 and the U.S. Foreign Corrupt Practices Act of 1977 ("Anti-Bribery Laws"), which prohibit (amongst other things) corrupt offers of anything of value, either directly or indirectly, to a government official to obtain or keep business. ''Government officials" include any government employee, candidate for public office, and employee of government-owned or government-controlled companies, public international organisations, and political parties. Furthermore, Distributor will not make any facilitation payments, which are payments to induce officials to perform routine functions they are otherwise obligated to perform.
8.6 No conditions, warranties or other terms apply to the Products, [ * ] or to any other goods or services supplied under this Agreement unless expressly set out in this Agreement. Subject to Clause 9.1, no implied conditions, warranties or other terms apply (including any implied terms as to satisfactory quality, fitness for purpose or conformance with description).
9. LIMITATION OF LIABILITY
9.1 Nothing in this Agreement shall exclude or limit either party's liability for:
(a) death or personal injury resulting from the negligence of either party or their servants, agents or employees;
(b) fraud or fraudulent misrepresentation;
- 10 -
In this Clause 9.4, "Contract Year" means a period of one year starting on the Effective Date or the relevant anniversary of the Effective Date (as appropriate). If the amount referred to in (b) above cannot be calculated accurately at the time the relevant liability is to be assessed (the "Applicable Time"), it shall be calculated on a pro-rata basis as X/Y x Z. Where: X = the total sum paid and payable to the Distributor pursuant to Clause 4 in the relevant Contract Year prior to the Applicable Time; Y = the number of days elapsed in the relevant Contract Year prior to the Applicable Time; and Z = 365 *Confidential treatment requested Google Confidential
(c) breach of any implied condition as to title or quiet enjoyment; and
(d) misuse of confidential information.
9.2 Nothing in this Agreement shall exclude or limit either party's liability under Clause 10 (Indemnities), or Distributor's liability under Clause 2 (License Grants and Restrictions), Clause 3.5 (Exclusivity), Clause 3.6 (End User License Agreement) and Clause 3.7 (Accurate Reproduction) or Clause [ * ].
9.3 Subject to Clauses 9.1 and 9.2, neither party shall be liable under this Agreement (whether in contract, tort or otherwise) for any:
(a) loss of anticipated savings;
(b) loss of business opportunity (which for the avoidance of doubt shall not include loss of advertising revenue);
(c) loss of or corruption of data;
(d) loss or damage resulting from third party claims; or
(e) indirect or consequential losses;
suffered or incurred by the other party (whether or not such losses were within the contemplation of the parties at the date of this Agreement).
9.4 Subject to Clauses 9.1 and 9.2, each party's total liability under or in connection with this Agreement (whether in contract, tort or otherwise) arising in any Contract Year is limited to the greater of:
(a) [ * ] Euros ([ * ] Euros); and
(b) [ * ]% of the total payment due to the Distributor in the relevant Contract Year pursuant to Clause 4 (Payment Terms).
- 11 -
By Distributor.
User claim arising out of or resulting from such End Users use of any Distributor App(s), including any actions or claims in product liability, tort, contract or equity. *Confidential treatment requested Google Confidential
10. INDEMNIFICATION BY GOOGLE.
10.1 Google [ * ] and will indemnify Distributor against all liabilities, costs, damages and expenses (including settlement costs approved in writing by Google and reasonable legal fees [ * ]) suffered or incurred by Distributor arising from any claim from a third party that any Products or any Google Trademark infringe(s) any copyright, trade secret or trademark of such third party (an "IP Claim"), provided that Distributor:
(a) promptly notifies Google;
(b) provides Google with reasonable information, assistance and cooperation in responding to and, where applicable, defending such IP Claim; and
(c) gives Google full control and sole authority over the defence and settlement of such IP Claim. Distributor may appoint its own supervising counsel of its choice at its own expense.
10.2 Google will not have any obligations or liability under this Clause 10 in relation to any IP Claim arising from:
(a) use of the Products or Google Trademarks in a modified form or in combination with materials not furnished by Google;
(b) use of the Products or Google Trademarks other than in accordance with this Agreement; or
(c) any content, information or data provided to Google by Distributor, End Users or any other third parties;
10.3 Google may (at its sole discretion) suspend Distributors distribution or use of the Products or the Google Trademarks which are alleged, or believed by Google, to infringe any third party's Intellectual Property Rights, or modify such items to make them non-infringing. if any suspension under this Clause continues for more than 30 days, Distributor may, at any time until use of the distribution or use of the Products or the Google Trademarks is reinstated, terminate this Agreement immediately upon written notice. [ * ] will use reasonable endeavours to [ * ] with [ * ] (to the extent it is practicable to do so) of the [ * ] or [ * ].
10.4 Distributor [ * ] and will indemnify Google against all liabilities, costs, damages and expenses (including settlement costs approved in writing by Distributor and reasonable legal fees [ * ]) suffered or incurred by Google or any Google Group Company arising from: (a) Distributor's improper (ie not in accordance with the requirements of this Agreement including the Exhibits) or unauthorised, replication, packaging, marketing, distribution, or installation of the Products, including any breach of Clause 8.5 and any claims based on representations, warranties, or misrepresentations made by Distributor, (b) any claim from a third party that the Distributor App(s) infringe any third party copyright, trademark, or trade secret, or (c) any End
- 12 -
*Confidential treatment requested Google Confidential
10.5 The indemnification obligations set out in Clause 10.4(b) shall exist only if Google: (a) promptly notifies Distributor of such claim, (b) provides Distributor with reasonable information, assistance and cooperation in responding to and, where applicable, defending the lawsuit or proceeding, and (c) gives Distributor full control and sole authority over the defense and settlement of such claim. Google may join in defense with counsel of its choice at its own expense.
10.6 The foregoing Clauses 10.1 to 10.5 states the parties' entire liability and exclusive remedy with respect to infringement of a third party's Intellectual Property Rights.
11. GENERAL
11.1 Publicity. Subject to clause 6 (Confidential Information), neither party may make any public statement regarding the relationship contemplated by this Agreement without the other's prior written approval.
11.2 Notices. All notices of termination or breach must be in English, in writing, addressed to the other party's Legal Department and sent to Distributor's address set out at the head of this Agreement or to [ * ] (as applicable) or such other address as either party has notified the other in accordance with this Clause. All notices shall be deemed to have been given on receipt as verified by written or automated receipt or electronic log (as applicable). All other notices must be in English, in writing, addressed to the other party's primary contact and sent to their then current postal address or email address.
11.3 Assignment. [ * ] may [ * ]any of its rights or obligations under this Agreement without the prior written consent of [ * ]. For the avoidance of doubt, a Change of Control shall be deemed an assignment hereunder unless [ * ] does not exercise its [ * ].
11.4 Force Majeure. Neither party shall be liable for failure to perform or delay in performing any obligation under this Agreement if the failure or delay is caused by any circumstances beyond its reasonable control.
11.5 Compliance with Export Laws. Distributor shall comply with all applicable export and re-export control laws and regulations ("Export Laws"), which the parties agree include: (a) the Export Administration Regulations maintained by the U.S. Department of Commerce, (b) trade and economic sanctions maintained by the U.S. Treasury Department's Office of Foreign Assets Control, and (c) the International Traffic in Arms Regulations maintained by the U.S. Department of State. Unless Distributor obtains prior authorisation required by applicable Export Laws, Distributor shall not export any Product to Cuba, Iran, North Korea, Sudan or Syria.
11.6 No Waiver. Failure or delay in exercising any right or remedy under this Agreement shall not constitute a waiver of such (or any other) right or remedy.
11.7 Severability. The invalidity, illegality or unenforceability of any term (or part of a term) of this Agreement shall not affect the continuation in force of the remainder of the term (if any) and this Agreement.
11.8 No Agency. Except as expressly stated otherwise, nothing in this Agreement shall create an agency, partnership or joint venture of any kind between the parties.
11.9 No Third-Party Beneficiaries. Except as expressly stated otherwise, nothing in this Agreement shall create or confer any rights or other benefits in favour of any person other than the parties to this Agreement.
- 13 -
Signed by the parties on the dates shown below.
*Confidential treatment requested Google Confidential
11.10 Governing Law. This Agreement is governed by English law and the parties submit to the exclusive jurisdiction of the English courts in relation to any dispute (contractual or non-contractual) concerning this Agreement save that either party may apply to any court for an injunction or other relief to protect its Intellectual Property Rights. If this Agreement is translated into any other language, if there is conflict the English text will take precedence.
11.11 Counterparts. The parties may execute this agreement in counterparts, which taken together will constitute one instrument.
11.12 Entire Agreement. Subject to Clause 9.1, this Agreement sets out all terms agreed between the parties in relation to its subject matter and supersedes all previous agreements between the parties relating to the same. In entering into this Agreement neither party has relied on any statement, representation or warranty not expressly set out in this Agreement.
DISTRIBUTOR GOOGLE INC /[ * ] /s/ [ * ] By By [ * ] [ * ] Name Name [ * ] [ * ] Title Title [ * ] [ * ] Date Date
- 14 -
EXHIBIT A Payments
*[ * ] ** [ * ]. *Confidential treatment requested Google Confidential
[ * ] [ * ] [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ]** [ * ]* $ [ * ]
- 15 -
EXHIBIT B Process Flow
- 16 -
Form of Offering 1 - WhiteSmoke Welcome Screen
- 17 -
2-Toolbar offer lf [ * ] Criteria Checker has returned "True"
*Confidential treatment requested
- 18 -
3-Chrome offer If [ * ] Criteria Checker has not returned 'True" AND [ * ] Criteria Checker has returned "True"
*Confidential treatment requested
- 19 -
4 - Installation Progress
Google Confidential
- 20 -
5 - Chrome First Launch If Chrome has been installed
Criteria Checker During the Term, for each End User who installs the Distributor App, Distributor shall use the [ * ] Criteria Checker to determine if [ * ] can be offered to such End User. If the [ * ] Criteria Checker returns True, Distributor shall offer the End User the opportunity to install the [ * ] in conjunction with the Distributor App. If the [ * ] Criteria Checker returns False Distributor shall: a) not offer the End User the opportunity to install the [ * ] and b) use the [ * ] Criteria Checker to determine whether the [ * ] can be offered to such End User. If the [ * ] Criteria Checker returns True, Distributor shall offer the End User the opportunity to install the [ * ] in conjunction with the Distributor App. If the [ * ] Criteria Checker returns False, Distributor shall not offer such End User the opportunity to install the [ * ]. Prior to Launch, Distributor shall obtain Google's approval of the parameters Distributor uses to call the [ * ] Criteria Checker and [ * ] Criteria Checker Chrome Browser Auto Launch. Distributor shall ensure that the first launch of the Chrome Browser following installation of the Chrome Browser complies with each of the following requirements (the "Chrome Launch Requirements"): (a) The Chrome Browser shall auto-launch immediately prior to the launch of the Distributor App, no earlier and no later. *Confidential treatment requested
- 21 -
(b) No advertisements, offers, or other communications shall appear between launch of a Distributor App and launch of the Chrome Browser. (c) Upon launch of the Chrome Browser, the Chrome Browser shall immediately appear on the End User's computer desktop exactly as shown in this Exhibit B. Without limiting the preceding sentence, each of the following shall appear on the End User's desktop exactly as shown in this Exhibit B: (i) the location and size of the Chrome Browser window and the Distributor App window, (ii) the z-order of the Distributor App and the Chrome Browser, and (iii) the number and content of the tabs in the Chrome Browser (i.e., the Chrome Browser shall contain exactly two (2) tabs, with the first tab set to google.com, and the second tab set to http://tools.google.com/chrome/intlfen-US/welcome.html (or such other url as Google may specify). In no event shall the Chrome Browser window be minimized. Notwithstanding the foregoing, Distributor may modify the content and design of the Distributor App window provided that Distributor complies with the other restrictions in this Agreement and obtains Google's prior consent. (d) The tabs in the Chrome Browser and the Omnibox shall be clearly visible to the End User as shown in this Exhibit B, regardless of the resolution of the End User's monitor. In no event shall the tabs in the Chrome Browser or the Omnibox be hidden behind a Distributor App. (e) Distributor shall implement (or, if implemented by Google, Distributor shall not modify) the six-month flag (i.e., the functionality that prevents an End User from receiving more than one (1) offer for the Chrome Browser within any six (6)-month period) unless Google has provided written confirmation (including by email) that the 6-months flag can be turned off. Note that this authorisation may be revoked at any time and Distributor shall then include the 6 months flag again in future builds.
- 22 -
EXHIBIT C Guidelines for Applications Bundled with Google Applications Google has observed a significant increase in the number of reports of software that is engaging in deceptive, malicious and other annoying practices that significantly diminish user perception and enjoyment of the internet. These practices include but are not limited to installing software on computers without obtaining informed end user consent (the so-called "drive-by download"), inundating end users with advertisements without adequate attribution or labeling, exposing users to pornographic material without obtaining informed end user consent, obtaining or transmitting personal information about an end user without obtaining informed end user consent, and interfering with an end user's ability to easily uninstall applications the end user does not wish to be on his or her computer. Google does not wish to be associated with these types of practices. Accordingly, Google has developed the Guidelines set forth below to prevent its trademark, other intellectual property, and services from being used in connection with these practices. Google believes that these Guidelines are necessary to protect Google from any allegation that it has contributed to practices that might be viewed as unlawful or actionable; to preserve the reputation of Google as a provider of trusted software and services in a manner that is beneficial and fair to users and other constituents; and to stem the rising incidence of practices that harm users and diminish the perceived value and reliability of the internet, which are essential to Google's business. With this objective in mind, Google has established the following Guidelines to apply to customer Applications that are bundled with any Google Application. Except to the extent Google has otherwise specifically agreed in writing, Google does not grant permission to, and you will not, bundle any Application with a Google Application unless you ensure that any such Application specified in the agreement between you and Google that incorporated these Guidelines complies with these Guidelines. For the avoidance of doubt, by these Guidelines Google does not intend to, and does not, impose any restrictions on what you may do with any Application that is not bundled with a Google Application, bundled with an Application that accesses Google services, or used to access Google services; you remain free to sell any Application you wish (whether or not it complies with these Guidelines) so long as it is not bundled with a Google Application, bundled with an Application that accesses Google services, or used to access Google services. In these Guidelines: (a) "you" and "your" refer to the legal entity(ies) that has entered into the contract with Google into which these Guidelines are incorporated, as well as any person or entity acting on your behalf; and (b) "Application" means any application, plug-in, helper, component or other executable code that runs on a user's computer, examples of which include those that provide browser helper objects, instant messaging, chat, email, data, file viewing, media playing, file sharing, games, internet navigation, search and other services. Google Confidential
- 23 -
Google welcomes input about these Guidelines from you and from other interested parties, and is always willing to consider revisions as appropriate to encourage innovation while protecting against deceptive, unfair and harmful practices. Accordingly, Google may update these Guidelines, including the Attachments, from time to time as provided in Section 10 below. If you have any questions about these Guidelines, please do not hesitate to discuss them with your Google account manager. Google Confidential
- 24 -
1. General. 1.1 Approval and Ongoing Compliance. You may bundle Google Applications with Applications only to the extent permitted in the signed written agreement into which these Guidelines have been incorporated. In such instance, you must ensure that your Application both (1) has been approved by Google for the purpose of being bundled with Google Applications in writing in advance, and (2) complies at all times with the requirements outlined herein. To obtain Google's approval for any Applications not expressly approved in your agreement, you must submit a written request. 1.2 No Google Branding or Attribution. Your Application, and any related collateral material (including any Web pages promoting your Application or from which your Application is made available), must not contain any Google branding, trademarks or attribution unless (and then only to the extent) Google expressly consents otherwise in writing. In addition, queries entered into Applications may not resolve to a results page that contains any Google branding, trademarks or attribution unless (and then only to the extent) Google expressly consents otherwise in writing. 2. Prohibited Content. You may not bundle any Google Application with an Application that: (a) contains any viruses, worms, trojan horses, or the like; and (b) is distributed primarily for the purpose of (i) distributing pornographic, obscene, excessively profane, gambling-related, deceptive, fraudulent or illegal content, or (ii) distributing content related to "hacking" or "cracking." 3. Prohibited Behavior. You may not bundle any Google Application with an Application that engages in deceptive, unfair, harassing or otherwise annoying practices. For example, the Application may not:
Google Confidential
(a) use, or permit an unaffiliated person to use, an end user's computer system for any purpose not understood and affirmatively consented to by the end user (including, without limitation, for purposes of consuming bandwidth or computer resources, sending email messages, launching denial of service attacks, accruing toll charges through a dialer or obtaining personal information from an end user's computer such as login, password, account or other information personal to the end user);
(b) intentionally create or exploit any security vulnerabilities in end user computers;
(c) trigger pop-ups, pop-unders, exit windows, or similar obstructive or intrusive functionality, that materially interfere with an end user's Web navigation or browsing or the use of his or her computer;
(d) repeatedly ask an end user to take, or try to deceive an end user into taking, an action that the end user has previously declined to take (such as repeatedly asking an end user to change his or her home page or some other setting or configuration);
- 25 -
4. Disclosure and Consent. 4.1 Disclosure and Consent before Installation. You may not bundle any Google Application with any Application unless you (and your distribution and bundling partners, if applicable under the terms of the agreement between you and Google that incorporates these Guidelines) design the installation of any such Application in a manner that ensures that it is installed by end users in a knowing and willful manner - e.g., no "drive-by' downloads or installs. By "distribution partner" we mean any third party who distributes your Application and by "bundling partner" we mean any third party who installs your Application in combination with or alongside one or more other Applications. At a minimum, compliance with this provision requires that, prior to installing your Application, you and any third party distributing or bundling your Application:
4.2 Disclosure and Consent for Collection and Transmission of Personally Identifiable information. You may not bundle any Google Application with any Application that (1) collects or transmits to any entity other than the end user personally identifiable information, or (2) collects or transmits information related to a user's computer or Internet usage or activity in a manner that could collect or transmit such user's personally identifiable information (such as through keystroke logging), unless prior to the first occurrence of any such collection or transmission you:
Google Confidential
(e) redirect browser traffic away from valid DNS entries (except that your Application may direct unresolved URLs to an alternative URL designated by you, provided that the page to which the end user resolves adequately informs the end user that you and your Application are the source of that page);
(f) interfere with the browser default search functionality (except that your Application may permit an end user to change his or her default search engine with proper disclosure, consent and attribution as provided below); or
(g) engage in activity that violates any applicable Jaw or regulation.
(a) first, fully, accurately, clearly and conspicuously disclose to end users:
(i) that they are installing an application,
(ii) the name of the Application, identifying you as the entity responsible for it, and
(iii) the principal and significant features and functionality of the Application; and
(b) then, obtain the end user's affirmative consent to install the Application.
(a) first, fully, accurately, clearly and conspicuously disclose:
- 26 -
4.3 Disclosure and Consent for Setting Changes. You may not bundle any Google Application with any Application that makes a change to any operating system or Application data setting which will impact the user experience of other Applications (e.g., changing the browser default home page or changing the default application for a file type, such as the default email, browser or media player application), unless prior to making such change you:
Notwithstanding the foregoing, (i) no disclosure and consent need be made for changes to operating system or Application data settings that have only a minor impact on user experience, such as adding a small number of bookmarks to the browser menu or adding an item to a start menu, and (ii) the disclosure and consent requirements of this Section 4.3 will not apply to those setting changes that may be made prior to sale to the end user. 4.4 Method of Disclosure and Consent. In order to satisfy the requirements above, the disclosure of the items specified above (a) must be provided in both (1) the End User License Agreement (EULA) or privacy policy (to the extent required by law or otherwise by industry custom) and (2) separately from the EULA and/or privacy policy (e.g. in installation screens or message boxes, as the case may be), and (b) must be designed so that it will be read by, adequately inform and evidence the consent of a typical Internet user. See Attachment 1 for sample disclosure and consent implementations that would satisfy certain of the requirements above. 4.5 EULA and Privacy Policy. You may not bundle any Google Application with any Application unless it conforms, and is distributed pursuant to a EULA that conforms, with all applicable laws and regulations. In addition, you and your Application must comply with the agreements and representations you make with your end users in your EULA and privacy policy. Your privacy policy must be accessible from your Application in an easily found location. If your Application collects or transmits any other information related to the user's use of his or her computer, but not required to be disclosed and consented to pursuant to Section 4.2, then the collection and use of such other information must be disclosed in your privacy policy. Google Confidential
(i) the type of information collected (described with specificity in the case of personally identifiable information),
(ii) the method of collection (e.g. by registration, etc.), and
(iii) the location of (i.e., a link to) the privacy policy that governs the collection, use and disclosure of the information; and
(b) then, obtain the end user's affirmative consent to such collection and/or transmission.
(a) first, fully, accurately, clearly and conspicuously disclose the change in a manner that will explain the practical effect of such change; and
(b) then, obtain the end user's affirmative consent to make such change.
- 27 -
5. Transparency. Neither you nor any of your third party distribution or bundling partners may mislead end users or create end user confusion with regard to the source or owner of an Application or any portion of its purpose, functionality or features. For example, all elements of your Application that are visible to the end user must clearly identify their source through its branding and attribution, and that identification, whatever form it takes, must correspond to the identification of your application in the menu that permits end users to remove programs. You must clearly label advertisements provided by your Application (if any) as such and clearly identify your Application as the source of those advertisements. In addition, if your Application modifies the operation or display of other applications or Web sites (other than Web sites that you own), then in each instance you must clearly and conspicuously attribute the source of that modification to your Application (as distinct from the application or Web site modified) in a manner that will inform a typical Internet user; provided that this requirement will not apply to modifications for which you obtain disclosure and consent pursuant to Section 4.3. See Attachment 1 for examples of modifications that are clearly and conspicuously disclosed to end users. 6. Deactivation. You may not bundle any Google Application with any Application that impairs an end user's ability to change any preferences or settings set by the Application in accordance with the way that such preferences or settings ordinarily may be changed by the applicable Application. Once disabled by an end user, your Application may not be re-enabled without an affirmative action by the end user to explicitly re- enable your application. Accordingly, no use, update, installation or re-enablement of a separate Application, and no code downloaded as a result of browsing a Web site, may operate to re-enable your Application. Your Application must permit end users to uninstall it (in the customary place the applicable operating system has designated for adding or removing programs, e.g., Add/Remove Programs control panel in Windows) in a straightforward manner, without undue effort or skill. In addition, your Application, when running, must provide (in an easily found location) clear and concise instructions on how it may be uninstalled. Once uninstalled, your Application must not leave behind any functionality or design elements, and all setting changes made by the application, but not explicitly agreed to by the end user, should be reversed to the extent practicable. 7. Bundling of Applications. In addition to the requirements set forth in the agreement between you and Google that incorporates these Guidelines, in order for you to bundle any Application with a Google Application must satisfy each of the following requirements:
Google Confidential
(a) the end user is made aware of all of the Applications included in the bundle prior to any installation;
(b) all such Applications included in the bundle or download comply with the provisions of Section 2 through 6 of these Guidelines;
(c) if Applications in a bundle in which you are participating are supported in part by revenue generated by advertising displayed in another independent Application included in that bundle and the continued use of the Application is conditioned on such other independent Application remaining installed and active on the end user's computer, the end user must be made aware of that relationship; and
- 28 -
8. Information and Assistance. Subject to any confidentiality obligations owed to third parties, you must provide Google with such information as Google may reasonably request about the distribution of those of your Applications that are bundled with any Google Application. For example, we may ask you to share with us: (a) the means by and/or the locations from which your Applications are distributed; or (b) the identity of any applications included in any of your bundling relationships (and the entities responsible for such applications). In addition, you must provide such assistance as Google may reasonably request to investigate and stop potential violations of these Guidelines that may be connected to your Application, including by way of using such number of identifiers and other tracking parameters as Google may reasonably request. This would include providing Google with "golden masters" of any bundle or other distribution that includes your Application, or working with Google to stop any entities that may be financially benefiting from your Application from engaging in any of these proscribed practices. You understand, however, that Google has no obligation to provide support to end users of your Application. For the avoidance of doubt, these information and assistance rights do not extend to any of your Applications that are not used to access Google services, bundled with a Google Application, or bundled with an Application that accesses Google services. 9. Legal. You must maintain ownership and control of your Application at all times to the extent required to practically and legally enforce the requirements of these guidelines. If you are seeking to permit a third party Application to be bundled with a Google Application, then you must also obtain Google's written approval of that third party Application (in addition to the approval required for your Application). If Google approves the third party Application, you are responsible for ensuring that such third party Application also complies with these Guidelines. Special indemnity and other suspension and/or termination provisions may apply. These are addressed in your agreement with Google. 10. Updates. 10.1 General. As mentioned above, Google may update these Guidelines, including the Attachments, from time to time; provided, however, that no updates will be effective until Google provides you with thirty (30) days' written notice thereof. Once you receive that notice (the date on which you receive such notice, the "Update Notice Date"), you will be required to bring your Application into compliance within thirty (30) days Google Confidential
(d) either (1) the bundle must provide for a master uninstaller that will enable the end user to uninstall every Application in the bundle without undue effort or skill, or (2) if no master uninstaller is provided, the de-installation of any Application may not be dependent or conditioned upon the de-installation of any other Application included in the bundle.
- 29 -
10.2 Extended Compliance Period. If, solely as a result of an updated requirement, one or more of your Applications no longer complies with these Guidelines, as updated, and you are incapable of bringing such Application into compliance prior to the scheduled effective date of such update (the "Update Effective Date"), you agree to provide Google with written notice thereof as soon as reasonably practicable, but in any event no later than the Update Effective Date, identifying the Application and the reasons why it may not be brought into compliance prior to the Update Effective Date, and providing such other detail as Google may reasonably request with respect thereto (consistent in any event with your confidentiality obligations). Thereafter, the parties will consult, and you agree to will work, diligently and in good faith to develop and execute a plan to bring such Application into compliance with these Guidelines, as updated, as soon as reasonably practicable, but in any event within ninety (90) days of the Update Notice Date (the "Maximum Compliance Period"). You agree that you will provide Google with such information as Google reasonably requests during this period to keep Google apprised of your progress in bringing your Application into compliance. Notwithstanding the foregoing (but subject to the next sentence), in no event may a new requirement provided for in any update to these Guidelines require you to take any action which would violate the terms of any agreement between you and any unaffiliated third party that is in effect on the date that Google delivers notice of the proposed update. In any event, if you are unable to bring any Application into compliance during the Maximum Compliance Period, Google may elect, by providing at least thirty (30) days prior written notice, to require you to cease bundling either the specific non-conforming Application or those versions of the Application which are, or are distributed, in violation of the Guidelines, as updated; it being understood that, at such time, you will be entitled to procure services from an alternative source for those Applications (or versions thereof) with respect to which Google has exercised such election. Google Confidential
- 30 -
Attachment 1 Prohibited Behavior and Content The application may not impact the display of other applications unless you provide clear disclosure in each instance
Google Confidential
- 31 -
Google Confidential
- 32 -
Disclosure and Consent Clear and conspicuous disclosure is required prior to download or install: what it is, what it does, and how it will be displayed to the end user
Disclosure and Consent Describe type, method, and use of personal information, if applicable. Point user to privacy policy
Google Confidential
- 33 -
Google Confidential
- 34 -
Branding & Attribution The visible elements of the application should be easily identifiable to the end user
Google Confidential
- 35 -
Implementation, Transparency and Deactivation The Application must permit end users to uninstall it in the customary place the applicable operating system has designated for adding or removing programs (e.g., Add/Remove Programs control panel in Windows) in a straightforward manner Google Confidential
- 36 -
Google Confidential
- 37 -
Implementation, Transparency and Deactivation The Application must contain (in an easily found location) clear and concise instructions on how it may be uninstalled
Google Confidential
- 38 -
Bundling of Applications When bundling, the end user must be made aware of all the applications included prior to installation.
Google Confidential
- 39 -
Bundling of Applications When bundling, the end user must be made aware of advertising revenue relationships to other applications, if the continued use of the primary application is conditioned on the other applications being installed and active on the end user's computer
Google Confidential
- 40 - [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 10.26 CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [*], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. PROMOTION AND DISTRIBUTION AGREEMENT This Promotion and Distribution Agreement including all exhibits (collectively referred to as the "Agreement"), effective as of 1 August 2011 (the "Effective Date"), is made by and between Whitesmoke Inc., with registered offices/principle place of business at 501 Silverside Road, Suite 105, Wilmington DE 19809, USA, ("Distributor"), and Google Inc whose principle place of business is at 1600 Amphitheatre Parkway, Mountain View, CA 94043, USA ("Google").
"Bundle" means the Distribution Products bundled with the Distributor App(s). "Chrome Browser" means the machine-readable binary code version of the Google Chrome browser provided to Distributor in connection with this Agreement, and any modifications or updates to it that Google may provide to Distributor. "Chrome Browser Installer" means: (a) the machine-readable binary code version of the installer provided to Distributor in connection with this Agreement that installs the Chrome Browser, and any modifications, updates or upgrades to it that Google may provide to Distributor; and (b) the Chrome Browser Criteria Checker. "Chrome Use Event" means an event that indicates an [* ] has occurred. "Chrome Server Communication" means a communication that, as determined solely by Google, is sent for the purpose of indicating that an End User: (a) is [* ] to the [* ]; and (b) has kept the [* ] open for a minimum of [* ] during a [* ] (whether during the [* ] or a [* ] of the Chrome Browser). "Criteria Checker" means a set of software routines (and any updates to them) provided to Distributor by Google, as part of a software library, that check certain criteria (as determined by Google and modified by Google from time to time) to determine if the Chrome Browser or Google Toolbar (as applicable) can be installed on an End User's operating system. Accordingly, "Chrome Browser Criteria Checker" means the Criteria Checker provided by Google in respect of the Chrome Browser and "Google Toolbar Criteria Checker" means the Criteria Checker provided by Google in respect of the Google Toolbar. "Distributor App(s)" means the following application (and successor versions of such software): the trial version of the WhiteSmoke Writer (currently called WhiteSmoke 2011) available on a worldwide basis, but for the avoidance of doubt shall not mean any other products of Distributor, including without limitation the full paid version of Whitesmoke Writer or any version of Whitesmoke "Translator" software, regardless of whether Whitesmoke Writer incorporates any translation functionality. *Confidential treatment requested Google Confidential
1. DEFINITIONS
1.1 In this Agreement unless expressly stated otherwise:
- 1 -
"Distribution Products" means:
"End User" means an end user customer of Distributor who is located in the Territory. "EULA" means the end user license agreement applicable to a Product, which end user license agreement may be updated or modified by Google in its sole discretion from time to time. "False" means a "false" response (or equivalent negative response) given by the Criteria Checker. "Google Program Guidelines" means the policy and implementation guidelines applicable to the Products as updated by Google and provided to Distributor from time to time. "Google Toolbar" means the machine-readable binary code version of the Google toolbar for Internet Explorer provided to Distributor in connection with this Agreement, and any modifications or updates to it that Google may provide to Distributor. "Google Toolbar Installer" means: (a) the machine-readable binary code version of the installer provided to Distributor in connection with this Agreement that installs the Google Toolbar, and any modifications, updates or upgrades to it that Google may provide to Distributor; and (b) the Google Toolbar Criteria Checker. "Google Trademarks" means all names, trade names, trademarks, and logos used by Google in connection with the Products. "Group Company" means in relation to each of the parties:
"Install Completed" occurs when an End User has completed the install process for a Bundle and the install completed screen is shown to the End User in accordance with Exhibit B.
(a) as at the Effective Date, the Google Toolbar Installer and the Chrome Browser Installer; and
(b) if Distributor notifies Google at any time after the Effective Date that it wishes to bundle the full Google Toolbar and Google provides its approval in writing (including email), the Google Toolbar; and
(c) if Distributor notifies Google at any time after the Effective Date that it wishes to bundle the full Chrome Browser and Google provides its approval in writing (including email), the Chrome Browser.
(a) any parent company of that party; and
(b) any corporate body of which that party directly or indirectly has control or which is directly or indirectly controlled by the same person or group of persons as that party.
- 2 -
"Intellectual Property Rights" means all copyright, moral rights, patent rights, trade marks, design right, rights in or relating to databases, rights in or relating to confidential information, rights in relation to domain names, and any other intellectual property rights (registered or unregistered) throughout the world. "IPO" means an initial public offering of all or any of the shares in Distributor or securities representing those shares for the purposes of being publically traded or quoted on an investment exchange. "Maximum Distribution Commitment" means [* ] , as may be increased by Google pursuant to Clause 4.2 (Maximum Distribution Commitment). "[ * ]" means a [ * ] or [ * ] entered by the [ * ] into the [ * ] located at the [ * ] of the [ * ]. [ * ] do not include the events listed in Clause 3.9(c)(ii). "Products" means the Google Toolbar, Google Toolbar Installer, Chrome Browser and Chrome Browser Installer. "[ * ]" means the [ * ] received by a [ * ] that, as determined solely by [ * ]: (a) is [ * ] by a [ * ] obtained via a [ * ]; (b) is the next [ * ] that occurs following a [ * ]; and (c) includes the [ * ]. [ * ] only include those [ * ] which meet the requirements set out in Clause 3.9(c)(iii). "[ * ]" means a [ * ] received by [ * ] that, as determined solely by [ * ]: (a) is [ * ] by a [ * ] obtained via a [ * ]; (b) is sent for the [ * ] of indicating that an [ * ]: (i) has opened [ * ] following installation of the [ * ], (ii) is [ * ] to the [ * ], and (iii) has [ * ] a [ * ] into the [ * ]; and (c) includes the correct [ * ]. [ * ] only include those [ * ] which meet the requirements set out in Clause 3.9(c)(i). "Term" means the earlier of: (a) the end of the two year period from the Effective Date to 31 July 2013; or (b) the last day of the calendar month within which the Maximum Distribution Commitment is reached. "Territory" means those countries listed in Exhibit A, excluding any territory or state prohibited under Clause 11.5. "True" means a "true" response (or equivalent positive response) given by the Criteria Checker.
*Confidential treatment requested Google Confidential
1.2 In this Agreement, the words "include" and "including" will not limit the generality of any words preceding them.
2. LICENSE GRANTS AND RESTRICTIONS
2.1 Products License Grant. Subject to the terms and conditions of this Agreement, Google grants to Distributor a [* ] license during the Term to: (a) bundle the Distribution Products, in machine-readable binary code format only, solely with Distributor App(s); (b) distribute Bundles directly (or indirectly, subject to Clause 2.2 (Third Party Distribution)) to End Users in the Territory; (c) when indicated by the applicable Criteria Checker and requested by the End User in accordance with clause 3.2 (Form of Distribution Offering), install the Chrome Browser or the Google Toolbar (as applicable) on the End User's system using the Google Installers; and (d) reproduce (or have reproduced by Third Party Distributors as defined in Clause 2.2 (Third Party Distribution)), the Distribution Products to the extent necessary to exercise the rights granted in (a), (b) and (c).
- 3 -
*Confidential treatment requested Google Confidential
2.2 Third Party Distribution. Distributor may distribute Bundles to third parties solely for redistribution of such Bundles by those third parties directly to End Users (such third parties, "Third Party Distributors"); provided that: (a) in connection with any and all such offers or distributions, Distributor shall, and shall ensure that each Third Party Distributor shall, distribute Bundles in a manner that is no less protective of the Products and Google than the terms of this Agreement, and (b) Google in its sole discretion may direct Distributor to cease distributing Bundles to any Third Party Distributor that in Google's sole discretion would either: (i) harm or devalue Google's business, brand or name, or (ii) violate Google's privacy policy, and Distributor shall cause any such Third Party Distributor to cease distribution of Bundles as soon as practicable but in no event longer than [ * ] following receipt of such request from Google. Distributor shall ensure that no Third Party Distributor bundles anything in or with Bundles without Google's prior written approval, and if Google grants its approval, Distributor shall provide Google with information about any such bundling arrangements at Google's request.
2.3 License Grant Restrictions. Distributor shall not, and shall not allow any third party to (except to the extent that such prohibitions are not permitted by law): (a) disassemble, de-compile or otherwise reverse engineer the Products or otherwise attempt to learn the source code or algorithms underlying the Products; (b) modify the Products, create derivative works from or based on the Products; (c) except as expressly set out in this Agreement, provide, sell, license, distribute, lease, lend, or disclose the Products to any third party; (d) use the Products for timeshare, service bureau, or other unauthorised purposes; or (e) exceed the scope of any license granted to Distributor under this Agreement.
2.4 Trademark License and Use. Subject to the terms and conditions of this Agreement, Google grants to Distributor a limited, [ * ] license during the Term to use the Google Trademarks, in accordance with Google's trademark usage guidelines, solely to market and promote the Products consistent with this Agreement, provided that all use of the Google Trademarks shall be subject to Google's prior review and advance written consent. All uses of the Google Trademarks, and all goodwill associated therewith, shall inure solely to the benefit of Google.
2.5 Trademark Restrictions. Distributor shall not remove, modify, adapt, or prepare derivative works of any Google Trademarks or Google copyright notices, or other Google proprietary rights notices.
2.6 Updated Versions of Distribution Products. Google may request that Distributor distribute the latest version of the Distribution Products. Distributor shall begin such distribution within [ * ] following Google's request.
3. DISTRIBUTION AND OTHER OBLIGATIONS
3.1 Delivery. Google shall deliver the Distribution Products electronically to Distributor at a [ * ] following the Effective Date and prior to Launch (as defined in Clause 3.4 (Launch)).
- 4 -
User to review such EULA via a hyperlink to such EULA: and (c) a button on which each End User may click indicating agreement to the terms of such EULA. In the event that an End User does not affirmatively agree to install the Google Toolbar or Chrome Browser, by clicking on the button to agree to the terms of the applicable EULA, then the Google Toolbar or Chrome Browser (as applicable) shall not be installed on such End User's computer.
*Confidential treatment requested Google Confidential
3.2 Form of Distribution Offering. Distributor shall ensure that the form of any offering of the Products by Distributor, including the timing, relative and absolute placement, visual presentation to End Users, initial launch of the Products (and any modifications to them) and the presentation of any other applications or products offered with the Products, conforms to the Google Program Guidelines and to Exhibit B of this Agreement. Except as set out in Clause 2 (Licence Grant and Restrictions) and except for End Users as expressly set out in this Agreement, Distributor shall not offer or distribute the Products to any third party. If, during the Term, Exhibit B and the Google Program Guidelines conflict, Exhibit B will take precedence with respect to the conflicting terms.
3.3 Guidelines for Applications. Distributor shall comply, and shall ensure that each Third Party Distributor complies, with the Guidelines for Applications set out in Exhibit C.
3.4 Launch. Distributor shall begin distribution of Bundles in accordance with this Agreement ("Launch") within [ * ] days following the Effective Date (the date of such Launch, the "Launch Date"). Beginning on the Launch Date and continuing throughout the Term, Distributor shall ensure that [ * ]Distributor App distributed by or on behalf of Distributor is bundled with the Distribution Products as set out in this Agreement.
3.5 Exclusivity.
(a) [ * ]
(b) [ * ].
3.6 EULA. In connection with Distributor's distribution of the Products under this Agreement, and before the Google Toolbar or Chrome Browser can be installed by an End User, Distributor shall provide each End User with: (a) a clear statement inviting the End User to agree to the terms of the applicable EULA; (b) the opportunity for each End
3.7 Accurate Reproduction. Distributor agrees that in connection with its exercise of the right granted in Clause 2.1 (Products Licence Grant) it shall accurately reproduce the Distribution Products and shall not: (a) modify any Product (including modify the Chrome Browser or Google Toolbar configuration files or registry settings); or (b) insert into the Products any viruses, worms, date bombs, time bombs, or other code that is specifically designed to cause the Products to cease operating, or to damage, interrupt, or interfere with any Products or End User data.
3.8 [ * ]. During the Term and for a period of [ * ] following the expiration or termination of this Agreement, Distributor shall not, and shall not engage any third party to: (a) restrict, modify, or reconfigure in any manner any of the Products that have been installed by End Users (such End Users, "Installed Base End Users") in connection with this Agreement; or (b) engage in activities that encourage Installed Base End Users to modify, uninstall or reconfigure any or the Products.
- 5 -
*Confidential treatment requested Google Confidential
3.9 Reporting.
(a) By Distributor. During the Term, Distributor shall, on a [ * ] basis, no later than the [ * ] of the following [ * ], provide Google with a report identifying, on a country-by-country basis, the total number of: (i) Bundles distributed; (ii) Installs Completed; (iii) Google Toolbar offers presented to End Users; and (iv) Chrome Browser offers presented to End Users, in the preceding [ * ].
(b) By Google. During the Term, Google shall on a [ * ] basis, provide Distributor with a report of the [ * ] of [ * ] and [ * ] in the preceding [ * ] broken down on a [ * ] basis and by the [ * ] in Exhibit A.
(c) Parameters. Distributor acknowledges, and shall cooperate with Google to [ * ] that:
(i) [ * ]: (A) are determined on a [ * ] (B) are only [ * ]; (C) do not include [ * ] from computers on which another [ * ] of the [ * ] is [ * ]; and (D) do not include use of the [ * ] in any [ * ] other than [ * ].
(ii) [ * ] do not include: (A) [ * ] that has been [ * ], (B) [ * ] or [ * ] in any area other than in the [ * ], or (C) any other [ * ] of the [ * ] designed to artificially [ * ].
(iii) [ * ]: (A) are determined on a [ * ]; (B) are only [ * ]; (C) are not sent in response to [ * ] from computers on which another [ * ] of the [ * ] is [ * ]; and (D) are sent only in response to [ * ] from computers that meet the [ * ] requirements as determined by the [ * ].
(d) Records and Audit Rights. Distributor will keep and maintain complete and accurate books, records, and accounts relating to this Agreement. During the Term, and for a period of [ * ] thereafter, Google may audit Distributor's relevant records to confirm Distributor's compliance with this Agreement. Google's auditor will only have access to those books and records of Distributor which are reasonably necessary to confirm such compliance.
4. PAYMENT TERMS
4.1 Payments. Subject to Clause 4.2, during the Term on a [ * ] basis, Google shall pay to Distributor the applicable payment set out in Exhibit A for each [ * ] and each [ * ] that occurred during the previous [ * ]. Google shall determine the [ * ] in respect of which each [ * ] and [ * ] took [ * ] (using the relevant [ * ]). Notwithstanding the foregoing, in no event will the [ * ] of [ * ] by Google to Distributor for all [ * ] and all [ * ] in respect of [ * ] (as set out in Exhibit A) exceed [ * ] ([ * ]) of the [ * ] to Distributor for such [ * ].
4.2 [ * ]. Notwithstanding anything to the contrary, in no event shall the [ * ] paid or payable to Distributor by Google pursuant to Clause 4.1 (Payments) exceed the [ * ]. Google shall have the right, at its sole option, to increase the [ * ] by providing written notice to Distributor no later than [ * ] prior to the end of the Term. The foregoing sentence shall not relieve Google of any payment obligations that have accrued prior to the achievement of the [ * ].
4.3 Payment Terms. All payments under this Agreement shall be made in [ * ] in the [ * ] following the [ * ] for which the payments are applicable. The party receiving payment will be responsible for any bank charges assessed by the recipient's bank. In addition to other rights and remedies Google may have, Google may offset any payment obligations to Distributor that Google may incur under this Agreement against any product or service fees owed to Google and not yet paid by Distributor under any agreement between Distributor and Google. Google may also withhold and offset against its payment obligations under this Agreement, or require Distributor to pay to Google within [ * ] of any invoice, any amounts Google [ * ] overpaid to Distributor in prior periods.
- 6 -
*Confidential treatment requested Google Confidential
4.4 Taxes. All payments under this Agreement are exclusive of taxes imposed by any governmental entity. Google shall pay any applicable taxes imposed by governmental agencies with respect to the transactions under this Agreement other than taxes based upon Distributor's income. Google shall promptly provide to Distributor a copy of an official tax receipt or other appropriate evidence of any taxes imposed on payments made under this Agreement. When Distributor has the legal obligation to collect any applicable taxes, the appropriate amount shall be invoiced to and paid by Google unless Google provides Distributor with a valid tax exemption certificate authorised by the appropriate taxing authority.
4.5 Interest. Distributor may charge interest at the rate of [ * ] above the base rate of Barclays Bank PLC from time to time, from the due date until the date of actual payment, whether before or after judgment, on any payment pursuant to this Clause 4 (Payment Terms) which is overdue.
5. TERM AND TERMINATION
5.1 Term. This Agreement shall commence on the Effective Date and, unless earlier terminated as set out in this Agreement, shall continue for the Term.
5.2 Termination for breach. A party may suspend performance and/or terminate this Agreement, with immediate effect, if the other party:
(a) is in material breach of this Agreement where the breach is incapable of remedy; or
(b) is in material breach of this Agreement where the breach is capable of remedy and fails to remedy that breach within thirty (30) days after receiving written notice of such breach.
5.3 Termination for insolvency. A party may suspend performance and/or terminate this Agreement with immediate effect, if:
(a) the other party enters into an arrangement or composition with or for the benefit of its creditors, goes into administration, receivership or administrative receivership, is declared bankrupt or insolvent or is dissolved or otherwise ceases to carry on business; or
(b) any analogous event happens to the other party in any jurisdiction in which it is incorporated or resident or in which it carries on business or has assets.
5.4 Change of Control. [ * ] may terminate this Agreement immediately upon written notice if there is a Change of Control of [ * ]. In this Clause the term "Control" shall mean the possession by any person(s) directly or indirectly of the power to direct or cause the direction of another person and "Change of Control" is to be construed accordingly. [ * ] expected to experience, or [ * ] is experiencing, such Change of Control shall notify [ * ] in writing of this before or within [ * ] after the Change of Control. If [ * ] has not exercised its right of termination under this Clause within [ * ] following the later of (i) the receipt of notice of [ * ] Change of Control or (ii) the Change of Control event, that [ * ]. The parties acknowledge that as at the Effective Date, [ * ] may [ * ] its [ * ]. [ * ] agrees not to exercise its termination right under this clause 5.4 if [ * ], provided that following [ * ]:
- 7 -
For the avoidance of doubt, if following [ * ] there is a transfer of shareholding or interests in Distributor to any existing or new shareholder(s) which results in any person or persons subsequently gaining Control of Distributor, then Google may exercise its right to terminate in accordance with this clause 5.4..
*Confidential treatment requested Google Confidential
5.4.1. no one person Controls [ * ] (other than an[ * ] which is not a [ * ] of [ * ] (as determined by [ * ]in its sole discretion)); and
5.4.2. no [ * ] of [ * ] (as determined by [ * ] in its sole discretion) holds a [ * ] or [ * ] in [ * ].
5.5 Additional Termination Rights. Google may terminate this Agreement immediately upon written notice to Distributor if: (a) Distributor breaches Clause 2 (License Grants and Restrictions), Clause 3.6 (EULA), Clause 3.7 (Accurate Reproduction), or Clause 6 (Confidential Information), (b) if Google believes, in good faith, that the Distributor has violated or caused Google to violate any Anti-Bribery Laws (as defined in Clause 8.5) or that such a violation is reasonably likely to occur, or (c) Distributor is in material breach of this Agreement more than [ * ] notwithstanding any cure of such breaches. Notwithstanding anything to the contrary, in the event that the government or controlling body of any country or territory in which Bundles are distributed imposes any law, restriction or regulation that makes it illegal to distribute the Products, or any portion of them, into such country or territory, or if any such law, restriction or regulation places a substantial burden on Google, where substantial is measured with respect to Google's economic benefit under this Agreement, as determined by Google in its reasonable and good faith judgment (such substantial burden, a "Substantial Burden") then either party or Google (in the case of a Substantial Burden) may require the suspension of all distributions of Bundles in such country or territory until such time as such law, restriction or regulation is repealed, nullified or modified such that it is no longer illegal or a Substantial Burden (in the case of Google), as applicable, for Bundles to be distributed in such country or territory ("Special Suspension"); provided, however, that Distributor's obligations under Clause 3.5 (Exclusivity) shall not apply in respect of the relevant country or territory during any period of Special Suspension. If a period of Special Suspension extends for more than [ * ] may then terminate this Agreement (in part) in respect of the affected country or territory only, such termination to take effect upon written notice[ * ]. [ * ] will use its reasonable endeavours to provide [ * ] with [ * ] (to the extent it is practicable to do so) of the [ * ] or [ * ] (which was commenced by [ * ]).
5.6 Effect of Termination. Upon expiration or termination of this Agreement: (a) all rights and licenses granted under this Agreement shall immediately cease; (b) Distributor shall (and shall ensure that any Third Party Distributors shall) immediately stop reproducing the Products and offering or distributing Bundles; (c) Distributor shall return or destroy (and a duly appointed officer of Distributor shall certify to such destruction) all copies of the Products and any other Google Confidential Information in its possession; and (d) the fees payable to Distributor shall immediately cease accruing and Google shall within [ * ] following such expiration or termination pay to Distributor any undisputed amounts which have accrued from the time of the most recent payment to Distributor through the date of termination or expiration of this Agreement. Clauses 5.6 (Effect of Termination), 6 (Confidential Information), 7 (Proprietary Rights), 9 (Limitation of Liability), 10 (Indemnification) and 11 (General) shall survive the termination or expiration of this Agreement.
- 8 -
*Confidential treatment requested Google Confidential
6. CONFIDENTIAL INFORMATION
6.1 In this Agreement, "Confidential Information" means information disclosed by (or on behalf of) one party to the other party under this Agreement that is marked as confidential or, from its nature, content or the circumstances in which it is disclosed, might reasonably be supposed to be confidential, including the terms and conditions (including the Exhibits) of this Agreement. It does not include information that the recipient already knew, that becomes public through no fault of the recipient, that was independently developed by the recipient or that was lawfully given to the recipient by a third party.
6.2 The recipient of any Confidential Information shall not disclose that Confidential Information, except to Group Companies, employees and/or professional advisors who need to know it and who have agreed in writing (or in the case of professional advisors are otherwise bound) to keep it confidential. The recipient shall ensure that those people and entities: (a) use such Confidential Information only to exercise rights and fulfill obligations under this Agreement, and (b) keep such Confidential Information confidential. The recipient may also disclose Confidential Information when required by law, or the regulation or rule of a major US stock exchange or the United States Securities and Exchange Commission, after giving reasonable notice to the discloser, such notice to be sufficient to give the discloser: (i) the opportunity to seek confidential treatment, a protective order or similar remedies or relief prior to disclosure (if applicable) and (ii) (where any disclosure is necessary) time to consult on and approve the form and content of the relevant disclosure. The parties shall then promptly discuss and agree in good faith on the form and content of the disclosure (each acting reasonably).
7. PROPRIETARY RIGHTS
7.1 Distributor acknowledges that Google and/or its licensors own all right, title and interest, including all Intellectual Property Rights in and to the Products and the Google Trademarks and all modifications to them. Distributor has, and shall acquire, no rights in the foregoing except those expressly granted by this Agreement. Google shall not be restricted from selling, licensing, modifying, or otherwise distributing the Products and/or the Google Trademarks to any third party.
7.2 Google acknowledges that Distributor and/or its licensors own all right, title and interest, including all Intellectual Property Rights, in and to the Distributor Apps and all [ * ] to [ * ]. Except as expressly set forth in this Agreement, Distributor shall not be [ * ]from [ * ], or otherwise [ * ]the Distributor App(s) or other products of Distributor to [ * ].
8. WARRANTIES
8.1 Each party warrants to the other that it will use reasonable care and skill in complying with its obligations under this Agreement. Distributor also represents and warrants that it will undertake commercially reasonable endeavours in good faith to comply with Google's business partner due diligence process including providing requested information.
- 9 -
*Confidential treatment requested Google Confidential
8.2 Google warrants that the Distribution Products will for a period of [ * ] from the date of their supply to Distributor be free from any defect which has a materially adverse effect on their use or operation.
8.3 If any of the warranties in Clause 8.1 or 8.2 is breached by Google, Distributor must tell Google as soon as possible. Distributor must give Google a reasonable time to fix the problem and (if necessary) to supply Distributor with a corrected or replacement version of the Distribution Product or a way to work-around the problem that is not materially detrimental to Distributor, or to re-perform any relevant services. This will be done without any additional charge to Distributor. If Google is able to do this within a reasonable time, Google will have no other obligations or liability in relation to that breach.
8.4 Google will not be liable for breach of any of the warranties or other terms in this Agreement to the extent that the breach arises from:
(a) use of the Products other than in accordance with normal operating procedures;
(b) any alterations or maintenance to the Products done by anyone other than Google or someone authorised by Google;
(c) any problem with a computer on which the Products are installed, or with any equipment connected to that computer or any other software which is installed on that computer;
(d) any abnormal or incorrect operating conditions; or
(e) use of the Products in combination with any other hardware or software, unless this use has been approved by Google in writing.
8.5 Distributor will comply with all applicable commercial and public anti-bribery laws, including, without limitation, the UK's Bribery Act 2010 and the U.S. Foreign Corrupt Practices Act of 1977 ("Anti-Bribery Laws"), which prohibit (amongst other things) corrupt offers of anything of value, either directly or indirectly, to a government official to obtain or keep business. ''Government officials" include any government employee, candidate for public office, and employee of government-owned or government-controlled companies, public international organisations, and political parties. Furthermore, Distributor will not make any facilitation payments, which are payments to induce officials to perform routine functions they are otherwise obligated to perform.
8.6 No conditions, warranties or other terms apply to the Products, [ * ] or to any other goods or services supplied under this Agreement unless expressly set out in this Agreement. Subject to Clause 9.1, no implied conditions, warranties or other terms apply (including any implied terms as to satisfactory quality, fitness for purpose or conformance with description).
9. LIMITATION OF LIABILITY
9.1 Nothing in this Agreement shall exclude or limit either party's liability for:
(a) death or personal injury resulting from the negligence of either party or their servants, agents or employees;
(b) fraud or fraudulent misrepresentation;
- 10 -
In this Clause 9.4, "Contract Year" means a period of one year starting on the Effective Date or the relevant anniversary of the Effective Date (as appropriate). If the amount referred to in (b) above cannot be calculated accurately at the time the relevant liability is to be assessed (the "Applicable Time"), it shall be calculated on a pro-rata basis as X/Y x Z. Where: X = the total sum paid and payable to the Distributor pursuant to Clause 4 in the relevant Contract Year prior to the Applicable Time; Y = the number of days elapsed in the relevant Contract Year prior to the Applicable Time; and Z = 365 *Confidential treatment requested Google Confidential
(c) breach of any implied condition as to title or quiet enjoyment; and
(d) misuse of confidential information.
9.2 Nothing in this Agreement shall exclude or limit either party's liability under Clause 10 (Indemnities), or Distributor's liability under Clause 2 (License Grants and Restrictions), Clause 3.5 (Exclusivity), Clause 3.6 (End User License Agreement) and Clause 3.7 (Accurate Reproduction) or Clause [ * ].
9.3 Subject to Clauses 9.1 and 9.2, neither party shall be liable under this Agreement (whether in contract, tort or otherwise) for any:
(a) loss of anticipated savings;
(b) loss of business opportunity (which for the avoidance of doubt shall not include loss of advertising revenue);
(c) loss of or corruption of data;
(d) loss or damage resulting from third party claims; or
(e) indirect or consequential losses;
suffered or incurred by the other party (whether or not such losses were within the contemplation of the parties at the date of this Agreement).
9.4 Subject to Clauses 9.1 and 9.2, each party's total liability under or in connection with this Agreement (whether in contract, tort or otherwise) arising in any Contract Year is limited to the greater of:
(a) [ * ] Euros ([ * ] Euros); and
(b) [ * ]% of the total payment due to the Distributor in the relevant Contract Year pursuant to Clause 4 (Payment Terms).
- 11 -
By Distributor.
User claim arising out of or resulting from such End Users use of any Distributor App(s), including any actions or claims in product liability, tort, contract or equity. *Confidential treatment requested Google Confidential
10. INDEMNIFICATION BY GOOGLE.
10.1 Google [ * ] and will indemnify Distributor against all liabilities, costs, damages and expenses (including settlement costs approved in writing by Google and reasonable legal fees [ * ]) suffered or incurred by Distributor arising from any claim from a third party that any Products or any Google Trademark infringe(s) any copyright, trade secret or trademark of such third party (an "IP Claim"), provided that Distributor:
(a) promptly notifies Google;
(b) provides Google with reasonable information, assistance and cooperation in responding to and, where applicable, defending such IP Claim; and
(c) gives Google full control and sole authority over the defence and settlement of such IP Claim. Distributor may appoint its own supervising counsel of its choice at its own expense.
10.2 Google will not have any obligations or liability under this Clause 10 in relation to any IP Claim arising from:
(a) use of the Products or Google Trademarks in a modified form or in combination with materials not furnished by Google;
(b) use of the Products or Google Trademarks other than in accordance with this Agreement; or
(c) any content, information or data provided to Google by Distributor, End Users or any other third parties;
10.3 Google may (at its sole discretion) suspend Distributors distribution or use of the Products or the Google Trademarks which are alleged, or believed by Google, to infringe any third party's Intellectual Property Rights, or modify such items to make them non-infringing. if any suspension under this Clause continues for more than 30 days, Distributor may, at any time until use of the distribution or use of the Products or the Google Trademarks is reinstated, terminate this Agreement immediately upon written notice. [ * ] will use reasonable endeavours to [ * ] with [ * ] (to the extent it is practicable to do so) of the [ * ] or [ * ].
10.4 Distributor [ * ] and will indemnify Google against all liabilities, costs, damages and expenses (including settlement costs approved in writing by Distributor and reasonable legal fees [ * ]) suffered or incurred by Google or any Google Group Company arising from: (a) Distributor's improper (ie not in accordance with the requirements of this Agreement including the Exhibits) or unauthorised, replication, packaging, marketing, distribution, or installation of the Products, including any breach of Clause 8.5 and any claims based on representations, warranties, or misrepresentations made by Distributor, (b) any claim from a third party that the Distributor App(s) infringe any third party copyright, trademark, or trade secret, or (c) any End
- 12 -
*Confidential treatment requested Google Confidential
10.5 The indemnification obligations set out in Clause 10.4(b) shall exist only if Google: (a) promptly notifies Distributor of such claim, (b) provides Distributor with reasonable information, assistance and cooperation in responding to and, where applicable, defending the lawsuit or proceeding, and (c) gives Distributor full control and sole authority over the defense and settlement of such claim. Google may join in defense with counsel of its choice at its own expense.
10.6 The foregoing Clauses 10.1 to 10.5 states the parties' entire liability and exclusive remedy with respect to infringement of a third party's Intellectual Property Rights.
11. GENERAL
11.1 Publicity. Subject to clause 6 (Confidential Information), neither party may make any public statement regarding the relationship contemplated by this Agreement without the other's prior written approval.
11.2 Notices. All notices of termination or breach must be in English, in writing, addressed to the other party's Legal Department and sent to Distributor's address set out at the head of this Agreement or to [ * ] (as applicable) or such other address as either party has notified the other in accordance with this Clause. All notices shall be deemed to have been given on receipt as verified by written or automated receipt or electronic log (as applicable). All other notices must be in English, in writing, addressed to the other party's primary contact and sent to their then current postal address or email address.
11.3 Assignment. [ * ] may [ * ]any of its rights or obligations under this Agreement without the prior written consent of [ * ]. For the avoidance of doubt, a Change of Control shall be deemed an assignment hereunder unless [ * ] does not exercise its [ * ].
11.4 Force Majeure. Neither party shall be liable for failure to perform or delay in performing any obligation under this Agreement if the failure or delay is caused by any circumstances beyond its reasonable control.
11.5 Compliance with Export Laws. Distributor shall comply with all applicable export and re-export control laws and regulations ("Export Laws"), which the parties agree include: (a) the Export Administration Regulations maintained by the U.S. Department of Commerce, (b) trade and economic sanctions maintained by the U.S. Treasury Department's Office of Foreign Assets Control, and (c) the International Traffic in Arms Regulations maintained by the U.S. Department of State. Unless Distributor obtains prior authorisation required by applicable Export Laws, Distributor shall not export any Product to Cuba, Iran, North Korea, Sudan or Syria.
11.6 No Waiver. Failure or delay in exercising any right or remedy under this Agreement shall not constitute a waiver of such (or any other) right or remedy.
11.7 Severability. The invalidity, illegality or unenforceability of any term (or part of a term) of this Agreement shall not affect the continuation in force of the remainder of the term (if any) and this Agreement.
11.8 No Agency. Except as expressly stated otherwise, nothing in this Agreement shall create an agency, partnership or joint venture of any kind between the parties.
11.9 No Third-Party Beneficiaries. Except as expressly stated otherwise, nothing in this Agreement shall create or confer any rights or other benefits in favour of any person other than the parties to this Agreement.
- 13 -
Signed by the parties on the dates shown below.
*Confidential treatment requested Google Confidential
11.10 Governing Law. This Agreement is governed by English law and the parties submit to the exclusive jurisdiction of the English courts in relation to any dispute (contractual or non-contractual) concerning this Agreement save that either party may apply to any court for an injunction or other relief to protect its Intellectual Property Rights. If this Agreement is translated into any other language, if there is conflict the English text will take precedence.
11.11 Counterparts. The parties may execute this agreement in counterparts, which taken together will constitute one instrument.
11.12 Entire Agreement. Subject to Clause 9.1, this Agreement sets out all terms agreed between the parties in relation to its subject matter and supersedes all previous agreements between the parties relating to the same. In entering into this Agreement neither party has relied on any statement, representation or warranty not expressly set out in this Agreement.
DISTRIBUTOR GOOGLE INC /[ * ] /s/ [ * ] By By [ * ] [ * ] Name Name [ * ] [ * ] Title Title [ * ] [ * ] Date Date
- 14 -
EXHIBIT A Payments
*[ * ] ** [ * ]. *Confidential treatment requested Google Confidential
[ * ] [ * ] [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ]** [ * ]* $ [ * ]
- 15 -
EXHIBIT B Process Flow
- 16 -
Form of Offering 1 - WhiteSmoke Welcome Screen
- 17 -
2-Toolbar offer lf [ * ] Criteria Checker has returned "True"
*Confidential treatment requested
- 18 -
3-Chrome offer If [ * ] Criteria Checker has not returned 'True" AND [ * ] Criteria Checker has returned "True"
*Confidential treatment requested
- 19 -
4 - Installation Progress
Google Confidential
- 20 -
5 - Chrome First Launch If Chrome has been installed
Criteria Checker During the Term, for each End User who installs the Distributor App, Distributor shall use the [ * ] Criteria Checker to determine if [ * ] can be offered to such End User. If the [ * ] Criteria Checker returns True, Distributor shall offer the End User the opportunity to install the [ * ] in conjunction with the Distributor App. If the [ * ] Criteria Checker returns False Distributor shall: a) not offer the End User the opportunity to install the [ * ] and b) use the [ * ] Criteria Checker to determine whether the [ * ] can be offered to such End User. If the [ * ] Criteria Checker returns True, Distributor shall offer the End User the opportunity to install the [ * ] in conjunction with the Distributor App. If the [ * ] Criteria Checker returns False, Distributor shall not offer such End User the opportunity to install the [ * ]. Prior to Launch, Distributor shall obtain Google's approval of the parameters Distributor uses to call the [ * ] Criteria Checker and [ * ] Criteria Checker Chrome Browser Auto Launch. Distributor shall ensure that the first launch of the Chrome Browser following installation of the Chrome Browser complies with each of the following requirements (the "Chrome Launch Requirements"): (a) The Chrome Browser shall auto-launch immediately prior to the launch of the Distributor App, no earlier and no later. *Confidential treatment requested
- 21 -
(b) No advertisements, offers, or other communications shall appear between launch of a Distributor App and launch of the Chrome Browser. (c) Upon launch of the Chrome Browser, the Chrome Browser shall immediately appear on the End User's computer desktop exactly as shown in this Exhibit B. Without limiting the preceding sentence, each of the following shall appear on the End User's desktop exactly as shown in this Exhibit B: (i) the location and size of the Chrome Browser window and the Distributor App window, (ii) the z-order of the Distributor App and the Chrome Browser, and (iii) the number and content of the tabs in the Chrome Browser (i.e., the Chrome Browser shall contain exactly two (2) tabs, with the first tab set to google.com, and the second tab set to http://tools.google.com/chrome/intlfen-US/welcome.html (or such other url as Google may specify). In no event shall the Chrome Browser window be minimized. Notwithstanding the foregoing, Distributor may modify the content and design of the Distributor App window provided that Distributor complies with the other restrictions in this Agreement and obtains Google's prior consent. (d) The tabs in the Chrome Browser and the Omnibox shall be clearly visible to the End User as shown in this Exhibit B, regardless of the resolution of the End User's monitor. In no event shall the tabs in the Chrome Browser or the Omnibox be hidden behind a Distributor App. (e) Distributor shall implement (or, if implemented by Google, Distributor shall not modify) the six-month flag (i.e., the functionality that prevents an End User from receiving more than one (1) offer for the Chrome Browser within any six (6)-month period) unless Google has provided written confirmation (including by email) that the 6-months flag can be turned off. Note that this authorisation may be revoked at any time and Distributor shall then include the 6 months flag again in future builds.
- 22 -
EXHIBIT C Guidelines for Applications Bundled with Google Applications Google has observed a significant increase in the number of reports of software that is engaging in deceptive, malicious and other annoying practices that significantly diminish user perception and enjoyment of the internet. These practices include but are not limited to installing software on computers without obtaining informed end user consent (the so-called "drive-by download"), inundating end users with advertisements without adequate attribution or labeling, exposing users to pornographic material without obtaining informed end user consent, obtaining or transmitting personal information about an end user without obtaining informed end user consent, and interfering with an end user's ability to easily uninstall applications the end user does not wish to be on his or her computer. Google does not wish to be associated with these types of practices. Accordingly, Google has developed the Guidelines set forth below to prevent its trademark, other intellectual property, and services from being used in connection with these practices. Google believes that these Guidelines are necessary to protect Google from any allegation that it has contributed to practices that might be viewed as unlawful or actionable; to preserve the reputation of Google as a provider of trusted software and services in a manner that is beneficial and fair to users and other constituents; and to stem the rising incidence of practices that harm users and diminish the perceived value and reliability of the internet, which are essential to Google's business. With this objective in mind, Google has established the following Guidelines to apply to customer Applications that are bundled with any Google Application. Except to the extent Google has otherwise specifically agreed in writing, Google does not grant permission to, and you will not, bundle any Application with a Google Application unless you ensure that any such Application specified in the agreement between you and Google that incorporated these Guidelines complies with these Guidelines. For the avoidance of doubt, by these Guidelines Google does not intend to, and does not, impose any restrictions on what you may do with any Application that is not bundled with a Google Application, bundled with an Application that accesses Google services, or used to access Google services; you remain free to sell any Application you wish (whether or not it complies with these Guidelines) so long as it is not bundled with a Google Application, bundled with an Application that accesses Google services, or used to access Google services. In these Guidelines: (a) "you" and "your" refer to the legal entity(ies) that has entered into the contract with Google into which these Guidelines are incorporated, as well as any person or entity acting on your behalf; and (b) "Application" means any application, plug-in, helper, component or other executable code that runs on a user's computer, examples of which include those that provide browser helper objects, instant messaging, chat, email, data, file viewing, media playing, file sharing, games, internet navigation, search and other services. Google Confidential
- 23 -
Google welcomes input about these Guidelines from you and from other interested parties, and is always willing to consider revisions as appropriate to encourage innovation while protecting against deceptive, unfair and harmful practices. Accordingly, Google may update these Guidelines, including the Attachments, from time to time as provided in Section 10 below. If you have any questions about these Guidelines, please do not hesitate to discuss them with your Google account manager. Google Confidential
- 24 -
1. General. 1.1 Approval and Ongoing Compliance. You may bundle Google Applications with Applications only to the extent permitted in the signed written agreement into which these Guidelines have been incorporated. In such instance, you must ensure that your Application both (1) has been approved by Google for the purpose of being bundled with Google Applications in writing in advance, and (2) complies at all times with the requirements outlined herein. To obtain Google's approval for any Applications not expressly approved in your agreement, you must submit a written request. 1.2 No Google Branding or Attribution. Your Application, and any related collateral material (including any Web pages promoting your Application or from which your Application is made available), must not contain any Google branding, trademarks or attribution unless (and then only to the extent) Google expressly consents otherwise in writing. In addition, queries entered into Applications may not resolve to a results page that contains any Google branding, trademarks or attribution unless (and then only to the extent) Google expressly consents otherwise in writing. 2. Prohibited Content. You may not bundle any Google Application with an Application that: (a) contains any viruses, worms, trojan horses, or the like; and (b) is distributed primarily for the purpose of (i) distributing pornographic, obscene, excessively profane, gambling-related, deceptive, fraudulent or illegal content, or (ii) distributing content related to "hacking" or "cracking." 3. Prohibited Behavior. You may not bundle any Google Application with an Application that engages in deceptive, unfair, harassing or otherwise annoying practices. For example, the Application may not:
Google Confidential
(a) use, or permit an unaffiliated person to use, an end user's computer system for any purpose not understood and affirmatively consented to by the end user (including, without limitation, for purposes of consuming bandwidth or computer resources, sending email messages, launching denial of service attacks, accruing toll charges through a dialer or obtaining personal information from an end user's computer such as login, password, account or other information personal to the end user);
(b) intentionally create or exploit any security vulnerabilities in end user computers;
(c) trigger pop-ups, pop-unders, exit windows, or similar obstructive or intrusive functionality, that materially interfere with an end user's Web navigation or browsing or the use of his or her computer;
(d) repeatedly ask an end user to take, or try to deceive an end user into taking, an action that the end user has previously declined to take (such as repeatedly asking an end user to change his or her home page or some other setting or configuration);
- 25 -
4. Disclosure and Consent. 4.1 Disclosure and Consent before Installation. You may not bundle any Google Application with any Application unless you (and your distribution and bundling partners, if applicable under the terms of the agreement between you and Google that incorporates these Guidelines) design the installation of any such Application in a manner that ensures that it is installed by end users in a knowing and willful manner - e.g., no "drive-by' downloads or installs. By "distribution partner" we mean any third party who distributes your Application and by "bundling partner" we mean any third party who installs your Application in combination with or alongside one or more other Applications. At a minimum, compliance with this provision requires that, prior to installing your Application, you and any third party distributing or bundling your Application:
4.2 Disclosure and Consent for Collection and Transmission of Personally Identifiable information. You may not bundle any Google Application with any Application that (1) collects or transmits to any entity other than the end user personally identifiable information, or (2) collects or transmits information related to a user's computer or Internet usage or activity in a manner that could collect or transmit such user's personally identifiable information (such as through keystroke logging), unless prior to the first occurrence of any such collection or transmission you:
Google Confidential
(e) redirect browser traffic away from valid DNS entries (except that your Application may direct unresolved URLs to an alternative URL designated by you, provided that the page to which the end user resolves adequately informs the end user that you and your Application are the source of that page);
(f) interfere with the browser default search functionality (except that your Application may permit an end user to change his or her default search engine with proper disclosure, consent and attribution as provided below); or
(g) engage in activity that violates any applicable Jaw or regulation.
(a) first, fully, accurately, clearly and conspicuously disclose to end users:
(i) that they are installing an application,
(ii) the name of the Application, identifying you as the entity responsible for it, and
(iii) the principal and significant features and functionality of the Application; and
(b) then, obtain the end user's affirmative consent to install the Application.
(a) first, fully, accurately, clearly and conspicuously disclose:
- 26 -
4.3 Disclosure and Consent for Setting Changes. You may not bundle any Google Application with any Application that makes a change to any operating system or Application data setting which will impact the user experience of other Applications (e.g., changing the browser default home page or changing the default application for a file type, such as the default email, browser or media player application), unless prior to making such change you:
Notwithstanding the foregoing, (i) no disclosure and consent need be made for changes to operating system or Application data settings that have only a minor impact on user experience, such as adding a small number of bookmarks to the browser menu or adding an item to a start menu, and (ii) the disclosure and consent requirements of this Section 4.3 will not apply to those setting changes that may be made prior to sale to the end user. 4.4 Method of Disclosure and Consent. In order to satisfy the requirements above, the disclosure of the items specified above (a) must be provided in both (1) the End User License Agreement (EULA) or privacy policy (to the extent required by law or otherwise by industry custom) and (2) separately from the EULA and/or privacy policy (e.g. in installation screens or message boxes, as the case may be), and (b) must be designed so that it will be read by, adequately inform and evidence the consent of a typical Internet user. See Attachment 1 for sample disclosure and consent implementations that would satisfy certain of the requirements above. 4.5 EULA and Privacy Policy. You may not bundle any Google Application with any Application unless it conforms, and is distributed pursuant to a EULA that conforms, with all applicable laws and regulations. In addition, you and your Application must comply with the agreements and representations you make with your end users in your EULA and privacy policy. Your privacy policy must be accessible from your Application in an easily found location. If your Application collects or transmits any other information related to the user's use of his or her computer, but not required to be disclosed and consented to pursuant to Section 4.2, then the collection and use of such other information must be disclosed in your privacy policy. Google Confidential
(i) the type of information collected (described with specificity in the case of personally identifiable information),
(ii) the method of collection (e.g. by registration, etc.), and
(iii) the location of (i.e., a link to) the privacy policy that governs the collection, use and disclosure of the information; and
(b) then, obtain the end user's affirmative consent to such collection and/or transmission.
(a) first, fully, accurately, clearly and conspicuously disclose the change in a manner that will explain the practical effect of such change; and
(b) then, obtain the end user's affirmative consent to make such change.
- 27 -
5. Transparency. Neither you nor any of your third party distribution or bundling partners may mislead end users or create end user confusion with regard to the source or owner of an Application or any portion of its purpose, functionality or features. For example, all elements of your Application that are visible to the end user must clearly identify their source through its branding and attribution, and that identification, whatever form it takes, must correspond to the identification of your application in the menu that permits end users to remove programs. You must clearly label advertisements provided by your Application (if any) as such and clearly identify your Application as the source of those advertisements. In addition, if your Application modifies the operation or display of other applications or Web sites (other than Web sites that you own), then in each instance you must clearly and conspicuously attribute the source of that modification to your Application (as distinct from the application or Web site modified) in a manner that will inform a typical Internet user; provided that this requirement will not apply to modifications for which you obtain disclosure and consent pursuant to Section 4.3. See Attachment 1 for examples of modifications that are clearly and conspicuously disclosed to end users. 6. Deactivation. You may not bundle any Google Application with any Application that impairs an end user's ability to change any preferences or settings set by the Application in accordance with the way that such preferences or settings ordinarily may be changed by the applicable Application. Once disabled by an end user, your Application may not be re-enabled without an affirmative action by the end user to explicitly re- enable your application. Accordingly, no use, update, installation or re-enablement of a separate Application, and no code downloaded as a result of browsing a Web site, may operate to re-enable your Application. Your Application must permit end users to uninstall it (in the customary place the applicable operating system has designated for adding or removing programs, e.g., Add/Remove Programs control panel in Windows) in a straightforward manner, without undue effort or skill. In addition, your Application, when running, must provide (in an easily found location) clear and concise instructions on how it may be uninstalled. Once uninstalled, your Application must not leave behind any functionality or design elements, and all setting changes made by the application, but not explicitly agreed to by the end user, should be reversed to the extent practicable. 7. Bundling of Applications. In addition to the requirements set forth in the agreement between you and Google that incorporates these Guidelines, in order for you to bundle any Application with a Google Application must satisfy each of the following requirements:
Google Confidential
(a) the end user is made aware of all of the Applications included in the bundle prior to any installation;
(b) all such Applications included in the bundle or download comply with the provisions of Section 2 through 6 of these Guidelines;
(c) if Applications in a bundle in which you are participating are supported in part by revenue generated by advertising displayed in another independent Application included in that bundle and the continued use of the Application is conditioned on such other independent Application remaining installed and active on the end user's computer, the end user must be made aware of that relationship; and
- 28 -
8. Information and Assistance. Subject to any confidentiality obligations owed to third parties, you must provide Google with such information as Google may reasonably request about the distribution of those of your Applications that are bundled with any Google Application. For example, we may ask you to share with us: (a) the means by and/or the locations from which your Applications are distributed; or (b) the identity of any applications included in any of your bundling relationships (and the entities responsible for such applications). In addition, you must provide such assistance as Google may reasonably request to investigate and stop potential violations of these Guidelines that may be connected to your Application, including by way of using such number of identifiers and other tracking parameters as Google may reasonably request. This would include providing Google with "golden masters" of any bundle or other distribution that includes your Application, or working with Google to stop any entities that may be financially benefiting from your Application from engaging in any of these proscribed practices. You understand, however, that Google has no obligation to provide support to end users of your Application. For the avoidance of doubt, these information and assistance rights do not extend to any of your Applications that are not used to access Google services, bundled with a Google Application, or bundled with an Application that accesses Google services. 9. Legal. You must maintain ownership and control of your Application at all times to the extent required to practically and legally enforce the requirements of these guidelines. If you are seeking to permit a third party Application to be bundled with a Google Application, then you must also obtain Google's written approval of that third party Application (in addition to the approval required for your Application). If Google approves the third party Application, you are responsible for ensuring that such third party Application also complies with these Guidelines. Special indemnity and other suspension and/or termination provisions may apply. These are addressed in your agreement with Google. 10. Updates. 10.1 General. As mentioned above, Google may update these Guidelines, including the Attachments, from time to time; provided, however, that no updates will be effective until Google provides you with thirty (30) days' written notice thereof. Once you receive that notice (the date on which you receive such notice, the "Update Notice Date"), you will be required to bring your Application into compliance within thirty (30) days Google Confidential
(d) either (1) the bundle must provide for a master uninstaller that will enable the end user to uninstall every Application in the bundle without undue effort or skill, or (2) if no master uninstaller is provided, the de-installation of any Application may not be dependent or conditioned upon the de-installation of any other Application included in the bundle.
- 29 -
10.2 Extended Compliance Period. If, solely as a result of an updated requirement, one or more of your Applications no longer complies with these Guidelines, as updated, and you are incapable of bringing such Application into compliance prior to the scheduled effective date of such update (the "Update Effective Date"), you agree to provide Google with written notice thereof as soon as reasonably practicable, but in any event no later than the Update Effective Date, identifying the Application and the reasons why it may not be brought into compliance prior to the Update Effective Date, and providing such other detail as Google may reasonably request with respect thereto (consistent in any event with your confidentiality obligations). Thereafter, the parties will consult, and you agree to will work, diligently and in good faith to develop and execute a plan to bring such Application into compliance with these Guidelines, as updated, as soon as reasonably practicable, but in any event within ninety (90) days of the Update Notice Date (the "Maximum Compliance Period"). You agree that you will provide Google with such information as Google reasonably requests during this period to keep Google apprised of your progress in bringing your Application into compliance. Notwithstanding the foregoing (but subject to the next sentence), in no event may a new requirement provided for in any update to these Guidelines require you to take any action which would violate the terms of any agreement between you and any unaffiliated third party that is in effect on the date that Google delivers notice of the proposed update. In any event, if you are unable to bring any Application into compliance during the Maximum Compliance Period, Google may elect, by providing at least thirty (30) days prior written notice, to require you to cease bundling either the specific non-conforming Application or those versions of the Application which are, or are distributed, in violation of the Guidelines, as updated; it being understood that, at such time, you will be entitled to procure services from an alternative source for those Applications (or versions thereof) with respect to which Google has exercised such election. Google Confidential
- 30 -
Attachment 1 Prohibited Behavior and Content The application may not impact the display of other applications unless you provide clear disclosure in each instance
Google Confidential
- 31 -
Google Confidential
- 32 -
Disclosure and Consent Clear and conspicuous disclosure is required prior to download or install: what it is, what it does, and how it will be displayed to the end user
Disclosure and Consent Describe type, method, and use of personal information, if applicable. Point user to privacy policy
Google Confidential
- 33 -
Google Confidential
- 34 -
Branding & Attribution The visible elements of the application should be easily identifiable to the end user
Google Confidential
- 35 -
Implementation, Transparency and Deactivation The Application must permit end users to uninstall it in the customary place the applicable operating system has designated for adding or removing programs (e.g., Add/Remove Programs control panel in Windows) in a straightforward manner Google Confidential
- 36 -
Google Confidential
- 37 -
Implementation, Transparency and Deactivation The Application must contain (in an easily found location) clear and concise instructions on how it may be uninstalled
Google Confidential
- 38 -
Bundling of Applications When bundling, the end user must be made aware of all the applications included prior to installation.
Google Confidential
- 39 -
Bundling of Applications When bundling, the end user must be made aware of advertising revenue relationships to other applications, if the continued use of the primary application is conditioned on the other applications being installed and active on the end user's computer
Google Confidential
- 40 - | Highlight the parts (if any) of this contract related to "Non-Compete" that should be reviewed by a lawyer. Details: Is there a restriction on the ability of a party to compete with the counterparty or operate in a certain geography or business or technology sector? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Effective Date" that should be reviewed by a lawyer. Details: The date when the contract is effective
Context: Exhibit 99.4 JOINT FILING AGREEMENT In accordance with Rule 13d-1(k)(1) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing with each of the Reporting Persons (as such term is defined in the Schedule 13D referred to below) on behalf of each of them of a statement on Schedule 13D (including amendments thereto and statements on Schedule 13G) with respect to the Common Stock, par value $0.01 per share of Macy's, Inc., a corporation organized under the laws of the State of Delaware, and that this agreement may be included as an exhibit to such joint filing. The undersigned acknowledge that each shall be responsible for the timely filing of any amendments, and for the completeness and accuracy of the information concerning the undersigned or contained herein and therein, but shall not be responsible for the completeness and accuracy of the information concerning the others. IN WITNESS WHEREOF, the undersigned hereby execute this agreement as of May 11, 2020. VESA EQUITY INVESTMENT S.À R.L. /s/ Marek Spurny By: Marek Spurny Title:Authorized Signatory /s/ Pascal Leclerc By: Pascal Leclerc Title:Authorized Signatory EP INVESTMENT S.À R.L. /s/ Marek Spurny By: Marek Spurny Title:Authorized Signatory /s/ Pascal Leclerc By: Pascal Leclerc Title:Authorized Signatory DANIEL KŘETÍNSKÝ /s/ Daniel Kretinsky By: Daniel Kretinsky [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 99.4 JOINT FILING AGREEMENT In accordance with Rule 13d-1(k)(1) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing with each of the Reporting Persons (as such term is defined in the Schedule 13D referred to below) on behalf of each of them of a statement on Schedule 13D (including amendments thereto and statements on Schedule 13G) with respect to the Common Stock, par value $0.01 per share of Macy's, Inc., a corporation organized under the laws of the State of Delaware, and that this agreement may be included as an exhibit to such joint filing. The undersigned acknowledge that each shall be responsible for the timely filing of any amendments, and for the completeness and accuracy of the information concerning the undersigned or contained herein and therein, but shall not be responsible for the completeness and accuracy of the information concerning the others. IN WITNESS WHEREOF, the undersigned hereby execute this agreement as of May 11, 2020. VESA EQUITY INVESTMENT S.À R.L. /s/ Marek Spurny By: Marek Spurny Title:Authorized Signatory /s/ Pascal Leclerc By: Pascal Leclerc Title:Authorized Signatory EP INVESTMENT S.À R.L. /s/ Marek Spurny By: Marek Spurny Title:Authorized Signatory /s/ Pascal Leclerc By: Pascal Leclerc Title:Authorized Signatory DANIEL KŘETÍNSKÝ /s/ Daniel Kretinsky By: Daniel Kretinsky | Highlight the parts (if any) of this contract related to "Effective Date" that should be reviewed by a lawyer. Details: The date when the contract is effective | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Non-Disparagement" that should be reviewed by a lawyer. Details: Is there a requirement on a party not to disparage the counterparty?
Context: Exhibit 10.1
INTELLECTUAL PROPERTY AGREEMENT
THIS AGREEMENT (the "Agreement"), dated June 16, 2004, is made and entered into by and between VISUALANT INCORPORATED, a Nevada corporation (the "Company") and KENNETH TURPIN ("Turpin"),
WHEREAS, the Company is in the business of researching, developing, acquiring, and commercializing products and services related to color technology outside the visible spectrum, using specialized narrow band N-IR and N-UV sensors and spatial analysis software modeling which translate the invisible into the visible (the "Business"), and involving specialized and proprietary information and trade secrets which the Company considers to be amongst its most sensitive, confidential, and proprietary information;
WHEREAS, Turpin has identified, researched and is developing the Business for and on behalf of the Company;
NOW THEREFORE, in consideration of the sum of $10.00 paid by each party to the other, and the representations, warranties and covenants contained herein, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1. Definitions. In this Agreement, the following words and phrases shall have the following meanings:
(a) "Affiliate" shall have the same meaning as contained in the Canada Business Corporations Act; "Company Affiliate" shall mean any Affiliate of the Company;
(b) "Company Property" means any and all information, equipment, hardware, components, documents and other property of the Company or any Company Affiliate provided to or used by Turpin, including all computers, monitors, laptops, personal digital assistants, mobile computing devices, computer peripherals, cell phones and other telephones, pagers, storage media, security cards, keys, calling cards, charge cards, reference materials, designs, specifications, schematics, drawings, diagrams, pictures, notes, memoranda, papers, manuals, records, and the like;
(c) "Intellectual Property Rights" means any and all copyrights, design rights, trade-marks, trade secrets and confidential information, patent rights, and all other proprietary rights, which may subsist anywhere in the world, whether registered or unregistered, including all applications for registration or issuance of any of the foregoing, all priority and convention rights in any of the foregoing, and all rights to file any such applications;
(d) "Research and Development" means information pertaining to any research, development, investigation, study, analysis, experiment or test carried on or proposed to be carried on by the Company or any Company Affiliate;
(e) "Software" means any and all algorithms, data structures, code, instructions, scripts, tables, data, and other information used by a computer or processor to process information, such Software including, without limitation, (i) all source code, object code and executable code, and (ii) all routines, subroutines, program material, computer files, system architectures, models, flowcharts, requirements, specifications, notes, outlines, papers, descriptions and other
1
documents created or developed in connection with any of the foregoing, the resulting screen formats and other visual effects of the Software, and any formulae, processes, or ideas, whether or not protected by copyright;
(f) "Work" means, with respect to the Business, any and all inventions, discoveries, designs, developments, modifications, improvements, products, methods, trade secrets, mid know- how that Turpin, solely or with others, conceives of, modifies, develops, contributes to, or reduces to practice, including without limitation Software, records, documents, photographs, video recordings, sound recordings, images, designs, animations, drawings, sketches, diagrams, plans, compilations, and analyses, and all parts, elements, combinations and derivative works thereof, and
(g) "Work Product" means any and all Work and other items in any form that Turpin, solely or with others, conceives of, modifies, develops, contributes to, or reduces to practice during the period of Turpin's employment with the Company and which:
(i) relate, directly or indirectly, to the Company's present or future foreseeable Business or Research and Development; or
(ii) result from any work performed by Turpin for the Company;
whether or not such are made during or after working hours, on or off the Company's premises.
2. Ownership by the Company. Turpin acknowledges and agrees that all Work
Product have been made for the Company and that the Company shall be the exclusive owner of all right, title, and interest in and to the Work Product and all Intellectual Property Rights therein. Turpin does hereby assign and transfer to the Company, effective upon creation, all right, title, and interest that Turpin may have in and to the Work Product and all Intellectual Property Rights therein and does hereby assign all of Turpin's future right, title, and interest that Turpin may have in and to each of the Work Product and Intellectual Property Rights therein, effective at the time each is created. Turpin hereby irrevocably and expressly waives as against any person all moral rights Turpin may have in any and all Work Product.
3. Disclosure of Work Product. Turpin agrees to maintain at all times adequate and current records relating to the creation and development of the Work Product and Intellectual Property Rights therein, which records and all copies thereof shall be and shall remain the exclusive property of the Company, and to disclose all such records and copies to the Company promptly.
4. Assistance. Turpin shall, at the Company's request, assist with, execute and deliver all further documents, applications, declarations, verifications, submissions, transfers and assignments and do all other things requested by the Company, acting reasonably, during the term hereof and thereafter, at the expense of the Company, but without additional compensation, to enable the Company or its nominees to apply for, acquire, prosecute, perfect, enforce and/or maintain any and all right, title and interest, in any country, in and to the Confidential Information, the Work Product and the Intellectual Property Rights in same.
2
5. Protection of Work Product. Turpin covenants that Turpin shall not at any time directly or indirectly contest or assist any third party in contesting the Company's right, title, and interest in and to the Work Product or any Intellectual Property Rights therein. Turpin shall not, directly or indirectly, apply for or seek registration of any Intellectual Property Rights in any Work Product in any jurisdiction without the express written approval of the Company. Turpin waives any and all existing and future moral rights with respect to the Work Product and all Intellectual Property Rights therein.
6. Return of Company Property. Turpin shall deliver to the Company all Work Product and Company Property, including all originals and copies thereof, in Turpin's possession and/or control, at the request of the Company, or, in the absence of such a request, upon the termination of Turpin's employment with the Company.
7. Term and Termination. This Agreement shall continue until terminated as provided herein. This Agreement may, with written notice, be terminated by either party should Turpin's employment with the Company terminate for any reason. Termination under this Section 12 shall be effective from the date written notice is delivered or the date specified in the written notice. whichever is later.
8. Injunctive Relief. Turpin acknowledges that monetary damages would be inadequate to compensate the Company for any breach by Turpin of this Agreement and that any such breach would constitute irreparable harm to the Company. Accordingly, Turpin agrees that upon the breach or threatened breach of any terms of this Agreement, the Company shall, in addition to all other remedies, be entitled to an immediate injunction enjoining any breach of this Agreement or a decree for specific performance.
9. Amendment. Waiver. Variation. No amendment, waiver, or variation of the terms, conditions, warranties, covenants, agreements or undertakings set out herein shall be of any force or effect unless reduced to writing duly executed by all parties hereto in the same manner and with the same formality as this Agreement is executed.
10. Successors and Assigns. This Agreement shall be binding upon Turpin and the heirs and legal representatives of Turpin, and shall be binding upon and ensure to the benefit of the Company and its successors and assigns, including any corporation with which or into which the Company or its successors may be merged or which may succeed, to its assets or business.
11. Employment by Affiliates. Turpin acknowledges and agrees that Turpin's employment with the Company may be succeeded by employment with a Company Affiliate, in which case the terms of this Agreement shall continue in effect with respect to such employment until an agreement relating to this subject matter is signed between Turpin and the Company Affiliate.
12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia (without regard to its conflict of laws provisions) which shall be deemed to be the proper law thereof. All disputes or claims arising out of or in relation to the Agreement may be submitted to and resolved by the Courts of the Province of British Columbia (including the Supreme Court of Canada). The parties hereby irrevocably submit and attorn to the non-exclusive jurisdiction of such Courts to finally adjudicate or determine any suit, action, or proceeding arising out of or in relation to this Agreement.
3
13. Terms Paramount. The terms of this Agreement are in addition to any other existing terms (the "Existing Terms") between the Company and Turpin. In
the event of any inconsistency or conflict between the terms of this Agreement and any Existing Terms, the terms of this Agreement shall be paramount and shall supersede the Existing Terms to the extent of the inconsistency or conflict.
14. Time. Time shall be of the essence for each and every term and condition hereof.
15. Severability. The provisions of this Agreement, whether or not contained in the same section, are independent and separable. If any of the provisions of this Agreement shall be invalid or unenforceable under the laws of the jurisdiction where enforcement is sought, such invalidity or unenforceability shall not invalidate or render unenforceable the entire Agreement but rather the entire Agreement shall be construed as if not containing the particular invalid or unenforceable provision or provisions and the rights and obligations of the parties shall be construed and enforced accordingly, with the invalid or unenforceable provision modified so as to be limited and enforced to the fullest extent possible under the laws of that jurisdiction, with retroactive effect to the date of this Agreement.
16. Interpretation. The language in all parts of this Agreement shall be in all cases construed simply according to its fair meaning and not strictly for or against any of the parties hereto. Any rule of construction that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement. Each of the terms "including", "include" and "includes", when used in this Agreement, is not limiting whether or not non-limiting language (such as "without limitation" or "but not limited to" or words of similar import) is used with reference thereto.
17. Headings and Gender. The headings and subheadings contained in this Agreement are used solely for convenience and do not constitute a part of the Agreement, nor should they be used to aid in any manner in the construction or interpretation of this Agreement. Unless the context requires otherwise, words importing the singular include the plural and vice versa and words importing gender include all genders.
18. Counterparts and Execution by Fax. This Agreement may be executed in any number of counterparts with the same effect as if' all the parties have signed the same document. All counterparts shall be construed together and shall constitute one agreement. This Agreement may be validly executed by means of transmission of signed facsimile.
19. Acknowledgement. Turpin has carefully read and considered the terms of this Agreement and, having done so, understands the terms and agrees that the terms herein are fair and reasonable and are reasonably required for the protection of the interests of the Company.
IN WITNESS WHEREOF the parties have duly executed this Agreement on the date first above written.
VISUALANT INCORPORATED
PER /s/ RONALD P. ERICKSON -------------------------- RONALD P. ERICKSON
Authorized Signatory
/s/ KENNETH TURPIN ------------------ KENNETH TURPIN
4 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 10.1
INTELLECTUAL PROPERTY AGREEMENT
THIS AGREEMENT (the "Agreement"), dated June 16, 2004, is made and entered into by and between VISUALANT INCORPORATED, a Nevada corporation (the "Company") and KENNETH TURPIN ("Turpin"),
WHEREAS, the Company is in the business of researching, developing, acquiring, and commercializing products and services related to color technology outside the visible spectrum, using specialized narrow band N-IR and N-UV sensors and spatial analysis software modeling which translate the invisible into the visible (the "Business"), and involving specialized and proprietary information and trade secrets which the Company considers to be amongst its most sensitive, confidential, and proprietary information;
WHEREAS, Turpin has identified, researched and is developing the Business for and on behalf of the Company;
NOW THEREFORE, in consideration of the sum of $10.00 paid by each party to the other, and the representations, warranties and covenants contained herein, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1. Definitions. In this Agreement, the following words and phrases shall have the following meanings:
(a) "Affiliate" shall have the same meaning as contained in the Canada Business Corporations Act; "Company Affiliate" shall mean any Affiliate of the Company;
(b) "Company Property" means any and all information, equipment, hardware, components, documents and other property of the Company or any Company Affiliate provided to or used by Turpin, including all computers, monitors, laptops, personal digital assistants, mobile computing devices, computer peripherals, cell phones and other telephones, pagers, storage media, security cards, keys, calling cards, charge cards, reference materials, designs, specifications, schematics, drawings, diagrams, pictures, notes, memoranda, papers, manuals, records, and the like;
(c) "Intellectual Property Rights" means any and all copyrights, design rights, trade-marks, trade secrets and confidential information, patent rights, and all other proprietary rights, which may subsist anywhere in the world, whether registered or unregistered, including all applications for registration or issuance of any of the foregoing, all priority and convention rights in any of the foregoing, and all rights to file any such applications;
(d) "Research and Development" means information pertaining to any research, development, investigation, study, analysis, experiment or test carried on or proposed to be carried on by the Company or any Company Affiliate;
(e) "Software" means any and all algorithms, data structures, code, instructions, scripts, tables, data, and other information used by a computer or processor to process information, such Software including, without limitation, (i) all source code, object code and executable code, and (ii) all routines, subroutines, program material, computer files, system architectures, models, flowcharts, requirements, specifications, notes, outlines, papers, descriptions and other
1
documents created or developed in connection with any of the foregoing, the resulting screen formats and other visual effects of the Software, and any formulae, processes, or ideas, whether or not protected by copyright;
(f) "Work" means, with respect to the Business, any and all inventions, discoveries, designs, developments, modifications, improvements, products, methods, trade secrets, mid know- how that Turpin, solely or with others, conceives of, modifies, develops, contributes to, or reduces to practice, including without limitation Software, records, documents, photographs, video recordings, sound recordings, images, designs, animations, drawings, sketches, diagrams, plans, compilations, and analyses, and all parts, elements, combinations and derivative works thereof, and
(g) "Work Product" means any and all Work and other items in any form that Turpin, solely or with others, conceives of, modifies, develops, contributes to, or reduces to practice during the period of Turpin's employment with the Company and which:
(i) relate, directly or indirectly, to the Company's present or future foreseeable Business or Research and Development; or
(ii) result from any work performed by Turpin for the Company;
whether or not such are made during or after working hours, on or off the Company's premises.
2. Ownership by the Company. Turpin acknowledges and agrees that all Work
Product have been made for the Company and that the Company shall be the exclusive owner of all right, title, and interest in and to the Work Product and all Intellectual Property Rights therein. Turpin does hereby assign and transfer to the Company, effective upon creation, all right, title, and interest that Turpin may have in and to the Work Product and all Intellectual Property Rights therein and does hereby assign all of Turpin's future right, title, and interest that Turpin may have in and to each of the Work Product and Intellectual Property Rights therein, effective at the time each is created. Turpin hereby irrevocably and expressly waives as against any person all moral rights Turpin may have in any and all Work Product.
3. Disclosure of Work Product. Turpin agrees to maintain at all times adequate and current records relating to the creation and development of the Work Product and Intellectual Property Rights therein, which records and all copies thereof shall be and shall remain the exclusive property of the Company, and to disclose all such records and copies to the Company promptly.
4. Assistance. Turpin shall, at the Company's request, assist with, execute and deliver all further documents, applications, declarations, verifications, submissions, transfers and assignments and do all other things requested by the Company, acting reasonably, during the term hereof and thereafter, at the expense of the Company, but without additional compensation, to enable the Company or its nominees to apply for, acquire, prosecute, perfect, enforce and/or maintain any and all right, title and interest, in any country, in and to the Confidential Information, the Work Product and the Intellectual Property Rights in same.
2
5. Protection of Work Product. Turpin covenants that Turpin shall not at any time directly or indirectly contest or assist any third party in contesting the Company's right, title, and interest in and to the Work Product or any Intellectual Property Rights therein. Turpin shall not, directly or indirectly, apply for or seek registration of any Intellectual Property Rights in any Work Product in any jurisdiction without the express written approval of the Company. Turpin waives any and all existing and future moral rights with respect to the Work Product and all Intellectual Property Rights therein.
6. Return of Company Property. Turpin shall deliver to the Company all Work Product and Company Property, including all originals and copies thereof, in Turpin's possession and/or control, at the request of the Company, or, in the absence of such a request, upon the termination of Turpin's employment with the Company.
7. Term and Termination. This Agreement shall continue until terminated as provided herein. This Agreement may, with written notice, be terminated by either party should Turpin's employment with the Company terminate for any reason. Termination under this Section 12 shall be effective from the date written notice is delivered or the date specified in the written notice. whichever is later.
8. Injunctive Relief. Turpin acknowledges that monetary damages would be inadequate to compensate the Company for any breach by Turpin of this Agreement and that any such breach would constitute irreparable harm to the Company. Accordingly, Turpin agrees that upon the breach or threatened breach of any terms of this Agreement, the Company shall, in addition to all other remedies, be entitled to an immediate injunction enjoining any breach of this Agreement or a decree for specific performance.
9. Amendment. Waiver. Variation. No amendment, waiver, or variation of the terms, conditions, warranties, covenants, agreements or undertakings set out herein shall be of any force or effect unless reduced to writing duly executed by all parties hereto in the same manner and with the same formality as this Agreement is executed.
10. Successors and Assigns. This Agreement shall be binding upon Turpin and the heirs and legal representatives of Turpin, and shall be binding upon and ensure to the benefit of the Company and its successors and assigns, including any corporation with which or into which the Company or its successors may be merged or which may succeed, to its assets or business.
11. Employment by Affiliates. Turpin acknowledges and agrees that Turpin's employment with the Company may be succeeded by employment with a Company Affiliate, in which case the terms of this Agreement shall continue in effect with respect to such employment until an agreement relating to this subject matter is signed between Turpin and the Company Affiliate.
12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia (without regard to its conflict of laws provisions) which shall be deemed to be the proper law thereof. All disputes or claims arising out of or in relation to the Agreement may be submitted to and resolved by the Courts of the Province of British Columbia (including the Supreme Court of Canada). The parties hereby irrevocably submit and attorn to the non-exclusive jurisdiction of such Courts to finally adjudicate or determine any suit, action, or proceeding arising out of or in relation to this Agreement.
3
13. Terms Paramount. The terms of this Agreement are in addition to any other existing terms (the "Existing Terms") between the Company and Turpin. In
the event of any inconsistency or conflict between the terms of this Agreement and any Existing Terms, the terms of this Agreement shall be paramount and shall supersede the Existing Terms to the extent of the inconsistency or conflict.
14. Time. Time shall be of the essence for each and every term and condition hereof.
15. Severability. The provisions of this Agreement, whether or not contained in the same section, are independent and separable. If any of the provisions of this Agreement shall be invalid or unenforceable under the laws of the jurisdiction where enforcement is sought, such invalidity or unenforceability shall not invalidate or render unenforceable the entire Agreement but rather the entire Agreement shall be construed as if not containing the particular invalid or unenforceable provision or provisions and the rights and obligations of the parties shall be construed and enforced accordingly, with the invalid or unenforceable provision modified so as to be limited and enforced to the fullest extent possible under the laws of that jurisdiction, with retroactive effect to the date of this Agreement.
16. Interpretation. The language in all parts of this Agreement shall be in all cases construed simply according to its fair meaning and not strictly for or against any of the parties hereto. Any rule of construction that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement. Each of the terms "including", "include" and "includes", when used in this Agreement, is not limiting whether or not non-limiting language (such as "without limitation" or "but not limited to" or words of similar import) is used with reference thereto.
17. Headings and Gender. The headings and subheadings contained in this Agreement are used solely for convenience and do not constitute a part of the Agreement, nor should they be used to aid in any manner in the construction or interpretation of this Agreement. Unless the context requires otherwise, words importing the singular include the plural and vice versa and words importing gender include all genders.
18. Counterparts and Execution by Fax. This Agreement may be executed in any number of counterparts with the same effect as if' all the parties have signed the same document. All counterparts shall be construed together and shall constitute one agreement. This Agreement may be validly executed by means of transmission of signed facsimile.
19. Acknowledgement. Turpin has carefully read and considered the terms of this Agreement and, having done so, understands the terms and agrees that the terms herein are fair and reasonable and are reasonably required for the protection of the interests of the Company.
IN WITNESS WHEREOF the parties have duly executed this Agreement on the date first above written.
VISUALANT INCORPORATED
PER /s/ RONALD P. ERICKSON -------------------------- RONALD P. ERICKSON
Authorized Signatory
/s/ KENNETH TURPIN ------------------ KENNETH TURPIN
4 | Highlight the parts (if any) of this contract related to "Non-Disparagement" that should be reviewed by a lawyer. Details: Is there a requirement on a party not to disparage the counterparty? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Covenant Not To Sue" that should be reviewed by a lawyer. Details: Is a party restricted from contesting the validity of the counterparty’s ownership of intellectual property or otherwise bringing a claim against the counterparty for matters unrelated to the contract?
Context: CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY [*]. THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
SPONSORSHIP AGREEMENT
This agreement ("Agreement") is entered into as of the 15th day of December, 1997 ("Effective Date"), by and between Excite, Inc., a California corporation, located at 555 Broadway, Redwood City, California 94063 ("Excite"), and NetGrocer, Inc. a Delaware corporation, located at 333 Seventh avenue, 11th Floor, New York, NY 10001 ("NetGrocer").
RECITALS
A. Excite maintains a site on the Internet at http://www.excite.com (the "Excite Site") and owns and/or manages related World Wide Web sites worldwide (collectively, the Excite Site and the related web sites are referred to as the "Excite Network") which, among other things, allow its users to search for and access content and other sites on the Internet.
B. Within the Excite Site, Excite currently organizes certain content into topical channels, including a Shopping Channel.
C. NetGrocer operates an online supermarket service at its Web site located at http://www.netgrocer.com (the "NetGrocer Site").
D. NetGrocer wishes to promote use of the NetGrocer Site to Excite's users by sponsoring the Excite Shopping Channel and purchasing banner advertising and other promotional links on the Excite Site.
1. SPONSORSHIP
a) Excite will promote NetGrocer in the Excite Shopping Channel as follows:
i) For the term of this Agreement, Excite will display a text and/or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer Site on the Excite Shopping Channel main page.
ii) Excite will display a text and/or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer Site in the home page of the Excite Shopping Channel "Such a Deal" promotion in four separate one-week segments during each year of the term of the Agreement, once every calendar quarter.
iii) Excite will display a text and/or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer Site in the home page of the Excite Shopping Channel "Shop Here First" promotion in four separate one-week segments during the term of the Agreement, once every calendar quarter. Excite shall not display the link under this Section 1 (a)(iii) in the same weeks as the promotional link under Section 1 (a)(ii).
iv) For the term of the Agreement, Excite will display a text and/or graphic link (consistent with the format listed on similar links on the same page) to the NetGrocer Site on the front page of the "Gourmet and Groceries" department of the Excite Shopping Channel.
v) Excite will display a text and/or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer Site in the "Shop Here First" promotion in the Gourmet and Groceries department of the Excite Shopping Channel for the term of the Agreement. Such link will be displayed as the left-most link or top-most link at least fifty percent (50%) of the time.
vi) Excite currently plans to develop a coupon promotion area in the Excite Shopping Channel, tentatively called "Coupon Corner". When launched, Excite will display an advertising banner or text or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer Site will Coupon Corner for the remainder of the term of the Agreement.
b) Excite will promote NetGrocer in the Excite Site as follows:
i) For the term of the Agreement, Excite will display a link to the NetGrocer Site (consistent with the format used on similar links on the same page) in the default configuration of the "Favorite Links" listing of Web sites on the home page of the Health & Fitness and the Food & Drink departments of the Lifestyle Channel, and the home page of the Lifestyle Channel in the Excite Site.
ii) For the term of the Agreement, Excite will display a text and/or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer Site on the "Exciting Stuff' promotion on the home page of the Lifestyle Channel and the home page of the Food & Drink department of the Lifestyle Channel in the Excite Site.
iii) Excite will display a text and/or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer
-2-
Site in the area reserved for promotional rotations on the home page of the Excite Site for one week in each year of the term of the Agreement.
iv) Excite will display NetGrocer's advertising banners in the Lifestyle and Shopping Channels on the Excite Site.
v) Excite will display a link (consistent with the format used on similar links on the same page) to a co-branded version of the NetGrocer Site in the "Try, These First" area on Excite Search results pages in response to mutually determined relevant search terms. The co-branded version of the NetGrocer Site will comply with Excite's then-current standards applicable to third party sites promoted through "Try, These First" links.
vi) For the term of the Agreement, Excite will display a link to the NetGrocer Site (consistent with the format used on similar links on the same page) in the default configuration of the "services" or comparable module on the default configuration of the My Excite Channel.
c) Excite will display NetGrocer's advertising banners on Excite Search results pages on the Excite Site in response to mutually determined keywords, including the following: NetGrocer, Peapod, Oncart, Shoppers Express, grocery, groceries, women, female, disabled, senior, military, family, baby, kids, children, pets, dogs, cats staples, supermarket, drug store, and club store. Excite will work with NetGrocer to develop a more extensive list of keywords and, when Excite implements keyphrase advertising banners, Excite will work-with NetGrocer to develop a mutually-determined list of keyphrases.
d) For the term of the Agreement, Excite will display NetGrocer's advertising banners in general rotation on the Excite Site, on the MailExcite free email service and on Excite's Internet chat service.
e) Excite will use reasonable commercial efforts to deliver [*] "Impressions" of the promotional placements and advertising banners described in Sections 1 (a) - (d) in the first year of the term of the Agreement and to deliver [*] "Impressions" of the promotional placements and advertising banners described in Sections 1 (a) - (d) in the second year of the term of the Agreement. For the purposes of this Agreement, an "Impression" is defined as any link to the NetGrocer Site, whether graphic, text or any combination of graphic and text, served by Excite to a user as part of an HTML page, part of the Excite's Internet chat service or part of search results displayed in "Excite Shopping Service powered by Jango".
-3-
f) Excite guarantees that it will deliver [*] "Click-throughs" on the promotional placements and advertising banners described in Section 1 (a) - (d) in the first year of the term of the Agreement by delivering [*] of the annual guaranteed "Click-throughs" in the first quarter of the first year of the term of the Agreement, a cumulative total of [*] of the annual guaranteed "Click-throughs" in the second quarter of the first year of the term of the Agreement, a cumulative total of [*] of the annual guaranteed "Click-throughs" in the third quarter of the first year of the term of the Agreement and a cumulative total of 100% of the annual guaranteed "Click-throughs" in the fourth quarter of the
first year of the term of the Agreement. Excite guarantees that it will deliver four million fifty thousand (4,050,000) "Click-throughs" on the promotional placements and advertising banners described in Section 1(a) - (d) in the second year of the term of the Agreement by delivering [*] of the annual guaranteed "Click-throughs" in the first quarter of the second year of the term of the Agreement, a cumulative total of [*] of the annual guaranteed "Click-throughs" in the second quarter of the second year of the term of the Agreement, a cumulative total of [*] of the annual guaranteed "click-throughs" in the third quarter of the second year of the term of the Agreement and a cumulative total of 100% of the annual guaranteed "Click-throughs" in the fourth quarter of the second year of the term of the Agreement. For the purposes of this Agreement, a "Click-through" occurs when a user activates the link to the NetGrocer Site (the address or addresses of which are provided by NetGrocer for such Impression) contained in an Impression and (i) the activation of the link to the NetGrocer Site is recorded by Excite's servers or (ii) in the case of "Try These First" links only, until Excite has the technical capability to count the activation of "Try These First" links to the NetGrocer Site, the user is referred to the NetGrocer Site through the activation of a "Try These First' link and the referral is recorded by NetGrocer's servers. Until Excite has the technical capability to count the activation of "Try These First" links to the NetGrocer Site, NetGrocer will report to Excite the number of "Try These First" referrals it records within twenty (20) days following the end of each calendar month.
g) If Excite misses any quarterly guaranteed Click-through amount, Excite will make good the difference within [*] days following the end of such quarter. If Excite does not make good the difference within [*] days, NetGrocer may suspend (but not eliminate) its payments of the sponsorship and advertising fees described in Section 5(b) and 5(c) until the make-good is delivered, at which time NetGrocer will resume its payments of the sponsorship and advertising fees.
h) Excite will use commercially reasonable efforts to maintain the Excite Network and display the promotional placements and advertising banners
-4-
described in Section 1 (a) - (d) during the term of the Agreement and to display the promotional placements and advertising banners on the Excite Site in the following proportions: [*] in the Shopping Channel, [*] in the other targeted Channels and keyword banners and [*] in general rotation.
i) The content and design of the advertising banners described in Section 1(a) - (d) will be created by NetGrocer subject to Excite's then-current standards applicable to advertising banners.
j) Excite will provide account management support for NetGrocer's sponsorship of the Excite Site. Excite and NetGrocer will hold monthly review of the performance of the promotional placements and advertising banners described in Section 1 (a) - (d) and the sponsorship objectives.
2. LAUNCH DATE
a) The "Launch Date" is the date of the first display of the promotional placements and advertising banners described in Sections 1 (a) - (d). The parties intend that the Launch Date will be December 15, 1997.
b) NetGrocer and Excite will use reasonable efforts to achieve the scheduled Launch Date provided that, no later than fourteen (14) days prior to the scheduled Launch Date, NetGrocer provides final versions of all graphics, text, keywords, banner advertising, promotional placements, other promotional media and valid URL links necessary to implement the promotional placements and advertising banners described in Section 1 (a) - (dj (collectively, "Impression Material") to Excite.
c) In the event that NetGrocer fails to provide the Impression Material to Excite fourteen (14) days in advance of the scheduled Launch Date, Excite may (i) reschedule the Launch Date according to the availability of Excite's engineering resources after delivery of the complete Impression Material or (ii) commence delivery of Impressions based on Impression Material in Excite's possession at the time.
d) NetGrocer may revise, update and/or replace the Impression Material at any time in its sole discretion. Within three (3) business days of Excite's receipt of any revised advertising banners, Excite shall replace the former advertising banners with the updated advertising banners. Text and/or graphics in the "Exciting Stuff' and "Such A Deal" promotions may be
replaced with new text and/or graphics twice per month. All other text links may be replaced with new text links once per month.
-5-
3. EXCLUSIVITY
a) For the term of the Agreement, Excite will not enter into any agreement to display and shall not display on the Excite Site content created by Excite promoting NetGrocer's "Competitors", content created by NetGrocer's Competitors, promotional placements and/or advertising banners from NetGrocer's Competitors or make available on the Excite Site online supermarket sales offered by NetGrocer's Competitors.
b) For the purposes of this Agreement, "Competitors" means online supermarkets, which offer selections of consumer packaged goods and groceries comparable to NetGrocer or off-Web supermarkets, as listed in Exhibit A. The parties may amend Exhibit A from time to time and Excite will not unreasonably withhold its consent to the inclusion of bona fide Competitors submitted by NetGrocer.
c) In the event of a dispute between the parties regarding the inclusion or exclusion of an online supermarket from Exhibit A or the display on the Excite Site of advertising or promotional material from an online supermarket, the parties will follow the dispute resolution process described in Section 13(c) without the prerequisite of submitting the dispute to mediation. In the event that it is determined that Excite violated the Agreement by excluding a bona fide NetGrocer Competitor from Exhibit A or displayed on the Excite Site advertising or promotional material from a bona fide NetGrocer Competitor, Excite will be obligated to (i) immediately add the online supermarket to Exhibit A, (ii) immediately remove from the Excite Site any advertising or promotional material from the online supermarket and (iii) provide NetGrocer with advertising and promotional value, without additional cost, equal to the advertising and promotional value provided to the online supermarket prior to the removal of its advertising and promotional material from the Excite Site.
d) Notwithstanding the foregoing, Excite may display Excite Search results links to NetGrocer's Competitors in Excite Search results pages in response to user queries, may display links to NetGrocer's Competitors in Excite's general directory of Web sites and, after giving NetGrocer reasonable advance notice, in search results displayed in "Excite Shopping Service powered by Jango". For the term of this Agreement. Excite will display links to the NetGrocer Site as search results displayed in "Excite Shopping Service powered by Jango" for the categories for which NetGrocer carries products until requested not to do so by NetGrocer.
-6-
4. CUSTOMER INFORMATION
NetGrocer retains all right, title and interest to information regarding customers who access the NetGrocer Site pursuant to the Agreement.
5. SPONSORSHIP, ADVERTISING AND CLICK-THROUGH FEES
a) A one-time sponsorship initiation fee of [*] is due and will be paid to Excite upon execution of the Agreement as compensation for costs of initiating access to the Excite Network, set-up costs and other expenses associated with Excite's initiation of the links, placements, advertisements and promotions contemplated by this Agreement.
b) Separate and apart from the one-time sponsorship initiation fee NetGrocer shall pay to Excite sponsorship and advertising fees for the first year of the term of the Agreement in the total amount of [*] payable in nine equal monthly installments of [*], commencing on March 15, 1998. NetGrocer will pay the remainder of the monthly installments on or prior to the fifteenth day of each of the next eight (8) calendar months.
c) Separate and apart from the one-time sponsorship initiation fee, NetGrocer shall pay to Excite sponsorship and advertising fees for the second year of the term of the Agreement in the total amount of [*] payable in equal monthly installments of [*], commencing on December 15, 1998. NetGrocer will pay the remainder of the monthly installments on or prior to the fifteenth day of each of the next eleven (11) calendar months.
d) Separate and apart from the one-time sponsorship initiation fee and sponsorship and advertising fees, NetGrocer will pay
Excite [*] for each Click-through on the promotional placements and advertising banners described in Section 1(a) - (d) occurring during that year in excess of [*] during the first year of the term of the Agreement. NetGrocer will make these Click-through payments (if any) to Excite within thirty (30) days of Excite's monthly report and invoice reflecting Click-throughs during the first year of the term of the Agreement in excess of [*]
e) Separate and apart from the one-time sponsorship initiation fee and sponsorship and advertising fees, NetGrocer will pay Excite [*] for each Click-through on the promotional placements and
-7-
advertising banners described in Section 1(a) - (d) in excess of [*] occurring in the second year of the term of the Agreement. NetGrocer will make these Click-through payments (if any) to Excite with within thirty (30) days of Excite's monthly report and invoice reflecting Click-throughs during the second year of the term of the Agreement in excess of [*]
f) In its sole discretion, during the first year of the term of the Agreement NetGrocer may elect to terminate the display of its banner advertising on the Excite Network for the remainder of the first year of the term of the Agreement once the number of Click-throughs on the promotional placements and advertising banners described in Section 1 (a) - (d) exceeds [*] in the first year of the term of the Agreement. This election will not relieve NetGrocer of its obligation to make Click-through payments on non--banner Impressions.
g) In its sole discretion, during the second year of the term of the Agreement, NetGrocer may elect to terminate the display of its banner advertising on the Excite Network once the number of Click-throughs on the promotional placements and advertising banners described in Section 1 (a) - (d) exceeds [*] in the second year of the term of the Agreement. This election will not relieve NetGrocer of its obligation to make Click-through payments on non-banner Impressions.
h) The one-time sponsorship initiation fee, sponsorship and advertising fees and Click-through payments are net of any agency commissions to be paid by NetGrocer.
i) During the term of the Agreement, on a weekly basis, Excite will provide NetGrocer with a detailed report showing the number of Impressions of the advertising banners described in Section 1 (a) - (d) and the number of Click-throughs on the advertising banners described in Section 1 (a) - (d).
j) During the term of the Agreement, within twenty (20) days following the end of each calendar month, Excite will send NetGrocer a detailed report showing the number of Impressions of the different promotional placements and text links described in Section 1 (a) - (d) and the number of Click-throughs on the promotional placements described in Section 1 (a) - (d).
k) Excite will maintain accurate records with respect to calculation of all payments due under this Agreement. NetGrocer may, upon no less than thirty (30) days prior written notice to Excite cause an independent Certified Public Accountant to inspect the records of Excite reasonably
-8-
related to the calculation of such payments during Excite's normal business hours. The fees charged by such Certified Public Accountant will be paid by NetGrocer unless the audit finds a discrepancy of more than five percent (5%) with respect to the item being audited, in which case Excite shall be responsible for the payment of the reasonable fees for such inspection.
6. PUBLICITY
Neither party will make any public statement, press release or other announcement relating to the terms of or existence of this Agreement without the prior written approval of the other party, except as may be required to the extent advised by counsel for a party that such disclosure is necessary or appropriate to comply with applicable law. Notwithstanding the foregoing, the parties agree to issue an initial press release regarding the relationship between Excite and NetGrocer, the timing and wording of which will be mutually agreed upon,.
7. OTHER BUSINESS OPPORTUNITIES
a) Excite currently plans to develop a consumer packaged goods ("CPG") program that would combine the broad reach of the Excite Network with the depth of CPG merchants' industry
contacts and sales staffs. Under this program, Excite and each CPG merchant would develop co-branded Web pages on the Excite Network that would promote the merchant's goods cr provide content of interest to Excite's users. Excite would run dual promotional efforts, one that sends consumers to each CPG merchant's co-branded area and a second that sends consumers to the portion of the Excite Network that promotes the entire CPG program. Excite and NetGrocer agree to negotiate in good faith to establish the terms and conditions for NetGrocer's participation in Excite's CPG program when and if launched.
b) Excite currently plans to make available sponsorship opportunities on its WebCrawler Site (located at http://www.webcrawler.com) generally similar to the opportunity described by this Agreement, with the significant exception that merchants will not be granted category exclusivity or rights to exclude competitors on the WebCrawler Site. Excite and NetGrocer agree to negotiate in good faith to establish the terms and conditions for NetGrocer's participation in available sponsorship opportunities on the WebCrawler Site when and if launched.
-9-
8. TERM AND TERMINATION
a) The term of this Agreement will begin on December 15, 1997 and will end the later of (i) December 15, 1999 or (ii) Excite's delivery of all of the guaranteed Click-throughs described in Section 1(f).
b) Either party may terminate this Agreement, in the event that the other party materially breaches its obligations or guarantees hereunder and such breach remains uncured for sixty (60) days following written notice to the breaching party of the breach.
c) All payments that would be due pursuant to Sections 5(b) - (d) up to the date of any termination or expiration of this Agreement will be payable in full within thirty (30) days following such termination or expiration.
d) The provisions of Section 4 (Customer Information), Section 9(a) and 9(b), Section 10 (Confidentiality), Section 11 (Warranty and Indemnity), Section 12 (Limitation of Liability) and Section 13 (Dispute Resolution) will survive any termination or expiration of this Agreement.
9. TRADEMARK OWNERSHIP AND LICENSE
a) NetGrocer retains all right, title and interest in and to the NetGrocer Site, its trademarks, service marks and trade names worldwide, subject to the limited license granted to Excite hereunder.
b) Excite will retain all right, title and interest in and to its trademarks, service marks and trade names worldwide, subject to the limited license granted to NetGrocer hereunder.
c) Each party hereby grants to the other a non-exclusive, limited license to use its trademarks, service marks or trade names only as specifically described in this Agreement. All such use shall be in accordance with each party's reasonable policies regarding advertising and trademark usage as established from time to time.
d) Upon the expiration or termination of this Agreement, each party will cease using the trademarks, service marks and/or trade names of the other and Excite will cease the display of any banner advertising and/or links to the NetGrocer Site except as the parties may agree in writing.
10. CONFIDENTIALITY
a) For the purposes of this Agreement, "Confidential Information" means information received from the disclosing party or any of its affiliates or representatives about the disclosing party's (or its suppliers') business or
-10-
activities that is proprietary and confidential, which shall include all business, financial, technical trade secret and other information of a party marked or designated by such party as "confidential or "proprietary.
b) Confidential Information will not include information that (i) is in or enters the public domain without breach of this Agreement, (ii) the receiving party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation or (iii) the receiving party knew prior to receiving such information from the
disclosing party or develops independently.
c) Each party agrees (i) that it will not disclose to any third patty or use any Confidential Information disclosed to it by the other except as expressly permitted in this Agreement and (ii) that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance.
d) Notwithstanding the foregoing, each party may disclose Confidential Information (i) to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by law or (ii) on a "need-to-know" basis under an obligation of confidentiality to its employees, legal counsel, accountants, banks and other financing sources and their advisors.
e) The terms and conditions of this Agreement will be deemed to be the Confidential Information of each party and will not be disclosed without the written consent of the other party.
11. WARRANTY AND INDEMNITY
a) NetGrocer will indemnify, defend and hold harmless Excite, its affiliates, officers, directors, employees, consultants and agents from any and all third party claims, liability, damages and/or costs (including, but not limited to, reasonable attorneys fees) arising from:
i) The breach of any warranty, representation or covenant in this Agreement; or
ii) Any claim that the advertising banners created by NetGrocer infringe or violate any third party's copyright, patent, trade secret, trademark, right of publicity or right of privacy or contain any defamatory content; or
-11-
iii) Any claim arising from content displayed on the NetGrocer Site;
provided that Excite will promptly notify NetGrocer of any and all such claims and will reasonably cooperate with NetGrocer with the defense and/or settlement thereof; and provided further that, if any settlement requires an affirmative obligation of, results in any ongoing liability to or prejudices or detrimentally impacts Excite in any way and such obligation, liability, prejudice or impact can reasonably be expected to be material, then such settlement shall require Excite's written consent (not to be unreasonably withheld or delayed) and Excite may have its own counsel in attendance at all proceedings and substantive negotiations relating to such claim.
b) EXCEPT AS SPECIFIED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE REGARDING SUCH SUBJECT MATTER.
12. LIMITATION OF LIABILITY
EXCEPT UNDER SECTION 11(a), IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, WHETHER OR NOT THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE LIABILITY OF EXCITE FOR DAMAGES OR ALLEGED DAMAGES HEREUNDER, WHETHER IN CONTRACT, TORT OR ANY OTHER LEGAL THEORY, IS LIMITED TO, AND WILL NOT EXCEED, THE TOTAL AMOUNTS PREVIOUSLY PAID OR TO BE PAID BY NETGROCER TO EXCITE HEREUNDER [*]
13. DISPUTE RESOLUTION
a) The parties agree that any breach of either of the parties' obligations regarding trademarks, service marks or trade names and/or confidentiality would result in irreparable injury for which there is no adequate remedy at law. Therefore, in the event of any breach or threatened breach of a party's obligations regarding trademarks, service marks or trade names or confidentiality, the aggrieved party will be entitled to seek equitable relief in addition to its other available legal remedies in a court of competent jurisdiction.
-12-
b) In the event of disputes between the parties arising from or concerning in any manner the subject matter of this
Agreement, other than disputes arising from or concerning trademarks, service marks or trade names and/or confidentiality, the parties will first attempt to resolve the dispute(s) through good faith negotiation. In the event that the dispute(s) cannot be resolved through good faith negotiation, the parties will refer the dispute(s) to a mutually acceptable mediator for hearing.
c) In the event that disputes between the parties arising from or concerning in any manner the subject matter of this Agreement, other than disputes arising from or concerning trademarks, service marks or trade names and/or confidentiality, cannot be resolved through good faith negotiation and mediation, the parties will refer the dispute(s) to the American Arbitration Association for resolution through binding arbitration by a single arbitrator pursuant to the American Arbitration Association's rules applicable to commercial disputes.
14. GENERAL
a) Assignment. Neither party may assign this Agreement, in whole or in part, without the other party's written consent (which will not be unreasonably withheld), except that no such consent will be required in connection with (i) a merger, reorganization or sale of all, or substantially all, of such party's assets or (ii) the assignment and/or delegation of such party's rights and responsibilities hereunder to a wholly-owned subsidiary or joint venture in which that party holds an interest. Any attempt to assign this Agreement other than as permitted above will be null and void.
b) Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of California, notwithstanding the actual state or country of residence or incorporation of NetGrocer.
c) Notice. Any notice under this Agreement will be in writing and delivered by personal delivery, express courier, confirmed facsimile, confirmed email or certified or registered mail, return receipt requested, and will be deemed given upon personal delivery, one (1) day after deposit with express courier, upon confirmation of receipt of facsimile or email or five (5) days after deposit in the mail. Notices will be sent to a party at its address set forth below or such other address as that party may specify in writing pursuant to this Section.
d) No Agency. The parties are independent contractors and will have no power or authority to assume or create any obligation or responsibility on behalf of each other. This Agreement will not be construed to create or imply any partnership, agency or joint venture.
-13-
e) Force Majeure. Any delay in or failure of performance by either party under this Agreement will not be considered a breach of this Agreement and will be excused to the extent caused by any occurrence beyond the reasonable control of such party including, but not limited to, acts of God, power outages and governmental restrictions. Notwithstanding the foregoing, either party may terminate the Agreement in the event that a delay due to force majeure continues for a period of sixty (60) uninterrupted days.
f) Severability. In the event that any of the provisions of this Agreement are held by to be unenforceable by a court or arbitrator, the remaining portions of the Agreement will remain in full force and effect.
g) Entire Agreement. This Agreement is the complete and exclusive agreement between the parties with respect to the subject matter hereof, superseding any prior agreements and communications (both written and oral) regarding such subject matter. This Agreement may only be modified, or any rights under it waived, by a written document executed by both parties.
NetGrocer Excite, Inc.
By: /s/ Daniel Nissan By: /s/ Robert C. Hood -------------------------- -------------------------- Name: Daniel Nissan Name: Robert C. Hood ------------------------ ------------------------ Title: President & CEO Title: EVP-CFO ----------------------- ----------------------- Date: 12/30/97 Date: 12-31-97 ------------------------ ------------------------
333 Seventh Avenue 555 Broadway 11th Floor Redwood City, California 94063 New York, New York 10001 650.568.6000 (voice 650.568.6030 (fax)
-14-
EXHIBIT A
LIST OF NETGROCER COMPETITORS
Peapod
Shoppers Express/Oncart
-15- [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY [*]. THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
SPONSORSHIP AGREEMENT
This agreement ("Agreement") is entered into as of the 15th day of December, 1997 ("Effective Date"), by and between Excite, Inc., a California corporation, located at 555 Broadway, Redwood City, California 94063 ("Excite"), and NetGrocer, Inc. a Delaware corporation, located at 333 Seventh avenue, 11th Floor, New York, NY 10001 ("NetGrocer").
RECITALS
A. Excite maintains a site on the Internet at http://www.excite.com (the "Excite Site") and owns and/or manages related World Wide Web sites worldwide (collectively, the Excite Site and the related web sites are referred to as the "Excite Network") which, among other things, allow its users to search for and access content and other sites on the Internet.
B. Within the Excite Site, Excite currently organizes certain content into topical channels, including a Shopping Channel.
C. NetGrocer operates an online supermarket service at its Web site located at http://www.netgrocer.com (the "NetGrocer Site").
D. NetGrocer wishes to promote use of the NetGrocer Site to Excite's users by sponsoring the Excite Shopping Channel and purchasing banner advertising and other promotional links on the Excite Site.
1. SPONSORSHIP
a) Excite will promote NetGrocer in the Excite Shopping Channel as follows:
i) For the term of this Agreement, Excite will display a text and/or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer Site on the Excite Shopping Channel main page.
ii) Excite will display a text and/or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer Site in the home page of the Excite Shopping Channel "Such a Deal" promotion in four separate one-week segments during each year of the term of the Agreement, once every calendar quarter.
iii) Excite will display a text and/or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer Site in the home page of the Excite Shopping Channel "Shop Here First" promotion in four separate one-week segments during the term of the Agreement, once every calendar quarter. Excite shall not display the link under this Section 1 (a)(iii) in the same weeks as the promotional link under Section 1 (a)(ii).
iv) For the term of the Agreement, Excite will display a text and/or graphic link (consistent with the format listed on similar links on the same page) to the NetGrocer Site on the front page of the "Gourmet and Groceries" department of the Excite Shopping Channel.
v) Excite will display a text and/or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer Site in the "Shop Here First" promotion in the Gourmet and Groceries department of the Excite Shopping Channel for the term of the Agreement. Such link will be displayed as the left-most link or top-most link at least fifty percent (50%) of the time.
vi) Excite currently plans to develop a coupon promotion area in the Excite Shopping Channel, tentatively called "Coupon Corner". When launched, Excite will display an advertising banner or text or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer Site will Coupon Corner for the remainder of the term of the Agreement.
b) Excite will promote NetGrocer in the Excite Site as follows:
i) For the term of the Agreement, Excite will display a link to the NetGrocer Site (consistent with the format used on similar links on the same page) in the default configuration of the "Favorite Links" listing of Web sites on the home page of the Health & Fitness and the Food & Drink departments of the Lifestyle Channel, and the home page of the Lifestyle Channel in the Excite Site.
ii) For the term of the Agreement, Excite will display a text and/or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer Site on the "Exciting Stuff' promotion on the home page of the Lifestyle Channel and the home page of the Food & Drink department of the Lifestyle Channel in the Excite Site.
iii) Excite will display a text and/or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer
-2-
Site in the area reserved for promotional rotations on the home page of the Excite Site for one week in each year of the term of the Agreement.
iv) Excite will display NetGrocer's advertising banners in the Lifestyle and Shopping Channels on the Excite Site.
v) Excite will display a link (consistent with the format used on similar links on the same page) to a co-branded version of the NetGrocer Site in the "Try, These First" area on Excite Search results pages in response to mutually determined relevant search terms. The co-branded version of the NetGrocer Site will comply with Excite's then-current standards applicable to third party sites promoted through "Try, These First" links.
vi) For the term of the Agreement, Excite will display a link to the NetGrocer Site (consistent with the format used on similar links on the same page) in the default configuration of the "services" or comparable module on the default configuration of the My Excite Channel.
c) Excite will display NetGrocer's advertising banners on Excite Search results pages on the Excite Site in response to mutually determined keywords, including the following: NetGrocer, Peapod, Oncart, Shoppers Express, grocery, groceries, women, female, disabled, senior, military, family, baby, kids, children, pets, dogs, cats staples, supermarket, drug store, and club store. Excite will work with NetGrocer to develop a more extensive list of keywords and, when Excite implements keyphrase advertising banners, Excite will work-with NetGrocer to develop a mutually-determined list of keyphrases.
d) For the term of the Agreement, Excite will display NetGrocer's advertising banners in general rotation on the Excite Site, on the MailExcite free email service and on Excite's Internet chat service.
e) Excite will use reasonable commercial efforts to deliver [*] "Impressions" of the promotional placements and advertising banners described in Sections 1 (a) - (d) in the first year of the term of the Agreement and to deliver [*] "Impressions" of the promotional placements and advertising banners described in Sections 1 (a) - (d) in the second year of the term of the Agreement. For the purposes of this Agreement, an "Impression" is defined as any link to the NetGrocer Site, whether graphic, text or any combination of graphic and text, served by Excite to a user as part of an HTML page, part of the Excite's Internet chat service or part of search results displayed in "Excite Shopping Service powered by Jango".
-3-
f) Excite guarantees that it will deliver [*] "Click-throughs" on the promotional placements and advertising banners described in Section 1 (a) - (d) in the first year of the term of the Agreement by delivering [*] of the annual guaranteed "Click-throughs" in the first quarter of the first year of the term of the Agreement, a cumulative total of [*] of the annual guaranteed "Click-throughs" in the second quarter of the first year of the term of the Agreement, a cumulative total of [*] of the annual guaranteed "Click-throughs" in the third quarter of the first year of the term of the Agreement and a cumulative total of 100% of the annual guaranteed "Click-throughs" in the fourth quarter of the
first year of the term of the Agreement. Excite guarantees that it will deliver four million fifty thousand (4,050,000) "Click-throughs" on the promotional placements and advertising banners described in Section 1(a) - (d) in the second year of the term of the Agreement by delivering [*] of the annual guaranteed "Click-throughs" in the first quarter of the second year of the term of the Agreement, a cumulative total of [*] of the annual guaranteed "Click-throughs" in the second quarter of the second year of the term of the Agreement, a cumulative total of [*] of the annual guaranteed "click-throughs" in the third quarter of the second year of the term of the Agreement and a cumulative total of 100% of the annual guaranteed "Click-throughs" in the fourth quarter of the second year of the term of the Agreement. For the purposes of this Agreement, a "Click-through" occurs when a user activates the link to the NetGrocer Site (the address or addresses of which are provided by NetGrocer for such Impression) contained in an Impression and (i) the activation of the link to the NetGrocer Site is recorded by Excite's servers or (ii) in the case of "Try These First" links only, until Excite has the technical capability to count the activation of "Try These First" links to the NetGrocer Site, the user is referred to the NetGrocer Site through the activation of a "Try These First' link and the referral is recorded by NetGrocer's servers. Until Excite has the technical capability to count the activation of "Try These First" links to the NetGrocer Site, NetGrocer will report to Excite the number of "Try These First" referrals it records within twenty (20) days following the end of each calendar month.
g) If Excite misses any quarterly guaranteed Click-through amount, Excite will make good the difference within [*] days following the end of such quarter. If Excite does not make good the difference within [*] days, NetGrocer may suspend (but not eliminate) its payments of the sponsorship and advertising fees described in Section 5(b) and 5(c) until the make-good is delivered, at which time NetGrocer will resume its payments of the sponsorship and advertising fees.
h) Excite will use commercially reasonable efforts to maintain the Excite Network and display the promotional placements and advertising banners
-4-
described in Section 1 (a) - (d) during the term of the Agreement and to display the promotional placements and advertising banners on the Excite Site in the following proportions: [*] in the Shopping Channel, [*] in the other targeted Channels and keyword banners and [*] in general rotation.
i) The content and design of the advertising banners described in Section 1(a) - (d) will be created by NetGrocer subject to Excite's then-current standards applicable to advertising banners.
j) Excite will provide account management support for NetGrocer's sponsorship of the Excite Site. Excite and NetGrocer will hold monthly review of the performance of the promotional placements and advertising banners described in Section 1 (a) - (d) and the sponsorship objectives.
2. LAUNCH DATE
a) The "Launch Date" is the date of the first display of the promotional placements and advertising banners described in Sections 1 (a) - (d). The parties intend that the Launch Date will be December 15, 1997.
b) NetGrocer and Excite will use reasonable efforts to achieve the scheduled Launch Date provided that, no later than fourteen (14) days prior to the scheduled Launch Date, NetGrocer provides final versions of all graphics, text, keywords, banner advertising, promotional placements, other promotional media and valid URL links necessary to implement the promotional placements and advertising banners described in Section 1 (a) - (dj (collectively, "Impression Material") to Excite.
c) In the event that NetGrocer fails to provide the Impression Material to Excite fourteen (14) days in advance of the scheduled Launch Date, Excite may (i) reschedule the Launch Date according to the availability of Excite's engineering resources after delivery of the complete Impression Material or (ii) commence delivery of Impressions based on Impression Material in Excite's possession at the time.
d) NetGrocer may revise, update and/or replace the Impression Material at any time in its sole discretion. Within three (3) business days of Excite's receipt of any revised advertising banners, Excite shall replace the former advertising banners with the updated advertising banners. Text and/or graphics in the "Exciting Stuff' and "Such A Deal" promotions may be
replaced with new text and/or graphics twice per month. All other text links may be replaced with new text links once per month.
-5-
3. EXCLUSIVITY
a) For the term of the Agreement, Excite will not enter into any agreement to display and shall not display on the Excite Site content created by Excite promoting NetGrocer's "Competitors", content created by NetGrocer's Competitors, promotional placements and/or advertising banners from NetGrocer's Competitors or make available on the Excite Site online supermarket sales offered by NetGrocer's Competitors.
b) For the purposes of this Agreement, "Competitors" means online supermarkets, which offer selections of consumer packaged goods and groceries comparable to NetGrocer or off-Web supermarkets, as listed in Exhibit A. The parties may amend Exhibit A from time to time and Excite will not unreasonably withhold its consent to the inclusion of bona fide Competitors submitted by NetGrocer.
c) In the event of a dispute between the parties regarding the inclusion or exclusion of an online supermarket from Exhibit A or the display on the Excite Site of advertising or promotional material from an online supermarket, the parties will follow the dispute resolution process described in Section 13(c) without the prerequisite of submitting the dispute to mediation. In the event that it is determined that Excite violated the Agreement by excluding a bona fide NetGrocer Competitor from Exhibit A or displayed on the Excite Site advertising or promotional material from a bona fide NetGrocer Competitor, Excite will be obligated to (i) immediately add the online supermarket to Exhibit A, (ii) immediately remove from the Excite Site any advertising or promotional material from the online supermarket and (iii) provide NetGrocer with advertising and promotional value, without additional cost, equal to the advertising and promotional value provided to the online supermarket prior to the removal of its advertising and promotional material from the Excite Site.
d) Notwithstanding the foregoing, Excite may display Excite Search results links to NetGrocer's Competitors in Excite Search results pages in response to user queries, may display links to NetGrocer's Competitors in Excite's general directory of Web sites and, after giving NetGrocer reasonable advance notice, in search results displayed in "Excite Shopping Service powered by Jango". For the term of this Agreement. Excite will display links to the NetGrocer Site as search results displayed in "Excite Shopping Service powered by Jango" for the categories for which NetGrocer carries products until requested not to do so by NetGrocer.
-6-
4. CUSTOMER INFORMATION
NetGrocer retains all right, title and interest to information regarding customers who access the NetGrocer Site pursuant to the Agreement.
5. SPONSORSHIP, ADVERTISING AND CLICK-THROUGH FEES
a) A one-time sponsorship initiation fee of [*] is due and will be paid to Excite upon execution of the Agreement as compensation for costs of initiating access to the Excite Network, set-up costs and other expenses associated with Excite's initiation of the links, placements, advertisements and promotions contemplated by this Agreement.
b) Separate and apart from the one-time sponsorship initiation fee NetGrocer shall pay to Excite sponsorship and advertising fees for the first year of the term of the Agreement in the total amount of [*] payable in nine equal monthly installments of [*], commencing on March 15, 1998. NetGrocer will pay the remainder of the monthly installments on or prior to the fifteenth day of each of the next eight (8) calendar months.
c) Separate and apart from the one-time sponsorship initiation fee, NetGrocer shall pay to Excite sponsorship and advertising fees for the second year of the term of the Agreement in the total amount of [*] payable in equal monthly installments of [*], commencing on December 15, 1998. NetGrocer will pay the remainder of the monthly installments on or prior to the fifteenth day of each of the next eleven (11) calendar months.
d) Separate and apart from the one-time sponsorship initiation fee and sponsorship and advertising fees, NetGrocer will pay
Excite [*] for each Click-through on the promotional placements and advertising banners described in Section 1(a) - (d) occurring during that year in excess of [*] during the first year of the term of the Agreement. NetGrocer will make these Click-through payments (if any) to Excite within thirty (30) days of Excite's monthly report and invoice reflecting Click-throughs during the first year of the term of the Agreement in excess of [*]
e) Separate and apart from the one-time sponsorship initiation fee and sponsorship and advertising fees, NetGrocer will pay Excite [*] for each Click-through on the promotional placements and
-7-
advertising banners described in Section 1(a) - (d) in excess of [*] occurring in the second year of the term of the Agreement. NetGrocer will make these Click-through payments (if any) to Excite with within thirty (30) days of Excite's monthly report and invoice reflecting Click-throughs during the second year of the term of the Agreement in excess of [*]
f) In its sole discretion, during the first year of the term of the Agreement NetGrocer may elect to terminate the display of its banner advertising on the Excite Network for the remainder of the first year of the term of the Agreement once the number of Click-throughs on the promotional placements and advertising banners described in Section 1 (a) - (d) exceeds [*] in the first year of the term of the Agreement. This election will not relieve NetGrocer of its obligation to make Click-through payments on non--banner Impressions.
g) In its sole discretion, during the second year of the term of the Agreement, NetGrocer may elect to terminate the display of its banner advertising on the Excite Network once the number of Click-throughs on the promotional placements and advertising banners described in Section 1 (a) - (d) exceeds [*] in the second year of the term of the Agreement. This election will not relieve NetGrocer of its obligation to make Click-through payments on non-banner Impressions.
h) The one-time sponsorship initiation fee, sponsorship and advertising fees and Click-through payments are net of any agency commissions to be paid by NetGrocer.
i) During the term of the Agreement, on a weekly basis, Excite will provide NetGrocer with a detailed report showing the number of Impressions of the advertising banners described in Section 1 (a) - (d) and the number of Click-throughs on the advertising banners described in Section 1 (a) - (d).
j) During the term of the Agreement, within twenty (20) days following the end of each calendar month, Excite will send NetGrocer a detailed report showing the number of Impressions of the different promotional placements and text links described in Section 1 (a) - (d) and the number of Click-throughs on the promotional placements described in Section 1 (a) - (d).
k) Excite will maintain accurate records with respect to calculation of all payments due under this Agreement. NetGrocer may, upon no less than thirty (30) days prior written notice to Excite cause an independent Certified Public Accountant to inspect the records of Excite reasonably
-8-
related to the calculation of such payments during Excite's normal business hours. The fees charged by such Certified Public Accountant will be paid by NetGrocer unless the audit finds a discrepancy of more than five percent (5%) with respect to the item being audited, in which case Excite shall be responsible for the payment of the reasonable fees for such inspection.
6. PUBLICITY
Neither party will make any public statement, press release or other announcement relating to the terms of or existence of this Agreement without the prior written approval of the other party, except as may be required to the extent advised by counsel for a party that such disclosure is necessary or appropriate to comply with applicable law. Notwithstanding the foregoing, the parties agree to issue an initial press release regarding the relationship between Excite and NetGrocer, the timing and wording of which will be mutually agreed upon,.
7. OTHER BUSINESS OPPORTUNITIES
a) Excite currently plans to develop a consumer packaged goods ("CPG") program that would combine the broad reach of the Excite Network with the depth of CPG merchants' industry
contacts and sales staffs. Under this program, Excite and each CPG merchant would develop co-branded Web pages on the Excite Network that would promote the merchant's goods cr provide content of interest to Excite's users. Excite would run dual promotional efforts, one that sends consumers to each CPG merchant's co-branded area and a second that sends consumers to the portion of the Excite Network that promotes the entire CPG program. Excite and NetGrocer agree to negotiate in good faith to establish the terms and conditions for NetGrocer's participation in Excite's CPG program when and if launched.
b) Excite currently plans to make available sponsorship opportunities on its WebCrawler Site (located at http://www.webcrawler.com) generally similar to the opportunity described by this Agreement, with the significant exception that merchants will not be granted category exclusivity or rights to exclude competitors on the WebCrawler Site. Excite and NetGrocer agree to negotiate in good faith to establish the terms and conditions for NetGrocer's participation in available sponsorship opportunities on the WebCrawler Site when and if launched.
-9-
8. TERM AND TERMINATION
a) The term of this Agreement will begin on December 15, 1997 and will end the later of (i) December 15, 1999 or (ii) Excite's delivery of all of the guaranteed Click-throughs described in Section 1(f).
b) Either party may terminate this Agreement, in the event that the other party materially breaches its obligations or guarantees hereunder and such breach remains uncured for sixty (60) days following written notice to the breaching party of the breach.
c) All payments that would be due pursuant to Sections 5(b) - (d) up to the date of any termination or expiration of this Agreement will be payable in full within thirty (30) days following such termination or expiration.
d) The provisions of Section 4 (Customer Information), Section 9(a) and 9(b), Section 10 (Confidentiality), Section 11 (Warranty and Indemnity), Section 12 (Limitation of Liability) and Section 13 (Dispute Resolution) will survive any termination or expiration of this Agreement.
9. TRADEMARK OWNERSHIP AND LICENSE
a) NetGrocer retains all right, title and interest in and to the NetGrocer Site, its trademarks, service marks and trade names worldwide, subject to the limited license granted to Excite hereunder.
b) Excite will retain all right, title and interest in and to its trademarks, service marks and trade names worldwide, subject to the limited license granted to NetGrocer hereunder.
c) Each party hereby grants to the other a non-exclusive, limited license to use its trademarks, service marks or trade names only as specifically described in this Agreement. All such use shall be in accordance with each party's reasonable policies regarding advertising and trademark usage as established from time to time.
d) Upon the expiration or termination of this Agreement, each party will cease using the trademarks, service marks and/or trade names of the other and Excite will cease the display of any banner advertising and/or links to the NetGrocer Site except as the parties may agree in writing.
10. CONFIDENTIALITY
a) For the purposes of this Agreement, "Confidential Information" means information received from the disclosing party or any of its affiliates or representatives about the disclosing party's (or its suppliers') business or
-10-
activities that is proprietary and confidential, which shall include all business, financial, technical trade secret and other information of a party marked or designated by such party as "confidential or "proprietary.
b) Confidential Information will not include information that (i) is in or enters the public domain without breach of this Agreement, (ii) the receiving party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation or (iii) the receiving party knew prior to receiving such information from the
disclosing party or develops independently.
c) Each party agrees (i) that it will not disclose to any third patty or use any Confidential Information disclosed to it by the other except as expressly permitted in this Agreement and (ii) that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance.
d) Notwithstanding the foregoing, each party may disclose Confidential Information (i) to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by law or (ii) on a "need-to-know" basis under an obligation of confidentiality to its employees, legal counsel, accountants, banks and other financing sources and their advisors.
e) The terms and conditions of this Agreement will be deemed to be the Confidential Information of each party and will not be disclosed without the written consent of the other party.
11. WARRANTY AND INDEMNITY
a) NetGrocer will indemnify, defend and hold harmless Excite, its affiliates, officers, directors, employees, consultants and agents from any and all third party claims, liability, damages and/or costs (including, but not limited to, reasonable attorneys fees) arising from:
i) The breach of any warranty, representation or covenant in this Agreement; or
ii) Any claim that the advertising banners created by NetGrocer infringe or violate any third party's copyright, patent, trade secret, trademark, right of publicity or right of privacy or contain any defamatory content; or
-11-
iii) Any claim arising from content displayed on the NetGrocer Site;
provided that Excite will promptly notify NetGrocer of any and all such claims and will reasonably cooperate with NetGrocer with the defense and/or settlement thereof; and provided further that, if any settlement requires an affirmative obligation of, results in any ongoing liability to or prejudices or detrimentally impacts Excite in any way and such obligation, liability, prejudice or impact can reasonably be expected to be material, then such settlement shall require Excite's written consent (not to be unreasonably withheld or delayed) and Excite may have its own counsel in attendance at all proceedings and substantive negotiations relating to such claim.
b) EXCEPT AS SPECIFIED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE REGARDING SUCH SUBJECT MATTER.
12. LIMITATION OF LIABILITY
EXCEPT UNDER SECTION 11(a), IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, WHETHER OR NOT THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE LIABILITY OF EXCITE FOR DAMAGES OR ALLEGED DAMAGES HEREUNDER, WHETHER IN CONTRACT, TORT OR ANY OTHER LEGAL THEORY, IS LIMITED TO, AND WILL NOT EXCEED, THE TOTAL AMOUNTS PREVIOUSLY PAID OR TO BE PAID BY NETGROCER TO EXCITE HEREUNDER [*]
13. DISPUTE RESOLUTION
a) The parties agree that any breach of either of the parties' obligations regarding trademarks, service marks or trade names and/or confidentiality would result in irreparable injury for which there is no adequate remedy at law. Therefore, in the event of any breach or threatened breach of a party's obligations regarding trademarks, service marks or trade names or confidentiality, the aggrieved party will be entitled to seek equitable relief in addition to its other available legal remedies in a court of competent jurisdiction.
-12-
b) In the event of disputes between the parties arising from or concerning in any manner the subject matter of this
Agreement, other than disputes arising from or concerning trademarks, service marks or trade names and/or confidentiality, the parties will first attempt to resolve the dispute(s) through good faith negotiation. In the event that the dispute(s) cannot be resolved through good faith negotiation, the parties will refer the dispute(s) to a mutually acceptable mediator for hearing.
c) In the event that disputes between the parties arising from or concerning in any manner the subject matter of this Agreement, other than disputes arising from or concerning trademarks, service marks or trade names and/or confidentiality, cannot be resolved through good faith negotiation and mediation, the parties will refer the dispute(s) to the American Arbitration Association for resolution through binding arbitration by a single arbitrator pursuant to the American Arbitration Association's rules applicable to commercial disputes.
14. GENERAL
a) Assignment. Neither party may assign this Agreement, in whole or in part, without the other party's written consent (which will not be unreasonably withheld), except that no such consent will be required in connection with (i) a merger, reorganization or sale of all, or substantially all, of such party's assets or (ii) the assignment and/or delegation of such party's rights and responsibilities hereunder to a wholly-owned subsidiary or joint venture in which that party holds an interest. Any attempt to assign this Agreement other than as permitted above will be null and void.
b) Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of California, notwithstanding the actual state or country of residence or incorporation of NetGrocer.
c) Notice. Any notice under this Agreement will be in writing and delivered by personal delivery, express courier, confirmed facsimile, confirmed email or certified or registered mail, return receipt requested, and will be deemed given upon personal delivery, one (1) day after deposit with express courier, upon confirmation of receipt of facsimile or email or five (5) days after deposit in the mail. Notices will be sent to a party at its address set forth below or such other address as that party may specify in writing pursuant to this Section.
d) No Agency. The parties are independent contractors and will have no power or authority to assume or create any obligation or responsibility on behalf of each other. This Agreement will not be construed to create or imply any partnership, agency or joint venture.
-13-
e) Force Majeure. Any delay in or failure of performance by either party under this Agreement will not be considered a breach of this Agreement and will be excused to the extent caused by any occurrence beyond the reasonable control of such party including, but not limited to, acts of God, power outages and governmental restrictions. Notwithstanding the foregoing, either party may terminate the Agreement in the event that a delay due to force majeure continues for a period of sixty (60) uninterrupted days.
f) Severability. In the event that any of the provisions of this Agreement are held by to be unenforceable by a court or arbitrator, the remaining portions of the Agreement will remain in full force and effect.
g) Entire Agreement. This Agreement is the complete and exclusive agreement between the parties with respect to the subject matter hereof, superseding any prior agreements and communications (both written and oral) regarding such subject matter. This Agreement may only be modified, or any rights under it waived, by a written document executed by both parties.
NetGrocer Excite, Inc.
By: /s/ Daniel Nissan By: /s/ Robert C. Hood -------------------------- -------------------------- Name: Daniel Nissan Name: Robert C. Hood ------------------------ ------------------------ Title: President & CEO Title: EVP-CFO ----------------------- ----------------------- Date: 12/30/97 Date: 12-31-97 ------------------------ ------------------------
333 Seventh Avenue 555 Broadway 11th Floor Redwood City, California 94063 New York, New York 10001 650.568.6000 (voice 650.568.6030 (fax)
-14-
EXHIBIT A
LIST OF NETGROCER COMPETITORS
Peapod
Shoppers Express/Oncart
-15- | Highlight the parts (if any) of this contract related to "Covenant Not To Sue" that should be reviewed by a lawyer. Details: Is a party restricted from contesting the validity of the counterparty’s ownership of intellectual property or otherwise bringing a claim against the counterparty for matters unrelated to the contract? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Source Code Escrow" that should be reviewed by a lawyer. Details: Is one party required to deposit its source code into escrow with a third party, which can be released to the counterparty upon the occurrence of certain events (bankruptcy, insolvency, etc.)?
Context: [INITIALS ILLEGIBLE] [INITIALS ILLEGIBLE] 20.3.98 30.4.98
5
SCHEDULE 3
Project Managers
The Publishers:
Project Manager - --------------- Ian Bannerman Blackwell Science Ltd Osney Mead Oxford OX2 0EL UK e-mail: ian.bannerman@blacksci.co.uk tel: +44 (0)1865 206101
Deputy Project Manager - ---------------------- Martin Clutterbuck Blackwell Science Ltd Osney Mead Oxford OX2 0EL UK e-mail: martin.clutterbuck@blacksci.co.uk tel: +44 (0)1865 206110
Deputy Project Manager - ---------------------- Anders Geertsen Munksgaard International Publishers Ltd 35 Norre Sogade, P.O. Box 2148 1016 Copenhagen K Denmark e-mail: ag@mail.munksgaard.dk tel: +45 77 33 31 03
HealthGate:
Project Manager - --------------- Mark Israel HealthGate 380 Pleasant Street Suite 230 Malden MA 02148 USA tel: 781 321 6000 Ext 248 e-mail: misra@healthgate.com
Deputy Project Manager - ---------------------- Rick Lawson HealthGate 380 Pleasant Street Suite 230 Malden MA 02148 USA tel: 781 321 6000 Ext 211 e-mail: lawson@healthgate.com
[INITIALS ILLEGIBLE] [INITIALS ILLEGIBLE] 20.3.98 30.4.98
6
SCHEDULE 4
3
SCHEDULE 4
ESCROW AGREEMENT
When the annexed escrow agreement is entered, the terms shall include those set out in the annexed letter from NCC Escrow International, the escrow agent, of 12 March 1998 by way of variation of NCC document STD001Y2K.UK.
The Required Information at ii) shall be provided by the parties. The date of the Licence Agreement shall be the date of this agreement. The name of the
package shall be "HealthGate Electronic Journal Proprietary Software". These words shall also appear in Schedule 1 of the escrow agreement. The parties shall provide the medium on which the source code shall be supplied, which in default of agreement shall be such medium as the escrow agent NCC Escrow International Limited thinks fit.
The fees to be inserted in Schedule 4 of the Escrow Agreement shall be the then applicable fees of NCC Escrow International Limited.
The Escrow Agreement shall be signed by HealthGate and Blackwell Science Limited.
[INITIALS ILLEGIBLE] [INITIALS ILLEGIBLE] 20.3.98 30.4.98
NCC ESCROW INTERNATIONAL
12 March 1998 National Computing Centre Oxford House, Oxford Road Manchester M1 7ED, UK
Telephone: +44(O)161 228 6333 Facsimile: +44(0)161 242 2275 e-mail: escrow@ncc.co.uk
Mr J S Saunders [NCC LOGO] Linnells, Solicitors Greyfriars Court Paradise Square Oxford OX1 1BB
Dear Mr Saunders
Proposed Escrow Agreement: Healthgate Data Corp / Blackwell Science Ltd / NCC
I confirm that NCC is willing to enter into our standard form escrow agreement std001y2k.uk with the following amendments by reference to the appropriate clauses:
(2) Add the words "and/or companies in the Blackwell Science Ltd group" after "Blackwell Science Ltd".
6.1.6 A new clause: "there is a Change in Control of the Owner. For the purposes of this clause, a person shall have "Control" of a company if he holds, directly or indirectly, shares which together with shares held by any persons acting in concert with him carry 50% or more of the voting rights of that company, and "Change in Control" shall be interpreted accordingly. Words and phrases in the City Code on Take-overs and Mergers shall have the same meaning here."
6.1.7 A new clause: "the Licensee exercises its option under clause 10.4.1 of the Licence Agreement".
11.4 Replace with: "If the obligations in clause 31 of the Licence Agreement have terminated this Agreement will automatically terminate on the same date."
Yours sincerely
/s/ Carmel Gorman
Carmel Gorman NCC Escrow International
[INITIALS ILLEGIBLE] [INITIALS ILLEGIBLE] 20.3.98 30.4.98
[NCC Escrow International logo]
This document is to be used where an Owner deposits source code on behalf of a single user only.
PROCEDURE:
The required information sheet on page ii should be completed, detached and returned by fax or post to NCC at the following address:
Contracts Administrator NCC Escrow International Limited Oxford House, Oxford Road Manchester M1 7ED, England
Telephone: +44 (0) 161 242 2109 Facsimile: +44 (0) 161 242 2275 E-mail: escrow@ncc.co.uk
i. NCC will check the required information and will then send out signature copies of the Escrow Agreement, together with the relevant invoices. A reference number will be given in respect of that agreement which must be quoted in all correspondence.
ESCROW 2000
ii. When the Owner and the Licensee have signed the Escrow Agreement all copies must be returned to NCC.
iii. NCC will sign and date the Agreement and a signed copy will be sent to each party.
iv. The Owner should then lodge the Material.
NB: Until all parties sign the Escrow Agreement no binding escrow arrangements have been made.
single licensee ---------- UK
Version 1: August 1997 i
FAO: P. FLEMING REQUIRED INFORMATION - --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- OWNER
[-1] Company Name ---------------------------------------------------------------
[-2] Registered Office ----------------------------------------------------------
- --------------------------------------------------------------------------------
Correspondence Address ----------------------------------------------------------
*[-3] Company Registration Number *VAT Number ------------------- -----------------
Telephone Number Fax Number ------------------------------------ ------------------
Contact Name Position in Company ------------------------------- ------------------
*only applicable to countries within the EU - --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- LICENSEE
[-4] Company Name ---------------------------------------------------------------
[-5] Registered Office ----------------------------------------------------------
- --------------------------------------------------------------------------------
Correspondence Address ----------------------------------------------------------
*[-6] Company Registration Number *VAT Number ------------------- -----------------
Telephone Number Fax Number ------------------------------------ ------------------
Contact Name Position in Company ------------------------------- ------------------
*only applicable to countries within the EU - --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- OTHER DETAILS
[-7] Name of Package ------------------------------------------------------------
- --------------------------------------------------------------------------------
INSURANCE FEE (complete if appropriate) - -------------------------------------------------------------------------------- Standard NCC limitation of liability is St(pound)500,000 (no charge).
There is a charge of St(pound)100 (annual fee) for each additional St(pound)500,000.
Maximum liability is St(pound)5,000,000.
Please indicate required liability --------------------------
- --------------------------------------------------------------------------------
------------------------------------ FEES PAYABLE (tick as appropriate) Owner Licensee - -------------------------------------------------------------------------------- Initial Fee - -------------------------------------------------------------------------------- Annual Fee - -------------------------------------------------------------------------------- Update Fee (payable in the event of more than 4 updates per annum) - -------------------------------------------------------------------------------- Storage Fee (payable if the source code exceeds one cubic foot) - -------------------------------------------------------------------------------- Annual liability fee payable (if appropriate) - -------------------------------------------------------------------------------- Release Fee (plus NCC's reasonable expenses) X - --------------------------------------------------------------------------------
ii Version 1: August 1997
(C) NCC Escrow International Limited 1997 STD001Y2K.UK
[NCC Escrow International logo]
SINGLE LICENSEE (UK) ESCROW 2000 - -------------------------------------------------------------------------------- ESCROW AGREEMENT: DATED:
Between:
(1) [-1] whose registered office is at [-2] (CRN: [-3]) ("the Owner");
(2) [-4] whose registered office is at [-5] (CRN: [-6]) ("the Licensee"); and
(3) NCC ESCROW INTERNATIONAL LIMITED whose registered office is at Oxford House, Oxford Road, Manchester M1 7ED, England (CRN:3081952) ("NCC").
Preliminary:
(A) The Licensee has been granted a licence to use a software package comprising computer programs.
(B) Certain technical information and documentation describing the software package are the confidential property of the Owner and are required for understanding, maintaining and correcting the software package.
(C) The Owner acknowledges that in certain circumstances the Licensee may require possession of the technical information and documentation held under this Agreement.
(D) Each of the parties to this Agreement acknowledges that the considerations for their respective undertakings given under it are the undertakings given under it by each of the other parties.
It is agreed that:
1 Definitions
In this Agreement the following terms shall have the following meanings:
1.1 "Full Verification Service" means those bespoke tests agreed between the Licensee and NCC for the verification of the Material;
1.2 "Intellectual Property Rights" means copyright, trade secret, patent, and all other rights of a similar nature;
1.3 "Licence Agreement" means the licence granted to the Licensee for the Package;
1.4 "Material" means the source code of the Package comprising the latest technical information and documentation described in Schedules 1 and 2;
1.5 "Package" means the software package licensed to the Licensee under the Licence Agreement; and
1.6 "Standard Verification Service" means those tests detailed in the Standard Verification Service published by NCC from time to time.
2 Owner's Duties and Warranties
2.1 The Owner shall:
2.1.1 deliver a copy of the Material to NCC within 30 days of the date of this Agreement;
2.1.2 at all times ensure that the Material as delivered to NCC is capable of being used to generate the latest version of the Package issued to the Licensee and shall deliver further copies of the Material as and when necessary;
2.1.3 deliver to NCC a replacement copy of the Material within 12 months of the last delivery;
2.1.4 deliver a replacement copy of the Material within 14 days of receipt of a notice served upon it by NCC under the provisions of Clause 4.1.5; and
2.1.5 deliver with each deposit of the Material the information detailed in Schedule 2.
2.2 The Owner warrants that:
2.2.1 it owns the Intellectual Property Rights in the Material and has authority to enter into this Agreement; and
2.2.2 the Material lodged under Clause 2.1 shall contain all information in human-readable form and on suitable media to enable a reasonably skilled programmer or analyst to understand, maintain and correct the Package without the assistance of any other person.
3 Licensee's Responsibilities
It shall be the responsibility of the Licensee to notify NCC of any change to the Package that necessitates a replacement deposit of the Material.
Version 1: August 1997 1 of 6
4 NCC's Duties
4.1 NCC shall:
4.1.1 hold the Material in a safe and secure environment;
4.1.2 inform the Owner and the Licensee of the receipt of any copy of the Material;
4.1.3 in accordance with the terms of Clause 9 perform those tests that form part of its Standard Verification Service from time to time;
4.1.4 at all times retain a copy of the latest verified deposit of the Material; and
4.1.5 notify the Owner if it becomes aware at any time during the term of this Agreement that the copy of the Material held by it has been lost, damaged or destroyed.
4.2 NCC shall not be responsible for procuring the delivery of the Material in the event of failure by the Owner to do so.
5 Payment
NCC's fees are payable in accordance with Schedule 4.
6 Release Events
6.1 Subject to the provisions of Clauses 6.2 and 6.3, NCC shall release the Material to a duly authorised officer of the Licensee if at any time or times any of the following events or circumstances occur, arise or become apparent:
6.1.1 the Owner enters into any composition or arrangement with its creditors or (being a company) enters into liquidation whether compulsory or voluntary (other than for the purposes of solvent reconstruction or amalgamation) or has a receiver or administrative receiver appointed over all or any part of its assets or undertaking or a petition is presented for an Administration Order or (being an individual or partnership) becomes bankrupt, or an event occurs within the jurisdiction of the country in which the Owner is situated which has a similar effect to any of the above events in the United Kingdom; or
6.1.2 the Owner ceases to trade; or
6.1.3 the Owner assigns copyright in the Material and the assignee fails within 60 days of such assignment to offer the Licensee substantially similar protection to that provided by this Agreement without significantly increasing the cost to the Licensee; or
6.1.4 the Owner without legal justification, has defaulted to a material degree in any obligation to provide maintenance or modification of the Package under the Licence Agreement or any maintenance agreement entered into in connection with the Package and has failed to remedy such default notified by the Licensee to the Owner; or
6.1.5 coding of the Package is such that either the accuracy or the functionality or the performance of the Package is or becomes or is demonstrably likely to become significantly adversely affected by the entry or processing of data incorporating any date or dates whether prior or subsequent to or including 31 December 1999, including but not limited to any of the following:
6.1.5.1 the Package crashes at any time while processing any such data;
6.1.5.2. the Owner has warranted or represented that the Package is capable of accurately and correctly processing such data in accordance with the Package's current functional specification and the Licensee demonstrates that the Package is not so capable;
6.1.5.3 the Owner has undertaken or attempted to procure the Package to be so capable and the Licensee demonstrates that the Package is still not so capable;
6.1.5.4 no such warranty, representation, undertaking or attempt has been given or made and the Licensee demonstrates that the Package is not so capable.
6.2 The Licensee must notify NCC of any event or circumstance of any of the kinds specified in Clause 6.1 by delivering to NCC a statutory or notarised declaration ("the Declaration") made by an officer of the Licensee attesting that such event has occurred and that the Licence Agreement was still valid and effective up to the occurrence of such event and exhibiting:
6.2.1 such documentation in support of the Declaration as NCC shall reasonably require;
6.2.2 a copy of the Licence Agreement; and
6.2.3 a signed confidentiality undertaking as detailed in Schedule 3
then NCC will release the Material to the Licensee upon receipt of the release fee stated in Schedule 4.
6.3 Upon receipt of a Declaration from the Licensee claiming a release event under Clause 6.1.4:
6.3.1 NCC shall send a copy of the Declaration to the Owner by registered post; and
6.3.2 unless within 14 days after the date of delivery the Owner delivers to NCC a counter-notice signed by a duly authorised officer of the Owner stating that no such failure has occurred or that any such failure has been rectified
then NCC will release the Material to the Licensee upon receipt of the release fee stated in Schedule 4.
2 of 6 Version 1: August 1997
(C) NCC Escrow International Limited 1997 STD001Y2K.UK
6.4 Where there is any dispute as to the occurrence of any of the events or circumstances set out in Clause 6.1.1 to 6.1.4, 6.2 or 6.3 or the fulfilment of any obligations detailed therein, such dispute will be referred at the request of either the Owner or the Licensee to the Managing Director for the time being of NCC for the appointment of an expert who shall give a decision on the matter within 14 days of the date of referral or as soon as practicable thereafter. The expert's decision shall be final and binding as between the Owner and the Licensee except in the case of manifest error.
6.5 Where there is any dispute as to the occurrence of any of the events or circumstances set out in Clause 6.1.5 or the fulfillment of any obligations referred to therein, such dispute will be referred to arbitration in accordance with Clause 12.
7 Confidentiality
7.1 The Material shall remain the confidential property of the Owner and in the event that NCC provides a copy of the Material to the Licensee, the Licensee shall be permitted to use the Material only in accordance with a confidentiality undertaking in the form contained in Schedule 3.
7.2 NCC agrees to maintain all information and/or documentation coming into its possession or to its knowledge under this Agreement in strictest confidence and secrecy. NCC further agrees not to make use of such information and/or documentation other than for the purposes of this Agreement and will not disclose or release it other than in accordance with the terms of this Agreement.
7.3 Termination of this Agreement will not relieve NCC or its employees, or the Licensee or its employees, from the obligations of confidentiality contained in this Clause 7.
8 Intellectual Property Rights
The release of the Material to the Licensee will not act as an assignment of any Intellectual Property Rights that the Owner possesses in the Material.
9 Verification
9.1 Subject to the provisions of Clauses 9.2 and 9.3, NCC shall bear no obligation or responsibility to any person, firm, company or entity whatsoever to determine the existence, relevance, completeness, accuracy, effectiveness or any other aspect of the Material.
9.2 Upon the Material being lodged with NCC, NCC shall perform those tests in accordance with its Standard Verification Service and shall provide a copy of the test report to the parties to this Agreement.
9.3 The Licensee shall be entitled to require that NCC carries out a Full Verification. Any reasonable charges and expenses incurred by NCC in carrying out a Full Verification will be paid by the Licensee save that if in the opinion of the expert appointed by the Managing Director of NCC the Material is substantially defective in content any such reasonable charges and expenses will be paid by the Owner.
10 NCC's Liability
10.1 NCC shall not be liable for any loss caused to the Owner or the Licensee either jointly or severally except for loss of or damage to the Material to the extent that such loss or damage is caused by the negligent acts or omissions of NCC, its employees, agents or sub-contractors and in such event NCC's total liability in respect of all claims arising under or by virtue of this Agreement shall not (except in the case of claims for personal injury or death) exceed the sum of (pounds)500,000.
10.2 NCC shall in no circumstances be liable to the Owner or the Licensee for indirect or consequential loss of any nature whatsoever whether for loss of profit, loss of business or otherwise.
10.3 NCC shall be protected in acting upon any written request, waiver, consent, receipt or other document furnished to it pursuant to this Agreement, not only in assuming its due execution and the validity and effectiveness of its provisions but also as to the truth and acceptability of any information contained in it, which NCC in good faith believes to be genuine and what it purports to be.
11 Termination
11.1 NCC may terminate this Agreement after failure by the Owner or the Licensee to comply with a 30 day written notice from NCC to pay any outstanding fee. If the failure to pay is on the part of the Owner the Licensee shall be given the option of paying such fee itself. Such amount will be recoverable by the Licensee direct from the Owner.
11.2 NCC may terminate this Agreement by giving 60 days written notice to the Owner and the Licensee. In that event the Owner and the Licensee shall appoint a mutually acceptable new custodian on terms similar to those contained in this Agreement.
11.3 If a new custodian is not appointed within 30 days of delivery of any notice issued by NCC in accordance with the provisions of Clause 11.2, the Owner or the Licensee shall be entitled to request the President for the time being of the British Computer Society to appoint a suitable new custodian upon such terms and conditions as he shall require. Such appointment shall be final and binding on all parties.
11.4 If the Licence Agreement has expired or has been lawfully terminated this Agreement will automatically terminate on the same date.
11.5 The Licensee may terminate this Agreement at any time by giving written notice to the Owner and NCC.
11.6 The Owner may only terminate this Agreement with the written consent of the Licensee.
Version 1: August 1997 3 of 6
STD001Y2K.UK (C) NCC Escrow International Limited 1997
11.7 This Agreement shall terminate upon release of the Material to the Licensee in accordance with Clause 6.
11.8 Upon termination under the provisions of Clauses 11.2, 11.4, 11.5 or 11.6 NCC will deliver the Material to the Owner. If NCC is unable to trace the Owner NCC will destroy the Material.
11.9 Upon termination under the provisions of Clause 11.1 the Material will be available for collection by the Owner from NCC for 30 days from the date of termination. After such 30 day period NCC will destroy the Material.
11.10 NCC may forthwith terminate this Agreement and destroy the Material
if it is unable to trace the Owner having used all reasonable endeavours to do so.
12 Arbitration
12.1 Any dispute arising under Clause 5.1.5 shall be referred to a panel of arbitrators ("the Panel") constituted as follows:
12.1.1 the Owner and the Licensee shall each appoint one member; and
12.1.2 the third member who shall act as chairman of the Panel shall be appointed by the President for the time being of the International Chamber of Commerce.
12.2 The Owner and the Licensee shall pay the fees and disbursements of its own member and half the fees and disbursements of the chairman of the Panel.
12.3 Should any member of the Panel die, become ill or incapacitated, resign or retire from his appointment, become disqualified from acting or otherwise cease to act as arbitrator before the dispute is resolved, he shall be replaced by a new member appointed by the party who appointed his predecessor.
12.4 Upon the appointment of such new member, the proceedings shall not be held de nova but shall continue from the stage at which the previous member ceased to act.
12.5 Proceedings under Clause 12 may be commenced by any party to a dispute by:
12.5.1 serving upon the other or others notice of its intention to refer such dispute to arbitration and nominating a member of the Panel; and
12.5.2 requesting the President of the International Chamber of Commerce for the time being to appoint a chairman of the Panel.
12.6 The Panel shall determine its own rules of procedure.
13 General
13.1 This Agreement shall be governed by and construed in accordance with the laws of England and Wales.
13.2 This Agreement represents the whole agreement relating to the escrow arrangements between the parties for the Package and supersedes all prior arrangements, negotiations and undertakings.
13.3 All notices to be given to the parties under this Agreement shall be deemed to have been duly given or made when delivered personally or 7 days after posting of it sent by facsimile, 12 hours after despatch to the party to which such notice is required to be given or made under this Agreement addressed to the principal place of business, or for companies based in the UK, the registered office.
SCHEDULE 1
The Material
The source code of the Package known as [-7].
SCHEDULE 2
Material: Technical Information
The Material shall be supplied with details of the following:
1 Details of the deposit: full name and version details, number of media items, media type and density, file or archive format, list or retrieval commands, archive hardware and operating system details.
2 Name and functionality of each module/application of the Material.
3 Names and versions of development tools etc.
4 Documentation describing the procedures for building / compiling / executing / using the software (technical notes, user guides).
5 Hardcopy directory listings of the contents of the media.
6 Name and contact details of employee(s) with knowledge of how to maintain and support the Material.
SCHEDULE 3
Confidentiality Undertaking
This undertaking is given on release of the Material pursuant to an Escrow Agreement dated [ ] between:
(1) [-1] ("the Owner");
(2) [-4] ("the Licensee"); and
(3) NCC ESCROW INTERNATIONAL LIMITED ("NCC");
1 Definitions contained in the Escrow Agreement will apply to this undertaking.
4 of 6 Version 1: August 1997
2 In consideration of NCC delivering the Material to the Licensee, the Licensee undertakes with the Owner and NCC:
2.1 to use the Material only for the purpose of understanding, maintaining and correcting the Package exclusively on behalf of the Licensee;
2.2 not to use the Material for any other purpose nor disclose it to any person save such of its employees or contractors who need to know the same in order to understand, maintain and correct the Package exclusively on behalf of the Licensee. In that event such contractors shall enter into a Confidentiality Undertaking direct with NCC in similar terms to this Undertaking;
2.3 to hold all media containing the Material in a safe and secure environment when not in use; and
2.4 forthwith to destroy the same should the Licensee cease to be entitled to use the Package.
SCHEDULE 4
NCC's Fees (St(pound))
- -------------------------------------------------------------------------------- DESCRIPTION FEE OWNER LICENSEE - -------------------------------------------------------------------------------- 1 Initial Fee (payable on completion of this Agreement) - -------------------------------------------------------------------------------- 2 Annual Fee (payable on completion of this Agreement and on each anniversary thereafter) - -------------------------------------------------------------------------------- 3 Update Fee (per update after the first 4 updates per annum) - -------------------------------------------------------------------------------- 4 Storage Fee (per annum, per cubic foot payable if the source code exceeds 1 cubic foot) - -------------------------------------------------------------------------------- 5 Liability Fee (per annum, (pound)100 per (pound)500,000 of liability exceeding (pound)500,000) - -------------------------------------------------------------------------------- 6 Release Fee (plus NCC's reasonable expenses) NIL 100% - --------------------------------------------------------------------------------
1 All fees are subject to VAT where applicable*
2 All fees are reviewed by NCC from time to time
* only applicable to countries within the EU.
Signed on behalf of [-1]
Name --------------------------------------:------------------------------------ Position: ----------------------------------: (Authorised Signatory)
Signed on behalf of [-4]
Name --------------------------------------:------------------------------------ Position: ----------------------------------: (Authorised Signatory)
Signed on behalf of NCC ESCROW INTERNATIONAL LIMITED
Name --------------------------------------:------------------------------------ Position: ----------------------------------: (Authorised Signatory)
Version 1: August 1997 5 of 6
STD001Y2K.UK (C) NCC Escrow International Limited 1997
Any queries regarding this document should be directed to:
Contracts Administrator NCC Escrow International Limited Oxford House
Oxford Road Manchester M1 7ED England
Telephone: +44 (0) 161 242 2109 Fax: +44 (0) 161 242 2275 E-mail: escrow@ncc.co.uk
The following information is referenced within this agreement:
[-1] Owner's Name [-2] Owner's Registered Office [-3] Owner's Company Registration Number* [-4] Licensee's Name [-5] Licensee's Registered Office [-6] Licensee's Company Registration Number* [-7] Name Of Package
[INITIALS ILLEGIBLE] [INITIALS ILLEGIBLE] 20.3.98 30.4.98 [/INST] ```json
{<answer_start>
"answer": "Subject to the provisions of Clauses 6.2 and 6.3, NCC shall release the Material to a duly authorised officer of the Licensee if at any time or times any of the following events or circumstances occur, arise or become apparent:
6.1.1 the Owner enters into any composition or arrangement with its creditors or (being a company) enters into liquidation whether compulsory or voluntary (other than for the purposes of solvent reconstruction or amalgamation) or has a receiver or administrative receiver appointed over all or any part of its assets or undertaking or a petition is presented for an Administration Order or (being an individual or partnership) becomes bankrupt, or an event occurs within the jurisdiction of the country in which the Owner is situated which has a similar effect to any of the above events in the United Kingdom; or
6.1.2 the Owner ceases to trade; or
6.1.3 the Owner assigns copyright in the Material and the assignee fails within 60 days of such assignment to offer the Licensee substantially similar protection to that provided by this Agreement without significantly increasing the cost to the Licensee; or
6.1.4 the Owner without legal justification, has defaulted to a material degree in any obligation to provide maintenance or modification of the Package under the Licence Agreement or any maintenance agreement entered into in connection with the Package and has failed to remedy such default notified by the Licensee to the Owner; or
6.1.5 coding of the Package is such that either the accuracy or the functionality or the performance of the Package is or becomes or is demonstrably likely to become significantly adversely affected by the entry or processing of data incorporating any date or dates whether prior or subsequent to or including 31 December 1999, including but not limited to any of the following:
6.1.5.1 the Package crashes at any time while processing any such data;
6.1.5.2. the Owner has warranted or represented that the Package is capable of accurately and correctly processing such data in accordance with the Package's current functional specification and the Licensee demonstrates that the Package is not so capable;
6.1.5.3 the Owner has undertaken or attempted to procure the Package to be so capable and the Licensee demonstrates that the Package is still not so capable;
6.1.5.4 no such warranty, representation, undertaking or attempt has been given or made and the Licensee demonstrates that the Package is not so capable."
<answer_end>
}
``` </s> | [INITIALS ILLEGIBLE] [INITIALS ILLEGIBLE] 20.3.98 30.4.98
5
SCHEDULE 3
Project Managers
The Publishers:
Project Manager - --------------- Ian Bannerman Blackwell Science Ltd Osney Mead Oxford OX2 0EL UK e-mail: ian.bannerman@blacksci.co.uk tel: +44 (0)1865 206101
Deputy Project Manager - ---------------------- Martin Clutterbuck Blackwell Science Ltd Osney Mead Oxford OX2 0EL UK e-mail: martin.clutterbuck@blacksci.co.uk tel: +44 (0)1865 206110
Deputy Project Manager - ---------------------- Anders Geertsen Munksgaard International Publishers Ltd 35 Norre Sogade, P.O. Box 2148 1016 Copenhagen K Denmark e-mail: ag@mail.munksgaard.dk tel: +45 77 33 31 03
HealthGate:
Project Manager - --------------- Mark Israel HealthGate 380 Pleasant Street Suite 230 Malden MA 02148 USA tel: 781 321 6000 Ext 248 e-mail: misra@healthgate.com
Deputy Project Manager - ---------------------- Rick Lawson HealthGate 380 Pleasant Street Suite 230 Malden MA 02148 USA tel: 781 321 6000 Ext 211 e-mail: lawson@healthgate.com
[INITIALS ILLEGIBLE] [INITIALS ILLEGIBLE] 20.3.98 30.4.98
6
SCHEDULE 4
3
SCHEDULE 4
ESCROW AGREEMENT
When the annexed escrow agreement is entered, the terms shall include those set out in the annexed letter from NCC Escrow International, the escrow agent, of 12 March 1998 by way of variation of NCC document STD001Y2K.UK.
The Required Information at ii) shall be provided by the parties. The date of the Licence Agreement shall be the date of this agreement. The name of the
package shall be "HealthGate Electronic Journal Proprietary Software". These words shall also appear in Schedule 1 of the escrow agreement. The parties shall provide the medium on which the source code shall be supplied, which in default of agreement shall be such medium as the escrow agent NCC Escrow International Limited thinks fit.
The fees to be inserted in Schedule 4 of the Escrow Agreement shall be the then applicable fees of NCC Escrow International Limited.
The Escrow Agreement shall be signed by HealthGate and Blackwell Science Limited.
[INITIALS ILLEGIBLE] [INITIALS ILLEGIBLE] 20.3.98 30.4.98
NCC ESCROW INTERNATIONAL
12 March 1998 National Computing Centre Oxford House, Oxford Road Manchester M1 7ED, UK
Telephone: +44(O)161 228 6333 Facsimile: +44(0)161 242 2275 e-mail: escrow@ncc.co.uk
Mr J S Saunders [NCC LOGO] Linnells, Solicitors Greyfriars Court Paradise Square Oxford OX1 1BB
Dear Mr Saunders
Proposed Escrow Agreement: Healthgate Data Corp / Blackwell Science Ltd / NCC
I confirm that NCC is willing to enter into our standard form escrow agreement std001y2k.uk with the following amendments by reference to the appropriate clauses:
(2) Add the words "and/or companies in the Blackwell Science Ltd group" after "Blackwell Science Ltd".
6.1.6 A new clause: "there is a Change in Control of the Owner. For the purposes of this clause, a person shall have "Control" of a company if he holds, directly or indirectly, shares which together with shares held by any persons acting in concert with him carry 50% or more of the voting rights of that company, and "Change in Control" shall be interpreted accordingly. Words and phrases in the City Code on Take-overs and Mergers shall have the same meaning here."
6.1.7 A new clause: "the Licensee exercises its option under clause 10.4.1 of the Licence Agreement".
11.4 Replace with: "If the obligations in clause 31 of the Licence Agreement have terminated this Agreement will automatically terminate on the same date."
Yours sincerely
/s/ Carmel Gorman
Carmel Gorman NCC Escrow International
[INITIALS ILLEGIBLE] [INITIALS ILLEGIBLE] 20.3.98 30.4.98
[NCC Escrow International logo]
This document is to be used where an Owner deposits source code on behalf of a single user only.
PROCEDURE:
The required information sheet on page ii should be completed, detached and returned by fax or post to NCC at the following address:
Contracts Administrator NCC Escrow International Limited Oxford House, Oxford Road Manchester M1 7ED, England
Telephone: +44 (0) 161 242 2109 Facsimile: +44 (0) 161 242 2275 E-mail: escrow@ncc.co.uk
i. NCC will check the required information and will then send out signature copies of the Escrow Agreement, together with the relevant invoices. A reference number will be given in respect of that agreement which must be quoted in all correspondence.
ESCROW 2000
ii. When the Owner and the Licensee have signed the Escrow Agreement all copies must be returned to NCC.
iii. NCC will sign and date the Agreement and a signed copy will be sent to each party.
iv. The Owner should then lodge the Material.
NB: Until all parties sign the Escrow Agreement no binding escrow arrangements have been made.
single licensee ---------- UK
Version 1: August 1997 i
FAO: P. FLEMING REQUIRED INFORMATION - --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- OWNER
[-1] Company Name ---------------------------------------------------------------
[-2] Registered Office ----------------------------------------------------------
- --------------------------------------------------------------------------------
Correspondence Address ----------------------------------------------------------
*[-3] Company Registration Number *VAT Number ------------------- -----------------
Telephone Number Fax Number ------------------------------------ ------------------
Contact Name Position in Company ------------------------------- ------------------
*only applicable to countries within the EU - --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- LICENSEE
[-4] Company Name ---------------------------------------------------------------
[-5] Registered Office ----------------------------------------------------------
- --------------------------------------------------------------------------------
Correspondence Address ----------------------------------------------------------
*[-6] Company Registration Number *VAT Number ------------------- -----------------
Telephone Number Fax Number ------------------------------------ ------------------
Contact Name Position in Company ------------------------------- ------------------
*only applicable to countries within the EU - --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- OTHER DETAILS
[-7] Name of Package ------------------------------------------------------------
- --------------------------------------------------------------------------------
INSURANCE FEE (complete if appropriate) - -------------------------------------------------------------------------------- Standard NCC limitation of liability is St(pound)500,000 (no charge).
There is a charge of St(pound)100 (annual fee) for each additional St(pound)500,000.
Maximum liability is St(pound)5,000,000.
Please indicate required liability --------------------------
- --------------------------------------------------------------------------------
------------------------------------ FEES PAYABLE (tick as appropriate) Owner Licensee - -------------------------------------------------------------------------------- Initial Fee - -------------------------------------------------------------------------------- Annual Fee - -------------------------------------------------------------------------------- Update Fee (payable in the event of more than 4 updates per annum) - -------------------------------------------------------------------------------- Storage Fee (payable if the source code exceeds one cubic foot) - -------------------------------------------------------------------------------- Annual liability fee payable (if appropriate) - -------------------------------------------------------------------------------- Release Fee (plus NCC's reasonable expenses) X - --------------------------------------------------------------------------------
ii Version 1: August 1997
(C) NCC Escrow International Limited 1997 STD001Y2K.UK
[NCC Escrow International logo]
SINGLE LICENSEE (UK) ESCROW 2000 - -------------------------------------------------------------------------------- ESCROW AGREEMENT: DATED:
Between:
(1) [-1] whose registered office is at [-2] (CRN: [-3]) ("the Owner");
(2) [-4] whose registered office is at [-5] (CRN: [-6]) ("the Licensee"); and
(3) NCC ESCROW INTERNATIONAL LIMITED whose registered office is at Oxford House, Oxford Road, Manchester M1 7ED, England (CRN:3081952) ("NCC").
Preliminary:
(A) The Licensee has been granted a licence to use a software package comprising computer programs.
(B) Certain technical information and documentation describing the software package are the confidential property of the Owner and are required for understanding, maintaining and correcting the software package.
(C) The Owner acknowledges that in certain circumstances the Licensee may require possession of the technical information and documentation held under this Agreement.
(D) Each of the parties to this Agreement acknowledges that the considerations for their respective undertakings given under it are the undertakings given under it by each of the other parties.
It is agreed that:
1 Definitions
In this Agreement the following terms shall have the following meanings:
1.1 "Full Verification Service" means those bespoke tests agreed between the Licensee and NCC for the verification of the Material;
1.2 "Intellectual Property Rights" means copyright, trade secret, patent, and all other rights of a similar nature;
1.3 "Licence Agreement" means the licence granted to the Licensee for the Package;
1.4 "Material" means the source code of the Package comprising the latest technical information and documentation described in Schedules 1 and 2;
1.5 "Package" means the software package licensed to the Licensee under the Licence Agreement; and
1.6 "Standard Verification Service" means those tests detailed in the Standard Verification Service published by NCC from time to time.
2 Owner's Duties and Warranties
2.1 The Owner shall:
2.1.1 deliver a copy of the Material to NCC within 30 days of the date of this Agreement;
2.1.2 at all times ensure that the Material as delivered to NCC is capable of being used to generate the latest version of the Package issued to the Licensee and shall deliver further copies of the Material as and when necessary;
2.1.3 deliver to NCC a replacement copy of the Material within 12 months of the last delivery;
2.1.4 deliver a replacement copy of the Material within 14 days of receipt of a notice served upon it by NCC under the provisions of Clause 4.1.5; and
2.1.5 deliver with each deposit of the Material the information detailed in Schedule 2.
2.2 The Owner warrants that:
2.2.1 it owns the Intellectual Property Rights in the Material and has authority to enter into this Agreement; and
2.2.2 the Material lodged under Clause 2.1 shall contain all information in human-readable form and on suitable media to enable a reasonably skilled programmer or analyst to understand, maintain and correct the Package without the assistance of any other person.
3 Licensee's Responsibilities
It shall be the responsibility of the Licensee to notify NCC of any change to the Package that necessitates a replacement deposit of the Material.
Version 1: August 1997 1 of 6
4 NCC's Duties
4.1 NCC shall:
4.1.1 hold the Material in a safe and secure environment;
4.1.2 inform the Owner and the Licensee of the receipt of any copy of the Material;
4.1.3 in accordance with the terms of Clause 9 perform those tests that form part of its Standard Verification Service from time to time;
4.1.4 at all times retain a copy of the latest verified deposit of the Material; and
4.1.5 notify the Owner if it becomes aware at any time during the term of this Agreement that the copy of the Material held by it has been lost, damaged or destroyed.
4.2 NCC shall not be responsible for procuring the delivery of the Material in the event of failure by the Owner to do so.
5 Payment
NCC's fees are payable in accordance with Schedule 4.
6 Release Events
6.1 Subject to the provisions of Clauses 6.2 and 6.3, NCC shall release the Material to a duly authorised officer of the Licensee if at any time or times any of the following events or circumstances occur, arise or become apparent:
6.1.1 the Owner enters into any composition or arrangement with its creditors or (being a company) enters into liquidation whether compulsory or voluntary (other than for the purposes of solvent reconstruction or amalgamation) or has a receiver or administrative receiver appointed over all or any part of its assets or undertaking or a petition is presented for an Administration Order or (being an individual or partnership) becomes bankrupt, or an event occurs within the jurisdiction of the country in which the Owner is situated which has a similar effect to any of the above events in the United Kingdom; or
6.1.2 the Owner ceases to trade; or
6.1.3 the Owner assigns copyright in the Material and the assignee fails within 60 days of such assignment to offer the Licensee substantially similar protection to that provided by this Agreement without significantly increasing the cost to the Licensee; or
6.1.4 the Owner without legal justification, has defaulted to a material degree in any obligation to provide maintenance or modification of the Package under the Licence Agreement or any maintenance agreement entered into in connection with the Package and has failed to remedy such default notified by the Licensee to the Owner; or
6.1.5 coding of the Package is such that either the accuracy or the functionality or the performance of the Package is or becomes or is demonstrably likely to become significantly adversely affected by the entry or processing of data incorporating any date or dates whether prior or subsequent to or including 31 December 1999, including but not limited to any of the following:
6.1.5.1 the Package crashes at any time while processing any such data;
6.1.5.2. the Owner has warranted or represented that the Package is capable of accurately and correctly processing such data in accordance with the Package's current functional specification and the Licensee demonstrates that the Package is not so capable;
6.1.5.3 the Owner has undertaken or attempted to procure the Package to be so capable and the Licensee demonstrates that the Package is still not so capable;
6.1.5.4 no such warranty, representation, undertaking or attempt has been given or made and the Licensee demonstrates that the Package is not so capable.
6.2 The Licensee must notify NCC of any event or circumstance of any of the kinds specified in Clause 6.1 by delivering to NCC a statutory or notarised declaration ("the Declaration") made by an officer of the Licensee attesting that such event has occurred and that the Licence Agreement was still valid and effective up to the occurrence of such event and exhibiting:
6.2.1 such documentation in support of the Declaration as NCC shall reasonably require;
6.2.2 a copy of the Licence Agreement; and
6.2.3 a signed confidentiality undertaking as detailed in Schedule 3
then NCC will release the Material to the Licensee upon receipt of the release fee stated in Schedule 4.
6.3 Upon receipt of a Declaration from the Licensee claiming a release event under Clause 6.1.4:
6.3.1 NCC shall send a copy of the Declaration to the Owner by registered post; and
6.3.2 unless within 14 days after the date of delivery the Owner delivers to NCC a counter-notice signed by a duly authorised officer of the Owner stating that no such failure has occurred or that any such failure has been rectified
then NCC will release the Material to the Licensee upon receipt of the release fee stated in Schedule 4.
2 of 6 Version 1: August 1997
(C) NCC Escrow International Limited 1997 STD001Y2K.UK
6.4 Where there is any dispute as to the occurrence of any of the events or circumstances set out in Clause 6.1.1 to 6.1.4, 6.2 or 6.3 or the fulfilment of any obligations detailed therein, such dispute will be referred at the request of either the Owner or the Licensee to the Managing Director for the time being of NCC for the appointment of an expert who shall give a decision on the matter within 14 days of the date of referral or as soon as practicable thereafter. The expert's decision shall be final and binding as between the Owner and the Licensee except in the case of manifest error.
6.5 Where there is any dispute as to the occurrence of any of the events or circumstances set out in Clause 6.1.5 or the fulfillment of any obligations referred to therein, such dispute will be referred to arbitration in accordance with Clause 12.
7 Confidentiality
7.1 The Material shall remain the confidential property of the Owner and in the event that NCC provides a copy of the Material to the Licensee, the Licensee shall be permitted to use the Material only in accordance with a confidentiality undertaking in the form contained in Schedule 3.
7.2 NCC agrees to maintain all information and/or documentation coming into its possession or to its knowledge under this Agreement in strictest confidence and secrecy. NCC further agrees not to make use of such information and/or documentation other than for the purposes of this Agreement and will not disclose or release it other than in accordance with the terms of this Agreement.
7.3 Termination of this Agreement will not relieve NCC or its employees, or the Licensee or its employees, from the obligations of confidentiality contained in this Clause 7.
8 Intellectual Property Rights
The release of the Material to the Licensee will not act as an assignment of any Intellectual Property Rights that the Owner possesses in the Material.
9 Verification
9.1 Subject to the provisions of Clauses 9.2 and 9.3, NCC shall bear no obligation or responsibility to any person, firm, company or entity whatsoever to determine the existence, relevance, completeness, accuracy, effectiveness or any other aspect of the Material.
9.2 Upon the Material being lodged with NCC, NCC shall perform those tests in accordance with its Standard Verification Service and shall provide a copy of the test report to the parties to this Agreement.
9.3 The Licensee shall be entitled to require that NCC carries out a Full Verification. Any reasonable charges and expenses incurred by NCC in carrying out a Full Verification will be paid by the Licensee save that if in the opinion of the expert appointed by the Managing Director of NCC the Material is substantially defective in content any such reasonable charges and expenses will be paid by the Owner.
10 NCC's Liability
10.1 NCC shall not be liable for any loss caused to the Owner or the Licensee either jointly or severally except for loss of or damage to the Material to the extent that such loss or damage is caused by the negligent acts or omissions of NCC, its employees, agents or sub-contractors and in such event NCC's total liability in respect of all claims arising under or by virtue of this Agreement shall not (except in the case of claims for personal injury or death) exceed the sum of (pounds)500,000.
10.2 NCC shall in no circumstances be liable to the Owner or the Licensee for indirect or consequential loss of any nature whatsoever whether for loss of profit, loss of business or otherwise.
10.3 NCC shall be protected in acting upon any written request, waiver, consent, receipt or other document furnished to it pursuant to this Agreement, not only in assuming its due execution and the validity and effectiveness of its provisions but also as to the truth and acceptability of any information contained in it, which NCC in good faith believes to be genuine and what it purports to be.
11 Termination
11.1 NCC may terminate this Agreement after failure by the Owner or the Licensee to comply with a 30 day written notice from NCC to pay any outstanding fee. If the failure to pay is on the part of the Owner the Licensee shall be given the option of paying such fee itself. Such amount will be recoverable by the Licensee direct from the Owner.
11.2 NCC may terminate this Agreement by giving 60 days written notice to the Owner and the Licensee. In that event the Owner and the Licensee shall appoint a mutually acceptable new custodian on terms similar to those contained in this Agreement.
11.3 If a new custodian is not appointed within 30 days of delivery of any notice issued by NCC in accordance with the provisions of Clause 11.2, the Owner or the Licensee shall be entitled to request the President for the time being of the British Computer Society to appoint a suitable new custodian upon such terms and conditions as he shall require. Such appointment shall be final and binding on all parties.
11.4 If the Licence Agreement has expired or has been lawfully terminated this Agreement will automatically terminate on the same date.
11.5 The Licensee may terminate this Agreement at any time by giving written notice to the Owner and NCC.
11.6 The Owner may only terminate this Agreement with the written consent of the Licensee.
Version 1: August 1997 3 of 6
STD001Y2K.UK (C) NCC Escrow International Limited 1997
11.7 This Agreement shall terminate upon release of the Material to the Licensee in accordance with Clause 6.
11.8 Upon termination under the provisions of Clauses 11.2, 11.4, 11.5 or 11.6 NCC will deliver the Material to the Owner. If NCC is unable to trace the Owner NCC will destroy the Material.
11.9 Upon termination under the provisions of Clause 11.1 the Material will be available for collection by the Owner from NCC for 30 days from the date of termination. After such 30 day period NCC will destroy the Material.
11.10 NCC may forthwith terminate this Agreement and destroy the Material
if it is unable to trace the Owner having used all reasonable endeavours to do so.
12 Arbitration
12.1 Any dispute arising under Clause 5.1.5 shall be referred to a panel of arbitrators ("the Panel") constituted as follows:
12.1.1 the Owner and the Licensee shall each appoint one member; and
12.1.2 the third member who shall act as chairman of the Panel shall be appointed by the President for the time being of the International Chamber of Commerce.
12.2 The Owner and the Licensee shall pay the fees and disbursements of its own member and half the fees and disbursements of the chairman of the Panel.
12.3 Should any member of the Panel die, become ill or incapacitated, resign or retire from his appointment, become disqualified from acting or otherwise cease to act as arbitrator before the dispute is resolved, he shall be replaced by a new member appointed by the party who appointed his predecessor.
12.4 Upon the appointment of such new member, the proceedings shall not be held de nova but shall continue from the stage at which the previous member ceased to act.
12.5 Proceedings under Clause 12 may be commenced by any party to a dispute by:
12.5.1 serving upon the other or others notice of its intention to refer such dispute to arbitration and nominating a member of the Panel; and
12.5.2 requesting the President of the International Chamber of Commerce for the time being to appoint a chairman of the Panel.
12.6 The Panel shall determine its own rules of procedure.
13 General
13.1 This Agreement shall be governed by and construed in accordance with the laws of England and Wales.
13.2 This Agreement represents the whole agreement relating to the escrow arrangements between the parties for the Package and supersedes all prior arrangements, negotiations and undertakings.
13.3 All notices to be given to the parties under this Agreement shall be deemed to have been duly given or made when delivered personally or 7 days after posting of it sent by facsimile, 12 hours after despatch to the party to which such notice is required to be given or made under this Agreement addressed to the principal place of business, or for companies based in the UK, the registered office.
SCHEDULE 1
The Material
The source code of the Package known as [-7].
SCHEDULE 2
Material: Technical Information
The Material shall be supplied with details of the following:
1 Details of the deposit: full name and version details, number of media items, media type and density, file or archive format, list or retrieval commands, archive hardware and operating system details.
2 Name and functionality of each module/application of the Material.
3 Names and versions of development tools etc.
4 Documentation describing the procedures for building / compiling / executing / using the software (technical notes, user guides).
5 Hardcopy directory listings of the contents of the media.
6 Name and contact details of employee(s) with knowledge of how to maintain and support the Material.
SCHEDULE 3
Confidentiality Undertaking
This undertaking is given on release of the Material pursuant to an Escrow Agreement dated [ ] between:
(1) [-1] ("the Owner");
(2) [-4] ("the Licensee"); and
(3) NCC ESCROW INTERNATIONAL LIMITED ("NCC");
1 Definitions contained in the Escrow Agreement will apply to this undertaking.
4 of 6 Version 1: August 1997
2 In consideration of NCC delivering the Material to the Licensee, the Licensee undertakes with the Owner and NCC:
2.1 to use the Material only for the purpose of understanding, maintaining and correcting the Package exclusively on behalf of the Licensee;
2.2 not to use the Material for any other purpose nor disclose it to any person save such of its employees or contractors who need to know the same in order to understand, maintain and correct the Package exclusively on behalf of the Licensee. In that event such contractors shall enter into a Confidentiality Undertaking direct with NCC in similar terms to this Undertaking;
2.3 to hold all media containing the Material in a safe and secure environment when not in use; and
2.4 forthwith to destroy the same should the Licensee cease to be entitled to use the Package.
SCHEDULE 4
NCC's Fees (St(pound))
- -------------------------------------------------------------------------------- DESCRIPTION FEE OWNER LICENSEE - -------------------------------------------------------------------------------- 1 Initial Fee (payable on completion of this Agreement) - -------------------------------------------------------------------------------- 2 Annual Fee (payable on completion of this Agreement and on each anniversary thereafter) - -------------------------------------------------------------------------------- 3 Update Fee (per update after the first 4 updates per annum) - -------------------------------------------------------------------------------- 4 Storage Fee (per annum, per cubic foot payable if the source code exceeds 1 cubic foot) - -------------------------------------------------------------------------------- 5 Liability Fee (per annum, (pound)100 per (pound)500,000 of liability exceeding (pound)500,000) - -------------------------------------------------------------------------------- 6 Release Fee (plus NCC's reasonable expenses) NIL 100% - --------------------------------------------------------------------------------
1 All fees are subject to VAT where applicable*
2 All fees are reviewed by NCC from time to time
* only applicable to countries within the EU.
Signed on behalf of [-1]
Name --------------------------------------:------------------------------------ Position: ----------------------------------: (Authorised Signatory)
Signed on behalf of [-4]
Name --------------------------------------:------------------------------------ Position: ----------------------------------: (Authorised Signatory)
Signed on behalf of NCC ESCROW INTERNATIONAL LIMITED
Name --------------------------------------:------------------------------------ Position: ----------------------------------: (Authorised Signatory)
Version 1: August 1997 5 of 6
STD001Y2K.UK (C) NCC Escrow International Limited 1997
Any queries regarding this document should be directed to:
Contracts Administrator NCC Escrow International Limited Oxford House
Oxford Road Manchester M1 7ED England
Telephone: +44 (0) 161 242 2109 Fax: +44 (0) 161 242 2275 E-mail: escrow@ncc.co.uk
The following information is referenced within this agreement:
[-1] Owner's Name [-2] Owner's Registered Office [-3] Owner's Company Registration Number* [-4] Licensee's Name [-5] Licensee's Registered Office [-6] Licensee's Company Registration Number* [-7] Name Of Package
[INITIALS ILLEGIBLE] [INITIALS ILLEGIBLE] 20.3.98 30.4.98 | Highlight the parts (if any) of this contract related to "Source Code Escrow" that should be reviewed by a lawyer. Details: Is one party required to deposit its source code into escrow with a third party, which can be released to the counterparty upon the occurrence of certain events (bankruptcy, insolvency, etc.)? | {
"answer_start": [
15446
],
"text": [
"Subject to the provisions of Clauses 6.2 and 6.3, NCC shall release the Material to a duly authorised officer of the Licensee if at any time or times any of the following events or circumstances occur, arise or become apparent:\n\n 6.1.1 the Owner enters into any composition or arrangement with its creditors or (being a company) enters into liquidation whether compulsory or voluntary (other than for the purposes of solvent reconstruction or amalgamation) or has a receiver or administrative receiver appointed over all or any part of its assets or undertaking or a petition is presented for an Administration Order or (being an individual or partnership) becomes bankrupt, or an event occurs within the jurisdiction of the country in which the Owner is situated which has a similar effect to any of the above events in the United Kingdom; or\n\n 6.1.2 the Owner ceases to trade; or\n\n 6.1.3 the Owner assigns copyright in the Material and the assignee fails within 60 days of such assignment to offer the Licensee substantially similar protection to that provided by this Agreement without significantly increasing the cost to the Licensee; or\n\n 6.1.4 the Owner without legal justification, has defaulted to a material degree in any obligation to provide maintenance or modification of the Package under the Licence Agreement or any maintenance agreement entered into in connection with the Package and has failed to remedy such default notified by the Licensee to the Owner; or\n\n\n\n\n\n 6.1.5 coding of the Package is such that either the accuracy or the functionality or the performance of the Package is or becomes or is demonstrably likely to become significantly adversely affected by the entry or processing of data incorporating any date or dates whether prior or subsequent to or including 31 December 1999, including but not limited to any of the following:\n\n 6.1.5.1 the Package crashes at any time while processing any such data;\n\n 6.1.5.2. the Owner has warranted or represented that the Package is capable of accurately and correctly processing such data in accordance with the Package's current functional specification and the Licensee demonstrates that the Package is not so capable;\n\n 6.1.5.3 the Owner has undertaken or attempted to procure the Package to be so capable and the Licensee demonstrates that the Package is still not so capable;\n\n 6.1.5.4 no such warranty, representation, undertaking or attempt has been given or made and the Licensee demonstrates that the Package is not so capable."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Minimum Commitment" that should be reviewed by a lawyer. Details: Is there a minimum order size or minimum amount or units per-time period that one party must buy from the counterparty under the contract?
Context: Exhibit 10.17
Supply Agreement - FUSION
CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED WITH "[***]". SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF DISCLOSED.
SUPPLY AGREEMENT ("Supply Agreement") effective as of the date of last signing ("Effective Date") between Centre for Probe Development and Commercialization, a not-for-profit research and services institution with offices located at McMaster University, Nuclear Research Building, 1280 Main Street West, Hamilton, Ontario, Canada, L8S 4K1, ("CPDC"), and FUSION Pharmaceuticals Inc. ("FUSION"), having a place of business at 270 Longwood Road South, Hamilton, Ontario, Canada, L8P 0A6, (together the "Parties" each a "Party"). This document defines the terms and conditions under which CPDC will provide FUSION the Product outlined in this Supply Agreement.
This Supply Agreement is conducted under the general provisions of the Master Services Agreement and the Quality Agreement entered into between the PARTIES. Unless explicitly stated within this Supply Agreement should there be discrepancies between the Supply Agreement and the Master Services Agreement, then the Master Services Agreement will be the controlling document. 1. "Products": 1.1 Ac-225 FPI-1434 1.2 [***] 1.3 The specifications for the Products are further defined in Schedule 2. 2. Definitions
As used herein, the following terms shall have the following meanings: 2.1 Affiliate(s) shall exclude CPDC, when referring to FUSION'S affiliates, and shall exclude FUSION, when referring to CPDC's affiliates. 2.2 "Batch" shall mean a single production, testing and release of Product according to the approved and validated processes. 2.3 "Clinical Phase" shall mean the period during which human studies involving the Products are performed for the purpose of evaluating the safety, efficacy and appropriate dose ranges of Product ("Clinical Trials"), to secure marketing approval from a Regulatory Authority. 2.4 "Current Good Manufacturing Practices" or "cGMP(s)" shall mean the standards required by the Regulatory Authority for the manufacturing, testing and quality control of pharmaceutical materials, which practices are current on the Effective Date of this Agreement and may be supplemented, amended or modified by such regulatory authority from time to time. 2.5 "Date of Manufacturing" shall mean the date on which the drug product is produced. 2.6 "[***] Territory" shall mean the territories [***] for which CPDC shall be the [***] supplier of Products for Fusion. 2.7 "Master Services Agreement" the agreement executed between the Parties on the 21st day of February, 2017. 2.8 "Precursors" shall mean the starting materials required to produce Product. For the purpose of this agreement, the Precursors are defined as FPI- 1175 and [***]. Page 1 of 13 CONFIDENTIAL
Supply Agreement - FUSION 2.9 "Process' shall mean a GMP-validated method for producing the Product, including formulation, manufacturing controls, and all applicable testing and evaluation suitable to meet regulatory requirements for use of the Product in clinical trials. 2.10 "Production Order* shall mean a written request from FUSION to CPDC authorizing the manufacture of one or more Batches of a Product as further described in Section 3.2. The Production Order is jointly maintained by CPDC and FUSION based on clinical trial requirements. 2.11 "Quality Agreement" means the agreement separately executed between the Parties defining the Specifications, applicable standards, commitment, responsibilities, and activities that both FUSION and CPDC will undertake to ensure that the cGMP manufacturing and services as expressly required under this Agreement and the Master Services Agreement are in full compliance. 2.12 "Regulatory Authority" means the United States Food and Drug Administration ("FDA'), European Medicines Agency ('EMA'), Health Canada and/or any other governmental, regulatory or administrative body having jurisdiction over any activities conducted under this Agreement. 2.13 "Specifications" shall mean the standards established in writing by the Parties for the characteristics, quality, and quality control testing of Product, and its constituents, components, and packaging, as further described in Section 4.4 below and Schedule 2, and as in effect from time to time. 2.14 "Unit" shall refer to an individual vial of Product produced according to the approved specifications. 3. Manufacture and Supply of Products 3.1 Scope and Object; Engagement. This Supply Agreement governs Clinical Phase supply for the Products in connection with Clinical Trials sponsored by FUSION, and in accordance with the responsibilities and obligations attributed to each of the Parties as set out in this Supply Agreement.
Accordingly, FUSION hereby engages CPDC, and CPDC hereby accepts such engagement, to supply Products for the Territory in connection with FUSION'S Clinical Trials.
The Products shall be manufactured by CPDC at the location in its cGMP facilities in the Nuclear Research Building (NRB) and on the campus of McMaster University in Hamilton, Ontario, Canada, established for this purpose pursuant to Deliverables defined within Supply Agreement.
For the avoidance of doubt, it shall be the responsibility of FUSION or its designate to file, obtain and maintain any Investigational New Drug (IND) applications, registrations, listings, authorizations and approvals, as the Regulatory Authority may require to enable use of Product in Clinical Trials, and provide CPDC with all particulars thereof and developments thereunder.
Both Parties acknowledge that at the time of signing this Supply Agreement that the CPDC is subject to a supply restriction to the United States of America (the "USA") due to and Import Alert 66-40 (the "Import Alert") issued by the FDA. 3.2 Production Orders. From time to time during the Term set forth in Section 6 of this Supply Agreement, FUSION and CPDC will agree to binding Production Orders for Products, as follows: (a) Based on a template order form for such Production Orders provided by CPDC to FUSION, FUSION shall complete the Production Order in such form [***] no later than (a) the order cut-off period for the third-party isotope providers ("Minimum Lead Time"). • In the case of [***] the isotope order cut-off is [***] eastern standard time the week prior to isotope delivery Page 2 of 13 CONFIDENTIAL
Supply Agreement - FUSION • In the case of Actinium-225 the isotope order cut-off is [***] eastern standard time the week prior to isotope delivery. (b) CPDC will respond, by email, the acceptance or rejection of each duly completed Production Order within [***] of receipt of such Production Order (an 'Accepted Production Order" or "Rejected Production Order," respectively). If there is no response to a Production Order within such timeline, it shall be considered an Accepted Production Order. In the case of a Rejected Production Order, [***]. (c) FUSION shall be entitled to make changes to Production Orders (a 'Change Order") to alter the quantity of Units packaged or distributed up to [***] prior to the Date of Manufacturing by providing CPDC with written notice [***]. CPDC will respond, by email, the acceptance or rejection of each Change Order within [***] of receipt of such change (an "Accepted Change Order" or "Rejected Change Order," respectively). If there is no response to a Change Order within such timeline, it shall be considered an Accepted Change Order. In the case of a Rejected Change Order, [***]. Changes to the number of Units packaged or distributed with less than [***] notice will be subject to the applicable [***] defined in Schedule 1. Notwithstanding the foregoing, CPDC is unable to alter the total quantity of Product produced after the order deadlines imposed by any third-party isotope supplier. (d) Cancelation of a Production Orders: (i) [***] (ii) All cancellations of Production Orders shall be provided to CPDC by FUSION in writing [***]. (e) [***]. 3.3 Shipping: All deliveries of Products shall be Free Carrier shipping point [***]. For greater certainty, [***] shall take ownership of and bear all risk of loss of or damage to the Products at the origin of the shipment. (a) If requested, [***] shall arrange for any insurance desired by [***] on shipments of Product, in amounts that [***] shall determine, and naming [***]. (b) When shipping Product, CPDC shall comply with all applicable laws and regulations, [***]. (c) All costs and responsibility for return shipping of any Products [***] and or re-usable packaging including but not limited to, lead pots, cardboard boxes or foam inserts, and/or other materials shall be borne by [***]. (d) In the event that any Product packaging materials are returned for reuse from clinical trial sites, [***] shall be responsible for transportation, disposal and/or replacement of any damaged, unusable or lost materials, if applicable. 3.4 Inability to Supply. In the event that it becomes apparent to CPDC at any time that it will be unable to fulfill any Production Order, then CPDC shall immediately notify FUSION in writing of CPDC's inability to meet such requirements for Product, along with a specific indication of the amount of such shortfall in manufacture of Product and anticipated timing of delivery. If CPDC is unable to fulfill the Production Order or any portion thereof within [***] of the planned delivery, then either: (a) CPDC will [***]; or Page 3 of 13 CONFIDENTIAL
Supply Agreement - FUSION (b) CPDC will [***]. 3.5 Pricing and Payment Terms. Schedule 1 of this Supply Agreement details the pricing and payment terms for the Product. For supply of Product, CPDC shall invoice FUSION [***]. CPDC shall send such invoices to:
Address:
270 Longwood Rd. South Hamilton, Ontario L8P 0J6 Canada [***]
FUSION shall pay such invoice within [***] of receipt of the invoice in accordance with the Supply Agreement 3.6 Batch Testing. FUSION shall have the right but not the obligation to conduct any Batch testing [***] or investigation it determines to be of value to determine compliance of Product with the Specifications and/or pursuant to any other standard imposed by law. A Batch shall be deemed to be acceptable if, upon testing, it meets the Specifications, relevant cGMP standards, all other applicable laws, rules and regulations (and any additional tests as agreed by the Parties). If either Party discovers that a Batch does not meet the Specifications, relevant cGMP standards or other applicable laws, rules or regulations, then the discovering Party shall promptly communicate with the other Party. All warranty obligations of CPDC with respect to a particular Batch shall cease and have no effect to the extent that any defect in such Batch arises from abuse, misuse, alteration, mishandling, improper storage or gross negligence by FUSION or FUSION'S employees, representatives, agents, suppliers or carriers, or defects in Precursor materials furnished by FUSION which are used in the production of such Batch. 3.7 Dispute Over Quality. In the event of a conflict regarding whether or not Product met the Specifications, cGMP standards or other applicable laws, rules or regulations, at the time of delivery, which CPDC and FUSION are unable to resolve after a good faith attempt by both Parties to resolve such matter in a period of [***] after the conflict arises, a sample of such Product shall be submitted by FUSION or its designee to an independent laboratory or quality assurance professional reasonably acceptable to both Parties for testing or review of the batch documentation. Any test results obtained by such laboratory shall be final and controlling for purposes of this Agreement. In the event the independent review and/or test results indicate that the rejected Product in question met the Specifications, cGMP standards, and all other applicable laws, rules and regulations, then [***]. 3.8 Non-Conforming Products. In the event it is settled pursuant to Section 3.6 or 3.7 that Product in question did not meet the Specifications, cGMP standards or other applicable laws, rules or regulations, FUSION shall be entitled [***]. 4. Additional Obligations of the Parties 4.1 Record Keeping, Inspection, etc. CPDC shall: (a) conform to the provisions detailed within the Quality Agreement, which includes the right of FUSION to conduct inspections, and the responsibility of CPDC to conduct quality control testing of Product prior to shipment and ensure conformance with the Specifications. CPDC shall retain or have retained accurate and complete records pertaining to such testing. Each shipment of CPDC hereunder shall be accompanied by a certificate of analysis for each Batch of CPDC therein; Page 4 of 13 CONFIDENTIAL
Supply Agreement - FUSION (b) keep accurate financial records of all Services performed and passthrough costs under this Supply Agreement and all amounts to be invoiced to FUSION and all invoice calculations, and, upon request by FUSION, make such records available for review by FUSION or its representatives to permit verification of the correctness of such amounts and calculations. 4.2 Licenses and Permits. CPDC shall be responsible for obtaining and maintaining any and all facility or other licenses, permits, registrations, and any regulatory approvals necessary to manufacture, handle, store, label, package and prepare under cGMP conditions Products for shipment, and the packaging, supply and export of Product to FUSION or its designees in accordance with the terms and conditions of this Agreement for the Clinical Phase. This includes, but is not limited to, the use and handling of radioactive materials. For greater certainty CPDC will abide by all laws, rules and regulations as applicable for radiation safety by the Canadian Nuclear Safety Commission ("CNSC") for compliance. 4.3 Precursor and Reference Standards. FUSION or, at FUSION'S discretion, its designee, shall provide to CPDC, at no charge, Precursor and reference standards, which meet the Specifications and in sufficient quantities to permit CPDC to meet its Production Schedule obligations hereunder. FUSION shall provide to CPDC all required supporting documentation required for its use in manufacturing the Product. In the event that the Precursor supplied by FUSION is found to be adulterated, damaged, or with compromised packaging, or not shipped within the required environmental conditions CPDC shall return the Precursor at FUSION'S cost. Should the applicable regulations require that CPDC audit FUSION'S Precursor supplier, FUSION shall compensate CPDC for the time and reasonable out of pocket expenses required to complete the audit. CPDC shall only use Precursor and reference standards provided hereunder for the development, validation or manufacture of Products pursuant to this Agreement. FUSION shall at all times retain title in and to such Precursor and reference standard materials in CPDC's possession. FUSION, to the best of its knowledge, represents and warrants to CPDC that it has all requisite rights and intellectual property in such Precursor and reference standard so as to permit their use by CPDC as contemplated by this Agreement without infringement of any third party rights. 4.4 Product Specifications. It is understood that the Specifications may be subject to change from time-to-time based on written agreement by both Parties and in accordance to the Quality Agreement. The current Product Specifications may be referred to within the CPDC controlled document attached as Schedule 2 hereto which is approved at the effective date of this Supply Agreement. 4.5 Changes by CPDC. CPDC shall manufacture Product in compliance with the approved batch records, Specifications, applicable cGMPs, the Quality Agreement, and all applicable laws, rules and regulations, and shall not make any changes contravening that specified within the Quality Agreement. 4.6 Complaints and Adverse Reactions. CPDC or FUSION shall provide to each other prompt notice of any information either of them receives regarding the safety of the Precursor, reference standards, excipients, Products or isotopes, including any confirmed or unconfirmed information regarding adverse, serious or unexpected events associated with any Product that may implicate the manufacture of the Product or one of its components; provided, however, that FUSION shall not be required to provide Clinical Trial reporting to CPDC. For all complaints with respect to any Product of which a Party becomes aware concerning adverse reactions or safety issues, notice must be given by telephone within [***] after receipt of the information, followed immediately with written notice, advising the other Party, regardless of the origin of such information. Any other complaints shall be reported in writing to the other party [***]. CPDC agrees to co-operate with FUSION and any Regulatory Authority in evaluating any complaint, claim, safety or adverse use report related to any Product CPDC will provide timely assistance in responding to any such complaints, including reviews of Batch records and retained samples as well as any necessary testing within reason. Page 5 of 13 CONFIDENTIAL
Supply Agreement - FUSION 4.7 Recalls. FUSION shall notify CPDC promptly if any Product is the subject of a recall or correction (a "Recall"), and FUSION and/or its designee shall have sole responsibility for the handling and disposition of such Recall. [***]. (a) In the event that CPDC disputes FUSION'S determination that the fault is due to CPDC and/or to its employees or agents, the Parties will select a mutually agreeable outside consulting firm which will be instructed to review the applicable information and data and to confirm or dissent from FUSION'S determination. If the consulting firm confirms FUSION'S determination, CPDC will pay the fees of such consulting firm. If the consulting firm dissents from FUSION'S determination, CPDC will not have the obligations set forth herein with respect to the Recall and FUSION will pay the fees of such consulting firm. (b) FUSION and/or its designee shall maintain records of all sales, shipping records of Product and customers in sufficient detail to adequately administer a Recall for the period of time as required by applicable law and regulation. CPDC's Shipping Records of Product will be given to Fusion on request such that Fusion can maintain the records and, if such a request is made, will be delivered within a timeframe to be detailed within Quality Agreement. 4.8 New Regulatory Requirements. Each Party shall promptly notify the other of new regulatory requirements of which it becomes aware which are relevant to the manufacture of any Product under this Agreement and which are required by the Regulatory Authorities, as applicable. The Parties shall confer with each other with respect to the best means to implement and comply with such requirements. Any reasonable costs for modifications or additions to the facility required as a result of new regulatory requirements shall be borne by [***]. 4.9 Records. CPDC shall maintain all records necessary to evidence compliance in all respects with (i) the applicable cGMP regulations, Canadian Environmental Health and Safety ("EHS") regulations, the requirements of the CNSC for handling of radioactive materials and the Canadian and International regulations for the transport of dangerous goods as related to the supply and manufacture of Products; (ii) the Specifications; and (iii) obligations under this Agreement. All such records shall be maintained by CPDC according to that specified within the Quality Agreement. CPDC shall provide to FUSION reasonable access to such records upon request Prior to destruction of any record after such time, CPDC shall give written notice to FUSION. FUSION shall have the right within [***] of receipt of such notice to request that CPDC maintain such records in an off-site storage facility for such longer periods as FUSION requests, provided that FUSION pays all costs associated with such off-site storage. 5. Representations and Warranties 5.1 Mutual Representations and Warranties. Each Party represents and warrants to the other as follows: (a) it is a corporation duly organized and validly existing under the laws of the state, province or country of its incorporation; (b) it has the complete and unrestricted power and right to enter into this Agreement and to perform its obligations hereunder; (c) this Agreement has been duly authorized, executed and delivered by such Party and constitutes a legal, valid and binding obligation of such Party enforceable against such Party in accordance with its terms except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent transfer, or other similar laws affecting the rights and remedies of creditors generally and by general principles of equity; Page 6 of 13 CONFIDENTIAL
Supply Agreement - FUSION (d) the execution, delivery and performance of this Agreement by such Party do not conflict with any agreement, instrument or understanding, oral or written, to which such Party is a Party or by which such Party may be bound, nor violate any law or regulation of any court, governmental body or administrative or other agency having authority over such Party; (e) all consents, approvals and authorizations from all governmental authorities or other third parties required to be obtained by such Party in connection with the execution and delivery of this Agreement have been obtained; (f) no person or entity has or will have, as a result of the transactions contemplated by this Agreement, any right, interest or valid claim against or upon such Party for any commission, fee or other compensation as a finder or broker because of any act by such Party or its agents, or, with respect to such Party, because of any act by its Affiliates or sublicensees; (g) it has not entered into any agreement with any third Party that is in conflict with the rights granted to the other Party pursuant to this Agreement; and (h) neither it nor its Affiliates has been debarred or is subject to debarment, and such Party will not use in any capacity in connection with this Agreement any person or entity who has been debarred pursuant to Section 306 of the United States Federal Food, Drug and Cosmetic Act. 5.2 CPDC Limited Product Warranty. CPDC hereby provides a limited product warranty, and accordingly does warrant for each Batch, that the Product shipped will (i) conform with the Specifications, (ii) be manufactured, tested, processed, packed and prepared for shipment in accordance with cGMPs, and (iii) be free from defects in material and workmanship for the period from the date of manufacture to the expiry date set out on each Unit of Product packed and prepared for shipment. 5.3 No Implied or Other Warranties. CPDC is manufacturing Batches to meet Specifications and is supplying Products to FUSION'S designees. Except as expressly set out in this Supply Agreement, CPDC and FUSION hereby disclaim all other warranties or conditions, whether express or implied, statutory or otherwise including, but not limited to, any implied warranties or conditions of merchantability or fitness for a particular purpose. 6. Term 6.1 Term. This Supply Agreement shall commence on the Effective Date, and shall continue for a period of [***] unless terminated earlier in accordance with the terms of this Supply Agreement.
[***] Import Alert [***], the Parties shall [***]. Negotiating in good faith, the Parties shall agree to a reasonable minimum percentage of Product supply to [***] Import Alert. In addition, the parties will negotiate the different aspects of the territories and related terms which may include, but are not limited to, [***].
[***] Import Alert [***], the Parties shall amend this Supply Agreement to revise the [***] Territories. Negotiating in good faith, the Parties shall agree to a reasonable minimum percentages of Product supply to the each territory, including but not limited to [***] and such amendment shall be closed within [***] of CPDC notifying Fusion [***] Import Alert. 6.2 Term, Renewal. Following the Term, this Supply Agreement shall automatically renew for successive periods of one (1) year (each a "Renewal Term"), unless a Party delivers written notice of non-renewal to the other Party [***] prior to the end of the applicable term. The Term, Initial Renewal Term and Renewal Terms shall be collectively referred to as the "Term". Page 7 of 13 CONFIDENTIAL
Supply Agreement - FUSION 7. Termination 7.1 Termination by FUSION, Without Cause. FUSION may terminate this Agreement by providing written notice to the CPDC where: (a) [***] following the Effective Date of this Supply Agreement, FUSION may terminate this Agreement without cause by providing CPDC with [***] prior written notice. (b) Fusion discontinues the trial or terminates the program, Fusion may terminate this agreement by giving [***] written notice to CPDC 7.2 Termination by FUSION, For Cause. FUSION may terminate this Agreement with immediate effect, by providing written notice to the CPDC, where: (a) CPDC commits a fundamental breach of any of its obligations under this Agreement, and such breach is not remedied (if capable of remedy) within [***] of notice in writing from FUSION requiring that such breach be remedied; (b) CPDC becomes insolvent or goes into administration, receivership or liquidation or enters into any arrangement or composition with its creditors; or (c) CPDC ceases or threatens to cease carrying on business. (d) CPDC fails to maintain a Drug Establishment License with Health Canada 7.3 Without limiting Section 11, in the event of for cause termination of this Agreement by FUSION pursuant to Section 7.2, CPDC's maximum liability shall be no greater than that set forth in Section 11.2. 7.4 Termination by CPDC, For Cause. CPDC may terminate this Agreement immediately on written notice to FUSION if: (a) FUSION fails to pay or dispute any invoice in accordance with Section 3.5 and fails to remedy such breach within [***] of a notice from CPDC requiring FUSION to remedy the same and stipulating that FUSION is in breach of this Agreement; or (b) FUSION becomes insolvent or goes into administration, receivership or liquidation or enters into any arrangement or composition with its creditors. 7.5 Termination of this Agreement is without prejudice to any accrued rights of either party as at the date of termination, including, without limitation, CPDC's right to invoice FUSION pursuant to Section 3.5 for any amounts chargeable pursuant to this Agreement as of the date of termination, or as a result of termination. 7.6 Upon termination of this Agreement for any reason whatsoever: (a) CPDC must immediately return, [***], all of FUSION'S property in CPDC's possession; and (b) all then active Production Orders shall be deemed to have been cancelled by FUSION as of the date of termination of this Agreement. Page 8 of 13 CONFIDENTIAL
Supply Agreement - FUSION (c) Shall relieve CPDC of its Exclusivity and Performance of Work obligations set forth in the Master Services Agreement sections 3 and 4 respectively, unless, other work orders under the MSA are still valid. 7.7 Prior Obligations. Except as otherwise set forth in this Section 7, termination of this Supply Agreement for any reason shall not release either Party from any obligation theretofore accrued. 8. Survival. Any provision of this Supply Agreement, which, by its terms, is intended to survive the termination or expiration of this Supply Agreement, shall survive such termination or expiration of this Agreement. 9. Assignment. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Parties hereto; provided, however, that neither Party shall transfer or assign this Agreement without the prior written consent of the other Party, such consent not to be unreasonably withheld, except where such assignment is by CPDC to any successor or subsidiary organization created within [***] of the Effective Date of this Agreement, which assignment may be completed without the prior written consent of FUSION. Notwithstanding the foregoing, each Party may assign this Agreement and its rights and obligations hereunder without such consent in connection with the transfer or sale of all or substantially all of the business of such Party to which this Agreement relates, whether by merger, sale of stock, sale of assets or otherwise, provided the assignee agrees in writing with the other Party hereto to assume all obligations and liabilities of the assignor under this Agreement. 10. Indemnification 10.1 By CPDC. CPDC shall defend, indemnify and hold FUSION and its Affiliates and sublicensees, and each of their respective directors, officers and employees, harmless from and against any and all damages, liabilities, costs and expenses (including the reasonable costs and expenses of lawyers and other professionals) (collectively "Losses") incurred by FUSION in connection with any claim, demand, action or other proceeding (each, a "Claim") by a third party (excluding FUSION'S Affiliates and sublicensees), to the extent such Losses arise out of (a) failure of the Product delivered under this Agreement to conform to the Specifications; (b) CPDC's breach of this Agreement, including without limitation any failure of its representations and warranties set forth in Section 5.1 or 5.2 to have been accurate when made or any breach of the covenants set forth in this Agreement; or (c) the gross negligence or intentional misconduct of CPDC or any of its Affiliates, or any of their respective directors, officers, employees, provided CPDC will not have an indemnification obligation with respect to any Claim to the extent that FUSION has an indemnification obligation under Section 10.2. 10.2 By FUSION. FUSION shall defend, indemnify and hold CPDC and Its Affiliates, and each of their respective directors, officers and employees, harmless from and against any and all Losses incurred by CPDC in connection with of any Claim by a third party (excluding CPDC's Affiliates), to the extent such Losses arise out of: (a) except to the extent arising from the failure of the Product to conform to the Specifications, the use or sale of the Product by FUSION, its Affiliates, sublicensees, distributors, agents or other parties; (b) except to the extent arising from the failure of the Product to conform to the Specifications, the manufacture, storage, use, handling, promotion, marketing, distribution, importation, sale or offering for sale of Product; (c) interactions and communications with governmental authorities, physicians or other third parties; or (d) FUSION'S breach of this Agreement, including without limitation any of its representations and warranties set forth in Section 5.1, (e) the gross negligence or intentional misconduct of FUSION or any of its Affiliates, or any of their respective directors, officers, employees, provided FUSION will not have an indemnification obligation with respect to any Claim to the extent that CPDC has an indemnification obligation under Section 10.1. Page 9 of 13 CONFIDENTIAL
Supply Agreement - FUSION 10.3 EXPENSES. AS THE PARTIES INTEND COMPLETE INDEMNIFICATION, ALL COSTS AND EXPENSES OF ENFORCING ANY PROVISION OF THIS SECTION 10 SHALL ALSO BE REIMBURSED BY THE INDEMNITOR. 11. LIMITATIONS OF LIABILITY. 11.1 GENERAL. EXCEPT FOR DAMAGES FOR WHICH A PARTY IS RESPONSIBLE PURSUANT TO ITS INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 10 ABOVE, EACH PARTY SPECIFICALLY DISCLAIMS ALL LIABILITY FOR AND SHALL IN NO EVENT BE LIABLE FOR ANY INCIDENTAL, SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, EXPENSES, LOST PROFITS, LOST SAVINGS, INTERRUPTIONS OF BUSINESS OR OTHER DAMAGES OF ANY KIND OR CHARACTER WHATSOEVER ARISING OUT OF OR RELATED TO THIS AGREEMENT OR RESULTING FROM THE MANUFACTURE, HANDLING. MARKETING, SALE, DISTRIBUTION OR USE OF LICENSED PRODUCT REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE, EVEN IF SUCH PARTY WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. FUSION SHALL HAVE NO REMEDY, AND CPDC SHALL HAVE NO LIABILITY, OTHER THAN AS EXPRESSLY SET FORTH IN THIS AGREEMENT. EXCEPT FOR DAMAGES FOR WHICH A PARTY IS RESPONSIBLE PURSUANT TO ITS INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 10 ABOVE, NO ACTION, REGARDLESS OF FORM, ARISING OUT OF OR RELATED TO THIS AGREEMENT MAY BE BROUGHT BY EITHER PARTY MORE THAN [***] AFTER SUCH PARTY HAS KNOWLEDGE OF THE OCCURRENCE THAT GAVE RISE TO THE CAUSE OF SUCH ACTION. 11.2 CPDC MAXIMUM LIABILITY. NOTWITHSTANDING ANY OTHER TERM HEREIN, OR ANY TERM OF THE MASTER SERVICES AGREEMENT. CPDC'S MAXIMUM LIABILITY TO FUSION UNDER THIS SUPPLY AGREEMENT FOR ANY REASON WHATSOEVER, INCLUDING, WILL NOT EXCEED [***]. 12. Non-Solicitation. During the term and for a period of [***] thereafter, neither party shall solicit, induce, encourage or attempt to induce or encourage any employee of the other party with whom such party has had direct contact to terminate his or her employment with such other party or to breach any other obligation to such other party. This section is not meant to encompass general solicitations such as may be found in newspaper advertisements and the like and the interviewing or hiring of any person who responds to a general solicitation 13. FORCE MAJEURE. NEITHER PARTY SHALL BE LIABLE FOR FAILURE TO PERFORM, OR DELAY IN THE PERFORMANCE OF, ITS OBLIGATIONS UNDER THIS AGREEMENT (OTHER THAN PAYMENT OBLIGATIONS) WHEN SUCH FAILURE OR DELAY IS CAUSED BY AN EVENT OF FORCE MAJEURE. FOR PURPOSES OF THIS AGREEMENT, AN EVENT OF FORCE MAJEURE MEANS ANY EVENT OR CIRCUMSTANCE BEYOND THE REASONABLE CONTROL OF THE AFFECTED PARTY. INCLUDING BUT NOT LIMITED TO, WAR, INSURRECTION, RIOT, FIRE, FLOOD OR OTHER UNUSUAL WEATHER CONDITION, EXPLOSION. ACT OF GOD, PERIL OF THE SEA, STRIKE, LOCKOUT OR OTHER INDUSTRIAL DISTURBANCE, SABOTAGE, ACCIDENT, EMBARGO, BREAKAGE OF MACHINERY OR APPARATUS, INJUNCTION, ACT OF GOVERNMENTAL AUTHORITY, COMPLIANCE WITH GOVERNMENTAL ORDER ON NATIONAL DEFENSE REQUIREMENTS, OR INABILITY TO OBTAIN FUEL, POWER, RAW MATERIALS, LABOR OR TRANSPORTATION FACILITIES. IF, DUE TO ANY EVENT OF FORCE MAJEURE, EITHER PARTY SHALL BE UNABLE TO FULFILL ITS OBLIGATIONS UNDER THIS AGREEMENT (OTHER THAN PREVIOUSLY ACCRUED PAYMENT OBLIGATIONS FROM COMPLETED WORK, THE AFFECTED PARTY SHALL IMMEDIATELY NOTIFY THE OTHER PARTY OF SUCH INABILITY AND OF THE PERIOD DURING WHICH SUCH INABILITY IS EXPECTED TO CONTINUE AND SHALL USE COMMERCIALLY REASONABLE EFFORTS TO MITIGATE THE LENGTH AND EFFECT OF SUCH FORCE MAJEURE EVENT. Page 10 of 13 CONFIDENTIAL
Supply Agreement - FUSION 14. Compliance with Law. Each Party agrees to comply, and to require its Affiliates and Sublicensees to comply with all applicable international, federal, state and local laws, rules and regulations, including, but not limited to, import/export restrictions, laws, rules and regulations governing use and patent, copyright and trade secret protection, in the performance of its activities as contemplated by this Agreement. 15. Costs and Expenses. Except as otherwise expressly provided in this Agreement, [***] shall bear all costs and expenses associated with the performance of [***] under this Agreement. 16. Notices. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be delivered in person, transmitted by facsimile, e-mail or similar means of recorded electronic communication or sent by registered mail, charges prepaid, addressed to the addresses set out on the signature page hereof. Any such notice or other communication shall be deemed to have been given and received on the day on which it was delivered or transmitted (or, if such day is not a business day, on the next following business day) unless mailed, in which case on the [***] following the date of mailing; provided, however, that if at the time of mailing or within [***] thereafter there is or occurs a labour dispute or other event that might reasonably be expected to disrupt the delivery of documents by mail, any notice or other communication hereunder shall be delivered or transmitted by means of recorded electronic communication as described. 17. Severability. Each provision contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any such provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof. 18. Headings and References. The descriptive headings of this Agreement are for convenience only and shall be of no force or effect in construing or interpreting any of the provisions of this Agreement. The terms "this Agreement", "hereof, "hereunder" and similar expressions refer to this Agreement and not to any particular Sections, subsection or other portion hereof, and include any agreement supplemental hereto. Unless something in the subject matter or context is inconsistent therewith, references herein to Sections, subsections, paragraphs, subparagraphs and further subdivisions are references to such subdivisions of this Agreement. 19. Number, Gender and Persons. Unless the context otherwise requires, any reference to gender shall include both genders and words importing the singular number shall include the plural and vice-versa. Words importing "persons" include individuals, partnerships, associations, trusts, unincorporated organizations and corporations. 20. Calculation of Time Periods. Where a time period is expressed to begin or end at, on or with a specified day, or to continue to or until a specified day, the time period includes that day. Where a time period is expressed to begin after or to be from a specified day, the time period does not include that day. Where anything is to be done within a time period expressed after, from or before a specified day, the time period does not include that day. If the last day of a time period is not a business day, the time period shall end on the next business day. 21. Definitions. Any definitions contained in this Agreement shall include any necessarily corresponding definitions as the context may require. Any capitalized or otherwise defined term used in this Agreement shall have the meaning ascribed in this Agreement regardless of whether such meaning is ascribed earlier or later in this document than the reference in question. 22. Further Assurances. Each of the Parties hereto shall, at all times and from time to time hereafter, execute, acknowledge, and deliver such other instruments and shall take such other action as may be necessary to carry out their respective obligations under this Agreement. Page 11 of 13 CONFIDENTIAL
Supply Agreement - FUSION 23. Waiver. Except as expressly provided in this Agreement, no amendment or waiver of this Agreement or any portion thereof shall be binding unless executed in writing. No waiver of any provision of this Agreement shall constitute a waiver of any other provision, nor shall any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided. 24. Counterparts. This Agreement may be executed in any number of counterparts, and/or by facsimile or e-mail transmission of standard PDF files, each of which shall constitute an original and all of which, taken together, shall constitute one and the same instrument.
(remainder of page intentionally left blank; signature page follows) Page 12 of 13 CONFIDENTIAL
Supply Agreement - FUSION IN WITNESS WHEREOF, the Parties hereto have each caused this Supply Agreement to be duly executed as of the Effective Date. Centre for Probe Development and Commercialization McMaster University Nuclear Research Building, A316 1280 Main Street West Hamilton, Ontario Canada, L8S 4K1
Fusion Pharmaceuticals Inc. 270 Longwood Road South Hamilton, Ontario Canada, L8P 0A6
By By Name Name Title Title Date Date
[SIGNATURE PAGE] Page 13 of 13 CONFIDENTIAL
Supply Agreement - FUSION SCHEDULE 1: SUPPLY PRICING
[***] 4. Production Standby Fee: a fee of $45,000 per month shall apply to [***]. CONFIDENTIAL Page 1 of 2
CONFIDENTIAL [/INST] ```json
{<answer_start>
"answer": "Negotiating in good faith, the Parties shall agree to a reasonable minimum percentage of Product supply to [***] Import Alert."
<answer_end>
}
``` </s> | Exhibit 10.17
Supply Agreement - FUSION
CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED WITH "[***]". SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF DISCLOSED.
SUPPLY AGREEMENT ("Supply Agreement") effective as of the date of last signing ("Effective Date") between Centre for Probe Development and Commercialization, a not-for-profit research and services institution with offices located at McMaster University, Nuclear Research Building, 1280 Main Street West, Hamilton, Ontario, Canada, L8S 4K1, ("CPDC"), and FUSION Pharmaceuticals Inc. ("FUSION"), having a place of business at 270 Longwood Road South, Hamilton, Ontario, Canada, L8P 0A6, (together the "Parties" each a "Party"). This document defines the terms and conditions under which CPDC will provide FUSION the Product outlined in this Supply Agreement.
This Supply Agreement is conducted under the general provisions of the Master Services Agreement and the Quality Agreement entered into between the PARTIES. Unless explicitly stated within this Supply Agreement should there be discrepancies between the Supply Agreement and the Master Services Agreement, then the Master Services Agreement will be the controlling document. 1. "Products": 1.1 Ac-225 FPI-1434 1.2 [***] 1.3 The specifications for the Products are further defined in Schedule 2. 2. Definitions
As used herein, the following terms shall have the following meanings: 2.1 Affiliate(s) shall exclude CPDC, when referring to FUSION'S affiliates, and shall exclude FUSION, when referring to CPDC's affiliates. 2.2 "Batch" shall mean a single production, testing and release of Product according to the approved and validated processes. 2.3 "Clinical Phase" shall mean the period during which human studies involving the Products are performed for the purpose of evaluating the safety, efficacy and appropriate dose ranges of Product ("Clinical Trials"), to secure marketing approval from a Regulatory Authority. 2.4 "Current Good Manufacturing Practices" or "cGMP(s)" shall mean the standards required by the Regulatory Authority for the manufacturing, testing and quality control of pharmaceutical materials, which practices are current on the Effective Date of this Agreement and may be supplemented, amended or modified by such regulatory authority from time to time. 2.5 "Date of Manufacturing" shall mean the date on which the drug product is produced. 2.6 "[***] Territory" shall mean the territories [***] for which CPDC shall be the [***] supplier of Products for Fusion. 2.7 "Master Services Agreement" the agreement executed between the Parties on the 21st day of February, 2017. 2.8 "Precursors" shall mean the starting materials required to produce Product. For the purpose of this agreement, the Precursors are defined as FPI- 1175 and [***]. Page 1 of 13 CONFIDENTIAL
Supply Agreement - FUSION 2.9 "Process' shall mean a GMP-validated method for producing the Product, including formulation, manufacturing controls, and all applicable testing and evaluation suitable to meet regulatory requirements for use of the Product in clinical trials. 2.10 "Production Order* shall mean a written request from FUSION to CPDC authorizing the manufacture of one or more Batches of a Product as further described in Section 3.2. The Production Order is jointly maintained by CPDC and FUSION based on clinical trial requirements. 2.11 "Quality Agreement" means the agreement separately executed between the Parties defining the Specifications, applicable standards, commitment, responsibilities, and activities that both FUSION and CPDC will undertake to ensure that the cGMP manufacturing and services as expressly required under this Agreement and the Master Services Agreement are in full compliance. 2.12 "Regulatory Authority" means the United States Food and Drug Administration ("FDA'), European Medicines Agency ('EMA'), Health Canada and/or any other governmental, regulatory or administrative body having jurisdiction over any activities conducted under this Agreement. 2.13 "Specifications" shall mean the standards established in writing by the Parties for the characteristics, quality, and quality control testing of Product, and its constituents, components, and packaging, as further described in Section 4.4 below and Schedule 2, and as in effect from time to time. 2.14 "Unit" shall refer to an individual vial of Product produced according to the approved specifications. 3. Manufacture and Supply of Products 3.1 Scope and Object; Engagement. This Supply Agreement governs Clinical Phase supply for the Products in connection with Clinical Trials sponsored by FUSION, and in accordance with the responsibilities and obligations attributed to each of the Parties as set out in this Supply Agreement.
Accordingly, FUSION hereby engages CPDC, and CPDC hereby accepts such engagement, to supply Products for the Territory in connection with FUSION'S Clinical Trials.
The Products shall be manufactured by CPDC at the location in its cGMP facilities in the Nuclear Research Building (NRB) and on the campus of McMaster University in Hamilton, Ontario, Canada, established for this purpose pursuant to Deliverables defined within Supply Agreement.
For the avoidance of doubt, it shall be the responsibility of FUSION or its designate to file, obtain and maintain any Investigational New Drug (IND) applications, registrations, listings, authorizations and approvals, as the Regulatory Authority may require to enable use of Product in Clinical Trials, and provide CPDC with all particulars thereof and developments thereunder.
Both Parties acknowledge that at the time of signing this Supply Agreement that the CPDC is subject to a supply restriction to the United States of America (the "USA") due to and Import Alert 66-40 (the "Import Alert") issued by the FDA. 3.2 Production Orders. From time to time during the Term set forth in Section 6 of this Supply Agreement, FUSION and CPDC will agree to binding Production Orders for Products, as follows: (a) Based on a template order form for such Production Orders provided by CPDC to FUSION, FUSION shall complete the Production Order in such form [***] no later than (a) the order cut-off period for the third-party isotope providers ("Minimum Lead Time"). • In the case of [***] the isotope order cut-off is [***] eastern standard time the week prior to isotope delivery Page 2 of 13 CONFIDENTIAL
Supply Agreement - FUSION • In the case of Actinium-225 the isotope order cut-off is [***] eastern standard time the week prior to isotope delivery. (b) CPDC will respond, by email, the acceptance or rejection of each duly completed Production Order within [***] of receipt of such Production Order (an 'Accepted Production Order" or "Rejected Production Order," respectively). If there is no response to a Production Order within such timeline, it shall be considered an Accepted Production Order. In the case of a Rejected Production Order, [***]. (c) FUSION shall be entitled to make changes to Production Orders (a 'Change Order") to alter the quantity of Units packaged or distributed up to [***] prior to the Date of Manufacturing by providing CPDC with written notice [***]. CPDC will respond, by email, the acceptance or rejection of each Change Order within [***] of receipt of such change (an "Accepted Change Order" or "Rejected Change Order," respectively). If there is no response to a Change Order within such timeline, it shall be considered an Accepted Change Order. In the case of a Rejected Change Order, [***]. Changes to the number of Units packaged or distributed with less than [***] notice will be subject to the applicable [***] defined in Schedule 1. Notwithstanding the foregoing, CPDC is unable to alter the total quantity of Product produced after the order deadlines imposed by any third-party isotope supplier. (d) Cancelation of a Production Orders: (i) [***] (ii) All cancellations of Production Orders shall be provided to CPDC by FUSION in writing [***]. (e) [***]. 3.3 Shipping: All deliveries of Products shall be Free Carrier shipping point [***]. For greater certainty, [***] shall take ownership of and bear all risk of loss of or damage to the Products at the origin of the shipment. (a) If requested, [***] shall arrange for any insurance desired by [***] on shipments of Product, in amounts that [***] shall determine, and naming [***]. (b) When shipping Product, CPDC shall comply with all applicable laws and regulations, [***]. (c) All costs and responsibility for return shipping of any Products [***] and or re-usable packaging including but not limited to, lead pots, cardboard boxes or foam inserts, and/or other materials shall be borne by [***]. (d) In the event that any Product packaging materials are returned for reuse from clinical trial sites, [***] shall be responsible for transportation, disposal and/or replacement of any damaged, unusable or lost materials, if applicable. 3.4 Inability to Supply. In the event that it becomes apparent to CPDC at any time that it will be unable to fulfill any Production Order, then CPDC shall immediately notify FUSION in writing of CPDC's inability to meet such requirements for Product, along with a specific indication of the amount of such shortfall in manufacture of Product and anticipated timing of delivery. If CPDC is unable to fulfill the Production Order or any portion thereof within [***] of the planned delivery, then either: (a) CPDC will [***]; or Page 3 of 13 CONFIDENTIAL
Supply Agreement - FUSION (b) CPDC will [***]. 3.5 Pricing and Payment Terms. Schedule 1 of this Supply Agreement details the pricing and payment terms for the Product. For supply of Product, CPDC shall invoice FUSION [***]. CPDC shall send such invoices to:
Address:
270 Longwood Rd. South Hamilton, Ontario L8P 0J6 Canada [***]
FUSION shall pay such invoice within [***] of receipt of the invoice in accordance with the Supply Agreement 3.6 Batch Testing. FUSION shall have the right but not the obligation to conduct any Batch testing [***] or investigation it determines to be of value to determine compliance of Product with the Specifications and/or pursuant to any other standard imposed by law. A Batch shall be deemed to be acceptable if, upon testing, it meets the Specifications, relevant cGMP standards, all other applicable laws, rules and regulations (and any additional tests as agreed by the Parties). If either Party discovers that a Batch does not meet the Specifications, relevant cGMP standards or other applicable laws, rules or regulations, then the discovering Party shall promptly communicate with the other Party. All warranty obligations of CPDC with respect to a particular Batch shall cease and have no effect to the extent that any defect in such Batch arises from abuse, misuse, alteration, mishandling, improper storage or gross negligence by FUSION or FUSION'S employees, representatives, agents, suppliers or carriers, or defects in Precursor materials furnished by FUSION which are used in the production of such Batch. 3.7 Dispute Over Quality. In the event of a conflict regarding whether or not Product met the Specifications, cGMP standards or other applicable laws, rules or regulations, at the time of delivery, which CPDC and FUSION are unable to resolve after a good faith attempt by both Parties to resolve such matter in a period of [***] after the conflict arises, a sample of such Product shall be submitted by FUSION or its designee to an independent laboratory or quality assurance professional reasonably acceptable to both Parties for testing or review of the batch documentation. Any test results obtained by such laboratory shall be final and controlling for purposes of this Agreement. In the event the independent review and/or test results indicate that the rejected Product in question met the Specifications, cGMP standards, and all other applicable laws, rules and regulations, then [***]. 3.8 Non-Conforming Products. In the event it is settled pursuant to Section 3.6 or 3.7 that Product in question did not meet the Specifications, cGMP standards or other applicable laws, rules or regulations, FUSION shall be entitled [***]. 4. Additional Obligations of the Parties 4.1 Record Keeping, Inspection, etc. CPDC shall: (a) conform to the provisions detailed within the Quality Agreement, which includes the right of FUSION to conduct inspections, and the responsibility of CPDC to conduct quality control testing of Product prior to shipment and ensure conformance with the Specifications. CPDC shall retain or have retained accurate and complete records pertaining to such testing. Each shipment of CPDC hereunder shall be accompanied by a certificate of analysis for each Batch of CPDC therein; Page 4 of 13 CONFIDENTIAL
Supply Agreement - FUSION (b) keep accurate financial records of all Services performed and passthrough costs under this Supply Agreement and all amounts to be invoiced to FUSION and all invoice calculations, and, upon request by FUSION, make such records available for review by FUSION or its representatives to permit verification of the correctness of such amounts and calculations. 4.2 Licenses and Permits. CPDC shall be responsible for obtaining and maintaining any and all facility or other licenses, permits, registrations, and any regulatory approvals necessary to manufacture, handle, store, label, package and prepare under cGMP conditions Products for shipment, and the packaging, supply and export of Product to FUSION or its designees in accordance with the terms and conditions of this Agreement for the Clinical Phase. This includes, but is not limited to, the use and handling of radioactive materials. For greater certainty CPDC will abide by all laws, rules and regulations as applicable for radiation safety by the Canadian Nuclear Safety Commission ("CNSC") for compliance. 4.3 Precursor and Reference Standards. FUSION or, at FUSION'S discretion, its designee, shall provide to CPDC, at no charge, Precursor and reference standards, which meet the Specifications and in sufficient quantities to permit CPDC to meet its Production Schedule obligations hereunder. FUSION shall provide to CPDC all required supporting documentation required for its use in manufacturing the Product. In the event that the Precursor supplied by FUSION is found to be adulterated, damaged, or with compromised packaging, or not shipped within the required environmental conditions CPDC shall return the Precursor at FUSION'S cost. Should the applicable regulations require that CPDC audit FUSION'S Precursor supplier, FUSION shall compensate CPDC for the time and reasonable out of pocket expenses required to complete the audit. CPDC shall only use Precursor and reference standards provided hereunder for the development, validation or manufacture of Products pursuant to this Agreement. FUSION shall at all times retain title in and to such Precursor and reference standard materials in CPDC's possession. FUSION, to the best of its knowledge, represents and warrants to CPDC that it has all requisite rights and intellectual property in such Precursor and reference standard so as to permit their use by CPDC as contemplated by this Agreement without infringement of any third party rights. 4.4 Product Specifications. It is understood that the Specifications may be subject to change from time-to-time based on written agreement by both Parties and in accordance to the Quality Agreement. The current Product Specifications may be referred to within the CPDC controlled document attached as Schedule 2 hereto which is approved at the effective date of this Supply Agreement. 4.5 Changes by CPDC. CPDC shall manufacture Product in compliance with the approved batch records, Specifications, applicable cGMPs, the Quality Agreement, and all applicable laws, rules and regulations, and shall not make any changes contravening that specified within the Quality Agreement. 4.6 Complaints and Adverse Reactions. CPDC or FUSION shall provide to each other prompt notice of any information either of them receives regarding the safety of the Precursor, reference standards, excipients, Products or isotopes, including any confirmed or unconfirmed information regarding adverse, serious or unexpected events associated with any Product that may implicate the manufacture of the Product or one of its components; provided, however, that FUSION shall not be required to provide Clinical Trial reporting to CPDC. For all complaints with respect to any Product of which a Party becomes aware concerning adverse reactions or safety issues, notice must be given by telephone within [***] after receipt of the information, followed immediately with written notice, advising the other Party, regardless of the origin of such information. Any other complaints shall be reported in writing to the other party [***]. CPDC agrees to co-operate with FUSION and any Regulatory Authority in evaluating any complaint, claim, safety or adverse use report related to any Product CPDC will provide timely assistance in responding to any such complaints, including reviews of Batch records and retained samples as well as any necessary testing within reason. Page 5 of 13 CONFIDENTIAL
Supply Agreement - FUSION 4.7 Recalls. FUSION shall notify CPDC promptly if any Product is the subject of a recall or correction (a "Recall"), and FUSION and/or its designee shall have sole responsibility for the handling and disposition of such Recall. [***]. (a) In the event that CPDC disputes FUSION'S determination that the fault is due to CPDC and/or to its employees or agents, the Parties will select a mutually agreeable outside consulting firm which will be instructed to review the applicable information and data and to confirm or dissent from FUSION'S determination. If the consulting firm confirms FUSION'S determination, CPDC will pay the fees of such consulting firm. If the consulting firm dissents from FUSION'S determination, CPDC will not have the obligations set forth herein with respect to the Recall and FUSION will pay the fees of such consulting firm. (b) FUSION and/or its designee shall maintain records of all sales, shipping records of Product and customers in sufficient detail to adequately administer a Recall for the period of time as required by applicable law and regulation. CPDC's Shipping Records of Product will be given to Fusion on request such that Fusion can maintain the records and, if such a request is made, will be delivered within a timeframe to be detailed within Quality Agreement. 4.8 New Regulatory Requirements. Each Party shall promptly notify the other of new regulatory requirements of which it becomes aware which are relevant to the manufacture of any Product under this Agreement and which are required by the Regulatory Authorities, as applicable. The Parties shall confer with each other with respect to the best means to implement and comply with such requirements. Any reasonable costs for modifications or additions to the facility required as a result of new regulatory requirements shall be borne by [***]. 4.9 Records. CPDC shall maintain all records necessary to evidence compliance in all respects with (i) the applicable cGMP regulations, Canadian Environmental Health and Safety ("EHS") regulations, the requirements of the CNSC for handling of radioactive materials and the Canadian and International regulations for the transport of dangerous goods as related to the supply and manufacture of Products; (ii) the Specifications; and (iii) obligations under this Agreement. All such records shall be maintained by CPDC according to that specified within the Quality Agreement. CPDC shall provide to FUSION reasonable access to such records upon request Prior to destruction of any record after such time, CPDC shall give written notice to FUSION. FUSION shall have the right within [***] of receipt of such notice to request that CPDC maintain such records in an off-site storage facility for such longer periods as FUSION requests, provided that FUSION pays all costs associated with such off-site storage. 5. Representations and Warranties 5.1 Mutual Representations and Warranties. Each Party represents and warrants to the other as follows: (a) it is a corporation duly organized and validly existing under the laws of the state, province or country of its incorporation; (b) it has the complete and unrestricted power and right to enter into this Agreement and to perform its obligations hereunder; (c) this Agreement has been duly authorized, executed and delivered by such Party and constitutes a legal, valid and binding obligation of such Party enforceable against such Party in accordance with its terms except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent transfer, or other similar laws affecting the rights and remedies of creditors generally and by general principles of equity; Page 6 of 13 CONFIDENTIAL
Supply Agreement - FUSION (d) the execution, delivery and performance of this Agreement by such Party do not conflict with any agreement, instrument or understanding, oral or written, to which such Party is a Party or by which such Party may be bound, nor violate any law or regulation of any court, governmental body or administrative or other agency having authority over such Party; (e) all consents, approvals and authorizations from all governmental authorities or other third parties required to be obtained by such Party in connection with the execution and delivery of this Agreement have been obtained; (f) no person or entity has or will have, as a result of the transactions contemplated by this Agreement, any right, interest or valid claim against or upon such Party for any commission, fee or other compensation as a finder or broker because of any act by such Party or its agents, or, with respect to such Party, because of any act by its Affiliates or sublicensees; (g) it has not entered into any agreement with any third Party that is in conflict with the rights granted to the other Party pursuant to this Agreement; and (h) neither it nor its Affiliates has been debarred or is subject to debarment, and such Party will not use in any capacity in connection with this Agreement any person or entity who has been debarred pursuant to Section 306 of the United States Federal Food, Drug and Cosmetic Act. 5.2 CPDC Limited Product Warranty. CPDC hereby provides a limited product warranty, and accordingly does warrant for each Batch, that the Product shipped will (i) conform with the Specifications, (ii) be manufactured, tested, processed, packed and prepared for shipment in accordance with cGMPs, and (iii) be free from defects in material and workmanship for the period from the date of manufacture to the expiry date set out on each Unit of Product packed and prepared for shipment. 5.3 No Implied or Other Warranties. CPDC is manufacturing Batches to meet Specifications and is supplying Products to FUSION'S designees. Except as expressly set out in this Supply Agreement, CPDC and FUSION hereby disclaim all other warranties or conditions, whether express or implied, statutory or otherwise including, but not limited to, any implied warranties or conditions of merchantability or fitness for a particular purpose. 6. Term 6.1 Term. This Supply Agreement shall commence on the Effective Date, and shall continue for a period of [***] unless terminated earlier in accordance with the terms of this Supply Agreement.
[***] Import Alert [***], the Parties shall [***]. Negotiating in good faith, the Parties shall agree to a reasonable minimum percentage of Product supply to [***] Import Alert. In addition, the parties will negotiate the different aspects of the territories and related terms which may include, but are not limited to, [***].
[***] Import Alert [***], the Parties shall amend this Supply Agreement to revise the [***] Territories. Negotiating in good faith, the Parties shall agree to a reasonable minimum percentages of Product supply to the each territory, including but not limited to [***] and such amendment shall be closed within [***] of CPDC notifying Fusion [***] Import Alert. 6.2 Term, Renewal. Following the Term, this Supply Agreement shall automatically renew for successive periods of one (1) year (each a "Renewal Term"), unless a Party delivers written notice of non-renewal to the other Party [***] prior to the end of the applicable term. The Term, Initial Renewal Term and Renewal Terms shall be collectively referred to as the "Term". Page 7 of 13 CONFIDENTIAL
Supply Agreement - FUSION 7. Termination 7.1 Termination by FUSION, Without Cause. FUSION may terminate this Agreement by providing written notice to the CPDC where: (a) [***] following the Effective Date of this Supply Agreement, FUSION may terminate this Agreement without cause by providing CPDC with [***] prior written notice. (b) Fusion discontinues the trial or terminates the program, Fusion may terminate this agreement by giving [***] written notice to CPDC 7.2 Termination by FUSION, For Cause. FUSION may terminate this Agreement with immediate effect, by providing written notice to the CPDC, where: (a) CPDC commits a fundamental breach of any of its obligations under this Agreement, and such breach is not remedied (if capable of remedy) within [***] of notice in writing from FUSION requiring that such breach be remedied; (b) CPDC becomes insolvent or goes into administration, receivership or liquidation or enters into any arrangement or composition with its creditors; or (c) CPDC ceases or threatens to cease carrying on business. (d) CPDC fails to maintain a Drug Establishment License with Health Canada 7.3 Without limiting Section 11, in the event of for cause termination of this Agreement by FUSION pursuant to Section 7.2, CPDC's maximum liability shall be no greater than that set forth in Section 11.2. 7.4 Termination by CPDC, For Cause. CPDC may terminate this Agreement immediately on written notice to FUSION if: (a) FUSION fails to pay or dispute any invoice in accordance with Section 3.5 and fails to remedy such breach within [***] of a notice from CPDC requiring FUSION to remedy the same and stipulating that FUSION is in breach of this Agreement; or (b) FUSION becomes insolvent or goes into administration, receivership or liquidation or enters into any arrangement or composition with its creditors. 7.5 Termination of this Agreement is without prejudice to any accrued rights of either party as at the date of termination, including, without limitation, CPDC's right to invoice FUSION pursuant to Section 3.5 for any amounts chargeable pursuant to this Agreement as of the date of termination, or as a result of termination. 7.6 Upon termination of this Agreement for any reason whatsoever: (a) CPDC must immediately return, [***], all of FUSION'S property in CPDC's possession; and (b) all then active Production Orders shall be deemed to have been cancelled by FUSION as of the date of termination of this Agreement. Page 8 of 13 CONFIDENTIAL
Supply Agreement - FUSION (c) Shall relieve CPDC of its Exclusivity and Performance of Work obligations set forth in the Master Services Agreement sections 3 and 4 respectively, unless, other work orders under the MSA are still valid. 7.7 Prior Obligations. Except as otherwise set forth in this Section 7, termination of this Supply Agreement for any reason shall not release either Party from any obligation theretofore accrued. 8. Survival. Any provision of this Supply Agreement, which, by its terms, is intended to survive the termination or expiration of this Supply Agreement, shall survive such termination or expiration of this Agreement. 9. Assignment. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Parties hereto; provided, however, that neither Party shall transfer or assign this Agreement without the prior written consent of the other Party, such consent not to be unreasonably withheld, except where such assignment is by CPDC to any successor or subsidiary organization created within [***] of the Effective Date of this Agreement, which assignment may be completed without the prior written consent of FUSION. Notwithstanding the foregoing, each Party may assign this Agreement and its rights and obligations hereunder without such consent in connection with the transfer or sale of all or substantially all of the business of such Party to which this Agreement relates, whether by merger, sale of stock, sale of assets or otherwise, provided the assignee agrees in writing with the other Party hereto to assume all obligations and liabilities of the assignor under this Agreement. 10. Indemnification 10.1 By CPDC. CPDC shall defend, indemnify and hold FUSION and its Affiliates and sublicensees, and each of their respective directors, officers and employees, harmless from and against any and all damages, liabilities, costs and expenses (including the reasonable costs and expenses of lawyers and other professionals) (collectively "Losses") incurred by FUSION in connection with any claim, demand, action or other proceeding (each, a "Claim") by a third party (excluding FUSION'S Affiliates and sublicensees), to the extent such Losses arise out of (a) failure of the Product delivered under this Agreement to conform to the Specifications; (b) CPDC's breach of this Agreement, including without limitation any failure of its representations and warranties set forth in Section 5.1 or 5.2 to have been accurate when made or any breach of the covenants set forth in this Agreement; or (c) the gross negligence or intentional misconduct of CPDC or any of its Affiliates, or any of their respective directors, officers, employees, provided CPDC will not have an indemnification obligation with respect to any Claim to the extent that FUSION has an indemnification obligation under Section 10.2. 10.2 By FUSION. FUSION shall defend, indemnify and hold CPDC and Its Affiliates, and each of their respective directors, officers and employees, harmless from and against any and all Losses incurred by CPDC in connection with of any Claim by a third party (excluding CPDC's Affiliates), to the extent such Losses arise out of: (a) except to the extent arising from the failure of the Product to conform to the Specifications, the use or sale of the Product by FUSION, its Affiliates, sublicensees, distributors, agents or other parties; (b) except to the extent arising from the failure of the Product to conform to the Specifications, the manufacture, storage, use, handling, promotion, marketing, distribution, importation, sale or offering for sale of Product; (c) interactions and communications with governmental authorities, physicians or other third parties; or (d) FUSION'S breach of this Agreement, including without limitation any of its representations and warranties set forth in Section 5.1, (e) the gross negligence or intentional misconduct of FUSION or any of its Affiliates, or any of their respective directors, officers, employees, provided FUSION will not have an indemnification obligation with respect to any Claim to the extent that CPDC has an indemnification obligation under Section 10.1. Page 9 of 13 CONFIDENTIAL
Supply Agreement - FUSION 10.3 EXPENSES. AS THE PARTIES INTEND COMPLETE INDEMNIFICATION, ALL COSTS AND EXPENSES OF ENFORCING ANY PROVISION OF THIS SECTION 10 SHALL ALSO BE REIMBURSED BY THE INDEMNITOR. 11. LIMITATIONS OF LIABILITY. 11.1 GENERAL. EXCEPT FOR DAMAGES FOR WHICH A PARTY IS RESPONSIBLE PURSUANT TO ITS INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 10 ABOVE, EACH PARTY SPECIFICALLY DISCLAIMS ALL LIABILITY FOR AND SHALL IN NO EVENT BE LIABLE FOR ANY INCIDENTAL, SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, EXPENSES, LOST PROFITS, LOST SAVINGS, INTERRUPTIONS OF BUSINESS OR OTHER DAMAGES OF ANY KIND OR CHARACTER WHATSOEVER ARISING OUT OF OR RELATED TO THIS AGREEMENT OR RESULTING FROM THE MANUFACTURE, HANDLING. MARKETING, SALE, DISTRIBUTION OR USE OF LICENSED PRODUCT REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE, EVEN IF SUCH PARTY WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. FUSION SHALL HAVE NO REMEDY, AND CPDC SHALL HAVE NO LIABILITY, OTHER THAN AS EXPRESSLY SET FORTH IN THIS AGREEMENT. EXCEPT FOR DAMAGES FOR WHICH A PARTY IS RESPONSIBLE PURSUANT TO ITS INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 10 ABOVE, NO ACTION, REGARDLESS OF FORM, ARISING OUT OF OR RELATED TO THIS AGREEMENT MAY BE BROUGHT BY EITHER PARTY MORE THAN [***] AFTER SUCH PARTY HAS KNOWLEDGE OF THE OCCURRENCE THAT GAVE RISE TO THE CAUSE OF SUCH ACTION. 11.2 CPDC MAXIMUM LIABILITY. NOTWITHSTANDING ANY OTHER TERM HEREIN, OR ANY TERM OF THE MASTER SERVICES AGREEMENT. CPDC'S MAXIMUM LIABILITY TO FUSION UNDER THIS SUPPLY AGREEMENT FOR ANY REASON WHATSOEVER, INCLUDING, WILL NOT EXCEED [***]. 12. Non-Solicitation. During the term and for a period of [***] thereafter, neither party shall solicit, induce, encourage or attempt to induce or encourage any employee of the other party with whom such party has had direct contact to terminate his or her employment with such other party or to breach any other obligation to such other party. This section is not meant to encompass general solicitations such as may be found in newspaper advertisements and the like and the interviewing or hiring of any person who responds to a general solicitation 13. FORCE MAJEURE. NEITHER PARTY SHALL BE LIABLE FOR FAILURE TO PERFORM, OR DELAY IN THE PERFORMANCE OF, ITS OBLIGATIONS UNDER THIS AGREEMENT (OTHER THAN PAYMENT OBLIGATIONS) WHEN SUCH FAILURE OR DELAY IS CAUSED BY AN EVENT OF FORCE MAJEURE. FOR PURPOSES OF THIS AGREEMENT, AN EVENT OF FORCE MAJEURE MEANS ANY EVENT OR CIRCUMSTANCE BEYOND THE REASONABLE CONTROL OF THE AFFECTED PARTY. INCLUDING BUT NOT LIMITED TO, WAR, INSURRECTION, RIOT, FIRE, FLOOD OR OTHER UNUSUAL WEATHER CONDITION, EXPLOSION. ACT OF GOD, PERIL OF THE SEA, STRIKE, LOCKOUT OR OTHER INDUSTRIAL DISTURBANCE, SABOTAGE, ACCIDENT, EMBARGO, BREAKAGE OF MACHINERY OR APPARATUS, INJUNCTION, ACT OF GOVERNMENTAL AUTHORITY, COMPLIANCE WITH GOVERNMENTAL ORDER ON NATIONAL DEFENSE REQUIREMENTS, OR INABILITY TO OBTAIN FUEL, POWER, RAW MATERIALS, LABOR OR TRANSPORTATION FACILITIES. IF, DUE TO ANY EVENT OF FORCE MAJEURE, EITHER PARTY SHALL BE UNABLE TO FULFILL ITS OBLIGATIONS UNDER THIS AGREEMENT (OTHER THAN PREVIOUSLY ACCRUED PAYMENT OBLIGATIONS FROM COMPLETED WORK, THE AFFECTED PARTY SHALL IMMEDIATELY NOTIFY THE OTHER PARTY OF SUCH INABILITY AND OF THE PERIOD DURING WHICH SUCH INABILITY IS EXPECTED TO CONTINUE AND SHALL USE COMMERCIALLY REASONABLE EFFORTS TO MITIGATE THE LENGTH AND EFFECT OF SUCH FORCE MAJEURE EVENT. Page 10 of 13 CONFIDENTIAL
Supply Agreement - FUSION 14. Compliance with Law. Each Party agrees to comply, and to require its Affiliates and Sublicensees to comply with all applicable international, federal, state and local laws, rules and regulations, including, but not limited to, import/export restrictions, laws, rules and regulations governing use and patent, copyright and trade secret protection, in the performance of its activities as contemplated by this Agreement. 15. Costs and Expenses. Except as otherwise expressly provided in this Agreement, [***] shall bear all costs and expenses associated with the performance of [***] under this Agreement. 16. Notices. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be delivered in person, transmitted by facsimile, e-mail or similar means of recorded electronic communication or sent by registered mail, charges prepaid, addressed to the addresses set out on the signature page hereof. Any such notice or other communication shall be deemed to have been given and received on the day on which it was delivered or transmitted (or, if such day is not a business day, on the next following business day) unless mailed, in which case on the [***] following the date of mailing; provided, however, that if at the time of mailing or within [***] thereafter there is or occurs a labour dispute or other event that might reasonably be expected to disrupt the delivery of documents by mail, any notice or other communication hereunder shall be delivered or transmitted by means of recorded electronic communication as described. 17. Severability. Each provision contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any such provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof. 18. Headings and References. The descriptive headings of this Agreement are for convenience only and shall be of no force or effect in construing or interpreting any of the provisions of this Agreement. The terms "this Agreement", "hereof, "hereunder" and similar expressions refer to this Agreement and not to any particular Sections, subsection or other portion hereof, and include any agreement supplemental hereto. Unless something in the subject matter or context is inconsistent therewith, references herein to Sections, subsections, paragraphs, subparagraphs and further subdivisions are references to such subdivisions of this Agreement. 19. Number, Gender and Persons. Unless the context otherwise requires, any reference to gender shall include both genders and words importing the singular number shall include the plural and vice-versa. Words importing "persons" include individuals, partnerships, associations, trusts, unincorporated organizations and corporations. 20. Calculation of Time Periods. Where a time period is expressed to begin or end at, on or with a specified day, or to continue to or until a specified day, the time period includes that day. Where a time period is expressed to begin after or to be from a specified day, the time period does not include that day. Where anything is to be done within a time period expressed after, from or before a specified day, the time period does not include that day. If the last day of a time period is not a business day, the time period shall end on the next business day. 21. Definitions. Any definitions contained in this Agreement shall include any necessarily corresponding definitions as the context may require. Any capitalized or otherwise defined term used in this Agreement shall have the meaning ascribed in this Agreement regardless of whether such meaning is ascribed earlier or later in this document than the reference in question. 22. Further Assurances. Each of the Parties hereto shall, at all times and from time to time hereafter, execute, acknowledge, and deliver such other instruments and shall take such other action as may be necessary to carry out their respective obligations under this Agreement. Page 11 of 13 CONFIDENTIAL
Supply Agreement - FUSION 23. Waiver. Except as expressly provided in this Agreement, no amendment or waiver of this Agreement or any portion thereof shall be binding unless executed in writing. No waiver of any provision of this Agreement shall constitute a waiver of any other provision, nor shall any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided. 24. Counterparts. This Agreement may be executed in any number of counterparts, and/or by facsimile or e-mail transmission of standard PDF files, each of which shall constitute an original and all of which, taken together, shall constitute one and the same instrument.
(remainder of page intentionally left blank; signature page follows) Page 12 of 13 CONFIDENTIAL
Supply Agreement - FUSION IN WITNESS WHEREOF, the Parties hereto have each caused this Supply Agreement to be duly executed as of the Effective Date. Centre for Probe Development and Commercialization McMaster University Nuclear Research Building, A316 1280 Main Street West Hamilton, Ontario Canada, L8S 4K1
Fusion Pharmaceuticals Inc. 270 Longwood Road South Hamilton, Ontario Canada, L8P 0A6
By By Name Name Title Title Date Date
[SIGNATURE PAGE] Page 13 of 13 CONFIDENTIAL
Supply Agreement - FUSION SCHEDULE 1: SUPPLY PRICING
[***] 4. Production Standby Fee: a fee of $45,000 per month shall apply to [***]. CONFIDENTIAL Page 1 of 2
CONFIDENTIAL | Highlight the parts (if any) of this contract related to "Minimum Commitment" that should be reviewed by a lawyer. Details: Is there a minimum order size or minimum amount or units per-time period that one party must buy from the counterparty under the contract? | {
"answer_start": [
23765
],
"text": [
"Negotiating in good faith, the Parties shall agree to a reasonable minimum percentage of Product supply to [***] Import Alert."
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Anti-Assignment" that should be reviewed by a lawyer. Details: Is consent or notice required of a party if the contract is assigned to a third party?
Context: CONTENT LICENSE AGREEMENT
THIS CONTENT LICENSE AGREEMENT (this "Agreement"), dated as of December 21, 2015 (the "Effective Date"), is entered into between Beijing Sun Seven Stars Culture Development Limited, a P.R.C. company with an address at Eastern Fangzheng Road, Southern Dongying Village, Hancunhe Town, Fangshan District, Beijing City, P.R.C. ("Licensor"), and YOU ON DEMAND HOLDINGS, INC., a Nevada corporation with an address at 375 Greenwich Street, Suite 516, New York, New York 10013 ("Licensee").
WHEREAS, Licensor and Licensee have agreed to enter into this Agreement, pursuant to which Licensor shall license to Licensee certain video programming on the terms and subject to the conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises and covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and incorporating the above recitals with and into this Agreement, the parties hereby agree as follows:
TERMS AND CONDITIONS
1. Definitions.
(a) "Additional Title" shall have the meaning specified in Section 5.
(b) "Advertising" shall have the meaning specified in Section 9.
(c) "Affiliate(s)" shall mean an entity controlling, controlled by or under common control with a party. "Control," for purposes of this definition, means direct or indirect ownership or control of more than 50% of the voting interests of the subject entity.
(d) "Confidential Information" shall have the meaning specified in Section 14(a) [Confidential Information].
(e) "Indemnified Party" shall have the meaning specified in Section 13.
(f) "Indemnifying Party" shall have the meaning specified in Section 13.
(g) "Licensor Marks" shall have the meaning specified in Section 11.
(h) "Materials" shall have the meaning specified in Section 4(b) [4) For Titles listed in Schedule A5].
(i) "Mobile Sites" shall mean any and all versions of the Licensee Sites optimized for delivery and/or distribution via a wireless network.
1
Source: IDEANOMICS, INC., 10-K, 3/30/2016
(j) "Reports" shall have the meaning specified in Section 8(b) [Privacy and Data Collection; Reports].
(k) "Share Consideration" has the meaning specified in Section 10.
(l) "Sites" shall mean any and all websites, applications, products and other services through which Licensee (itself or through a third party) delivers content via the public Internet or an IP-based network, regardless of whether the device used to access such websites, applications, products or other services is a laptop or desktop computer, mobile device, tablet, mobile phone, set-top box, or other device.
(m) "Term" shall have the meaning specified in Section 7.
(n) "Territory" shall mean mainland China.
(o) "Titles" shall mean the programming listed on Schedule A (as Schedule A may be amended in accordance with Section 5 from time to time).
(p) "Users" shall mean all subscribers to Licensee's services.
(q) "VOD" shall mean a system that allows for the exhibition of video programming chosen by a subscriber for display on that subscriber's video display unit on an on-demand basis, such that a subscriber is able, at his or her discretion, to select the time for commencement of exhibition, and shall include subscription VOD ("SVOD"), transactional VOD ("TVOD"), ad-supported VOD ("AVOD") and free VOD.
2. Rights Granted.
(a) License Grant. In exchange for the Share Consideration, Licensor hereby grants to Licensee a non-exclusive, royalty-free, perpetual and non-perpetual license (subject to the duration and scope, and format limitations for which Licensor has the rights to each Title as specified in Schedule A1-A6 of Schedule A) to:
i. license, exhibit, distribute, reproduce, transmit, perform, display, and otherwise exploit and make available each Title within the Territory in any language by VOD (including SVOD, TVOD, AVOD and free VOD) for Internet, TV and mobile platforms (including, but not limited to, OTT streaming services, Sites and Mobile Sites), subject to these limitations for each of the Title in Schedule A1-A6:
1) For Titles listed in Schedule A1-A2:
Licensor can only grant Licensee distribution rights to up to six (6) MSOs plus two (2) of China's Internet TV license holders or their OTT Internet-based video partners by VOD (including SVOD, TVOD, AVOD and free VOD). China's current Internet TV license holders include: CNTV (中国网络电视台/未来电视), BesTV (百视通), Wasu (华数), Southern Media Cooperation (南方传媒), Hunan TV (芒果 TV), China National Radio/Galaxy Internet TV (GITV) (银河电视), and China Radio International (中国国际 广播电台);
2
Source: IDEANOMICS, INC., 10-K, 3/30/2016
2) For Titles listed in Schedule A3:
For "天下女人": No satellite TV broadcasting rights granted. Titles other than "猜 猜女人心", "赏深越慕" , "职场新女性挑战行动", " 杨澜访谈录" (自第192期及以后的节 目),"人生相对论 ", " 天下女人", and "正青春" cannot be edited in any way;
3) For Titles listed in Schedule A4:
Other than the versions (dubbed or translated) in which the Titles in Schedule A4 already exist in (and were delivered in), no further dubbing, translation, or editing may be performed by any party on Schedule A4's Titles.
4) For Titles listed in Schedule A5 (except "Summer in February"):
Limitations on Rights Granted: the following distribution methods are permitted: non-theatrical, public video, ship and hotel rights (all not earlier than the US theatrical release); home video rental, home video sell through, and commercial video rights (all not earlier than the US video release); cable TV (pay & free), terrestrial TV (pay & free), satellite pay TV; internet TV (pay & free), residential and non-residential pay-per-view, residential and non-residential internet pay-per-view, VOD, near VOD, and internet VOD (all no earlier than the corresponding exploitation in the USA).
Contents are dubbed and subtitled in Cantonese and Mandarin languages. Exploitation of the Title over the internet must adhere to the following: 1) Distribution is limited to the dubbed or subtitled version, provided the subtitles shall be burnt in with no option to remove them, 2) Licensor must be notified prior to the first exhibition of the Title over the internet, and 3) Authorization to use excerpts, stills, trailers and soundtrack parts of the Title for the 3 promotion of the Title only on Licensor's or Licensor's authorized agent's web site online.
Source: IDEANOMICS, INC., 10-K, 3/30/2016
Rights granted for "Summer in February", shall adhere to Section 2, not subject to the limitations in section 2(a)(i)(4).
ii. copy and dub the Titles, and authorize any person to do the foregoing Licensee shall also have the right to make (or have made on its behalf) translations of the Titles with prior written approval by Licensor and subject to the applicable limitations (if any) in Section 2(a)(i) [License Grant];
iii. promote each Title in any manner or media, including, without limitation, the right to use and license others to use Licensor's name, the title of, trailers created for and excerpts from such Title (including but not limited to audio portions only), Materials and the name, voice and likeness of and any biographical material concerning all persons appearing in or connected with such Title for the purpose of advertising, promoting and/or publicizing such Title, Licensee and the program service on which the Title is exhibited subject to the applicable limitations (if any) in Section 2(a)(i) [License Grant] ;
iv. use the Titles for (i) audience and marketing testing, (ii) sponsor/advertiser screening, and (iii) reference and file purposes, subject to the applicable limitations (if any) in Section 2(a)(i) [License Grant]; and
v. include Licensee's name, trademark and logo in the Titles to identify Licensee as the exhibitor of the Titles.
(b) Sublicensing. Licensee shall have the right to assign or sublicense any or all of its rights granted under this Agreement, in whole or in part, to third parties exhibiting the Titles in the ordinary course of Licensee's business with prior written notice to Licensor and subject to the applicable limitations (if any) in Section 2(a)(i) [License Grant]. Except as otherwise specified in the previous sentence, Licensee may not sublicense any of its rights under Section 2(a) [License Grant] without Licensor's prior written consent, which shall not be unreasonably withheld or delayed.
(c) Display of Titles. Licensee agrees to display the Titles without material alteration to the content thereof. Licensee may make non-material modifications or edits the format of the Titles only for technical purposes with prior written approval by Licensor (such approval not to be unreasonably withheld or delayed) and subject to the applicable limitations (if any) in section 2(a)(i). Nothing in this Agreement prevents Licensee from providing Users with the ability to use the Titles as permitted by law or in a manner for which a license is not required.
4
Source: IDEANOMICS, INC., 10-K, 3/30/2016
(d) Removal of Titles. If Licensee receives written notice from Licensor that Licensor no longer has the rights to provide a Title to Licensee, Licensee shall use commercially reasonable efforts to remove such Title from Licensee's services. Nothing in this Agreement shall obligate Licensee to distribute, exhibit or otherwise use any Title. In addition, should Licensee deem any aspect of any Title as either inappropriate or otherwise objectionable or undesirable (whether for editorial, legal, business or other reasons), Licensee reserves the right, but does not assume the obligation, to discontinue distribution of such Title, without liability and without limiting any rights or remedies to which Licensee may be entitled, whether under this Agreement, at law, or in equity.
(e) Profit Participation. For content listed in Schedule A6 of Schedule A (each a "Project"), Licensor will only grant Licensee certain profit participation rights, for certain durations, as detailed and set forth in Schedule A6 of Schedule A. Licensee will not have distribution rights or any other rights to the content in Schedule A6 of Schedule A under Section 2(a) [License Grant]- (d). If for any reason the A6 projects do not get produced, SSS will substitute comparable projects, to be mutually approved. "Profit Participation" means a portion of Profits equal to the amount designated in Schedule A6 of Schedule A. "Profits" shall be defined and calculated as follows:
i. "Profits" shall mean Gross Revenue received by Licensor in connection with the Project remaining after the deduction therefrom of Fees, Expenses, and Third Party Royalties (each as defined below).
ii. "Gross Revenue" shall mean 100% of all sums actually received by or credited to Licensor in connection with the exploitation of the Project, for a period of 5 years from initial release, on a worldwide basis from the distribution and exploitation of the Project or any part thereof, provided that Gross Revenue shall not include (i) expenses in connection with collecting such Gross Revenue; (ii) actual, verifiable, third party, sales agency costs, fees and commissions which are mutually approved by the parties; (iii) customary "off the tops," including (without limitation) claims, insurance, accounting or other professional service costs actually paid by Producer or a reasonable reserve therefor.
iii. "Fees" shall only apply to non-television, non-Internet exploitation of the Project (e.g., DVD, merchandise) and shall mean the actual, verifiable fee charged by a third party licensing agent or distributor, and mutually agreed to by Licensee and Licensor.
iv. "Expenses" shall mean, collectively, all costs, charges and expenses incurred and/or paid (including without limitation residuals) in connection with the development, production, distribution, marketing, advertising and promotion of the Project. Expenses may include a producer or production fee to Licensor.
5
Source: IDEANOMICS, INC., 10-K, 3/30/2016
v. "Third Party Royalties" shall mean any and all royalties and payments paid or payable to third parties for rights and/or services in connection with the Project.
vi. Licensee shall have equal rights and access to all financial statements, records and/or data received from any entity in connection with the Project. Licensor shall compile this information (including information regarding approved budgets) on a annual basis and provide to Licensee in summary form, the calculation of Profit Participation for all of the parties, which shall be accompanied by the parties' share thereof, if any. Licensor will keep and maintain accurate books and records with respect to the Project. Until one (1) year after the expiration of the Profit Participation of each Project, the books and records will be available for inspection by a certified accounting firm or CPA once per year upon reasonable advance notice. Such books and records shall be made available at Licensor's normal place of business during normal business hours. If any examination of Licensor's books and records reveals that Licensor has failed to properly account for any Profits owing to the parties, Licensor will promptly pay such past due amounts.
(f) Editing of Titles. Any edits to any Title will require the prior written approval by Licensor.
3. Licenses and Clearances.
Licensor shall be solely responsible for the Titles and any and all legal liability resulting from the Titles, excluding any legal liability caused by Licensee's breach of this Agreement or gross negligence with regards to the Titles. Without limiting the generality of the foregoing, Licensor shall be solely responsible for any and all royalties and other fees payable to any applicable licensor(s) or any third party for distribution of the Titles by Licensee (including, without limitation, residuals and clearances or other payments to guilds or unions and rights for music clearances, such as performance rights, synchronization rights and mechanical rights), and all other fees, payments and obligations arising out of the activities contemplated by this Agreement, and Licensee shall have no responsibility or liability for any such royalties or fees. Licensor acknowledges that Licensee cannot and does not undertake to review, and shall not be responsible for Users' unauthorized use or exploitation of, the Titles. Should Licensee become aware of Users' unauthorized use or exploitation of the Titles, Licensee shall immediately report such use to Licensor.
4. Delivery Requirements; Customer Service.
(a) Within fifteen (15) days after the Effective Date or on December 31, 2015 (whichever is earlier), Licensor shall (at Licensor's sole expense), make the Titles available either online or by hard drive to Licensee or the third-party vendor specified by Licensee to provide or deliver the Titles from Licensee's or its third-party vendor's facilities. Delivery of the Titles shall be deemed complete if Licensor makes the Titles available in accordance with the previous sentence. If, from time to time, Licensee requests an alternate delivery method for the Titles and/or the implementation of Licensee's technical specifications relating to the online delivery of the Titles, then Licensor will use commercially reasonable efforts to comply with each such request.
6
Source: IDEANOMICS, INC., 10-K, 3/30/2016
(b) When Licensor delivers each Title to Licensee, Licensor shall provide Licensee (at the place specified by Licensee) with all available promotional materials for such Title, including, but not limited to, captioned photographs, brochures, a synopsis and description of such Title, a complete list of cast and credits, biographies of key performers, and any electronic press kits, trailers or featurettes created for such Title (collectively, the "Materials").
(c) In the event of technical problems with any of the Titles, each party shall use commercially reasonable efforts to notify the other and to remedy any such problems in a timely manner.
(d) Licensor will provide Licensee with reasonable assistance in responding to User inquiries regarding the Titles.
5. Additional Titles.
If, during the Term, Licensor develops or obtains the rights to license any live action or animated feature-length motion picture (each an "Additional Title"), Licensor shall give Licensee the first right of negotiation for each Additional Title (i.e., the preferred vendor). Licensor will promptly provide written notice to Licensee in which Licensor lists each Additional Title. Should Licensee agree to be the vendor for an Additional Title, Licensor and Licensee will negotiate in good faith to mutually agree upon the pricing and terms for each Additional Title in an amendment to this Agreement. Licensor will deliver each Additional Title in accordance with Section 4(a) [4) For Titles listed in Schedule A5]. Unless otherwise expressly stated in such an amendment, each Additional Title listed in such an amendment will be deemed a "Title" and Schedule A will be deemed amended to include such Additional Title.
6. Expansion of Licensee's VOD Services.
Licensor will use its partners and media channels to expand distribution of Licensee's VOD services to more cable MSOs and all other platforms for which Licensee is permitted to distribute the Titles under Section 2(a)(i) [License Grant].
7. Term and Termination.
(a) The Term of this Agreement (the "Term") shall commence on the Effective Date listed above and continue for twenty (20) years, unless sooner terminated as provided in Section 7(b) [Term and Termination].
7
Source: IDEANOMICS, INC., 10-K, 3/30/2016
(b) This Agreement may be terminated at any time by either party, effective immediately upon written notice, if the other party: (i) becomes insolvent; (ii) files a petition in bankruptcy; or (iii) makes an assignment for the benefit of its creditors. Either party may terminate this Agreement upon written notice if the other party materially breaches this Agreement and fails to cure such breach within thirty (30) days after the date that it receives written notice of such breach from the non-breaching party.
(c) Sections 2(a) [License Grant], 2(b) [Sublicensing], 2(c) [Display of Titles], 2(d) [Removal of Titles], 3, and 11 shall survive the expiration or termination of this Agreement: (i) in perpetuity with respect to Titles for which the licenses granted in Section 2(a) [License Grant] are perpetual; and (ii) for the duration of the applicable license term specified in Schedule A with respect to Titles for which the license term specified in Schedule A extends beyond the expiration or termination of this Agreement. Sections 1, 7, 8(a) [Privacy and Data Collection; Reports], 12, 13, 14, 15, 16 and 17 shall survive any expiration or termination of this Agreement in perpetuity.
8. Privacy and Data Collection; Reports.
(a) All User information (including, without limitation, any personally identifiable information and statistical information regarding Users' use and viewing of the Titles) generated, collected or created in connection with the display of the Titles through Licensee's services shall be considered Confidential Information of Licensee, and all right, title and interest in and to such information shall be owned by Licensee.
(b) Licensee will provide Licensor with reports ("Reports") containing statistical information collected by Licensee on (i) Users' use of the Titles, (ii) distribution channels used by Licensee for the distribution of the Titles, (iii) sub-licensees to which the Titles were sub- distributed by Licensee and (if permitted under Licensee's agreements with the sublicensees) any relevant reports received by Licensee from those sublicensees, and (iv) any other information that the Licensor may request Licensee to gather from time to time, subject to mutual approval. The Reports will be delivered in a format that is mutually agreed upon by the parties. The Reports and all information contained in the Reports shall be considered Confidential Information of Licensee, and all right, title and interest in and to such Reports and information shall be owned by Licensee.
9. Advertising.
The parties acknowledge and agree that Licensee's services may contain advertising, promotions and/or sponsorship material (collectively, "Advertising"). Such Advertising shall be determined by Licensee in its sole discretion and Licensee shall be entitled to retain all revenues resulting from the sale of Advertising.
8
Source: IDEANOMICS, INC., 10-K, 3/30/2016
10. Consideration.
No royalty or fees of any kind shall be owed by Licensee under this Agreement. The consideration for the licenses granted by Licensor to Licensee under this Agreement is the issuance of the IP Common Shares as defined in the Amended and Securities Purchase Agreement, dated as of December 21, 2015, by and among the Licensee and the Licensor (the "Share Consideration").
11. Use of Licensor Marks.
Licensor hereby grants Licensee a non-exclusive license to use the logos, trademarks and service marks used by Licensor to identify the Titles (collectively, "Licensor Marks") in connection with the use of the Titles as set forth in this Agreement. Licensee acknowledges and agrees that Licensee's use of the Licensor Marks shall inure to the benefit of Licensor. Should Licensor find objectionable any use of the Licensor Marks by Licensee, Licensor shall have the right to revoke, with respect to the objectionable use, the rights granted to Licensee under this Agreement to use the Licensor Marks, and Licensee shall promptly cease using the Licensor Marks in the manner found objectionable by Licensor.
12. Representations and Warranties.
(a) Licensor represents and warrants that:
i. The execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of Licensor and this Agreement constitutes a valid and legally binding agreement of Licensor enforceable against Licensor in accordance with its terms;
ii. It will not take or authorize any action, or fail to take any action, by which any of the rights in any Title granted herein may be impaired in any way;
iii. It has all rights and authority necessary to fully perform its obligations and grant the rights granted under this Agreement and all rights in and to the Titles and in and to all literary, artistic, dramatic, intellectual property and musical material included therein required for the exercise of rights granted in this Agreement without liability of any kind to any third party; provided however, that this representation and warranty shall not apply to non-dramatic performing rights in music to the extent that they are controlled by SESAC, ASCAP or BMI or to the extent that such music is in the public domain;
9
Source: IDEANOMICS, INC., 10-K, 3/30/2016
iv. Each Title is and will be protected during the Term by copyright throughout the Territory;
v. There are no taxes, charges, fees, royalties or other amounts owed to any party other than as set forth in this Agreement for the exercise of rights granted in this Agreement and Licensor has paid or will pay all charges, taxes, license fees and other amounts that have been or may become owed in connection with the Titles or the exercise of any rights granted under this Agreement;
vi. Licensor shall make all payments which may become due to any union or guild and to any third parties who rendered services in connection with the production of the Titles by virtue of the use made of the Titles hereunder;
vii. No claim or litigation is pending or threatened and no lien, charge, restriction or encumbrance is in existence with respect to any Title that would adversely affect or impair any of the rights granted under this Agreement;
viii. The Titles, Materials and Licensor Marks will not violate or infringe any common law or statutory right of any person or other entity including, without limitation, any contractual rights, proprietary rights, trademark, service mark, copyright or patent rights, or any rights of privacy or publicity;
ix. The Titles, Materials and the Licensor Marks will not be unlawful, slanderous or libelous; and
x. To the extent that any Title makes any claims or renders any instruction or advice, such claim, instruction or advice shall comply with all federal, state and other applicable laws and regulations and shall cause no harm to any person or entity following or acting in accordance with such instruction or advice.
(b) Licensee represents and warrants that:
i. The execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of Licensee and this Agreement constitutes a valid and legally binding agreement of Licensee enforceable against Licensee in accordance with its terms;
ii. It will use the Titles solely as permitted under this Agreement;
iii. It has the full right, capacity and authority to enter into this Agreement and to perform all of its obligations hereunder; and
iv. As of the Effective Date, there is no claim, action, suit, investigation or proceeding relating to or affecting Licensee pending or threatened, in law or in equity, or any other circumstance which might adversely affect Licensee's ability to perform all of its obligations hereunder.
10
Source: IDEANOMICS, INC., 10-K, 3/30/2016
13. Indemnification.
Each party shall defend, indemnify and hold the other party and its Affiliates, and their respective directors, officers, employees, agents, successors, assigns, licensees and distributors harmless from and against any and all judgments, settlements, damages, penalties, costs and expenses (including, but not limited to, reasonable attorneys' fees) arising out of any third party claims relating to the Indemnifying Party's breach or alleged breach of any of its representations, warranties, covenants or obligations hereunder. The party seeking indemnification (the "Indemnified Party") will give prompt notice to the indemnifying party (the "Indemnifying Party") of any claim for which the Indemnified Party seeks indemnification under this Agreement; provided, however, that failure to give prompt notice will not relieve the Indemnifying Party of any liability hereunder (except to the extent the Indemnifying Party has suffered actual material prejudice by such failure). The Indemnified Party will reasonably cooperate (at the Indemnifying Party's expense) in the defense of any claim for which the Indemnified Party seeks indemnification under this Section 13. The Indemnified Party shall have the right to employ separate counsel and to participate in (but not control) any such action, but the fees and expenses of such counsel will be at the expense of the Indemnified Party unless: (i) the employment of counsel by the Indemnified Party has been authorized by the Indemnifying Party; (ii) the Indemnified Party has been advised by its counsel in writing that there is a conflict of interest between the Indemnifying Party and the Indemnified Party in the conduct of the defense of the action (in which case the Indemnifying Party will not have the right to direct the defense of the action on behalf of the Indemnified Party); or (iii) the Indemnifying Party has not in fact employed counsel to assume the defense of the action within a reasonable time following receipt of the notice given pursuant to this Section 13, in each of which cases the fees and expenses of such counsel will be at the expense of the Indemnifying Party. The Indemnifying Party will not be liable for any settlement of an action effected without its written consent (which consent will not be unreasonably withheld or delayed), nor will the Indemnifying Party settle any such action without the written consent of the Indemnified Party (which consent will not be unreasonably withheld or delayed). The Indemnifying Party will not consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to the Indemnified Party a release from all liability with respect to the claim.
14. Confidentiality.
(a) Confidential Information. "Confidential Information" means all non-public information about the disclosing party's business or activities that is marked or designated by such party as "confidential" or "proprietary" at the time of disclosure or that reasonably would be understood to be confidential given the circumstances of disclosure. Notwithstanding the foregoing, Confidential Information does not include information that: (a) is in or enters the public domain without breach of this Agreement; (b) the receiving party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation; (c) the receiving party rightfully knew prior to receiving such information from the disclosing party; or (d) the receiving party develops entirely independently of, and without any access or reference to or use of, any Confidential Information communicated to the receiving party by the disclosing party.
11
Source: IDEANOMICS, INC., 10-K, 3/30/2016
(b) Restrictions. Each party agrees that, during the Term and for two (2) years thereafter: (i) it will not disclose to any third party any Confidential Information disclosed to it by the other party except as expressly permitted in this Agreement; (ii) it will only permit access to Confidential Information of the disclosing party to those of its employees or authorized representatives or advisors (including, without limitation, the receiving party's auditors, accountants, and attorneys) having a need to know and who, prior to obtaining such access, are legally bound to protect the disclosing party's Confidential Information at least to the same extent as set forth herein; (iii) it will use any Confidential Information disclosed to it by the other party only for the purpose of performing its obligations or exercising its rights under this Agreement and not for any other purpose, whether for such party's own benefit or the benefit of any third party; (iv) it will maintain the confidentiality of all Confidential Information of the other party in its possession or control; and (v) that (x) upon the expiration or termination of this Agreement, or (y) at any time the disclosing party may so request, it will deliver promptly to the disclosing party, or, at the disclosing party's option, it will destroy, all Confidential Information of the disclosing party that it may then possess or have under its control. Notwithstanding the foregoing, each party may disclose Confidential Information of the other party to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by law, provided that such party will, as soon as reasonably practicable, provide the disclosing party with written notice of such requirement so that the disclosing party may seek a protective order or other appropriate remedy. The receiving party and its representatives will cooperate fully with the disclosing party to obtain any such protective order or other remedy. If the disclosing party elects not to seek, or is unsuccessful in obtaining, any such protective order or similar remedy and if the receiving party receives advice from reputable legal counsel confirming that the disclosure of Confidential Information is required pursuant to applicable law, then the receiving party may disclose such Confidential Information to the extent required; provided, however, that the receiving party will use commercially reasonable efforts to ensure that such Confidential Information is treated confidentially by each party to which it is disclosed.
15. Disclaimers.
EXCEPT AS EXPRESSLY STATED IN SECTION 12, THE PARTIES HEREBY DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, CONCERNING THE SUBJECT MATTER OF THIS AGREEMENT.
12
Source: IDEANOMICS, INC., 10-K, 3/30/2016
16. Limitation of Liability.
EXCEPT FOR THE ABOVE INDEMNIFICATION OBLIGATIONS AND FOR BREACHES OF SECTION 14, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT (INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS), WHETHER IN AN ACTION OR ARISING OUT OF BREACH OF CONTRACT, TORT OR ANY OTHER CAUSE OF ACTION EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
17. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed in all respects in accordance with the laws of the State of New York, without giving effect to any conflicts of laws principles.
(b) Dispute Resolution. Any dispute, controversy and/or difference which may arise out of or in connection with or in relation to this Agreement, shall be solely and finally settled by binding arbitration pursuant to then-current rules of the International Chamber of Commerce. Such arbitration shall be held in New York, New York. The merits of the dispute shall be resolved in accordance with the laws of the State of New York, without reference to its choice of law rules. The tribunal shall consist of three arbitrators, each of whom shall be knowledgeable in the subject matter hereof. The arbitration shall be conducted in the English language, and all documents shall be submitted in English or be accompanied by a certified English translation. The arbitrators will provide a written explanation to the parties of any arbitration award. The award thereof shall be final and binding upon the parties hereto, and judgment on such award may be entered in any court or tribunal having jurisdiction, and the parties hereby irrevocably waive any objection to the jurisdiction of such courts based on any ground, including without limitation, improper venue or forum non conveniens. The parties and the arbitration panel shall be bound to maintain the confidentiality of this Agreement, the dispute and any award, except to the extent necessary to enforce any such award. The prevailing party, if a party is so designated in the arbitration award, shall be entitled to recover from the other party its costs and fees, including attorneys' fees, associated with such arbitration. By agreeing to this binding arbitration provision, the parties understand that they are waiving certain rights and protections which may otherwise be available if a dispute between the parties were determined by litigation in court, including, without limitation, the right to seek or obtain certain types of damages precluded by this arbitration provision, the right to a jury trial, certain rights of appeal, and a right to invoke formal rules of procedure and evidence. Notwithstanding anything to the contrary herein, each party shall be entitled, at any time, without first resorting to the dispute resolution process set forth above, to seek injunctive or other equitable relief from any court of competent jurisdiction, wherever such party deems appropriate, in order to preserve or enforce such party's rights hereunder.
13
Source: IDEANOMICS, INC., 10-K, 3/30/2016
(c) Non-Exclusivity. Nothing in this Agreement limits or restricts Licensee from entering into any similar agreements with any third party.
(d) Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. In the event that any provision of this Agreement is determined to be invalid, unenforceable or otherwise illegal, such provision shall be deemed restated, in accordance with applicable law, to reflect as nearly as possible the original intentions of the parties, and the remainder of the Agreement shall remain in full force and effect.
(e) Waiver. No term or condition of this Agreement shall be deemed waived, and no breach shall be deemed excused, unless such waiver or excuse is in writing and is executed by the party against whom such waiver or excuse is claimed.
(f) Entire Agreement. This Agreement contains the entire agreement and understanding between the parties with regard to the subject matter hereof, and supersedes all prior and contemporaneous oral or written agreements and representations with respect to such subject matter. This Agreement may be modified or amended only in a writing signed by all parties.
(g) Jury Trial Waiver. THE PARTIES SPECIFICALLY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY COURT WITH RESPECT TO ANY CONTRACTUAL, TORTIOUS, OR STATUTORY CLAIM, COUNTERCLAIM, OR CROSS-CLAIM AGAINST THE OTHER ARISING OUT OF OR CONNECTED IN ANY WAY TO THIS AGREEMENT, BECAUSE THE PARTIES HERETO, BOTH OF WHOM ARE REPRESENTED BY COUNSEL, BELIEVE THAT THE COMPLEX COMMERCIAL AND PROFESSIONAL ASPECTS OF THEIR DEALINGS WITH ONE ANOTHER MAKE A JURY DETERMINATION NEITHER DESIRABLE NOR APPROPRIATE.
(h) Assignment. Neither party may assign its rights, duties or obligations under this Agreement to any third party in whole or in part, without the other party's prior written consent, except that (i) Licensee may assign its rights and obligations to this Agreement to any of its Affiliate or subsidiaries with the prior written consent of the Licensor, and (ii) Licensor may assign its rights and obligations in this Agreement to its Affiliates or subsidiaries and either party may assign this Agreement in its entirety to any purchaser of all or substantially all of its business or assets pertaining to the line of business to which this Agreement relates or to any Affiliate of the party without the other party's approval. This Agreement will be binding upon, and inure to the benefit of, the respective permitted assignees, transferees and successors of each of the parties.
14
Source: IDEANOMICS, INC., 10-K, 3/30/2016
(i) No Third Party Beneficiaries. The parties acknowledge and agree that there are no third party beneficiaries to this Agreement.
(j) Interpretation. In interpreting the terms and conditions of this Agreement, no presumption shall be interpreted for or against a party as a result of the role of such party in the drafting of this Agreement. Sections headings are for convenience only and shall not be used to interpret this Agreement.
(k) Notice. Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows, with notice deemed given upon receipt or refusal: (i) by overnight courier service; (ii) hand delivery; or (iii) by certified or registered mail, return receipt requested. Notice shall be sent to the addresses set forth below or to such other address as either party may specify in a notice given under this Section 17(k) [Notice].
If to Licensee:
You On Demand Holdings, Inc. 375 Greenwich Street, Suite 516 New York, New York 10013 Attn: Board of Directors
With a copy (which shall not constitute notice or such other communication) to each of: Cooley LLP The Grace Building 1114 Avenue of the Americas New York, New York 10036-7798 Attn: William Haddad
and Cooley LLP 101 California Street, 5th Floor San Francisco, California 94111-5800 Attn: Garth Osterman
If to Licensor:
Beijing Sun Seven Stars Culture Development Limited Eastern Fangzheng Road Southern Dongying Village
15
Source: IDEANOMICS, INC., 10-K, 3/30/2016
Hancunhe Town Fangshan District Beijing City, P.R.C. Attn: Zhang Jie
With a copy (which shall not constitute notice or such other communication) to: Shanghai Sun Seven Stars Cultural Development Limited 686 WuZhong Road, Tower D, 9th Floor Shanghai, China 201103 Attn: Polly Wang
(l) Press Releases. Unless required by law, neither party will, without the prior written approval of the other party, issue any press release or similar announcement relating to the existence or terms of this Agreement.
(m) Counterparts. This Agreement may be executed in counterparts, all of which when taken together shall be deemed to constitute one and the same instrument.
[Signature Page Follows]
16
Source: IDEANOMICS, INC., 10-K, 3/30/2016
IN WITNESS WHEREOF and intending to be legally bound hereby, the parties have executed this Content License Agreement as of the date first set forth above.
LICENSOR:
BEIJING SUN SEVEN STARS CULTURE DEVELOPMENT LIMITED
By: /s/ Bruno Wu Name: Bruno Wu Title:Chairman & CEO
LICENSEE:
YOU ON DEMAND HOLDINGS, INC.
By: /s/ Shane McMahon Name: Shane McMahon Title:Chairman
[SIGNATURE PAGE TO CONTENT LICENSE AGREEMENT]
Source: IDEANOMICS, INC., 10-K, 3/30/2016
SCHEDULE A
TITLES
[Attached]
Source: IDEANOMICS, INC., 10-K, 3/30/2016 [/INST] ```json
{<answer_start>
"answer": "Licensee shall have the right to assign or sublicense any or all of its rights granted under this Agreement, in whole or in part, to third parties exhibiting the Titles in the ordinary course of Licensee's business with prior written notice to Licensor and subject to the applicable limitations (if any) in Section 2(a)(i) [License Grant]"
<answer_end>
}
``` </s> | CONTENT LICENSE AGREEMENT
THIS CONTENT LICENSE AGREEMENT (this "Agreement"), dated as of December 21, 2015 (the "Effective Date"), is entered into between Beijing Sun Seven Stars Culture Development Limited, a P.R.C. company with an address at Eastern Fangzheng Road, Southern Dongying Village, Hancunhe Town, Fangshan District, Beijing City, P.R.C. ("Licensor"), and YOU ON DEMAND HOLDINGS, INC., a Nevada corporation with an address at 375 Greenwich Street, Suite 516, New York, New York 10013 ("Licensee").
WHEREAS, Licensor and Licensee have agreed to enter into this Agreement, pursuant to which Licensor shall license to Licensee certain video programming on the terms and subject to the conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises and covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and incorporating the above recitals with and into this Agreement, the parties hereby agree as follows:
TERMS AND CONDITIONS
1. Definitions.
(a) "Additional Title" shall have the meaning specified in Section 5.
(b) "Advertising" shall have the meaning specified in Section 9.
(c) "Affiliate(s)" shall mean an entity controlling, controlled by or under common control with a party. "Control," for purposes of this definition, means direct or indirect ownership or control of more than 50% of the voting interests of the subject entity.
(d) "Confidential Information" shall have the meaning specified in Section 14(a) [Confidential Information].
(e) "Indemnified Party" shall have the meaning specified in Section 13.
(f) "Indemnifying Party" shall have the meaning specified in Section 13.
(g) "Licensor Marks" shall have the meaning specified in Section 11.
(h) "Materials" shall have the meaning specified in Section 4(b) [4) For Titles listed in Schedule A5].
(i) "Mobile Sites" shall mean any and all versions of the Licensee Sites optimized for delivery and/or distribution via a wireless network.
1
Source: IDEANOMICS, INC., 10-K, 3/30/2016
(j) "Reports" shall have the meaning specified in Section 8(b) [Privacy and Data Collection; Reports].
(k) "Share Consideration" has the meaning specified in Section 10.
(l) "Sites" shall mean any and all websites, applications, products and other services through which Licensee (itself or through a third party) delivers content via the public Internet or an IP-based network, regardless of whether the device used to access such websites, applications, products or other services is a laptop or desktop computer, mobile device, tablet, mobile phone, set-top box, or other device.
(m) "Term" shall have the meaning specified in Section 7.
(n) "Territory" shall mean mainland China.
(o) "Titles" shall mean the programming listed on Schedule A (as Schedule A may be amended in accordance with Section 5 from time to time).
(p) "Users" shall mean all subscribers to Licensee's services.
(q) "VOD" shall mean a system that allows for the exhibition of video programming chosen by a subscriber for display on that subscriber's video display unit on an on-demand basis, such that a subscriber is able, at his or her discretion, to select the time for commencement of exhibition, and shall include subscription VOD ("SVOD"), transactional VOD ("TVOD"), ad-supported VOD ("AVOD") and free VOD.
2. Rights Granted.
(a) License Grant. In exchange for the Share Consideration, Licensor hereby grants to Licensee a non-exclusive, royalty-free, perpetual and non-perpetual license (subject to the duration and scope, and format limitations for which Licensor has the rights to each Title as specified in Schedule A1-A6 of Schedule A) to:
i. license, exhibit, distribute, reproduce, transmit, perform, display, and otherwise exploit and make available each Title within the Territory in any language by VOD (including SVOD, TVOD, AVOD and free VOD) for Internet, TV and mobile platforms (including, but not limited to, OTT streaming services, Sites and Mobile Sites), subject to these limitations for each of the Title in Schedule A1-A6:
1) For Titles listed in Schedule A1-A2:
Licensor can only grant Licensee distribution rights to up to six (6) MSOs plus two (2) of China's Internet TV license holders or their OTT Internet-based video partners by VOD (including SVOD, TVOD, AVOD and free VOD). China's current Internet TV license holders include: CNTV (中国网络电视台/未来电视), BesTV (百视通), Wasu (华数), Southern Media Cooperation (南方传媒), Hunan TV (芒果 TV), China National Radio/Galaxy Internet TV (GITV) (银河电视), and China Radio International (中国国际 广播电台);
2
Source: IDEANOMICS, INC., 10-K, 3/30/2016
2) For Titles listed in Schedule A3:
For "天下女人": No satellite TV broadcasting rights granted. Titles other than "猜 猜女人心", "赏深越慕" , "职场新女性挑战行动", " 杨澜访谈录" (自第192期及以后的节 目),"人生相对论 ", " 天下女人", and "正青春" cannot be edited in any way;
3) For Titles listed in Schedule A4:
Other than the versions (dubbed or translated) in which the Titles in Schedule A4 already exist in (and were delivered in), no further dubbing, translation, or editing may be performed by any party on Schedule A4's Titles.
4) For Titles listed in Schedule A5 (except "Summer in February"):
Limitations on Rights Granted: the following distribution methods are permitted: non-theatrical, public video, ship and hotel rights (all not earlier than the US theatrical release); home video rental, home video sell through, and commercial video rights (all not earlier than the US video release); cable TV (pay & free), terrestrial TV (pay & free), satellite pay TV; internet TV (pay & free), residential and non-residential pay-per-view, residential and non-residential internet pay-per-view, VOD, near VOD, and internet VOD (all no earlier than the corresponding exploitation in the USA).
Contents are dubbed and subtitled in Cantonese and Mandarin languages. Exploitation of the Title over the internet must adhere to the following: 1) Distribution is limited to the dubbed or subtitled version, provided the subtitles shall be burnt in with no option to remove them, 2) Licensor must be notified prior to the first exhibition of the Title over the internet, and 3) Authorization to use excerpts, stills, trailers and soundtrack parts of the Title for the 3 promotion of the Title only on Licensor's or Licensor's authorized agent's web site online.
Source: IDEANOMICS, INC., 10-K, 3/30/2016
Rights granted for "Summer in February", shall adhere to Section 2, not subject to the limitations in section 2(a)(i)(4).
ii. copy and dub the Titles, and authorize any person to do the foregoing Licensee shall also have the right to make (or have made on its behalf) translations of the Titles with prior written approval by Licensor and subject to the applicable limitations (if any) in Section 2(a)(i) [License Grant];
iii. promote each Title in any manner or media, including, without limitation, the right to use and license others to use Licensor's name, the title of, trailers created for and excerpts from such Title (including but not limited to audio portions only), Materials and the name, voice and likeness of and any biographical material concerning all persons appearing in or connected with such Title for the purpose of advertising, promoting and/or publicizing such Title, Licensee and the program service on which the Title is exhibited subject to the applicable limitations (if any) in Section 2(a)(i) [License Grant] ;
iv. use the Titles for (i) audience and marketing testing, (ii) sponsor/advertiser screening, and (iii) reference and file purposes, subject to the applicable limitations (if any) in Section 2(a)(i) [License Grant]; and
v. include Licensee's name, trademark and logo in the Titles to identify Licensee as the exhibitor of the Titles.
(b) Sublicensing. Licensee shall have the right to assign or sublicense any or all of its rights granted under this Agreement, in whole or in part, to third parties exhibiting the Titles in the ordinary course of Licensee's business with prior written notice to Licensor and subject to the applicable limitations (if any) in Section 2(a)(i) [License Grant]. Except as otherwise specified in the previous sentence, Licensee may not sublicense any of its rights under Section 2(a) [License Grant] without Licensor's prior written consent, which shall not be unreasonably withheld or delayed.
(c) Display of Titles. Licensee agrees to display the Titles without material alteration to the content thereof. Licensee may make non-material modifications or edits the format of the Titles only for technical purposes with prior written approval by Licensor (such approval not to be unreasonably withheld or delayed) and subject to the applicable limitations (if any) in section 2(a)(i). Nothing in this Agreement prevents Licensee from providing Users with the ability to use the Titles as permitted by law or in a manner for which a license is not required.
4
Source: IDEANOMICS, INC., 10-K, 3/30/2016
(d) Removal of Titles. If Licensee receives written notice from Licensor that Licensor no longer has the rights to provide a Title to Licensee, Licensee shall use commercially reasonable efforts to remove such Title from Licensee's services. Nothing in this Agreement shall obligate Licensee to distribute, exhibit or otherwise use any Title. In addition, should Licensee deem any aspect of any Title as either inappropriate or otherwise objectionable or undesirable (whether for editorial, legal, business or other reasons), Licensee reserves the right, but does not assume the obligation, to discontinue distribution of such Title, without liability and without limiting any rights or remedies to which Licensee may be entitled, whether under this Agreement, at law, or in equity.
(e) Profit Participation. For content listed in Schedule A6 of Schedule A (each a "Project"), Licensor will only grant Licensee certain profit participation rights, for certain durations, as detailed and set forth in Schedule A6 of Schedule A. Licensee will not have distribution rights or any other rights to the content in Schedule A6 of Schedule A under Section 2(a) [License Grant]- (d). If for any reason the A6 projects do not get produced, SSS will substitute comparable projects, to be mutually approved. "Profit Participation" means a portion of Profits equal to the amount designated in Schedule A6 of Schedule A. "Profits" shall be defined and calculated as follows:
i. "Profits" shall mean Gross Revenue received by Licensor in connection with the Project remaining after the deduction therefrom of Fees, Expenses, and Third Party Royalties (each as defined below).
ii. "Gross Revenue" shall mean 100% of all sums actually received by or credited to Licensor in connection with the exploitation of the Project, for a period of 5 years from initial release, on a worldwide basis from the distribution and exploitation of the Project or any part thereof, provided that Gross Revenue shall not include (i) expenses in connection with collecting such Gross Revenue; (ii) actual, verifiable, third party, sales agency costs, fees and commissions which are mutually approved by the parties; (iii) customary "off the tops," including (without limitation) claims, insurance, accounting or other professional service costs actually paid by Producer or a reasonable reserve therefor.
iii. "Fees" shall only apply to non-television, non-Internet exploitation of the Project (e.g., DVD, merchandise) and shall mean the actual, verifiable fee charged by a third party licensing agent or distributor, and mutually agreed to by Licensee and Licensor.
iv. "Expenses" shall mean, collectively, all costs, charges and expenses incurred and/or paid (including without limitation residuals) in connection with the development, production, distribution, marketing, advertising and promotion of the Project. Expenses may include a producer or production fee to Licensor.
5
Source: IDEANOMICS, INC., 10-K, 3/30/2016
v. "Third Party Royalties" shall mean any and all royalties and payments paid or payable to third parties for rights and/or services in connection with the Project.
vi. Licensee shall have equal rights and access to all financial statements, records and/or data received from any entity in connection with the Project. Licensor shall compile this information (including information regarding approved budgets) on a annual basis and provide to Licensee in summary form, the calculation of Profit Participation for all of the parties, which shall be accompanied by the parties' share thereof, if any. Licensor will keep and maintain accurate books and records with respect to the Project. Until one (1) year after the expiration of the Profit Participation of each Project, the books and records will be available for inspection by a certified accounting firm or CPA once per year upon reasonable advance notice. Such books and records shall be made available at Licensor's normal place of business during normal business hours. If any examination of Licensor's books and records reveals that Licensor has failed to properly account for any Profits owing to the parties, Licensor will promptly pay such past due amounts.
(f) Editing of Titles. Any edits to any Title will require the prior written approval by Licensor.
3. Licenses and Clearances.
Licensor shall be solely responsible for the Titles and any and all legal liability resulting from the Titles, excluding any legal liability caused by Licensee's breach of this Agreement or gross negligence with regards to the Titles. Without limiting the generality of the foregoing, Licensor shall be solely responsible for any and all royalties and other fees payable to any applicable licensor(s) or any third party for distribution of the Titles by Licensee (including, without limitation, residuals and clearances or other payments to guilds or unions and rights for music clearances, such as performance rights, synchronization rights and mechanical rights), and all other fees, payments and obligations arising out of the activities contemplated by this Agreement, and Licensee shall have no responsibility or liability for any such royalties or fees. Licensor acknowledges that Licensee cannot and does not undertake to review, and shall not be responsible for Users' unauthorized use or exploitation of, the Titles. Should Licensee become aware of Users' unauthorized use or exploitation of the Titles, Licensee shall immediately report such use to Licensor.
4. Delivery Requirements; Customer Service.
(a) Within fifteen (15) days after the Effective Date or on December 31, 2015 (whichever is earlier), Licensor shall (at Licensor's sole expense), make the Titles available either online or by hard drive to Licensee or the third-party vendor specified by Licensee to provide or deliver the Titles from Licensee's or its third-party vendor's facilities. Delivery of the Titles shall be deemed complete if Licensor makes the Titles available in accordance with the previous sentence. If, from time to time, Licensee requests an alternate delivery method for the Titles and/or the implementation of Licensee's technical specifications relating to the online delivery of the Titles, then Licensor will use commercially reasonable efforts to comply with each such request.
6
Source: IDEANOMICS, INC., 10-K, 3/30/2016
(b) When Licensor delivers each Title to Licensee, Licensor shall provide Licensee (at the place specified by Licensee) with all available promotional materials for such Title, including, but not limited to, captioned photographs, brochures, a synopsis and description of such Title, a complete list of cast and credits, biographies of key performers, and any electronic press kits, trailers or featurettes created for such Title (collectively, the "Materials").
(c) In the event of technical problems with any of the Titles, each party shall use commercially reasonable efforts to notify the other and to remedy any such problems in a timely manner.
(d) Licensor will provide Licensee with reasonable assistance in responding to User inquiries regarding the Titles.
5. Additional Titles.
If, during the Term, Licensor develops or obtains the rights to license any live action or animated feature-length motion picture (each an "Additional Title"), Licensor shall give Licensee the first right of negotiation for each Additional Title (i.e., the preferred vendor). Licensor will promptly provide written notice to Licensee in which Licensor lists each Additional Title. Should Licensee agree to be the vendor for an Additional Title, Licensor and Licensee will negotiate in good faith to mutually agree upon the pricing and terms for each Additional Title in an amendment to this Agreement. Licensor will deliver each Additional Title in accordance with Section 4(a) [4) For Titles listed in Schedule A5]. Unless otherwise expressly stated in such an amendment, each Additional Title listed in such an amendment will be deemed a "Title" and Schedule A will be deemed amended to include such Additional Title.
6. Expansion of Licensee's VOD Services.
Licensor will use its partners and media channels to expand distribution of Licensee's VOD services to more cable MSOs and all other platforms for which Licensee is permitted to distribute the Titles under Section 2(a)(i) [License Grant].
7. Term and Termination.
(a) The Term of this Agreement (the "Term") shall commence on the Effective Date listed above and continue for twenty (20) years, unless sooner terminated as provided in Section 7(b) [Term and Termination].
7
Source: IDEANOMICS, INC., 10-K, 3/30/2016
(b) This Agreement may be terminated at any time by either party, effective immediately upon written notice, if the other party: (i) becomes insolvent; (ii) files a petition in bankruptcy; or (iii) makes an assignment for the benefit of its creditors. Either party may terminate this Agreement upon written notice if the other party materially breaches this Agreement and fails to cure such breach within thirty (30) days after the date that it receives written notice of such breach from the non-breaching party.
(c) Sections 2(a) [License Grant], 2(b) [Sublicensing], 2(c) [Display of Titles], 2(d) [Removal of Titles], 3, and 11 shall survive the expiration or termination of this Agreement: (i) in perpetuity with respect to Titles for which the licenses granted in Section 2(a) [License Grant] are perpetual; and (ii) for the duration of the applicable license term specified in Schedule A with respect to Titles for which the license term specified in Schedule A extends beyond the expiration or termination of this Agreement. Sections 1, 7, 8(a) [Privacy and Data Collection; Reports], 12, 13, 14, 15, 16 and 17 shall survive any expiration or termination of this Agreement in perpetuity.
8. Privacy and Data Collection; Reports.
(a) All User information (including, without limitation, any personally identifiable information and statistical information regarding Users' use and viewing of the Titles) generated, collected or created in connection with the display of the Titles through Licensee's services shall be considered Confidential Information of Licensee, and all right, title and interest in and to such information shall be owned by Licensee.
(b) Licensee will provide Licensor with reports ("Reports") containing statistical information collected by Licensee on (i) Users' use of the Titles, (ii) distribution channels used by Licensee for the distribution of the Titles, (iii) sub-licensees to which the Titles were sub- distributed by Licensee and (if permitted under Licensee's agreements with the sublicensees) any relevant reports received by Licensee from those sublicensees, and (iv) any other information that the Licensor may request Licensee to gather from time to time, subject to mutual approval. The Reports will be delivered in a format that is mutually agreed upon by the parties. The Reports and all information contained in the Reports shall be considered Confidential Information of Licensee, and all right, title and interest in and to such Reports and information shall be owned by Licensee.
9. Advertising.
The parties acknowledge and agree that Licensee's services may contain advertising, promotions and/or sponsorship material (collectively, "Advertising"). Such Advertising shall be determined by Licensee in its sole discretion and Licensee shall be entitled to retain all revenues resulting from the sale of Advertising.
8
Source: IDEANOMICS, INC., 10-K, 3/30/2016
10. Consideration.
No royalty or fees of any kind shall be owed by Licensee under this Agreement. The consideration for the licenses granted by Licensor to Licensee under this Agreement is the issuance of the IP Common Shares as defined in the Amended and Securities Purchase Agreement, dated as of December 21, 2015, by and among the Licensee and the Licensor (the "Share Consideration").
11. Use of Licensor Marks.
Licensor hereby grants Licensee a non-exclusive license to use the logos, trademarks and service marks used by Licensor to identify the Titles (collectively, "Licensor Marks") in connection with the use of the Titles as set forth in this Agreement. Licensee acknowledges and agrees that Licensee's use of the Licensor Marks shall inure to the benefit of Licensor. Should Licensor find objectionable any use of the Licensor Marks by Licensee, Licensor shall have the right to revoke, with respect to the objectionable use, the rights granted to Licensee under this Agreement to use the Licensor Marks, and Licensee shall promptly cease using the Licensor Marks in the manner found objectionable by Licensor.
12. Representations and Warranties.
(a) Licensor represents and warrants that:
i. The execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of Licensor and this Agreement constitutes a valid and legally binding agreement of Licensor enforceable against Licensor in accordance with its terms;
ii. It will not take or authorize any action, or fail to take any action, by which any of the rights in any Title granted herein may be impaired in any way;
iii. It has all rights and authority necessary to fully perform its obligations and grant the rights granted under this Agreement and all rights in and to the Titles and in and to all literary, artistic, dramatic, intellectual property and musical material included therein required for the exercise of rights granted in this Agreement without liability of any kind to any third party; provided however, that this representation and warranty shall not apply to non-dramatic performing rights in music to the extent that they are controlled by SESAC, ASCAP or BMI or to the extent that such music is in the public domain;
9
Source: IDEANOMICS, INC., 10-K, 3/30/2016
iv. Each Title is and will be protected during the Term by copyright throughout the Territory;
v. There are no taxes, charges, fees, royalties or other amounts owed to any party other than as set forth in this Agreement for the exercise of rights granted in this Agreement and Licensor has paid or will pay all charges, taxes, license fees and other amounts that have been or may become owed in connection with the Titles or the exercise of any rights granted under this Agreement;
vi. Licensor shall make all payments which may become due to any union or guild and to any third parties who rendered services in connection with the production of the Titles by virtue of the use made of the Titles hereunder;
vii. No claim or litigation is pending or threatened and no lien, charge, restriction or encumbrance is in existence with respect to any Title that would adversely affect or impair any of the rights granted under this Agreement;
viii. The Titles, Materials and Licensor Marks will not violate or infringe any common law or statutory right of any person or other entity including, without limitation, any contractual rights, proprietary rights, trademark, service mark, copyright or patent rights, or any rights of privacy or publicity;
ix. The Titles, Materials and the Licensor Marks will not be unlawful, slanderous or libelous; and
x. To the extent that any Title makes any claims or renders any instruction or advice, such claim, instruction or advice shall comply with all federal, state and other applicable laws and regulations and shall cause no harm to any person or entity following or acting in accordance with such instruction or advice.
(b) Licensee represents and warrants that:
i. The execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of Licensee and this Agreement constitutes a valid and legally binding agreement of Licensee enforceable against Licensee in accordance with its terms;
ii. It will use the Titles solely as permitted under this Agreement;
iii. It has the full right, capacity and authority to enter into this Agreement and to perform all of its obligations hereunder; and
iv. As of the Effective Date, there is no claim, action, suit, investigation or proceeding relating to or affecting Licensee pending or threatened, in law or in equity, or any other circumstance which might adversely affect Licensee's ability to perform all of its obligations hereunder.
10
Source: IDEANOMICS, INC., 10-K, 3/30/2016
13. Indemnification.
Each party shall defend, indemnify and hold the other party and its Affiliates, and their respective directors, officers, employees, agents, successors, assigns, licensees and distributors harmless from and against any and all judgments, settlements, damages, penalties, costs and expenses (including, but not limited to, reasonable attorneys' fees) arising out of any third party claims relating to the Indemnifying Party's breach or alleged breach of any of its representations, warranties, covenants or obligations hereunder. The party seeking indemnification (the "Indemnified Party") will give prompt notice to the indemnifying party (the "Indemnifying Party") of any claim for which the Indemnified Party seeks indemnification under this Agreement; provided, however, that failure to give prompt notice will not relieve the Indemnifying Party of any liability hereunder (except to the extent the Indemnifying Party has suffered actual material prejudice by such failure). The Indemnified Party will reasonably cooperate (at the Indemnifying Party's expense) in the defense of any claim for which the Indemnified Party seeks indemnification under this Section 13. The Indemnified Party shall have the right to employ separate counsel and to participate in (but not control) any such action, but the fees and expenses of such counsel will be at the expense of the Indemnified Party unless: (i) the employment of counsel by the Indemnified Party has been authorized by the Indemnifying Party; (ii) the Indemnified Party has been advised by its counsel in writing that there is a conflict of interest between the Indemnifying Party and the Indemnified Party in the conduct of the defense of the action (in which case the Indemnifying Party will not have the right to direct the defense of the action on behalf of the Indemnified Party); or (iii) the Indemnifying Party has not in fact employed counsel to assume the defense of the action within a reasonable time following receipt of the notice given pursuant to this Section 13, in each of which cases the fees and expenses of such counsel will be at the expense of the Indemnifying Party. The Indemnifying Party will not be liable for any settlement of an action effected without its written consent (which consent will not be unreasonably withheld or delayed), nor will the Indemnifying Party settle any such action without the written consent of the Indemnified Party (which consent will not be unreasonably withheld or delayed). The Indemnifying Party will not consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to the Indemnified Party a release from all liability with respect to the claim.
14. Confidentiality.
(a) Confidential Information. "Confidential Information" means all non-public information about the disclosing party's business or activities that is marked or designated by such party as "confidential" or "proprietary" at the time of disclosure or that reasonably would be understood to be confidential given the circumstances of disclosure. Notwithstanding the foregoing, Confidential Information does not include information that: (a) is in or enters the public domain without breach of this Agreement; (b) the receiving party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation; (c) the receiving party rightfully knew prior to receiving such information from the disclosing party; or (d) the receiving party develops entirely independently of, and without any access or reference to or use of, any Confidential Information communicated to the receiving party by the disclosing party.
11
Source: IDEANOMICS, INC., 10-K, 3/30/2016
(b) Restrictions. Each party agrees that, during the Term and for two (2) years thereafter: (i) it will not disclose to any third party any Confidential Information disclosed to it by the other party except as expressly permitted in this Agreement; (ii) it will only permit access to Confidential Information of the disclosing party to those of its employees or authorized representatives or advisors (including, without limitation, the receiving party's auditors, accountants, and attorneys) having a need to know and who, prior to obtaining such access, are legally bound to protect the disclosing party's Confidential Information at least to the same extent as set forth herein; (iii) it will use any Confidential Information disclosed to it by the other party only for the purpose of performing its obligations or exercising its rights under this Agreement and not for any other purpose, whether for such party's own benefit or the benefit of any third party; (iv) it will maintain the confidentiality of all Confidential Information of the other party in its possession or control; and (v) that (x) upon the expiration or termination of this Agreement, or (y) at any time the disclosing party may so request, it will deliver promptly to the disclosing party, or, at the disclosing party's option, it will destroy, all Confidential Information of the disclosing party that it may then possess or have under its control. Notwithstanding the foregoing, each party may disclose Confidential Information of the other party to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by law, provided that such party will, as soon as reasonably practicable, provide the disclosing party with written notice of such requirement so that the disclosing party may seek a protective order or other appropriate remedy. The receiving party and its representatives will cooperate fully with the disclosing party to obtain any such protective order or other remedy. If the disclosing party elects not to seek, or is unsuccessful in obtaining, any such protective order or similar remedy and if the receiving party receives advice from reputable legal counsel confirming that the disclosure of Confidential Information is required pursuant to applicable law, then the receiving party may disclose such Confidential Information to the extent required; provided, however, that the receiving party will use commercially reasonable efforts to ensure that such Confidential Information is treated confidentially by each party to which it is disclosed.
15. Disclaimers.
EXCEPT AS EXPRESSLY STATED IN SECTION 12, THE PARTIES HEREBY DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, CONCERNING THE SUBJECT MATTER OF THIS AGREEMENT.
12
Source: IDEANOMICS, INC., 10-K, 3/30/2016
16. Limitation of Liability.
EXCEPT FOR THE ABOVE INDEMNIFICATION OBLIGATIONS AND FOR BREACHES OF SECTION 14, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT (INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS), WHETHER IN AN ACTION OR ARISING OUT OF BREACH OF CONTRACT, TORT OR ANY OTHER CAUSE OF ACTION EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
17. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed in all respects in accordance with the laws of the State of New York, without giving effect to any conflicts of laws principles.
(b) Dispute Resolution. Any dispute, controversy and/or difference which may arise out of or in connection with or in relation to this Agreement, shall be solely and finally settled by binding arbitration pursuant to then-current rules of the International Chamber of Commerce. Such arbitration shall be held in New York, New York. The merits of the dispute shall be resolved in accordance with the laws of the State of New York, without reference to its choice of law rules. The tribunal shall consist of three arbitrators, each of whom shall be knowledgeable in the subject matter hereof. The arbitration shall be conducted in the English language, and all documents shall be submitted in English or be accompanied by a certified English translation. The arbitrators will provide a written explanation to the parties of any arbitration award. The award thereof shall be final and binding upon the parties hereto, and judgment on such award may be entered in any court or tribunal having jurisdiction, and the parties hereby irrevocably waive any objection to the jurisdiction of such courts based on any ground, including without limitation, improper venue or forum non conveniens. The parties and the arbitration panel shall be bound to maintain the confidentiality of this Agreement, the dispute and any award, except to the extent necessary to enforce any such award. The prevailing party, if a party is so designated in the arbitration award, shall be entitled to recover from the other party its costs and fees, including attorneys' fees, associated with such arbitration. By agreeing to this binding arbitration provision, the parties understand that they are waiving certain rights and protections which may otherwise be available if a dispute between the parties were determined by litigation in court, including, without limitation, the right to seek or obtain certain types of damages precluded by this arbitration provision, the right to a jury trial, certain rights of appeal, and a right to invoke formal rules of procedure and evidence. Notwithstanding anything to the contrary herein, each party shall be entitled, at any time, without first resorting to the dispute resolution process set forth above, to seek injunctive or other equitable relief from any court of competent jurisdiction, wherever such party deems appropriate, in order to preserve or enforce such party's rights hereunder.
13
Source: IDEANOMICS, INC., 10-K, 3/30/2016
(c) Non-Exclusivity. Nothing in this Agreement limits or restricts Licensee from entering into any similar agreements with any third party.
(d) Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. In the event that any provision of this Agreement is determined to be invalid, unenforceable or otherwise illegal, such provision shall be deemed restated, in accordance with applicable law, to reflect as nearly as possible the original intentions of the parties, and the remainder of the Agreement shall remain in full force and effect.
(e) Waiver. No term or condition of this Agreement shall be deemed waived, and no breach shall be deemed excused, unless such waiver or excuse is in writing and is executed by the party against whom such waiver or excuse is claimed.
(f) Entire Agreement. This Agreement contains the entire agreement and understanding between the parties with regard to the subject matter hereof, and supersedes all prior and contemporaneous oral or written agreements and representations with respect to such subject matter. This Agreement may be modified or amended only in a writing signed by all parties.
(g) Jury Trial Waiver. THE PARTIES SPECIFICALLY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY COURT WITH RESPECT TO ANY CONTRACTUAL, TORTIOUS, OR STATUTORY CLAIM, COUNTERCLAIM, OR CROSS-CLAIM AGAINST THE OTHER ARISING OUT OF OR CONNECTED IN ANY WAY TO THIS AGREEMENT, BECAUSE THE PARTIES HERETO, BOTH OF WHOM ARE REPRESENTED BY COUNSEL, BELIEVE THAT THE COMPLEX COMMERCIAL AND PROFESSIONAL ASPECTS OF THEIR DEALINGS WITH ONE ANOTHER MAKE A JURY DETERMINATION NEITHER DESIRABLE NOR APPROPRIATE.
(h) Assignment. Neither party may assign its rights, duties or obligations under this Agreement to any third party in whole or in part, without the other party's prior written consent, except that (i) Licensee may assign its rights and obligations to this Agreement to any of its Affiliate or subsidiaries with the prior written consent of the Licensor, and (ii) Licensor may assign its rights and obligations in this Agreement to its Affiliates or subsidiaries and either party may assign this Agreement in its entirety to any purchaser of all or substantially all of its business or assets pertaining to the line of business to which this Agreement relates or to any Affiliate of the party without the other party's approval. This Agreement will be binding upon, and inure to the benefit of, the respective permitted assignees, transferees and successors of each of the parties.
14
Source: IDEANOMICS, INC., 10-K, 3/30/2016
(i) No Third Party Beneficiaries. The parties acknowledge and agree that there are no third party beneficiaries to this Agreement.
(j) Interpretation. In interpreting the terms and conditions of this Agreement, no presumption shall be interpreted for or against a party as a result of the role of such party in the drafting of this Agreement. Sections headings are for convenience only and shall not be used to interpret this Agreement.
(k) Notice. Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows, with notice deemed given upon receipt or refusal: (i) by overnight courier service; (ii) hand delivery; or (iii) by certified or registered mail, return receipt requested. Notice shall be sent to the addresses set forth below or to such other address as either party may specify in a notice given under this Section 17(k) [Notice].
If to Licensee:
You On Demand Holdings, Inc. 375 Greenwich Street, Suite 516 New York, New York 10013 Attn: Board of Directors
With a copy (which shall not constitute notice or such other communication) to each of: Cooley LLP The Grace Building 1114 Avenue of the Americas New York, New York 10036-7798 Attn: William Haddad
and Cooley LLP 101 California Street, 5th Floor San Francisco, California 94111-5800 Attn: Garth Osterman
If to Licensor:
Beijing Sun Seven Stars Culture Development Limited Eastern Fangzheng Road Southern Dongying Village
15
Source: IDEANOMICS, INC., 10-K, 3/30/2016
Hancunhe Town Fangshan District Beijing City, P.R.C. Attn: Zhang Jie
With a copy (which shall not constitute notice or such other communication) to: Shanghai Sun Seven Stars Cultural Development Limited 686 WuZhong Road, Tower D, 9th Floor Shanghai, China 201103 Attn: Polly Wang
(l) Press Releases. Unless required by law, neither party will, without the prior written approval of the other party, issue any press release or similar announcement relating to the existence or terms of this Agreement.
(m) Counterparts. This Agreement may be executed in counterparts, all of which when taken together shall be deemed to constitute one and the same instrument.
[Signature Page Follows]
16
Source: IDEANOMICS, INC., 10-K, 3/30/2016
IN WITNESS WHEREOF and intending to be legally bound hereby, the parties have executed this Content License Agreement as of the date first set forth above.
LICENSOR:
BEIJING SUN SEVEN STARS CULTURE DEVELOPMENT LIMITED
By: /s/ Bruno Wu Name: Bruno Wu Title:Chairman & CEO
LICENSEE:
YOU ON DEMAND HOLDINGS, INC.
By: /s/ Shane McMahon Name: Shane McMahon Title:Chairman
[SIGNATURE PAGE TO CONTENT LICENSE AGREEMENT]
Source: IDEANOMICS, INC., 10-K, 3/30/2016
SCHEDULE A
TITLES
[Attached]
Source: IDEANOMICS, INC., 10-K, 3/30/2016 | Highlight the parts (if any) of this contract related to "Anti-Assignment" that should be reviewed by a lawyer. Details: Is consent or notice required of a party if the contract is assigned to a third party? | {
"answer_start": [
7869
],
"text": [
"Licensee shall have the right to assign or sublicense any or all of its rights granted under this Agreement, in whole or in part, to third parties exhibiting the Titles in the ordinary course of Licensee's business with prior written notice to Licensor and subject to the applicable limitations (if any) in Section 2(a)(i) [License Grant]"
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Parties" that should be reviewed by a lawyer. Details: The two or more parties who signed the contract
Context: CO-BRANDING AGREEMENT (FORM)
This CO-BRANDING AGREEMENT (the "Agreement") is made and entered into as of Nov 5, 1999, (the "Effective Date") by and between NETTAXI Online Communities, Inc., a Delaware corporation with principal offices at 2165 S. Bascom Avenue, Campbell, California 95008 ("NETTAXI"), and Solutions Media, Inc., dba SpinRecords.com a Delaware Corporation, with offices at 11440 West Barnardo Ct., Suite 170, San Diego, CA 32127 ("SpinRecords.com" or "Client").
RECITALS
A. NETTAXI is in the business of providing entertainment, education, and information services over the world wide web through its Internet web site at http://www.NETTAXI.com.
B. SpinRecords.com is in the business of providing entertainment and information services over the World Wide Web through its internet website at http://www.spinrecords.com.
C. NETTAXI and SpinRecords.com desire co-brand their services under the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties hereby agree as follows:
1. DEFINITIONS
1.1 "Spinrecords.com Brand Features" means the SpinRecords.com name and logo and other trademarks, trade names and service names including but not limited to those set forth on Exhibit A attached hereto and incorporated herein --------- by reference and all Intellectual Property Rights related thereto. SpinRecords.com Brand Features shall include any derivatives, improvements or modifications thereto or thereof and any Intellectual Property rights related thereto.
1.2 "SpinRecords.com Pages" means the SpinRecords.com Web-based pages that incorporate certain SpinRecords.com services, as the same may be updated or modified from time to time in SpinRecords.com's sole discretion, currently located at http://www.spinrecords.com.
1.3 "Impressions" means the loading of all or part of a Web page into the browser of a User.
1.4 "Intellectual Property Rights" means all current and future worldwide trademark, patents and patent rights, utility models, copyrights, mask work rights, trade secrets, and all other intellectual property rights and the related documentation or other tangible expression thereof.
1.5 "NETTAXI Brand Features" means the NETTAXI name and logo and any other trademarks, trade names and service names of NETTAXI, including but not limited to those set forth on Exhibit B attached hereto and incorporated herein --------- by reference and all Intellectual Property Rights related thereto. NETTAXI Brand Features shall include any derivatives, improvements or modifications thereto or thereof and any Intellectual Property rights related thereto.
1.6 "NETTAXI Pages" means the NETTAXI's Web-based pages that incorporate certain NETTAXI services, as the same may be updated or modified from time to time in NETTAXI's sole discretion, currently located at http://www.NETTAXI.com.
1.7 "Statement of Work" means the Statement of Work attached hereto as Exhibit C and incorporated herein by reference. ----------
1.8 "User" means a person using a software browser to view the World Wide Web.
2. CO-BRANDING, MARKETING AND PROMOTION
2.1 The SpinRecords.com Pages. SpinRecords.com shall brand the ---------------------------
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000
SpinRecords.com Pages with the NETTAXI Brand Features in the manner set forth in the Statement of Work. NETTAXI will provide electronic copies of the NETTAXI Brand Features upon SpinRecords.com's request. All Spinrecords.com Pages shall display appropriate intellectual property legends, including but not limited to the copyright notice and trademark references.
1
2.2 The NETTAXI Pages. NETTAXI shall brand certain NETTAXI Pages with ------------------ the SpinRecords.com Brand Features in the manner set forth in the Statement of Work. SpinRecords.com will provide electronic copies of the SpinRecords.com Brand Features upon NETTAXI's request. All NETTAXI Pages shall display appropriate intellectual property legends, including but not limited to the copyright notice and trademark references. NETTAXI shall not be obligated to co-brand those pages containing content which NETTAXI has branded with a third party which: (i) NETTAXI is prohibited from co-branding pursuant to another agreement; (ii) NETTAXI is technically unable to co-brand; or (iii) are commercially unreasonable, in NETTAXI's discretion, to co-brand.
2.3 Marketing by SpinRecords.com. Throughout the term of this ------------------------------ Agreement, SpinRecords.com shall use reasonable commercial efforts to market the NETTAXI Brand Features in order to maximize the number of visitors to the NETTAXI Pages in accordance with the Statement of Work. The parties shall review the Statement of Work and NETTAXI's marketing activities on a quarterly basis in order to assess the performance and agree upon additional activities, if necessary, in order to increase usage of the pages.
2.4 Marketing by NETTAXI. Throughout the term of this Agreement, ----------------------- NETTAXI shall use reasonable commercial efforts to market the SpinRecords.com Brand Features in order to maximize the number of visitors to the SpinRecords.com Pages in accordance with the Statement of Work. The parties shall review the Statement of Work and Spinrecords.com's marketing activities on a quarterly basis in order to assess the performance and agree upon additional activities, if necessary, in order to increase usage of the pages.
2.5 Additional Statements of Work. If the parties hereto desire to -------------------------------- engage each other for additional services which are not included in the Statement of Work and which do not constitute merely a revision or modification of the Statement of Work, the parties shall in good faith negotiate additional Statements of Work, each of which upon signing shall be deemed a part of this Agreement. Additional Statements of Work shall be entered into by mutual agreement between NETTAXI and SpinRecords.com and shall be substantially in the form of the Statement of Work attached hereto. Each Statement of Work shall be signed by authorized representatives of the parties. This Agreement may cover more than one Statement of Work at any given time.
3. Licenses AND OWNERSHIP.
3.1 Licenses by NETTAXI to SpinRecords.com. NETTAXI hereby grants to ----------------------------------------- SpinRecords.com a non-exclusive, worldwide, nontransferable, revocable, royalty free license to use the NETTAXI Brand Features as the same may be modified from time to time for the purposes of this Agreement
3.2 Licenses by SpinRecords.com to NETTAXI. SpinRecords.com hereby ------------------------------------------- grants NETTAXI a nonexclusive, worldwide, nontransferable, revocable, royalty free license to display and distribute the, and make derivative works from the SpinRecords.com Brand Features and any enhancements, modifications or improvements thereto as necessary to carry out the terms of this Agreement.
3.3 Ownership by NETTAXI. NETTAXI shall own all right, title, and ---------------------- interest in the NETTAXI Brand Features, the NETTAXI Pages and all Intellectual Property Rights therein, including any derivatives, improvements thereof, excluding the SpinRecords.com Brand Features
3.4 Ownership by SpinRecords.com. Except as otherwise set forth below, ----------------------------- SpinRecords.com shall own all right, title, and interest in the SpinRecords.com Brand Features and the SpinRecords.com Pages and all Intellectual Property Rights therein, including any derivatives, improvements thereof, excluding the NETTAXI Brand Features.
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000
3.5 Impressions. Neither party nor its employees shall take actions ---------- which will artificially increase the number of Impressions on the party's web pages. For example, a party's employees shall not repeatedly access the other party's web pages.
4. PAYMENT
4.1 Payment. In consideration of the duties and obligations of the ------- parties hereto, SpinRecords.com shall pay NETTAXI in the manner set forth in the Statement of Work.
5. REPRESENTATIONS AND WARRANTIES.
5.1 Representations and Warranties of SpinRecords.com. SpinRecords.com -------------------------------------------------- hereby represents and warrants to NETTAXI that: (i) SpinRecords.com has the full power and authority to enter into this Agreement and to carry out its obligations under this Agreement; (ii) SpinRecords.com has the full power and authority to grant the rights and licenses granted to NETTAXI in this Agreement; and (iii) SpinRecords.com owns the SpinRecords.com Brand Features.
2
5.2 Representations and Warranties of NETTAXI. NETTAXI hereby --------------------------------------------- represents and warrants to SpinRecords.com that (i) NETTAXI has the full power and authority to enter into this Agreement and to carry out its obligations under this Agreement; (ii) NETTAXI has the full power and authority to grant the rights and licenses granted to SpinRecords.com in this Agreement; and (iii) NETTAXI owns the NETTAXI Brand Features.
5.3 THE NETTAXI SERVICES FURNISHED AS A RESULT OF OR UNDER THIS AGREEMENT ARE PROVIDED ON AN "AS IS" BASIS, WITHOUT ANY WARRANTIES OR REPRESENTATIONS EXPRESS, IMPLIED OR STATUTORY; INCLUDING, WITHOUT LIMITATION, WARRANTIES OF QUALITY, PERFORMANCE, NONINFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NOR ARE THERE ANY WARRANTIES CREATED BY A COURSE OF DEALING, COURSE OF PERFORMANCE OR TRADE USAGE. NETTAXI DOES NOT WARRANT THAT THE SERVICES, WILL MEET SPINRECORDS.COM'S OR ANY END USERS NEEDS OR BE FREE FROM ERRORS, OR THAT THE OPERATION OF ITS WEB PAGES WILL BE UNINTERRUPTED. THE FOREGOING EXCLUSIONS AND DISCLAIMERS ARE AN ESSENTIAL PART OF THIS AGREEMENT.
6. CONFIDENTIALITY.
6.1 Agreement as Confidential Information. The parties shall treat the -------------------------------------- terms and conditions and the existence of this Agreement as Confidential Information. Each party shall obtain the other's consent prior to any publication, presentation, public announcement or press release concerning the existence or terms and conditions of this Agreement.
6.2 Confidential Information. "Confidential Information" means all ------------------------- information identified in written or oral format by the Disclosing Party as confidential, trade secret or proprietary information, and, if disclosed orally, summarized in written format within thirty (30) days of disclosure. "Disclosing Party" is the party disclosing Confidential Information. "Receiving Party" is the party receiving Confidential Information. The Receiving Party shall not disclose the Confidential Information to any third party other than persons in the direct employ of the Receiving Party who have a need to have access to and knowledge of the Confidential Information solely for the purpose authorized above. Each party shall take appropriate measures by instruction and agreement prior to disclosure to such employees to assure against unauthorized use or disclosure. The Receiving Party shall have no obligation with respect to information which (i) was rightfully in possession of or known to the Receiving Party without any obligation of confidentiality prior to receiving it from the Disclosing Party; (ii) is, or subsequently becomes, legally and publicly available without breach of this Agreement; (iii) is rightfully obtained by the Receiving Party from a source other than the Disclosing Party without any obligation of confidentiality; (iv) is disclosed by the Receiving Party under a valid order created by a court or government agency, provided that the Receiving Party provides prior written notice to the Disclosing Party of such obligation and the opportunity to oppose such disclosure. Upon written demand of the Disclosing Party, the Receiving Party shall cease using the Confidential
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000
Information and return the Confidential Information and all copies, notes or extracts thereof to the Disclosing Party within seven (7) days of receipt of notice.
7. INDEMNITY AND LIMITATION OF LIABILITY.
7.1 Indemnification by Spinrecords.com. SpinRecords.com shall defend, ------------------------------------ indemnify and hold NETTAXI harmless from any and all damages, liabilities, costs and expenses (including, but not limited to reasonable attorneys' fees) incurred by NETTAXI as a result of (i) any breach of this Agreement; (ii) any claim that the SpinRecords.com Brand Features or any part thereof, infringes or misappropriates any Intellectual Property Right of a third party; (iii) any claim arising out of NETTAXI's display of the SpinRecords.com Brand Features; or (iv) the operation of the SpinRecords.com Pages. NETTAXI shall provide SpinRecords.com with written notice of the claim and permit SpinRecords.com to control the defense, settlement, adjustment or compromise of any such claim. NETTAXI may employ counsel at its own expense to assist it with respect to any such claim; provided, however, that if such counsel is necessary because of a conflict of interest of either SpinRecords.com or its counsel or because SpinRecords.com does not assume control, SpinRecords.com will bear the expense of such counsel.
7.2 Indemnification by NETTAXI. NETTAXI shall defend, indemnify and ---------------------------- hold SpinRecords.com harmless from any and all damages, liabilities, costs and expenses (including, but not limited to reasonable attorneys' fees) incurred by SpinRecords.com as a result of (1) any breach of this Agreement; (ii) any claim that the NETTAXI Brand Features or any part thereof, infringes or misappropriates any Intellectual Property Right of a third party; or (iii) any claim arising out of Spinrecords.com's display of the NETTAXI Brand Features SpinRecords.com shall provide NETTAXI with written notice of the claim and permit NETTAXI to control the defense, settlement, adjustment or compromise of any such claim. SpinRecords.com may employ counsel at its own expense to assist it with respect to any such claim; provided, however, that if such counsel is necessary because of a conflict of interest of either NETTAXI or its counsel or because NETTAXI does not assume control, NETTAXI will bear the expense of such counsel.
7.3 Limitation of Liability. EXCEPT AS SET FORTH IN SECTION 6 AND 7.1, ------------------------ UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE OTHER UNDER ANY CONTRACT, STRICT LIABILITY, NEGLIGENCE OR OTHER LEGAL OR EQUITABLE THEORY, FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT.
3
8. TERM AND TERMINATION
8.1 Term of Agreement. This Agreement shall be effective upon the ------------------- Effective Date and shall remain in force for a period of one (1) year, and shall be automatically renewed for successive periods of one (1) year unless otherwise terminated as provided herein.
8.2 Convenience. NETTAXI may terminate this Agreement at any time for ----------- its convenience, for no reason or for any reason, upon sixty (60) days prior written notice to SpinRecords.com. In the event of such termination, Spinrecords.com shall be entitled to receive and retain all payments made or payable by NETTAXI prior to the date of termination. SpinRecords.com may terminate this Agreement for no reason or for any reason upon sixty (60) days prior written notice to NETTAXI.
8.3 Termination for Cause. This Agreement may be terminated by a party ---------------------- for cause immediately upon the occurrence of and in accordance with the following:
(a) Insolvency Event. Either may terminate this Agreement by delivering written notice to the other party upon the occurrence of any of the following events: (i) a receiver is appointed for either party or its property; (ii) either makes a general assignment for the benefit of its creditors; (iii) either party commences, or has commenced against it, proceedings under any bankruptcy, insolvency or debtor's relief law, which proceedings are not dismissed within sixty (60) days; or (iv) either party is liquidated or
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000
dissolved.
(b) Change of Control. In the event more that there is a change in ownership representing fifty percent (50%) or more of the equity ownership of either party, the other party may, at its option, terminate this Agreement upon written notice.
(c) Default. Either party may terminate this Agreement effective upon written notice to the other if the other party violates any covenant, agreement, representation or warranty contained herein in any material respect or defaults or fails to perform any of its obligations or agreements hereunder in any material respect, which violation, default or failure is not cured within thirty (30) days after notice thereof from the non-defaulting party stating its intention to terminate this Agreement by reason thereof.
8.4 Survival of Rights and Obligations Upon Termination. Sections 6 and --------------------------------------------------- 7 shall survive termination or expiration of this Agreement. Notwithstanding anything in the foregoing to the contrary, in the case of termination by NETTAXI for cause pursuant to Section 8.3 [Termination for Cause], NETTAXI shall not be required to pay any fee to SpinRecords.com after termination.
8.5 Return of Materials Upon Termination. On or before ten (10) days --------------------------------------- after the termination of this Agreement, SpinRecords.com shall deliver to NETTAXI all NETTAXI Confidential Information and NETTAXI Brand Features, including but not limited to all work product, diagrams, designs and schematics in Spinrecords.com's possession and NETTAXI.com shall deliver to SpinRecords.com all SpinRecords.com Confidential Information and SpinRecords.com Brand Features, including but not limited to all work product, diagrams, designs and schematics in Nettaxi.com's possession
9. MISCELLANEOUS
9.1 Force Majeure. Neither party shall be liable to the other for -------------- delays or failures in performance resulting from causes beyond the reasonable control of that party, including, but not limited to, acts of God, labor disputes or disturbances, material shortages or rationing, riots, acts of war, governmental regulations, communication or utility failures, or casualties.
9.2 Relationship of Parties. The parties are independent contractors ------------------------- under this Agreement and no other relationship is intended, including a partnership, franchise, joint venture, agency, employer/employee, fiduciary, master/servant relationship, or other special relationship. Neither party shall act in a manner which expresses or implies a relationship other than that of independent contractor, nor bind the other party.
9.3 No Third Party Beneficiaries. Unless otherwise expressly provided, ----------------------------- no provisions of this Agreement are intended or shall be construed to confer upon or give to any person or entity other than NETTAXI and SpinRecords.com any rights, remedies or other benefits under or by reason of this Agreement.
9.4 Equitable Relief. Each party acknowledges that a breach by the ----------------- other party of any confidentiality or proprietary rights provision of this Agreement may cause the non-breaching party irreparable damage, for which the award of damages would not be adequate compensation. Consequently, the non-breaching party may institute an action to enjoin the breaching party from any and all acts in violation of those provisions, which remedy shall be cumulative and not exclusive, and a party may seek the entry of an injunction enjoining any breach or threatened breach of those provisions, in addition to any other relief to which the non-breaching party may be entitled at law or in equity.
4
9.5 Attorneys' Fees. In addition to any other relief awarded, the ---------------- prevailing party in any action arising out of this Agreement shall be entitled to its reasonable attorneys' fees and costs.
9.6 Notices. Any notice required or permitted to be given by either ------- party under this Agreement shall be in writing and shall be personally delivered
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000
or sent by a reputable overnight mail service (e.g., Federal Express), or by first class mail (certified or registered), or by facsimile confirmed by first class mail (registered or certified), to the party at the address indicated above. Notices will be deemed effective (i) three (3) working days after deposit, postage prepaid, if mailed, (ii) the next day if sent by overnight mail, or (iii) the same day if sent by facsimile and confirmed as set forth above.
9.7 Assignment. Neither NETTAXI or SpinRecords.com shall assign its ---------- respective rights or delegate its obligations hereunder, either in whole or in part, whether by operation of law or otherwise, without the prior written consent of the other party. Any attempted assignment or delegation without the other party's written consent will be void.
9.8 Waiver and Modification. Failure by either party to enforce any ------------------------- provision of this Agreement will not be deemed a waiver of future enforcement of that or any other provision. Any waiver, amendment or other modification of any provision of this Agreement will be effective only if in writing and signed by the parties.
9.9 Severability. if for any reason a court of competent jurisdiction ------------ finds any provision of this Agreement to be unenforceable, that provision of the Agreement will be enforced to the maximum extent permissible so as to effect the intent of the parties, and the remainder of this Agreement will continue in full force and effect.
9.10 Controlling Law and Jurisdiction. This Agreement and any action ----------------------------------- related thereto shall be governed, controlled, interpreted and defined by and under the laws of the State of California and the United States, without regard to the conflicts of laws provisions thereof. Unless waived by NETTAXI (which it may do in its sole discretion) the exclusive jurisdiction and venue of any action with respect to the subject matter of this Agreement shall be the Superior Court of California for the County of Santa Clara or the United States District Court for the Northern District of California and each of the parties hereto submits itself to the exclusive jurisdiction and venue of such courts for the purpose of any such action. The parties specifically disclaim the UN Convention on Contracts for the International Sale of Goods.
9.11 Headings. Headings used in this Agreement are for ease of -------- reference only and shall not be used to interpret any aspect of this Agreement.
9.12 Entire Agreement. This Agreement, including all exhibits which are ---------------- incorporated herein by reference, constitutes the entire agreement between the parties with respect to the subject matter hereof, and supersedes and replaces all prior and contemporaneous understandings or agreements, written or oral, regarding such subject matter.
9.13 Counterparts. This Agreement may be executed in two counterparts, ------------ each of which shall be an original and together which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by persons duly authorized as of the date and year first above written.
NETTAXI: NETTAXI ONLINE COMMUNITIES, INC. By: /s/ --------------------------------------------- Its: Executive Vice President Sales & Marketing --------------------------------------------
Solutions Media SOLUTIONS MEDIA, INC. ----------------------- By: /s/ --------------------------------------------- Its: President ---------------------------------------------
TABLE OF EXHIBITS
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000
EXHIBIT A - SPINRECORDS.COM BRAND FEATURES EXHIBIT B - NETTAXI BRAND FEATURES EXHIBIT C - STATEMENT OF WORK
5
EXHIBIT A
SPINRECORDS.COM BRAND FEATURES
1. Service Marks: "SpinRecords.com" "SpinRadio" "Spin TV" "Local Spin" "Spin Chat" "Gig-a-board" "Spin Cuts" "Spin Charts" "Join the evolution" "The promise of music on the Internet delivered" 2. SpinRecords.com collateral and dress - SpinRecords.com color scheme, fonts and general "look and feel" 3. SpinRecords.com logos 4. "Anything but that" cartoon series 5. SpinRecords.com source materials 6. SpinRecords.com website
6
EXHIBIT B
NETTAXI BRAND FEATURES
1. Service Marks: "NETTAXI" "NETTAXI.COM" "NETTAXI ONLINE COMMUNITIES" "INTERNET THE CITY" "DRIVING YOUR INTERNET EXPERIENCE" 2. Trade dress - Nettaxi color scheme and checkered motif; "look and feel" 3. Nettaxi logos 4. Nettaxi source materials 5. The Website
7
EXHIBIT C
STATEMENT OF WORK
1. GENERAL
This is a Statement of Work under the Co-Branding Agreement by and between NETTAXI Online Communities, Inc. ("NETTAXI") and Solutions Media, Inc., ("SpinRecords.com") dated effective as of Nov. 5, 1999.
2. PROJECT MANAGERS.
NETTAXI: Will Richards SPINRECORDS.COM: Criona Mclaughlin 2165 S. Bascom Avenue 11440 West Bernardo Ct Campbell, California 95008 San Diego, California 92127 Phone: (408) 879-9880 Phone: (619)451-3223 Fax: (408) 879-9907 Fax: (619)451-2373
3. BRANDING METHODS
Spinrecords.com and Nettaxi.com will enter into a multi-phase launch of a co-branded community for Nettaxi, and the implementation of community services for Spinrecords.com members. The following defines the agreement after the final phase. The individual phases are specified following the Marketing Section of the Statement of Work. 1) SpinRecords.com will develop a co-branded site showing the Nettaxi.com logo. The co-branding shall not include SpinRadioTM, SpinTVTM, feature
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000
modules, and Spin branded charts. All other navigation bar features shall be modified to the co-brand including localnettaxi, and nettaxichat. The spinwares and spinstore will be modified to include licensed content purchased directly from Spinrecords.com and to eliminate products that will compete with the Nettaxi store. 2) Spinrecords.com will incorporate from the navigation bar a link from nettaxistores to the Nettaxi commerce site. 3) The co-branded nettaximusic store will contain spingear, spingallery, spinmusic, and Kingdom Skateboard products and services. Spin agrees to pay Nettaxi a 5% commission of the gross sales price on all transactions. 4) Spinrecords.com will maintain the Spin logo on the site in a corner of their choice. 5) Nettaxi web based e-mail will replace spinmail on the co-branded site. 6) Nettaxi's search engine shall be the default search engine on the co-branded site and on the Spinrecords.com homesite, with the exception that, in the event Spinrecords.com provides its content to or otherwise develops any co-branded sites with any ISP, Internet Portal or other entity, Spinrecords.com shall not be required to employ the Nettaxi search engine. In all cases in which the Nettaxi search engine is employed, the search shall first deliver results found on the Spinrecords.com website. The search feature shall have the tag line "Driven by Nettaxi" underneath the search bar. 7) Nettaxi shall cause its search engine to search and deliver results from the SpinRecords.com site and co-branded site as one of the top results for all searches for related words on the co-branded site, the SpinRecords.com homesite and the Nettaxi.com site. Related words shall include, but not be limited to: "music," "mp3," "independent artist/music" and "CD." 8) Nettaxi will create a music template for the Nettaxi homepage builder. Every registered member of Spinrecords.com and Nettaximusic will be provided a dynamically generated home page. Spinrecords.com will submit to Nettaxi the existing list of Spinrecords.com members from which a homepage shall be generated. 9) Nettaximusic and Spinrecords.com will share registered users by synchronizing the databases for registered users. Nettaxi will maintain unique ID's for each community home page built in the Spinrecords.com domain and Nettaximusic.com domain (for the purpose of the auto-generation of fan page templates). This synchronization shall not include any users that arrive at SpinRecords.com through any other co-branded site or through any other means of co-branding/co-marketing with any other ISP, Website or other entity. 10) Nettaxi will develop a link from the Nettaxi Arts & Entertainment area for the co-branded site. 11) Nettaxi will add Nettaximusic to the street sign on the A&E page. 12) Nettaxi will make the word "music" on the splash page, under A&E a link, and have it link to nettaxi.spinrecords.com. the co-branded site. 13) The co-branded site will have the Nettaxi mp3 player as an available mp3 player on the site. 14) Spinrecords.com will place the Nettaxi logo on promotional CDROM's and Samplers that contain the Nettaxi mp3 player or site banners. Banners on CDROM's will link straight to Nettaxi and Nettaximusic. 15) Nettaxi will include the Spinrecords.com logo on promotional CDROM's containing music provided Spinrecords.com. 16) Spinrecords.com will provide a link from all artists' pages to the co-branded registration site for fans to produce fan pages. 17) Nettaxi.com and Spinrecords.com will develop ability for all registered users of the co-branded site to achieve one-click buying on the co-branded site whether purchasing from Nettaxi's store or the Spinstore.
8
4. MARKETING EFFORTS
1) Spinrecords.com will sell ad space on the co-branded site, in accordance with the agreement, within 30 days of the Effective Date. 2) Both Parties agree to develop a Nettaxi co-branded CD featuring Nettaximusic.com. Both parties will share the production costs of the Nettaximusic.com Co-Branded CD. The per unit cost shall be 50 cents or less, unless both parties agree otherwise. 3) Nettaxi will develop a community based affinity model for music that features SpinRecords.com artists. 4) Nettaxi will provide in-house advertising to promote the co-branded music site. 5) Spinrecords.com will engage with Nettaxi as an -advertising sponsor promoting the co-branded site with each party contributing a monthly investment of not less than $20,000 per month, in cash expenditure or in-kind contribution toward the marketing effort(s). 6) SpinRecords.com will promote Nettaximusic.com as a music affiliate in their
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000
non-traditional street marketing methods, to include flyer's created in-house for Spin Bands, will have the logo of Nettaxi.com Music in-order that consumers see alternate choices to find the bands music. 7) Both parties agree to include advertisements for the other party in the advertising included with their web-based e-mail offered to their users. 8) Spinrecords.com will grant Nettaxi the rights to use the artist's likeness in promotions of the co-branded site. 9) Nettaxi.com agrees to participate in Spinrecords.com fourth quarter promotional plans by procuring $250,000 worth of co-promotional placement in Spinrecords advertising targeted towards colleges, extreme sports and other mutually agreed upon target audiences. 10) Spinrecords.com agrees to purchase in the fourth quarter, $250,000 worth of advertising and sponsorship space within the Nettaxi site for promotion of the co-branded and Spinrecords.com community.
PHASED ROLL OUT PLAN
PHASE I: NOVEMBER 8TH The existing site located at Spinrecords.com/Nettaxi shall be launched - target date one week from agreement date. This site shall contain the web based e-mail from Nettaxi. This site shall also use Spinstore and Spinware as it currently exists on the site.
Nettaxi will begin development of the music template for the home page builder. Spinrecords will submit their existing list of members to Nettaxi to integrate the homepage builder database and resolve duplicate ID's existing between Nettaxi and Spinrecords member registration.
Nettaxi and Spinrecords will integrate their respective registrations to allow both companies to synchronize their registered users from the co-branded site.
Spinrecords can announce the partnership in a press release the day the co-branded site launches. This press release will detail the co-branded relationship.
PHASE II: NOVEMBER 22ND Community home pages will be available to all members of Nettaximusic.com and Spinrecords.com. Spinrecords.com will announce to their existing membership the existence of their new homepage, provide them with their Unique URL and promote their ability to develop a unique web site.
Nettaxi will announce the same ability to all registered members of Nettaximusic.com.
Nettaxi's search engine will be launched on the Spinrecords.com domain.
Nettaxi's e-commerce offering will be launched on the co-branded site. Spinrecords.com e-comnerce offerings will be reduced to provide licensed merchandise and content and any additional products mutually agreed upon by Nettaxi.com and Spinrecords.com.
Both companies will announce their users ability to shop on the co-branded site using one-click buying. Each member can move between the stores on the co-brand site and order in each individual store.
9
PHASE III: JANUARY 1, 2000
Nettaxi launches citizen and small business e-commerce offering for all community sites. This feature will allow current Nettaxi home page web sites to integrate e-commerce offerings from their own products and products from the Nettaxi store.
5. PAYMENT
PERCENTAGE OF ADVERTISING REVENUE
5.1 "SpinRecords.com's Advertising Revenue" means the gross revenue from advertising invoiced by SpinRecords.com in a calendar quarter for advertising by third parties on the SpinRecords.com Pages, less any commissions not to exceed 35%.
5.2 "SpinRecords.com's AR Share" means the number of Impressions on the SpinRecords.com Pages by Users arriving through the Co-branded NETTAXI Pages in
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000
a calendar quarter divided by the total number of Impressions on the SpinRecords.com Pages by all Users in that calendar quarter.
5.3 "NETTAXI Advertising Revenue" means the gross revenue from advertising invoiced by NETTAXI in a calendar quarter for advertising by third parties on the NETTAXI Pages, less any commissions.
5.4 "NETTAXI's AR Share" means the number of Impressions on the NETTAXI Pages by Users arriving through the Co-branded SpinRecords.com Pages in a calendar quarter divided by the total number of Impressions on the NETTAXI Pages by all Users in that calendar quarter.
5.5 SpinRecords.com Rate. In full consideration for the rights granted --------------------- by NETTAXI, SpinRecords.com agrees to pay NETTAXI fifty (50%) percent of ad revenue at an average rate no lower then $6.50 per one thousand impressions (CPM) payable to NETTAXI which results when the SpinRecords.com Advertising Revenue is multiplied by SpinRecords.com's AR Share. SpinRecords.com shall be responsible for payment of all taxes based on the Advertising Revenue except taxes based on NETTAXI's income.
5.6 NETTAXI Rate. N/A. -------------
5.7 Payment Schedule. The parties shall make such payments within ----------------- thirty (30) days of the end of each calendar quarter for the Advertising Revenue invoiced during such calendar quarter.
5.8 Records. SpinRecords.com agrees to keep accurate books of account ------- and records at its principal place of business covering all Advertising Revenues and associated commissions. Upon reasonable notice of not less than seven (7) business days, but in no event more than once per year (unless the immediately preceding audit showed a material underpayment), NETTAXI shall have the right, subject to suitable confidentiality measures, to cause a certified public accountant to inspect those portions of the books of account and records which relate to the royalties owed NETTAXI, to confirm that the correct amount owing NETTAXI under this Agreement has been paid. SpinRecords.com shall maintain such books of account and records which support each statement for at least two years after the termination or expiration of this contract or after the final payment made by SpinRecords.com to NETTAXI, whichever is later.
2: PER CUSTOMER FEE
1. SpinRecords.com Payment. For each User that accesses the co-branded ------------------------ site and becomes a paying customer on the co-branded site, SpinRecords.com agrees to pay a fee of five (5%) percent of the gross sale.
2. NETTAXI Payment. N/A. ----------------
3. Payment Terms. All fees will be paid on or before fifteen (15) days -------------- after the end of the month in which the party has received payment
4. Audit Rights. SpinRecords.com shall maintain for a period of two ------------- (2) years after the end of the year to which they pertain, complete records of it's customers in order to calculate and confirm SpinRecords.com's obligations hereunder. Upon reasonable prior notice, NETTAXI will have the right, exercisable not more than once every twelve (12) months, to appoint an independent accounting firm or other agent reasonably acceptable to SpinRecords.com, at NETTAXI'S expense, to examine such books, records and accounts during SpinRecords.com's normal business hours to verify the amounts due by SpinRecords.com to NETTAXI herein, subject execution of NETTAXI's standard confidentiality agreement by the accounting firm or agent; provided, however, that execution of such agreement will not preclude such firm from reporting its results to NETTAXI. In the event such audit discloses an underpayment or overpayment of royalties due hereunder, the appropriate party will promptly remit the amounts due to the other party. If any such audit discloses a shortfall in payment to NETTAXI of more than five percent (5%) for any quarter, SpinRecords.com agrees to pay or reimburse NETTAXI for the expenses of such audit.
10
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000 [/INST] ```json
{<answer_start>
"answer": "NETTAXI"
<answer_end>
}
``` </s> | CO-BRANDING AGREEMENT (FORM)
This CO-BRANDING AGREEMENT (the "Agreement") is made and entered into as of Nov 5, 1999, (the "Effective Date") by and between NETTAXI Online Communities, Inc., a Delaware corporation with principal offices at 2165 S. Bascom Avenue, Campbell, California 95008 ("NETTAXI"), and Solutions Media, Inc., dba SpinRecords.com a Delaware Corporation, with offices at 11440 West Barnardo Ct., Suite 170, San Diego, CA 32127 ("SpinRecords.com" or "Client").
RECITALS
A. NETTAXI is in the business of providing entertainment, education, and information services over the world wide web through its Internet web site at http://www.NETTAXI.com.
B. SpinRecords.com is in the business of providing entertainment and information services over the World Wide Web through its internet website at http://www.spinrecords.com.
C. NETTAXI and SpinRecords.com desire co-brand their services under the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties hereby agree as follows:
1. DEFINITIONS
1.1 "Spinrecords.com Brand Features" means the SpinRecords.com name and logo and other trademarks, trade names and service names including but not limited to those set forth on Exhibit A attached hereto and incorporated herein --------- by reference and all Intellectual Property Rights related thereto. SpinRecords.com Brand Features shall include any derivatives, improvements or modifications thereto or thereof and any Intellectual Property rights related thereto.
1.2 "SpinRecords.com Pages" means the SpinRecords.com Web-based pages that incorporate certain SpinRecords.com services, as the same may be updated or modified from time to time in SpinRecords.com's sole discretion, currently located at http://www.spinrecords.com.
1.3 "Impressions" means the loading of all or part of a Web page into the browser of a User.
1.4 "Intellectual Property Rights" means all current and future worldwide trademark, patents and patent rights, utility models, copyrights, mask work rights, trade secrets, and all other intellectual property rights and the related documentation or other tangible expression thereof.
1.5 "NETTAXI Brand Features" means the NETTAXI name and logo and any other trademarks, trade names and service names of NETTAXI, including but not limited to those set forth on Exhibit B attached hereto and incorporated herein --------- by reference and all Intellectual Property Rights related thereto. NETTAXI Brand Features shall include any derivatives, improvements or modifications thereto or thereof and any Intellectual Property rights related thereto.
1.6 "NETTAXI Pages" means the NETTAXI's Web-based pages that incorporate certain NETTAXI services, as the same may be updated or modified from time to time in NETTAXI's sole discretion, currently located at http://www.NETTAXI.com.
1.7 "Statement of Work" means the Statement of Work attached hereto as Exhibit C and incorporated herein by reference. ----------
1.8 "User" means a person using a software browser to view the World Wide Web.
2. CO-BRANDING, MARKETING AND PROMOTION
2.1 The SpinRecords.com Pages. SpinRecords.com shall brand the ---------------------------
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000
SpinRecords.com Pages with the NETTAXI Brand Features in the manner set forth in the Statement of Work. NETTAXI will provide electronic copies of the NETTAXI Brand Features upon SpinRecords.com's request. All Spinrecords.com Pages shall display appropriate intellectual property legends, including but not limited to the copyright notice and trademark references.
1
2.2 The NETTAXI Pages. NETTAXI shall brand certain NETTAXI Pages with ------------------ the SpinRecords.com Brand Features in the manner set forth in the Statement of Work. SpinRecords.com will provide electronic copies of the SpinRecords.com Brand Features upon NETTAXI's request. All NETTAXI Pages shall display appropriate intellectual property legends, including but not limited to the copyright notice and trademark references. NETTAXI shall not be obligated to co-brand those pages containing content which NETTAXI has branded with a third party which: (i) NETTAXI is prohibited from co-branding pursuant to another agreement; (ii) NETTAXI is technically unable to co-brand; or (iii) are commercially unreasonable, in NETTAXI's discretion, to co-brand.
2.3 Marketing by SpinRecords.com. Throughout the term of this ------------------------------ Agreement, SpinRecords.com shall use reasonable commercial efforts to market the NETTAXI Brand Features in order to maximize the number of visitors to the NETTAXI Pages in accordance with the Statement of Work. The parties shall review the Statement of Work and NETTAXI's marketing activities on a quarterly basis in order to assess the performance and agree upon additional activities, if necessary, in order to increase usage of the pages.
2.4 Marketing by NETTAXI. Throughout the term of this Agreement, ----------------------- NETTAXI shall use reasonable commercial efforts to market the SpinRecords.com Brand Features in order to maximize the number of visitors to the SpinRecords.com Pages in accordance with the Statement of Work. The parties shall review the Statement of Work and Spinrecords.com's marketing activities on a quarterly basis in order to assess the performance and agree upon additional activities, if necessary, in order to increase usage of the pages.
2.5 Additional Statements of Work. If the parties hereto desire to -------------------------------- engage each other for additional services which are not included in the Statement of Work and which do not constitute merely a revision or modification of the Statement of Work, the parties shall in good faith negotiate additional Statements of Work, each of which upon signing shall be deemed a part of this Agreement. Additional Statements of Work shall be entered into by mutual agreement between NETTAXI and SpinRecords.com and shall be substantially in the form of the Statement of Work attached hereto. Each Statement of Work shall be signed by authorized representatives of the parties. This Agreement may cover more than one Statement of Work at any given time.
3. Licenses AND OWNERSHIP.
3.1 Licenses by NETTAXI to SpinRecords.com. NETTAXI hereby grants to ----------------------------------------- SpinRecords.com a non-exclusive, worldwide, nontransferable, revocable, royalty free license to use the NETTAXI Brand Features as the same may be modified from time to time for the purposes of this Agreement
3.2 Licenses by SpinRecords.com to NETTAXI. SpinRecords.com hereby ------------------------------------------- grants NETTAXI a nonexclusive, worldwide, nontransferable, revocable, royalty free license to display and distribute the, and make derivative works from the SpinRecords.com Brand Features and any enhancements, modifications or improvements thereto as necessary to carry out the terms of this Agreement.
3.3 Ownership by NETTAXI. NETTAXI shall own all right, title, and ---------------------- interest in the NETTAXI Brand Features, the NETTAXI Pages and all Intellectual Property Rights therein, including any derivatives, improvements thereof, excluding the SpinRecords.com Brand Features
3.4 Ownership by SpinRecords.com. Except as otherwise set forth below, ----------------------------- SpinRecords.com shall own all right, title, and interest in the SpinRecords.com Brand Features and the SpinRecords.com Pages and all Intellectual Property Rights therein, including any derivatives, improvements thereof, excluding the NETTAXI Brand Features.
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000
3.5 Impressions. Neither party nor its employees shall take actions ---------- which will artificially increase the number of Impressions on the party's web pages. For example, a party's employees shall not repeatedly access the other party's web pages.
4. PAYMENT
4.1 Payment. In consideration of the duties and obligations of the ------- parties hereto, SpinRecords.com shall pay NETTAXI in the manner set forth in the Statement of Work.
5. REPRESENTATIONS AND WARRANTIES.
5.1 Representations and Warranties of SpinRecords.com. SpinRecords.com -------------------------------------------------- hereby represents and warrants to NETTAXI that: (i) SpinRecords.com has the full power and authority to enter into this Agreement and to carry out its obligations under this Agreement; (ii) SpinRecords.com has the full power and authority to grant the rights and licenses granted to NETTAXI in this Agreement; and (iii) SpinRecords.com owns the SpinRecords.com Brand Features.
2
5.2 Representations and Warranties of NETTAXI. NETTAXI hereby --------------------------------------------- represents and warrants to SpinRecords.com that (i) NETTAXI has the full power and authority to enter into this Agreement and to carry out its obligations under this Agreement; (ii) NETTAXI has the full power and authority to grant the rights and licenses granted to SpinRecords.com in this Agreement; and (iii) NETTAXI owns the NETTAXI Brand Features.
5.3 THE NETTAXI SERVICES FURNISHED AS A RESULT OF OR UNDER THIS AGREEMENT ARE PROVIDED ON AN "AS IS" BASIS, WITHOUT ANY WARRANTIES OR REPRESENTATIONS EXPRESS, IMPLIED OR STATUTORY; INCLUDING, WITHOUT LIMITATION, WARRANTIES OF QUALITY, PERFORMANCE, NONINFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NOR ARE THERE ANY WARRANTIES CREATED BY A COURSE OF DEALING, COURSE OF PERFORMANCE OR TRADE USAGE. NETTAXI DOES NOT WARRANT THAT THE SERVICES, WILL MEET SPINRECORDS.COM'S OR ANY END USERS NEEDS OR BE FREE FROM ERRORS, OR THAT THE OPERATION OF ITS WEB PAGES WILL BE UNINTERRUPTED. THE FOREGOING EXCLUSIONS AND DISCLAIMERS ARE AN ESSENTIAL PART OF THIS AGREEMENT.
6. CONFIDENTIALITY.
6.1 Agreement as Confidential Information. The parties shall treat the -------------------------------------- terms and conditions and the existence of this Agreement as Confidential Information. Each party shall obtain the other's consent prior to any publication, presentation, public announcement or press release concerning the existence or terms and conditions of this Agreement.
6.2 Confidential Information. "Confidential Information" means all ------------------------- information identified in written or oral format by the Disclosing Party as confidential, trade secret or proprietary information, and, if disclosed orally, summarized in written format within thirty (30) days of disclosure. "Disclosing Party" is the party disclosing Confidential Information. "Receiving Party" is the party receiving Confidential Information. The Receiving Party shall not disclose the Confidential Information to any third party other than persons in the direct employ of the Receiving Party who have a need to have access to and knowledge of the Confidential Information solely for the purpose authorized above. Each party shall take appropriate measures by instruction and agreement prior to disclosure to such employees to assure against unauthorized use or disclosure. The Receiving Party shall have no obligation with respect to information which (i) was rightfully in possession of or known to the Receiving Party without any obligation of confidentiality prior to receiving it from the Disclosing Party; (ii) is, or subsequently becomes, legally and publicly available without breach of this Agreement; (iii) is rightfully obtained by the Receiving Party from a source other than the Disclosing Party without any obligation of confidentiality; (iv) is disclosed by the Receiving Party under a valid order created by a court or government agency, provided that the Receiving Party provides prior written notice to the Disclosing Party of such obligation and the opportunity to oppose such disclosure. Upon written demand of the Disclosing Party, the Receiving Party shall cease using the Confidential
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000
Information and return the Confidential Information and all copies, notes or extracts thereof to the Disclosing Party within seven (7) days of receipt of notice.
7. INDEMNITY AND LIMITATION OF LIABILITY.
7.1 Indemnification by Spinrecords.com. SpinRecords.com shall defend, ------------------------------------ indemnify and hold NETTAXI harmless from any and all damages, liabilities, costs and expenses (including, but not limited to reasonable attorneys' fees) incurred by NETTAXI as a result of (i) any breach of this Agreement; (ii) any claim that the SpinRecords.com Brand Features or any part thereof, infringes or misappropriates any Intellectual Property Right of a third party; (iii) any claim arising out of NETTAXI's display of the SpinRecords.com Brand Features; or (iv) the operation of the SpinRecords.com Pages. NETTAXI shall provide SpinRecords.com with written notice of the claim and permit SpinRecords.com to control the defense, settlement, adjustment or compromise of any such claim. NETTAXI may employ counsel at its own expense to assist it with respect to any such claim; provided, however, that if such counsel is necessary because of a conflict of interest of either SpinRecords.com or its counsel or because SpinRecords.com does not assume control, SpinRecords.com will bear the expense of such counsel.
7.2 Indemnification by NETTAXI. NETTAXI shall defend, indemnify and ---------------------------- hold SpinRecords.com harmless from any and all damages, liabilities, costs and expenses (including, but not limited to reasonable attorneys' fees) incurred by SpinRecords.com as a result of (1) any breach of this Agreement; (ii) any claim that the NETTAXI Brand Features or any part thereof, infringes or misappropriates any Intellectual Property Right of a third party; or (iii) any claim arising out of Spinrecords.com's display of the NETTAXI Brand Features SpinRecords.com shall provide NETTAXI with written notice of the claim and permit NETTAXI to control the defense, settlement, adjustment or compromise of any such claim. SpinRecords.com may employ counsel at its own expense to assist it with respect to any such claim; provided, however, that if such counsel is necessary because of a conflict of interest of either NETTAXI or its counsel or because NETTAXI does not assume control, NETTAXI will bear the expense of such counsel.
7.3 Limitation of Liability. EXCEPT AS SET FORTH IN SECTION 6 AND 7.1, ------------------------ UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE OTHER UNDER ANY CONTRACT, STRICT LIABILITY, NEGLIGENCE OR OTHER LEGAL OR EQUITABLE THEORY, FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT.
3
8. TERM AND TERMINATION
8.1 Term of Agreement. This Agreement shall be effective upon the ------------------- Effective Date and shall remain in force for a period of one (1) year, and shall be automatically renewed for successive periods of one (1) year unless otherwise terminated as provided herein.
8.2 Convenience. NETTAXI may terminate this Agreement at any time for ----------- its convenience, for no reason or for any reason, upon sixty (60) days prior written notice to SpinRecords.com. In the event of such termination, Spinrecords.com shall be entitled to receive and retain all payments made or payable by NETTAXI prior to the date of termination. SpinRecords.com may terminate this Agreement for no reason or for any reason upon sixty (60) days prior written notice to NETTAXI.
8.3 Termination for Cause. This Agreement may be terminated by a party ---------------------- for cause immediately upon the occurrence of and in accordance with the following:
(a) Insolvency Event. Either may terminate this Agreement by delivering written notice to the other party upon the occurrence of any of the following events: (i) a receiver is appointed for either party or its property; (ii) either makes a general assignment for the benefit of its creditors; (iii) either party commences, or has commenced against it, proceedings under any bankruptcy, insolvency or debtor's relief law, which proceedings are not dismissed within sixty (60) days; or (iv) either party is liquidated or
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000
dissolved.
(b) Change of Control. In the event more that there is a change in ownership representing fifty percent (50%) or more of the equity ownership of either party, the other party may, at its option, terminate this Agreement upon written notice.
(c) Default. Either party may terminate this Agreement effective upon written notice to the other if the other party violates any covenant, agreement, representation or warranty contained herein in any material respect or defaults or fails to perform any of its obligations or agreements hereunder in any material respect, which violation, default or failure is not cured within thirty (30) days after notice thereof from the non-defaulting party stating its intention to terminate this Agreement by reason thereof.
8.4 Survival of Rights and Obligations Upon Termination. Sections 6 and --------------------------------------------------- 7 shall survive termination or expiration of this Agreement. Notwithstanding anything in the foregoing to the contrary, in the case of termination by NETTAXI for cause pursuant to Section 8.3 [Termination for Cause], NETTAXI shall not be required to pay any fee to SpinRecords.com after termination.
8.5 Return of Materials Upon Termination. On or before ten (10) days --------------------------------------- after the termination of this Agreement, SpinRecords.com shall deliver to NETTAXI all NETTAXI Confidential Information and NETTAXI Brand Features, including but not limited to all work product, diagrams, designs and schematics in Spinrecords.com's possession and NETTAXI.com shall deliver to SpinRecords.com all SpinRecords.com Confidential Information and SpinRecords.com Brand Features, including but not limited to all work product, diagrams, designs and schematics in Nettaxi.com's possession
9. MISCELLANEOUS
9.1 Force Majeure. Neither party shall be liable to the other for -------------- delays or failures in performance resulting from causes beyond the reasonable control of that party, including, but not limited to, acts of God, labor disputes or disturbances, material shortages or rationing, riots, acts of war, governmental regulations, communication or utility failures, or casualties.
9.2 Relationship of Parties. The parties are independent contractors ------------------------- under this Agreement and no other relationship is intended, including a partnership, franchise, joint venture, agency, employer/employee, fiduciary, master/servant relationship, or other special relationship. Neither party shall act in a manner which expresses or implies a relationship other than that of independent contractor, nor bind the other party.
9.3 No Third Party Beneficiaries. Unless otherwise expressly provided, ----------------------------- no provisions of this Agreement are intended or shall be construed to confer upon or give to any person or entity other than NETTAXI and SpinRecords.com any rights, remedies or other benefits under or by reason of this Agreement.
9.4 Equitable Relief. Each party acknowledges that a breach by the ----------------- other party of any confidentiality or proprietary rights provision of this Agreement may cause the non-breaching party irreparable damage, for which the award of damages would not be adequate compensation. Consequently, the non-breaching party may institute an action to enjoin the breaching party from any and all acts in violation of those provisions, which remedy shall be cumulative and not exclusive, and a party may seek the entry of an injunction enjoining any breach or threatened breach of those provisions, in addition to any other relief to which the non-breaching party may be entitled at law or in equity.
4
9.5 Attorneys' Fees. In addition to any other relief awarded, the ---------------- prevailing party in any action arising out of this Agreement shall be entitled to its reasonable attorneys' fees and costs.
9.6 Notices. Any notice required or permitted to be given by either ------- party under this Agreement shall be in writing and shall be personally delivered
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000
or sent by a reputable overnight mail service (e.g., Federal Express), or by first class mail (certified or registered), or by facsimile confirmed by first class mail (registered or certified), to the party at the address indicated above. Notices will be deemed effective (i) three (3) working days after deposit, postage prepaid, if mailed, (ii) the next day if sent by overnight mail, or (iii) the same day if sent by facsimile and confirmed as set forth above.
9.7 Assignment. Neither NETTAXI or SpinRecords.com shall assign its ---------- respective rights or delegate its obligations hereunder, either in whole or in part, whether by operation of law or otherwise, without the prior written consent of the other party. Any attempted assignment or delegation without the other party's written consent will be void.
9.8 Waiver and Modification. Failure by either party to enforce any ------------------------- provision of this Agreement will not be deemed a waiver of future enforcement of that or any other provision. Any waiver, amendment or other modification of any provision of this Agreement will be effective only if in writing and signed by the parties.
9.9 Severability. if for any reason a court of competent jurisdiction ------------ finds any provision of this Agreement to be unenforceable, that provision of the Agreement will be enforced to the maximum extent permissible so as to effect the intent of the parties, and the remainder of this Agreement will continue in full force and effect.
9.10 Controlling Law and Jurisdiction. This Agreement and any action ----------------------------------- related thereto shall be governed, controlled, interpreted and defined by and under the laws of the State of California and the United States, without regard to the conflicts of laws provisions thereof. Unless waived by NETTAXI (which it may do in its sole discretion) the exclusive jurisdiction and venue of any action with respect to the subject matter of this Agreement shall be the Superior Court of California for the County of Santa Clara or the United States District Court for the Northern District of California and each of the parties hereto submits itself to the exclusive jurisdiction and venue of such courts for the purpose of any such action. The parties specifically disclaim the UN Convention on Contracts for the International Sale of Goods.
9.11 Headings. Headings used in this Agreement are for ease of -------- reference only and shall not be used to interpret any aspect of this Agreement.
9.12 Entire Agreement. This Agreement, including all exhibits which are ---------------- incorporated herein by reference, constitutes the entire agreement between the parties with respect to the subject matter hereof, and supersedes and replaces all prior and contemporaneous understandings or agreements, written or oral, regarding such subject matter.
9.13 Counterparts. This Agreement may be executed in two counterparts, ------------ each of which shall be an original and together which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by persons duly authorized as of the date and year first above written.
NETTAXI: NETTAXI ONLINE COMMUNITIES, INC. By: /s/ --------------------------------------------- Its: Executive Vice President Sales & Marketing --------------------------------------------
Solutions Media SOLUTIONS MEDIA, INC. ----------------------- By: /s/ --------------------------------------------- Its: President ---------------------------------------------
TABLE OF EXHIBITS
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000
EXHIBIT A - SPINRECORDS.COM BRAND FEATURES EXHIBIT B - NETTAXI BRAND FEATURES EXHIBIT C - STATEMENT OF WORK
5
EXHIBIT A
SPINRECORDS.COM BRAND FEATURES
1. Service Marks: "SpinRecords.com" "SpinRadio" "Spin TV" "Local Spin" "Spin Chat" "Gig-a-board" "Spin Cuts" "Spin Charts" "Join the evolution" "The promise of music on the Internet delivered" 2. SpinRecords.com collateral and dress - SpinRecords.com color scheme, fonts and general "look and feel" 3. SpinRecords.com logos 4. "Anything but that" cartoon series 5. SpinRecords.com source materials 6. SpinRecords.com website
6
EXHIBIT B
NETTAXI BRAND FEATURES
1. Service Marks: "NETTAXI" "NETTAXI.COM" "NETTAXI ONLINE COMMUNITIES" "INTERNET THE CITY" "DRIVING YOUR INTERNET EXPERIENCE" 2. Trade dress - Nettaxi color scheme and checkered motif; "look and feel" 3. Nettaxi logos 4. Nettaxi source materials 5. The Website
7
EXHIBIT C
STATEMENT OF WORK
1. GENERAL
This is a Statement of Work under the Co-Branding Agreement by and between NETTAXI Online Communities, Inc. ("NETTAXI") and Solutions Media, Inc., ("SpinRecords.com") dated effective as of Nov. 5, 1999.
2. PROJECT MANAGERS.
NETTAXI: Will Richards SPINRECORDS.COM: Criona Mclaughlin 2165 S. Bascom Avenue 11440 West Bernardo Ct Campbell, California 95008 San Diego, California 92127 Phone: (408) 879-9880 Phone: (619)451-3223 Fax: (408) 879-9907 Fax: (619)451-2373
3. BRANDING METHODS
Spinrecords.com and Nettaxi.com will enter into a multi-phase launch of a co-branded community for Nettaxi, and the implementation of community services for Spinrecords.com members. The following defines the agreement after the final phase. The individual phases are specified following the Marketing Section of the Statement of Work. 1) SpinRecords.com will develop a co-branded site showing the Nettaxi.com logo. The co-branding shall not include SpinRadioTM, SpinTVTM, feature
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000
modules, and Spin branded charts. All other navigation bar features shall be modified to the co-brand including localnettaxi, and nettaxichat. The spinwares and spinstore will be modified to include licensed content purchased directly from Spinrecords.com and to eliminate products that will compete with the Nettaxi store. 2) Spinrecords.com will incorporate from the navigation bar a link from nettaxistores to the Nettaxi commerce site. 3) The co-branded nettaximusic store will contain spingear, spingallery, spinmusic, and Kingdom Skateboard products and services. Spin agrees to pay Nettaxi a 5% commission of the gross sales price on all transactions. 4) Spinrecords.com will maintain the Spin logo on the site in a corner of their choice. 5) Nettaxi web based e-mail will replace spinmail on the co-branded site. 6) Nettaxi's search engine shall be the default search engine on the co-branded site and on the Spinrecords.com homesite, with the exception that, in the event Spinrecords.com provides its content to or otherwise develops any co-branded sites with any ISP, Internet Portal or other entity, Spinrecords.com shall not be required to employ the Nettaxi search engine. In all cases in which the Nettaxi search engine is employed, the search shall first deliver results found on the Spinrecords.com website. The search feature shall have the tag line "Driven by Nettaxi" underneath the search bar. 7) Nettaxi shall cause its search engine to search and deliver results from the SpinRecords.com site and co-branded site as one of the top results for all searches for related words on the co-branded site, the SpinRecords.com homesite and the Nettaxi.com site. Related words shall include, but not be limited to: "music," "mp3," "independent artist/music" and "CD." 8) Nettaxi will create a music template for the Nettaxi homepage builder. Every registered member of Spinrecords.com and Nettaximusic will be provided a dynamically generated home page. Spinrecords.com will submit to Nettaxi the existing list of Spinrecords.com members from which a homepage shall be generated. 9) Nettaximusic and Spinrecords.com will share registered users by synchronizing the databases for registered users. Nettaxi will maintain unique ID's for each community home page built in the Spinrecords.com domain and Nettaximusic.com domain (for the purpose of the auto-generation of fan page templates). This synchronization shall not include any users that arrive at SpinRecords.com through any other co-branded site or through any other means of co-branding/co-marketing with any other ISP, Website or other entity. 10) Nettaxi will develop a link from the Nettaxi Arts & Entertainment area for the co-branded site. 11) Nettaxi will add Nettaximusic to the street sign on the A&E page. 12) Nettaxi will make the word "music" on the splash page, under A&E a link, and have it link to nettaxi.spinrecords.com. the co-branded site. 13) The co-branded site will have the Nettaxi mp3 player as an available mp3 player on the site. 14) Spinrecords.com will place the Nettaxi logo on promotional CDROM's and Samplers that contain the Nettaxi mp3 player or site banners. Banners on CDROM's will link straight to Nettaxi and Nettaximusic. 15) Nettaxi will include the Spinrecords.com logo on promotional CDROM's containing music provided Spinrecords.com. 16) Spinrecords.com will provide a link from all artists' pages to the co-branded registration site for fans to produce fan pages. 17) Nettaxi.com and Spinrecords.com will develop ability for all registered users of the co-branded site to achieve one-click buying on the co-branded site whether purchasing from Nettaxi's store or the Spinstore.
8
4. MARKETING EFFORTS
1) Spinrecords.com will sell ad space on the co-branded site, in accordance with the agreement, within 30 days of the Effective Date. 2) Both Parties agree to develop a Nettaxi co-branded CD featuring Nettaximusic.com. Both parties will share the production costs of the Nettaximusic.com Co-Branded CD. The per unit cost shall be 50 cents or less, unless both parties agree otherwise. 3) Nettaxi will develop a community based affinity model for music that features SpinRecords.com artists. 4) Nettaxi will provide in-house advertising to promote the co-branded music site. 5) Spinrecords.com will engage with Nettaxi as an -advertising sponsor promoting the co-branded site with each party contributing a monthly investment of not less than $20,000 per month, in cash expenditure or in-kind contribution toward the marketing effort(s). 6) SpinRecords.com will promote Nettaximusic.com as a music affiliate in their
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000
non-traditional street marketing methods, to include flyer's created in-house for Spin Bands, will have the logo of Nettaxi.com Music in-order that consumers see alternate choices to find the bands music. 7) Both parties agree to include advertisements for the other party in the advertising included with their web-based e-mail offered to their users. 8) Spinrecords.com will grant Nettaxi the rights to use the artist's likeness in promotions of the co-branded site. 9) Nettaxi.com agrees to participate in Spinrecords.com fourth quarter promotional plans by procuring $250,000 worth of co-promotional placement in Spinrecords advertising targeted towards colleges, extreme sports and other mutually agreed upon target audiences. 10) Spinrecords.com agrees to purchase in the fourth quarter, $250,000 worth of advertising and sponsorship space within the Nettaxi site for promotion of the co-branded and Spinrecords.com community.
PHASED ROLL OUT PLAN
PHASE I: NOVEMBER 8TH The existing site located at Spinrecords.com/Nettaxi shall be launched - target date one week from agreement date. This site shall contain the web based e-mail from Nettaxi. This site shall also use Spinstore and Spinware as it currently exists on the site.
Nettaxi will begin development of the music template for the home page builder. Spinrecords will submit their existing list of members to Nettaxi to integrate the homepage builder database and resolve duplicate ID's existing between Nettaxi and Spinrecords member registration.
Nettaxi and Spinrecords will integrate their respective registrations to allow both companies to synchronize their registered users from the co-branded site.
Spinrecords can announce the partnership in a press release the day the co-branded site launches. This press release will detail the co-branded relationship.
PHASE II: NOVEMBER 22ND Community home pages will be available to all members of Nettaximusic.com and Spinrecords.com. Spinrecords.com will announce to their existing membership the existence of their new homepage, provide them with their Unique URL and promote their ability to develop a unique web site.
Nettaxi will announce the same ability to all registered members of Nettaximusic.com.
Nettaxi's search engine will be launched on the Spinrecords.com domain.
Nettaxi's e-commerce offering will be launched on the co-branded site. Spinrecords.com e-comnerce offerings will be reduced to provide licensed merchandise and content and any additional products mutually agreed upon by Nettaxi.com and Spinrecords.com.
Both companies will announce their users ability to shop on the co-branded site using one-click buying. Each member can move between the stores on the co-brand site and order in each individual store.
9
PHASE III: JANUARY 1, 2000
Nettaxi launches citizen and small business e-commerce offering for all community sites. This feature will allow current Nettaxi home page web sites to integrate e-commerce offerings from their own products and products from the Nettaxi store.
5. PAYMENT
PERCENTAGE OF ADVERTISING REVENUE
5.1 "SpinRecords.com's Advertising Revenue" means the gross revenue from advertising invoiced by SpinRecords.com in a calendar quarter for advertising by third parties on the SpinRecords.com Pages, less any commissions not to exceed 35%.
5.2 "SpinRecords.com's AR Share" means the number of Impressions on the SpinRecords.com Pages by Users arriving through the Co-branded NETTAXI Pages in
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000
a calendar quarter divided by the total number of Impressions on the SpinRecords.com Pages by all Users in that calendar quarter.
5.3 "NETTAXI Advertising Revenue" means the gross revenue from advertising invoiced by NETTAXI in a calendar quarter for advertising by third parties on the NETTAXI Pages, less any commissions.
5.4 "NETTAXI's AR Share" means the number of Impressions on the NETTAXI Pages by Users arriving through the Co-branded SpinRecords.com Pages in a calendar quarter divided by the total number of Impressions on the NETTAXI Pages by all Users in that calendar quarter.
5.5 SpinRecords.com Rate. In full consideration for the rights granted --------------------- by NETTAXI, SpinRecords.com agrees to pay NETTAXI fifty (50%) percent of ad revenue at an average rate no lower then $6.50 per one thousand impressions (CPM) payable to NETTAXI which results when the SpinRecords.com Advertising Revenue is multiplied by SpinRecords.com's AR Share. SpinRecords.com shall be responsible for payment of all taxes based on the Advertising Revenue except taxes based on NETTAXI's income.
5.6 NETTAXI Rate. N/A. -------------
5.7 Payment Schedule. The parties shall make such payments within ----------------- thirty (30) days of the end of each calendar quarter for the Advertising Revenue invoiced during such calendar quarter.
5.8 Records. SpinRecords.com agrees to keep accurate books of account ------- and records at its principal place of business covering all Advertising Revenues and associated commissions. Upon reasonable notice of not less than seven (7) business days, but in no event more than once per year (unless the immediately preceding audit showed a material underpayment), NETTAXI shall have the right, subject to suitable confidentiality measures, to cause a certified public accountant to inspect those portions of the books of account and records which relate to the royalties owed NETTAXI, to confirm that the correct amount owing NETTAXI under this Agreement has been paid. SpinRecords.com shall maintain such books of account and records which support each statement for at least two years after the termination or expiration of this contract or after the final payment made by SpinRecords.com to NETTAXI, whichever is later.
2: PER CUSTOMER FEE
1. SpinRecords.com Payment. For each User that accesses the co-branded ------------------------ site and becomes a paying customer on the co-branded site, SpinRecords.com agrees to pay a fee of five (5%) percent of the gross sale.
2. NETTAXI Payment. N/A. ----------------
3. Payment Terms. All fees will be paid on or before fifteen (15) days -------------- after the end of the month in which the party has received payment
4. Audit Rights. SpinRecords.com shall maintain for a period of two ------------- (2) years after the end of the year to which they pertain, complete records of it's customers in order to calculate and confirm SpinRecords.com's obligations hereunder. Upon reasonable prior notice, NETTAXI will have the right, exercisable not more than once every twelve (12) months, to appoint an independent accounting firm or other agent reasonably acceptable to SpinRecords.com, at NETTAXI'S expense, to examine such books, records and accounts during SpinRecords.com's normal business hours to verify the amounts due by SpinRecords.com to NETTAXI herein, subject execution of NETTAXI's standard confidentiality agreement by the accounting firm or agent; provided, however, that execution of such agreement will not preclude such firm from reporting its results to NETTAXI. In the event such audit discloses an underpayment or overpayment of royalties due hereunder, the appropriate party will promptly remit the amounts due to the other party. If any such audit discloses a shortfall in payment to NETTAXI of more than five percent (5%) for any quarter, SpinRecords.com agrees to pay or reimburse NETTAXI for the expenses of such audit.
10
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000
Source: RAE SYSTEMS INC, 10-Q, 11/14/2000 | Highlight the parts (if any) of this contract related to "Parties" that should be reviewed by a lawyer. Details: The two or more parties who signed the contract | {
"answer_start": [
201
],
"text": [
"NETTAXI"
]
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Change Of Control" that should be reviewed by a lawyer. Details: Does one party have the right to terminate or is consent or notice required of the counterparty if such party undergoes a change of control, such as a merger, stock sale, transfer of all or substantially all of its assets or business, or assignment by operation of law?
Context: Exhibit 10.1
STRATEGIC ALLIANCE AGREEMENT
THIS AGREEMENT dated for reference the 5th day of December 2008.
BETWEEN:
GOLD RESOURCE CORPORATION, a company organized under the laws of the State of Colorado, with registered office located at 222 Milwaukee Street, Suite 301, Denver, CO 80206 ("GRC" or "the Company")
AND:
HOCHSCHILD MINING HOLDINGS LIMITED, a private limited company organized under the laws of England and Wales, with registered office located at 46 Albemarle Street, London, England W1S 4JL ("HOC")
WHEREAS:
A. The Company is a mineral exploration and development company engaged in the acquisition and exploration, as well as development of mineral properties (the "Properties") in Mexico through its Mexican subsidiaries with prospects for hosting gold, silver and base metal deposits, and through such subsidiaries holds interests in several mineral resource properties, including but not limited to (i) El Aguila, (ii) Las Margaritas, (iii) Solaga, and (iv) El Rey located in Oaxaca, Mexico (the "Existing Properties");
B. HOC is an Affiliate of Hochschild Mining plc., a leading underground precious metals producer operating in the Americas with a primary focus on silver and gold;
C. The Company and HOC believe that their respective corporate strategies are compatible and, as such, wish to establish a strategic alliance on the terms and conditions set forth herein;
D. The Company and HOC are entering into this Agreement as a condition to and in furtherance of the investment in Shares (as defined below) contemplated in the Subscription Agreement dated December 5, 2008 (the "Subscription Agreement") between the Company and HOC without the Company having executed and delivered this Agreement; and
E. The Board of Directors has authorized the Company to enter into this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual premises, covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by both parties, the parties hereby covenant and agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions. In this Agreement, unless the context otherwise requires:
(a) "Acceptance Notice" has the meaning ascribed to it in Section 4.1(e);
(b) "Additional Securities" has the meaning ascribed to it in Section 4.1(a);
(c) "Additional Shares" has the meaning ascribed to it in Section 2.1;
(d) "Affiliate" shall have the meaning ascribed thereto in the Securities Act;
(e) "Agreement" means this strategic alliance agreement and any instrument amending this Agreement and "hereof", "hereto", "hereunder" and similar expressions mean and refer to this Agreement and not to a particular Article, Section, Subsection or Paragraph;
(f) "Alternative Proposal" has the meaning ascribed to it in Section 9.1;
(g) "Authority" and "Authorities" means any (i) multinational, federal, provincial, state, regional, municipal, local or other government, governmental or public department, securities commission (including the Securities Commissions), central bank, court, tribunal, arbitral body, commission, board, bureau or agency, domestic or foreign, (ii) any subdivision, agent, commission, board, or authority of any of the foregoing, or (iii) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing, and includes a stock exchange and any other self-regulatory authority;
(h) "Board of Directors" means the board of directors of the Company;
(i) "Business Day" means any day which is not a Saturday, a Sunday or a day on which banks are generally closed for business in Denver, Colorado or London, England;
(j) "Claims" means all losses, damages, expenses, Liabilities, claims and demands of whatever nature or kind, including all reasonable legal fees and disbursements;
(k) "Closing Date" has the meaning given to it in the Subscription Agreement;
(l) "Commencement of Production" has the meaning given to it in Section 2.3;
(m) "Common Stock" has the meaning given to it in Section 4.1(a);
(n) "Company" has the meaning given to it in the preamble hereto;
(o) "Company Indemnitees" has the meaning given to it in Section 11.2;
(p) "Convertible Securities" means all warrants, rights, agreements, options, or Debt Instruments present or future, contingent or absolute, or any right or privilege capable of becoming a right, agreement or option, for the purchase, subscription or issuance of any Shares in the Company or any other security or Debt Instruments convertible or exchangeable for Shares, including options granted to officers, directors or employees, and whether issued pursuant to the Stock Option Plan;
2
(q) "Debt Instrument" means any loan, bond, debenture, promissory note or other instrument evidencing material indebtedness of the Company for borrowed money or other material liability;
(r) "Equity Securities" means Shares, Convertible Securities and any other equity or voting securities of the Company;
(s) "Existing Properties" has the meaning given to it in the preamble hereto;
(t) "Financing Election" has the meaning ascribed to it in Section 2.3;
(u) "HOC Director" has the meaning ascribed to it in Section 5.1;
(v) "HOC Entities" means HOC and its Affiliates, and any person acting jointly or in concert with any of them, excluding, for greater certainty, the Company and any of its Subsidiaries to the extent they may be or become Affiliates at any relevant point in time;
(w) "HOC Indemnitees" has the meaning ascribed to it in Section 11.1;
(x) "HOC JV Acceptance Notice" has the meaning ascribed to it in Section 6.2(b);
(y) "HOC Option" has the meaning ascribed to it in Section 2.1;
(z) "Joint Venture Proposal Notice" has the meaning ascribed to it in Section 6.2(a);
(aa) "JV Negotiation Period" has the meaning ascribed to it in Section 6.2(b);
(bb) "Laws" means any and all applicable (i) laws, constitutions, treaties, statutes, codes, ordinances, orders, decrees, rules, regulations and municipal by-laws, (ii) judicial, arbitral, administrative, ministerial, departmental or regulatory judgments or orders of any Authorities, and (iii) policies, guidelines and protocols;
(cc) "Liabilities" means, with respect to any Person, any liability or obligation of such Person of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due;
(dd) "Lien" means any mortgage, easement, encroachment, adverse claim, and assignment by way of security, security interest, servitude, pledge, charge, lien, assignment, hypothecation, conditional sale agreement, title retention, preferential right, trust arrangement, right of set-off, counterclaim or banker's lien, financing statement, privilege or priority, or other encumbrance of any kind having the effect of security, any designation of loss payees or beneficiaries or any similar arrangement under or with respect to any insurance policy or any preference of one creditor over another arising by operation of law;
(ee) "Market Purchases" has the meaning ascribed to it in Section 3.1;
3
(ff) "Option Exercise Notice" has the meaning ascribed to it in Section 2.1;
(gg) "Option Expiration Date" has the meaning ascribed to it in Section 2.1;
(hh) "Options" means outstanding options to acquire Shares under the Stock Option Plan;
(ii) "Other Purchasers" has the meaning ascribed to it in Section 4.1(a);
(jj) "Parties" means the Company and HOC and their successors and permitted assigns; and "Party" means any one of them;
(kk) "Person" means an individual, partnership, unincorporated association, organization, syndicate, corporation or trust or a trustee, executor, administrator or other legal or personal representative;
(ll) "Private Agreement Purchases" means purchases of Equity Securities other than on any stock exchange on which the Shares are then listed or quoted provided such purchases are made in accordance with applicable Laws, including applicable Securities Laws;
(mm) "Pro Rata Interest" has the meaning ascribed to it in Section 4.1(a);
(nn) "Proposed Joint Venture" has the meaning ascribed to it in Section 6.1(a);
(oo) "Properties" has the meaning ascribed to it in the Preamble hereto;
(pp) "Purchased Shares" shall mean the shares of Common Stock to be acquired by HOC pursuant to the terms of the Subscription Agreement.
(qq) "Rights Notice" has the meaning ascribed to it in Section 4.1(c);
(rr) "Securities Exchange Act" means the Securities Exchange Act of 1934;
(ss) "Securities Commissions" means the securities regulator in each jurisdiction whose Securities Laws are applicable to the Company;
(tt) "Securities Laws" means the Laws relating to securities of the Company, and the regulations and rules made and forms prescribed thereunder together with all applicable published policy statements, blanket orders, rulings and notices adopted by the Securities Commissions of each such jurisdiction or applicable in such jurisdictions;
(uu) "Shareholders" means the holders of Shares;
(vv) "Shares" means common shares or any other securities into which the common shares in the capital of the Company are reorganized, exchanged or converted;
(ww) "Stock Option Plan" means any stock option plan, agreement or arrangement adopted by the Company from time to time which provides for the issuance of options to acquire Shares;
4
(xx) "Subscription Agreement" has the meaning ascribed to it in the Preamble hereto;
(yy) "Subsequent Closing Date" has the meaning ascribed to it in Section 2.1;
(zz) "Transactions" means the transactions contemplated in this Agreement.
1.2 Gender and Certain References. Whenever the context requires, the gender of all words used shall include the masculine, feminine and neuter, and the number of all words shall include the singular and plural. The terms "hereof", "herein" or "hereunder"shall refer to this Agreement as a whole and not to any particular Article or Section hereof. All titles and headings to Articles and Sections in this Agreement are included for convenience and ease of reference. Titles and headings shall not affect in any way the meaning or interpretation of Articles or Sections of this Agreement. Any references to specific Articles or Sections shall mean the Articles and Sections in this Agreement.
ARTICLE 2 ADDITIONAL INVESTMENTS BY HOC
2.1 HOC Option to Purchase Additional Shares. From and after the Closing Date and until 5:00 pm Denver time on the date which is eighty (80) days from the Closing Date (the "Option Expiration Date"), HOC shall have the option (the "Option"), at its sole discretion, to subscribe for all, but not less than all, of an additional 4,330,000 Shares from the Company (the "Additional Shares") at a price of US$3.00 per share, or a total of US$12,990,000. If HOC wishes to exercise the Option, it shall give written notice to the Company (the "Option Exercise Notice") prior to the Option Expiration Date in the manner set forth in Section 12.1 of this Agreement. If HOC fails to deliver the Option Exercise Notice on or before the Option Expiration Date, HOC shall be deemed to have waived its rights under this Section 2.1. In the event HOC exercises the Option, one or more of the HOC Entities shall subscribe and pay for and the Company shall issue to the relevant HOC Entities, free and clear of any liens or encumbrances, the Additional Shares and the Parties shall exchange representations and warranties substantially similar to those contained in the Subscription Agreement and execute such documents as may be necessary to complete the subscription and sale of the Additional Shares. Closing of the purchase and sale of the Additional Shares shall take place within ten (10) business days of the delivery of the Option Exercise Notice, such date being referred to as the "Subsequent Closing Date".
2.2 Use of Proceeds. In the event HOC exercises the Option, the Company agrees to use not less than five million U.S. Dollars (US$5,000,000) of the proceeds from the subscription of the Purchased Shares and the Additional Shares to fund exploration activities (including but not limited to drilling, assaying and staking new claims) on the El Aguila project. The Company further agrees that the balance of the proceeds from the subscription of the Purchased Shares and the Additional Shares shall be used as follows: (i) ten million U.S. Dollars (US$10,000,000) to fund the development and construction of the mine and plant for the El Aguila project; and (ii) three million U.S. Dollars (US$3,000,000) for working capital of the Company and other investments in the El Aguila project.
5
2.3. Additional Financing. Subject to the provisions of Section 8.2, if the Company determines to solicit additional equity financing subsequent to exercise of the Option but prior to Commencement of Production (hereinafter defined) at the El Aguila project, it shall provide written notice to that effect to HOC and HOC shall be entitled to exclusively provide such financing upon the terms and conditions hereinafter set forth. For purposes of the preceding sentence, "Commencement of Production" shall be defined as the production and delivery to the point of sale (refiner) by the Company (either directly or through a subsidiary) of not less than 4,000 ounces of gold within a 45 day period. HOC shall have ten (10) Business Days from delivery of such notice in which to notify the Company that it desires to provide all of such financing (the "Financing Election"). If HOC delivers the Financing Election, the purchase price for each share shall be equal to eighty percent (80%) of the average closing price of the Shares during the thirty (30) calendar days preceding the date HOC delivers the Financing Election. Closing of the subscription, purchase and sale shall be at such place and time as the Parties agree but not more than ten (10) days from delivery of the Financing Election. If HOC delivers the Financing Election, one or more of the HOC Entities shall pay the purchase price for, and the Company shall issue, additional Shares, free and clear of all liens and encumbrances. The Parties shall exchange representations and warranties, in form and in substance substantially similar to those provided in the Subscription Agreement and execute such documents as may be necessary to complete the subscription and sale of the Shares. In the event HOC fails to provide the Financing Election as set forth above, the Company shall be free to obtain such financing from one or more additional parties, free of any obligation to HOC.
ARTICLE 3 MARKET PURCHASES AND PRIVATE PURCHASES
3.1 Market Purchases.Subject to compliance with applicable laws, the HOC Entities shall at any time and from time to time, in their sole discretion, be entitled to make purchases of the Company's common stock in the over-the-counter market or on any stock exchange on which its common stock is then quoted or listed (the "Market Purchases"); provided, however, that for a period of two (2) years following the Closing Date, unless the Parties otherwise agree, the HOC Entities do not beneficially own, directly or indirectly, more than forty percent (40%) of the Company's outstanding common stock on an undiluted basis, following any Market Purchase and any Private Agreement Purchase. For purposes of this Agreement, beneficial ownership shall be determined in accordance with the provisions of Rule 13d-3 of the Securities Exchange Act.
3.2 Private Purchase.In addition to Market Purchases, as described in Section 3.1 above, HOC shall be entitled to make Private Agreement Purchases, provided that such purchases are made in accordance with all applicable laws; and provided further, that for a period of two (2) years following the Closing Date, unless the Parties otherwise agree, the HOC Entities will not beneficially own more than forty percent (40%) of the Company's outstanding common stock on an undiluted basis following any Market Purchase and/or Private Agreement Purchase. At the request of HOC, the Company shall introduce HOC to persons whom the Company believes may be interested in selling its common stock.
6
ARTICLE 4 PRE-EMPTIVE RIGHT
4.1 HOC's Pre-emptive Right.
(a) Subject to the provisions of subsection (g) of this Section 4.1 and Section 8.2 hereof, if at any time after the Closing Date, the Company proposes to issue or sell Equity Securities ("Additional Securities") other than (i) under any Stock Option Plan, (ii) pursuant to the exercise of options under any Stock Option Plan, (iii) upon the exercise, exchange or conversion of any Convertible Securities, or (iv) for property other than money, the HOC Entities shall have the right to subscribe for and purchase Additional Securities, at the price at which such Additional Securities are offered for sale to other purchasers (the "Other Purchasers"), up to its Pro Rata Interest (as defined below) prior to giving effect to the issuance or sale of such Additional Securities. "Pro Rata Interest" means, at any relevant time, the ownership interest of HOC, expressed as a percentage, equal to: (i) the number of outstanding shares of common stock of the Company ("Common Stock") beneficially owned by the HOC Entities, including all shares of Common Stock issuable upon the conversion, exercise or exchange of all Convertible Securities beneficially owned by the HOC Entities divided by (ii) the aggregate number of outstanding shares of Common Stock, plus the number of shares of Common Stock issuable upon the conversion, exercise or exchange of all outstanding Convertible Securities;
(b) If the Company issues Equity Securities in circumstances that would not give rise to the rights of the HOC Entities pursuant to Section 4.1(a) (the "Non-Participating Transaction"), then in any concurrent or subsequent transaction which does give rise to the rights of the HOC Entities pursuant to Section 4.1(a) (the "Participating Transaction"), the Company shall allow the HOC Entities to subscribe for and purchase Additional Securities in an amount greater than HOC's Pro Rata Interest; provided that in the Participating Transaction, HOC shall not be entitled to purchase any more than its Pro Rata Interest of the securities sold collectively in the Non-Participating Transaction and the Participating Transaction.
(c) If the Company intends to authorize and/or issue equity securities that give rise to the rights of HOC pursuant to Section 4.1(a), the Company shall provide notice to HOC (the "Rights Notice") no less than ten (10) business days before the date on which the Company intends to issue equity securities giving rise to the rights of HOC in Section 4.1(a).
(d) The Rights Notice shall specify sufficient information regarding the particulars of the issuance or sale of the Additional Securities to allow HOC to make a reasoned decision in respect of making the investment, including to the extent any such terms are determinable at such time: (i) the total number of equity securities outstanding as of the date thereof; (ii) the total number of Additional Securities which are being offered; (iii) the rights, privileges, restrictions, terms and conditions of such Additional Securities; (iv) the amount payable by HOC for the Additional Securities to which it is entitled pursuant to Section 4.1(a); and (v) the proposed closing date, and thereafter, to the extent it is not included in the Rights Notice, the Company shall immediately provide notice to HOC of such information as it is determined.
(e) HOC shall give notice (an "Acceptance Notice") to the Company not later than 5:00 p.m. (Denver time) on the tenth business day following the deemed receipt of any Rights Notice given under paragraph 4.1(c) setting out the number of Additional Securities, if any, which any of HOC Entities intends to subscribe for and purchase and, if applicable, the name and address of HOC Entity whose name in which such securities should be registered, provided that if HOC, acting reasonably, determines that it has insufficient information to make such investment decision, HOC shall notify the Company of the information required to make such investment decision and thereafter shall have the longer of (i) the remainder of the ten (10) Business Days set out in the first sentence of this paragraph; or (ii) two (2) Business Days from the receipt of such additional information to make the investment decision and deliver or refrain from delivering the Acceptance Notice. Notwithstanding the preceding sentence, the Rights Notice shall be deemed to include sufficient information to make such investment decision if it includes the information specified in items (i) to (iv) of Section 4.1(d). If no Acceptance Notice has been provided to the Company within the required time, HOC will be deemed to have elected not to subscribe for or purchase any such Additional Securities.
7
(f) Following delivery of the Acceptance Notice, if any, the HOC Entities shall pay for, and the Company shall issue to the relevant HOC Entities, free and clear of any liens, the number of Additional Securities specified in the Acceptance Notice and, except as otherwise agreed, the Company shall provide HOC with substantially the same closing documents, including opinions, if applicable, as are delivered to the other persons subscribing for Additional Securities on the closing date for such issuance.
(g) The rights granted to HOC under this Article 4 shall terminate and be of no further force or effect if HOC does not exercise Option and complete the purchase of the Additional Shares.
ARTICLE 5 BOARD REPRESENTATION
5.1 Appointment of HOC Nominee. If, but only if HOC exercises the Option and completes the acquisition of the Additional Shares, HOC shall be entitled to nominate one (1) individual to the Board of Directors (the "HOC Director"). Upon receipt of such nomination and its satisfaction that the individual nominated by HOC meets the qualification requirements for directors under applicable laws, the Board of Directors further agrees to expand its membership to four (4) positions and appoint the individual nominated by HOC to the newly-created vacancy. The Board of Directors further agrees that if HOC maintains a Pro Rata Interest of at least 14.5%, it shall nominate such individual to the slate of directors at each subsequent annual meeting so long as the provisions of Section 8.2 are not invoked.
5.2 Increase in Membership of the Board of Directors. If HOC acquires the Additional Shares and subsequently acquires additional Shares such that it holds a Pro Rata Interest of 40% or more, HOC shall be entitled to appoint one (1) additional individual to the Board of Directors. For greater clarity, if HOC exercises the Option and holds a Pro Rata Interest of at least 40%, HOC shall be entitled to appoint a total of two (2) individuals to the Board of Directors. Upon receipt of a nomination from HOC for the second director and its satisfaction that the individual meets the qualification requirements for directors under applicable law, the Board of Directors agrees to expand its membership to five positions and appoint the individual nominated by HOC to the newly created vacancy. The Board of Directors further agrees that so long as HOC maintains a Pro Rata Interest of at least 35%, it shall nominate such individual to the slate of directors at each subsequent annual meeting so long as the provisions of Section 8.2 are not invoked. The Company further agrees that if HOC exercises the Option and so long as the provisions of Section 8.2 are not invoked, it will not take any action to authorize and will cause the Board of Directors not to authorize any proposal to expand the Board beyond five (5) members without the advance written approval of HOC.
8
5.3 Board Meetings. At all times when the provisions of Section 5.1 are satisfied, the Company shall provide HOC Director(s) not less than 7 (seven) Business Days advance written notice of the date on which any meeting of the Board of Directors shall be held. In providing such notice, the Company shall take into consideration the matters to be discussed at the meeting, the proximity to the place of the meeting and the time zone in which the HOC Director is resident.
5.4 Resignation of HOC Director(s). If (x) one or both HOC Directors do not meet the individual qualifications for a director prescribed by applicable laws, (y) the Pro Rata Interest of HOC falls below 14.5%, or (z) the provisions of Section 8.2 hereof become applicable and the Company delivers notice to HOC to that effect, all of the HOC Directors shall forthwith resign; provided, however, that in the event of (x), HOC shall then be entitled to appoint an individual to replace the resigning director(s) and such resigning director(s) shall be afforded the benefits of any indemnity and insurance as may exist for all matters occurring prior to such resignation.
5.5 Indemnification and Director's and Officer's Insurance. So long as HOC is entitled to nominate and maintain a director pursuant to this Article 5, the Company shall indemnify each current and former HOC Director and shall maintain director's and officer's liability insurance for the benefit of each such director, with the same rights and benefits as are accorded the directors of the Company generally.
ARTICLE 6 RIGHT OF FIRST OFFER
The provisions of this Article 6 shall apply if, but only if, HOC exercises the Option and acquires the Additional Shares and so long as the provisions of Section 8.2 do not apply:
6.1 Joint Venture
(a) If the Company or any of its Subsidiaries decides to seek a joint venture partner to develop, acquire or otherwise earn an interest in any Properties including the Existing Properties, in circumstances where the Company's participation in such joint venture is not dependent on the participation of a particular third party as joint venture partner (such as in the case of an earn-in) (each a "Proposed Joint Venture"), the Company shall immediately provide notice to HOC (the "Joint Venture Proposal Notice") specifying sufficient information regarding the particulars of the Proposed Joint Venture to allow HOC to make a reasoned decision in respect of participating in the Proposed Joint Venture, including to the extent any such terms are determinable at such time: (A) a description of the Property in respect of which the Proposed Joint Venture relates, and (B) the terms, including the purchase price, for the Proposed Joint Venture, and if applicable, a true copy of any related term sheet setting forth such terms.
Notwithstanding the foregoing, nothing in this Section 6.1 shall prevent the Company from concurrently negotiating with third parties with respect to those matters set out in this Section 6.1.
(b) If HOC, acting reasonably, determines that the Joint Venture Proposal Notice contains insufficient information to make a reasoned decision in respect of participating in the Proposed Joint Venture, it shall notify the Company of the information required to make such decision and thereafter shall have the greater of (i) five (5) Business Days from the receipt of such information from the Company, and (ii) the days remaining in the period specified in Section 6.2 to make such decision and deliver or refrain from delivering the HOC JV Acceptance Notice in accordance with such Section 6.2. Notwithstanding the foregoing, a copy of the term sheet for the Proposed Joint Venture shall be deemed to be sufficient information to make such reasoned decision, if it includes the information specified in Section 6.1(a).
9
6.2 Joint Venture Proposal
(a) Receipt of the Joint Venture Proposal Notice by HOC shall be deemed to constitute an invitation to HOC Entities to participate in the Proposed Joint Venture.
(b) If any of HOC Entities provides the Company an acceptance (the "HOC JV Acceptance Notice") in writing in respect of the Joint Venture Proposal Notice, within fifteen (15) Business Days of receipt thereof or such shorter period as may be specified in the Joint Venture Proposal Notice of a determination in respect of the Proposed Joint Venture, the Company shall negotiate exclusively in good faith with HOC to finalize terms of the Proposed Joint Venture acceptable to each of the Parties, acting reasonably, within a period of sixty days or such additional period as the Parties may from time to time agree in writing (the "JV Negotiation Period"), failing which the Company shall be entitled to pursue other partners for the Proposed Joint Venture. If HOC does not provide HOC JV Acceptance Notice to the Company within fifteen (15) Business Days or such shorter period as may be specified in the Joint Venture Proposal Notice, of receiving of the Joint Venture Proposal Notice, the Company may enter into negotiations with any other person regarding the Proposed Joint Venture. If the Company truncates the period during which the HOC JV Acceptance Notice is required to be returned by HOC, it shall include in the Joint Venture Proposal Notice a statement certified by an officer of the Company that the Company has determined that it is necessary to truncate such period to avoid losing the opportunity to make such acquisition or other related transaction and that it has used commercially reasonable efforts to avoid truncating such period.
ARTICLE 7 STANDSTILL
The provisions of this Article 7 shall apply if HOC acquires the Additional Shares and for a period of two (2) years after the Subsequent Closing Date:
7.1 Standstill
(a) HOC covenants and agrees that, except as otherwise contemplated in this Agreement, HOC will not, and will not allow any HOC Entities to, in either case, without the prior written consent of the Company, directly or indirectly:
(i) acquire or enter into any agreement to acquire or make any proposal or offer to acquire in any manner any equity securities of the Company (whether issued or unissued) that would result in a Pro Rata Interest greater than 40% other than (A) as a result of a stock dividend or distribution made by or a recapitalization of the Company, (B) in accordance with the terms of any dividend reinvestment or share purchase plan made available from time to time by the Company to holders of equity securities; (C) pursuant to the exercise of rights issued pursuant to a rights offering made by the Company to the holders of its equity securities; or (D) pursuant to the exercise of rights issued pursuant to any shareholder rights plan of the Company and attached to equity securities;
10
(ii) assist, encourage or advise any other person to acquire or agree to acquire in any manner any equity securities;
(iii) propose or support or engage in any discussions or negotiations with respect to, or enter into any agreement, commitment or understanding with any third party to effect, any tender offer, merger, business combination, asset or share transaction, financing transaction or corporate restructuring involving the Company;
(iv) make or participate directly or indirectly in any solicitation of proxies from shareholders of the Company;
(v) form, join or in any way participate in any group acting jointly or in concert with any of the foregoing; or
(vi) make any public disclosure of any intention in connection with the foregoing;
(each an "Acquisition Proposal").
(b)Notwithstanding Section 6.1, none of the HOC Entities shall be prohibited from making an Acquisition Proposal:
(i) in the event the Company materially breaches its obligations under Section 2.3 (Additional Financing), Article 4 (Pre-Emptive Right), Article 5 (Board Representation) or Article 6 (Right of First Offer), provided that HOC has notified the Company of any alleged breach and the Company has failed to cure such alleged breach, if curable, within thirty days of such notice;
(ii) from the date any public announcement of or public disclosure of an intention to commence or enter into any agreement with respect to any of the following is made by any person (other than any HOC Entity) to the date of the withdrawal or cancellation of the Tender Offer Transaction or Business Combination Transaction (each as defined below):
A) a tender offer or an intention to undertake a tender offer for equity securities of the Company by any person or group of persons (other than any HOC Entities) which if completed would result in such tender offer person or group of persons holding 20% or more on a non-diluted basis of any class of then outstanding equity securities of the Company (a "Tender Offer Transaction"); or
11
B) any acquisition (excluding a Tender Offer Transaction), merger, asset purchase and sale, business combination
B) any acquisition (excluding a Tender Offer Transaction), merger, asset purchase and sale, business combination transaction or other extraordinary transaction involving or relating to the Company or any of its subsidiaries, or an intention to make an offer to the Company and/or its subsidiaries to undertake such a transaction, by any person or group of persons (other than any HOC Entities) which would, if completed, result in (I) any class of outstanding equity securities being converted into cash or securities of another person resulting in shareholders holding less than 50% of the equity and/or voting securities of the resulting entity; or (II) all or substantially all of the Company's assets being sold to any person or group of persons (other than any HOC Entities) (a "Business Combination Transaction"), provided that in the case of this Section 6.1(b)(ii)(B) HOC must make such Acquisition Proposal confidentially to the Board of Directors and not by way of public offer to the shareholders.
For greater certainty, if HOC has commenced an Acquisition Proposal in reliance on this Section 6.1(b)(ii) or in respect of Section 6.1(b)(ii)(B), has agreed with the Company to an Acquisition Proposal, prior to the withdrawal or cancellation of such Tender Offer Transaction or Business Combination Transaction, HOC shall not be precluded from continuing with such Acquisition Proposal by reason only of the withdrawal or cancellation of any relevant Tender Offer Transaction or Business Combination Transaction; or
(iii) if a person or group of persons other than any of the HOC Entities, the Company or its subsidiaries obtains proxies carrying a majority of the votes attached to all outstanding voting securities of the Company and exercises such votes to replace the Board of Directors.
7.2 Most Favored Nation. The Company shall immediately inform HOC and provide HOC with a copy of any other standstill provisions in any agreement pertaining to the matters set forth in this Article 6, entered into by the Company with another person subsequent to the date hereof, and notwithstanding delivery of such notice and a copy of any such provisions, HOC shall have the full benefit of any materially more favourable terms, in the opinion of HOC, contained in such standstill and Section 6.1 shall be deemed to be amended accordingly.
ARTICLE 8 COVENANTS
8.1 Designation of Consulting Geologists. During the time up to the Option Expiration Date, and thereafter if HOC exercises the Option and acquires the Additional Shares and the provisions of Section 8.2 do not apply, HOC shall have the right to designate one full or part time geologist to act as a consultant to the Company at any of its Existing Properties for the purpose of advising the Company with regard to ongoing exploration and development. The Company shall provide such geologist with room and board while such geologist is on-site at any of the Existing Properties. HOC, however, shall be responsible for payment of any compensation for such geologist. Other consulting services which may be required by the Company, including metallurgical, underground mining engineering or concentrate contract negotiations, may be requested from HOC, and provided that HOC agrees to deliver those services, any charges for such services shall be billed by HOC to the Company at no more than HOC's actual cost plus 1%.
12
8.2 Termination of Certain HOC Rights. Notwithstanding anything in this Agreement to the contrary, in the event (i) HOC shall hold a Pro Rata Interest less than 14.5% or (ii) HOC shall have achieved a Pro Rata Interest greater than 14.5% but subsequently sells or otherwise disposes of 20% or more of its Pro Rata Interest in any one or more transactions, the benefits provided to HOC pursuant to the provisions of Section 2.3 (Additional Financing), Article 4 (Pre-Emptive Rights), Article 5 (Board Representation), Article 6 (First Offer) and Section 8.1 (Designation of Geologist) above shall immediately terminate and be of no further force or effect. Furthermore, any HOC Director nominated and appointed pursuant to the provisions of Section 5.1 or 5.2 shall immediately resign in the event that the provisions of subsection (i) or (ii) above shall be applicable.
ARTICLE 9 ADDITIONAL COVENANTS
9.1 Covenants of the Company.
(a) Prior to the Option Expiration Date, the Company shall not and shall not permit its Affiliates, agents or other representatives (including any director, officer, investment banker, legal advisor or accountant retained by the Company or any of its Susidiaries) to:
(i) initiate, solicit, promote or encourage, directly or indirectly, inquiries or the submission of proposals or offers from any Person with respect to any proposal or offer or action that would reasonably be expected to delay, prevent or frustrate the Transactions or any part thereof (an "Alternative Proposal");
(ii) encourage, or participate or engage in negotiations concerning, or furnish to any Person other than to HOC Entities, any non-public information with respect to, or otherwise co-operate in any way with, or participate in, or facilitate or encourage any Person to make an Alternative Proposal; or
(iii) endorse, accept, approve or recommend a proposal of, or enter into any Contract or understanding with , any Person relating to an Alternative Proposal, or otherwise facilitate any effort or attempt to make or implement an Alternative Proposal.
(b) Notwithstanding anything else in this Section 9.1, if the Company or any of its subsidiaries receives an unsolicited Alternative Proposal prior to the Option Exercise Date, the Board of Directors may participate in discussions with, furnish information to, or enter into an agreement with the Person that initiated the Alternative Proposal only if: (x) the Board of Directors determines in good faith, after consultation with outside counsel, that such action is necessary in order for them to act in a manner consistent with their fiduciary duty under applicable Laws; (y) the Company shall have provided to HOC notice at least five (5) Business Days prior to the date on which the agreement to effect such Alternative Proposal is to be entered into specifying the terms of the Alternative Proposal; and (z) after taking into account modifications to this Agreement proposed by HOC during such five Business Day period, such proposal would constitute a superior proposal ("Superior Proposal"). If HOC makes a proposal to amend this Agreement to increase the purchase price payable for the Additional Shares, such that the proposal of such other Person shall no longer be a Superior Proposal, and shall complete the purchase of the Additional Shares upon such terms, then neither the Company nor its subsidiaries shall enter into such Alternative Proposal.
13
(c) The Company shall comply with all securities regulatory filing requirements on a timely basis in connection with the issuance of any Equity Securities of the Company to any HOC Entity, including filing within the periods stipulated under Securities Laws, at the Company's expense, all private placement forms required to be filed by the Company and paying all filing fees required to be paid in connection therewith so that such issuance may lawfully occur without the necessity of filing a prospectus, registration statement or any similar document under the Securities Laws.
(d) The Company shall, to the extent and for so long as HOC Entities hold at least 14.5% of the Shares on a non-diluted basis, upon HOC's request, permit representatives of the HOC Entities to have access to the site and any of the premises where the business and operations of the Company and its Subsidiaries are conducted and access and duplicating rights (and use commercially reasonable efforts to cause persons or firms possessing such documentation or information to give similar access and duplicating rights) to the Company and its Subsidiaries' books of account and records and such other documents, communications, items and matters, within the knowledge, possession or control of the Company, which HOC may reasonably request, at HOC's own cost (other than those it is permitted to examine and make copies of free of charge pursuant to applicable Laws) provided that, except to the extent the information can be provided in the necessary course of business of the Company, acting reasonably including to provide HOC Entities with information to assist the HOC Entities and their advisors with the preparation of the financial statements for such HOC Entities, nothing herein shall require the Company to provide HOC Entities with any information which would constitute a material fact with respect to the Company which has not been generally disclosed.
(e) In the event the Company shall breach any representation or warranty, covenant or any other right of HOC under this Agreement in any material respect, including but not limited to, the rights afforded to HOC under Articles 2, 4, 5, 6 and 8 hereof, then at the request of HOC, the Company shall promptly prepare and file with the SEC a registration statement on Form S-l or S-3 (or, if Form S-l or S-3 is not then available, on such form of registration statement as is then available to effect a registration for resale of the Purchase Shares and the Additional Shares ("Registration Statement")), covering the resale of all of the Shares owned by HOC; provided, however, that if prior to the filing of the Registration Statement, the provisions of Rule 144 of the Securities Act of 1933, as amended (the "1933 Act") allow the sale of all of the Shares in compliance with that Rule, the Company shall not be obligated to file such Registration Statement so long as the Company at its own expense, does the following: (i) complies with any necessary filing or reporting requirements (under the 1933 Act or otherwise) to permit such sale, (ii) cooperates with HOC in removing any legend on the certificates representing the Shares, including but not limited to instructing its transfer agent to remove such restrictive legend and (iii) provides HOC with an opinion of counsel confirming that such sale is permitted under Rule 144. Such Registration Statement also shall cover, to the extent allowable under the 1933 Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Shares. The Company shall pay all expenses associated with the registration, including filing and printing fees, counsel and accounting fees and expenses, and State "Blue Sky" fees and expenses. The Company shall use its commercially reasonable efforts to have the Registration Statement declared effective by the SEC as soon as practicable. The Company shall notify HOC by facsimile or e-mail as promptly as practicable, and in any event, within three (3) business days, after the Registration Statement is declared effective and shall simultaneously provide HOC with copies of any related prospectus to be used in connection with the sale or other disposition of the securities covered thereby.
14
(f) In connection with the foregoing, the Company shall indemnify and hold harmless HOC against any losses, claims, damages or liabilities to which it may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement or any other public filing by the Company, so long as such statement has not been provided to the Company by HOC for inclusion in such registration statement; (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, so long as such omission or alleged omission does not relate to HOC or the manner of sale for the Shares as provided to the Company by HOC; or (iii) any violation of the 1933 Act, any rule or regulation thereunder or any other securities law, rule or regulation applicable to the Company and relating to the action or inaction required of the Company in connection therewith. The foregoing indemnification obligation shall extend to the fees and expenses of any counsel retained by HOC in connection with any such loss, claim, damage or liability.
ARTICLE 10 REPRESENTATIONS & WARRANTIES
10.1 Representations and Warranties of the Company. The Company represents, warrants and agrees with HOC as of the date of this Agreement, that:
(a) The Company is a corporation duly incorporated under the laws of the State of Colorado, and is validly existing and in good standing under the laws of the State of Colorado and no proceedings have been instituted or are pending for the dissolution or liquidation of the Company;
(b) The Company has all requisite legal and corporate power and authority to execute, deliver and perform its obligations under this Agreement;
(c) This Agreement has been duly authorized by all necessary corporate action on the part of the Company and has been duly executed and delivered by the Company and constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms; and
15
(d) The execution and delivery of this Agreement and the performance by the Company of its obligations hereunder and the consummation of the Transactions, do not and will not conflict with, or result in a breach or violation of, any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time or both): (i) the constating documents of the Company; (ii) the resolutions of the shareholders or directors (or any committee thereof) of the Company which are in effect at the date hereof; (iii) any mortgage, note, indenture, contract, agreement, instrument, lease or other document to which the Company is a party or by which it is bound; or (iv) any judgement, writ, injunction, decree or order, of any court or of any Authority that is binding the Company or the property or assets of the Company.
10.2 Representations and Warranties of HOC. HOC represents, warrants and agrees with the Company as of the date of this Agreement, that:
(a) HOC is a limited company incorporated under the Companies Act 1985 (England) as a limited company, registered in England and Wales, and is validly existing and in good standing under the laws of England and no proceedings have been instituted or are pending for the dissolution or liquidation of HOC;
(b) HOC has all requisite legal and corporate power and authority to execute, deliver and perform its obligations under this Agreement;
(c) this Agreement has been duly authorized by all necessary corporate action on the part of HOC and has been duly executed and delivered by HOC and constitutes a valid and legally binding obligation of HOC enforceable against HOC in accordance with its terms; and
(d) the execution and delivery of this Agreement and the performance by HOC of its obligations hereunder and the consummation of the Transactions, do not and will not conflict with, or result in a breach or violation of, any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time or both): (i) the constating documents of HOC; (ii) the resolutions of the shareholders or directors (or any committee thereof) of HOC which are in effect at the date hereof; (iii) any mortgage, note, indenture, contract, agreement, instrument, lease or other document to which HOC is a party or by which it is bound; or (iv) any judgement, writ, injunction, decree or order, of any court or of any Authority that is binding on HOC or the property or assets of HOC.
ARTICLE 11 INDEMNIFICATION
11.1 Indemnification by the Company.
The Company will indemnify and save harmless the HOC Entities and the directors, officers, employees and agents of the HOC Entities (collectively, the "HOC Indemnitees") from and against all Claims incurred by any one or more of the HOC Indemnitees directly or indirectly resulting from any breach of any covenant, representation or warranty of the Company contained in this Agreement.
16
11.2 Indemnification by HOC.
HOC will indemnify and save harmless the Company and the directors, officers, employees and agents of the Company (collectively, the "Company Indemnitees") from and against all Claims incurred by any one or more of the Company Indemnitees directly or indirectly resulting from any breach of any covenant, representation or warranty of HOC contained in this Agreement.
11.3 Injunctive Relief.
Notwithstanding any other provision of this Agreement, nothing herein is intended to or shall restrict a Party from seeking and receiving injunctive relief (whether as a temporary restraining order, preliminary injunction or otherwise) or specific performance.
ARTICLE 12 MISCELLANEOUS PROVISIONS
12.1 Notices. All notices or other communications required or permitted to be given by one party to another by the terms hereof shall be given in writing by personal delivery or facsimile delivered to such other party as follows:
To the Company:
Gold Resource Corporation 222 Milwaukee St., Suite 301 Denver, CO 80206 Attention: William Reid, President Facsimile No.: (303) 320-7835
To HOC:
Hochschild Mining Holdings Limited Calle La Colonia 180 Surco, Lima 33, Peru Attention: VP & General Counsel Facsimile No.: +511-437-5009
or at such other address or facsimile number as may be given by either of them to the other in writing from time to time and such other notices or communications shall be deemed to have been received when delivered or, if by facsimile, on the next business day after such notice or other communication has been transmitted by facsimile (with receipt confirmed).
17
12.2 Further Assurances. Each of the parties hereto upon the request of each of the other parties hereto, whether before or after the date of this Agreement, shall do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered all such further acts, deeds, documents, assignments, transfers, conveyances, powers of attorney and assurances as may reasonably be necessary or desirable to complete the transactions contemplated herein.
12.3 Costs and Expenses. All costs and expenses (including, without limitation, the fees and disbursements of legal counsel) incurred in connection with this Agreement and the transactions herein contemplated shall be paid and borne by the party incurring such costs and expenses.
12.4 Applicable Law. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of New York and the laws of the United States applicable therein. Any and all disputes arising under this Agreement, whether as to interpretation, performance or otherwise, shall be subject to the non-exclusive jurisdiction of the courts of Colorado and each of the parties hereto hereby irrevocably attorns to the jurisdiction of the courts of such province.
12.5 Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the transactions contemplated herein and cancels and supersedes any prior understandings, agreements, negotiations and discussions between the parties. There are no representations, warranties, terms, conditions, undertakings or collateral agreements or understandings, express or implied, between the parties hereto other than those expressly set forth in this Agreement or in any such agreement, certificate, affidavit, statutory declaration or other document as aforesaid.
12.6 Amendment and Waivers. No amendment of this Agreement will be effective unless made in writing and signed by the Parties. A waiver of any default, breach or non-compliance under this Agreement is not effective unless in writing and signed by the Party to be bound by the waiver. No waiver shall be inferred from or implied by any failure to act or delay in acting by a Party in respect of any default, breach or non-observance or by anything done or omitted to be done by the other Party in respect of any default, beach or non-observance or by anything done or omitted to be done by the other Party. The waiver by any Party of any default, breach or non-compliance under this Agreement shall not operate as a waiver of that Party's rights under this Agreement in respect of any continuing or subsequent default, breach or non-observance (whether of the same or any other nature).
12.7 Severability. If any one or more provisions in this Agreement, for any reason, shall be determined to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of any such provision in any other respect and the remaining provisions of this Agreement shall not be in anyway impaired.
12.8 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same Agreement. Counterparts may be delivered either in original or faxed form and the parties adopt any signature received by a receiving fax machine as original signatures of the parties.
12.9 Assignment. This Agreement may not be assigned by either party except with the prior written consent of the other parties hereto.
18
12.10 Enurement. This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, successors (including any successor by reason of the amalgamation or merger of any party), administrators and permitted assigns.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day and year first above written.
GOLD RESOURCE CORPORATIOn
By: ___________________________________________ Authorized Signing Officer
HOCHSCHILD MINING HOLDINGS LIMITED
By: ___________________________________________ Authorized Signing Officer
19 [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 10.1
STRATEGIC ALLIANCE AGREEMENT
THIS AGREEMENT dated for reference the 5th day of December 2008.
BETWEEN:
GOLD RESOURCE CORPORATION, a company organized under the laws of the State of Colorado, with registered office located at 222 Milwaukee Street, Suite 301, Denver, CO 80206 ("GRC" or "the Company")
AND:
HOCHSCHILD MINING HOLDINGS LIMITED, a private limited company organized under the laws of England and Wales, with registered office located at 46 Albemarle Street, London, England W1S 4JL ("HOC")
WHEREAS:
A. The Company is a mineral exploration and development company engaged in the acquisition and exploration, as well as development of mineral properties (the "Properties") in Mexico through its Mexican subsidiaries with prospects for hosting gold, silver and base metal deposits, and through such subsidiaries holds interests in several mineral resource properties, including but not limited to (i) El Aguila, (ii) Las Margaritas, (iii) Solaga, and (iv) El Rey located in Oaxaca, Mexico (the "Existing Properties");
B. HOC is an Affiliate of Hochschild Mining plc., a leading underground precious metals producer operating in the Americas with a primary focus on silver and gold;
C. The Company and HOC believe that their respective corporate strategies are compatible and, as such, wish to establish a strategic alliance on the terms and conditions set forth herein;
D. The Company and HOC are entering into this Agreement as a condition to and in furtherance of the investment in Shares (as defined below) contemplated in the Subscription Agreement dated December 5, 2008 (the "Subscription Agreement") between the Company and HOC without the Company having executed and delivered this Agreement; and
E. The Board of Directors has authorized the Company to enter into this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual premises, covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by both parties, the parties hereby covenant and agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions. In this Agreement, unless the context otherwise requires:
(a) "Acceptance Notice" has the meaning ascribed to it in Section 4.1(e);
(b) "Additional Securities" has the meaning ascribed to it in Section 4.1(a);
(c) "Additional Shares" has the meaning ascribed to it in Section 2.1;
(d) "Affiliate" shall have the meaning ascribed thereto in the Securities Act;
(e) "Agreement" means this strategic alliance agreement and any instrument amending this Agreement and "hereof", "hereto", "hereunder" and similar expressions mean and refer to this Agreement and not to a particular Article, Section, Subsection or Paragraph;
(f) "Alternative Proposal" has the meaning ascribed to it in Section 9.1;
(g) "Authority" and "Authorities" means any (i) multinational, federal, provincial, state, regional, municipal, local or other government, governmental or public department, securities commission (including the Securities Commissions), central bank, court, tribunal, arbitral body, commission, board, bureau or agency, domestic or foreign, (ii) any subdivision, agent, commission, board, or authority of any of the foregoing, or (iii) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing, and includes a stock exchange and any other self-regulatory authority;
(h) "Board of Directors" means the board of directors of the Company;
(i) "Business Day" means any day which is not a Saturday, a Sunday or a day on which banks are generally closed for business in Denver, Colorado or London, England;
(j) "Claims" means all losses, damages, expenses, Liabilities, claims and demands of whatever nature or kind, including all reasonable legal fees and disbursements;
(k) "Closing Date" has the meaning given to it in the Subscription Agreement;
(l) "Commencement of Production" has the meaning given to it in Section 2.3;
(m) "Common Stock" has the meaning given to it in Section 4.1(a);
(n) "Company" has the meaning given to it in the preamble hereto;
(o) "Company Indemnitees" has the meaning given to it in Section 11.2;
(p) "Convertible Securities" means all warrants, rights, agreements, options, or Debt Instruments present or future, contingent or absolute, or any right or privilege capable of becoming a right, agreement or option, for the purchase, subscription or issuance of any Shares in the Company or any other security or Debt Instruments convertible or exchangeable for Shares, including options granted to officers, directors or employees, and whether issued pursuant to the Stock Option Plan;
2
(q) "Debt Instrument" means any loan, bond, debenture, promissory note or other instrument evidencing material indebtedness of the Company for borrowed money or other material liability;
(r) "Equity Securities" means Shares, Convertible Securities and any other equity or voting securities of the Company;
(s) "Existing Properties" has the meaning given to it in the preamble hereto;
(t) "Financing Election" has the meaning ascribed to it in Section 2.3;
(u) "HOC Director" has the meaning ascribed to it in Section 5.1;
(v) "HOC Entities" means HOC and its Affiliates, and any person acting jointly or in concert with any of them, excluding, for greater certainty, the Company and any of its Subsidiaries to the extent they may be or become Affiliates at any relevant point in time;
(w) "HOC Indemnitees" has the meaning ascribed to it in Section 11.1;
(x) "HOC JV Acceptance Notice" has the meaning ascribed to it in Section 6.2(b);
(y) "HOC Option" has the meaning ascribed to it in Section 2.1;
(z) "Joint Venture Proposal Notice" has the meaning ascribed to it in Section 6.2(a);
(aa) "JV Negotiation Period" has the meaning ascribed to it in Section 6.2(b);
(bb) "Laws" means any and all applicable (i) laws, constitutions, treaties, statutes, codes, ordinances, orders, decrees, rules, regulations and municipal by-laws, (ii) judicial, arbitral, administrative, ministerial, departmental or regulatory judgments or orders of any Authorities, and (iii) policies, guidelines and protocols;
(cc) "Liabilities" means, with respect to any Person, any liability or obligation of such Person of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due;
(dd) "Lien" means any mortgage, easement, encroachment, adverse claim, and assignment by way of security, security interest, servitude, pledge, charge, lien, assignment, hypothecation, conditional sale agreement, title retention, preferential right, trust arrangement, right of set-off, counterclaim or banker's lien, financing statement, privilege or priority, or other encumbrance of any kind having the effect of security, any designation of loss payees or beneficiaries or any similar arrangement under or with respect to any insurance policy or any preference of one creditor over another arising by operation of law;
(ee) "Market Purchases" has the meaning ascribed to it in Section 3.1;
3
(ff) "Option Exercise Notice" has the meaning ascribed to it in Section 2.1;
(gg) "Option Expiration Date" has the meaning ascribed to it in Section 2.1;
(hh) "Options" means outstanding options to acquire Shares under the Stock Option Plan;
(ii) "Other Purchasers" has the meaning ascribed to it in Section 4.1(a);
(jj) "Parties" means the Company and HOC and their successors and permitted assigns; and "Party" means any one of them;
(kk) "Person" means an individual, partnership, unincorporated association, organization, syndicate, corporation or trust or a trustee, executor, administrator or other legal or personal representative;
(ll) "Private Agreement Purchases" means purchases of Equity Securities other than on any stock exchange on which the Shares are then listed or quoted provided such purchases are made in accordance with applicable Laws, including applicable Securities Laws;
(mm) "Pro Rata Interest" has the meaning ascribed to it in Section 4.1(a);
(nn) "Proposed Joint Venture" has the meaning ascribed to it in Section 6.1(a);
(oo) "Properties" has the meaning ascribed to it in the Preamble hereto;
(pp) "Purchased Shares" shall mean the shares of Common Stock to be acquired by HOC pursuant to the terms of the Subscription Agreement.
(qq) "Rights Notice" has the meaning ascribed to it in Section 4.1(c);
(rr) "Securities Exchange Act" means the Securities Exchange Act of 1934;
(ss) "Securities Commissions" means the securities regulator in each jurisdiction whose Securities Laws are applicable to the Company;
(tt) "Securities Laws" means the Laws relating to securities of the Company, and the regulations and rules made and forms prescribed thereunder together with all applicable published policy statements, blanket orders, rulings and notices adopted by the Securities Commissions of each such jurisdiction or applicable in such jurisdictions;
(uu) "Shareholders" means the holders of Shares;
(vv) "Shares" means common shares or any other securities into which the common shares in the capital of the Company are reorganized, exchanged or converted;
(ww) "Stock Option Plan" means any stock option plan, agreement or arrangement adopted by the Company from time to time which provides for the issuance of options to acquire Shares;
4
(xx) "Subscription Agreement" has the meaning ascribed to it in the Preamble hereto;
(yy) "Subsequent Closing Date" has the meaning ascribed to it in Section 2.1;
(zz) "Transactions" means the transactions contemplated in this Agreement.
1.2 Gender and Certain References. Whenever the context requires, the gender of all words used shall include the masculine, feminine and neuter, and the number of all words shall include the singular and plural. The terms "hereof", "herein" or "hereunder"shall refer to this Agreement as a whole and not to any particular Article or Section hereof. All titles and headings to Articles and Sections in this Agreement are included for convenience and ease of reference. Titles and headings shall not affect in any way the meaning or interpretation of Articles or Sections of this Agreement. Any references to specific Articles or Sections shall mean the Articles and Sections in this Agreement.
ARTICLE 2 ADDITIONAL INVESTMENTS BY HOC
2.1 HOC Option to Purchase Additional Shares. From and after the Closing Date and until 5:00 pm Denver time on the date which is eighty (80) days from the Closing Date (the "Option Expiration Date"), HOC shall have the option (the "Option"), at its sole discretion, to subscribe for all, but not less than all, of an additional 4,330,000 Shares from the Company (the "Additional Shares") at a price of US$3.00 per share, or a total of US$12,990,000. If HOC wishes to exercise the Option, it shall give written notice to the Company (the "Option Exercise Notice") prior to the Option Expiration Date in the manner set forth in Section 12.1 of this Agreement. If HOC fails to deliver the Option Exercise Notice on or before the Option Expiration Date, HOC shall be deemed to have waived its rights under this Section 2.1. In the event HOC exercises the Option, one or more of the HOC Entities shall subscribe and pay for and the Company shall issue to the relevant HOC Entities, free and clear of any liens or encumbrances, the Additional Shares and the Parties shall exchange representations and warranties substantially similar to those contained in the Subscription Agreement and execute such documents as may be necessary to complete the subscription and sale of the Additional Shares. Closing of the purchase and sale of the Additional Shares shall take place within ten (10) business days of the delivery of the Option Exercise Notice, such date being referred to as the "Subsequent Closing Date".
2.2 Use of Proceeds. In the event HOC exercises the Option, the Company agrees to use not less than five million U.S. Dollars (US$5,000,000) of the proceeds from the subscription of the Purchased Shares and the Additional Shares to fund exploration activities (including but not limited to drilling, assaying and staking new claims) on the El Aguila project. The Company further agrees that the balance of the proceeds from the subscription of the Purchased Shares and the Additional Shares shall be used as follows: (i) ten million U.S. Dollars (US$10,000,000) to fund the development and construction of the mine and plant for the El Aguila project; and (ii) three million U.S. Dollars (US$3,000,000) for working capital of the Company and other investments in the El Aguila project.
5
2.3. Additional Financing. Subject to the provisions of Section 8.2, if the Company determines to solicit additional equity financing subsequent to exercise of the Option but prior to Commencement of Production (hereinafter defined) at the El Aguila project, it shall provide written notice to that effect to HOC and HOC shall be entitled to exclusively provide such financing upon the terms and conditions hereinafter set forth. For purposes of the preceding sentence, "Commencement of Production" shall be defined as the production and delivery to the point of sale (refiner) by the Company (either directly or through a subsidiary) of not less than 4,000 ounces of gold within a 45 day period. HOC shall have ten (10) Business Days from delivery of such notice in which to notify the Company that it desires to provide all of such financing (the "Financing Election"). If HOC delivers the Financing Election, the purchase price for each share shall be equal to eighty percent (80%) of the average closing price of the Shares during the thirty (30) calendar days preceding the date HOC delivers the Financing Election. Closing of the subscription, purchase and sale shall be at such place and time as the Parties agree but not more than ten (10) days from delivery of the Financing Election. If HOC delivers the Financing Election, one or more of the HOC Entities shall pay the purchase price for, and the Company shall issue, additional Shares, free and clear of all liens and encumbrances. The Parties shall exchange representations and warranties, in form and in substance substantially similar to those provided in the Subscription Agreement and execute such documents as may be necessary to complete the subscription and sale of the Shares. In the event HOC fails to provide the Financing Election as set forth above, the Company shall be free to obtain such financing from one or more additional parties, free of any obligation to HOC.
ARTICLE 3 MARKET PURCHASES AND PRIVATE PURCHASES
3.1 Market Purchases.Subject to compliance with applicable laws, the HOC Entities shall at any time and from time to time, in their sole discretion, be entitled to make purchases of the Company's common stock in the over-the-counter market or on any stock exchange on which its common stock is then quoted or listed (the "Market Purchases"); provided, however, that for a period of two (2) years following the Closing Date, unless the Parties otherwise agree, the HOC Entities do not beneficially own, directly or indirectly, more than forty percent (40%) of the Company's outstanding common stock on an undiluted basis, following any Market Purchase and any Private Agreement Purchase. For purposes of this Agreement, beneficial ownership shall be determined in accordance with the provisions of Rule 13d-3 of the Securities Exchange Act.
3.2 Private Purchase.In addition to Market Purchases, as described in Section 3.1 above, HOC shall be entitled to make Private Agreement Purchases, provided that such purchases are made in accordance with all applicable laws; and provided further, that for a period of two (2) years following the Closing Date, unless the Parties otherwise agree, the HOC Entities will not beneficially own more than forty percent (40%) of the Company's outstanding common stock on an undiluted basis following any Market Purchase and/or Private Agreement Purchase. At the request of HOC, the Company shall introduce HOC to persons whom the Company believes may be interested in selling its common stock.
6
ARTICLE 4 PRE-EMPTIVE RIGHT
4.1 HOC's Pre-emptive Right.
(a) Subject to the provisions of subsection (g) of this Section 4.1 and Section 8.2 hereof, if at any time after the Closing Date, the Company proposes to issue or sell Equity Securities ("Additional Securities") other than (i) under any Stock Option Plan, (ii) pursuant to the exercise of options under any Stock Option Plan, (iii) upon the exercise, exchange or conversion of any Convertible Securities, or (iv) for property other than money, the HOC Entities shall have the right to subscribe for and purchase Additional Securities, at the price at which such Additional Securities are offered for sale to other purchasers (the "Other Purchasers"), up to its Pro Rata Interest (as defined below) prior to giving effect to the issuance or sale of such Additional Securities. "Pro Rata Interest" means, at any relevant time, the ownership interest of HOC, expressed as a percentage, equal to: (i) the number of outstanding shares of common stock of the Company ("Common Stock") beneficially owned by the HOC Entities, including all shares of Common Stock issuable upon the conversion, exercise or exchange of all Convertible Securities beneficially owned by the HOC Entities divided by (ii) the aggregate number of outstanding shares of Common Stock, plus the number of shares of Common Stock issuable upon the conversion, exercise or exchange of all outstanding Convertible Securities;
(b) If the Company issues Equity Securities in circumstances that would not give rise to the rights of the HOC Entities pursuant to Section 4.1(a) (the "Non-Participating Transaction"), then in any concurrent or subsequent transaction which does give rise to the rights of the HOC Entities pursuant to Section 4.1(a) (the "Participating Transaction"), the Company shall allow the HOC Entities to subscribe for and purchase Additional Securities in an amount greater than HOC's Pro Rata Interest; provided that in the Participating Transaction, HOC shall not be entitled to purchase any more than its Pro Rata Interest of the securities sold collectively in the Non-Participating Transaction and the Participating Transaction.
(c) If the Company intends to authorize and/or issue equity securities that give rise to the rights of HOC pursuant to Section 4.1(a), the Company shall provide notice to HOC (the "Rights Notice") no less than ten (10) business days before the date on which the Company intends to issue equity securities giving rise to the rights of HOC in Section 4.1(a).
(d) The Rights Notice shall specify sufficient information regarding the particulars of the issuance or sale of the Additional Securities to allow HOC to make a reasoned decision in respect of making the investment, including to the extent any such terms are determinable at such time: (i) the total number of equity securities outstanding as of the date thereof; (ii) the total number of Additional Securities which are being offered; (iii) the rights, privileges, restrictions, terms and conditions of such Additional Securities; (iv) the amount payable by HOC for the Additional Securities to which it is entitled pursuant to Section 4.1(a); and (v) the proposed closing date, and thereafter, to the extent it is not included in the Rights Notice, the Company shall immediately provide notice to HOC of such information as it is determined.
(e) HOC shall give notice (an "Acceptance Notice") to the Company not later than 5:00 p.m. (Denver time) on the tenth business day following the deemed receipt of any Rights Notice given under paragraph 4.1(c) setting out the number of Additional Securities, if any, which any of HOC Entities intends to subscribe for and purchase and, if applicable, the name and address of HOC Entity whose name in which such securities should be registered, provided that if HOC, acting reasonably, determines that it has insufficient information to make such investment decision, HOC shall notify the Company of the information required to make such investment decision and thereafter shall have the longer of (i) the remainder of the ten (10) Business Days set out in the first sentence of this paragraph; or (ii) two (2) Business Days from the receipt of such additional information to make the investment decision and deliver or refrain from delivering the Acceptance Notice. Notwithstanding the preceding sentence, the Rights Notice shall be deemed to include sufficient information to make such investment decision if it includes the information specified in items (i) to (iv) of Section 4.1(d). If no Acceptance Notice has been provided to the Company within the required time, HOC will be deemed to have elected not to subscribe for or purchase any such Additional Securities.
7
(f) Following delivery of the Acceptance Notice, if any, the HOC Entities shall pay for, and the Company shall issue to the relevant HOC Entities, free and clear of any liens, the number of Additional Securities specified in the Acceptance Notice and, except as otherwise agreed, the Company shall provide HOC with substantially the same closing documents, including opinions, if applicable, as are delivered to the other persons subscribing for Additional Securities on the closing date for such issuance.
(g) The rights granted to HOC under this Article 4 shall terminate and be of no further force or effect if HOC does not exercise Option and complete the purchase of the Additional Shares.
ARTICLE 5 BOARD REPRESENTATION
5.1 Appointment of HOC Nominee. If, but only if HOC exercises the Option and completes the acquisition of the Additional Shares, HOC shall be entitled to nominate one (1) individual to the Board of Directors (the "HOC Director"). Upon receipt of such nomination and its satisfaction that the individual nominated by HOC meets the qualification requirements for directors under applicable laws, the Board of Directors further agrees to expand its membership to four (4) positions and appoint the individual nominated by HOC to the newly-created vacancy. The Board of Directors further agrees that if HOC maintains a Pro Rata Interest of at least 14.5%, it shall nominate such individual to the slate of directors at each subsequent annual meeting so long as the provisions of Section 8.2 are not invoked.
5.2 Increase in Membership of the Board of Directors. If HOC acquires the Additional Shares and subsequently acquires additional Shares such that it holds a Pro Rata Interest of 40% or more, HOC shall be entitled to appoint one (1) additional individual to the Board of Directors. For greater clarity, if HOC exercises the Option and holds a Pro Rata Interest of at least 40%, HOC shall be entitled to appoint a total of two (2) individuals to the Board of Directors. Upon receipt of a nomination from HOC for the second director and its satisfaction that the individual meets the qualification requirements for directors under applicable law, the Board of Directors agrees to expand its membership to five positions and appoint the individual nominated by HOC to the newly created vacancy. The Board of Directors further agrees that so long as HOC maintains a Pro Rata Interest of at least 35%, it shall nominate such individual to the slate of directors at each subsequent annual meeting so long as the provisions of Section 8.2 are not invoked. The Company further agrees that if HOC exercises the Option and so long as the provisions of Section 8.2 are not invoked, it will not take any action to authorize and will cause the Board of Directors not to authorize any proposal to expand the Board beyond five (5) members without the advance written approval of HOC.
8
5.3 Board Meetings. At all times when the provisions of Section 5.1 are satisfied, the Company shall provide HOC Director(s) not less than 7 (seven) Business Days advance written notice of the date on which any meeting of the Board of Directors shall be held. In providing such notice, the Company shall take into consideration the matters to be discussed at the meeting, the proximity to the place of the meeting and the time zone in which the HOC Director is resident.
5.4 Resignation of HOC Director(s). If (x) one or both HOC Directors do not meet the individual qualifications for a director prescribed by applicable laws, (y) the Pro Rata Interest of HOC falls below 14.5%, or (z) the provisions of Section 8.2 hereof become applicable and the Company delivers notice to HOC to that effect, all of the HOC Directors shall forthwith resign; provided, however, that in the event of (x), HOC shall then be entitled to appoint an individual to replace the resigning director(s) and such resigning director(s) shall be afforded the benefits of any indemnity and insurance as may exist for all matters occurring prior to such resignation.
5.5 Indemnification and Director's and Officer's Insurance. So long as HOC is entitled to nominate and maintain a director pursuant to this Article 5, the Company shall indemnify each current and former HOC Director and shall maintain director's and officer's liability insurance for the benefit of each such director, with the same rights and benefits as are accorded the directors of the Company generally.
ARTICLE 6 RIGHT OF FIRST OFFER
The provisions of this Article 6 shall apply if, but only if, HOC exercises the Option and acquires the Additional Shares and so long as the provisions of Section 8.2 do not apply:
6.1 Joint Venture
(a) If the Company or any of its Subsidiaries decides to seek a joint venture partner to develop, acquire or otherwise earn an interest in any Properties including the Existing Properties, in circumstances where the Company's participation in such joint venture is not dependent on the participation of a particular third party as joint venture partner (such as in the case of an earn-in) (each a "Proposed Joint Venture"), the Company shall immediately provide notice to HOC (the "Joint Venture Proposal Notice") specifying sufficient information regarding the particulars of the Proposed Joint Venture to allow HOC to make a reasoned decision in respect of participating in the Proposed Joint Venture, including to the extent any such terms are determinable at such time: (A) a description of the Property in respect of which the Proposed Joint Venture relates, and (B) the terms, including the purchase price, for the Proposed Joint Venture, and if applicable, a true copy of any related term sheet setting forth such terms.
Notwithstanding the foregoing, nothing in this Section 6.1 shall prevent the Company from concurrently negotiating with third parties with respect to those matters set out in this Section 6.1.
(b) If HOC, acting reasonably, determines that the Joint Venture Proposal Notice contains insufficient information to make a reasoned decision in respect of participating in the Proposed Joint Venture, it shall notify the Company of the information required to make such decision and thereafter shall have the greater of (i) five (5) Business Days from the receipt of such information from the Company, and (ii) the days remaining in the period specified in Section 6.2 to make such decision and deliver or refrain from delivering the HOC JV Acceptance Notice in accordance with such Section 6.2. Notwithstanding the foregoing, a copy of the term sheet for the Proposed Joint Venture shall be deemed to be sufficient information to make such reasoned decision, if it includes the information specified in Section 6.1(a).
9
6.2 Joint Venture Proposal
(a) Receipt of the Joint Venture Proposal Notice by HOC shall be deemed to constitute an invitation to HOC Entities to participate in the Proposed Joint Venture.
(b) If any of HOC Entities provides the Company an acceptance (the "HOC JV Acceptance Notice") in writing in respect of the Joint Venture Proposal Notice, within fifteen (15) Business Days of receipt thereof or such shorter period as may be specified in the Joint Venture Proposal Notice of a determination in respect of the Proposed Joint Venture, the Company shall negotiate exclusively in good faith with HOC to finalize terms of the Proposed Joint Venture acceptable to each of the Parties, acting reasonably, within a period of sixty days or such additional period as the Parties may from time to time agree in writing (the "JV Negotiation Period"), failing which the Company shall be entitled to pursue other partners for the Proposed Joint Venture. If HOC does not provide HOC JV Acceptance Notice to the Company within fifteen (15) Business Days or such shorter period as may be specified in the Joint Venture Proposal Notice, of receiving of the Joint Venture Proposal Notice, the Company may enter into negotiations with any other person regarding the Proposed Joint Venture. If the Company truncates the period during which the HOC JV Acceptance Notice is required to be returned by HOC, it shall include in the Joint Venture Proposal Notice a statement certified by an officer of the Company that the Company has determined that it is necessary to truncate such period to avoid losing the opportunity to make such acquisition or other related transaction and that it has used commercially reasonable efforts to avoid truncating such period.
ARTICLE 7 STANDSTILL
The provisions of this Article 7 shall apply if HOC acquires the Additional Shares and for a period of two (2) years after the Subsequent Closing Date:
7.1 Standstill
(a) HOC covenants and agrees that, except as otherwise contemplated in this Agreement, HOC will not, and will not allow any HOC Entities to, in either case, without the prior written consent of the Company, directly or indirectly:
(i) acquire or enter into any agreement to acquire or make any proposal or offer to acquire in any manner any equity securities of the Company (whether issued or unissued) that would result in a Pro Rata Interest greater than 40% other than (A) as a result of a stock dividend or distribution made by or a recapitalization of the Company, (B) in accordance with the terms of any dividend reinvestment or share purchase plan made available from time to time by the Company to holders of equity securities; (C) pursuant to the exercise of rights issued pursuant to a rights offering made by the Company to the holders of its equity securities; or (D) pursuant to the exercise of rights issued pursuant to any shareholder rights plan of the Company and attached to equity securities;
10
(ii) assist, encourage or advise any other person to acquire or agree to acquire in any manner any equity securities;
(iii) propose or support or engage in any discussions or negotiations with respect to, or enter into any agreement, commitment or understanding with any third party to effect, any tender offer, merger, business combination, asset or share transaction, financing transaction or corporate restructuring involving the Company;
(iv) make or participate directly or indirectly in any solicitation of proxies from shareholders of the Company;
(v) form, join or in any way participate in any group acting jointly or in concert with any of the foregoing; or
(vi) make any public disclosure of any intention in connection with the foregoing;
(each an "Acquisition Proposal").
(b)Notwithstanding Section 6.1, none of the HOC Entities shall be prohibited from making an Acquisition Proposal:
(i) in the event the Company materially breaches its obligations under Section 2.3 (Additional Financing), Article 4 (Pre-Emptive Right), Article 5 (Board Representation) or Article 6 (Right of First Offer), provided that HOC has notified the Company of any alleged breach and the Company has failed to cure such alleged breach, if curable, within thirty days of such notice;
(ii) from the date any public announcement of or public disclosure of an intention to commence or enter into any agreement with respect to any of the following is made by any person (other than any HOC Entity) to the date of the withdrawal or cancellation of the Tender Offer Transaction or Business Combination Transaction (each as defined below):
A) a tender offer or an intention to undertake a tender offer for equity securities of the Company by any person or group of persons (other than any HOC Entities) which if completed would result in such tender offer person or group of persons holding 20% or more on a non-diluted basis of any class of then outstanding equity securities of the Company (a "Tender Offer Transaction"); or
11
B) any acquisition (excluding a Tender Offer Transaction), merger, asset purchase and sale, business combination
B) any acquisition (excluding a Tender Offer Transaction), merger, asset purchase and sale, business combination transaction or other extraordinary transaction involving or relating to the Company or any of its subsidiaries, or an intention to make an offer to the Company and/or its subsidiaries to undertake such a transaction, by any person or group of persons (other than any HOC Entities) which would, if completed, result in (I) any class of outstanding equity securities being converted into cash or securities of another person resulting in shareholders holding less than 50% of the equity and/or voting securities of the resulting entity; or (II) all or substantially all of the Company's assets being sold to any person or group of persons (other than any HOC Entities) (a "Business Combination Transaction"), provided that in the case of this Section 6.1(b)(ii)(B) HOC must make such Acquisition Proposal confidentially to the Board of Directors and not by way of public offer to the shareholders.
For greater certainty, if HOC has commenced an Acquisition Proposal in reliance on this Section 6.1(b)(ii) or in respect of Section 6.1(b)(ii)(B), has agreed with the Company to an Acquisition Proposal, prior to the withdrawal or cancellation of such Tender Offer Transaction or Business Combination Transaction, HOC shall not be precluded from continuing with such Acquisition Proposal by reason only of the withdrawal or cancellation of any relevant Tender Offer Transaction or Business Combination Transaction; or
(iii) if a person or group of persons other than any of the HOC Entities, the Company or its subsidiaries obtains proxies carrying a majority of the votes attached to all outstanding voting securities of the Company and exercises such votes to replace the Board of Directors.
7.2 Most Favored Nation. The Company shall immediately inform HOC and provide HOC with a copy of any other standstill provisions in any agreement pertaining to the matters set forth in this Article 6, entered into by the Company with another person subsequent to the date hereof, and notwithstanding delivery of such notice and a copy of any such provisions, HOC shall have the full benefit of any materially more favourable terms, in the opinion of HOC, contained in such standstill and Section 6.1 shall be deemed to be amended accordingly.
ARTICLE 8 COVENANTS
8.1 Designation of Consulting Geologists. During the time up to the Option Expiration Date, and thereafter if HOC exercises the Option and acquires the Additional Shares and the provisions of Section 8.2 do not apply, HOC shall have the right to designate one full or part time geologist to act as a consultant to the Company at any of its Existing Properties for the purpose of advising the Company with regard to ongoing exploration and development. The Company shall provide such geologist with room and board while such geologist is on-site at any of the Existing Properties. HOC, however, shall be responsible for payment of any compensation for such geologist. Other consulting services which may be required by the Company, including metallurgical, underground mining engineering or concentrate contract negotiations, may be requested from HOC, and provided that HOC agrees to deliver those services, any charges for such services shall be billed by HOC to the Company at no more than HOC's actual cost plus 1%.
12
8.2 Termination of Certain HOC Rights. Notwithstanding anything in this Agreement to the contrary, in the event (i) HOC shall hold a Pro Rata Interest less than 14.5% or (ii) HOC shall have achieved a Pro Rata Interest greater than 14.5% but subsequently sells or otherwise disposes of 20% or more of its Pro Rata Interest in any one or more transactions, the benefits provided to HOC pursuant to the provisions of Section 2.3 (Additional Financing), Article 4 (Pre-Emptive Rights), Article 5 (Board Representation), Article 6 (First Offer) and Section 8.1 (Designation of Geologist) above shall immediately terminate and be of no further force or effect. Furthermore, any HOC Director nominated and appointed pursuant to the provisions of Section 5.1 or 5.2 shall immediately resign in the event that the provisions of subsection (i) or (ii) above shall be applicable.
ARTICLE 9 ADDITIONAL COVENANTS
9.1 Covenants of the Company.
(a) Prior to the Option Expiration Date, the Company shall not and shall not permit its Affiliates, agents or other representatives (including any director, officer, investment banker, legal advisor or accountant retained by the Company or any of its Susidiaries) to:
(i) initiate, solicit, promote or encourage, directly or indirectly, inquiries or the submission of proposals or offers from any Person with respect to any proposal or offer or action that would reasonably be expected to delay, prevent or frustrate the Transactions or any part thereof (an "Alternative Proposal");
(ii) encourage, or participate or engage in negotiations concerning, or furnish to any Person other than to HOC Entities, any non-public information with respect to, or otherwise co-operate in any way with, or participate in, or facilitate or encourage any Person to make an Alternative Proposal; or
(iii) endorse, accept, approve or recommend a proposal of, or enter into any Contract or understanding with , any Person relating to an Alternative Proposal, or otherwise facilitate any effort or attempt to make or implement an Alternative Proposal.
(b) Notwithstanding anything else in this Section 9.1, if the Company or any of its subsidiaries receives an unsolicited Alternative Proposal prior to the Option Exercise Date, the Board of Directors may participate in discussions with, furnish information to, or enter into an agreement with the Person that initiated the Alternative Proposal only if: (x) the Board of Directors determines in good faith, after consultation with outside counsel, that such action is necessary in order for them to act in a manner consistent with their fiduciary duty under applicable Laws; (y) the Company shall have provided to HOC notice at least five (5) Business Days prior to the date on which the agreement to effect such Alternative Proposal is to be entered into specifying the terms of the Alternative Proposal; and (z) after taking into account modifications to this Agreement proposed by HOC during such five Business Day period, such proposal would constitute a superior proposal ("Superior Proposal"). If HOC makes a proposal to amend this Agreement to increase the purchase price payable for the Additional Shares, such that the proposal of such other Person shall no longer be a Superior Proposal, and shall complete the purchase of the Additional Shares upon such terms, then neither the Company nor its subsidiaries shall enter into such Alternative Proposal.
13
(c) The Company shall comply with all securities regulatory filing requirements on a timely basis in connection with the issuance of any Equity Securities of the Company to any HOC Entity, including filing within the periods stipulated under Securities Laws, at the Company's expense, all private placement forms required to be filed by the Company and paying all filing fees required to be paid in connection therewith so that such issuance may lawfully occur without the necessity of filing a prospectus, registration statement or any similar document under the Securities Laws.
(d) The Company shall, to the extent and for so long as HOC Entities hold at least 14.5% of the Shares on a non-diluted basis, upon HOC's request, permit representatives of the HOC Entities to have access to the site and any of the premises where the business and operations of the Company and its Subsidiaries are conducted and access and duplicating rights (and use commercially reasonable efforts to cause persons or firms possessing such documentation or information to give similar access and duplicating rights) to the Company and its Subsidiaries' books of account and records and such other documents, communications, items and matters, within the knowledge, possession or control of the Company, which HOC may reasonably request, at HOC's own cost (other than those it is permitted to examine and make copies of free of charge pursuant to applicable Laws) provided that, except to the extent the information can be provided in the necessary course of business of the Company, acting reasonably including to provide HOC Entities with information to assist the HOC Entities and their advisors with the preparation of the financial statements for such HOC Entities, nothing herein shall require the Company to provide HOC Entities with any information which would constitute a material fact with respect to the Company which has not been generally disclosed.
(e) In the event the Company shall breach any representation or warranty, covenant or any other right of HOC under this Agreement in any material respect, including but not limited to, the rights afforded to HOC under Articles 2, 4, 5, 6 and 8 hereof, then at the request of HOC, the Company shall promptly prepare and file with the SEC a registration statement on Form S-l or S-3 (or, if Form S-l or S-3 is not then available, on such form of registration statement as is then available to effect a registration for resale of the Purchase Shares and the Additional Shares ("Registration Statement")), covering the resale of all of the Shares owned by HOC; provided, however, that if prior to the filing of the Registration Statement, the provisions of Rule 144 of the Securities Act of 1933, as amended (the "1933 Act") allow the sale of all of the Shares in compliance with that Rule, the Company shall not be obligated to file such Registration Statement so long as the Company at its own expense, does the following: (i) complies with any necessary filing or reporting requirements (under the 1933 Act or otherwise) to permit such sale, (ii) cooperates with HOC in removing any legend on the certificates representing the Shares, including but not limited to instructing its transfer agent to remove such restrictive legend and (iii) provides HOC with an opinion of counsel confirming that such sale is permitted under Rule 144. Such Registration Statement also shall cover, to the extent allowable under the 1933 Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Shares. The Company shall pay all expenses associated with the registration, including filing and printing fees, counsel and accounting fees and expenses, and State "Blue Sky" fees and expenses. The Company shall use its commercially reasonable efforts to have the Registration Statement declared effective by the SEC as soon as practicable. The Company shall notify HOC by facsimile or e-mail as promptly as practicable, and in any event, within three (3) business days, after the Registration Statement is declared effective and shall simultaneously provide HOC with copies of any related prospectus to be used in connection with the sale or other disposition of the securities covered thereby.
14
(f) In connection with the foregoing, the Company shall indemnify and hold harmless HOC against any losses, claims, damages or liabilities to which it may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement or any other public filing by the Company, so long as such statement has not been provided to the Company by HOC for inclusion in such registration statement; (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, so long as such omission or alleged omission does not relate to HOC or the manner of sale for the Shares as provided to the Company by HOC; or (iii) any violation of the 1933 Act, any rule or regulation thereunder or any other securities law, rule or regulation applicable to the Company and relating to the action or inaction required of the Company in connection therewith. The foregoing indemnification obligation shall extend to the fees and expenses of any counsel retained by HOC in connection with any such loss, claim, damage or liability.
ARTICLE 10 REPRESENTATIONS & WARRANTIES
10.1 Representations and Warranties of the Company. The Company represents, warrants and agrees with HOC as of the date of this Agreement, that:
(a) The Company is a corporation duly incorporated under the laws of the State of Colorado, and is validly existing and in good standing under the laws of the State of Colorado and no proceedings have been instituted or are pending for the dissolution or liquidation of the Company;
(b) The Company has all requisite legal and corporate power and authority to execute, deliver and perform its obligations under this Agreement;
(c) This Agreement has been duly authorized by all necessary corporate action on the part of the Company and has been duly executed and delivered by the Company and constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms; and
15
(d) The execution and delivery of this Agreement and the performance by the Company of its obligations hereunder and the consummation of the Transactions, do not and will not conflict with, or result in a breach or violation of, any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time or both): (i) the constating documents of the Company; (ii) the resolutions of the shareholders or directors (or any committee thereof) of the Company which are in effect at the date hereof; (iii) any mortgage, note, indenture, contract, agreement, instrument, lease or other document to which the Company is a party or by which it is bound; or (iv) any judgement, writ, injunction, decree or order, of any court or of any Authority that is binding the Company or the property or assets of the Company.
10.2 Representations and Warranties of HOC. HOC represents, warrants and agrees with the Company as of the date of this Agreement, that:
(a) HOC is a limited company incorporated under the Companies Act 1985 (England) as a limited company, registered in England and Wales, and is validly existing and in good standing under the laws of England and no proceedings have been instituted or are pending for the dissolution or liquidation of HOC;
(b) HOC has all requisite legal and corporate power and authority to execute, deliver and perform its obligations under this Agreement;
(c) this Agreement has been duly authorized by all necessary corporate action on the part of HOC and has been duly executed and delivered by HOC and constitutes a valid and legally binding obligation of HOC enforceable against HOC in accordance with its terms; and
(d) the execution and delivery of this Agreement and the performance by HOC of its obligations hereunder and the consummation of the Transactions, do not and will not conflict with, or result in a breach or violation of, any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time or both): (i) the constating documents of HOC; (ii) the resolutions of the shareholders or directors (or any committee thereof) of HOC which are in effect at the date hereof; (iii) any mortgage, note, indenture, contract, agreement, instrument, lease or other document to which HOC is a party or by which it is bound; or (iv) any judgement, writ, injunction, decree or order, of any court or of any Authority that is binding on HOC or the property or assets of HOC.
ARTICLE 11 INDEMNIFICATION
11.1 Indemnification by the Company.
The Company will indemnify and save harmless the HOC Entities and the directors, officers, employees and agents of the HOC Entities (collectively, the "HOC Indemnitees") from and against all Claims incurred by any one or more of the HOC Indemnitees directly or indirectly resulting from any breach of any covenant, representation or warranty of the Company contained in this Agreement.
16
11.2 Indemnification by HOC.
HOC will indemnify and save harmless the Company and the directors, officers, employees and agents of the Company (collectively, the "Company Indemnitees") from and against all Claims incurred by any one or more of the Company Indemnitees directly or indirectly resulting from any breach of any covenant, representation or warranty of HOC contained in this Agreement.
11.3 Injunctive Relief.
Notwithstanding any other provision of this Agreement, nothing herein is intended to or shall restrict a Party from seeking and receiving injunctive relief (whether as a temporary restraining order, preliminary injunction or otherwise) or specific performance.
ARTICLE 12 MISCELLANEOUS PROVISIONS
12.1 Notices. All notices or other communications required or permitted to be given by one party to another by the terms hereof shall be given in writing by personal delivery or facsimile delivered to such other party as follows:
To the Company:
Gold Resource Corporation 222 Milwaukee St., Suite 301 Denver, CO 80206 Attention: William Reid, President Facsimile No.: (303) 320-7835
To HOC:
Hochschild Mining Holdings Limited Calle La Colonia 180 Surco, Lima 33, Peru Attention: VP & General Counsel Facsimile No.: +511-437-5009
or at such other address or facsimile number as may be given by either of them to the other in writing from time to time and such other notices or communications shall be deemed to have been received when delivered or, if by facsimile, on the next business day after such notice or other communication has been transmitted by facsimile (with receipt confirmed).
17
12.2 Further Assurances. Each of the parties hereto upon the request of each of the other parties hereto, whether before or after the date of this Agreement, shall do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered all such further acts, deeds, documents, assignments, transfers, conveyances, powers of attorney and assurances as may reasonably be necessary or desirable to complete the transactions contemplated herein.
12.3 Costs and Expenses. All costs and expenses (including, without limitation, the fees and disbursements of legal counsel) incurred in connection with this Agreement and the transactions herein contemplated shall be paid and borne by the party incurring such costs and expenses.
12.4 Applicable Law. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of New York and the laws of the United States applicable therein. Any and all disputes arising under this Agreement, whether as to interpretation, performance or otherwise, shall be subject to the non-exclusive jurisdiction of the courts of Colorado and each of the parties hereto hereby irrevocably attorns to the jurisdiction of the courts of such province.
12.5 Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the transactions contemplated herein and cancels and supersedes any prior understandings, agreements, negotiations and discussions between the parties. There are no representations, warranties, terms, conditions, undertakings or collateral agreements or understandings, express or implied, between the parties hereto other than those expressly set forth in this Agreement or in any such agreement, certificate, affidavit, statutory declaration or other document as aforesaid.
12.6 Amendment and Waivers. No amendment of this Agreement will be effective unless made in writing and signed by the Parties. A waiver of any default, breach or non-compliance under this Agreement is not effective unless in writing and signed by the Party to be bound by the waiver. No waiver shall be inferred from or implied by any failure to act or delay in acting by a Party in respect of any default, breach or non-observance or by anything done or omitted to be done by the other Party in respect of any default, beach or non-observance or by anything done or omitted to be done by the other Party. The waiver by any Party of any default, breach or non-compliance under this Agreement shall not operate as a waiver of that Party's rights under this Agreement in respect of any continuing or subsequent default, breach or non-observance (whether of the same or any other nature).
12.7 Severability. If any one or more provisions in this Agreement, for any reason, shall be determined to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of any such provision in any other respect and the remaining provisions of this Agreement shall not be in anyway impaired.
12.8 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same Agreement. Counterparts may be delivered either in original or faxed form and the parties adopt any signature received by a receiving fax machine as original signatures of the parties.
12.9 Assignment. This Agreement may not be assigned by either party except with the prior written consent of the other parties hereto.
18
12.10 Enurement. This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, successors (including any successor by reason of the amalgamation or merger of any party), administrators and permitted assigns.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day and year first above written.
GOLD RESOURCE CORPORATIOn
By: ___________________________________________ Authorized Signing Officer
HOCHSCHILD MINING HOLDINGS LIMITED
By: ___________________________________________ Authorized Signing Officer
19 | Highlight the parts (if any) of this contract related to "Change Of Control" that should be reviewed by a lawyer. Details: Does one party have the right to terminate or is consent or notice required of the counterparty if such party undergoes a change of control, such as a merger, stock sale, transfer of all or substantially all of its assets or business, or assignment by operation of law? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Affiliate License-Licensor" that should be reviewed by a lawyer. Details: Does the contract contain a license grant by affiliates of the licensor or that includes intellectual property of affiliates of the licensor?
Context: 1
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS AND ENCLOSED BY BRACKETS. THE CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
EXHIBIT 10.22
MP3.com, Inc. P.O. BOX 910091 San Diego, CA 92191 (619) 558-9390
SPONSORSHIP AGREEMENT
This Sponsorship Agreement ("Agreement") is made an entered into on February 17, 1999 ("Effective Date"), by and between Tickets.com, Inc., a Delaware corporation, located at 4061 Glencoe Ave., Marina del Rey, CA 90292 ("Tickets") and MP3.com, Inc., having an address at P.O. Box 910091, San Diego, CA 92191-0091 ("MP3.com"). MP3.com owns and operates the website located at www.mp3.com (the "Website").
1. Form of Sponsorship. During the term of this Agreement, Tickets shall be MP3.com's exclusive partner/source for sports, entertainment, and travel tickets, and MP3.com shall include a Tickets Portal on the "Music" page and the "Pop," "Rock" and "Alternative" genre pages on the Website. A "Portal" is defined as a web graphic with the dimensions not to exceed 125 x 125 pixels and 20Kb in size. The content of the Portal shall be supplied by Tickets and shall conform with reasonable technical and content specifications supplied by MP3.com.
2. Impressions. MP3.com agrees to deliver a guaranteed minimum of 3,000,000 Impressions per month for the term of this Agreement. An "Impression" is defined as the display of the Tickets Portal to a user on one of the above referenced pages.
3. Sponsor Fees. Tickets agrees to pay MP3.com, during the term of this Agreement, as follows: (i) $[***] payable on the Effective Date; (ii) $[***] payable on or before one month subsequent to the Effective Date; (iii) $[***] payable on or before two months subsequent to the Effective Date; (iv) $[***] payable on or before three months subsequent to the Effective Date; (v) $[***] payable on or before four months subsequent to the Effective Date; (vi) $[***] payable on or before five months subsequent to the Effective Date. Any late payments under this Agreement will be assessed a service fee of one and one-half percent (1.5%) per month, to the extent allowed by law.
4. Term and Termination. This Agreement shall commence on the Effective Date and shall remain in full force and effect until one (1) year subsequent to the Effective Date, provided however, that Tickets may terminate this Agreement for any reason upon thirty (30) days' notice to MP3. com at any time prior to the expiration of sixty (60) days subsequent to the Effective Date. Furthermore, for a thirty (30) day period, beginning thirty (30) days prior to the first anniversary of this Agreement, Tickets shall have the right to renew the Agreement for another year with Sponsor Fees that do not exceed a [***] percent increase over the existing Sponsor Fees. Any payments which have accrued prior to the date of termination shall remain due and payable. Sections 6, 7, and 8 shall survive termination of this agreement.
5. Measurement. Upon request, Tickets shall have access to pertinent statistics related to Impressions covering the period of this contract. Tickets agrees to accept MP3.com's measurement of Impressions (the "Count") according to MP3.com's logs and other tracking devices and/or software MP3.com may use, provided however, that Tickets shall have the right to audit MP3.com's records in this regard. If Tickets reasonably disputes the Count pursuant to this Agreement, then Tickets shall have the right to select the independent auditor of its choice to conduct an audit of MP3.com's records (the "Audit"). The Audit will be conducted in such a way so as not to interfere to any material extent with MP3.com's operations. If, for any applicable period, the independent auditor determines that MP3.com overstated the Count by more than five percent (5%), than MP3.com shall pay the cost of the Audit and shall refund Tickets the difference between the amount originally paid and the amount which should have been paid, or MP3.com shall credit the appropriate amount of Impressions to Tickets' account.
[***] Confidential treatment has been requested for redacted portion. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.
2
6. Representations and Warranties. Each party is solely responsible for any legal liability arising out of or relating to the content of its site and any material to which users can link through the sites. Each party represents and warrants that its sites will not: (i) infringe upon any third party's copyright, patent, trademark, trade secret or other proprietary rights or rights of publicity or privacy; (ii) violate any law, statue, ordinance or regulation, including without limitation any laws regarding unfair competition, antidiscrimination or false advertising; (iii) be pornographic or obscene; (iv) be defamatory or trade libelous; or (v) contain viruses other harmful programming routines. Each party agrees to defend, indemnify and hold harmless the other and its shareholders, directors, officers, agents and employees for any and all losses, costs, liabilities or expenses (including without limitation
reasonable attorneys' and expert witnesses' fees) incurred or arising from: (a) any breach of the foregoing representations or warranties; (b) any claim arising from the sale or license of either party's goods or services; or (c) any other act, omission or representation by either party. Either party may participate in the defense of itself at its option and expense.
7. No Consequential Damages. Except for claims arising under section 6, in no event will either party be liable for any special, indirect, incidental or consequential damages.
8. Miscellaneous. This Agreement shall be governed by and construed in accordance with the laws of the State of California without reference to conflict of law principles thereof. Any claim arising out of or related to this Agreement must be brought exclusively in the state or federal courts located in San Diego County, California, and each party hereby consent to the jurisdiction thereof. In any action to enforce this Agreement the prevailing party will be entitled to costs and attorneys' fees. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior discussions, documents, agreements and prior course of dealing, and shall not be effective until signed by both parties. This Agreement may not be assigned by Tickets without MP3.com's written consent, which shall be promptly granted or denied and not unreasonably withheld, except that Tickets may assign this Agreement without MP3.com's consent if another entity acquires substantially all the assets of Tickets. The parties to this Agreement are independent contractors, and no agency, partnership, joint venture or employee-employer relationship is created by this Agreement. MP3.com intends to, and does, bind its successors and assigns to the terms of this Agreement.
/s/ Greg Flores /s/ Adam Epstein - ----------------------------------- ----------------------------------- Representative of MP3.com Representative of Tickets.com, Inc.
/s/ Greg Flores, VP Sales Adam Epstein, SVP Counsel - ----------------------------------- ----------------------------------- Printed Name & Position Printed Name & Position
- ----------------------------------- ----------------------------------- Date Date [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | 1
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS AND ENCLOSED BY BRACKETS. THE CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
EXHIBIT 10.22
MP3.com, Inc. P.O. BOX 910091 San Diego, CA 92191 (619) 558-9390
SPONSORSHIP AGREEMENT
This Sponsorship Agreement ("Agreement") is made an entered into on February 17, 1999 ("Effective Date"), by and between Tickets.com, Inc., a Delaware corporation, located at 4061 Glencoe Ave., Marina del Rey, CA 90292 ("Tickets") and MP3.com, Inc., having an address at P.O. Box 910091, San Diego, CA 92191-0091 ("MP3.com"). MP3.com owns and operates the website located at www.mp3.com (the "Website").
1. Form of Sponsorship. During the term of this Agreement, Tickets shall be MP3.com's exclusive partner/source for sports, entertainment, and travel tickets, and MP3.com shall include a Tickets Portal on the "Music" page and the "Pop," "Rock" and "Alternative" genre pages on the Website. A "Portal" is defined as a web graphic with the dimensions not to exceed 125 x 125 pixels and 20Kb in size. The content of the Portal shall be supplied by Tickets and shall conform with reasonable technical and content specifications supplied by MP3.com.
2. Impressions. MP3.com agrees to deliver a guaranteed minimum of 3,000,000 Impressions per month for the term of this Agreement. An "Impression" is defined as the display of the Tickets Portal to a user on one of the above referenced pages.
3. Sponsor Fees. Tickets agrees to pay MP3.com, during the term of this Agreement, as follows: (i) $[***] payable on the Effective Date; (ii) $[***] payable on or before one month subsequent to the Effective Date; (iii) $[***] payable on or before two months subsequent to the Effective Date; (iv) $[***] payable on or before three months subsequent to the Effective Date; (v) $[***] payable on or before four months subsequent to the Effective Date; (vi) $[***] payable on or before five months subsequent to the Effective Date. Any late payments under this Agreement will be assessed a service fee of one and one-half percent (1.5%) per month, to the extent allowed by law.
4. Term and Termination. This Agreement shall commence on the Effective Date and shall remain in full force and effect until one (1) year subsequent to the Effective Date, provided however, that Tickets may terminate this Agreement for any reason upon thirty (30) days' notice to MP3. com at any time prior to the expiration of sixty (60) days subsequent to the Effective Date. Furthermore, for a thirty (30) day period, beginning thirty (30) days prior to the first anniversary of this Agreement, Tickets shall have the right to renew the Agreement for another year with Sponsor Fees that do not exceed a [***] percent increase over the existing Sponsor Fees. Any payments which have accrued prior to the date of termination shall remain due and payable. Sections 6, 7, and 8 shall survive termination of this agreement.
5. Measurement. Upon request, Tickets shall have access to pertinent statistics related to Impressions covering the period of this contract. Tickets agrees to accept MP3.com's measurement of Impressions (the "Count") according to MP3.com's logs and other tracking devices and/or software MP3.com may use, provided however, that Tickets shall have the right to audit MP3.com's records in this regard. If Tickets reasonably disputes the Count pursuant to this Agreement, then Tickets shall have the right to select the independent auditor of its choice to conduct an audit of MP3.com's records (the "Audit"). The Audit will be conducted in such a way so as not to interfere to any material extent with MP3.com's operations. If, for any applicable period, the independent auditor determines that MP3.com overstated the Count by more than five percent (5%), than MP3.com shall pay the cost of the Audit and shall refund Tickets the difference between the amount originally paid and the amount which should have been paid, or MP3.com shall credit the appropriate amount of Impressions to Tickets' account.
[***] Confidential treatment has been requested for redacted portion. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.
2
6. Representations and Warranties. Each party is solely responsible for any legal liability arising out of or relating to the content of its site and any material to which users can link through the sites. Each party represents and warrants that its sites will not: (i) infringe upon any third party's copyright, patent, trademark, trade secret or other proprietary rights or rights of publicity or privacy; (ii) violate any law, statue, ordinance or regulation, including without limitation any laws regarding unfair competition, antidiscrimination or false advertising; (iii) be pornographic or obscene; (iv) be defamatory or trade libelous; or (v) contain viruses other harmful programming routines. Each party agrees to defend, indemnify and hold harmless the other and its shareholders, directors, officers, agents and employees for any and all losses, costs, liabilities or expenses (including without limitation
reasonable attorneys' and expert witnesses' fees) incurred or arising from: (a) any breach of the foregoing representations or warranties; (b) any claim arising from the sale or license of either party's goods or services; or (c) any other act, omission or representation by either party. Either party may participate in the defense of itself at its option and expense.
7. No Consequential Damages. Except for claims arising under section 6, in no event will either party be liable for any special, indirect, incidental or consequential damages.
8. Miscellaneous. This Agreement shall be governed by and construed in accordance with the laws of the State of California without reference to conflict of law principles thereof. Any claim arising out of or related to this Agreement must be brought exclusively in the state or federal courts located in San Diego County, California, and each party hereby consent to the jurisdiction thereof. In any action to enforce this Agreement the prevailing party will be entitled to costs and attorneys' fees. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior discussions, documents, agreements and prior course of dealing, and shall not be effective until signed by both parties. This Agreement may not be assigned by Tickets without MP3.com's written consent, which shall be promptly granted or denied and not unreasonably withheld, except that Tickets may assign this Agreement without MP3.com's consent if another entity acquires substantially all the assets of Tickets. The parties to this Agreement are independent contractors, and no agency, partnership, joint venture or employee-employer relationship is created by this Agreement. MP3.com intends to, and does, bind its successors and assigns to the terms of this Agreement.
/s/ Greg Flores /s/ Adam Epstein - ----------------------------------- ----------------------------------- Representative of MP3.com Representative of Tickets.com, Inc.
/s/ Greg Flores, VP Sales Adam Epstein, SVP Counsel - ----------------------------------- ----------------------------------- Printed Name & Position Printed Name & Position
- ----------------------------------- ----------------------------------- Date Date | Highlight the parts (if any) of this contract related to "Affiliate License-Licensor" that should be reviewed by a lawyer. Details: Does the contract contain a license grant by affiliates of the licensor or that includes intellectual property of affiliates of the licensor? | {
"answer_start": [],
"text": []
} |
<s>[INST] <<SYS>>
You are a helpful, respectful and honest assistant. Always answer as helpfully as possible, while being safe. Your answers should not include any harmful, unethical, racist, sexist, toxic, dangerous, or illegal content. Please ensure that your responses are socially unbiased and positive in nature.
If a question does not make any sense, or is not factually coherent, explain why instead of answering something not correct. If you don't know the answer to a question, please don't share false information.
<</SYS>>
Extract from the following context the minimal span word for word that best answers the question. Think step by step and explain your reasoning. Then give the answer in JSON format as follows:
```json
{
"answer": ...
}
```
If the answer is not in the context, the answer should be "?".
Question: Highlight the parts (if any) of this contract related to "Exclusivity" that should be reviewed by a lawyer. Details: Is there an exclusive dealing commitment with the counterparty? This includes a commitment to procure all “requirements” from one party of certain technology, goods, or services or a prohibition on licensing or selling technology, goods or services to third parties, or a prohibition on collaborating or working with other parties), whether during the contract or after the contract ends (or both).
Context: Exhibit 99.3
EXECUTION COPY
INTELLECTUAL PROPERTY AGREEMENT
THIS INTELLECTUAL PROPERTY AGREEMENT (this "Intellectual Property Agreement"), dated as of December 20, 2007, is made by and between NMS COMMUNICATIONS CORP., a Delaware corporation ("Seller"), and VERSO BACKHAUL SOLUTIONS, INC., a Georgia corporation ("Backhaul").
RECITALS:
WHEREAS, Seller and Verso Technologies, Inc., a Minnesota corporation ("Buyer"), have entered into that certain Asset Purchase Agreement, dated as of the date hereof (the "Asset Purchase Agreement"), pursuant to which Buyer has the right to acquire the Purchased Assets of Seller and its Subsidiaries, as more particularly described in the Asset Purchase Agreement (all capitalized words and terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Asset Purchase Agreement); and
WHEREAS, Buyer has designated Backhaul as a Buyer Designee for purposes of the Asset Purchase Agreement, and Buyer has assigned to Backhaul the right to receive the Purchased Assets pursuant to that certain Assignment of Asset Purchase Agreement between Buyer and Backhaul dated as of the date hereof.
ASSIGNMENT:
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Seller does hereby transfer, sell, assign, convey and deliver to Backhaul all right, title and interest in, to and under the Assigned Intellectual Property, including, without limitation, the Trademarks and Patents set forth on Schedules A and B hereof, respectively, and all goodwill of the Purchased Business associated therewith. Seller hereby covenants and agrees, that from time to time forthwith upon the reasonable written request of Backhaul or Buyer, that Seller will, at Backhaul's cost and expense, do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, each and all of such further acts, deeds, assignments, transfers, conveyances and assurances as may reasonably be required by Backhaul or Buyer in order to transfer, assign, convey and deliver unto and vest in Backhaul title to all right, title and interest of Seller in, to and under the Assigned Intellectual Property.
This Intellectual Property Agreement is subject in all respects to the terms and conditions of the Asset Purchase Agreement and is intended only to document the assignment of the Assigned Intellectual Property. Nothing contained in this Intellectual Property Agreement shall be deemed to supersede any of the obligations, agreements, representations, covenants or warranties of Seller and Buyer contained in the Asset Purchase Agreement.
This Intellectual Property Agreement shall be construed and interpreted according to the laws of the State of Georgia, applicable contracts to be wholly performed within the State of Georgia.
This Intellectual Property Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Intellectual Property Agreement by facsimile shall be effective as delivery of a manually executed counterpart of this Intellectual Property Agreement.
[Signature Page to Follow]
2
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Intellectual Property Agreement as of the date first written above.
NMS COMMUNICATIONS CORP. By: /s/ Robert Schechter Name: Robert Schechter Title: CEO/President VERSO BACKHAUL SOLUTIONS, INC. By: /s/ Martin D. Kidder Name: Martin D. Kidder Title: President
STATE OF Massachusetts:
COUNTY OF Middlesex:
On the 20th day of December, 2007, before me personally came Robert Schechter, to me known (or satisfactorily proven), who being by me duly sworn, did depose and say that he/she is the CEO/President of NMS Communications Corporation, the corporation described in, and which executed the foregoing instrument, and that he/she was fully authorized to execute this Intellectual Property Agreement on behalf of said corporation.
/s/ Jason A. Minio (SEAL) Jason A. Minio Notary Public Commonwealth of Massachusetts My Commission Expires November 1, 2013
STATE OF Georgia:
COUNTY OF Cobb:
On the 20th day of December, 2007, before me personally came Martin Kidder, to me known (or satisfactorily proven), who being by me duly sworn, did depose and say that he/she is the CFO of Verso Technologies, the corporation described in, and which executed the foregoing instrument, and that he/she was fully authorized to execute this Intellectual Property Agreement on behalf of said corporation.
/s/ Susanne G. Davis (SEAL) Susanne G. Davis Notary Public, Cobb County, GA My Commission expires Aug. 10, 2010
SCHEDULE A
[INTENTIONALLY OMITTED]
SCHEDULE B
[INTENTIONALLY OMITTED] [/INST] ```json
{<answer_start>
"answer": "?"
<answer_end>
}
``` </s> | Exhibit 99.3
EXECUTION COPY
INTELLECTUAL PROPERTY AGREEMENT
THIS INTELLECTUAL PROPERTY AGREEMENT (this "Intellectual Property Agreement"), dated as of December 20, 2007, is made by and between NMS COMMUNICATIONS CORP., a Delaware corporation ("Seller"), and VERSO BACKHAUL SOLUTIONS, INC., a Georgia corporation ("Backhaul").
RECITALS:
WHEREAS, Seller and Verso Technologies, Inc., a Minnesota corporation ("Buyer"), have entered into that certain Asset Purchase Agreement, dated as of the date hereof (the "Asset Purchase Agreement"), pursuant to which Buyer has the right to acquire the Purchased Assets of Seller and its Subsidiaries, as more particularly described in the Asset Purchase Agreement (all capitalized words and terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Asset Purchase Agreement); and
WHEREAS, Buyer has designated Backhaul as a Buyer Designee for purposes of the Asset Purchase Agreement, and Buyer has assigned to Backhaul the right to receive the Purchased Assets pursuant to that certain Assignment of Asset Purchase Agreement between Buyer and Backhaul dated as of the date hereof.
ASSIGNMENT:
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Seller does hereby transfer, sell, assign, convey and deliver to Backhaul all right, title and interest in, to and under the Assigned Intellectual Property, including, without limitation, the Trademarks and Patents set forth on Schedules A and B hereof, respectively, and all goodwill of the Purchased Business associated therewith. Seller hereby covenants and agrees, that from time to time forthwith upon the reasonable written request of Backhaul or Buyer, that Seller will, at Backhaul's cost and expense, do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, each and all of such further acts, deeds, assignments, transfers, conveyances and assurances as may reasonably be required by Backhaul or Buyer in order to transfer, assign, convey and deliver unto and vest in Backhaul title to all right, title and interest of Seller in, to and under the Assigned Intellectual Property.
This Intellectual Property Agreement is subject in all respects to the terms and conditions of the Asset Purchase Agreement and is intended only to document the assignment of the Assigned Intellectual Property. Nothing contained in this Intellectual Property Agreement shall be deemed to supersede any of the obligations, agreements, representations, covenants or warranties of Seller and Buyer contained in the Asset Purchase Agreement.
This Intellectual Property Agreement shall be construed and interpreted according to the laws of the State of Georgia, applicable contracts to be wholly performed within the State of Georgia.
This Intellectual Property Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Intellectual Property Agreement by facsimile shall be effective as delivery of a manually executed counterpart of this Intellectual Property Agreement.
[Signature Page to Follow]
2
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Intellectual Property Agreement as of the date first written above.
NMS COMMUNICATIONS CORP. By: /s/ Robert Schechter Name: Robert Schechter Title: CEO/President VERSO BACKHAUL SOLUTIONS, INC. By: /s/ Martin D. Kidder Name: Martin D. Kidder Title: President
STATE OF Massachusetts:
COUNTY OF Middlesex:
On the 20th day of December, 2007, before me personally came Robert Schechter, to me known (or satisfactorily proven), who being by me duly sworn, did depose and say that he/she is the CEO/President of NMS Communications Corporation, the corporation described in, and which executed the foregoing instrument, and that he/she was fully authorized to execute this Intellectual Property Agreement on behalf of said corporation.
/s/ Jason A. Minio (SEAL) Jason A. Minio Notary Public Commonwealth of Massachusetts My Commission Expires November 1, 2013
STATE OF Georgia:
COUNTY OF Cobb:
On the 20th day of December, 2007, before me personally came Martin Kidder, to me known (or satisfactorily proven), who being by me duly sworn, did depose and say that he/she is the CFO of Verso Technologies, the corporation described in, and which executed the foregoing instrument, and that he/she was fully authorized to execute this Intellectual Property Agreement on behalf of said corporation.
/s/ Susanne G. Davis (SEAL) Susanne G. Davis Notary Public, Cobb County, GA My Commission expires Aug. 10, 2010
SCHEDULE A
[INTENTIONALLY OMITTED]
SCHEDULE B
[INTENTIONALLY OMITTED] | Highlight the parts (if any) of this contract related to "Exclusivity" that should be reviewed by a lawyer. Details: Is there an exclusive dealing commitment with the counterparty? This includes a commitment to procure all “requirements” from one party of certain technology, goods, or services or a prohibition on licensing or selling technology, goods or services to third parties, or a prohibition on collaborating or working with other parties), whether during the contract or after the contract ends (or both). | {
"answer_start": [],
"text": []
} |